The Limited Recourse Loan Agreement is a specialized financing document used in Australia when lenders agree to limit their enforcement rights to specific assets or cash flows, rather than having recourse to all of the borrower's assets. This type of agreement is particularly common in project finance, asset-based lending, and structured finance transactions where the loan is secured by high-value assets or predictable cash flows. The document includes detailed provisions regarding the loan facility, security arrangements, and enforcement mechanisms, while carefully delineating the assets available for recourse. It is structured to comply with Australian federal and state laws, including the Personal Property Securities Act 2009 (Cth) and relevant banking regulations. This agreement type is particularly useful for project-specific financing where the lender's risk assessment focuses on the viability and value of specific assets rather than the borrower's overall creditworthiness.

1. Parties: Identifies and defines the Lender and Borrower

2. Background: Sets out the context of the loan and its limited recourse nature

3. Definitions and Interpretation: Defines key terms and interpretation principles

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

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

6. Repayment: Sets out repayment terms, prepayment rights, and payment mechanics

7. Limited Recourse Nature: Defines the limited recourse provisions and identifies specific assets against which recourse is available

8. Security: Details the security arrangements over the specified assets

9. Representations and Warranties: Standard and specific representations regarding the borrower and secured assets

10. Undertakings: Borrower's obligations regarding the loan and secured assets

11. Events of Default: Specifies events triggering default and enforcement rights

12. Enforcement: Details enforcement rights limited to the specified assets

13. Expenses and Indemnities: Allocates costs and establishes indemnities (subject to limited recourse)

14. Assignment and Transfer: Rules for transfer of rights and obligations

15. Notices: Communication requirements and contact details

16. General Provisions: Standard boilerplate clauses modified for limited recourse nature

17. Governing Law and Jurisdiction: Specifies Australian law as governing law and jurisdiction