EXHIBIT 99.6
[Letterhead - Industrial and Commercial Bank of China, Singapore
Branch]
PERFORMANCE GUARANTEE
Irrevocable, Unconditional Guarantee
No. 9711073
TO: Bhote Koshi Power Company Private Limited
(hereinafter referred to as the "Owner")
KHA 1-960, Kalimati, Tachachal
Kathmandu, Nepal
ATTN: ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
10 December 1997
Dear Sirs:
We refer to our Performance Guarantee No. 9705047, for
USDLR3,400,000.00 dated 1 May 1997 and our Performance
Guarantee No. 9610025 for USDLR11,600,000.00 dated 8 Oct 1996.
Please be advised that these two guarantees are hereby
cancelled and replace by the following Guarantee No. 9711073.
Please confirm in writing that the above mentioned two
guarantees have been cancelled and shall cease to be valid and
binding on us upon your receipt of this Guarantee No. PG
9711073 dated 10 December 1997. This Guarantee replaces the
one (bearing the same number) which we sent to you via tested
Telex to Chase Manhattan Bank, New York on 8 December 1997.
Quote
Performance Guarantee No. 9711073
1. By an Amended and Restated Contract for the Engineering,
Procurement and Construction of the Upper Bhote Koshi
Hydroelectric Project on the Bhote Koshi River in the
Sindhupalchok District of Nepal (the "EPC Contract")
dated as of December 19, 1996 between the Owner and China
Gezhouba Construction Group Corporation for Water
Resources and Hydropower (the "Contractor"), the
Contractor shall provide an irrevocable, unconditional
bank guarantee from a financial institution acceptable to
Owner in an amount equal to twenty-five percent (25%) of
the Contract Price, namely US$11,600,000 (subject to
increase or decrease pursuant to Paragraph 2 hereof), and
Industrial and Commercial Bank of China (the
"Guarantor"), acting through its Singapore branch, which
has been requested by the Contractor, hereby agrees to
provide such Guarantee for the Contractor in favor of the
Owner. Terms defined and expressions construed in the
EPC Contract have the same meaning and construction in
this Guarantee.
2. The sum referred to in Paragraph 1 of this Guarantee
shall be amended as follows:
(i) Upon receipt by the Guarantor of a
certificate from the Owner stating that there
has been an increase or decrease of the
Contract Price pursuant to Article 6 of the EPC
Contract and stating the amount of such
increase or decrease, the sum referred to in
Paragraph 1 shall be increased or decreased, as
applicable, by the amount stated in such
certificate from the Owner (it being understood
that the aforesaid certificate shall have a
copy of the relevant change order attached);
(ii) Upon receipt by the Guarantor of a
certificate from the Owner stating that there
has been a drawing under this Guarantee for
amounts due from the Contractor for Performance
Liquidated Damages or Schedule Liquidated
Damages pursuant to Article 12 or Article 13 of
the EPC Contract and stating the amount of such
drawing, the Guarantor shall increase the
amount of this Guarantee by the amount of any
such drawing;
(iii) Promptly, upon receipt of a
certificate at any time and from time to time
pursuant to clause (i) or (ii) above from the
Owner, the Guarantor shall execute and deliver
by international courier to the Owner (or to
its respective order) (with a copy to the
Trustee) an amendment to this Guarantee, in the
form of Annex A (correctly completed),
confirming the adjustment of the amount of the
Guarantee in accordance with the terms hereof.
It is the express understanding and agreement of the
Guarantor, the Owner, and the Contractor that, except on
account of increases pursuant to Clause (i) of Paragraph
2 hereof, the maximum amount of the Contractor's
liability which is being guaranteed by the Guarantor
pursuant to this Guarantee is an amount equal to thirty-
five percent (35%) of the Contract Price, namely
USD16,219,000.00.
