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A Corporate Guarantee For Bank Loan is a crucial financial instrument in Canadian banking and corporate finance, commonly used when a parent company or affiliated corporation provides financial backing for a borrower's bank loan. This document is essential when a lender requires additional security beyond the borrower's own creditworthiness, particularly in corporate group structures or when supporting subsidiary companies' financing. The guarantee must comply with both federal Canadian banking regulations and provincial contract laws, depending on the jurisdiction where it's executed. It typically includes detailed provisions about the scope of guaranteed obligations, enforcement mechanisms, representations about corporate authority, and the continuing nature of the guarantee. The document is particularly important in corporate financing structures where the guarantor's financial strength is a key factor in the bank's lending decision.

1. Parties: Identifies the Guarantor (the corporation providing the guarantee), the Bank (the beneficiary of the guarantee), and the Borrower (the entity whose obligations are being guaranteed)

2. Background: Describes the context of the guarantee, including reference to the underlying loan agreement and the relationship between the parties

3. Definitions: Defines key terms used throughout the guarantee, including 'Guaranteed Obligations', 'Loan Agreement', and 'Event of Default'

4. Guarantee and Indemnity: Core section establishing the guarantee obligations, including the unconditional promise to pay and indemnify

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

6. Preservation of Rights: Establishes that the bank's rights are not affected by various circumstances such as amendments to the loan or the borrower's insolvency

7. Representations and Warranties: Corporate guarantor's confirmations regarding its power and authority to enter into the guarantee

8. Payment Provisions: Details of how and when payments must be made under the guarantee, including gross-up provisions for taxes

9. Enforcement: Sets out when and how the bank can enforce the guarantee, including any notice requirements

10. Costs and Expenses: Establishes the guarantor's liability for costs related to the guarantee and its enforcement

11. Assignment and Transfer: Provisions regarding the bank's right to assign the guarantee and restrictions on the guarantor's ability to transfer obligations

12. Notices: Details how formal communications between parties should be made and when they are deemed received

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