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Loan Guarantee Agreement
"I need a Loan Guarantee Agreement for our parent company to guarantee a $5 million business expansion loan being taken by our New Zealand subsidiary, with the guarantee to be effective from March 1, 2025."
1. Parties: Identifies the guarantor, the creditor (beneficiary of the guarantee), and the principal debtor
2. Background: Recitals explaining the context of the guarantee, including reference to the principal debt/loan agreement
3. Definitions and Interpretation: Defines key terms and establishes interpretation rules for the agreement
4. Guarantee and Indemnity: Core provisions establishing the guarantee obligations and indemnity provisions
5. Extent and Limits of Guarantee: Defines the scope of the guarantee, including maximum liability if applicable
6. Nature of Guarantee: Specifies that the guarantee is continuing, unconditional, and irrevocable
7. Guarantor's Obligations: Details specific obligations, including payment, compliance, and notification requirements
8. Representations and Warranties: Guarantor's confirmations about their capacity and authority to enter the guarantee
9. Preservation of Rights: Creditor's rights preservation and ability to enforce without affecting guarantee validity
10. Payments: Payment mechanisms, currency, and treatment of taxes
11. Default and Enforcement: Events of default and creditor's enforcement rights
12. Costs and Expenses: Allocation of legal and enforcement costs
13. Notices: Communication requirements and contact details
14. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, and amendment procedures
1. Security Provisions: Required when the guarantee is secured against specific assets
2. Multiple Guarantors: Required when there are multiple guarantors, establishing joint and several liability
3. Corporate Guarantor Provisions: Required when the guarantor is a company, including director's certificates and corporate authority
4. Independent Legal Advice: May be required to ensure enforceability, particularly for individual guarantors
5. Guarantee Limitation: Required when the guarantee amount is capped or limited in specific ways
6. Cross-Guarantee Provisions: Required when there are multiple related guarantees or cross-collateralization
7. Priority Arrangements: Required when there are multiple creditors or security interests
1. Schedule 1 - Principal Loan Agreement Details: Summary of the main loan agreement terms being guaranteed
2. Schedule 2 - Guarantor Information: Detailed information about the guarantor(s) including contact details and identification
3. Schedule 3 - Security Details: Description of any security provided under the guarantee
4. Schedule 4 - Guarantee Limit Calculations: If applicable, detailed breakdown of guarantee caps or limitations
5. Schedule 5 - Form of Demand: Template for making formal demands under the guarantee
6. Appendix A - Corporate Authority Documentation: Required corporate resolutions and certificates for corporate guarantors
7. Appendix B - Independent Legal Advice Certificates: Certificates from lawyers confirming advice given to guarantors
Authors
Banking & Financial Services
Real Estate & Property
Commercial Lending
Investment & Securities
Construction & Infrastructure
Manufacturing
Retail & Wholesale
Agriculture & Farming
Professional Services
Healthcare
Legal
Finance
Risk Management
Compliance
Commercial Banking
Credit Assessment
Corporate Finance
Operations
Documentation
Treasury
Legal Counsel
Credit Manager
Risk Assessment Officer
Commercial Lending Manager
Corporate Finance Manager
Compliance Officer
Financial Controller
Chief Financial Officer
Commercial Banking Officer
Credit Risk Analyst
Legal Director
Loan Officer
Security Trustee
Corporate Secretary
Business Development Manager
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