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Guarantee And Indemnity Agreement Template for Hong Kong

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Key Requirements PROMPT example:

Guarantee And Indemnity Agreement

"I need a Guarantee and Indemnity Agreement for a Hong Kong subsidiary company guaranteeing a HKD 10 million bank facility for its parent company, with the guarantee to be effective from March 1, 2025, including provisions for multiple guarantors and cross-border enforcement."

Document background
The Guarantee And Indemnity Agreement is a fundamental document in Hong Kong's commercial and financial landscape, typically used when one party needs to provide financial security for another's obligations. It combines two distinct legal concepts: a guarantee (a secondary obligation that becomes active upon the principal debtor's default) and an indemnity (a primary obligation independent of the underlying debt). This document is essential in various contexts, including corporate financing, property transactions, and commercial contracts, where additional security is required beyond the principal debtor's covenant. The agreement must comply with Hong Kong's Contract Ordinance and related legislation, incorporating specific provisions for enforcement under Hong Kong law. It's particularly relevant in banking transactions, corporate group structures, and situations where parent companies guarantee subsidiaries' obligations.
Suggested Sections

1. Parties: Identification of the Guarantor(s), the Creditor/Beneficiary, and the Principal Debtor

2. Background: Context of the guarantee, reference to the principal agreement or facility, and the reason for providing the guarantee

3. Definitions and Interpretation: Definitions of key terms, interpretation rules, and construction principles

4. Guarantee: The primary guarantee obligations, including scope, limitations, and nature of the guarantee (continuing, unconditional, irrevocable)

5. Indemnity: The indemnity provisions, circumstances triggering indemnity, and scope of indemnification

6. Representations and Warranties: Guarantor's representations about capacity, authority, and financial condition

7. Preservation of Rights: Provisions ensuring guarantee remains valid despite variations to principal obligation or other circumstances

8. Payment Provisions: Terms regarding payment obligations, currency, method, and timing of payments

9. Tax Gross-up and Indemnities: Provisions for tax-related payments and indemnities

10. Costs and Expenses: Allocation of costs, expenses, and enforcement charges

11. Duration and Release: Term of the guarantee and conditions for release or discharge

12. General Provisions: Standard boilerplate clauses including notices, amendments, severability, and governing law

Optional Sections

1. Security Provisions: Include when specific assets are being provided as security for the guarantee obligations

2. Multiple Guarantors: Additional provisions required when there are multiple guarantors, including joint and several liability

3. Subordination: Include when the guarantor's rights need to be subordinated to other creditors

4. Assignment and Transfer: Specific provisions regarding the ability to assign or transfer rights under the guarantee

5. Set-off Rights: Detailed set-off provisions where parties have multiple dealings

6. Currency Conversion: Include when guaranteed obligations are in multiple currencies

7. Independent Legal Advice: Confirmation of independent legal advice where required by law or practice

8. Power of Attorney: Include when the creditor requires power of attorney for specific actions

Suggested Schedules

1. Schedule 1 - Principal Agreement: Details or copy of the principal agreement being guaranteed

2. Schedule 2 - Guaranteed Obligations: Detailed description of the obligations covered by the guarantee

3. Schedule 3 - Security Assets: List and details of any security assets (if applicable)

4. Schedule 4 - Guarantor Information: Detailed information about the guarantor(s) including address and contact details

5. Schedule 5 - Form of Notice: Standard forms for notices or demands under the guarantee

6. Appendix A - Compliance Certificate: Form of compliance certificate if regular confirmation of financial condition is required

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions









































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Relevant Industries

Banking

Financial Services

Real Estate

Construction

Manufacturing

Trading

Retail

Hospitality

Infrastructure

Telecommunications

Corporate Services

Import/Export

Shipping and Logistics

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Corporate Secretarial

Credit Control

Commercial

Corporate Finance

Banking Operations

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Secretary

Risk Manager

Credit Manager

Treasury Manager

Commercial Director

Compliance Officer

Financial Controller

Banking Relationship Manager

Senior Legal Manager

Corporate Finance Manager

Managing Director

Company Director

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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