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Prepaid Forward Purchase Agreement for Germany

Prepaid Forward Purchase Agreement Template for Germany

A German law-governed agreement that establishes the terms for a prepaid forward purchase transaction, where one party makes an upfront payment to purchase an asset that will be delivered or settled at a future date. The document details the calculation methods, settlement procedures, and rights and obligations of the parties under German legal and regulatory framework, including BaFin requirements. It incorporates necessary risk disclosures, tax provisions, and regulatory compliance elements specific to German jurisdiction, while addressing both physical and cash settlement options.

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Prepaid Forward Purchase Agreement

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What is a Prepaid Forward Purchase Agreement?

The Prepaid Forward Purchase Agreement is a sophisticated financial instrument used when parties wish to structure a transaction involving an upfront payment for future delivery or settlement of an asset. This document is particularly relevant in German markets and must comply with German civil law, financial regulations, and BaFin requirements. It is commonly used in corporate finance, commodity transactions, and strategic investments where parties seek to lock in future prices while providing immediate funding. The agreement details payment terms, delivery obligations, settlement procedures, and risk allocations, incorporating specific German legal requirements and market practices. It is essential for transactions requiring certainty in future delivery or settlement while addressing immediate funding needs.

What sections should be included in a Prepaid Forward Purchase Agreement?

1. Parties: Identification of the parties to the agreement, including registration details and addresses

2. Background: Context of the transaction and purpose of the agreement

3. Definitions and Interpretation: Key terms used in the agreement, calculation methods, and interpretation rules

4. Purchase and Sale Obligation: Core transaction terms including the underlying asset, prepayment amount, and settlement obligations

5. Calculation and Valuation: Methods for determining the final settlement amount, reference prices, and adjustments

6. Settlement Terms: Procedures for physical or cash settlement, timing, and delivery requirements

7. Representations and Warranties: Standard and transaction-specific representations by both parties

8. Covenants: Ongoing obligations of the parties during the term of the agreement

9. Events of Default: Circumstances constituting default and consequences

10. Termination: Early termination rights and procedures

11. Tax Provisions: Tax obligations, withholding requirements, and gross-up provisions

12. Notices: Communication procedures between parties

13. Governing Law and Jurisdiction: German law as governing law and jurisdiction provisions

14. General Provisions: Standard boilerplate clauses including amendments, assignments, and severability

What sections are optional to include in a Prepaid Forward Purchase Agreement?

1. Collateral Arrangements: Required when parties agree to collateralize obligations under the agreement

2. Market Disruption: Include when the underlying asset is traded on public markets to address market disruption events

3. Regulatory Compliance: Required when either party is subject to specific regulatory requirements

4. Break Clauses: Optional provisions allowing early termination on specific dates or events

5. Third Party Rights: Required when certain rights are extended to third parties

6. Additional Regular Payments: Include when the structure includes interim payments or distributions

7. Force Majeure: Optional broader force majeure provisions beyond standard market disruption

8. Hedging Provisions: Include when parties need to address hedging activities

What schedules should be included in a Prepaid Forward Purchase Agreement?

1. Schedule 1 - Calculation Methods: Detailed formulae and calculation procedures for determining payments

2. Schedule 2 - Form of Confirmation: Template for transaction-specific terms and confirmations

3. Schedule 3 - Settlement Procedures: Detailed procedures for physical or cash settlement

4. Schedule 4 - Account Details: Banking and securities account information for settlements

5. Appendix A - Risk Disclosures: Mandatory risk warnings and disclosures

6. Appendix B - Tax Documentation: Required tax forms and documentation

7. Appendix C - Collateral Terms: Detailed collateral requirements and procedures if applicable

8. Appendix D - Form of Transfer Notice: Template for physical settlement notices

Authors

Alex Denne

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

Jurisdiction

Germany

Document Type

Purchase Agreement

Cost

Free to use
Relevant legal definitions




























































Clauses








































Relevant Industries

Financial Services

Banking

Investment Management

Commodities

Energy

Mining

Manufacturing

Insurance

Agriculture

Private Equity

Hedge Funds

Corporate Finance

Relevant Teams

Legal

Finance

Treasury

Trading

Risk Management

Compliance

Tax

Operations

Corporate Finance

Structured Products

Documentation

Investment Management

Relevant Roles

Chief Financial Officer

Treasury Manager

Legal Counsel

Derivatives Trader

Risk Manager

Structured Products Manager

Investment Manager

Corporate Finance Director

Compliance Officer

Tax Director

Trading Operations Manager

Portfolio Manager

Finance Director

General Counsel

Transaction Manager

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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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