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The Guarantee in Loan Agreement is a crucial document in Philippine banking and finance transactions, used when a third party (guarantor) agrees to secure the debt obligations of a borrower. This document becomes necessary when a lender requires additional security beyond the borrower's own creditworthiness, particularly in high-value commercial loans or when the borrower's financial standing alone doesn't meet the lender's requirements. The agreement must comply with Philippine banking regulations, the Civil Code, and the New Central Bank Act. It typically includes detailed provisions on the scope of guaranteed obligations, enforcement mechanisms, representations and warranties, and termination conditions. The document is particularly important in the Philippine context where family-owned businesses often rely on personal guarantees from shareholders or related parties to secure corporate borrowing.

1. Parties: Identifies the Guarantor, Lender (Creditor), and Borrower (Principal Debtor)

2. Background: Recitals explaining the context of the underlying loan agreement and the purpose of the guarantee

3. Definitions: Defines key terms used throughout the agreement, including 'Guaranteed Obligations', 'Event of Default', and 'Enforcement Event'

4. Guarantee and Indemnity: Core section detailing the scope of the guarantee, including the guarantor's undertaking to guarantee the borrower's obligations

5. Nature of Guarantee: Specifies that the guarantee is continuing, irrevocable, and unconditional

6. Preservation of Rights: Establishes that the guarantee remains valid despite changes to the loan agreement or borrower's circumstances

7. Representations and Warranties: Guarantor's confirmations regarding their capacity, authority, and financial condition

8. Payment Mechanics: Procedures for making payments under the guarantee, including timing and method

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

10. Termination: Conditions under which the guarantee may be terminated or released

11. Notices: Communication procedures between parties

12. Governing Law and Jurisdiction: Confirms Philippine law as governing law and specifies jurisdiction for disputes