IRREVOCABLE STANDBY LETTER OF CREDIT
[Letterhead of Bank]
[Agency Name]
[Agency Address]
Place:
Standby Letter of Credit No.
Date:
Dear Sirs:
KNOW ALL MEN BY THESE PRESENTS that we, [•], a corporation organized and existing under the laws of the Republic of the Philippines (the "Issuer"), hereby establish our Irrevocable Standby Letter of Credit No. [•] (the "Letter of Credit") in your favor and for the account of [insert name of Company] ("Company") relating to the obligations of the Company from the Signature Date until the Provisional Operations Start Date under the Bulk Water Supply Agreement dated [•] (the "Agreement") between yourselves and Company. Capitalized terms used in this Letter of Credit shall have the meanings given to them in the Agreement except as otherwise expressly defined herein.
1. The maximum aggregate amount available under this Letter of Credit is [•] Pesos (PHP [•+) (the "Stated Amount"). The Stated Amount shall be reduced from time to time by drawings made hereunder and by express notice in writing from Agency to Issuer.
2. Subject to the other provisions of this Letter of Credit, Agency is hereby irrevocably authorized to make one or more drawings under this Letter of Credit by presenting to the Issuer, at its address set forth above, a demand for payment from Agency in substantially the form attached as Annex A, duly completed, and that is in the form of (a) a letter on Agency's letterhead signed by any of its authorized signatories, or (b) a tested telex sent by any of its authorized signatories.
3. Multiple drawings may be made hereunder, provided that each drawing honored by the Issuer shall reduce the amount available under this Letter of Credit. The Issuer shall be deemed to have honored a drawing if the Issuer deposits the amount of such drawing in the account (the "Designated Account") designated by Agency in accordance with Annex A. Forthwith upon any such drawing being honored, the Stated Amount shall be reduced by an amount equal to the amount of such drawing. Any such drawing made hereunder shall be free and clear of all interest and charges and any sums due to the Issuer.
4. We hereby agree to honor each drawing hereunder made in compliance with this Letter of Credit by transferring in immediately available funds to the Designated Account the amount specified in a demand for payment at the opening of business on the first or second Business Day succeeding the date of such demand. As used herein, the term "Business Day" means any day other than (i) a Saturday or Sunday or (ii) a day on which banking institutions in [•], Philippines are authorized or obligated by law or executive order to remain closed.
5. If a demand for payment does not conform to the terms and conditions of this Letter of Credit, we shall give prompt notice (but within the first Business Day succeeding the date of such demand) to Agency that the demand for payment was not effected in accordance with the terms and conditions of this Letter of Credit, stating the reasons for the same. Upon being notified that a demand for payment was not effected in conformity with this Letter of Credit, you may attempt to correct any such nonconforming demand and re-submit such demand in accordance with the terms and conditions hereof.
6. This Letter of Credit shall expire (unless otherwise extended in accordance with the provisions hereof) on the earliest of (i) 5 p.m. at the place of presentation on [insert date no less than one year from date of the Letter of Credit], (ii) the date on which we receive confirmation from you that the Stated Amount has been reduced to zero, and (iii) the date on which we have honored a drawing or drawings in an aggregate amount equal to the Stated Amount (the "Expiration Date"). With respect to subclause (i), on the Business Day immediately preceding such Expiration Date, the Expiration Date shall be automatically extended to the date one year after such Expiration Date, unless the Issuer notifies Agency in writing not less than [•] Days prior to such Expiration Date that such Expiration Date will not be extended. In case Agency receives a notification from the Issuer that this Letter of Credit will not be extended, Agency may draw the full undrawn portion of this Letter of Credit by Agency's written certificate of demand for payment, in substantially the form of Annex A, which must be received by the Issuer before the then current Expiration Date.
7. All documents presented to the Issuer in connection with any drawing hereunder, as well as all notices and other communications to the Issuer in respect of this Letter of Credit, must comply with they following conditions:
a. They must be in writing.
b. They must make specific reference to this Letter of Credit by number.
c. They must be addressed and delivered or sent by courier to the Issuer at its address set forth above (or at such other address as the Issuer shall have specified in writing to Agency) or sent to the Issuer by tested telex to the following number:
Telex No. [ ] (Answerback: [ ]).
8. This Letter of Credit may not be cancelled or amended without the prior written consent of the Issuer and Agency.
9. This Letter of Credit sets forth our undertaking and our agreement with you and such undertaking and such agreement may not in any way be modified, amended, amplified, or limited by reference to any other document, instrument, or agreement referred to herein.
10. The Issuer hereby agrees that it shall have no recourse to Agency if the Company fails at any time to pay any amounts which may from time to time to be due and payable by it to the Issuer in relation to this Letter of Credit.
11. References in this Letter of Credit to the Agreement or any other document or instrument, except to the Annexes hereto, are for identification purposes only. The Agreement and such other documents and instruments are not incorporated herein, nor are they made a part of this Letter of Credit.
12. This Letter of Credit is issued subject to the Uniform Customs and Practice for Documentary Credits, 1993 revision, International Chamber of Commerce Publication No. 500 ("UCP 500"), the provisions of which are incorporated into this Letter of Credit, except to the extent superseded by the express terms and conditions of this Letter of Credit and excluding Article 41 (Installment Shipments/Drawings) and Article 48 (Transferable Credit) in their entirety, excluding the last sentence of Article 17 (Force Majeure) and substituting therefor the following: If this Letter of Credit should expire during an interruption of our business as described in Article 17, the Issuer hereby agrees to honor any demand presented in accordance with this Letter of Credit within thirty (30) days after the resumption of our business.
13. To the extent that the provisions of this Letter of Credit are not governed by UCP 500 this Letter of Credit shall be governed by the laws of the Republic of the Philippines and construed in accordance with said laws, without regard to principles of conflicts of law.