Exhibit 10.34
LETTER OF CONTINUING GUARANTEE
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This Letter of Continuing Guarantee is executed at Mumbai this 29 day of January
2003 by M/s. Sterlite Industries (India) Ltd., having its Registered Office at
X-00/0, Xxxxx XXXX Xxxxxxxxxx Xxxx, Xxxxx Dist. Xxxxxxxxxx - 000 000,
Xxxxxxxxxxx, Xxxxx hereinafter called "the GUARANTOR" (which expression shall,
unless it be repugnant to the context or meaning thereof shall mean and include
its successors) of the one part and HDFC BANK LTD., a Banking Company
incorporated and registered under the provisions of the Companies Xxx, 0000,
havings its registered office at Sandoz House, Xx. Xxxxx Xxxxxx Road, Worli,
Mumbai - 400 018 and its branch office at 000-X, Xxxxxx Xxxxxx, Xxxx Xxxxx,
Xxxxxxx - 600 002, hereinafter called "the BANK" (which expression shall unless
it be repugnant to the context or meaning thereof mean and include its
successors and assigns) of the other part:
WHEREAS:
(i) All the request of the Guarantor the Bank has granted/agreed to grant to
The Madras Aluminium Company Ltd., (hereinafter referred to as "the
borrower" the following Credit facilities viz.:
a) Non Convertible Debentures/Short Term Loans
b) Working Capital facilities
totalling to Rs. 55 Crores (hereinafter collectively called the "said
Credit Facility/ies"
(ii) One of the conditions of the Bank having agreed to grant/having granted the
said credit Facility/ies to the Borrower was that the Guarantor shall
execute in favour of the Bank an unconditional and irrevocable continuing
Guarantee being these presents;
NOW THESE PRESENTS WITNESSETH as follows
The Guarantor doth hereby irrevocably and unconditionally guarantee the due
repayment to the Bank at its Xxxx Salai Branch at Chennai on demand without
demur and/or contestation and notwithstanding any dispute between the Bank
and the Borrower of all the amounts including the principal sum of Rs.
55,00,00,000/- (Rupees Fifty Five Crores only) towards the said credit
facility/ies and indebtedness due and payable by the Borrower to the Bank
under the said credit facility/ies or any one or more or all of them or any
part thereof for the time being outstanding under the said credit
facility/ies granted/agreed to be granted by the Bank to the Borrower and
all interest, commission, costs, charges and expenses and all other monies
whatsoever due owing and payable by the Borrower to the Bank thereunder
("the said dues"), in the event of failure on the part of Borrower in
repaying the same to the Bank or discharging its liability thereunder. The
Guarantor shall pay to the Bank forthwith on first demand at its Branch
Office at 000-X, Xxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxx -- 600 002, the said
dues (the decision of the Bank as to such default (failure of the Borrower
and the amount claimed therein, being final, conclusive and binding on the
Guarantor).
The obligations hereunder are joint and several and independent of the
obligations of Borrower, and a separate action or actions may be brought
against the Guarantor alone or jointly with the Borrower.
3 In the event of the Guarantor's failure to pay to the Bank the said dues
forthwith on demand made by the Bank then in such event, the aforesaid
amount shall be and carry interest at the one percent over and above the
Bank rate or such other rate as the Bank may in its absolute discretion
stipulate, from the date of demand till payment by the Guarantor.
4. The Guarantor hereby indemnifies the Bank and agrees to keep the Bank
indemnified and save harmless at all times till the said credit
facility/ies is outstanding, due and payable by the Borrower, against all
actions, proceedings, claims and demands, duties, penalties, taxes, losses,
damages, cost (as between Advocate and Client) charges and expenses and
other liability whatever which may be brought and made against or sustained
or incurred by the Bank by reason of having granted/continued/agreed to
grant the said credit facility/ies to the Borrower.
5. The Bank shall be at liberty, and shall have full discretionary power
without the Guarantor's further assent and knowledge and without in any way
affecting the Guarantor's liability under this guarantee and the Guarantor
hereby waives the rights available to it as surety under the applicable
provisions of the Indian Contract Act, 1872 or its statutory modification
or re-enactment thereof.
