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The Co-Financing Agreement is utilized when multiple financial institutions collaborate to provide financing that exceeds the capacity or risk appetite of a single lender. This document is particularly crucial in the Indian market where large-scale projects often require participation from both domestic and international financial institutions. The agreement must comply with Indian regulatory requirements, including RBI guidelines, FEMA regulations for foreign lenders, and the Banking Regulation Act. It typically includes detailed provisions for facility administration, security sharing, voting rights, decision-making processes, and the relationship between co-financiers. The document is essential for complex financing structures where risk sharing and coordinated action among lenders are paramount.

1. Parties: Identification of all co-financiers and the borrower(s)

2. Background: Context of the financing arrangement, purpose of the facility, and relationship between the parties

3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement

4. Facility Amount and Purpose: Total facility amount, contribution from each co-financier, and permitted use of funds

5. Conditions Precedent: Conditions that must be satisfied before the facility becomes effective

6. Disbursement Procedures: Process and requirements for drawing down the facility

7. Interest and Fees: Interest rates, calculation methods, and applicable fees

8. Repayment Terms: Schedule and mechanics of repayment

9. Security Structure: Security arrangements and ranking between co-financiers

10. Intercreditor Provisions: Rights and obligations between co-financiers, voting mechanisms, and decision-making process

11. Representations and Warranties: Statements of fact and assurances from the borrower

12. Covenants: Positive and negative obligations of the borrower

13. Events of Default: Circumstances constituting default and consequences

14. Administration and Agency: Appointment and role of facility agent if applicable

15. Payments and Application of Proceeds: Payment mechanics and distribution of recoveries

16. Miscellaneous: Standard boilerplate provisions including notices, amendments, governing law

17. Governing Law and Jurisdiction: Applicable law and dispute resolution mechanisms