Loan Sharing Agreement Template for New Zealand

The Loan Sharing Agreement is essential in scenarios where multiple lenders collaborate to provide financing to a borrower, particularly in large-scale financing arrangements common in commercial, real estate, or infrastructure projects. This document type is crucial when the loan amount exceeds a single lender's capacity or risk appetite, necessitating the participation of multiple financial institutions. The agreement must comply with New Zealand's regulatory framework, including the Credit Contracts and Consumer Finance Act 2003, Fair Trading Act 1986, and relevant banking regulations. It details the mechanics of loan participation, including commitment shares, interest allocation, voting rights, and administrative procedures. The Loan Sharing Agreement also establishes the relationship between lenders, defining their respective rights, obligations, and the procedures for making collective decisions regarding the loan facility.

1. Parties: Identifies and defines all parties to the loan sharing agreement, including lenders, borrowers, and any facility agent or security trustee

2. Background: Sets out the context of the agreement, including the purpose of the loan and the intention to share the lending obligations

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

4. Loan Amount and Shares: Specifies the total loan amount and each lender's share or participation percentage

5. Purpose and Utilization: Details the approved purpose of the loan and how funds can be drawn down

6. Interest and Fees: Specifies interest rates, calculation methods, and any fees payable

7. Repayment Terms: Sets out the repayment schedule, prepayment provisions, and allocation of payments between lenders

8. Representations and Warranties: Standard representations and warranties from all parties

9. Lender Obligations: Details the obligations of each lender, including funding commitments and participation requirements

10. Decision Making and Administration: Procedures for making decisions affecting the loan and administrative matters

11. Events of Default: Lists circumstances constituting default and consequences

12. Payments and Calculations: Mechanics for making and receiving payments, including payment calculations and distributions

13. Costs and Expenses: Allocation of costs and expenses among parties

14. Confidentiality: Provisions regarding confidential information and its treatment

15. Notices: Requirements for giving notices under the agreement

16. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, and amendment procedures