Agreement of Guarantee

Agreement of Guarantee

This agreement of guarantee is made at Calcutta this ……….……… day of …………. 2000 between AB, son of……………………, residing at……………… and CD, son of ………………, residing at……………….. (hereinafter called the GUARNTORS which term shall unless the context otherwise requires include their heirs, successors, legal representatives and assigns) of the first part and EF BANK constituted under the BANKing Companies (Acquisition and Transfer of Undertakings) Act 1980 carrying on business, inter alia, at………. (hereinafter called the BANK which term shall unless the context otherwise requires include its successors and assigns) of the second part.

In consideration of the BANK having agreed to grant, granting and/or continuing to grant credit facilities with limits which could be varied from time to time to the Borrower, X Company Limited, a company registered under the Companies Act 1956 and carrying on business at …………….. at our request in, inter alia,

Overdraft in Current Account

Clean Cash Credit Account,

Cash Credit Hypothecation Account,

Cash Credit Pledge Account,

Letter of Credit Account,

Letter of Guarantee Account,

Deferred Payment Guarantee Account, or

In any other Account

from the BANK’s one or more branches on terms and conditions agreed upon or that might be agreed upon from time to time between the BANK and the borrower the GUARNTORS hereby agree and covenant with the BANK as follows:

1. The GUARNTORS hereby guarantee jointly and severally to the BANK the due performance of all present and future obligations by the borrower towards the BANK and payment of all moneys due or that might become due from the borrower to the BANK in the said or other Accounts with interest at the rate chargeable by the BANK from time to time in the said Accounts with all costs, charges and expenses in default of the borrower remedying the breach or making payment after being demanded by the BANK.

2. The GUARNTORS declare and agree that this guarantee shall be a continuing guarantee and shall not be considered as cancelled or in any way affected by the fact that at any time the borrower may not have any liability on any of the said Accounts or the borrower may have even a credit balance in the Account but shall continue to be a guarantee and remain in operation in respect of all subsequent transactions.

3. The GUARNTORS hereby agree that the BANK shall be at liberty to vary the terms and conditions of granting credit facilities to the borrower as also vary the securities, take new securities or release existing securities without any consent of the GUARNTORS.

4. The GUARNTORS agree that as between the BANK and the GUARNTORS, the GUARNTORS are debtors and the BANK will be at liberty to proceed against the GUARNTORS without any obligation to exhaust its remedies against the borrower company. The GUARNTORS hereby declare and agree with the BANK that they shall not be entitled to and shall not claim any rights conferred on GUARNTORS by sections 133, 134, 135, 139 and 141 of the Indian Contract Act 1872.

5. The GUARNTORS agree that the BANK shall be entitled to obtain from the borrower company renewal documents or fresh documents and to open new Accounts and take new securities or consolidate or combine Accounts and/or securities and notwithstanding this the GUARNTORS shall continue to remain liable to the BANK for payment of all indebtedness and liabilities of the borrower both present and future including interest, cost and charges.

6. The GUARNTORS declare and agree that without first paying the claims of the BANK against the borrower they shall not claim or enforce any right against any assets of the borrower company or any Dividend or monies payable to or in relation to the borrower.

7. The GUARNTORS hereby agree that any Account settled between the BANK and the borrower or any acknowledgment made by the borrower or any Balance Confirmation or Acknowledgment of Debts and Securities executed by the borrower shall be binding on the GUARNTORS and for this purpose the borrower shall be deemed to be the agent duly authorised by the GUARNTORS herein.

8. The GUARNTORS hereby agree that their liability shall be joint and several and their respective heirs, successors, administrators and legal representatives shall be liable to pay the claims of the BANK in relation to the said credit facilities to the borrower.

9. In the event the BANK in breach of its undertaking fails to grant credit facilities and as a consequence whereof the borrower ceases to carry on business or suffers substantial loss or is wound up then and in that event the GUARNTORS shall stand discharged from these presents and from all indebtedness and liabilities and obligations whatsoever towards the BANK.

10. The GUARNTORS agree that the BANK may enforce its rights as a pledgee or right of a lien on all goods, assets, properties and all moneys standing to the credit of the GUARNTORS for payment of BANK’s debts against the borrower and/or GUARNTORS.

11. The death, insanity or insolvency of the GUARNTORS shall not affect the transactions or loans given by the BANK to the borrower till the happening of such event. Any notice to determine the guarantee or death, insanity or insolvency of the GUARNTORS will terminate the guarantee only in respect of future transactions. In any such event the Clayton’s Rule shall apply in respect of future transactions.

12. No infirmity or irregularity in the power of the borrower to borrow from the BANK or in the exercise of the borrowing power shall affect the validity of these presents or the obligations and liability of the GUARNTORS to the BANK.

13. The GUARNTORS agree to accept as binding on them and as conclusive evidence of the moneys payable by the GUARNTORS to the BANK statements of Accounts duly certified under the BANKer’s Books Evidence Act furnished to the GUARNTORS.

14. Any notice to be served by any of the parties herein shall be deemed to have been duly served if sent by registered post at the address given herein unless some other address is specially communicated by a party herein.

15. The BANK agrees to act with due dispatch and in businessman like in all transactions with the borrower without any undue delay or arbitrariness and in the interest of trade and business without, however, je opardising the public money and the prospect of recycling its funds.

In witness whereof the GUARNTORS and the BANK have signed these presents on the day, month and year first above-written.

Signed and delivered by AB and CD,

the GUARNTORSs in the presence of:

Signed  on  behalf  of  EF  BANK  by

Mr. ………..…………….. the Manager,

authorised signatory and Power of

Attorney holder in the presence of:

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