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The Loss Share Agreement is a crucial risk management tool in South African financial transactions, commonly used in scenarios involving asset transfers, portfolio acquisitions, or financial institution restructuring. This document type emerged from the need to facilitate complex financial transactions while managing risk exposure for all parties involved. The agreement details specific mechanisms for sharing losses, typically used when one party seeks to transfer or acquire assets but wants to limit potential downside risk. Under South African law, particularly the Financial Sector Regulation Act and Banks Act, these agreements must comply with strict regulatory requirements while providing clear procedures for loss calculation, claims processing, and payment obligations. The document includes comprehensive provisions for monitoring, reporting, and dispute resolution, making it essential for significant financial transactions where risk sharing is a key consideration.

1. Parties: Identification of the parties entering into the loss share agreement, including their full legal names, registration numbers, and addresses

2. Background: Context of the agreement, including the transaction or arrangement giving rise to the loss-sharing need

3. Definitions and Interpretation: Comprehensive definitions of terms used in the agreement, including financial terms, calculation methodologies, and interpretation rules

4. Scope of Loss Share Arrangement: Detailed description of the assets or portfolio covered by the loss-sharing arrangement

5. Loss Share Mechanics: Specific methodology for calculating and sharing losses, including thresholds, percentages, and timing

6. Payment Procedures: Process and timing for making loss share payments between parties

7. Reporting Requirements: Details of required reports, documentation, and evidence of losses

8. Claims Process: Procedures for submitting, reviewing, and resolving loss share claims

9. Rights and Obligations: Specific responsibilities of each party in managing covered assets and maintaining records

10. Representations and Warranties: Standard and specific representations and warranties from each party

11. Events of Default: Circumstances constituting default and corresponding remedies

12. Term and Termination: Duration of the agreement and circumstances for early termination

13. Dispute Resolution: Procedures for resolving disputes between parties

14. General Provisions: Standard boilerplate clauses including notices, amendments, governing law, etc.