Letter of Guarantee for the Promoter’s Loan

Letter of Guarantee for the Promoter’s Loan

Place: Calcutta

Date: 10th May 1999


ELF Home Finance Ltd.

56 G.C. Avenue


Dear Sirs

In consideration of your having agreed to grant Promoter’s loan of Rs. 30 lakhs to Mr. AB of ………………………………………… (hereinafter referred to as borrower) broadly on terms and conditions stated in the Promoter’s Loan Agreement dated 10th May 1999. I, Mr. CD, by occupation business, residing at ………………………………… give you this Guarantee.

1. I hereby guarantee that the borrower will duly and punctually observe and perform each and every one of the obligations, to pay money whether for or towards principal, interest, other charges, expenses or otherwise howsoever on the borrower’s part to be performed under the said Promoter’s Loan Agreement. I do hereby agree and undertake that in the event of default on the borrower’s part in making payment in discharge of such obligation I shall forthwith upon your notifying such default to make payment to you not only of the instalments due in respect of the defaulted instalments but also in the event of your having accelerated payment of the said amounts make payment to you of the entire loan without demur or protest on my part notwithstanding any objection from the borrower and I shall without prejudice to all your other rights indemnify you and keep you indemnified against all losses of principal, interest or other moneys due and payable to you in respect of the loan and all costs, charges and expenses whatsoever which you may incur by reason of any such default on the part of the borrower.

2. I hereby accord my consent to the terms of the said Promoter’s Loan Agreement and/or any instruments that may hereafter be executed by the borrower in your favour varying or modifying the main agreement without requiring my consent or approval thereto and I agree that my liability under this Guarantee shall not in any manner be affected and/or reduced by such variation and modification and I expressly waive and relinquish my rights as a surety under the provisions of any law for the time being in force in that behalf.

3. You shall have the fullest liberty without in any way affecting this guarantee or discharging me from my liability hereunder to postpone for any time or from time to time the exercise of any power reserved to or conferred on you by the said Promoter’s Loan Agreement or any other instrument that may hereafter be executed by the borrower in your favour and to exercise the same at any time and in any manner and either to enforce or forbear to enforce payment of the principal or interest or other moneys due and payable to you by the borrower or any of the remedies or securities available to you or to grant any indulgence or facility to the borrower and I shall not be released by any exercise by you of your liberty or by reasons of time being given to the borrower or any other forbearance, act or omission on your part or any other indulgence given by you to the borrower or by any other matter or thing whatsoever which under the law relating to sureties would but for this provision have the effect of releasing me. I hereby waive all those rights relating to the suretyship and other rights which I might otherwise be entitled to and in force howsoever but for this provision have the effect of releasing me.

4. This guarantee shall be enforceable against me notiwthstanding that the securities comprised in any instrument that may be executed by the borrower or any other person in your favour shall be at the time when the proceedings are taken against me hereunder are remaining unrealised.

5. In order to give effect to the guarantee you will be entitled to act as if I were a principal debtor to you for all payments guaranteed by me as aforesaid.

6. Without prejudice to anything stated in any other clause herein, and without in any way limiting or restricting the scope and operation of the guarantee herein contained all the obligations and liabilities would remain in full force and effect and I agree, assure and undertake that the borrower shall in terms of the said Promoter’s Loan Agreement and/or any other Instrument or document that may be executed hereafter pay you every month during the period of loan a sum of Rs. ……… as loan repayment by equated monthly instalments failing which I shall make good the deficit by full payment of the equated monthly instalments within seven days of notice of such default. I also undertake to pay forthwith without demur, protest or objection and notwithstanding any objections from borrower the amount demanded without being required to obtain any consent or confirmation from the borrower.

7. This Guarantee is a continuing one and shall be binding on me, my heirs, executors, successors, administrators, legal representatives and assigns for all amounts of the principal of the loan that may be advanced by you to the borrower under the said Promoter’s Loan Agreement as also for all interest, additional interest, commitment charges, extra charges, service charges, cost and other moneys which may from time to time become due and remain unpaid to you by the borrower and shall remain in force until all such moneys shall be paid off in full with interest, costs and charges. Notwithstanding anything contained anywhere herein my liability towards the principal amount of the loan together with interest, additional interest, other charges, extra charges on arrears, service charges, costs or otherwise howsoever under the guarantee may not exceed Rs. 35 lakhs.

8. The benefit of this guarantee shall enure to your successors and assigns and shall be irrevocable until all obligations hereunder be discharged.

9. I assure that I am not under any disability or restriction to give you this guarantee and I undertake to make payment to you and discharge the pecuniary obligations of the borrower as set out in the Promoter’s Loan Agreement.

10. I agree that this guarantee shall automatically come into force and become valid and binding on me immediately on disbursement being made under the Promoter’s Loan Agreement executed between the borrower and yourself without requiring any further consent or approval from me.

11. You shall have the fullest liberty to increase the loan amount and vary the rate of interest and/or payment terms without any reference to me or prior consent from me. A certificate in writing signed by any of your duly authorised officers stating the amount at any particular time payable under the guarantee shall be conclusive evidence against me.

12. I further assure you that I have not applied for loan from you or any other bank or person or for myself or in respect of any person and I undertake not to apply for laon from you or any other Bank or person or give guarantee to any other company, Bank or person until this Guarantee has been cancelled by you on full repayment of your loan claims.

Signature of CD

Signature attested