CONFIDENTIAL
21982 1
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IS A CLEAR DEMONSTRATION OF THE WISHES OF BOTH PARTIES
BUT IF THE BANK OF CHINA WISHED TO HAVE PART OF IT
EXPRESSED IN A SEPARATE DOCUMENT, HMG WOULD BE PREPARED
TO SIGN A SEPARATE LETTER WHICH WOULD EXPRESS AGAIN WHAT
IT HAS SAID IN THE MEMORANDUM OF UNDERSTANDING.
ANOTHER OUTSTANDING MATTER NOT MENTIONED IN THE MEMORANDUM BUT
REFERRED TO IN SUBSEQUENT MEETINGS IS THE QUESTION OF CROSS
DEFAULT UNDER THE LOAN AGREEMENT. ECGD AT PRESENT REQUIRE A
CROSS DEFAULT WITH ALL OTHER LOANS IN RESPECT OF THE CONVENTIONAL
AND NUCLEAR ISLANDS OF THE PROJECT. IF THE FRENCH HAVE THIS
RIGHT, THEN ECGD MUST CONTINUE WITH ITS REQUEST FOR PARITY.
OTHERWISE, IN ORDER TO MEET THE CHINESE POSITION, ECGD WOULD BE
PREPARED TO WAIVE THIS REQUIREMENT AND WOULD ACCEPT INSTEAD A
CROSS DEFAULT WITH ANY OTHER LOANS NOW OR IN THE FUTURE TO WHICH
ECGD AND THE BANK OF CHINA ARE ASSOCIATED.
UNQUOTE.
GUANGDONG
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