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The Financial Guarantee And Performance Guarantee is a critical legal instrument used in the Philippine business environment where both financial security and performance assurance are required from a third party. This document is particularly relevant in large-scale projects, infrastructure developments, and significant commercial transactions where stakeholders need protection against both payment defaults and performance failures. It combines elements of traditional financial guarantees with performance bonds, creating a comprehensive security instrument that complies with Philippine banking regulations, the Civil Code, and relevant financial laws. The document is commonly used in situations where a guarantor (typically a bank or financial institution) provides assurance for both the financial obligations and performance commitments of a principal debtor to a beneficiary. This type of guarantee is essential in the Philippine market where project owners and investors often require robust security arrangements that cover both monetary and operational aspects of their transactions.

1. Parties: Identifies the Guarantor, Principal Debtor/Obligor, and Beneficiary with complete legal names and addresses

2. Background: Explains the context of the underlying obligation and reason for the guarantee

3. Definitions: Defines key terms used throughout the guarantee agreement

4. Scope of Guarantee: Details the extent of both financial and performance guarantees, including maximum liability amounts

5. Nature of Guarantee: Specifies that this is a continuing, irrevocable, and unconditional guarantee

6. Guarantor's Obligations: Detailed description of the guarantor's commitments, including payment and performance obligations

7. Conditions for Calling the Guarantee: Circumstances and procedures under which the guarantee can be called upon

8. Payment Terms: Timeframes and methods for making payments under the guarantee

9. Duration and Validity: Period of effectiveness and conditions for expiry of the guarantee

10. Representations and Warranties: Standard declarations by the guarantor regarding capacity and authority

11. Events of Default: Circumstances constituting default and consequences thereof

12. Enforcement: Mechanisms and procedures for enforcing the guarantee

13. Governing Law and Jurisdiction: Confirms Philippine law as governing law and specifies jurisdiction for disputes

14. Notices: Communication procedures and contact details for all parties

15. General Provisions: Standard boilerplate clauses including severability, amendments, and entire agreement