Unassociated Document


    DEED
      OF GUARANTEE FOR OVERALL LIMIT

     

    THIS
      DEED
      OF GUARANTEE made the 26th
      day of
      June 2008 by Surendra Ajjarapu residing at 8-93 Indian Airlines Colony
      (hereinafter unless otherwise specifically designated referred to as “the
      Guarantors” which expression shall unless repugnant to the context or meaning
      thereof be deemed to include their respective heirs, executors, administrators
      and legal representatives) in favour of STATE BANK OF INDIA a Corporation
      constituted by the State Bank of India Act, 1955 and having one of its local
      head office at Hyderabad and among other places a branch at mclau: 3/6/2811
      A/1,
      18th
      Floor,
      Hyderabad Main Road, Hyderabad (hereinafter unless otherwise specifically
      designated referred to as “the Bank” which expression shall unless repugnant to
      the context or meaning thereof be deemed to include its successors and
      assigns).

     

    WHEREAS
      in terms of an Agreement of Loan executed by Universal Biofuels Pvt limited,
      a
      company within the meaning of the Companies Act, 1956, and having its registered
      office at (hereinafter referred to as “the Borrower” which express shall unless
      repugnant to the context or meaning thereof be deemed to include its successors
      and permitted assigns) with the Bank of the Other Part on the 26h day of June
      2008 as modified and/or extended by Supplemental Agreement dated the _____
      day
      of __________ 20__ executed between the Borrower and the Bank (hereinafter
      collectively referred to as “the said agreement of Loan”) the Bank has agreed to
      finance the business of the Borrower by granting all or some or any of the
      credit facilities or the Bank has agreed to continue the credit facilities
      now
      being enjoyed by the Borrower and the Bank has also agreed not to sue the
      Borrower in respect of all or some or any of the credit facilities either in
      Indian or foreign currencies by way of overdrafts demand loans, loans, cash
      credits (by way of pledge lock and key type, factory type or mundy type or
      by
      way of hypothecation or in any other form including working capital term loan),
      term loans (including funding of interest or in any other form granted as part
      of rehabilitation packages), pre-shipment and post-shipment credits, opening
      of
      letters of credits, issuing of guarantee including deferred payment guarantees
      and indemnities negotiations and discounting of demand and/or usuance bills
      and
      cheques inland as well as foreign and such other facilities as may be agreed
      upon from time to time between the Bank and Borrower for sums not exceeding
      in
      the aggregate the sum of Rs 2500 lacs (hereinafter referred to as “the aforesaid
      credit facilities) on the terms and conditions specified and contained
      therein.

     

    AND
      WHEREAS one of the conditions specified and contained in the said Agreement
      of
      Loan is that the Borrower shall procure and furnish to the Bank a guarantee
      guaranteeing due payment by the Borrower of the said sum of Rs. 2500 lacs
      (hereinafter for the sake of brevity referred to as “the principal sum”)
      together with interest costs, charges, expenses and/or other monies due to
      the
      Bank in respect of or under the aforesaid credit facilities or any of them
      on
      demand by the Bank.

     

    AND
      WHEREAS the Guarantees at the request of the Borrower and in consideration
      of
      the Bank having agreed to grant or granted at the request of the Guarantors
      of
      the aforesaid credit facilities to the Borrower have agreed to execute this
      Guarantee in favour of the Bank on the terms and in the manner hereinafter
      appearing.


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    NOW
      THIS
      INDENTURE WITNESSETH that in consideration of the above premises it is hereby
      covenanted and agreed (the Guarantors covenanting and agreeing jointly and
      severally) as follows:

     

    1. If
      a any
      time default shall be made by the Borrower in payment of the principal sum
      (not
      exceeding Rs. 2500 lacs together with interest, costs, charges, expenses and/or
      other monies for the time being due to the Bank in respect of or under the
      aforesaid credit facilities or any of them the Guarantors shall forthwith on
      demand pay to the Bank the whole of such principal sum (not exceeding Rs. 2500
      (not exceeding Rs 2500 lacs)together with interest, costs, charges, expenses
      and/or any other monies as maybe then due to the Bank in respect o the aforesaid
      credit facilities and shall indemnify and keep indemnified the Bank against
      all
      losses of the said principal sum, interest or other monies due and all costs,
      charges and expenses whatsoever which the Bank ma incur by reason of any default
      on the part of the Borrower.

