Principals’ Guaranty Clause Samples
The Principals’ Guaranty clause requires the main individuals or entities behind a party (the principals) to personally guarantee the obligations of that party under the agreement. In practice, this means that if the primary party fails to fulfill its contractual duties, the principals themselves become legally responsible for meeting those obligations, such as payment or performance. This clause is commonly used to provide additional assurance to the other party, reducing the risk of non-performance by ensuring that there are financially responsible individuals backing the agreement.
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Principals’ Guaranty. (a) To induce the Purchaser to enter into this Agreement, each Principal severally (in accordance with its Pro Rata Percentage), and not jointly, hereby absolutely, irrevocably and unconditionally guarantees to the Purchaser and its permitted assigns, the due and punctual payment and performance of, and compliance with, all agreements, obligations, covenants, warranties, representations, indemnities and undertakings of the AHI Seller and its permitted assigns under and contained in this Agreement as primary obligor and not merely as surety, whether heretofore, now, or hereafter made, incurred or created, whether voluntary or involuntary, however arising, absolute or contingent, liquidated or unliquidated, determined or undetermined (collectively, the “Principal Guaranteed Obligations”), whether the AHI Seller or its permitted assigns may be liable individually or jointly with others, and whether or not such Principal Guaranteed Obligations may hereafter become otherwise unenforceable; provided, that any Principal shall have the right to claim and assert all of the AHI Seller’s rights, claims and defenses hereunder, including limitations on indemnification obligations pursuant to Article IX (the “Principal Guaranty”). If, for any reason whatsoever, the AHI Seller or any of its permitted assigns shall fail or be unable to duly, punctually and fully pay or perform the Principal Guaranteed Obligations, each Principal severally (in accordance with its Pro Rata Percentage), and not jointly, will forthwith pay or perform, or cause to be paid or performed, the Principal Guaranteed Obligations. Each Principal hereby waives diligence, presentment, demand of payment, filing objections with a court, any right to require proceeding first against the AHI Seller or any such permitted assign if the AHI Seller fails or is unable to duly, punctually and fully pay or perform the Principal Guaranteed Obligations, any right to require the prior disposition of the assets of the AHI Seller or any such permitted assign to meet their respective obligations, notice (except notice to be provided to the AHI Seller or its counsel in accordance with this Agreement), protest and all demands whatsoever. Each Principal’s obligations hereunder, including the Principal Guaranty, may not be revoked or terminated and shall remain in full force and effect without interruption, shall be binding on each Principal and their respective successors and assigns and are unconditional irrespective of a...