EXHIBIT 10.94
AMENDED AND RESTATED
OPERATION AND MAINTENANCE AGREEMENT
BY
AND
BETWEEN
TANGSHAN PANDA HEAT AND POWER CO., LTD.
TANGSHAN PAN-WESTERN HEAT AND POWER CO., LTD.
TANGSHAN CAYMAN HEAT AND POWER CO., LTD.
TANGSHAN PAN-SINO HEAT CO., LTD.
AND
DUKE/FLUOR ▇▇▇▇▇▇ INTERNATIONAL SERVICES
TABLE OF CONTENTS
SECTION I
DEFINITIONS 3
SECTION II
SERVICES TO BE PERFORMED BY OPERATOR 8
SECTION III
SERVICES TO BE PERFORMED BY OWNER 31
SECTION IV
COMPENSATION 34
SECTION V
PAYMENT 45
SECTION VI
TERM 46
SECTION VII
TERMINATION 47
SECTION VIII
INSURANCE AND INDEMNIFICATION 51
SECTION IX
PERMITS AND LICENSES 57
SECTION X
INDEPENDENT CONTRACTOR 58
SECTION XI
COORDINATION AND ACCESS 58
SECTION XII
FORCE MAJEURE 59
SECTION XIII
ARBITRATION 61
SECTION XIV
OPERATOR AND OWNER REPRESENTATIONS AND WARRANTIES 61
SECTION XV
NOTICES 64
SECTION XVI
APPLICABLE LAW 65
SECTION XVII
NON-WAIVER 66
SECTION XVIII
TITLE 67
SECTION XIX
ASSIGNMENT 67
SECTION XX
MISCELLANEOUS 67
AMENDED AND RESTATED
OPERATION AND MAINTENANCE AGREEMENT
BY
AND
BETWEEN
TANGSHAN PANDA HEAT AND POWER CO., LTD.,
TANGSHAN PAN-WESTERN HEAT AND POWER CO., LTD.
TANGSHAN CAYMAN HEAT AND POWER CO., LTD.
TANGSHAN PAN-SINO HEAT CO., LTD.
AND
DUKE/FLUOR ▇▇▇▇▇▇ INTERNATIONAL SERVICES
RECITALS:
THIS AMENDED AND RESTATED OPERATION AND MAINTENANCE
AGREEMENT is made and entered into on the 6th day of March, 1997,
by and between Tangshan Panda Heat and Power Co., Ltd., a Chinese
Joint Venture company ("Tangshan Panda"), Tangshan Pan-Western
Heat and Power Co., Ltd., a Chinese Joint Venture company
("Tangshan Pan-Western"), Tangshan Cayman Heat and Power Co.,
Ltd., a Chinese Joint Venture company ("Tangshan Cayman") and
Tangshan Pan-Sino Heat Co., Ltd., a Chinese Joint Venture company
("Tangshan Pan-Sino") (collectively, hereinafter referred to as
"Owner"), and Duke/Fluor ▇▇▇▇▇▇ International Services, a general
partnership formed in the State of Nevada by Duke Coal Project
Services Pacific, Inc., a Nevada corporation, and Fluor ▇▇▇▇▇▇
▇▇▇▇, Inc., a Delaware corporation, (hereinafter referred to as
"Operator"), individually referred to hereinafter as "Party" and
collectively as "Parties."
WHEREAS, Duke Coal Project Services Pacific, Inc. entered
into a Partnership Agreement dated September 1, 1994 with Fluor
▇▇▇▇▇▇ ▇▇▇▇, Inc. to form the partnership to be known as
Duke/Fluor ▇▇▇▇▇▇ International Services;
WHEREAS, Owner and North China Power Group Company, a
Chinese company (the "Utility") entered into an Electric Energy
Purchase and Sales Agreement dated September 22, 1995, pursuant
to which Owner intends to construct and operate two nominal 50MW
coal-fired electric and thermal energy cogeneration power
generation stations (collectively, the "Facilities") in Luannan
County near the city of Gujiaying, Hebei Province, the People's
Republic of China and pursuant to which Owner will sell and the
Utility will purchase electrical energy produced by the
Facilities and Owner shall sell steam and heat to local
businesses;
WHEREAS, Owner and Harbin Power Engineering Company,
Limited, a Chinese company (the "EPC Contractor") have entered
into a turnkey Engineering, Procurement and Construction
Agreement dated April 24, 1996 (the "EPC Contract") a copy of
which has previously been furnished to Operator pursuant to which
the EPC Contractor thereunder will design, construct, test and
startup the Facilities;
WHEREAS, Owner desires to have Operator provide pre-
commercial and post-commercial operation and maintenance services
at the Facilities and Operator desires to provide such services;
WHEREAS, Owner and Duke/Fluor ▇▇▇▇▇▇ International Services,
Inc. entered into the Operation and Maintenance Agreement dated
June 26, 1996 and where Duke/Fluor ▇▇▇▇▇▇ International Services,
Inc. was characterized incorrectly as a Nevada corporation; and
WHEREAS, the Operation and Maintenance Agreement dated June
26, 1996 is superceded by this Amended and Restated Operation and
Maintenance Agreement dated as of the date first written above.
NOW, THEREFORE, in consideration of the foregoing and of the
premises hereinafter contained, Owner and Operator agree as
follows:
SECTION I
DEFINITIONS
Whenever the following terms appear in this Agreement, they
shall have the following meanings:
"Affiliate" shall mean, with respect to any corporation, a
corporation which controls, is controlled by, or is under common
control with such corporation or successor thereto.
"Agreement" shall mean this Operation and Maintenance
Agreement made and entered into on the date set forth above by
and between Tangshan Panda Heat and Power Co., Ltd., Tangshan Pan-
Western Heat and Power Co., Ltd., Tangshan Cayman Heat and Power
Co., Ltd., Tangshan Pan-Sino Heat Co., Ltd., and Duke/Fluor
▇▇▇▇▇▇ International Services.
"Annual Budget" shall mean the budget of all costs and
expenses anticipated to be incurred by Operator to meet its
obligations under this Agreement during any calendar year, or
part thereof.
"Annual Outage Period" shall mean the annual period from
November 1 through October 31 each year.
"Approved Budget" shall mean the annual budget prepared and
submitted by Operator pursuant to Section 2.17 hereof, which has
been approved by Owner.
"Authorization To Proceed" shall mean Owners' written notice
to Operator to commence the work required by this Agreement.
"Claims" shall have the meaning given such term in Section
8.03A. hereof.
"Commencement Date" shall mean the calendar date upon which
Operator is to commence the work required by this Agreement as
specified in the Authorization to Proceed. The expected date for
the Commencement Date is September 1, 1996.
"Commercial Operation Date" shall mean the date upon which
Owner's Facilities start regular delivery of their electric
energy delivered to the Utility's Grid which shall be determined
by the Utility and Owner after approval of 72 hour full-load
testing operation by both the generation units of Owner's
Facilities.
"Consumables" shall have the meaning set forth in Section
2.07 hereof.
"EPC Contract" shall mean the Turnkey EPC Contract between
Owner and EPC Contractor relating to the design, procurement,
construction, testing and starting up of the Facilities as the
same may be amended, supplemented or modified from time-to-time.
"EPC Contractor" shall mean Harbin Power Engineering Company
Limited, a Chinese company.
"Facilities" shall mean two nominal 50 MW coal-fired
electric and thermal energy cogeneration power stations and steam
and hot water distribution systems to be built by Owner in
Luannan County near the city of Gujiaying in Hebei Province, The
People's Republic of China to supply electrical energy to the
Utility and thermal energy to a number of Chinese companies in
Luannan County and all equipment contained therein and parts
thereof. It shall include, without limitation, the fuel
receiving and storage facility, all fuel delivery equipment from
the fuel storage facility to the balance of the Facility,
interconnection facilities to interconnect disconnect switch with
the Utility (that is on the high side of Owner's step-up
transformer) and other auxiliary equipment and systems described
in the EPC Contract. It shall also include the steam and hot
water distribution systems, including, without limitation,
piping, heat exchangers, valves, controls, and insulation, to be
built under separate contracts, up to the interconnect point at
each individual customer.
"Facilities Funding Date" shall mean the date upon which the
initial loans are made by the Lenders to Owner.
"Heat Rate" shall mean the net electrical output divided
into the thermal input expressed in British Thermal Units Per
Kilowatt Hours (BTU/kWh) at a specific process steam flow and
condition.
"Indemnitee" shall have the meaning set forth in Section
8.03A. hereof.
"Lender" and "Lenders" shall mean Pan-Western Energy
Corporation LLC, a Cayman Islands corporation.
"Loan Documents" shall mean the relevant documentation
executed between the Lender(s) and Owner for the financing of the
Facilities and any other financing documents as may be amended
from time-to-time, excerpts of which are attached hereto as
Exhibit C.
