KUDREMUKH IRON ORE COMPANY LIMITED
(A Govt. of India Enterprise )
AN ISO 9001:2000, ISO 14001:1996 & OHSAS 18001:1999 COMPANY

FORM OF BANK GUARANTEE FOR SECURITY DEPOSIT

In consideration of Kudremukh Iron Ore Company Limited (hereinafter called Company) having agreed to exempt........(hereinafter called the said Supplier (s) / Contractor(s)) from demand under the terms and conditions of Purchase Order No......................Dated............... made between ....................And .................. for ............. (hereinafter referred to as 'contract') of security deposit for the due fulfillment by the said suppliers(s) / Contractor (s) of the terms and conditions contained in the said contract on production of a Bank Guarantee for Rs.........(Rupees..........................only) we,..........

(hereinafter referred as "the Bank") at the request of Supplier, (s) Contractor (s) do hereby guarantee the payment to the Company an amount not exceeding Rs.............. (Rupees............only) and interest thereon at........ percent per annum from the date of demand till payment against any loss or damage caused to or suffered or would be caused to or suffered by the Company by reason of any breach by the said Supplier(s)/ Contractor(s) of any of the terms and conditions contained in the said Contract.

2. We.............. do hereby unconditionally and irrevocably undertake to pay to the Company an amount to the extent of Rs. .................. (Rupees ...............................................only) and interest thereon at .................. percent per annum from the date of demand till payment without any demur, merely on a demand from the Company stating that the amount claimed is due by way of loss or damage caused to or suffered or would be caused to or suffered by the Company by reason of breach by the said Supplier(s) / Contractor(s) of any of the terms and conditions contained in the said Contract or by reason of the Supplier(s)/ Contractor(s) failure to perform the said contract. Any such demand made on the Bank shall be conclusive as regards the amount due and payable by the Bank under this Guarantee. However, our liability under this Guarantee shall be restricted to an amount not exceeding Rs...................... (Rupees..........................................only) and interest thereon as mentioned above from the date of demand till payment.

3. Our liability under these presents is absolute and unequivocal and we undertake to pay to the Company the amount so demanded notwithstanding the Supplier(s)/Contractor(s) raising any dispute and / or disputes or filing any suit or proceeding before any Court or tribunal or othert Authority. The payment so made by us under this Guarantee shall be a valid discharge of our liability for payment thereunder and the Contractor(s) Supplier(s) shall have no claim against us for making such payment.

4. We.............................further agree that the guarantee herein contained shall remain in full force and effect during the period that would be taken for the performance of the contract and that it shall continue to be enforceable till all the dues of the Company under or by virtue of the said contract have been fully paid and its claims satisfied or discharged or till the Company certifies that the terms and conditions of the said contract have been fully and properly carried out by the said Supplier(s) / Contractor(s) and accordingly discharges this Guarantee. Unless a demand or claim under this Guarantee is made on us in writing on or before...........................we shall be discharged from all liability under this Guarantee thereafter.

5. This Guarantee shall not be revocable by us except with the written consent of the Company and shall continue to be enforceable till.........................should it be necessary to extend Guarantee beyond the said date, we undertake to extend the validity of this Guarantee for such further period as may be required by the Company, and such extension shall be given one month before the expiry of this Guarantee filing which the amount covered under this Guarantee shall become forthwith payable, notwithstanding that the Contract is continuing and /or the Company has or has not terminated the Contract or preferred any claim against the Supplier (s) Contractor(s).

6. We................................. further agree with the Company that the Company shall have the fullest liberty without our consent and without affecting in any manner our obligations hereunder to vary any of the terms and conditions of the Contract or to extend time or performance by the said Supplier(s)/ Contractor(s) from time to time or to postpone for any time or from time to time in exercise of any of the powers exercisable by the Company against the said Supplier(s) Contractor(s) and to forbear or enforce any of the terms and conditions relating to the Contract and we shall not be relieved from our liability by reason of any such variation or extension being granted to the said Supplier(s)/Contractor(s) or for any forbearance,act or omission on the part of the Company or any indulgence by the Company to the said Supplier(s)/Contractor(s) or by any such matter or thing whatsoever which under the law relating to sureties, but for this provision, have effect of so relieving us.

7. This Guarantee shall not in any way be affected due to change in our constitution or by your taking or varying or giving up any securities from the CONTRACTOR(S)/ SUPPLIERS or any other person, firm or Company on its behalf or by the change in the constitution, winding up dissolution, insolvency or death as the case may be of the CONTRACTOR(S)/SUPPLIER(S).

8. In order to give full effect to the Guarantee herein contained you shall be entitled to act as if we were your principal debtors in respect of all your claims against the CONTRACTOR(S)/SUPPLIER(S) hereby Guaranteed by us as aforesaid and we hereby expressly waive all our rights of suretyship and other rights if any which are in any way inconsistent with the above or any other provisions of this Guarantee.

9. We............................. also undertake not to revoke this Guarantee during its currency except with previous consent of the Company in writing.

Dated the ..............day of ..................200

For...........................................................................

(indicate the name of Bank)

IMPORTANT NOTE

The following Points should be taken care of while submitting the Bank Guarantee:-

1 The Bank Guarantee should be on non-judicial stamp paper having a value of Rs.100/-or as.applicable in the State of, Karnataka

2 The stamp paper should be purchased in the name of the Bank,who give the guarantee and not in the name of the Supplier.

3 The Bank Guarantee should be strictly as per the profoma.

4 The Bank Guarantee should be from any of the Nationalised Bank,Scheduled Bank or any other bank Acceptable to owner

5 If any correction is made on the guarantee the same should be endorsed by the Bank with its official seal