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The Limited Guarantee Agreement is a crucial document in Hong Kong's commercial and financial landscape, commonly used when parties seek to provide financial security while maintaining controlled risk exposure. This document is particularly relevant in situations where a parent company, director, or related entity wishes to guarantee the obligations of another entity (such as a subsidiary or affiliated company) but needs to limit their potential liability. The agreement must comply with Hong Kong's legal framework, particularly the Companies Ordinance and contract law principles. It typically includes detailed provisions about the guarantee's scope, enforcement mechanisms, and specific monetary or percentage-based caps on the guarantor's liability. The Limited Guarantee Agreement is essential in various commercial contexts, from secured lending transactions to project finance, and requires careful consideration of both the guarantor's risk appetite and the beneficiary's security requirements.

1. Parties: Identification of the Guarantor, the Beneficiary, and the Principal Debtor

2. Background: Context of the guarantee, including reference to the underlying obligations or facility

3. Definitions and Interpretation: Key terms used in the agreement and rules of interpretation

4. Guarantee and Indemnity: Core guarantee obligations, scope of guarantee, and indemnity provisions

5. Limitation of Liability: Specific caps or limitations on the guarantor's liability

6. Representations and Warranties: Guarantor's confirmations regarding capacity, authority, and financial condition

7. Continuing Security: Provisions establishing the guarantee as continuing security until discharge

8. Preservation of Rights: Beneficiary's rights preservation and ability to enforce despite changes

9. Payments: Payment obligations, timing, currency, and payment mechanics

10. Tax Gross-up: Provisions for tax deductions and required gross-up payments

11. Costs and Expenses: Allocation of costs related to preparation and enforcement

12. Notices: Communication procedures and contact details

13. Assignment and Transfer: Rights and restrictions regarding transfer of guarantee rights

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