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The Loan Sharing Agreement is a critical document used in Canadian financial transactions where multiple lenders wish to participate in a single loan facility while maintaining a coordinated approach to loan administration. This agreement becomes necessary when a primary lender seeks to distribute loan exposure among other financial institutions or when multiple lenders want to collaborate on a significant financing transaction. The document addresses key aspects such as participation percentages, payment distributions, voting mechanisms, and administrative procedures, all while ensuring compliance with Canadian federal and provincial regulations. The agreement is particularly important in syndicated lending scenarios and must conform to Canadian banking laws, securities regulations, and financial services requirements. The Loan Sharing Agreement typically works in conjunction with the primary loan documentation and may include provisions for future transfers of participation interests.

1. Parties: Identifies all parties to the agreement, including the primary lender, participating lenders, and any loan administrator or agent

2. Background: Sets out the context of the loan sharing arrangement, including reference to the primary loan agreement and the intention to share the loan

3. Definitions: Defines key terms used throughout the agreement

4. Loan Participation: Details the percentage or amount of participation by each lender and the nature of their interest

5. Purchase and Sale of Participations: Outlines the terms under which participations are purchased and transferred

6. Payments and Distributions: Explains how payments received from the borrower will be distributed among participating lenders

7. Administration of the Loan: Describes how the loan will be administered and who has authority to make decisions

8. Voting Rights: Sets out voting rights of participating lenders on material decisions affecting the loan

9. Information Sharing: Establishes requirements for sharing loan-related information among participants

10. Representations and Warranties: Contains statements of fact and assurances from each party

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

12. Amendments and Waivers: Procedures for modifying the agreement or waiving rights

13. Governing Law and Jurisdiction: Specifies applicable law and courts having jurisdiction

14. General Provisions: Standard boilerplate provisions including notices, assignment, and severability