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Loss Share Agreement Template for New Zealand

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Key Requirements PROMPT example:

Loss Share Agreement

"I need a Loss Share Agreement between ABC Bank Limited and XYZ Investment Fund for a commercial property portfolio valued at NZD 50 million, with a 70-30 loss sharing ratio and quarterly loss assessments starting from March 2025."

Document background
Loss Share Agreements are essential risk management tools in the New Zealand financial and business landscape, typically employed when parties wish to distribute and manage potential financial losses across multiple entities. These agreements are particularly relevant in scenarios involving asset purchases, portfolio transfers, or joint venture arrangements where risk sharing is crucial. The Loss Share Agreement establishes detailed mechanisms for loss calculation, verification procedures, and payment terms, while ensuring compliance with New Zealand's regulatory framework, including the Contract and Commercial Law Act 2017 and Financial Markets Conduct Act 2013. The document is structured to provide clarity on loss definitions, coverage scope, and the specific obligations of each party, making it an indispensable tool for risk mitigation in complex financial transactions.
Suggested Sections

1. Parties: Identifies and defines all parties to the agreement, including their legal status and contact details

2. Background: Sets out the context and purpose of the loss sharing arrangement, including any relevant historical or business context

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

4. Scope of Loss Sharing: Defines what constitutes a covered loss and the specific assets or portfolio subject to the agreement

5. Loss Calculation Methodology: Details how losses will be calculated, including timing and verification procedures

6. Payment Terms: Specifies the mechanism for loss payments, including timing, currency, and payment procedures

7. Rights and Obligations: Sets out the specific responsibilities and rights of each party under the agreement

8. Representations and Warranties: Contains standard and specific representations and warranties from all parties

9. Record Keeping and Reporting: Establishes requirements for maintaining records and reporting loss-related information

10. Term and Termination: Specifies the duration of the agreement and circumstances for early termination

11. Confidentiality: Establishes confidentiality obligations regarding shared information and agreement terms

12. Dispute Resolution: Sets out procedures for resolving disputes between parties

13. General Provisions: Contains standard boilerplate clauses including notices, amendments, and governing law

Optional Sections

1. Security Arrangements: Used when collateral or security is required to support loss sharing obligations

2. Third Party Rights: Include when third parties may have rights or obligations under the agreement

3. Recovery Procedures: Required when parties want to specify procedures for recovering shared losses from third parties

4. Step-In Rights: Include when one party needs the right to take over certain operations in specific circumstances

5. Insurance Requirements: Used when specific insurance coverage is required as part of the risk management structure

6. Portfolio Management: Include when the agreement covers an ongoing portfolio requiring active management

7. Regulatory Compliance: Required when specific regulatory requirements need to be addressed

8. Tax Provisions: Include when specific tax implications need to be addressed in the loss sharing arrangement

Suggested Schedules

1. Schedule 1 - Covered Assets/Portfolio: Detailed list and description of assets or portfolio subject to loss sharing

2. Schedule 2 - Loss Calculation Examples: Worked examples showing how losses will be calculated in various scenarios

3. Schedule 3 - Payment Procedures: Detailed procedures for making and receiving loss share payments

4. Schedule 4 - Reporting Templates: Standard forms and templates for required reporting under the agreement

5. Schedule 5 - Loss Verification Procedures: Detailed procedures for verifying and documenting losses

6. Schedule 6 - Contact Details: List of key contacts and notice details for all parties

7. Appendix A - Excluded Losses: Detailed description of losses specifically excluded from the agreement

8. Appendix B - Required Documentation: List of documents required for loss claims and verification

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 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

Investment Management

Real Estate

Private Equity

Asset Management

Government and Public Sector

Corporate Finance

Risk Management

Relevant Teams

Legal

Risk Management

Finance

Compliance

Treasury

Operations

Portfolio Management

Investment

Due Diligence

Asset Management

Relevant Roles

Chief Risk Officer

Chief Financial Officer

Legal Counsel

Risk Manager

Portfolio Manager

Compliance Officer

Financial Controller

Treasury Manager

Investment Manager

Operations Director

Contract Manager

Business Development Manager

Due Diligence Officer

Asset 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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