Secured Demand Promissory Note for Germany

Secured Demand Promissory Note Template for Germany

A Secured Demand Promissory Note under German law is a formal financial instrument that combines a promise to pay a specified sum with security interests in specific assets. The document, governed by German civil and commercial law, particularly the Bürgerliches Gesetzbuch (BGB) and Wechselgesetz, creates an unconditional obligation to pay on demand while providing the creditor with security interests in specified collateral. It includes detailed provisions for the creation, perfection, and enforcement of security interests, complying with German security interest registration requirements and enforcement procedures.

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What is a Secured Demand Promissory Note?

The Secured Demand Promissory Note is commonly used in German commercial lending transactions where creditors require both immediate access to payment obligations and security for their loans. This document type combines the features of a traditional promissory note with security arrangements, providing creditors with multiple enforcement options. The security component typically includes detailed collateral descriptions, perfection requirements, and enforcement mechanisms compliant with German law. The document is particularly useful in situations requiring rapid enforcement capabilities while maintaining the protection of security interests. When properly structured, a Secured Demand Promissory Note provides creditors with both the procedural advantages of a promissory note under the Wechselgesetz and the practical benefits of having recourse to specific collateral.

What sections should be included in a Secured Demand Promissory Note?

1. Parties: Identification of the maker (promisor) and payee (promisee) with full legal names and addresses

2. Background: Context of the debt obligation and security arrangement

3. Definitions: Key terms used in the document, including 'Secured Obligations', 'Collateral', and 'Event of Default'

4. Promise to Pay: Unconditional promise to pay a specific sum with details of the principal amount, currency, and payment terms

5. Interest: Interest rate, calculation method, and payment frequency

6. Security Interest: Description of the security interest being granted and the secured obligations

7. Representations and Warranties: Basic representations regarding authority, ownership of collateral, and absence of encumbrances

8. Covenants: Obligations regarding maintenance and protection of collateral

9. Events of Default: Circumstances that trigger immediate payment obligation

10. Enforcement: Rights and remedies upon default, including realization of security

11. Notices: Method and addresses for formal communications

12. Governing Law: Confirmation of German law application and jurisdiction

What sections are optional to include in a Secured Demand Promissory Note?

1. Additional Security Provisions: Used when multiple forms of security are provided or special security arrangements apply

2. Guarantees: Include when third-party guarantees secure the obligation

3. Insurance Requirements: Required when specific insurance must be maintained on collateral

4. Registration Rights: Include when security interests require registration in public registers

5. Transfer and Assignment: Include when negotiability or transfer restrictions are required

6. Tax Provisions: Include when specific tax considerations affect the security arrangement

7. Currency Provisions: Used when payments may be made in multiple currencies

What schedules should be included in a Secured Demand Promissory Note?

1. Schedule 1 - Collateral Description: Detailed description of all assets serving as collateral

2. Schedule 2 - Payment Schedule: If installment payments are contemplated, detailed payment schedule

3. Schedule 3 - Security Documents: List and copies of additional security documents

4. Schedule 4 - Form of Notice: Standard forms for various notices required under the note

5. Appendix A - Registration Requirements: Details of required registrations for security interests

6. Appendix B - Existing Encumbrances: List of any permitted existing encumbrances on the collateral

Authors

Alex Denne

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

Jurisdiction

Germany

Publisher

Genie AI

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant Industries

Banking & Financial Services

Commercial Real Estate

Manufacturing

Industrial

Infrastructure

Energy

Technology

Telecommunications

Healthcare

Agriculture

Transportation & Logistics

Construction

Retail

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Credit Administration

Corporate Secretariat

Business Development

Commercial Operations

Security Administration

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Credit Manager

Legal Counsel

Corporate Lawyer

Compliance Officer

Risk Manager

Financial Controller

Banking Relationship Manager

Collateral Manager

Security Trustee

Commercial Director

Business Development Manager

Corporate Secretary

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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