Government Guarantee (Part II)

Updated atMarch 2010

This agreement is made this 5th day of June 2000 between the Governor of Chandigarh hereinafter called the GOVERNMENT (which expression shall unless excluded by or repugnant to the subject or context include his successors in Office) of the first part, Tell Me Paper Mills Limited, a COMPANY incorporated under the Companies Act 1956 and having its registered office at Warden Road, Calcutta 700 081 hereinafter called the COMPANY (which expression shall unless excluded by or repugnant to the subject or context include its successors and assigns) of the second part andStandard Chartered BANK, a body corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 and having its Head Office at 8 Suction Villa, Mention Street, Calcutta 700 080 hereinafter called the BANK (which expression shall unless excluded by or repugnant to the subject or context include its successors and assigns) of the third part.

Whereas the COMPANY is a borrower of the BANK and is indebted to the BANK for more than Rs.3 crores.

And whereas for expansion of the business the COMPANY needs further advances of about Rs.2 crores but is not in a position to give adequate security to the BANK.

And whereas the BANK has agreed to grant such advances if the GOVERNMENT guarantees repayment of said advances with applicable interest.

And whereas in the interest of the development of the State the GOVERNMENT has agreed to guarantee to the BANK payment of the COMPANY''s present and future indebtedness to the BANK and has requested the BANK to grant such advances to the COMPANY.

Now therefore these presents witnesseth and the parties agree as follows:

  1. In consideration of the BANK agreeing at the request of the GOVERNMENT to grant advances to the COMPANYupto Rs.2 crores the GOVERNMENT hereby guarantees to the BANK the payment of all present and future indebtedness and liabilities of the COMPANY to the BANK. The GOVERNMENT shall hereafter indemnify and keep the BANK fully indemnified from and against all losses of principal and/or interest, charges and expenses which the BANK may incur or be put to on account of default of the COMPANY and in demanding, enforcing or obtaining payment of all or any such moneys either from the COMPANY or the GOVERNMENT or howsoever otherwise.

  2. The BANK shall have the fullest liberty without affecting this guarantee to postpone for any time or from time to time the exercise of any of the rights powers or remedies...

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