Loan Modification Agreement for Hong Kong

Loan Modification Agreement Template for Hong Kong

A legal document governed by Hong Kong law that formally modifies the terms of an existing loan agreement between a lender and borrower. It outlines specific changes to the original loan terms while maintaining other unchanged provisions, ensuring compliance with Hong Kong banking and contract law requirements. The agreement typically addresses modifications to payment terms, interest rates, loan duration, or other key provisions, while incorporating necessary representations, warranties, and conditions precedent. It serves as an addendum to the original loan agreement and must comply with Hong Kong's regulatory framework, including the Banking Ordinance and Money Lenders Ordinance where applicable.

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What is a Loan Modification Agreement?

The Loan Modification Agreement is a crucial document used when parties to an existing loan agreement need to alter specific terms without creating an entirely new loan agreement. It's commonly utilized during financial restructuring, when borrowers face changed circumstances, or when market conditions necessitate loan term adjustments. This document, governed by Hong Kong law, must comply with various regulations including the Banking Ordinance (Cap. 155), Money Lenders Ordinance (Cap. 163), and Contract and Rights of Third Parties Ordinance (Cap. 623). It typically includes details of the original loan, specific modifications, conditions precedent, and necessary consents from all relevant parties. The agreement is particularly important in Hong Kong's dynamic financial market, where loan modifications are common in both corporate and individual lending scenarios.

What sections should be included in a Loan Modification Agreement?

1. Parties: Identification of the lender and borrower(s), including their full legal names and addresses

2. Background: Recitals describing the original loan agreement, its date, and the parties' desire to modify certain terms

3. Definitions: Key terms used in the agreement, including references to defined terms in the original loan agreement

4. Modification of Terms: Specific changes to the original loan agreement, clearly stating the original terms and their modifications

5. Confirmation of Other Terms: Affirmation that all other terms of the original loan agreement remain in full force and effect

6. Representations and Warranties: Statements by both parties confirming their authority to enter into the modification and the continuing accuracy of original representations

7. Conditions Precedent: Any conditions that must be satisfied before the modifications become effective

8. Effectiveness: The effective date of the modifications and any requirements for effectiveness

9. Governing Law and Jurisdiction: Confirmation that Hong Kong law governs the modification agreement

10. Execution: Signature blocks for all parties and any required witnesses

What sections are optional to include in a Loan Modification Agreement?

1. Security Confirmation: Confirmation that existing security remains in effect and extends to modified obligations - include if the original loan is secured

2. Guarantor Consent: Consent from any guarantors to the modifications - include if the original loan has guarantors

3. Fee Provisions: Details of any fees associated with the modification - include if fees are being charged

4. Tax Provisions: Provisions dealing with tax implications of the modification - include if there are significant tax consequences

5. Regulatory Compliance: Additional provisions ensuring compliance with specific banking or lending regulations - include if required by applicable regulations

6. Notice Requirements: Modified notice provisions - include if changing communication methods or contact details

What schedules should be included in a Loan Modification Agreement?

1. Schedule 1 - Modified Terms: Detailed listing of all modified terms in tabular format, showing original and new terms

2. Schedule 2 - Amended Payment Schedule: Updated amortization or payment schedule reflecting the modifications

3. Schedule 3 - Conditions Precedent Checklist: List of all documents and conditions required before modification becomes effective

4. Appendix A - Original Loan Agreement: Copy of the original loan agreement being modified

5. Appendix B - Supporting Resolutions: Corporate or other authorizing resolutions if required

Authors

Alex Denne

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

Jurisdiction

Hong Kong

Publisher

Genie AI

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions
Relevant Industries

Financial Services

Banking

Real Estate

Corporate

Construction

Manufacturing

Retail

Healthcare

Technology

Infrastructure

Relevant Teams

Legal

Finance

Compliance

Credit Risk

Corporate Banking

Retail Banking

Treasury

Corporate Secretariat

Debt Restructuring

Credit Analysis

Documentation

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Compliance Officer

Credit Risk Manager

Loan Officer

Banking Relationship Manager

Treasury Manager

Corporate Secretary

Financial Controller

Debt Restructuring Specialist

Legal Director

Senior Banker

Credit Analysis Manager

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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