"Lost Work Day" shall mean any employee lost workday
resulting from an on-the-job injury or illness.
"Net Facilities Output" shall mean the power output of the
Facilities in Kilowatts (kW) measured at the high voltage side of
the main power transformer.
"Operator" shall mean Duke/Fluor ▇▇▇▇▇▇ International
Services.
"Owner" shall mean collectively Tangshan Panda Heat and
Power Co., Ltd., a Chinese Joint Venture company, Tangshan Pan-
Western Heat and Power Co., Ltd., a Chinese Joint Venture
company, Tangshan Cayman Heat and Power Co., Ltd., a Chinese
Joint Venture company, and Tangshan Pan-Sino Heat Co., Ltd., a
Chinese Joint Venture company.
"Owner's Account" or "Account of Owner" shall have the
meaning set forth in Section 4.02 of this Agreement.
"Owner's Representative" shall have the meaning set forth in
Section 3.01 of this Agreement.
"Outage" shall mean any interruption of required
(dispatched) electric energy deliveries (as set forth in Sections
2.1 and 2.2 of the Electric Energy Purchase and Sales Agreement)
to the Utility's Grid by Owner's Facilities.
"Outage Days" shall mean the cumulative elapsed outage time
of any type for each 50 MW unit of the Facilities calculated for
each Annual Outage Period. Outage Days will be calculated on an
actual time elapsed basis. (For example, twenty-four (24) one (1)
hour outages shall be equal to one (1) day). Outage Days do not
include the time when the Utility dispatches the unit(s) off-line
or the Utility is unable to accept electrical energy due to Force
Majeure conditions.
"Plant Manager" shall mean Operator's on-site employee
responsible for the operation and maintenance of the Facilities.
"Power Agreement" shall mean the Electric Energy Purchase
and Sales Agreement, and the General Interconnection Agreement,
both dated as of September 22, 1995, the Supplemental Agreement
dated February 10, 1996 and the technical interconnect dispatch
agreement (to be executed prior to the Commercial Operation
Date), relevant excepts of which are attached hereto as Exhibit
A, all between Owner and the Utility.
"Prudent Utility Practices" shall mean those practices
generally followed by the United States electric utility industry
with respect to the operation and maintenance of electric
generating facilities (including, but not limited to, the
operation and safety practices generally followed by the electric
utility industry), to the extent reasonably possible, unless
otherwise directed in writing by Owner or otherwise required for
financing of the Facilities. Operator will not be responsible,
however, for any failure to comply with those standards, or
portions thereof, where that failure is caused or necessitated by
differences between Chinese Prudent Utility Practices (or the
like) and those of the United States, or by workforce or industry
customs in China that make compliance by Operator with United
States Prudent Utility Practices imprudent or impractical.
"Reimbursable Costs" or "Reimbursable Cost" shall mean all
reasonable and actual direct costs properly incurred.
"Scheduled Commercial Operation Date" shall mean the
expected date which the Facilities achieve Commercial Operation
Date which is estimated to be November 1, 1998. Owner may change
the Scheduled Commercial Operation Date by giving two hundred and
forty (240) days prior written notice to Operator.
"Scheduled Annual Overhaul Outages" shall mean those planned
outages of the Facilities applied for by the Operator and
approved and scheduled by the Utility annually in advance of the
November 1 to October 31 annual period.
"Scheduled Outage" shall mean those times the unit(s) are
scheduled off-line by the Utility or Operator's request in
advance such that they are not dispatched to produce electric
energy by the Utility.
"Site" shall mean that real property upon which the
Facilities are located.
"Utility" shall mean North China Power Group Company, a
Chinese company organized under the laws of China.
"$" shall mean United States Dollars.
SECTION II
SERVICES TO BE PERFORMED BY OPERATOR
Operator will provide all operation and maintenance services
necessary for the efficient, sound and effective operation of the
Facilities so as to enable the Facilities to satisfy the
requirements set forth in the Power Agreement, attached as
Exhibit A hereto and which may be amended from time-to-time, and
to maintain the Facilities in good mechanical and operating
repair and condition all in accordance with Prudent Utility
Practices. Without limiting the generality of the foregoing,
Operator shall do the following:
2.01 Personnel. Operator shall provide and train, in a
manner consistent with Prudent Utility Practices, competent
qualified personnel to operate and maintain the Facilities
including, without limitation, the following:
A. A Plant Manager, assigned to the
Facilities full time, to manage on-site operations
and maintenance, which individual shall be
approved in writing by Owner.
B. Additional full time on-site personnel
as needed.
C. Additional engineering support,
operations, maintenance, and management personnel
not located full time at the Facilities, as needed
to perform the requirements of this Agreement.
Without limiting the generality of the foregoing, Operator
will (i) staff the Facilities during all hours; (ii) provide
those full time on-site personnel identified and agreed to by
Operator and Owner; and (iii) provide the home office support
identified in Exhibit B hereto. Operator shall submit the
qualifications of full-time, on-site management and key
supervisory personnel hired for review and approval by Owner, and
such personnel shall be acceptable to Owner at all times.
Owner's approval or acceptance of any such personnel shall not be
construed as or imply Owner's acceptance of the conduct,
performance or qualifications of such personnel nor result in any
waiver of Operator's duties and responsibilities for providing
personnel as required for its performance or for responsibility
for compliance with any standard or other duty of performance
hereunder and as required by the Power Agreement and the Loan
Documents.
2.02 Initial Staffing, Startup and Testing. After receiving
Authorization to Proceed, Operator shall prepare a hiring
schedule for the personnel identified and agreed to by Operator
and Owner. After review and written approval of the hiring
schedule by Owner, Operator shall cause the commencement of
initial hiring of personnel. Operator shall adjust the hiring
schedule, as requested by Owner in writing, in accordance with
changes in the construction, startup, and Commercial Operation
Date, and shall obtain Owner's review and approval of such
changes.
Operator shall provide capable operating personnel to assist
in initial training, startup and testing of the Facilities under
the direction and supervision of the EPC Contractor. It is
understood that Owner is obligated to pay for Operator's services
during startup and testing as provided herein but that total
supervision and direction of all startup and testing activities
(including those of Operator) shall be furnished by the EPC
Contractor who will have care, custody and control of the
Facilities prior to Commercial Operation Date of the Facilities.
2.03 Operation and Maintenance. Operator shall operate and
maintain the Facilities, seven (7) days a week, twenty-four (24)
hours per day, in accordance with Prudent Utility Practices,
manufacturers' recommendations as applicable, and as required by
the Power Agreement attached hereto as Exhibit A, or Loan
Documents as may be amended relating to the Facilities and this
Agreement. The Operator will operate the Facilities in a manner
to maximize the useful life of the equipment, to avoid excessive
fuel consumption, to minimize downtime for repairs, and to avoid
forced outages, in a manner consistent with that of a prudent
owner maintaining its own facility for its own account. Operator
shall consult with Owner in order to clarify its obligations in
the event that any conflict exists in these obligations under
this Agreement. Operator shall be solely responsible for the
operation and maintenance of the Facilities hereunder but will
follow the directions of Owner with respect to financial or
economic matters as long as compliance with such directions will
not materially and adversely affect the operation and maintenance
of the Facilities nor its performance as required hereunder after
comparison of the relative benefits and detriment of incurring
any cost and the relative effect on operations if such cost were
not incurred.
2.04 Tools.
A. Operator shall review the tool list
developed by the EPC Contractor pursuant to the
EPC Contract, and shall identify and prepare a
list of recommended tools required to adequately
perform the requirements of this Agreement. Said
list will be submitted to Owner in one or more
increments and shall be modified or supplemented
throughout the term of this Agreement by agreement
of the Parties as necessary to permit the timely
acquisition thereof. The initial list of such
tools shall, in no event, be submitted to Owner
later than one hundred eighty (180) days prior to
the Scheduled Commercial Operation Date.
B. The initial supply of tools identified
on the list described in Section 2.04A. above
shall be subject to the written approval of the
Owner and will be procured by Operator to Owner's
account as provided in Section IV of this
Agreement or as a Reimbursable Cost. Operator
shall promptly notify Owner in writing of tools
that were not approved that could impact its
obligations and duties hereunder.
C. Operator shall be responsible for
annually, or as otherwise reasonably requested by
Owner in writing, preparing and presenting to
Owner an accurate reconciliation of the
Facilities' tool inventory.
D. Operator shall be responsible for the
use, management, control, care, and custody of the
Facilities' tools.
E. Operator shall repair or replace tools
as required, as a Reimbursable Cost or to the
Account of Owner, as provided in Section IV.
F. Operator shall periodically, and no less
frequently than annually, review the Facilities
tools, and make recommendations to Owner for
additional tools that would improve the Facilities
operations.
