Corporate Guarantee Agreement Template for Philippines

The Corporate Guarantee Agreement is a crucial financial instrument in Philippine business transactions, commonly used when a corporation needs to provide financial backing for another entity's obligations. This document is essential in various scenarios, such as parent companies guaranteeing subsidiaries' loans, corporate group arrangements, or major business transactions requiring additional security. The agreement must comply with Philippine legal requirements, including the Civil Code, Corporation Code, and relevant banking regulations. It typically includes detailed provisions on the guarantee's scope, enforcement mechanisms, representations and warranties, and necessary corporate authorizations. The document is particularly important in the Philippine context where corporate relationships and financial security arrangements play a vital role in business operations.

1. Parties: Identifies the Guarantor (the corporation providing the guarantee), the Beneficiary (the party receiving the guarantee), and the Principal Debtor (whose obligations are being guaranteed)

2. Background: Recitals explaining the context of the guarantee, including details of the underlying obligation being guaranteed

3. Definitions and Interpretation: Defines key terms used in the agreement and sets out interpretation rules

4. Guarantee and Indemnity: Core section establishing the guarantee obligations, including the scope and nature of the guarantee

5. Maximum Liability: Specifies the maximum amount for which the Guarantor can be held liable

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

7. Continuing Security: Establishes that the guarantee remains in force until all guaranteed obligations are fulfilled

8. Payments: Terms regarding how and when payments under the guarantee must be made

9. Tax Gross-up: Provisions for handling any tax implications of guarantee payments

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

11. Duration and Release: Terms regarding the duration of the guarantee and conditions for its release

12. Notices: Communication procedures between parties

13. Governing Law and Jurisdiction: Specifies Philippine law as governing law and sets out jurisdiction for disputes

14. Execution: Signature blocks and execution formalities