Parent Guarantee Agreement Template for Belgium

The Parent Guarantee Agreement serves as a crucial financial security instrument in corporate structures operating under Belgian law. It is typically used when a subsidiary requires additional credibility or financial backing for its business operations, such as obtaining loans, entering into significant commercial contracts, or participating in major projects. The document outlines the parent company's commitment to fulfill specified obligations if the subsidiary fails to do so, including detailed terms for enforcement, payment mechanisms, and compliance with Belgian corporate benefit requirements. This agreement is particularly important in cross-border transactions where Belgian subsidiaries need parent company support, and must be carefully structured to comply with Belgian civil law, financial regulations, and corporate legislation. The Parent Guarantee Agreement should address specific Belgian law requirements regarding corporate authority, financial assistance rules, and enforcement mechanisms.

1. Parties: Identification of the Guarantor (parent company), the Beneficiary, and the Principal Debtor (subsidiary)

2. Background: Context of the guarantee, including description of the underlying relationship and obligations being guaranteed

3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including references to Belgian law concepts

4. Guarantee and Indemnity: Core guarantee provisions, scope of guaranteed obligations, and nature of guarantee (independent guarantee vs. suretyship)

5. Representations and Warranties: Guarantor's representations including corporate capacity, authority, and validity of obligations

6. Payment Mechanics: Terms for making payments under the guarantee, including timing, currency, and payment instructions

7. Tax Gross-up and Indemnities: Provisions for tax-related payments and indemnities

8. Costs and Expenses: Allocation of costs related to preparation, enforcement, and maintenance of the guarantee

9. Duration and Release: Term of the guarantee and conditions for release or termination

10. Changes to Parties: Rules regarding assignment, transfer, and succession

11. Notices: Communication procedures and contact details

12. Governing Law and Jurisdiction: Confirmation of Belgian law governance and jurisdiction provisions