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The Loan Guarantee Agreement is a crucial financial security instrument used when a lender requires additional assurance for a loan beyond the borrower's own creditworthiness. This document is commonly used in various commercial contexts across Canada, from small business loans to large corporate financing arrangements. The agreement must comply with Canadian federal legislation such as the Bank Act and Financial Administration Act, as well as provincial laws governing contracts and security interests. It outlines the guarantor's obligations, enforcement mechanisms, and the specific circumstances under which the guarantee can be called upon. The document is essential in risk mitigation strategies for lenders and often forms part of a larger suite of loan and security documentation.

1. Parties: Identifies the guarantor, lender, and borrower with their full legal names and addresses

2. Background: Explains the context of the underlying loan and the purpose of the guarantee

3. Definitions: Defines key terms used throughout the agreement

4. Guarantee and Indemnity: Core section establishing the guarantee obligations and scope of the guarantor's liability

5. Nature of Guarantee: Specifies whether the guarantee is continuing, unlimited, or subject to a maximum amount

6. Guarantor's Representations and Warranties: Key statements about the guarantor's capacity and authority to provide the guarantee

7. Enforcement Rights: Sets out the lender's rights to enforce the guarantee and circumstances triggering enforcement

8. Preservation of Rights: Establishes that the lender's rights are preserved despite various circumstances that might otherwise affect them

9. Payments: Details how and when payments must be made under the guarantee

10. Costs and Expenses: Allocates responsibility for costs related to the guarantee

11. Assignment and Transfer: Governs the ability to transfer rights under the guarantee

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

13. Governing Law and Jurisdiction: Specifies that Canadian law governs and establishes jurisdiction for disputes

14. Execution: Signature blocks and execution requirements