PERFORMANCE BOND/BANK GUARANTEE

1. In consideration for the President of India, acting

through the Director General of Supplies & Disposals

(hereinafter called the Government) having agreedd to

release the 100% payment of nett. f.o.b. price under the

terms and conditions of a concluded Contract

No._________________________________for supply of__________

____________________to________________________(Please state

the name of the contractor) (give full particulars

including status and address of the contractor)

(hereinafter referred as the 'contractor') on submission of

a Bank Guarantee to the satisfaction of the Government for

the due performance of the said contract.

2. We_________________(hereinafter referred to as the

Bank) at the request of ________ ______________(contractor)

do, as primary obliger and not merely as surety, hereby

irrevocably, unconditionally and absolutely undertake

against any loss or damage caused to or suffered or would

be caused to or suffered by the Government by reason of any

failure of the Contractor to perform or omission or

negligence to perform any part of his/their obligation to

the satisfaction of the purchaser in terms of the contract.

3. We_____________________________do hereby undertake to

pay the amount due and payable under this guarantee without

any demur merely on a demand from the Government stating

that the amount claimed is due by way of loss or damage

caused to or would be caused to or suffered by the

Government by reason of any breach by the said

contractor(s) of any of the terms and conditions contained

in the said contract or by reason of the contractor(s)

failure or omission or negligence to perform the said

contract or any part thereof. Any such demand made on the

bank shall be conclusive as regards the amount due and

payable by the bank under this guranteee, which shall not

be considered as satisfied by any intermediate payment or

satisfaction of any part of or obligation hereunder.

However, our liability under this guarantee shall be

restricted to an amount not exceeding Rs.__________________

4. We undertake to pay to the Government any amount so

demanded by the Government, notwithstanding.

(a) any dispute or difference between the Government or

the Contractor or any person or any suit or

proceeding pending before any court or tribunal or

arbitrator relating thereto; or

(b) the invalidity, irregularity or unenforceability of

the contract; or

(c) any other circumstances which might otherwise

constitute discharge of this Guarantee, including any

act or omission or commission on the part of the

Government to enforce the obligations by the

Contractor(s)or any other person for any reason

whatsoever.

5. We________________________________(indicate the name of

the bank) further agree that the guarantee herein contained

shall be continued one and remain in full force and effect

during the period that would be taken for the performance

of the said Agreement and that it shall continue to be

enforceable till all the dues of the Government under or by

virtue of the said agreeement have been fully paid and its

claims satisfied or discharged or till_______________office

/Department, Ministry of _____________________certifies

that the terms and conditions of the said Agreement have

been fully and properly carried out by the said

contractor(s) and accordingly discharges this guarantee.

6. We, _____________________________hereby agree and

undertake that any claim which the Bank may have against the

Contractor shall be subject and subordinate to the prior

payment and performance in full of all the obligations of the

Bank hereunder and the Bank will not without prior written

consent of the Government exercise any legal rights or

remedies of any kind in respect of any such payment or

performance so long as the obligations of the Bank hereunder

remain owing and outstanding, regardless of the insolvency,

liquidation or bankruptcy of the Contractor or otherwise

howsoever.We will not counter claim or set off against its

liabilities to the Government hereunder any sum outstanding

to the credit of the Government with it.

7. We_________________________(indicate the name of bank)

further agree with the Government that the Government 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 Agreement or to

extend time of performance by the said contravctor(s) from

time to time or to postpone for any time or from time to

time and of the powers exerciseable by the Government

against the said contractor(s) and forbear or enforce any

of the terms and conditions relating to the said agreement

and we shall not be relieved from our liability by reason

of any such variation, or extension being granted to the

said contract(s) or for any forbearance, act or omission on

the part of the Government or any indulgence by the

Government to the said contractor(s) or by any such matter

or thing whatsoever which under the law relating to

sureties would, but for this provision, have effect of so

relieving us.

8. This guarantee will not be discharged due to the change

in the constitution of the Bank of the Contractor(s).

9. We___________________________ (indicate the name of

bank) lastly undertake not to revoke this gurantee during

its currency except with the previous consent of the

Government in writing.

The disputes relating to this Bank Guarantee shall be

resolved as per terms and conditions of the contract.

Dated the _____________________________day of 19____.

For ______________________________________(indicate the

name of Bank).