Loan Sharing Agreement for Germany

Loan Sharing Agreement Template for Germany

A comprehensive agreement governed by German law that establishes the framework for multiple lenders to participate in a shared loan arrangement. The document outlines the rights, obligations, and relationships between all participating lenders, including their respective shares in the loan, payment distribution mechanisms, decision-making procedures, and administrative arrangements. It ensures compliance with German banking regulations and civil law requirements while providing clear procedures for loan administration, transfer of interests, and collective action by the lenders.

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What is a Loan Sharing Agreement?

The Loan Sharing Agreement is essential when multiple lenders wish to participate in a single loan facility while maintaining clear governance and risk-sharing arrangements. This document type is commonly used in German banking and finance transactions where the size or risk profile of a loan makes it desirable to distribute participation among multiple lenders. The agreement complies with German civil law requirements and banking regulations, providing detailed provisions for loan administration, payment allocation, and collective decision-making. It includes specific mechanisms for transfer of interests, voting procedures, and the appointment of administrative agents. The Loan Sharing Agreement is particularly relevant for syndicated lending, project finance, and large corporate loans where risk diversification is desired.

What sections should be included in a Loan Sharing Agreement?

1. Parties: Identification of all participating lenders and the borrower(s), including their legal details and addresses

2. Background: Context of the loan sharing arrangement, including reference to the primary loan agreement

3. Definitions: Definitions of key terms used throughout the agreement

4. Loan Participation: Details of each lender's share in the loan, including amounts and percentages

5. Administration of the Loan: Appointment and roles of the loan administrator, including their powers and responsibilities

6. Payments and Distribution: Mechanisms for receiving and distributing payments among lenders

7. Decision Making: Procedures for collective decision-making, including voting rights and majority requirements

8. Transfer and Assignment: Rules and procedures for transferring loan shares to other parties

9. Representations and Warranties: Standard representations and warranties from each participating lender

10. Information Rights: Rights of lenders to receive information about the loan and borrower

11. Costs and Expenses: Allocation of costs and expenses among lenders

12. Termination: Circumstances and procedures for terminating the loan sharing arrangement

13. Governing Law and Jurisdiction: Specification of German law as governing law and jurisdiction for disputes

What sections are optional to include in a Loan Sharing Agreement?

1. Security Sharing: Required when the loan is secured by collateral, detailing how security interests are shared

2. Defaulting Lender Provisions: Include when participants want specific provisions for handling defaulting lenders

3. Tax Provisions: Detailed tax provisions when participants are from different tax jurisdictions

4. Subordination: Required when there are different classes of lenders with different priorities

5. Currency Provisions: Include when the loan involves multiple currencies

6. Banking Syndicate Provisions: Required when professional banking institutions are involved as lenders

What schedules should be included in a Loan Sharing Agreement?

1. Schedule 1 - Lender Commitments: Detailed breakdown of each lender's commitment amount and percentage share

2. Schedule 2 - Administrative Details: Contact details and bank account information for all parties

3. Schedule 3 - Form of Transfer Certificate: Standard form for documenting transfers of loan shares

4. Schedule 4 - Payment Procedures: Detailed procedures for processing and distributing payments

5. Schedule 5 - Voting Procedures: Detailed procedures for conducting votes and making collective decisions

6. Appendix A - Original Loan Agreement: Copy of the primary loan agreement being shared

7. Appendix B - Security Documents: Copies of any security documents related to the loan

Authors

Alex Denne

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

Jurisdiction

Germany

Publisher

Genie AI

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking & Financial Services

Investment Management

Real Estate

Infrastructure

Private Equity

Corporate Finance

Commercial Lending

Project Finance

Asset Management

Construction & Development

Relevant Teams

Legal

Finance

Treasury

Credit Risk

Compliance

Corporate Finance

Loan Administration

Investment

Portfolio Management

Syndications

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Banking Lawyer

Loan Officer

Credit Manager

Treasury Manager

Risk Manager

Syndication Manager

Portfolio Manager

Compliance Officer

Investment Manager

Financial Controller

Corporate Finance Manager

Debt Finance 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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