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The Vendor Loan Agreement is a crucial document used in Hong Kong when a seller provides financing to facilitate the sale of assets, business, or property. This arrangement is particularly common in situations where traditional bank financing may be unavailable or less favorable, or where the vendor wishes to generate additional returns through interest income while facilitating the sale. The document must comply with Hong Kong's regulatory framework, particularly the Money Lenders Ordinance (Cap. 163) and related legislation. It typically includes detailed provisions on loan amount, interest calculations, repayment terms, security arrangements, events of default, and enforcement mechanisms. This type of agreement is especially relevant in the current market environment where alternative financing arrangements are increasingly important for completing transactions.

1. Parties: Identifies and defines the Vendor/Lender and the Purchaser/Borrower with their full legal names and addresses

2. Background: Sets out the context of the loan agreement, typically referring to the related sale transaction and the agreement to provide vendor financing

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation rules

4. Loan Amount and Purpose: Specifies the principal amount of the loan and its intended purpose

5. Interest: Details the interest rate, calculation method, and payment frequency

6. Repayment Terms: Specifies the repayment schedule, installment amounts, and payment methods

7. Conditions Precedent: Lists conditions that must be satisfied before the loan becomes available

8. Representations and Warranties: Sets out the statements of fact and assurances given by the borrower

9. Borrower Covenants: Details the ongoing obligations and restrictions on the borrower

10. Events of Default: Defines circumstances that constitute default and trigger enforcement rights

11. Consequences of Default: Specifies the lender's rights and remedies upon default

12. Payments: Details payment mechanics, currency, and treatment of non-business days

13. Notices: Specifies how formal communications between parties should be made

14. Assignment and Transfer: Governs the ability to transfer rights and obligations under the agreement

15. General Provisions: Contains standard boilerplate clauses including governing law, entire agreement, etc.