2.05 Spare Parts.
A. Operator shall review the spare parts
list developed by the EPC Contractor pursuant to
the EPC Contract, and shall identify and prepare a
list of recommended spare parts required to
adequately perform the requirements of this
Agreement. Said list will be submitted to Owner
in one or more increments and shall be modified or
supplemented throughout the term of this Agreement
by agreement of the Parties as necessary to permit
the timely acquisition thereof. The initial list
of such spare parts shall, in no event, be
submitted to Owner later than one hundred eighty
(180) days prior to the Scheduled Commercial
Operation Date. Spare parts will be determined
with reference to generally accepted practices in
the industry and with reference to manufacturer's
recommendations.
B. The initial supply of spare parts
identified on the list described in Section 2.05A.
above shall be subject to the written approval of
the Owner and will be procured by Operator for
Owner's account as provided in Section IV of this
Agreement or as a Reimbursable Cost.
C. Operator shall, subsequent to submitting
the initial list of spare parts described in
Section 2.05A. above be responsible for procuring,
for Owner's account as provided in Section IV
hereof or as a Reimbursable Cost, replacements for
said listed spare parts as necessary.
D. Operator shall be responsible for the
use, care, custody, management and control of said
spare parts.
E. Operator shall be responsible for
annually, or as otherwise reasonably requested by
Owner in writing, performing and presenting to
Owner an accurate reconciliation of the
Facilities' spare parts inventory.
F. Operator shall be responsible for
establishing proper and effective on-site
warehousing and inventory controls for such spare
parts. The inventory control system is to be
coupled to an Owner approved plant maintenance
management information system.
G. Operator shall procure additional parts
subject to Owner's written approval or replacement
parts to maintain inventory at levels to support
Facilities requirements, as a Reimbursable Cost or
to the Account of Owner as provided for in Section
IV.
2.06 Equipment.
A. Operator shall identify and prepare a
list of recommended machinery, equipment, office
furnishings, computers, and software (the
"Equipment") required to adequately perform the
requirements of this Agreement. Said list will be
submitted to Owner in one or more increments and
shall be modified or supplemented throughout the
term of this Agreement by agreement of the Parties
as necessary to permit the timely acquisition
thereof. The initial list of such Equipment
shall, in no event, be submitted to Owner later
than one hundred eighty (180) days prior to the
Scheduled Commercial Operation Date.
B. The Equipment identified on the list of
such Equipment described in Section 2.06A. above
shall be subject to the written approval by Owner
and shall be procured by Operator for Owner's
Account as provided in Section IV or as a
Reimbursable Cost. Operator shall promptly notify
Owner in writing of the Equipment that was not
approved that could impact Operator's obligations
and duties hereunder.
C. Operator shall periodically review the
Equipment required to perform under this Agreement
and make recommendations to Owner of modifications
or additions to the Facilities equipment
throughout the term of this Agreement that would
improve or enhance the Facilities operations.
D. Operator shall be responsible for the
use, management, care, custody, operation and
maintenance of said Equipment. Operator shall
repair or replace, as a Reimbursable Cost or to
the Account of Owner as provided for in Section
IV, the Equipment.
E. Operator shall, when approved in advance
by Owner in writing, procure and install
additional Equipment as a Reimbursable Cost or to
the Account of Owner as provided for in Section
IV.
2.07 Consumables and Other Materials.
A. Operator shall identify those
consumable, expendable, and other materials and
supplies ("Consumables") necessary to perform the
requirements of this Agreement. Said Consumables
will be identified to Owner throughout the term of
this Agreement as necessary to permit the timely
acquisition thereof. The initial list of such
Consumables shall, in any event, be identified and
submitted to Owner in writing no later than one
hundred eighty (180) days prior to the Scheduled
Commercial Operation Date.
B. Operator shall use, manage, care for,
control and maintain Consumables as required to
support the needs of the Facilities, and procure
Consumables, as Reimbursable Costs or to Owner's
Account as provided in Section IV, throughout the
term of this Agreement.
2.08 Purchased Parts, Labor and Services. Operator shall
identify and procure, as Reimbursable Costs or for the account of
Owner as provided for in Section IV, parts other than spare parts
and labor and services throughout the term of this Agreement as
necessary to perform the requirements of this Agreement. This
will include procurement for the services of equipment
manufacturer's personnel, or personnel trained and qualified to
provide equivalent services, to perform manufacturer's
recommended service procedures when deemed necessary. Without
limitation, Operator, in its capacity as Owner's agent, shall
procure as a Reimbursable Cost third-party contracts to clean up
and remove hazardous waste and solid waste, except to the extent
such waste arises out of the negligence or fault of Operator or
pursuant to Section 2.16. Any maintenance or repair which can
reasonably be performed by regular full time on-site personnel,
provided pursuant to Section 2.01 above, shall be performed by
them.
2.09 Maintenance and Repairs. Operator shall comply with
procedures developed pursuant to Section 2.10 below and otherwise
provide all maintenance and repair services necessary to keep the
Facilities in good working order in a manner consistent with
Prudent Utility Practices, to correct by appropriate measures any
damage to or malfunction of the Facilities, and provide all
necessary information to and cooperate with Owner so that Owner
may enforce or make warranty claims with respect to any repair or
malfunction. Any parts utilized in performing operation and
maintenance services shall be new or refurbished according to
manufacturer's recommendations. Operator shall assign to Owner
the manufacturer's warranty on all parts Operator has procured.
2.10 Operating, Maintenance and Safety Plans and Procedures.
Using the operations and maintenance manuals supplied to Owner by
the EPC Contractor pursuant to the EPC Contract as supplemented
by Operator's standard procedures developed for like facilities,
Operator shall develop (and furnish copies to Owner for review
and approval in writing) necessary, specific and fully integrated
operating, maintenance and safety plans and procedures including,
without limitation, the following (each of which shall satisfy
the requirements set forth in the Power Agreement):
A. Startup, operating, dispatching and
shutdown procedures for the Facilities equipment
and systems including appropriate periodic checks
of and/or for water quality and treatment
requirements, fluid or gaseous leaks, improper
temperatures, excessive noise and vibrations,
proper pressures and liquid levels, emission
levels and other pertinent operating information
indicative of the equipment condition.
B. Periodic maintenance plans identifying
schedules and procedures for the equipment
lubrication, packing and seal checks, filter
checks and services, and electrical and control
system checks.
C. Plans and procedures for long-term
maintenance and overhaul of the Facilities'
equipment.
D. Plans and procedures for as-needed
repairs and overhauls.
E. Plans and procedures for emergency
service and repairs as needed, twenty-four (24)
hours a day, each day of the year. Such
procedures will provide for expedited service and
repairs; for the availability of Operator's
management personnel, in connection with such
services, on a twenty-four (24) hours a day, each
day of the year basis; for notification of and
expediting the availability of factory or service
personnel when necessary repairs are beyond the
capabilities of on-site personnel, and for the
immediate notification of Owner of any emergency
event or condition, of anticipated corrective
actions to be taken and of anticipated service and
repair times and cost consequences.
F. Procedures for identifying, acquiring
and maintaining required spare parts to ensure
that the Facilities has an adequate inventory of
spare parts, in accordance with Section 2.05 of
this Agreement including a critical spare parts
analysis which will identify key parts that may
require over-stocking for the purpose of increased
plant availability.
G. Procedures for notice to and approval by
Owner of any alterations or capital improvements
to the Facilities, so that no alterations or
capital improvements to the Facilities will be
made without the written consent of Owner.
Operator will, without limitation, provide in such plans and
procedures for visual, mechanical or instrumental inspection as
necessary in order to provide early detection of required
adjustments, repairs or replacements so that required
adjustments, repairs or replacements can be scheduled with
minimum interference to the Facilities operations insofar as
possible. Such procedures will be consistent with applicable
manufacturer's recommendations, will provide for the services of
factory representatives and/or outside consultants where
appropriate and will provide for orderly shutdowns and minimum
interference with operations. Such procedures will be reviewed
as required and in no event less frequently than annually with a
copy of the review provided to Owner. No alterations to the
Facilities shall, in any event, be made without the prior written
approval of Owner.
2.11 Records. Operator shall keep and maintain maintenance
and operation records for the Facilities and for the equipment
therein. Such records shall satisfy the requirements set forth
in the Power Agreement and Lenders' requirements under Loan
Documents and shall include, without limitation: the logging of
daily exception reports; daily Operator's logs; a record of all
maintenance and repairs performed; copies of all plans and
procedures developed pursuant to Section 2.10 above or otherwise;
emissions and compliance reports; equipment and instrument
calibration records; fuel consumption records; and electricity
production, consumption and delivery records. All records shall
be made available for examination by Owner, the Utility (where
required by the Power Agreement) or Lender (where required by the
Loan Documents) during normal working hours.
2.12 Reports. Operator shall prepare and furnish a monthly
operations report within ten (10) business days following the
close of each calendar month, including the following:
A. A review of operations for the prior
month (fuel consumption, electricity and steam
production, consumption and deliveries).
