Authorized Guarantee Agreement Template for Philippines

The Authorized Guarantee Agreement is a crucial financial instrument in Philippine business transactions, commonly used in situations where additional security is required for financial obligations. This document type is particularly relevant when a creditor (beneficiary) requires extra assurance for a debtor's obligations, such as in loan agreements, construction contracts, or large commercial transactions. The agreement must comply with Philippine law, including the Civil Code, Banking regulations, and relevant financial services legislation. It typically includes detailed provisions on the guarantee's scope, enforcement mechanisms, and parties' rights and obligations. The document is especially important in corporate financing, project development, and international trade where Philippine entities are involved.

1. Parties: Identifies and defines the Guarantor, the Beneficiary, and the Principal Debtor

2. Background: Explains the context of the guarantee, including the underlying obligation being guaranteed

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation rules

4. The Guarantee: Sets out the core guarantee obligations and their scope

5. Maximum Liability: Specifies the maximum amount of the guarantor's liability under the agreement

6. Duration and Validity: Establishes the term of the guarantee and conditions for its validity

7. Demands and Payments: Procedures for making demands under the guarantee and how payments should be made

8. Representations and Warranties: Guarantor's representations about their capacity and authority to provide the guarantee

9. Continuing Security: Establishes the guarantee as a continuing security until all obligations are fulfilled

10. Independent Obligation: Confirms the guarantee as independent from the underlying obligation

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

12. Notices: Communication procedures between parties

13. Assignment and Transfer: Rules regarding the transfer or assignment of rights under the guarantee

14. Governing Law and Jurisdiction: Specifies Philippine law as governing law and defines jurisdiction for disputes

15. Execution: Signature blocks and execution formalities