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The Profit Participating Loan Agreement under Swiss law serves as a hybrid financing instrument, bridging the gap between conventional debt and equity financing. This document is typically used when parties seek to establish a financing arrangement that allows the lender to participate in the borrower's success while maintaining debt characteristics for tax and regulatory purposes. It is particularly suitable for growth companies, real estate developments, and project financing where traditional bank financing may not be optimal. The agreement must comply with Swiss banking regulations, tax laws, and the Swiss Code of Obligations, particularly regarding interest rate provisions and profit participation mechanisms. It includes detailed provisions for calculating and paying both fixed interest and profit participation components, information rights to verify calculations, and typically contains robust creditor protection mechanisms.

1. Parties: Identification of the Lender and Borrower with full legal details

2. Background: Context of the loan arrangement and purpose

3. Definitions and Interpretation: Definitions of key terms including Profit Participation, Calculation Period, and other technical terms

4. The Loan: Principal amount, purpose, and drawdown mechanics

5. Interest and Profit Participation: Base interest rate and detailed mechanism for calculating and paying profit participation

6. Calculation and Payment Provisions: Specifics of how and when calculations are made, payment dates, and payment mechanics

7. Repayment and Prepayment: Terms for repayment of principal and any prepayment provisions

8. Representations and Warranties: Standard and specific representations by the borrower

9. Information Undertakings: Requirements for financial and other information to verify profit calculations

10. General Undertakings: Borrower's operational and financial covenants

11. Events of Default: Circumstances constituting default and consequences

12. Tax Provisions: Treatment of taxes on interest and profit participation payments

13. Changes to Parties: Assignment and transfer provisions

14. Administration: Notice provisions and administrative matters

15. Governing Law and Jurisdiction: Swiss law as governing law and jurisdiction provisions