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The Loan Agreement Between Parent Company And Subsidiary is a vital instrument for intra-group financing in Hong Kong corporate structures. It is commonly used when a parent company provides financial support to its subsidiary for various purposes such as working capital, expansion, project financing, or restructuring. The agreement must comply with Hong Kong's Companies Ordinance, Inland Revenue Ordinance, and transfer pricing regulations, ensuring the loan terms are on an arm's length basis. This document is particularly important in the context of Hong Kong's role as a major financial center, where many multinational corporations structure their regional operations through local holding companies and operating subsidiaries. The agreement typically includes detailed financial terms, regulatory compliance provisions, and appropriate protections for both parties while recognizing their related party status.

1. Parties: Identifies the parent company as lender and subsidiary as borrower, including registration numbers and registered offices

2. Background: Sets out the context of the intra-group loan and relationship between the parties

3. Definitions and Interpretation: Defines key terms and interpretation rules for the agreement

4. The Loan: Details the loan amount, purpose, and drawdown mechanisms

5. Interest: Specifies interest rate, calculation method, and payment periods

6. Repayment: Sets out repayment terms, scheduled payments, and early repayment provisions

7. Representations and Warranties: Standard corporate representations from the borrower regarding its status and ability to enter into the agreement

8. Covenants: Ongoing obligations of the borrower regarding its operations and financial management

9. Events of Default: Circumstances constituting default and consequences

10. Taxes and Stamp Duty: Addresses tax implications and responsibilities for payments

11. Notices: Process for formal communications between parties

12. Assignment and Transfer: Restrictions on transfer of rights and obligations

13. Governing Law and Jurisdiction: Specifies Hong Kong law and jurisdiction

14. Execution: Signature blocks and execution formalities