Principal Guaranty Clause Samples
A Principal Guaranty clause establishes that a third party, known as the guarantor, promises to fulfill the primary obligations of a debtor if the debtor fails to do so. This clause typically applies to financial agreements, such as loans or leases, where the guarantor agrees to pay outstanding amounts or perform required duties if the principal party defaults. By providing this assurance, the clause reduces the lender's risk and increases the likelihood that obligations will be met, thereby facilitating trust and enabling transactions that might not otherwise occur.
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Principal Guaranty. (a) In order to induce Buyer to execute and enter into this Agreement and consummate the transactions contemplated by this Agreement, and in consideration of the direct and indirect benefits that will be received by each Principal, the receipt and legal sufficiency of which are hereby acknowledged, each Principal hereby unconditionally guarantees, up to each Principal’s applicable Guaranty Limit, the full and prompt payment and performance when due of any payments, obligations, liabilities, covenants and agreements of Seller due to Buyer after the Closing, plus any costs, expenses, and fees related to enforcement thereof, which: (i) accrue during the first twelve (12) months following the Closing Date (“Guaranty Claim”), (ii) are enforceable against Seller, and (iii) the specific factual basis for such Guaranty Claim is included in a written notice to each Principal from Buyer within the first twelve (12) months following the Closing Date (“Guarantor Claim Notice”). Claims which are not Guarantor Claims properly identified in a timely Guarantor Claim Notice are waived. Guaranty Claims are subject to the limitations on indemnity and other provisions of this Article VIII. “Guaranty Limit” means, with respect to J▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, two-thirds of all payments due to Seller pursuant to this Section 8.11 and, with respect to J▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, one-third of all payments due to Seller pursuant to this Section 8.11; provided, however, that the Guaranty Limit as to each Principal shall be one hundred percent (100%) for claims against such Principal for breach of Section 6.08 by such Principal.
Principal Guaranty. As a material inducement to enter into this Agreement, Principal Guarantor:
i. Unconditionally, irrevocably and absolutely guarantees (1) the due and punctual payment of all amounts due and payable from CSO to Lender under this Agreement, including but not limited to, all Guarantied Obligations; and (2) the due and punctual performance and observance by CSO of all other obligations, warranties, covenants and duties of CSO set forth in this Agreement (all of which amounts payable and the terms, warranties, agreements, covenants and conditions being herein called the “Principal’s Obligations”).
ii. Agrees that the guaranty set forth in this Section 11(b) shall be a continuing guaranty, shall be binding upon Principal Guarantor, and upon its successors and assigns, and shall remain in full force and effect, and shall not be discharged, impaired or affected by the following without limitation (1) the existence or continuance of any of the Principal’s Obligation’s (other than the payment or performance of the Principal’s Obligations in accordance with their terms); (2) the validity or invalidity of any document or agreement evidencing the Principal’s Obligations or any of them; (3) the existence or continuance of CSO as a legal entity; (4) any waiver, indulgence, alteration, substitution, exchange, change in, modification or other disposition of any of the Principal’s Obligations, all of which Lender or CSO is hereby expressly authorized to make from time to time without notice to Principal Guarantor; (5) the acceptance by Lender of any security for, or other guarantors upon, all or any part of the Principal’s Obligations; or (6) any defense (other than the payment or performance of the Principal’s Obligations in accordance with their terms) that Principal Guarantor may or might have to its undertakings, liabilities and obligations hereunder, each and every such defense being hereby waived by Principal Guarantor.
iii. Agrees that Principal Guarantor shall be held liable hereunder and Lender shall have the right to enforce this guaranty against Principal Guarantor for and to the full amount of the Principal’s Obligations, with or without enforcing or attempting to enforce this guaranty against any other guarantor, without any obligation on the part of Lender, or anyone, at any time, to resort to any collateral, security, property, liens or other rights or remedies whatsoever, and whether or not other proceedings or steps are pending or have been taken or have be...