3. It is a condition precedent to the Owner's obligation
under the EPC Contract to employ the Contractor or to
continue such employment anytime during the term of the
EPC Contract that the Guarantor enters into this first
demand Guarantee in favor of the Owner of such twenty-
five percent (25%) of the Contract Price (subject to
increase and decrease pursuant to Paragraph 2 hereof).
4. This Guarantee is issued at the request of the Contractor
as per Exhibit G (as revised and agreed upon between the
Owner and the Contractor) of the EPC Contract, and shall
automatically become effective at Financial Closing,
without any further action or confirmation by the
Guarantor or the Contractor. This Guarantee shall be a
continuing guarantee remaining in full force and effect
during the entire term of the EPC Contract and until the
later of (i) the date falling thirty (30) days after WTC
has indicated, in a written notice to the Guarantor, the
agreement (a copy of which agreement does not need to be
presented to the Guarantor) of IFC that the Final
Acceptance of the Facility (as defined in the EPC
Contract) has occurred, and (ii) the date the Contractor
has delivered to the Owner (with a copy to the Trustee) a
Warranty Guarantee (in accordance with the EPC Contract)
in form and substance satisfactory to the Trustee, at
which time the Owner (or, if applicable, the Trustee)
shall return this Performance Guarantee to the Guarantor
with instructions for cancellation.
5. It is acknowledged and agreed that an intended assignee
of this Guarantee is Wilmington Trust Company, or any
substitute or replacement therefor from time to time
(provided IFC (as defined below) has given written notice
to the Guarantor of such substitute or replacement)
(Wilmington Trust Company or, as applicable, any such
substitute or replacement hereinafter referred to as
"WTC"), in each case acting on behalf of and for the
benefit of International Finance Corporation, an
international organization organized and existing by
virtue of the Articles of Agreement among its member
countries ("IFC") and DEG-Deutsche Investitions-und
Entwicklungsgesellschaft mbH, a company organised and
existing under the laws of the Federal Republic of
Germany ("DEG") (WTC, acting on behalf of and for the
benefit of IFC, referred to herein as the "Trustee").
6 This is an irrevocable and unconditional guarantee issued
by the Guarantor, whereby the Guarantor shall assume the
liability of a primary obligor, and not merely as
guarantor under an ordinary guarantee, and shall be
jointly and severally liable with the Contractor to the
Owner for the twenty-five percent (25%) of the EPC
Contract Price, namely US $11,600,000.00 (subject to
increase and decrease pursuant to Paragraph 2 hereof).
Accordingly, the Guarantor hereby unconditionally and
irrevocably guarantees the due and punctual payment by
the Contractor of all sums whatsoever that the Owner
shall certify (in a manner set out in paragraph 6 below)
are due and owing by the Contractor to the Owner, whether
actually or contingently, under or in connection with the
EPC Contract, up to a maximum amount of US$11,600.000.00
(the "Guaranteed Amount") (subject to increase and
decrease pursuant to Paragraph 2 hereof) and the
Guarantor unconditionally and irrevocably agrees that, if
the Owner notifies (in writing) the Guarantor that for
any reason the Contractor has not made payment on first
demand of any such sums, the Guarantor will pay such sums
on first demand by the Owner, up to the Guaranteed
Amount. Should there be any increase or decrease of the
Contract Price pursuant to Paragraph 2 hereof, the
Guaranteed Amount automatically shall be adjusted
accordingly immediately upon the delivery to the
Guarantor of a certificate in accordance with Paragraph 2
hereof, and any delay by the Owner to deliver to the
Guarantor a certificate in accordance with Paragraph 2
hereof shall not affect the increase or decrease of the
Guaranteed Amount immediately upon delivery of such
certificate, nor shall the failure of the Guarantor to
execute and deliver an amendment in accordance with
Paragraph 2(iii) hereof affect the increase or decrease
of the Guaranteed Amount.
