������Ƶ

The Profit Participating Loan Agreement is utilized in situations where traditional debt financing needs to be combined with equity-like returns, particularly suitable for growth companies in Indonesia. This document establishes a financing arrangement where the lender provides funding in return for both fixed interest payments and a share of the borrower's profits, creating a hybrid financing structure. The agreement must comply with Indonesian regulatory requirements, including those set by the Financial Services Authority (OJK) and Bank Indonesia. It typically includes comprehensive provisions covering loan disbursement, profit-sharing calculations, financial covenants, reporting requirements, and security arrangements if applicable. This type of agreement is particularly relevant in scenarios where companies seek growth capital but prefer not to dilute equity, while lenders seek higher returns than traditional loan products.

1. Parties: Identification of the lender and borrower, including registration details and addresses

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

3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including specific financial and technical terms related to profit participation

4. Loan Amount and Purpose: Specification of the loan amount, currency, and permitted use of funds

5. Profit Participation Mechanism: Detailed structure of how profit sharing will be calculated and paid

6. Drawdown and Conditions Precedent: Conditions for loan disbursement and drawdown procedures

7. Interest and Profit Share Payments: Terms for base interest (if any) and profit share calculations, payment dates, and payment mechanics

8. Repayment Terms: Loan repayment schedule, prepayment provisions, and mandatory prepayment events

9. Representations and Warranties: Standard and specific representations and warranties from both parties

10. Covenants: Financial and operational covenants, including information rights and business conduct requirements

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

12. Tax Provisions: Treatment of taxes on interest, profit share payments, and withholding requirements

13. Changes to Parties: Assignment and transfer provisions

14. Governing Law and Jurisdiction: Specification of Indonesian law as governing law and jurisdiction for disputes

15. Miscellaneous: Standard boilerplate provisions including notices, amendments, and severability