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The Guarantee and Indemnity Agreement is a fundamental security document used in German business transactions where additional security is required for financial or commercial obligations. This document is typically employed when a parent company guarantees its subsidiary's obligations, in project finance transactions, or in corporate lending scenarios. The agreement must comply with German law requirements, particularly the provisions of the German Civil Code (BGB) regarding guarantees (Bürgschaft) and indemnities (Freistellung). It includes detailed provisions on the scope of guaranteed obligations, enforcement mechanisms, and the relationship between the guarantee and the underlying obligation. The document is essential in various contexts, from simple bilateral arrangements to complex multi-party financing structures, and must be carefully drafted to ensure enforceability under German law.

1. Parties: Identification of the Guarantor, the Beneficiary, and the Principal Debtor

2. Background: Context of the guarantee, including details of the underlying obligation being guaranteed

3. Definitions: Definitions of key terms used throughout the agreement, including 'Guaranteed Obligations' and 'Indemnified Amounts'

4. Guarantee: The core guarantee provisions, including scope, nature (independent or accessory), and limitations of the guarantee

5. Indemnity: Independent indemnity obligations of the Guarantor

6. Representations and Warranties: Guarantor's confirmations regarding capacity, authority, and financial condition

7. Preservation of Rights: Provisions ensuring the guarantee remains valid despite variations to underlying obligations or other circumstances

8. Payments: Terms regarding payment obligations, including timing, currency, and payment mechanics

9. Costs and Expenses: Allocation of costs related to the preparation and enforcement of the guarantee

10. Notices: Communication requirements and contact details for formal notices

11. Governing Law and Jurisdiction: Confirmation of German law as governing law and jurisdiction provisions