7. Under this Guarantee, the Owner is hereby granted with
absolute and unconditional rights to make multiple
drawings from time to time, and in the event that the
Contractor fails to perform its obligations under the EPC
Contract, the Owner shall be entitled to issue a written
demand to the Guarantor for payment up to an aggregate
amount not to exceed the Guaranteed Amount, as increased
or decreased from time to time as aforesaid. Such
written demand shall be in the following form:
"Re: Guarantee No. [___________________]
(i) We refer to the Irrevocable Unconditional
Guarantee No. [______________] (the "Guarantee") for
a maximum amount of US$11,600,000.00 (or such other
amount as may be provided for therein). Terms
defined in the Guarantee shall have the same meaning
in this Certificate.
(ii) We hereby state that the Contractor has failed
to perform its obligations under the EPC Contract.
(iii) We hereby demand from you the sum of
US$[_____________] under the Guarantee.
(iii) We hereby confirm and certify to you that
as at the date of this Certificate, the sum being
drawn is due and owing by the Contractor under the
EPC Contract and the Contractor has not fulfilled
its obligations under the EPC Contract to pay such
sum on first demand and that, accordingly, we are
entitled to make a claim on you under the Guarantee.
(iv) Please pay such amount by wire transfer, in
immediately available funds, in US Dollars, to
Account No. , in the name of ,
at Wilmington Trust Company, [address]."
The Guarantor shall not require that such written demand
be accompanied by any documents from any third parties or
any evidence of the Contractor's non-compliance with the
EPC Contract.
8. Under this Guarantee, the Guarantor is hereby committed
to honor such written demand from the Owner for payment
immediately upon presentation. Each payment by the
Guarantor hereunder shall be made in US Dollars and shall
reduce the cumulative amount of the Guaranteed Amount on
a dollar-for-dollar basis, subject, however, to the
Guarantor's obligation to increase the amount of this
Guarantee pursuant to Paragraph 2 hereof. The Guarantor
shall neither require the Owner to exercise its recourse
against the Contractor first, nor require the Owner to
exhaust its remedies against the Contractor first, and
shall not set such requirements as a precondition of the
Guarantor to effect its payment under this Guarantee. In
particular, the Guarantor shall not raise any contractual
defense by the Contractor under the EPC Contract, but
shall honor its obligations hereunder as an indebtedness
independent of the EPC Contract or any obligations of the
Contractor thereunder. Without limiting the foregoing,
any evidence or assertion submitted or made by the
Contractor or any third party shall not impact in any way
the Guarantor's obligations to make payments under this
Guarantee upon written demand therefor from the Owner.
9. This Guarantee is not assignable by either the Guarantor
or the Owner, except by the Owner to the Trustee or by
the Owner to any person to whom the Trustee or IFC may
sell an interest in the Facility upon delivery to the
Guarantor of a completed notice of assignment, signed by
the assignor and counter-signed by the assignee. This
Guarantee shall be binding on the Guarantor and its
successors and shall inure to the benefit of the Owner
(and its successors and permitted assignees).
10. The obligations of the Guarantor hereunder shall not be
discharged by (i) any time, grace, indulgence, waiver or
consent at any time given to the Contractor, (ii) any
lack of validity or enforceability of, or any termination
of, amendment to or affecting, or waiver of, any clause
of the EPC Contract, provided that any amendment to the
EPC Contract which increases the Contract Price (with the
exception of any increase pursuant to Paragraph 2 hereof)
will not increase the amount guaranteed by the Guarantor
hereunder, (iii) any failure or delay in the enforcement
or release of any rights in connection with or under the
EPC Contract or this Guarantee. The Guarantor further
acknowledges and agrees that it will remain liable
hereunder notwithstanding that the Contractor may cease
to exist or for any other reason the Owner may no longer
be able to deal with the Contractor.
