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Guarantee Fee Agreement Template for India

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Key Requirements PROMPT example:

Guarantee Fee Agreement

"I need a Guarantee Fee Agreement for our parent company providing a corporate guarantee to our subsidiary's bank loan, with a 2% annual fee payable quarterly starting March 2025, governed by Indian law."

Document background
A Guarantee Fee Agreement is essential in transactions where one party provides a guarantee to support another party's obligations in exchange for a fee. This document is commonly used in Indian business and financial contexts where guarantees are required for various purposes such as loans, project financing, or commercial transactions. The agreement ensures clarity on the fee arrangement between the guarantor and the beneficiary, establishing payment terms, calculation methods, and related obligations. It must comply with Indian legal requirements, including the Indian Contract Act, 1872, stamp duty laws, and relevant banking regulations if financial institutions are involved. The document is particularly important in corporate group structures, project finance arrangements, and international trade transactions where guarantees are a crucial part of the security package.
Suggested Sections

1. Parties: Identification of the guarantor, beneficiary, and any other relevant parties

2. Background: Context of the guarantee arrangement and the reason for the guarantee fee

3. Definitions and Interpretation: Definitions of key terms and interpretation rules

4. Guarantee Fee: Details of the fee structure, calculation method, and basis

5. Payment Terms: Timing, method, and currency of fee payments

6. Duration: Term of the agreement and conditions for extension or termination

7. Representations and Warranties: Standard representations by both parties regarding capacity and authority

8. Obligations of the Parties: Key responsibilities of both the guarantor and beneficiary

9. Events of Default: Circumstances constituting default and consequences

10. Termination: Grounds for termination and the process

11. Notices: Communication protocols and contact details

12. Governing Law and Jurisdiction: Specification of Indian law as governing law and jurisdiction details

13. Boilerplate Clauses: Standard clauses including entire agreement, amendments, and severability

Optional Sections

1. Security: Include when additional security is required for the guarantee fee payments

2. Tax Provisions: Include detailed tax clauses when cross-border elements exist or specific tax arrangements are needed

3. Currency Provisions: Include when dealing with international parties or multiple currencies

4. Step-In Rights: Include when the guarantor needs rights to step into the underlying transaction

5. Assignment and Transfer: Include when parties need the ability to transfer rights or obligations

6. Force Majeure: Include when specific force majeure provisions are required beyond standard contract law

7. Confidentiality: Include when specific confidentiality obligations are needed beyond standard practice

Suggested Schedules

1. Fee Calculation Schedule: Detailed methodology for calculating the guarantee fee, including any variables or formulas

2. Payment Schedule: Detailed payment dates and amounts if following a fixed schedule

3. Form of Notices: Standard templates for various notices under the agreement

4. Underlying Guarantee: Copy or details of the guarantee for which the fee is being charged

5. Contact Details: Detailed contact information for all parties and authorized representatives

6. Required Documents: List of documents to be maintained or provided during the agreement term

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions





























Clauses































Relevant Industries

Banking

Financial Services

Insurance

Corporate Finance

Real Estate

Infrastructure

Manufacturing

International Trade

Construction

Project Finance

Relevant Teams

Legal

Finance

Treasury

Risk Management

Corporate Finance

Commercial

Company Secretarial

Credit

Compliance

Business Development

Relevant Roles

Chief Financial Officer

Legal Counsel

Finance Director

Treasury Manager

Risk Manager

Commercial Director

Company Secretary

Contract Manager

Banking Relationship Manager

Credit Manager

Legal Officer

Finance Manager

Corporate Finance Manager

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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