Intercompany Revolving Loan Agreement Template for Hong Kong

The Intercompany Revolving Loan Agreement is essential for multinational corporations and group companies operating in or through Hong Kong that require flexible financing arrangements between their affiliated entities. This document is typically used when a group company with excess funds provides financing to another group company with funding needs, allowing for multiple drawdowns and repayments within an agreed facility limit. The agreement must comply with Hong Kong corporate law, financial regulations, and transfer pricing requirements, particularly regarding arm's length terms and documentation. It includes provisions for facility limits, interest calculations, drawdown mechanics, representations, and corporate authorizations, making it suitable for ongoing group treasury operations and efficient capital management.

1. Parties: Identification of the lender and borrower companies, including registration details

2. Background: Context of the intercompany arrangement and relationship between the parties

3. Definitions and Interpretation: Key terms used in the agreement, including financial definitions and calculation methodologies

4. The Facility: Details of the revolving loan facility, including the commitment amount and purpose

5. Conditions Precedent: Documents and conditions required before the facility can be utilized

6. Drawdown Mechanics: Procedures and requirements for requesting and making drawdowns

7. Interest: Interest rate, calculation method, and payment provisions

8. Repayment and Prepayment: Terms for repayment and voluntary prepayment of the loan

9. Tax Provisions: Treatment of taxes, including withholding tax and transfer pricing compliance

10. Representations and Warranties: Standard corporate representations and specific declarations regarding the loan arrangement

11. Undertakings: Ongoing obligations of the borrower during the life of the facility

12. Events of Default: Circumstances that trigger default and remedies available to the lender

13. Changes to Parties: Provisions regarding assignment and transfer rights

14. Administration: Notice requirements, calculations, and other administrative matters

15. Governing Law and Jurisdiction: Hong Kong law as governing law and jurisdiction provisions