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The Intercompany Loan Agreement is essential for documenting financial arrangements between affiliated companies under German law. It is typically used when one group company provides financing to another group company, whether for operational needs, expansion projects, or restructuring purposes. The agreement must comply with German legal requirements, including the German Civil Code (BGB) and Commercial Code (HGB), while addressing corporate law restrictions on capital maintenance and transfer pricing regulations. The document should be structured to demonstrate arm's length terms and maintain proper documentation for tax and audit purposes. Key considerations include interest rate determination, security arrangements (if any), and compliance with group treasury policies. This agreement is particularly important in the German context due to strict corporate law requirements and the need for clear documentation of intercompany financial relationships.

1. Parties: Identification of the lender and borrower entities, including registration details as required under German law

2. Background: Context of the intercompany loan and relationship between the parties

3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including German law-specific concepts

4. The Loan: Core loan terms including amount, purpose, and drawdown conditions

5. Interest: Interest rate, calculation method, and payment terms in compliance with German arm's length principles

6. Repayment: Repayment terms, schedule, and early repayment provisions

7. Representations and Warranties: Standard representations regarding corporate existence, power, and authority to enter into the agreement

8. Borrower Covenants: Positive and negative covenants, including information requirements and financial covenants

9. Events of Default: Circumstances constituting default and consequences

10. Tax Provisions: Treatment of taxes, including withholding tax provisions

11. Payments and Calculations: Payment mechanics, business day convention, and calculation rules

12. Notices: Communication procedures between parties

13. Assignment and Transfer: Restrictions on transfer of rights and obligations

14. Governing Law and Jurisdiction: Explicit choice of German law and jurisdiction