B. Identification of significant exceptions
to the normal status of equipment.
C. Identification of all major repairs or
alterations made to equipment during the prior
month.
D. Identification and explanation of
significant performance deviations from the prior
month or from anticipated performance.
E. Identification of maintenance and
shutdowns planned for the succeeding twelve (12)
months.
F. Any significant personnel issues
including hiring, disciplinary action or lost time
due to injuries.
G. Such other matters as may be reasonably requested
by Owner in writing.
Operator shall also provide all notices and reports required
in connection with the operation and maintenance of the
Facilities by applicable permits, laws and regulations and the
Power Agreement and Loan Documents relating to the Facilities
within the times required. Owner shall be responsible, pursuant
to Section 3.10C., for providing those documents which identify
all required notices relating to the operation and maintenance of
equipment contained in the Facilities that are required by this
Section 2.12 and Operator will cooperate with Owner in the
identification and obtaining of all such documents.
2.13 Governmental, Regulatory, Utility and Safety
Requirements. Operator shall operate and maintain the Facilities
in compliance with all applicable laws, permits, approvals,
ordinances, rules, regulations and orders of central, provincial,
city, county and local governmental authorities. Operator shall
also comply with all safety and other rules and regulations
reasonably established in writing by Owner with respect to the
Facilities and with all safety and other rules and regulations
established by the Utility with respect to interconnection
delivery facilities and with respect to property owned by or
leased from the Utility. In the event that such requirements
change during the term of the Agreement, and such changes require
additional costs of Operator, these additional costs shall be
mutually determined by Owner and Operator and reimbursed to
Operator by Owner as Reimbursable Costs. In the event such
changes require alteration to the Facilities, Owner shall be
responsible for the costs of such alterations.
2.14 Liens And Encumbrances. Operator shall keep all real
property and all personal property and equipment associated with
or part of the Facilities free and clear of all liens and
encumbrances caused by an action or failure to act by Operator or
any of its consultants, suppliers or subcontractors in the
performance of its obligations under this Agreement, including,
without limitation, failure by Operator to pay, when due, any
▇▇▇▇ or charge for labor or services performed or materials or
equipment furnished for use in connection with this Agreement.
Contractor shall immediately notify Owner in writing of any such
liens or encumbrances. Nothing herein contained shall require
Operator to pay any claims for labor, materials or services which
Operator, in good faith disputes and which Operator, at its own
expense, is currently and diligently contesting; provided,
however, that Operator shall, not later than thirty (30) days
after notice of the filing of any claim of lien that is disputed
or contested by Operator, post a surety bond sufficient to
release said claim of lien in accordance with the relevant laws
and approvals of the People's Republic of China or other relevant
laws.
2.15 Metering. Operator shall verify the accuracy of meters
and devices used to measure the delivery of thermal energy as
required, but in no event less frequently than quarterly.
Operator shall verify the accuracy of meters and devices used to
measure the delivery of electricity, coal, and water as required,
but in no event less frequently than annually. Such verification
is to be performed in a manner consistent with the requirements
of the Power Agreement and the steam sales agreements, and other
applicable regulations of the Utility.
2.16 Waste. Operator shall not allow any hazardous or solid
waste to accumulate on the Site in contravention of any
applicable law, regulation or governmental permit or license, the
Power Agreement, or any Loan Documents relating to the Facilities
or otherwise to cause any impediment to operations and
maintenance services to be performed or which may threaten the
health or safety of persons present at the Facilities. Operator
shall notify Owner immediately should any hazardous or solid
waste problem arise and shall assist Owner to remedy such
situation.
2.17 Scope of Work. Operator shall perform, throughout the
term of this Agreement, all services described in this Agreement.
Such services shall be performed and supplied in connection with,
but not limited to, the following:
A. Prior to and until such time as
construction of the Facilities is commenced
pursuant to funding from non-affiliated third
party lenders to the Facilities, Operator will:
i. Develop a written plan for the
conduct of its responsibilities under this
Agreement and form, or be prepared to
immediately form, a business entity
appropriate for the conduct of its
responsibilities under this Agreement and in
accordance with a written business plan to be
agreed to by the Owner;
ii. Provide a preliminary review
and consult with Owner regarding all plant
design specifications, paying particular
attention to designs which affect the
Facilities operations and operability, and
submit a written assessment thereof to Owner
for its review;
iii. Conduct a preliminary
assessment of the available local Chinese
labor force which may be available to assist
in the Facilities operations and report
thereon to the Owner;
iv. Develop preliminary standards,
qualifications, and position description
criteria for key personnel and positions
which it believes necessary to perform its
duties under this Agreement;
v. Develop and provide to Owner
its plans with respect to all training
required for all Chinese labor;
vi. Prepare and deliver to Owner a
draft organization chart for the full
staffing of the Facilities, thought to be
required;
vii. Develop and prepare its
proposed preliminary, pre-commercial and post-
commercial operating budgets for the
Facilities and discuss all matters relating
thereto for conclusion and acceptance by
Owner;
viii. Support Owner with one
(1) trip to New York for a presentation to
bond rating agencies and cooperate with and
assist Owner on all matters, with information
relating to Operator which may be reasonably
required, within the scope of its work to be
conducted pursuant to this Agreement, which
may or does affect Owner's ability to obtain
construction and permanent financing for the
Facilities; and
ix. In the performance of the
services provided pursuant to this Section
2.17A., Operator may consult with and utilize
Owner's advisors and consultants and
information, for assistance in its
preliminary legal and procedural analysis of
the business structure required for the
conduct of operations. The cost of the use of
such outside consultants (whose use and scope
of services shall be pre-approved by Owner)
will be borne by Owner, except as required by
Operator in the formation of Operator's
business unit. Owner makes no representation
or warranty to Operator with respect to the
reliability or accuracy of all such
information, or advice, and Operator shall
make its own assessment and determination as
to the reliability and accuracy thereof.
B. Pre-Commercial Operations Period.
Subsequent to the Facilities Funding Date and
prior to the Commercial Operation Date (as defined
in the Power Agreement), Operator will assist
Owner in specifying and procuring tools, spare
parts, chemicals, etc., and will provide operating
personnel to assist in startup and testing of the
Facilities under the direction and supervision of
the EPC Contractor. These services will be
performed by Operator in accordance with this
Agreement and the schedules and budgets that are
established by Operator and approved by Owner, and
will include providing all management,
administration, supervision and staffing functions
required to mobilize and provide the personnel
capable of assisting the EPC Contractor during
startup and testing and also technically capable
of operating the Facilities upon commencement of
operations following the Commercial Operations
Date. In addition, Operator shall monitor any
services previously required to be provided, and
amend or revise or update all information as
required in order to maintain a current and
correct account thereof; and perform the following
generally described duties all in accordance with
the terms of this Agreement:
i. Administrative Services.
Operator shall be responsible for all normal
administrative and personnel related
activities with respect to Operator's
personnel, including benefits, bonuses,
scheduling and overtime. In addition,
Operator's administrative responsibilities
shall include, but are not limited to, the
following:
(a) The development of the
Facilities safety procedures including,
but not limited to, electrical lock-
out/tag-out procedures, closed vessel
entry procedures, hazardous materials
control plan, spill prevention plan,
fire prevention plan, etc.;
(b) All customary purchasing
activities on-site, including the
purchase of all consumables, chemicals,
spare parts, equipment, tools and
miscellaneous equipment needed prior to
Commercial Operations. Purchasing
activities shall include, without
limitation, obtaining competitive
quotes, examinations, purchase document
control, warranty tracking, receiving
and inspection and invoice approval.
Monthly purchase summaries shall be
provided to Owner within twenty (20)
days from the last day of each month;
(c) The development of an on-
site budget to provide for all customary
operation and maintenance functions in
accordance with Prudent Utility
Practices including, among other things,
initial spare parts, consumables,
maintenance overhauls, tools, equipment,
etc. This budget shall be submitted to
Owner for approval prior to any
commitment of funds;
(d) The review and comment by
Operator's management and supervisory
personnel of the startup and testing
activities prior to and during
performance testing by the EPC
Contractor, subject to Owner's ultimate
responsibility for the results of such
startup and testing activities;
(e) The review and comment by
Operator's management and supervisory
personnel of all mechanical and
electrical one line drawings to assure
plant operability and maintainability
concerns are addressed by the EPC
Contractor, subject to Owner's ultimate
responsibility for any errors or
omissions by the EPC Contractor;
(f) The review and comment by
Operator's management and supervisory
personnel of the adequacy of vendor
training programs and how these are
scheduled to fit in with the Operator's
overall training program;
(g) The development of
operating procedures for all customary
aspects of the plant's operations and
maintenance, including but not limited
to: day-to-day operations and
maintenance, dispatch protocol, delivery
and receipt of fuels, water treatment,
consumables and hazardous materials,
etc.;
(h) Making reasonable efforts
to promote the public relations of the
Facilities and to maintain good
community relations including those with
the city, county and provincial
authorities, customer representatives,
lending institution personnel and
approves site visitors;
(i) The identifying and
preparing of lists of recommended office
equipment and furnishings to adequately
perform administrative activities; and
(j) Providing Owner's on-site
plant manager and Owner's engineering
representatives with as needed
assistance during the startup and
testing of the Facilities.
ii. Training. Operator will
provide training services in conjunction with
those of the EPC Contractor which will fully
familiarize its personnel and subcontractor
personnel with all the Facilities systems
operation and maintenance requirements based
on Operator's assessment of available local
Chinese labor skills. Such training will
consist of, among other things, combined
classroom instruction and field walk-downs
for the operations and maintenance personnel,
as well as any specialized training required
for Chinese labor. These training sessions
will be conducted prior to the commencement
of startup activities on the plant so that
Operator's staff can get hands-on experience
during the startup, check-out and
commissioning and testing of the Facilities'
systems. Each session should be based on the
operating and maintenance data and
information contained in the Plant Manual(s)
to be prepared by the EPC Contractor's staff.
