TNAG-0769-FCO40-973-Supplies-of-electrical-power-for-Hong-Kong-Castle-Peak-power-1978 — Page 26

IS IMPORTANT TO THEM THAT CLP ITSELF BE THE BORROWER AS HAS BEEN PROPOSED THROUGHOUT THE LATTER STAGES OF NEGOTIATION.

5. HOWEVER, YOU CAN INDICATE THAT ECGD, WHOM WE NATURALLY CONSTED ON THIS POINT, QUOTE HAVE NO OBJECTIONS TO THE OPTION CLAUSE PROPOSED FOR THE LETTER OF INTENT PROVIDED CLP ACCEPT THAT ECGD WILL REQUIRE A CLAUSE ALONG THE LINES OF CLAUSE 14.1 OF THE KESCO LOAN (EXCLUDING THE INDIRECT REFERENCES TO THE INTER-COMPANY AGREEMENTS) TO BE INCORPORATED IN THE NEW LOAN AGREEMENT WITH CLP. UNQUOTE

6. THIS CLAUSE READS AS FOLLOWS:

QUOTE THE BORROWER HEREBY COVENANTS WITH THE BANKER THAT SO LONG AS ANY ADVANCES REMAIN TO BE MADE OR REPAID ...... IT WILL

NOT ASSIGN, TRANSFER OR OTHERWISE DISPOSE OF THE RIGHTS AND BENEFITS TO WHICH IT SHALL FROM TIME TO TIME-BE ENTITLED UNDER ANY OF THE DOCUMENTS REFERRED TO IN CLAUSE 5.1.1.10 (INCLUDING INTER ALIA THE SUPPLY CONTRACT AND THE SCHEME OF CONTROL) EXCEPT IN ACCORDANCE WITH THE TERMS THEREOF AND PROVIDED THAT ANY SUCH ASSIGNMENT TRANSFER OR DISPOSAL DOES NOT RESULT IN A MEMBER OF THE GROUP (IE CLP, PEPCO AND KESCO) CEASING TO OWN THE ASSETS WHICH IT REQUIRES FOR THE IMPLEMENTATION OF THE REVISED SCHEME OF CONTROL. WITHOUT THE PRIOR WRITTEN APPROVAL OF THE BANKER AND ECGD SUCH APPROVAL NOT TO BE UNREASONABLY REFUSED.

7. THE INWARDNESS TO THIS IS THAT ECGD ARE CONTENT THAT PROVIDED THAT IT IS CLP WHO SIGN THE LOAN AGREEMENT, AND PROVIDED A CLAUSE ON THESE LINES IS INCLUDED, THEY WILL CONSIDER THEMSELVES ADEQUATELY COVERED THEREAFTER.

8. THERE SHOULD PRESUMABLY BE NO PROBLEM ABOUT THE CLAUSE, SINCE IT WAS ACCEPTED FOR KESCO. WE WANT TO PLAY THE IMPORTANCE OF CLP AS BORROWER DOWN, BUT TO HAVE IT ON THE RECORD AS A CONDITION OF OUR AGREEMENT. ECGD THEREFORE WOULD PREFER THAT THEIR CONDITIONS (QUOTED ABOVE) BE IN WRITING OR CONFIRMED IN WRITING, SO THAT IF NECESSARY THE WORDS QUOTE WITH CLP UNQUOTE AT THE END CAN SUBSEQU

ENTLY BE HIGHLIGHTED IF NECESSARY.

9. WE SUGGEST YOU MAKE THE CONDITION KNOWN VERBALLY, BUT TRY TO FIND AN OPORTUNITY EVEN AFTER THE SIGNATURE OF THE LOI TO CONFIRM IN WRITING.

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