The Intercompany Promissory Note is a crucial document for formalizing internal financing arrangements within corporate groups operating under German law. It is typically used when one group company provides financing to another, requiring a formal debt instrument that complies with German civil and corporate law requirements. The document combines elements of both a loan agreement and a promissory note (Schuldschein), making it particularly suitable for intercompany financing structures. It needs to address various legal considerations including corporate benefit, arm's length principles, and thin capitalization rules. The document is essential for establishing clear financial obligations between group companies while maintaining compliance with German regulatory requirements and accounting standards.

1. Parties: Identification of the issuer (debtor) and holder (creditor) of the promissory note, including full legal names and registration details

2. Background: Brief context of the intercompany relationship and purpose of the promissory note

3. Definitions: Key terms used in the document, including 'Business Day', 'Interest Period', and any specific financial definitions

4. Promise to Pay: Core provision containing the unconditional promise to pay the principal amount, as required under German law

5. Principal Amount: Specification of the loan amount, currency, and disbursement details

6. Interest: Interest rate, calculation method, and payment dates

7. Repayment: Terms of principal repayment, including maturity date and any installment provisions

8. Payment Mechanics: Details of how and where payments should be made, including account details

9. Tax Provisions: Handling of tax deductions and withholding tax requirements

10. Representations: Basic representations regarding capacity and authority to issue the note

11. Events of Default: Circumstances under which the note becomes immediately due and payable

12. Governing Law and Jurisdiction: Confirmation of German law governance and jurisdiction of German courts