The Plant Manual(s) will be made available to
Operator on a schedule that will support the
development of a training program prior to
startup.
A preliminary list of systems expected to be covered in such materials is
presented below:
Ash Handling & Disposal HVAC
Chemical Feed Lighting
Circulating Water Main Steam
Coal Handling Plant Drains
Compressed Air Plant Water
Condensate Storage & Sample System
Transfer
Cooling Water Steam Generator
DCS/Controls Steam Turbine &
Auxiliaries
Feedwater UPS
Fire Protection Water Treatment
Fuel Oil 110 kV System
Fuel Unloading, Handling & 125 Vdc
Preparation
Heat Trace
iii. Operating Services. Operator's
operating responsibilities prior to the
Commercial Operation Date will include, but
are not limited to, the following:
(a) The hiring and
mobilization on-site in a timely manner
of qualified and competent (expatriate
or local) plant management, supervision,
operations and maintenance personnel
ready to be trained;
(b) Providing trained
operations and maintenance personnel to
assist in startup and testing of the
Facilities under the direction and
supervision of the EPC Contractor; and
(c) The development and
preparation of lists of consumables,
expendables and other materials and
supplies necessary to operate the plant.
iv. Maintenance Services.
Operator's maintenance responsibilities prior
to the Commercial Operation Date shall
include, but are not limited to, the
following:
(a) The development and
implementation of an Owner approved
maintenance management information
system (MMIS) in time to support the
commencement of system hand-over (in
some cases, this may occur prior to
Final Acceptance);
(b) The developing of
initial short- and long-term maintenance
plans for the Facilities in accordance
with manufacturer requirements prior to
the Commercial Operation Date;
(c) The preparation of
lists of recommended spare parts
required to adequately operate and
maintain the Facilities in a reliable
manner to meet the requirements of the
Power Agreement after the Commercial
Operation Date;
(d) The setting up and
organizing of an inventory control
system which is coupled to the MMIS
prior to the Commercial Operation Date;
and
(e) The organizing,
stocking and management of the plant
spare parts, consumables, and tools
inventory.
C. Commercial Operations Period. After the
Commercial Operation Date, Operator will have
complete on-site responsibility for the operations
and the maintenance of the Facilities. This
includes providing all (expatriate or local) plant
management, administration, supervision and
staffing functions and activities as are
necessary. This responsibility will include the
procurement of materials, supplies, consumables
and outside services, as per approved budget.
The scope of services and activities
required from Operator to meet these
responsibilities include, but are not limited to,
those described in the following sections.
i. Operational Services.
Operator's operations and maintenance
responsibilities shall include, but are not
limited to, the following:
(a) The continued providing
and training of sufficient qualified and
competent personnel to operate and
maintain the Facilities;
(b) Operational activities
necessary to produce and supply reliable
electrical energy to the customer in
accordance with the Power Agreement;
(c) Operational activities
necessary for the supply of thermal
energy to the thermal hosts in
accordance with the thermal energy
supply agreement during those hours when
electrical power is generated;
(d) The Facilities operation
in compliance with all environmental
regulations and updates, including
noise, water intake, waste water
discharge, ash and solids disposal, and
air emissions permits. This shall
include the timely submittal of periodic
reports as required by the permits;
(e) Fuel control including
sampling, testing, unloading, storage
and accounting;
(f) The control of minimal
waste water discharge from the
Facilities; and
(g) The safe and secure
storage and control of all gases,
chemicals, lubricants and any other
hazardous or perishable consumables.
ii. Maintenance Services.
Operator shall preserve the Facilities in
good mechanical, electrical and operating
repair and condition in accordance with
Prudent Utility Practices. Operator's
maintenance responsibilities shall also
include, but are not limited to, the
following:
(a) Providing continuous
updates to the previously implemented
MMIS including the generation of
comprehensive monthly reports on all
preventive, planned, and/or deferred
work orders associated with the
Facilities;
(b) Developing short-term and
long-term maintenance plans for the
Facilities in accordance with
manufacturer's requirements and prudent
practices;
(c) The Facilities upkeep and
maintenance, including landscaping,
roadways, buildings, and rubbish
collection; and
(d) The management of the
spare parts and tool inventory including
a monthly activity summary. This
responsibility shall include performing
an annual, audited, physical count of
all items retained on-site.
iii. Administrative Services.
Operator shall be responsible for all normal
administrative and personnel related
activities relating to its employees,
including benefits, bonuses, scheduling and
overtime.
In addition, Operator's responsibilities shall include, but are not
limited to, the following:
(a) The safety of all
personnel and equipment at the
Facilities. This responsibility shall
include compliance with all ordinances,
regulations, and local or national
legislation;
(b) The physical security of
the Facilities and its equipment,
inventory, and personnel;
(c) The efficient operation
of the Facilities to maximize useful
life of equipment, to avoid excessive
fuel consumption, to minimize downtime
for repairs and forced outages within
the constraints of the Power Agreement
and thermal energy agreements;
(d) The coordination of fuel
requirements for the Facilities with the
fuel supplier in accordance with the
fuel supply contract;
(e) All purchasing activities
on-site, including the purchase of all
consumables, chemicals, spare parts,
equipment, equipment repairs, outside
Operator services and approved the
Facilities modifications. Purchasing
activities shall include obtaining
competitive quotes, examination,
purchase document control, expediting,
receiving, inspection and invoice
approval. Monthly purchase activity
summaries will be required;
(f) The development of an on-
site annual budget with regard to
purchased parts, services and
administration cost for approval by
Owner at least two (2) months prior to
the budget year in question;
(g) The development of,
revisions to, and management of
emergency systems and procedures in
accordance with all Power Agreements and
local and national regulations;
(h) To use reasonable efforts
to promote mutually beneficial
relationships with customer
representatives, thermal hosts, and fuel
suppliers;
(i) To use reasonable efforts
to promote public relations relating to
the Facilities and to maintain good
community relations including those with
the city, county and provincial
authorities, and neighbors;
(j) Support of the Owner in
the timely update, re-application or
renewal of all environmental or
operating permits that pertain directly
to the operation of the Facilities; and
(k) The development of an
annual capital improvement plan with
draft plans and proposed budget
implications.
D. Preparation of the Facilities for the
Commercial Operation Date including, without
limitation, the following:
i. Review engineering drawings;
provided however, such review shall not give
Operator any responsibility for the design of
the Facilities;
ii. Participate with Owner in
design review meetings, in construction
reviews, in the development of training
programs and in development of the Facilities
checkout and startup procedures; and
iii. Provide and train qualified
Operator personnel.
E. Testing and acceptance of the Facilities
from the EPC Contractor including: (i) review of
turnover packages, (ii) system walk-downs; and
(iii) assistance in developing punchlists.
F. Testing of the Facilities required by
the Power Agreement. Operator shall provide
trained and qualified operating personnel to
assist in the startup and testing of the
Facilities under the direction and supervision of
the EPC Contractor prior to the Commercial
Operation Date of the Facilities.
G. Startup of the Facilities in connection
with each dispatch from the Utility.
H. Management and provision of all
activities required for the Facilities support and
operation, under the direction of Owner's
Representative, including but not limited to:
community interface, fuel scheduling, and
management of other contracts and services
necessary to support the Facilities.
I. Operation of the Facilities.
J. Management of all operation and
maintenance requirements of the Facilities.
K. Maintenance of the Facilities.
L. Furnishing electrical energy to the
Utility, together with the maintenance schedules
and other records required by the Utility under
the Power Agreement.
M. Providing home office support activities
for the Facilities including but not limited to
those of Exhibit B.
N. Assist Owner in obtaining and renewing
the necessary permits and licenses of Section 3.05
when requested by Owner.
