Guarantee - IDBI Bank Ltd., Government of India and Satyam Infoway Ltd.
[INDIAN CURRENCY -- FIFTY RUPEE NOTE]
PROFORMA FOR PERFORMANCE BANK GUARANTEE
To
The President of India
acting through the Telegraph Authority
In consideration of the President of India acting through the Telegraph
Authority (hereinafter referred to as 'the Authority') having agreed to grant a
licence to Satyam Infoway Limited, 35 Velachery Road, Little Mount, Chennai 600
015, (hereinafter called the 'LICENSEE' to establish, maintain and operate
Internet service (hereinafter called the SERVICE') on the terms and conditions
contained in the said Licence, which interalia provides for production of a Bank
Guarantee to the extent of Rs. 2,00,00,000/- (Rupees two crores only) for the
service by way of security for the due observance and performance of the terms
and conditions of the said licence, we IDBI Bank Ltd., a company incorporated
under the Companies Act 1956 and a banking company within the meaning of the
Banking Regulation Act, 1949 and having its registered office at Chaturvedi
Mansion, 2nd Floor, 26/4 Old Palasia, Agra-Bomaby, Road, Indore 452 001 and
among other places a branch at P.M. Towers, 37 Greams Road, Chennai 600 006
(hereinafter referred to as 'the Bank') at the request of the LICENSEE hereby
irrevocably and unconditionally guarantee to the Authority that the Licensee
shall render all necessary and efficient services which may be required to be
rendered by the LICENSEE in connection with and/or for the performance of the
said LICENSEE and further guarantees that the service which shall be provided by
the LICENSEE under the said licence, shall be actually performed in accordance
with terms & conditions of the LICENCE to the satisfaction of the Authority.
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2. We, the bank hereby undertake to pay to the Authority an amount not
exceeding Rs. 2,00,00,000/- (Rupees two crores only) against any loss or
damage caused to or suffered or would be caused to or suffered by the
Authority by reason of any breach by the said LICENSEE of any of the terms
and conditions contained in the said licence.
3. We, the bank hereby, in pursuance of the terms of the said licence,
absolutely, irrevocably and unconditionally guarantee as primary obliger
and not merely as surety the payment of an amount of Rs. 2,00,00,000/-
(Rupees two crores only) to the Authority to secure due and faithful
performance by the LICENSEE of all his/their obligations under the said
Licence.
4. We, the bank hereby also undertake to pay the amounts due and payable under
this guarantee without any demur, merely on a demand from the Authority
stating that the amount claimed is due by way of loss or damage caused or
would be caused to or suffered by the Authority by reason of breach by the
said LICENSEE of any of the terms or conditions contained in the said
Licence or by reason of the LICENSEE's failure to perform any of it's
obligations under the said Licence."
5. We, the bank, do hereby agree that the decision of the Authority as to
whether the licensee has failed to or neglected to perform or discharge his
duties and obligations as aforesaid and/or whether the service is free from
deficiencies and defects and is in accordance with or not of the terms &
conditions of the said Licence and as to the amount payable to the
Authority by the Bank hereunder shall be final and binding on the Bank.
6. WE, THE BANK, DO HEREBY DECLARE AND AGREE that:
a) the Guarantee herein contained shall remain in full force and effect
for a period of two years from the date hereof and that it shall continue to be
enforceable till all the dues of the Authority and by virtue of the said Licence
have been fully paid and its claims satisfied or discharged or till Authority
satisfies that the terms and conditions of the said licence have been fully and
properly carried out by the said LICENSEE and accordingly discharged this
guarantee.
b) the Authority 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 said Licence or to extend time of performance of any
obligations by the said LICENSEE from time to time or to postpone for any time
or from time to time any of the powers exercisable by the Authority against the
said LICENSEE and to forbear or to enforce any of the terms and conditions
relating to the said Licence and we shall not be relieved from our liability by
reason of any variation or extension being granted to the said LICENSEE or
forbearance act or
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omission on the part of the Authority or any indulgence by the
Authority to the said LICENSEE or to give such matter or thing
whatsoever which under the law relating to sureties would but for this
provision, have effect of so relieving us.
c) any claim which we have against the LICENSEE shall be subject and
subordinate to the prior payment and performance in full of all the obligations
of us hereunder and we will not without prior written consent of the Authority
exercise any legal right or remedy of any kind in respect of any such payment or
performance so long as the obligations of us hereunder remains owing and
outstanding.
d) this Guarantee shall be irrevocable and the obligations of us herein
shall not be conditional of any prior notice by us or by the LICENSEE.
7. We the BANK undertake not to revoke this Guarantee during its currency
except with the previous consent of the Authority in writing.
Notwithstanding anything contained hereinabove:
(i) our liability under this guarantee shall not exceed Rs.
2,00,00,000/-(Rupees two crores only)
(ii) this Bank Guarantee shall be valid up to and including 3rd
November 2000.
(iii) We are liable to pay the guaranteed amount or any part thereof
under this Bank Guarantee only and only if you serve upon us a written claim or
demand on or before the expiry of this guarantee.
Dated this 4/th/ day of November 1998.
For IDBI BANK LTD.
[IDBI BANK LTD. SEAL]
Witness:
1.
2.