Loan Guarantee Agreement Template for Denmark

The Loan Guarantee Agreement is a crucial financial instrument used in Danish lending transactions to provide additional security to lenders. It is commonly employed when a lender requires extra assurance beyond the borrower's own creditworthiness, such as in corporate financing, project finance, or real estate transactions. The agreement must comply with Danish law requirements, including the Danish Contracts Act (Aftaleloven) and Financial Business Act (Lov om finansiel virksomhed). It should clearly define the guarantee's scope, whether it's a conditional or on-demand guarantee, and include specific Danish law provisions regarding enforcement and limitation periods. This document is particularly important in situations where parent companies guarantee subsidiaries' loans, in corporate group structures, or where third-party security is required for significant financing transactions.

1. Parties: Identification of the Guarantor, Beneficiary (typically the lender), and the Principal Debtor

2. Background: Context of the guarantee, including reference to the underlying loan agreement and the reason for the guarantee

3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including Danish law-specific terminology

4. The Guarantee: Core terms of the guarantee, including scope, amount, and nature (whether on-demand or conditional)

5. Guarantor's Obligations: Detailed description of the guarantor's obligations, including payment terms and conditions

6. Representations and Warranties: Guarantor's confirmations regarding capacity, authority, and financial condition

7. Demand and Payment: Procedures for making demands under the guarantee and payment requirements

8. Duration and Release: Term of the guarantee and conditions for release or termination

9. Enforcement and Remedies: Rights and procedures for enforcement under Danish law

10. Costs and Expenses: Allocation of costs related to the guarantee

11. Notices: Communication procedures between parties

12. Governing Law and Jurisdiction: Confirmation of Danish law governance and jurisdiction provisions