O. Submit a desired schedule of Scheduled
Outages as defined herein (including the duration
of each outage) to Owner at least four (4) weeks
before Owner is required to supply same to the
Utility.
P. Cooperate with the Utility and Owner in
scheduling and performing all scheduled
maintenance outages, routine maintenance and major
overhaul outages in accordance with Owner's
obligations under the Power Agreement or as set
forth in any Loan Documents.
Q. Preparation and submission to Owner, for
Owner's approval, of an Annual Budget for the
Facilities, at least ninety (90) days before the
beginning of each calendar year. Such budget shall
be consistent with the requirements of this
Agreement and meet the requirements of the Power
Agreement or any Loan Documents.
R. Provide sufficient training to operating
and maintenance personnel to assure that their
capabilities and qualifications are maintained.
S. Cooperate with the Utility in scheduling
and performing all testing required under the
Power Agreement.
T. Provide all other maintenance and
operations services necessary to the safe,
efficient and reliable operation of the
Facilities.
SECTION III
SERVICES TO BE PERFORMED BY OWNER
From and after the Commencement Date, Owner shall be
responsible for the following:
3.01 Owner's Representative. Owner shall provide a full-
time Owner's Representative to administer Owner's
responsibilities under this Agreement, to monitor the operation
of the Facilities, and to provide direction on economic and
financial matters associated with all its responsibilities
hereunder.
3.02 Office Space, Equipment, and Administrative Services.
Owner shall provide office and administrative space,
administrative services and equipment for Operator at the
Facilities.
3.03 Tools, Spare Parts, Equipment and Consumables. Owner
will:
A. Provide written approval or give timely
objections to the lists of tools, spare parts,
Equipment, and Consumables identified by Operator
pursuant to Section II.
B. Pay for approved supplies of tools,
spare parts, equipment, Consumables, and purchased
parts, labor and services and Reimbursable Costs
required by Operator to perform its
responsibilities under this Agreement, and as
provided for in this Agreement.
3.04 Utilities. Owner will provide and pay for all
utilities.
3.05 Permits And Licenses. Owner will obtain necessary
permits and licenses, except those which are issued in the name
of Operator or that Operator is required to obtain under Section
II above.
3.06 Staffing Schedules. Owner will provide written
approval or give timely objections for its obligation to give
staffing schedule approval required in Section 2.02.
3.07 Manuals. Consistent with the needs of Operator for
such material to perform its obligations under this Agreement,
Owner shall deliver, or cause to be delivered to Operator, copies
of operating and maintenance manuals for all equipment installed
in the Facilities and any and all additional documents received
from the EPC Contractor under the EPC Contract including, but not
limited to, as-built drawings of the Facilities, record books,
vendor manuals and operations and maintenance manuals.
3.08 Training. Owner shall cause the EPC Contractor to
provide training to the employees of Operator in the startup and
operation of the Facilities and any and all related machinery and
equipment to the extent set forth in Section 3.02 of the EPC
Contract provided Operator has made such employees available to
the EPC Contractor as provided in Section II.
3.9 Payments. Owner shall make payments to Operator in
accordance with Sections IV and V of this Agreement.
3.10 Other Responsibilities. Owner will:
A. Provide and pay for all fuel required
throughout the term of this Agreement.
B. Pay or reimburse Operator all property
or other taxes (including, but not limited to, any
business tax or VAT taxes) related to the
Facilities or its activities and operations but
not income taxes of Operator.
C. Provide all necessary documents in its
possession, that Operator needs to perform its
obligations relating to the operation and
maintenance of equipment contained in the
Facilities under this Agreement. Owner and
Operator shall consult with each other to
determine the obligations under such documents for
which Operator is responsible.
3.11 Owner shall, at all times, conform to all laws,
ordinances, rules and regulations applicable to it.
3.12 Owner has a responsibility to identify and provide
Operator with all relevant provisions in the Power Agreement and
the Loan Documents and any amendments thereto in a timely manner.
To the extent that Owner does not notify Operator of such
amendments, Operator is not liable for compliance with such
amendments. Owner agrees to consult with Operator in the event
that such changes to the Loan Documents or Power Agreements is
contemplated.
SECTION IV
COMPENSATION
4.01 Owner shall pay for services provided by Operator
during all periods of service provided under this Agreement as
follows:
A. Operations and Maintenance Costs.
Operator will manage and control operations and
maintenance costs according to a predetermined
budget that has been accepted by and developed in
conjunction with the Owner. All operations and
maintenance expenses will be administered by
Operator and paid by Owner in local currency or
paid as a Reimbursable Cost.
B. Local Labor Costs. Operator shall
contract with one or more Chinese contractors to
supply suitable operations and maintenance
personnel for the Facilities. All labor contract
expenses shall be administered by Operator and
paid by Owner in local currency. In the event the
Parties determine that it may be appropriate or
desirable for Operator to direct-hire labor
personnel, the Parties will mutually agree upon
the compensation terms to apply to such direct-
hired labor.
C. Operator's US Labor Costs (work in US).
All Operator's United States labor (those employed
and paid by Operator) charges will be billed in US
dollars to Operator at a fixed multiplier of 2.1
on the hourly rate for work performed while in the
United States. Travel and living expenses which
have been pre-approved by Owner and Operator in
accordance with an approved budget, will be billed
in US dollars at actual cost with no markup in
accordance with Operator's standard travel
policies. Expenses associated with the work
performed will be billed at cost with no markup.
Payments by Owner to Operator for such labor shall
be in US currency.
D. Operator's US Labor Costs (work outside
of US). All Operator's United States labor (those
employed and paid by Operator for work performed
outside the US) will be billed in US dollars to
Owner at a fixed multiplier of 2.1 on the hourly
rate, plus an additional amount sufficient to
cover any duties, taxes, incentives and other
labor-related fees assessed on the income of
foreign nationals (which will be passed along by
Operator to its employees), for pre-approved work
performed hereunder outside of the United States.
Expenses associated with pre-approved work
performed will be billed at cost. Travel and
living expenses will be billed in US dollars at
actual cost with no markup in accordance with
Operator's standard travel policies. Payments by
Owner to Operator for such labor shall be in US
currency.
E. Expatriate Contract Labor Costs.
Expatriate contract labor costs will be treated as
normal operations and maintenance expenses
(summarized in 4.01A. above) and will be billed
through to Owner at actual cost with no markup,
but with an increase sufficient to cover any
duties, taxes, incentives and other labor-related
fees assessed on the income of such expatriate
contract laborers for payment by Operator to such
laborers. Payments by Owner to Operator for such
labor shall be in U.S. or Chinese currency as
directed by Operator.
All labor costs (items A., B., C. and E. above) will be
tracked against a budget approved by Owner.
F. Plant General and Administrative
Expenses. Plant site General and Administrative
(G&A) costs will be managed and controlled
according to a predetermined budget that has been
accepted by Owner. All G&A costs associated with
plant operations will be administered by Operator
and paid for by Owner in local currency.
G. Operating Fee. In addition to the
expense reimbursements provided for above, an
annual Operating Fee of Five Hundred Thousand and
No/100 Dollars ($500,000 US dollars) will be paid
to Operator in equal monthly installments
beginning with the establishment of Commercial
Operations to operate and maintain the Facilities.
For the first calendar month, the monthly
installment of the Operating Fee shall be prorated
based on the number of days of the month after the
Commercial Operations Date. The Operating Fee and
all dollar amounts indicated in Section ▇.▇▇▇.▇▇.,
vii., and viii. shall be adjusted annually
commencing on the first day of each year
subsequent to January 1, 1997, by the change in
index values of the (i) immediately preceding
month of December; and (ii) the next immediately
preceding month of December, as specified in the
Consumer Price Index for All Urban Consumers, U.S.
City Average, Table 1, in the row titled
"Services" under the column heading "Unadjusted
percent change to..." as published in CPI Detailed
Report for the immediately preceding December.
H. Contract Price Adjustments.
i. Peak Hour Output Price
Adjustment. Subsequent to the Commercial
Operations Date, Operator's monthly
installment of the annual Operating Fee,
described in Section 4.01G., will be adjusted
based on the facility energy output during
Peak Hours (Peak Hours shall mean the eight
(8) hour period during each day designated as
"Peak Hours" by the Utility) as follows:
(a) For each Peak Hour
period during each day that the
Facilities exceed 760,000 kWh of net
energy production, Operator will receive
an increase in the monthly installment
of the annual Operating Fee of
$0.010/kWh for each kWh above 760,000
kWh of net energy production during the
Peak Hour period for that day.