- to renew change/enlarge/release the terms & conditions for grant of the
said facility/ies or any advance, credit entered into with/granted to the
Borrower, or
- to hold over, renew, or give up in whole or in part, and from time to time,
any bills, notes, mortgages, charges, liens or other securities received or
to be received from the Borrower either alone or jointly with any other
person or persons;
- to vary/exchange or release any securities held or to be held by the Bank
for the said credit facility/ies; or
- to release or discharge the Borrower or any person liable with the Borrower
as guarantor or otherwise, or
- to do any act or omission the legal consequence of which is to discharge
the Borrower or any person liable for or with the Borrower as aforesaid, or
- to postpone for any time or from time to time the exercise of any power or
powers conferred upon the Bank by law or otherwise and to exercise the same
any time and in any manner and either to enforce or forbear to enforce the
covenants or agreements entered into by the Bank with the Borrower or any
other remedies or securities available to the Bank, or
- to enter into any composition or compound with or promise to grant/extend
time or any other indulgence or not to xxx, either the Borrower or any
other person liable as surety, or collaterally liable for the Borrower, as
the Bank may deem fit,
- And the Guarantor shall not be released by any exercise by the Bank of
their liberty with reference to the matters aforesaid or any of them.
6. The Guarantor shall also not be entitled to look into or consider any
question or dispute which may arise between the Bank as the Creditor and
the Borrower as to repayment by the Borrower to the Bank of all amounts due
under the said facility together with all interest, costs, charges and
expenses in respect thereof or otherwise howsoever.
7. This Guarantee shall remain in full force and effect until the Borrower is
fully discharged by the Bank of all the liabilities under the said credit
facility/ies and until the Borrower has got the discharge confirmed in
writing from the Bank.
8. Further, this guarantee shall be a continuing guarantee and be applicable
to the ultimate balance that may become due to the Bank from the Borrower
under the said credit facility/ies notwithstanding that the loan account
maintained by the Bank for the Borrower, may in the meantime or at any time
or times have been in credit or may have disclosed a reduced or nil
balance.
9. The Bank shall be entitled to retain realise or otherwise dispose off in
such manner as the Bank may think fit any securities, now or hereafter held
by the Bank and without liability to account to the Guarantor or any
appropriation of such securities or of the proceeds thereof until the said
ultimate balance shall have been satisfied.
10. And notwithstanding the Bank receiving payments from the Borrower,
Guarantor or any person or persons as aforesaid liable to the Bank, or from
any security held by the Bank of the whole or any part of the amount hereby
guaranteed, if the Borrower shall become bankrupt or insolvent or being a
corporation or any incorporated company shall pass a resolution for
voluntary winding-up or shall be ordered to be wound-up or shall be ordered
to be wound-up by an order of the court,or shall enter into any arrangement
scheme including rehabilitation scheme approved by Banks/Financial
institutions/BIFR etc., compromise with its creditor or creditors, the Bank
shall be at liberty without discharging the Guarantors liability to make or
assent to any compromises, compositions or arrangements and to rank as
creditors for the Bank's total claim hereunder and to receive dividends,
composition or other payments thereupon to the entire exclusion and
surrender of all the Guarantor's rights as surety/sureties in competition
with the Bank, notwithstanding the statutes of bankruptcy or any rule of
law or equity to the contrary, unless all the Bank's dues as aforesaid
have been satisfied in full.
11. Further, if the Guarantor now have or shall hereafter take any security
from the Borrower in respect of the Guarantor's liability under this
guarantee, the Guarantor will not prove in the bankruptcy or insolvency or
winding-up of the Borrower in respect thereof to the Bank's prejudice and
such security shall stand as a security for the Bank and shall forthwith be
deposited with the Bank.
12. Any indebtedness of the Borrower now or hereafter held by the Guarantor is
hereby subordinated to the indebtedness of the Borrower to the Bank; and
such indebtedness of Borrower to Guarantor as trustee for Bank and be paid
over to Bank on account of the indebtedness of Borrower to Bank but without
reducing or affecting in any manner the liability of Guarantor under the
other provisions of this guarantee.
13. The Bank may proceed against and recover from any of the Guarantor's
property including any credit balance or security held/to be held in
future, by the Bank on the Guarantor's account by sale and or otherwise and
allocate and apply the net proceeds of sale and realisation thereof and any
other monies in the Bank's hands standing to the Guarantor's credit or
belonging to the Guarantor's on any account whatsoever independently the
one of the order and in such manner as the Bank may think fit in or towards
the payment of any monies payable by the Borrower/Guarantor to the Bank
hereunder.
14. The Guarantor hereby undertake to do, execute and perform on demand at the
Guarantor's cost all such acts, deeds and things as the bank may require
for as further security or for due discharge of Guarantor's liability
hereunder and if so required by the Bank to deposit with the bank, cash or
any security acceptable to the Bank to cover the total liability and
obligations under this guarantee.
