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Parental Guarantee to other parties in relation to Shareholders Agreement

Guarantor

In relation to a Joint Venture / Shareholders Agreement, a guarantee is given by a party's parent to the other shareholders for the party's obligations. This is drafted in favour of the Guarantor.

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The document should be signed by the authorised signatory (or directors of a company) and witnessed to complete the formality.

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Document Description

In relation to a Joint Venture / Shareholders Agreement, a guarantee is given by a party's parent to the other shareholders for the party's obligations. This is drafted in favour of the Guarantor.

In consideration of the Other Shareholders entering into the Agreement the Guarantor (as principal obligor and not merely as a surety) unconditionally and irrevocably as a continuing obligation:

(a) guarantees the proper and punctual performance by the Party (while the Party is a Shareholder) of all of its obligations, commitments and undertakings under or pursuant to the Agreement; and

(b) undertakes to hold the Other Shareholders fully and completely indemnified against any loss, damages, costs and expenses occasioned by any failure of the Party or the Guarantor to perform any of the obligations referred to in paragraph (a) above.

How to use this Document?

This guarantee should be carefully read by the shareholders and guarantor involved.

This guarantee may be used when the parties enter into a shareholders agreement with the parent of one shareholder guaranteeing the obligations to the other shareholders upon the establishment of a Joint Venture Company. 

The guarantor should sign and return a copy, and once signed, all parties should get a copy.

To avoid any future disputes, the guarantor should have its signature witnessed. This guarantee cannot be revoked by the guarantor.

 

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