(b) For each Peak Hour
period during each day that the
Facilities produces less than 800,000
kWh of gross energy production,
Operator's monthly installment of the
annual Operating Fee will be decreased
by $0.050/kWh for each kWh below 800,000
kWh of gross energy production during
the Peak Hour period for that day. This
provision (b) does not apply for times
when either unit is in a Scheduled
Outage, is not dispatched by the Utility
or is unable to produce electric energy
due to a Force Majeure condition of the
Facilities or the Utility. In the event
of a forced outage which may be
extended, the second (2nd) day of the
outage will be treated as a Scheduled
Outage.
ii. Non-Peak Hour Output Price
Adjustment. Subsequent to the Commercial
Operations Date, Operator's monthly
installment of the annual Operating Fee,
described in Section 4.01G., will be adjusted
based on the Facilities energy output during
Non-Peak Hours (Non-Peak Hours shall mean the
eight (8) hour period during each day
designated as "Non-Peak Hours" by the
Utility") as follows:
(a) For each Non-Peak
Hour period during each day that the
Facilities exceeds 504,000 kWh of gross
energy production but is less than
560,000 kWh, Operator will receive an
increase in the monthly installment of
the annual Operating Fee of $0.010/kWh
for each kWh of energy production above
504,000 kWh up to a maximum of 16,000
kWh of gross energy production during
the Non-Peak Hour period for that day.
(b) For each Non-Peak
Hour period during each day that the
Facilities exceeds 560,000 kWh of gross
energy production, Operator monthly
installment of the annual Operating Fee
will be decreased by $0.010/kWh for each
kWh above 560,000 kWh of gross energy
production during the Non-Peak Hour
period for that day.
iii. Trough Hour Output Price
Adjustment. Subsequent to the Commercial
Operation Date, Operator's monthly
installment of the annual Operating Fee,
described in Section 4.01G., will be adjusted
based on the Facilities energy output during
Trough Hours as follows, (Trough Hour shall
mean the eight (8) hour period during each
day designated as "Trough Hours" by the
Utility):
(a) For each Trough Hour
period during each day that the
Facilities exceeds 464,000 kWh of gross
energy production but is less than
480,000 kWh, Operator will receive an
increase in the monthly installment of
the annual Operating Fee of $0.010/kWh
for each kWh of energy production above
464,000 kWh up to a maximum of 16,000
kWh of gross energy production during
the Trough Hour period for that day.
(b) For each Trough Hour
period during each day that the
Facilities exceeds 480,000 kWh of gross
energy production, Operator's monthly
installment of the annual Operating Fee
will be decreased by $0.050/kWh for each
kWh above 480,000 kWh of gross energy
production during the Trough Hour period
for that day.
iv. Heat Rate Price Adjustment.
The Heat Rate Adjustment will be based on the
Base Heat Rate which shall be equal to 1.035
times the Heat Rate (including process steam)
of the final Facilities test conducted by the
EPC Contractor averaged at 60MW, 65MW and
full output of the Facilities. Subsequent to
the Commercial Operations Date, Operator's
monthly installment of the annual Operating
Fee, described in Section 4.01G., will be
adjusted based on the Facilities' monthly
Heat Rate as follows:
(a) For each month that
the Facilities' average Heat Rate
(including process steam) is less than
Base Heat Rate, Operator will receive an
increase in the monthly installment of
the annual Operating Fee of $0.003/kWh
times the net energy produced for the
month in kWh times the difference
between the Base Heat Rate and the
actual Heat Rate in Btu/kWh the quantity
divided by the Base Heat Rate.
(b) For each month that
the Facilities' average Heat Rate
(including process steam) is greater
than the Base Heat Rate plus 400
Btu/kWh, Operator will receive an
decrease in the monthly installment of
the annual Operating Fee of $0.003/kWh
times the net energy produced for the
month in kWh times the difference
between the actual Heat Rate (including
process steam) in Btu/kWh and the Base
Heat Rate plus 400 Btu/kWh the quantity
divided by the Base Heat Rate plus 400
Btu/kWh.
v. Outage Maintenance Days Price
Adjustment. Starting with the second October
31 after the Commercial Operations Date,
Operator's December monthly installment of
the annual Operating Fee, described in
Section 4.01G., will be adjusted based on the
Outage Days used by the Operator in the
preceding Annual Outage Period as follows:
(a) For each day that
each unit's Outage Days is less than
fifty-five (55) days in the preceding
twelve month Annual Outage Period,
Operator will receive an increase in the
December monthly installment of the
annual Operating Fee of [***]
FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
(b) For each day that
each unit's Outage Days is greater than
fifty-five (55) days in the preceding
twelve month Annual Outage Period,
Operator will receive a decrease in the
December monthly installment of the
annual Operating Fee of [***]
FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
For the period from Commercial Operation Date to the first October
31, the base Outage Days of fifty-five (55) days for determining
the adjustments of the provisions 4.01H.v.(a) and 4.01H.v.(b) above
shall be adjusted based on [***]
FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
The Price Adjustment Fee arrangement as noted
in 4.01H.v.(a) and 4.01H.v.(b) above shall be calculated at [***]
FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
vi. Environmental Compliance Price
Adjustments. Subsequent to the Commercial
Operations Date, Operator's monthly
installment of the annual Operating Fee,
described in Section 4.01G., will be adjusted
based on the Operator's compliance with
applicable regulations and permits as
follows:
(a) Operator's monthly
installment of the annual Operating Fee
will be increased by [***]
FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
based on the compliance of the Facilities'
operations with all applicable regulations
and permits.
(b) Operator's monthly
installment of the annual Operating Fee
will be decreased by [***]
FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
based on violation of any applicable
regulations or permits due to the fault
of the Operator.
vii. Personnel Safety Price
Adjustments. Subsequent to the Commercial
Operation Date, Operator's monthly
installment of the annual Operating Fee,
described in Section 4.01G., will be adjusted
based on the following:
(a) Operator's monthly
installment of the annual Operating Fee
will be increased by [***]
FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
based on no Lost Work Days on-site for that
month.
(b) Operator's monthly
installment of the annual Operating Fee
will be decreased by [***]
FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
based on any Lost Work Days on-site for
that month.
viii. Management Effectiveness
and Plant Appearance, Price Adjustment.
Subsequent to the Commercial Operation Date,
Operator's monthly installment of the annual
Operating Fee, described in Section 4.01G.,
may be increased by up to [***]
FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
per month based on the Owner's subjective
assessment of Operator's management effectiveness
and the overall housekeeping and general appearance
of the Facilities.
I. Contract Price Adjustment Limitations
i. Should the total monthly
contract price adjustments of Section 4.02H.
exceed Operator's monthly installment of the
Operating Fee, described in Section 4.01G.,
the amount of such price adjustments in
excess of the Operating Fee installment shall
be carried forward to the next month for
adjustment of that next month's installment
of the Operating Fee.
ii. Annually, starting with the
first full twelve (12) calendar month Annual
Outage Period, should the total of the twelve
(12) months of contract price adjustments of
Section 4.02H. result in a total negative
amount of more than [***]
FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
Owner shall credit Operator on the next invoice
payment with the difference between [***]
FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
and the total negative amount, such that
Operator's maximum exposure for negative
adjustments shall not exceed [***]
FILED SEPARATELY WITH THE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
iii. Should the period from
Commercial Operation Date to the first
October 31 date be less than three hundred
sixty-five (365) days, the adjustments
limitations of Section 4.01I.ii. above shall
be prorated based on the number of days
between the Commercial Operation Date and
October 31 divided by three hundred sixty-
five (365) days.
4.02 Operator Procurement to Owner's Account. Operator may
procure those items and services which are considered
Reimbursable Costs and are included in the Approved Budget by
issuing purchase orders to be paid directly by Owner on Owner's
purchasing and requisition forms. Operator shall supply a
confirming copy of the purchase order to Owner. For purchase
orders in excess of the equivalent of One Thousand and No/100
Dollars (US$1,000) or for any items not in the Approved Budget,
Operator is required to receive written authorization from
Owner's Representative prior to issuing purchase orders to be
paid directly by Owner on Owner's purchasing and requisition
forms.
4.03 Special Compensation Structure Prior to the Facilities'
Commercial Operation Date. Notwithstanding the provisions for
compensation enumerated above:
A. Prior to the Facilities Funding Date.
The special provisions for compensation from
execution of this Agreement until the Facilities
Funding Date are as follows:
i. No Operating Fee will apply;
ii. Costs of Operator setting up
its corporate entity to operate in China will
be borne by Operator;
iii. Travel and labor costs
associated with Operator's first trip to
China (regardless of mission or work
accomplishment) will be borne by Operator;
iv. Operator will perform the
workscope shown in Section 2.17A. at no cost
to Owner, other than: (i) pre-approved fees
and costs of Owner's consultants and other
resources incurred in connection with the
Facilities related services performed by
Operator, as provided for above; and (ii) in
connection with services rendered pursuant to
Sections 2.17A.iv. and v (for which Operator
and Owner will agree to a reasonable
compensation structure, prior to Operator
providing such work); and
v. All Operator's ▇▇▇▇▇▇▇▇ during
this period will be held and will be
submitted for payment after the Facilities
Funding Date or six (6) months, whichever
comes first. Operator will submit to Owner
monthly statements showing current ▇▇▇▇▇▇▇▇
with totals accrued. No interest will accrue
on the ▇▇▇▇▇▇▇▇.