15. The Bank's decision shall be final and binding on the Guarantor in respect
of all matters concerning the aforesaid amounts and/or these presents.
16. The Bank may enforce and recover upon this guarantee for full amount hereby
guaranteed and interest thereon to satisfy its total claim against the
Borrower, notwithstanding any composition as aforesaid and notwithstanding
any other guarantee, security or remedy which the Bank may hold or be
entitled to in respect of the sum hereby secured, and notwithstanding any
charges for interest which may be debited in the Bank's account for the
Borrower or in any other account for the Borrower.
17. This guarantee shall not be affected by any change in the constitution of
the Borrower or the Guarantor and shall not be determined or in any manner
prejudiced by any absorption and amalgamation or re-constitution or
alteration in the status or change in the Constitution of the Bank but
shall ensure and be available for and by the absorbing or amalgamated or
reconstituted or altered or changed authority or body.
18. This guarantee shall be for Rs 55 Crores including all other guarantees
submitted earlier for the Borrower and signed by the Guarantor.
19. In order to give effect to this guarantee, the Bank shall be entitled to
act as if the Guarantor is the Principal debtor to the Bank for all
payments and convenants hereby guaranteed.
20. The Guarantor agrees that the Guarantor shall not be entitled to claim the
benefit of any legal consequences of any variation of any contract entered
into by the Borrower with the Bank, the liability in respect of which is
guaranteed by the Guarantor aforesaid.
The absence or infirmity of borrowing powers on the part of the Borrower or
any irregularity in the exercise thereof shall not affect the Guarantor's
liability and any monies advanced to the Borrower shall be deemed to be due
and owing notwithstanding such absence, infirmity or irregularity and this
guarantee shall not be effected by any change in the name or constitution
of the un-incorporated body or firm by death or retirement or otherwise
howsoever.
This guarantee shall be enforceable against the Guarantor notwithstanding
that the securities created/to be created by the Borrower or by the
Guarantor or any other collateral securities the Bank might obtain/have
obtained from the Guarantor or the Borrower or any negotiable or other
securities referred to herein or to which it may extend or be applicable
shall at the time of proceedings being taken against the Guarantor on this
guarantee be outstanding or unrealised.
23. In addition to all liens upon, and rights of set off against the monies,
securities or other property of Guarantor given to the Bank by law, the
Bank shall have a lien upon and a right of set off against, all monies,
securities and other property of Guarantor now or hereafter in the
possession of or on deposit with the Bank, whether held in a general or
special account or deposit, or for safe keeping or otherwise; and every
such lien and right of set off may be exercised without demand upon or
notice to Guarantor. No lien or right of set off shall be deemed to have
been waived by any act or conduct on the part of Bank, or by any neglect to
exercise such right of set off or to enforce such lien, or by any delay in
so doing and every rights of set off and lien shall continue in full force
and effect until such rights of set off or lien is specifically waived or
released by an instrument in writing executed by the Bank.
24. The demand hereunder in writing shall be deemed to have been duly given to
the Guarantor by the Bank, by sending the same by post addressed to the
Guarantor at the Guarantor's Registered office hereunder written and shall
be effectual notwithstanding any change thereof and notwithstanding notice
thereof to the Bank, and such demand shall be deemed to have been received
by the Guarantor 24 hours after the posting thereof and shall be sufficient
if signed by any officer of the bank and in proving such service it shall
be sufficient to prove that the letter containing the demand was properly
addressed and put into the Post Office.
25. This guarantee shall inure for the benefit of the Bank's successors and
assigns, and shall be binding on the Guarantor, Guarantor's estate, effects
and successors.
26. The Guarantor specifically agrees and confirms that this Guarantee and all
matters concerning the same or arising therefrom or relating thereto, shall
be construed in all respects by the Laws of India and shall be subject to
the exclusive jurisdiction of the courts at Bombay/Chennai only.
27. It is hereby expressly agreed between the parties that even if by any act
of legislation and/or by any act of State and/or God if Borrower's debts
under the said credit facility/ies to the Bank are suspended or cancelled
the Guarantor shall nevertheless be bound to pay to the Bank all the
amounts demanded by the Bank from the Guarantor hereunder.
Dated
The Common Seal of Sterlite Industries (India) Limited was hereunto
Affixed pursuant to the Resolution of its Board Meeting held on
The 29th day of January 2003 in the presence of
Xx XX Xxxxxxxx Director and
Mr ...................... who have
In token hereof set their respective hands hereto.
/s/ XX Xxxxxxxx
(GUARANTOR)
