The Guarantee Agreement For Loan is a critical document in Canadian commercial lending practices, commonly used when additional security is required for a loan facility. This agreement is essential when a lender requires extra assurance beyond the principal debtor's covenant, typically in situations involving parent company support for subsidiaries, personal guarantees for small business loans, or cross-guarantees within corporate groups. The document must comply with both federal Canadian legislation and provincial laws, particularly regarding security interests and contract enforcement. It typically includes detailed provisions about the scope of guaranteed obligations, enforcement mechanisms, guarantor's rights and waivers, and specific requirements for validity under Canadian law. This type of agreement is particularly important in commercial financing transactions where the lender seeks to mitigate credit risk by obtaining additional support for the borrower's obligations.

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

2. Background: Context of the loan agreement and reason for guarantee

3. Definitions: Key terms used throughout the agreement including 'Guaranteed Obligations', 'Event of Default', etc.

4. Guarantee: Core guarantee provisions, including scope and nature of the guarantee (continuing, absolute, unconditional)

5. Payment Obligations: Details of when and how the guarantor must pay, including payment on demand

6. Nature of Guarantor's Liability: Specification that liability is joint and several, primary or secondary

7. Preservation of Rights: Lender's rights regarding variations to the loan, releasing other guarantors, etc.

8. Representations and Warranties: Guarantor's confirmations about their capacity and authority

9. Continuing Security: Confirmation that the guarantee remains in effect until obligations are fully discharged

10. Enforcement: Lender's rights upon default and enforcement process

11. Costs and Indemnity: Guarantor's obligation to pay costs and provide indemnity

12. Notices: How formal communications between parties should be made

13. General Provisions: Standard boilerplate including governing law, assignment, amendments