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Intercompany Revolving Loan Agreement for Germany

Intercompany Revolving Loan Agreement Template for Germany

This agreement governs revolving loan arrangements between related companies within the same corporate group under German law. It establishes a flexible borrowing facility where the borrower can draw down, repay, and reborrow funds up to a specified limit during the facility period. The agreement incorporates German legal requirements, including civil law provisions, corporate law restrictions, and transfer pricing regulations. It details the loan terms, interest calculations, drawdown mechanisms, representations, and covenants while ensuring compliance with German regulatory and tax requirements.

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Intercompany Revolving Loan Agreement

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What is a Intercompany Revolving Loan Agreement?

The Intercompany Revolving Loan Agreement is essential for multinational corporations and German corporate groups managing internal funding needs. It provides a flexible financing mechanism allowing group companies to efficiently manage cash resources while complying with German legal requirements. This document is particularly useful for ongoing operational funding needs, working capital management, and group treasury operations. The agreement must comply with German civil and corporate law requirements, including capital maintenance rules, and incorporate appropriate transfer pricing provisions to satisfy tax authorities. It's commonly used in group financing structures where regular funding needs exist and traditional external financing may be less efficient or desirable.

What sections should be included in a Intercompany Revolving Loan Agreement?

1. Parties: Identification of the lender and borrower entities, including registration details and authorized representatives

2. Background: Context of the intercompany relationship and purpose of the revolving loan facility

3. Definitions: Definitions of key terms used throughout the agreement

4. The Facility: Details of the revolving loan facility, including maximum amount, purpose, and availability period

5. Drawing Mechanism: Procedures and conditions for requesting and making drawdowns under the facility

6. Interest: Interest rate determination, calculation periods, and payment provisions

7. Repayment and Prepayment: Terms for regular repayment and voluntary/mandatory prepayment provisions

8. Representations and Warranties: Standard corporate representations and specific financial condition warranties

9. Covenants: Financial and operational covenants applicable to the borrower

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

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

12. Transfer Pricing Compliance: Provisions ensuring compliance with transfer pricing regulations

13. Notices: Communication procedures between parties

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

What sections are optional to include in a Intercompany Revolving Loan Agreement?

1. Security: Include when the loan is to be secured by any form of collateral or guarantee

2. Subordination: Required when the loan needs to be subordinated to other financial obligations

3. Currency Provisions: Necessary for loans available in multiple currencies

4. Tax Gross-Up: Include when the borrower might be required to gross up payments for tax purposes

5. Regulatory Compliance: Additional section for specific regulatory requirements if either party is subject to special regulations

6. Group Treasury Management: Include when the loan is part of broader group treasury management arrangements

7. Change of Control: Required when changes in group structure might affect the loan arrangement

What schedules should be included in a Intercompany Revolving Loan Agreement?

1. Form of Drawdown Request: Standard form for requesting drawdowns under the facility

2. Calculation of Interest Rate: Detailed methodology for interest rate calculation and adjustments

3. Transfer Pricing Documentation: Documentation supporting the arm's length nature of the interest rate

4. Compliance Certificate: Template for periodic confirmation of compliance with agreement terms

5. Group Structure Chart: Current group structure showing relationship between parties

6. Required Authorizations: List of corporate and regulatory authorizations obtained

7. Payment Schedule: If applicable, schedule of planned drawdowns and repayments

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Germany

Publisher

Ƶ

Document Type

Financing Agreement

Cost

Free to use
Relevant legal definitions












































Clauses


































Relevant Industries

Manufacturing

Technology

Retail

Energy

Financial Services

Healthcare

Real Estate

Automotive

Consumer Goods

Infrastructure

Telecommunications

Professional Services

Relevant Teams

Legal

Finance

Treasury

Tax

Compliance

Accounting

Corporate Secretariat

Risk Management

Internal Audit

Relevant Roles

Chief Financial Officer

Treasury Manager

Finance Director

Group Controller

Tax Director

Legal Counsel

Corporate Lawyer

Financial Controller

Treasury Operations Manager

Group Accountant

Compliance Officer

Transfer Pricing Manager

Corporate Secretary

Finance Manager

Group Treasury Director

Industries










Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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