11. The Guarantor hereby represents, warrants and covenants
to the Owner as follows:
(a) The Guarantor is a state-owned bank duly
organized and validly existing under the laws of
China, is duly registered to do business in
Singapore as a branch and has full power, authority
and legal capacity to execute and deliver this
Guarantee and to assume and perform the obligations
provided for herein;
(b) The Guarantor has taken all appropriate and
necessary legal and other actions to authorize the
execution, delivery and performance of this
Guarantee;
(c) This Guarantee constitutes a legal, valid and
binding obligation of the Guarantor enforceable in
accordance with its terms;
(d) The obligations of the Guarantor hereunder rank
and will rank at least pari passu in priority of
payment and in all other respects with all other
unsecured indebtedness of the Guarantor;
(e) The Guarantor shall supply to the Owner and the
Trustee, upon request, copies of the annual
financial statements of the Guarantor; and
(f) There are no conditions precedent to the
obligation of the Guarantor to perform under, or for
the effectiveness of, this Guarantee.
12. This Guarantee is a commercial act of the Guarantor in
relation to a commercial transaction and all obligations
of the Guarantor arising under this Guarantee are
commercial in nature. The Guarantor hereby irrevocably
waives, and agrees not to raise, any claim of immunity
(if any) from suit, attachment or execution in respect of
any claims which may be made against it at any time
concerning its obligations under this Guarantee, and the
Guarantor agrees that the waivers and agreements set
forth herein shall have the fullest scope permitted under
the Foreign Sovereign Immunities Act of 1976 of the
United States and are intended to be irrevocable for the
purposes of such Act.
13. Any demand from the Owner to the Guarantor for payment
must be in written form, in the English language
delivered to the Guarantor at the following address (or
any new address designated by the Guarantor in writing
duly notified to the Owner in the future) in the
following manner:
(a) Method of delivery: (i) personally delivered,
(ii) transmitted by postage prepaid registered mail
(airmail if international), (iii) transmitted by
internationally recognized courier service, or (iv)
transmitted by telex or facsimile.
(b) Address of the Guarantor:
Industrial and Commercial Bank of China
c/o Singapore Branch
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Telephone Number: (▇▇)▇▇▇ ▇▇▇▇
Fax Number: (▇▇)▇▇▇ ▇▇▇▇
Attn.: General Manager
14. This Guarantee sets out the entire undertaking of the
Guarantor to the Owner.
15. This Guarantee shall be governed by and construed in
accordance with Singapore Law.
IN WITNESS WHEREOF, the undersigned ▇▇▇▇▇▇▇▇▇ has executed
this Guarantee by its duly authorized officer the day and year
first above-written.
INDUSTRIAL AND COMMERCIAL BANK OF CHINA
c/o Singapore Branch
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By:____________________________________
Name: ▇▇▇▇ ▇▇▇▇▇
Title: General Manager
Annex A
Form of Letter of Amendment to Amount of Performance Guarantee
To: Bhote Koshi Power Company Private Limited and
Trustee
Amendment to the Performance Guarantee
No. dated [ ] 1997
Whereas we, Industrial and Commercial Bank of China, acting
through its Singapore Branch, as the Guarantor under the
Performance Guarantee, issued such Performance Guarantee in
favour of the Owner on [ ] 1997 and have
received a certificate from the Owner in accordance with
Paragraph 2 of the Performance Guarantee.
NOW THIS AMENDMENT WITNESSETH as follows:
1. The sum set out in Paragraph 1 of the Performance Guarantee
is [increased] [reduced] by the amount of US$ [amount
certified by the Owner, as applicable].
2. As a consequence of the [increase] [decrease] referred to in
Paragraph 1 of this Amendment, the sum set out in Paragraph
1 of the Performance Guarantee is [amount specified in
Paragraph 1 of the Performance Guarantee prior to amendment
increased or decreased, as applicable, by the amount
specified in Paragraph 1 of this Amendment].
3. All other terms and conditions of the Performance Guarantee
shall remain unchanged.
4. A term defined in the Performance Guarantee has the same
meaning in this Annex A.
Yours faithfully
__________________________________
(Authorized Signatories)
For an on behalf of
Industrial and Commercial Bank of China