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Loss Share Agreement Template for Singapore

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Key Requirements PROMPT example:

Loss Share Agreement

"Need a Loss Share Agreement under Singapore law between our bank and a hedge fund partner to share potential losses on a USD 50M investment portfolio, with an 80:20 loss split and quarterly settlement periods starting from March 2025."

Document background
The Loss Share Agreement is commonly used in Singapore's financial sector when parties wish to allocate and manage potential losses from specific assets or activities. This type of agreement has become increasingly important in risk management strategies, particularly in structured finance and asset portfolio transactions. The document establishes clear mechanisms for calculating losses, determining each party's share, and managing payment obligations. Under Singapore law, these agreements must comply with both general contract law principles and specific financial sector regulations, particularly when regulated entities are involved.
Suggested Sections

1. Parties: Identification and details of all contracting parties

2. Background: Context and purpose of the loss share arrangement

3. Definitions: Key terms and their meanings as used in the agreement

4. Loss Share Structure: Core mechanics of how losses will be shared between parties

5. Loss Calculation Methodology: Detailed explanation of how losses are calculated and verified

6. Payment Mechanics: Procedures and timing for loss share payments

7. Representations and Warranties: Standard assurances from each party

8. Term and Termination: Duration of agreement and termination provisions

Optional Sections

1. Collateral Requirements: Security arrangements for loss share obligations, used when parties require additional security

2. Regulatory Compliance: Specific regulatory obligations applicable when regulated entities are involved

3. Third Party Rights: Rights of external parties to the agreement, included when third parties have enforcement rights

Suggested Schedules

1. Loss Calculation Formula: Detailed mathematical formula for loss calculations

2. Form of Loss Notice: Template for notifying losses under the agreement

3. Payment Procedures: Detailed payment mechanics and account details

4. Eligible Asset Categories: List of assets covered by the loss share arrangement

Authors

Alex Denne

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

Relevant legal definitions

































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Industries

Contracts Act 1872 (Chapter 53): Primary legislation governing contract formation, validity, and enforcement in Singapore. Covers fundamental principles of offer, acceptance, consideration, and contractual obligations.

Civil Law Act (Chapter 43): Foundational legislation governing civil matters in Singapore, including contract law principles and remedies for breach of contract.

Banking Act (Chapter 19): Regulatory framework for banking institutions in Singapore, relevant if the loss share agreement involves financial institutions.

Insurance Act (Chapter 142): Governs insurance-like features and risk transfer mechanisms that may be present in loss share agreements.

Monetary Authority of Singapore (MAS) Guidelines: Regulatory guidelines issued by MAS that may affect loss share agreements, particularly those involving financial institutions.

Arbitration Act (Chapter 10): Governs domestic arbitration proceedings in Singapore, relevant for dispute resolution provisions in the agreement.

International Arbitration Act (Chapter 143A): Framework for international arbitration in Singapore, important for cross-border loss share agreements.

Mediation Act 2017: Provides framework for mediation proceedings and enforceability of mediated settlements in Singapore.

Limitation Act (Chapter 163): Sets time limits for bringing legal actions, affecting the enforcement of rights under the loss share agreement.

Securities and Futures Act (Chapter 289): Relevant if the loss share agreement involves securities or regulated financial products.

Evidence Act (Chapter 97): Governs the admissibility of evidence in legal proceedings, affecting documentation requirements and proof of agreement terms.

Electronic Transactions Act (Chapter 88): Provides legal framework for electronic transactions and digital signatures, relevant for electronic execution of agreements.

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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