     

    2. The
      Guarantors agree and confirm that interest shall be charged on the outstandings
      in the account(s) opened in respect of the aforesaid credit facilities at such
      rate(s) as may be determined by the Bank from time to time and in such rate
      is
      linked to the State Bank Advance Rate obtaining at the particular time, any
      revision in the Sate Bank Advance Rate shall correspondingly change the
      effective rate of interest on such account from the date of such revision.
      Interest shall be calculated respectively on the daily balance of such
      account(s) and be debited thereto on the last working day of the month or
      quarter according to the practice of the Bank. The Bank shall also be entitled
      to charge as its own discretion such enhanced rates of interest on the
      account(s) either on the entire outstanding or on a potion thereof as it may
      fix
      for any irregularity and for such period as the irregularity continues or for
      such time as the Bank deems it necessary regard being had to the nature of
      the
      irregularity and the charging of such enhanced rate of interest shall be without
      prejudice to the Bank’s other rights and remedies.

     

    3. The
      Bank
      shall have the fullest liberty without affecting this Guarantee to vary the
      amounts of the individual limits of the aforesaid credit facilities as may
      be
      agreed upon from time to time between the Bank and the Borrower subject to
      the
      aggregate thereof not exceeding the principle sum and /or to postpone for any
      time or from time to time enforce or forbear any remedies of securities
      available to the bank to
      time
      enforce or forbear to enforce any remedies of securities available to the Bank
      of its liberty with reference to the matters aforesaid or any of them or by
      reason of time being given to the Borrower or of any other forbearance, act
      or
      omission on the part of the Bank or any other indulgence by the Bank to the
      Borrower or by any other matters or things whatsoever which under the law
      relating to sureties would but for this provision have the effect of so
      releasing the Guarantors.


    
      
        
        

      

      
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    4. As
      the
      aforesaid credit facilities have been further secured by hypothecation and/or
      pledge of the Borrower’s movable properties and/or mortgage of the Borrower’s
      immovable properties under separate security documents executed by the Borrower
      with the Bank which security documents would contain stipulations as to
      insurance assignment and delivery of Insurance policy to the Bank, the margin
      or
      value of properties to be maintained and the periodical furnishing of different
      statements to the Bank and other matter the Guarantors agree that no failure
      in
      requiring or obtaining such security or in the observance or performance of
      any
      of the stipulations or terms of the said security documents and no default
      of
      the Bank in requiring or enforcing the observance or performance of any of
      the
      said stipulations or terms shall have the effect of releasing or discharging
      or
      in any manner affecting the liability of the Guarantors under these
      presents.

     

    5. The
      Bank
      shall be at liberty to take, in addition to the subsisting securities any other
      securities for the aforesaid credit facilities or any of them or any part
      thereof and to release or forbear to enforce all or any of the remedies upon
      or
      under such securities and any collateral security or securities now held by
      the
      Bank and that no such release or forbearance as aforesaid shall have the effect
      of releasing or discharging or in any manner affecting the liability of the
      Guarantors under the Guarantee and that the Guarantors shall have no right
      to
      the benefit of the said security and/or any other security that may be held
      by
      the Bank until the claims of the Bank against the Borrower in respect of the
      aforesaid credit facilities and of all (if any) other claims of the Bank against
      the Borrowers on any other account whatsoever shall have been fully satisfied
      and then in so far only as such security shall not have been exhausted for
      the
      purpose of realizing the amount of the Bank’s claims and ratably only with other
      Guarantors or other persons (if any) entitled to the benefit of such securities
      respectively.

     

    6. The
      Guarantee herein contained shall be enforceable against the Guarantors
      notwithstanding the securities aforesaid or any of them or any other collateral
      securities that the Bank may have obtained or may obtain from the Borrower
      or
      any other person shall at the time when proceedings are taken against the
      Guarantors hereunder be outstanding and/or not enforced and/or remain
      unrealized.

     

    7. In
      order
      to give effect to the Guarantee herein contained the Bank shall be entitled
      to
      act as if the Guarantors were principal debtors to the Bank for all payments
      guaranteed by them as aforesaid to the Bank.

     

    8. The
      guarantee herein contained is a continuing one for all amounts advanced by
      the
      Bank to the Borrower in respect of or under the aforesaid credit facilities
      and
      also for all interest, costs and other monies which may from time to time become
      due and remain unpaid to the Bank thereunder and shall not be determined or
      in
      any way be affected by any account or accounts opened or to be opened by the
      Bank becoming nil or coming into credit at any time or from time to time or
      by
      reason of the said account or accounts being closed and fresh account or
      accounts being opened on respect of fresh facilities being granted within the
      overall limit sanctioned to the Borrower.


    
      
        
        

      

      
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    9. Notwithstanding
      the Bank’s rights under any security which the Bank may have obtained or may
      obtain the Bank shall have fullest liberty to call upon the Guarantors to pay
      the principal sum not exceeding Rs. 2500 lacs (rupees Two thousand five hundred
      lacs only) together with interest as well as the costs (as between advocate
      and
      client) charges and expenses, and/or other monies for the time being due to
      the
      Bank in respect of or under the above mentioned credit facilities or any of
      them
      without requiring the Bank to realize from the Borrower the amount due to the
      Bank in respect of the above mentioned credit facilities and/or requiring the
      Bank to enforce any remedies or securities available to the Bank.

     

    10. The
      Guarantee herein contained shall not be determined or in any way prejudiced
      by
      any absorption of or by Bank or by any amalgamation thereof or therewith but
      shall ensure and be available for and by the absorbing or amalgamated Bank
      or
      concern.

     

    11. The
      Guarantee shall be irrevocable and enforceable against the Guarantors
      notwithstanding any dispute between the Bank and the Borrower.

     

    12. The
      Guarantors affirm, confirm and declare that any balance confirmation and/or
      acknowledgment of debt and/or admission of liability given or promise or part
      payment made by the Borrower or the authorized agent of the Borrower to the
      Bank
      shall be deemed to have been made and/or given by or on behalf of the Guarantors
      themselves and shall be binding upon each of them.

     

    13. The
      Guarantors shall forthwith on demand made by the Bank deposit with the Bank
      such
      sum or security or further sum or security as the Bank may from time to time
      specify as security for the due fulfillment of their obligations under this
      Guarantee and any security deposited with the Bank may be sold by the Bank
      after
      giving to the Guarantors a reasonable notice of sales and the said sum or the
      proceeds of sale of the securities may be appropriated by the Bank in or towards
      satisfaction of the said obligations and any liability arising out of
      non-fulfillment thereof by the Guarantors.

     

    14. The
      Guarantors hereby agree that notwithstanding any variation made in the terms
      of
      the said Agreement of Loan and/or any of the said security documents including
      reallocation/interchange of the individual limits within the principal sum
      variation in the rate of interest, extension of the date for payment of the
      installments, if any, or any composition made between the Bank and Borrower
      to
      give time to or not to sue the Borrower, or the Bank parting with any of the
      securities given by the Borrower, the Guarantors shall not be released or
      discharged of their obligation under this Guarantee provided that in the event
      of any such variation or composition or agreement the liability of the
      Guarantors shall not withstanding anything herein contained be deemed to have
      accrued and the Guarantors shall be deemed to have become liable hereunder
      on
      the date or dates on which the Borrower shall become liable to pay the
      amount/amounts due under the said Agreement of Loan and/or any of the said
      security documents as a result of such variation or composition or
      agreement.

     

    15. The
      Guarantors hereby agree and confirm that the Bank shall be entitled to adjust
      appropriate or setoff all monies held by the Bank to the credit of or for the
      benefit of the Guarantors on any account or otherwise howsoever towards the
      discharge and satisfaction of the liability of the Guarantors under these
      presents.


    
      
        
        

      

      
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    16. The
      Guarantors agree that notwithstanding the Bank for any reason losing and/or
      parting with any of the securities given by the Borrower, the Guarantors shall
      not be released or discharged of their obligations under this Guarantee and
      in
      the event of the Bank so losing or parting with the security the Guarantors
      shall be deemed to have consented to or acquiesced in the same.

     

    17. The
      Guarantors agree that if the Borrower being an individual becomes an insolvent
      or being a company enters into liquidation or winding up (whether compulsory
      or
      voluntary) or if the management of the undertaking of the Borrower is taken
      over
      under any law or if the Borrower and/or the undertaking of the Borrower is
      nationalized under any law or make any arrangement or composition with creditors
      the Bank may (notwithstanding payment to the Bank by the Guarantors or any
      other
      person of the whole or any part of the amount hereby secured) rank as creditor
      and prove against the estate of the Borrower for the full amount of all the
      Bank’s claims against the Borrower or agree to and accept any composition in
      respect thereof and the Bank may receive and retain the whole of the dividends,
      composition, or other payments thereon to the exclusion of all the rights of
      the
      Guarantors in competition with Bank until all the Bank’s claims are fully
      satisfied and the Guarantors will not be paying off the amounts payable by
      them
      or any part thereof or otherwise prove or claim against the estate of the
      Borrower until the whole of the Bank’s claims against the Borrower have been
      satisfied and the Bank may enforce and recover payment from the Guarantors
      of
      the full amount payable by the Guarantors notwithstanding any such proof or
      composition as aforesaid. On the happening of any of the aforesaid events,
      the
      Guarantors shall forthwith inform the Bank in writing of the same.

     

    18. The
      Guarantee hereby given is independent and distinct from any security that the
      Bank has taken or may take in any manner whatsoever whether it be by way of
      hypothecation, pledge and/or mortgage and/or any other charge over goods
      movables or other assets and/or any other property movable or immovable and
      that
      the Guarantors have not given this Guarantee upon any understanding, faith
      or
      belief that the Bank has taken and/or may hereafter take any or other such
      security and that notwithstanding the provisions of Sections 140 and 141 of
      the
      Indian Contract Act, 1872 or other section of that Act or any other law, the
      Guarantors will not claim to be discharged to any extent because of the Bank’s
      failure to take any or other such security or in requiring or obtaining any
      or
      other such security or losing for any reason whatsoever including reasons
      attributable to its default and negligence, benefit of any or other such
      security or any of rights to any or other such security that have been or could
      have been taken.

     

    19. The
      Guarantors agree that any admission or acknowledgement in writing signed by
      the
      Borrower of the liability or indebtedness of the Borrower or otherwise in
      relation to the above mentioned credit facilities and or any part payment as
      may
      be made by the Borrower towards the principal sum hereby guaranteed or any
      judgment, aware, or order obtained by the Bank against the Borrower shall be
      binding on the Guarantors and the Guarantors accept the correctness of any
      statement of account that may be served on the Borrower which is duly certified
      by any officer of the Bank and the same shall be binding and conclusive as
      against the Guarantors also and the Guarantors further agree that in the
      Borrower making an acknowledgement or making a payment the Borrower shall in
      addition to his personal capacity be deemed to act as the Guarantors duly
      authorized agent in that behalf for the purposes of Sections 18 and 19 of the
      Limitation Act of 1963.


    
      
        
        

      

      
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    20. The
      Guarantors agree that amount due under or in respect of the aforesaid credit
      facilities and hereby guaranteed shall be payable to the Bank on the Bank
      serving the Guarantors with a notice requiring payment of the amount and such
      notice shall be deemed to have been served on the Guarantors either by actual
      delivery thereof to the Guarantors or by dispatch thereof by Registered Post
      or
      Certificate of Posting to the Guarantors address herein given or any other
      address in India to which, the Guarantors may by written intimation give to
      the
      Bank or request that communication addressed to the Guarantors be dispatched.
      Any notice dispatched by the Bank by Registered Post or Certificate of Posting
      to the address to which it is required to be dispatched under this clause shall
      be deemed to have been duly served on the Guarantors four days after the date
      of
      posting thereof, and shall be sufficient if signed by any officer of the Bank
      and in proving such service it shall be sufficient if it is established that
      the
      envelope containing such notice, communication or demand was properly addressed
      and put into the post office.

     

    IN
      WITNESS WHEREOF the Guarantors have executed these presents the day and year
      first hereinabove written.

     

    Signed,
      sealed and delivered by:

    


    
      	
              /s/
                Surendra Ajjarapu

            
	 
	
              Surendra
                Ajjarapu

            


    

     

    
      
        
        

      

      
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