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The document titled 'Parental Guarantee to Buyer in relation to Acquisition' is a guarantee agreement entered into between two parties: the guarantor (referred to as Party 1) and the buyer (referred to as Party 2). The document is of significant importance as it establishes the guarantor's commitment to guarantee the seller's obligations under an agreement between the seller and the buyer.
The document begins with an introduction, stating that the guarantor is the parent company of the seller and that the seller has entered into an agreement with the buyer. The guarantor has agreed to provide this guarantee to the buyer for the seller's obligations.
The guarantee is then detailed in several clauses. Clause 2.1 states that the guarantor unconditionally and irrevocably guarantees the proper and punctual observance and performance of all the seller's obligations, commitments, and undertakings under the agreement. The guarantor agrees to indemnify the buyer against any loss, damages, costs, and expenses resulting from the seller's failure to perform.
Clause 2.2 specifies that if the seller fails to perform any obligations, commitments, or undertakings, the guarantor must promptly perform or procure the performance of those obligations. The guarantor's liability under this clause remains in force regardless of any act, omission, neglect, event, or matter.
Clause 2.3 clarifies that the guarantor's liability is not affected by any circumstances that would discharge the guarantor or any other factors that might render the seller's obligations void or unenforceable. The guarantor's obligations are separate and additional to any other security held by the buyer.
Clause 2.4 allows the buyer to make demands under the guarantee, and the guarantor's obligations are continuing and extend to all the seller's obligations. The buyer can enforce the guarantee without first resorting to any other security or taking legal action against the seller.
Clause 2.5 states that any release, compromise, or discharge of the guarantor's obligations is subject to the condition that it will be void if any payment or security received by the buyer is set aside or proves invalid.
Clause 2.6 imposes an additional obligation on the guarantor to indemnify the buyer for any losses incurred if amounts due under the agreement are not recoverable or if the other obligations guaranteed are unenforceable.
Clause 2.7 prohibits the guarantor from taking any actions that would compete with the buyer's rights in case of liquidation, administration, or winding-up of the seller. The guarantor also waives the right to claim any payment or distribution from the seller or exercise any counterclaim or set-off against the seller.
Clause 2.8 ensures that any amounts payable under the guarantee are made in full without any deduction or withholding, unless required by law. If any deduction or withholding is made, the guarantor must pay an additional amount to ensure the buyer receives the full amount.
Clause 2.9 allows the buyer to place and keep amounts received from the guarantor to the credit of an account without paying interest. The buyer is not obliged to apply any amount received towards the discharge of amounts owed until all amounts are received in full.
The document also includes provisions regarding notices, invalidity of provisions, rights of third parties, and choice of law and jurisdiction.
In summary, the 'Parental Guarantee to Buyer in relation to Acquisition' document is a detailed guarantee agreement that outlines the guarantor's commitment to ensure the seller's obligations are fulfilled under an agreement with the buyer. The guarantor's liability is extensive and remains in force regardless of any circumstances that may affect the seller's obligations.
To use the 'Parental Guarantee to Buyer in relation to Acquisition' document effectively, follow these steps:
1. Familiarize yourself with the document: Read the entire document carefully to understand its purpose and the obligations of the guarantor and the buyer.
2. Identify the parties: Ensure that the correct names and registered addresses of the guarantor (Party 1) and the buyer (Party 2) are entered accurately in the agreement.
3. Interpretation: Review the definitions provided in Clause 1.1 to understand the meaning of specific terms used throughout the document.
4. Guarantee obligations: Understand the guarantor's obligations outlined in Clause 2.1, which include guaranteeing the seller's performance and indemnifying the buyer for any losses.
5. Failure to perform: Take note of Clause 2.2, which states that if the seller fails to perform any obligations, the guarantor must promptly perform or procure the performance of those obligations.
6. Guarantor's liability: Be aware that the guarantor's liability under the guarantee remains in force regardless of any circumstances mentioned in Clause 2.3.
7. Buyer's rights: Understand that the buyer can make demands under the guarantee and enforce it without resorting to any other security, as stated in Clause 2.4.
8. Additional indemnity: Note the additional obligation of the guarantor to indemnify the buyer in case amounts due under the agreement are not recoverable, as mentioned in Clause 2.6.
9. Payment and withholding: Ensure that any amounts payable under the guarantee are made in full without any deduction or withholding, unless required by law, as specified in Clause 2.8.
10. Notice requirements: Follow the notice provisions in Clause 3 to ensure that any communication between the parties is properly served and deemed valid.
11. Invalidity and third-party rights: Understand the provisions regarding invalidity of clauses and the fact that third parties have no right to enforce the terms of the guarantee.
12. Choice of law and jurisdiction: Note the choice of law and jurisdiction provisions in Clause 6, which determine the applicable law and the courts with jurisdiction over any disputes.
By following these steps, you can effectively utilize the 'Parental Guarantee to Buyer in relation to Acquisition' document and ensure compliance with its terms and obligations.