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Loss Share Agreement Template for India

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Key Requirements PROMPT example:

Loss Share Agreement

"I need a Loss Share Agreement between my investment bank and a state-owned bank in India for a portfolio of distressed real estate assets worth ₹500 crore, with an 70:30 loss sharing ratio, to be effective from March 1, 2025."

Document background
Loss Share Agreements are commonly used in Indian financial markets when parties seek to allocate and manage potential losses from specific assets or transactions. These agreements are particularly prevalent in scenarios involving asset sales, portfolio transfers, joint ventures, or restructuring arrangements. The Loss Share Agreement details the mechanism for calculating and sharing losses, payment obligations, and risk allocation between parties. It must comply with Indian legal requirements, including the Indian Contract Act, 1872, and relevant financial regulations, particularly when involving regulated entities like banks or financial institutions. The agreement is essential in transactions where risk sharing is crucial, such as distressed asset sales, bank restructuring, or complex financial arrangements. It provides clarity on loss calculation methodologies, sharing ratios, payment terms, and dispute resolution mechanisms, while ensuring alignment with Indian regulatory requirements and market practices.
Suggested Sections

1. Parties: Identification of all parties to the agreement, including their legal status and registered addresses

2. Background: Context of the agreement, including the transaction or arrangement that necessitates loss sharing

3. Definitions: Detailed definitions of terms used throughout the agreement, including 'Losses', 'Sharing Ratio', 'Covered Assets', etc.

4. Scope of Agreement: Defines the specific assets, transactions, or business activities covered under the loss-sharing arrangement

5. Loss Sharing Mechanism: Detailed explanation of how losses will be calculated and shared between parties

6. Payment Terms: Timing and method of payments for shared losses, including payment procedures and currency

7. Representations and Warranties: Standard representations and warranties from all parties regarding their capacity and authority

8. Rights and Obligations: Specific duties and responsibilities of each party under the agreement

9. Term and Termination: Duration of the agreement and circumstances under which it can be terminated

10. Dispute Resolution: Procedures for resolving disputes, including jurisdiction and governing law

11. Confidentiality: Provisions regarding the confidentiality of information shared under the agreement

12. Notices: Process and addresses for serving notices under the agreement

13. Miscellaneous: Standard boilerplate provisions including severability, entire agreement, and amendments

Optional Sections

1. Regulatory Compliance: Specific section for agreements involving regulated entities like banks or financial institutions

2. Asset Management: Procedures for managing covered assets when the agreement involves specific asset pools

3. Third Party Rights: Required when there are third parties who may have rights under the agreement

4. Step-In Rights: Relevant when one party needs the right to step in and manage assets under certain circumstances

5. Insurance: Required when specific insurance coverage is needed for the covered assets or activities

6. Security Arrangements: Include when collateral or security is required to support loss-sharing obligations

7. Force Majeure: Optional section for handling unforeseen circumstances affecting the loss-sharing arrangement

Suggested Schedules

1. Schedule 1 - Covered Assets: Detailed list and description of assets covered under the loss-sharing arrangement

2. Schedule 2 - Loss Calculation Methodology: Detailed methodology for calculating losses, including formulas and examples

3. Schedule 3 - Loss Sharing Ratios: Specific percentages or ratios for loss sharing between parties

4. Schedule 4 - Payment Procedures: Detailed procedures for making and receiving loss share payments

5. Schedule 5 - Reporting Requirements: Templates and timelines for required reports under the agreement

6. Appendix A - Related Agreements: List of related agreements that may affect the loss-sharing arrangement

7. Appendix B - Compliance Requirements: Specific regulatory or compliance requirements applicable to the arrangement

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions















































Clauses


































Relevant Industries

Banking

Financial Services

Insurance

Asset Management

Real Estate

Infrastructure

Private Equity

Corporate Finance

Distressed Assets Management

Investment Banking

Relevant Teams

Legal

Finance

Risk Management

Compliance

Treasury

Corporate Development

Investment

Asset Management

Due Diligence

Credit Risk

Portfolio Management

Strategic Planning

Regulatory Affairs

Relevant Roles

Chief Financial Officer

Risk Manager

Legal Counsel

Corporate Lawyer

Investment Manager

Asset Manager

Portfolio Manager

Compliance Officer

Transaction Manager

Director of Finance

Head of Treasury

Investment Banker

Restructuring Specialist

Due Diligence Officer

Financial Controller

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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