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The Profit Sharing Loan Agreement is utilized when traditional debt financing mechanisms may not be suitable or when parties seek to align the lender's returns with the borrower's performance. This document is particularly relevant in the Belgian market where specific legal frameworks govern such hybrid financing instruments. The agreement is commonly used for growth financing, startup funding, or project-specific financing where the lender is willing to share in both the upside and downside of the borrower's performance. It includes detailed provisions on profit calculation, verification rights, reporting requirements, and protection mechanisms for both parties. The document must comply with Belgian civil law, financial regulations, and tax legislation, particularly regarding the treatment of profit-sharing payments versus traditional interest. This type of agreement is increasingly popular in situations where companies seek flexible financing options while maintaining control over their operations.

1. Parties: Identification of the Lender and Borrower, including full legal names, registration details, and addresses

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

3. Definitions and Interpretation: Definitions of key terms including 'Profit', 'Calculation Period', 'Payment Dates', and interpretation rules

4. Loan Amount and Disbursement: Details of the principal amount, disbursement conditions and procedure

5. Profit Sharing Mechanism: Formula for calculating profit share, definition of relevant profits, calculation periods

6. Payment Terms: Payment schedule, method of payment, currency, and payment procedures

7. Calculation and Verification of Profits: Process for calculating profits, accounting principles, audit rights

8. Representations and Warranties: Standard representations from both parties regarding capacity, authority, and financial condition

9. Borrower Covenants: Obligations of the borrower regarding business operation, financial management, and reporting

10. Events of Default: Circumstances constituting default and consequences thereof

11. Remedies: Rights and remedies available to the lender upon default

12. Term and Termination: Duration of the agreement and circumstances for early termination

13. Confidentiality: Obligations regarding confidential information

14. Governing Law and Jurisdiction: Confirmation of Belgian law application and jurisdiction for disputes

15. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment