PERFORMANCE SECURITY BOND

Proforma of Bank Guarantee for Satisfactory Completion of Contract and Equipment

(10% of the contract price) [To be submitted as per clause 19.2.6

Bank Guarantee No.___________

The General Manager,

Rajasthan State Ganganagar Sugar Mills Ltd., 4^th Floor, Nehru Sahkar Bhawan,

Bhawani Singh Road, Jaipur, Rajasthan.

1. WHEREAS Rajasthan State Ganganagar Sugar Mills Ltd., a Company incorporated under the Companies Act, 1956, having its Registered Office at 4^th Floor, Nehru Sahakar Bhawan, Bhawani Singh Road, Jaipur -302006 (Rajasthan) (Hereinafter referred to as the

“Purchaser” which expression shall unless repugnant to the context include its successors, executors administrators, legal representatives and assigns) is setting a 1500 TCD Sugar Plant with 4.9 MWH Bio- mass based Co-Generation Power Plant based on turnkey basis at Chak – 23 „F‟, Kaminpura, Tehsil – Srikaranpur, Distt.

Sriganganganagar - 335001 (Rajasthan).

2. WHEREAS (name and address of the Sellers) (hereinafter called „The Sellers‟ which expression shall unless repugnant to the subject or context include their legal representatives, administrator, successors or permitted assignees) has entered into with the Purchaser a Contract dated ________________ (hereinafter called the said Agreement) for Satisfactory Completion of whole (Contract and Equipment) in accordance with the terms and conditions therein contained (hereinafter referred to as

„the said Plant and Equipment). I/We hereby undertake the overall responsibility for timely and satisfactory completion of whole (Contract and Equipment) in accordance with the terms and conditions therein contained (hereinafter referred to as „the said Plant and Equipment.

3. AND WHEREAS in conformity with the provisions of clause _____________ of the said contract, the seller has agreed to furnish a Bank Guarantee for an amount of Rs.

____________ for the faithful execution of the contract upto satisfactory performance as per PERT Chart under delay clause 15 of 1500 TCD Sugar Factory and 4.9 MW Co-Gen power plant complete in all respects after trial season upto end of two full crushing seasons working and for Bio- mass Co-Gen. power plant after trial 240 days working per year for two years

4. AND WHEREAS the Purchaser has agreed to accept a Bank Guarantee of nationalized Schedule Bank in Rajasthan for Rs_________ from seller of having its Head Office at __________________ __________________________ through its Branch _______________________________ (hereinafter referred to as “the Bank” which expression shall unless repugnant to the context include its successors and assigns) Representing 5% of the contract price against for the faithful execution of the contract and equipment.

5. In consideration of the above, the Bank hereby unconditionally and irrevocably guarantees and undertakes as a direct responsibility, to pay to the Purchaser on demand any and all moneys payable by the Seller on account of Performance Security Bond extended by the Purchaser to the Seller without any demure, reservation, recourse, contest or protest and/ or without reference to the Seller.

6. Any such demand made by the Purchaser on Bank shall be conclusive and binding notwithstanding any difference between Purchaser and the Seller or any dispute pending before any court, Tribunal, Arbitrator or any other authority. The Bank undertakes not to revoke this guarantee herein contained and this guarantee shall continue to be enforceable till the Seller discharges its obligation under the contract.

7. The decision of the Purchaser as to whether the Seller has fulfilled its obligation or not towards set-off of advance payment extended by the Purchaser to the Seller shall be final and binding on the Bank and the Seller.

8. The Purchaser shall have the fullest liberty without affecting in any way the liability of the bank under this guarantee from time to time extend the time for performance of the contract by the Seller. The Purchaser shall have the fullest liberty without affecting t his guarantee, to postpone from time to time the exercise of any powers vested in them or of any right which they might have against the Seller, and to exercise the same at any time in any manner, and either to enforce or to forebear to enforce any covena nts contained or implied in the Contract between the Purchaser and the Seller or any other course of remedy or security available to the Purchaser. The bank shall not be released of its obligations under these presents by any exercise by the Purchaser of its liberty with reference to matter aforesaid or any of them or by reason of any other act or forbearance to other acts of omission or commission on the part of the Purchaser of any other indulgence shown by the Purchaser or by any other matter or thing whatsoever which under the law would, but for this provision, have the effect of relieving the Bank.

9. The bank also agrees that the Purchaser at its opinion shall be entitled to enforce this guarantee against the Bank as a principle debtor, in the first insta nce without proceeding against the Seller , and notwithstanding any security or other guarantee that the Purchaser may have in relation to the Seller‟s liabilities.

10. This guarantee shall be valid for a period of ______________ months from ____________ i.e. upto _____________ and shall be revalidated automatically till satisfactory completion of contract and satisfactory performance of plant & machinery of 1500 TCD Sugar Factory and 4.9 MW Co-Gen power plant complete in all respects season upto end of two full crushing seasons satisfactory working and for Bio- mass Co-Gen. power plant 240 days satisfactory working per year for two years mentioned at clause 19.2.6 of Terms of Payment. The Guarantee herein contained shall be a continuing Guarantee and shall not be affected by any change in the constitution of the Bank or be affected by the any other security now or hereafter held by the Purchaser and Purchaser at its discretion and without any further consent from the Bank and without affecting the liability of “the Bank” and other indulgence to or make other arrangements with the Seller and nothing done or omitted to be done by the Purchaser in pursuance of any authority contained in this guarantee shall affect or discharge the liability of the Bank.

11. The Bank undertakes not to revoke this Guarantee during its currency except with the previous consent of the Purchaser in writing.

12. The Guarantor shall pay to the Purchaser on demand the sum under Clause 4 above without demur and without requiring the Purchaser to invoke any legal remedy that may be available to him, it being understood and agreed, FIRSTLY that the Purchaser shall be the sole judge or and as to whether the Sellers have committed breach/or breaches, of any of the terms and conditions of the Agreement and the extent of loss, damage, costs, charges and expenses caused to or suffered by the Purchaser from time to time shall be final and binding on the Guarantor and SECONDLY that the right of the Purchaser to recover from the Guarantor any amount under this Guarantee shall not be affected or suspended by reasons of the fact that any dispute or disputes have been raised by the Sellers with regard to their liability or that proceedings are pending before any Court with regard thereto or in connection therewith and THIRDLY that the Guarantor shall immediately pay the aforesaid guaranteed amount to the Purchaser on demand and it shall not be open to the Guarantor to know the reasons of or to investigate or to go into merits of the demand or to question or to challenge the demand or to know any fact affecting the demand and LASTLY that it shall not be open to the Guarantor to require proof of the liability of the Sellers to pay the amount before paying the aforesaid guaranteed amount to the Purchaser.

13. The Sellers and the Purchaser will be at liberty to vary and modify the terms and conditions of the said agreement without affecting this guarantee, notice of which modifications to the Guarantor is hereby waived and the same shall be deemed to have been done with the assent of the Guarantor.

14. Notwithstanding anything herein before above contained, the liability of the Bank under this Guarantee shall be restricted to Rs. __________ being the amount of Performance Security Bond and payment extended by the Purchaser to the Seller and the Guarantee shall remain in force upto and including.

15. BG shall remain enforce for 90 days after its expiry date.

16. This Bank Guarantee shall be revalidated automatically till satisfactory completion of contract and satisfactory performance of plant & machinery of 1500 TCD Sugar Factory and 4.9 MW Co-Gen power plant complete in all respects after trial season upto end of two full crushing seasons working and for Bio- mass Co-Gen. power plant after trial 240 days working per year for two years.

IN WITNESS WHEREOF we have set our hands and seal hereunder at this ________

day of _________________ at ______________________

Witnesses: For and on behalf of the Guarantor

Note :

a. Bank Guarantee should be on Rs. 100/- Non-Judicial Stamp Paper.

b. Stamp Paper to be purchased from the Rajasthan State Government in the name of the bank issuing the Bank Guarantee.

ANNEXURE VII