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The Co-Guarantor Agreement is essential in Canadian financial and commercial transactions where multiple parties agree to jointly guarantee a principal debt or obligation. This document is commonly used in business loans, property developments, and commercial financing arrangements where additional security is required beyond the principal debtor's commitments. The agreement must comply with both federal Canadian legislation (such as the Bank Act) and provincial laws governing contracts, securities, and guarantees. It typically includes detailed provisions about the extent of each guarantor's liability, mechanisms for sharing responsibility between co-guarantors, rights of contribution, and enforcement procedures. The document is particularly important in scenarios where lenders require multiple guarantors to strengthen the security of their loans, ensuring all parties understand their obligations and the consequences of default.

1. Parties: Identifies all parties to the agreement including the creditor, principal debtor, and all co-guarantors

2. Background: Explains the context of the principal debt and the reason for the guarantee arrangement

3. Definitions: Defines key terms used throughout the agreement including 'Guaranteed Obligations', 'Principal Debt', and 'Security'

4. Guarantee and Indemnity: Core section establishing the guarantee obligations and indemnification commitments of the co-guarantors

5. Joint and Several Liability: Establishes that co-guarantors are jointly and severally liable for the guaranteed obligations

6. Extent of Guarantee: Defines the scope and limitations of the guarantee obligations

7. Continuing Security: Confirms that the guarantee is ongoing and covers future obligations within the defined scope

8. Preservation of Rights: Establishes that the creditor's rights against one guarantor are not affected by actions taken against other guarantors

9. Representations and Warranties: Statements of fact and assurances made by the co-guarantors

10. Payments and Interest: Details how and when payments must be made, including interest calculations

11. Contribution and Subrogation: Establishes rights between co-guarantors for sharing liability and recovering payments

12. Duration and Release: Specifies how long the guarantee remains in effect and conditions for release

13. Enforcement: Details the creditor's rights to enforce the guarantee

14. Notices: Specifies how formal communications between parties should be made

15. Governing Law and Jurisdiction: Specifies the applicable law and courts for dispute resolution

16. General Provisions: Standard boilerplate clauses including severability, entire agreement, and amendments