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Guaranty And Security Agreement Template for South Africa

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Key Requirements PROMPT example:

Guaranty And Security Agreement

"I need a Guaranty and Security Agreement under South African law where our parent company and three subsidiary companies will act as guarantors for a R50 million facility agreement, with security over their movable assets and shares in group companies."

Document background
The Guaranty and Security Agreement is a crucial document in South African secured lending practices, typically used when a party wishes to provide both a guarantee and security for another party's obligations. It serves multiple purposes by combining what could otherwise be separate guarantee and security documents into a single, comprehensive agreement. This approach is particularly efficient in the South African context, where security interests must comply with specific statutory requirements for creation and perfection. The agreement is commonly used in corporate group structures, project finance, and general secured lending transactions, where the guarantor provides both a personal promise to pay and grants security over specific assets to secure that promise. The document must be carefully structured to comply with South African law, including the Companies Act's financial assistance provisions and the requirements for valid security interests under various property and security laws.
Suggested Sections

1. Parties: Identification of the Guarantor(s), Secured Party/ies, and Principal Debtor(s)

2. Background: Context of the underlying obligations and purpose of the guarantee and security arrangement

3. Definitions and Interpretation: Key terms used in the agreement, including defined terms for secured obligations, collateral, and enforcement events

4. Guarantee Provisions: Core guarantee obligations, including nature and extent of the guarantee, primary vs. secondary nature

5. Security Interest Creation: Express creation of security interests over specified collateral

6. Secured Obligations: Definition and scope of obligations being secured

7. Representations and Warranties: Guarantor's confirmations regarding capacity, ownership of collateral, and absence of restrictions

8. Perfection Requirements: Actions required to perfect security interests, including registration requirements

9. Guarantor's Covenants: Ongoing obligations regarding maintenance and preservation of collateral

10. Events of Default: Circumstances triggering enforcement rights

11. Enforcement Rights: Powers and remedies available upon default

12. Power of Attorney: Appointment of secured party as attorney for perfection and enforcement

13. Costs and Indemnities: Allocation of costs and indemnification obligations

14. Notices: Communication procedures and contact details

15. General Provisions: Standard boilerplate clauses including governing law, jurisdiction, and amendments

Optional Sections

1. Multiple Guarantors: Additional provisions for joint and several liability when there are multiple guarantors

2. Special Collateral Provisions: Specific provisions for unique types of collateral such as intellectual property or shares

3. Currency Provisions: Required when guaranteed obligations are in foreign currency

4. Subordination Provisions: When the guarantee needs to be subordinated to other obligations

5. Bank Accounts: Special provisions for security over bank accounts and operation thereof

6. Insurance Requirements: Detailed insurance obligations when significant physical assets are involved

7. Further Advances: Provisions for securing future advances under facility agreements

8. Tax Gross-up: Required when tax implications need to be addressed specifically

Suggested Schedules

1. Schedule 1 - Collateral Description: Detailed description of all assets subject to security interest

2. Schedule 2 - Secured Obligations: List of specific agreements or obligations being guaranteed and secured

3. Schedule 3 - Perfection Requirements: Checklist of required perfection actions for different types of collateral

4. Schedule 4 - Form of Notice to Third Parties: Template notices for perfecting security over certain assets

5. Schedule 5 - Existing Security Interests: List of permitted existing security interests over collateral

6. Appendix A - Resolution of Authority: Corporate resolutions authorizing the guarantee and security

7. Appendix B - Registration Forms: Required statutory forms for security registration

8. Appendix C - Compliance Certificates: Form of periodic compliance certificates if required

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 and Financial Services

Corporate Lending

Real Estate and Property Development

Manufacturing

Mining and Resources

Retail and Commercial

Agriculture

Technology and Communications

Infrastructure Development

Energy and Utilities

Relevant Teams

Legal

Finance

Treasury

Risk Management

Compliance

Corporate Finance

Credit

Operations

Company Secretarial

Portfolio Management

Relevant Roles

Chief Financial Officer

Legal Counsel

Finance Director

Treasury Manager

Credit Manager

Risk Manager

Corporate Finance Manager

Security Trustee Officer

Compliance Officer

Company Secretary

Transaction Manager

Portfolio Manager

Relationship Manager

Credit Risk Officer

Legal Director

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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