B. Pre-commercial Operations Period. The
special provisions for compensation subsequent to
the Facilities Funding Date and prior to the
Commercial Operation Date, are as follows:
i. All expenses specifically
associated with setting up the Operator's
subsidiary in the People's Republic of China
will be to the account of Operator;
ii. In lieu of the annual
Operating Fee applicable pursuant to Section
4.01G., during this period of time will be
Two Hundred Fifty Thousand and No/100 Dollars
(US$250,000) per annum payable in monthly
installments of Twenty Thousand Eight Hundred
Thirty Three and No/100 Dollars ($20,833)
starting with the Commencement Date; and
iii. Operator will also be eligible
for a Startup Bonus payment of Five Hundred
Thousand and No/100 Dollars (US$500,000) at
the end of the Pre-Commercial Operations
Period. The Startup Bonus will be based upon
mutually agreed-upon criteria that measure
the Facilities' success during this period
including, but not limited to, achieving
critical path elements such as hiring,
training, sparing, or other program setup
milestones within the direct control of
Operator; and
iv. Operator's labor (in-country,
expatriate and contract), travel and other
expenses will be reimbursed by Owner in the
same manner as during the Commercial
Operating Period.
4.04 Taxes. Owner shall pay or reimburse all taxes or
duties arising from this Agreement, other than tax on Operator's
income, as provided in Section 3.10B. If the People's Republic
of China "deem" a profit to Operator based upon payments relating
to this Agreement in an amount in excess of the Operating Fee, as
adjusted pursuant to Section 4.01H., the deemed profit tax
payable by Operator on that excess amount shall be a Reimbursable
Cost. Operator shall use its best efforts to minimize the amount
of any such "deemed" profit.
4.05 Invoicing. Operator will invoice monthly for all
Reimbursable Costs and Fees payable under this Agreement.
Operator shall include in its invoice the Operating Fee and the
anticipated Reimbursable Costs payable under Sections 4.01C. and
4.01D., for the month following the invoice submission. With
respect to other Reimbursable Costs and any Contract Price
Adjustments pursuant to Section 4.01H., Operator's invoice shall
include amounts payable from the preceding month. On a quarterly
basis, Operator and Owner will reconcile actual Reimbursable
Costs under Sections 4.01C. and 4.01D. with the projected amounts
which have been paid hereunder, and Operator's next invoice
following such reconciliation will be adjusted accordingly.
SECTION V
PAYMENT
5.01 Payment of Monthly Compensation. The payment required
by Section IV, will be made on a calendar month basis. Operator
shall submit its invoices by the fifth day of the month. Owner
shall pay the amount due to Operator on or before the thirtieth
(30th) day following the date the invoice is received by Owner,
provided that invoices are submitted in a timely manner to allow
payment in the applicable month in accordance with applicable
loan requirements. Invoices not timely submitted shall be paid
within sixty (60) days. Operator shall submit its billing
together with copies of supporting invoices, vouchers, receipts,
and such other evidence of payment as Owner shall require.
5.02 Payment Of Termination Payments. Owner shall pay the
amount due pursuant to Section 7.02 to Operator on or before the
thirtieth (30th) day following the date the invoice for such
amount is received by Owner. Operator shall submit its billing
together with copies of supporting invoices, vouchers, receipts,
and such other evidence of payment as Owner shall require.
5.03 Payment Disputes. In the event of a dispute or
question regarding any invoice submitted by Operator, (i) all
amounts not disputed or in question shall be promptly paid as and
when required by Section 5.01 above, (ii) an explanation of the
dispute shall be promptly transmitted by Owner to Operator, (iii)
Owner and Operator shall immediately seek to resolve the dispute
or question, and (iv) payment shall be made within ten (10) days
of any remaining amount due when the dispute is resolved.
5.04 Audit Rights. Owner shall have the right to audit
Operator's books and records to verify that all reimbursable
costs are properly charged to Owner. No audit rights extend to
the makeup of lump sum amounts, unit rates, fixed percentages or
multipliers as may be agreed upon between Owner and Operator.
5.05 Interest. If Owner should fail to pay Operator the
amounts due and payable hereunder, except to the extent such
amounts may be in dispute, such delinquent payments shall bear
interest at an annual rate equal to one and twenty-five
hundredths (1.25) times the prime interest rate then currently
charged by the Chase Manhattan Bank in New York, New York
prorated for the period of arrears, but in no event shall such
rate exceed the maximum legal rate allowed by applicable usury
laws. Payment of interest shall not excuse or cure any default
or delay in payment of amounts due.
SECTION VI
TERM
6.01 Term. This Agreement shall become effective as of the
date of execution of this Agreement, and shall continue in effect
thereafter until the tenth (10th) anniversary of the date of
Commercial Operations unless otherwise terminated as provided in
this Agreement.
6.02 Extension of Term. Owner and Operator may elect to
extend such term for two additional periods of five (5) years
each. Any extension of the term of this Agreement will be
affected by mutual written agreement between the parties after
having given notice of the desire to so extend at least sixty
(60) days prior to the end of the then effective term. All of
the terms and conditions of this Agreement which are not modified
or changed in any such written agreement shall remain in full
force and effect throughout any such extended term.
SECTION VII
TERMINATION
7.01 Termination By Owner Without Cause. Owner shall have
the right to terminate this Agreement upon any termination of the
Power Agreement. Any Lender to the Facilities shall have the
right to terminate this Agreement for convenience should it
declare an "Event of Default" under the Loan Documents after any
cure period or other ability of Owner or any other party to cure
any such default. In addition, Owner shall have the right to
terminate this Agreement for convenience or in the event that the
Facilities are sold to a third party who intends to operate the
Facilities. In the event Owner gives a written termination
notice pursuant to the provision of this Section 7.01, this
Agreement shall terminate as of the date specified in such notice
which shall be no earlier than fifteen (15) days after the date
the notice is given.
7.02 Termination Payments. Upon termination pursuant to
this Section VII, Owner shall pay Operator: (i) all outstanding
costs pursuant to Section IV hereof; (ii) reasonable costs that
may be incurred by Operator in support of the termination of this
Agreement, and (iii) reasonable severance costs resulting from
the termination of employment of Operator's employees. Payment
of these amounts will be in accordance with Section V.
In the event of termination for convenience pursuant to
Section 7.01 or in the event of termination pursuant to Sections
7.04A. and 7.04B., Owner shall pay, in addition to the amounts
above, monthly termination payments from the date of termination
through the original Term of this Agreement. The monthly amounts
for such payments shall be determined from the following schedule
and shall be in accordance with Section V:
A. Twenty Five Thousand and No/100 Dollars
($25,000) per month from the Commercial Operation
Date through the twenty-fourth (24th) month
following the Commercial Operation Date;
B. Twenty Thousand and No/100 Dollars
($20,000.00) per month for the twenty-fifth (25th)
month through the forty-eighth (48th) month
following the Commercial Operation Date; and
C. Fifteen Thousand and No/100 Dollars
($15,000) per month for the forty-ninth (49th)
month following the Commercial Operation Date
through the original Term of this Agreement.
Owner may pay at its sole option Operator these monthly
termination payments in a lump sum based on the net present value
of the payment stream discounted at a rate of twelve percent
(12%) per annum.
7.03 Termination By Owner for Cause. Owner may terminate
this Agreement upon written notice to Operator as provided for in
Section 7.05 upon the occurrence of any of the following:
A. Operator's failure to provide adequate
qualified personnel to perform its obligations
under the Agreement.
B. Repeated failure of the Facilities to
produce adequate thermal or electrical energy to
enable Owner to meet its obligations to the
Utility to the extent such failure was in
Operator's control.
C. Outage Days for either unit which when
added with the remaining Scheduled Annual Overhaul
Outages for that unit during the Annual Outage
Period exceed forty-five (45) days on or before
May 1 of any year, or exceed fifty (50) days on or
before August 1 of any year, or exceed fifty-five
(55) days at any time after August 1 of any year
until the end of the applicable Annual Outage
Period; provided, however, that in the case of
Annual Outage Periods during which there is a
planned major boiler/turbine overhaul during the
last two (2) months of the Annual Outage Period,
Operator may, within five (5) days after the
applicable maximum Outage Days described above
occurs, request Owner to seek the approval of the
Utility to reschedule such maintenance in a manner
that will allow Operator to avoid the termination
provisions of this Section. In the event Owner is
able to reschedule such maintenance with the
Utility within twenty-five (25) days after receipt
of the request of Operator, the termination shall
not take effect unless Operator thereafter exceeds
the maximum number of Outage Days using the
revised Scheduled Annual Overhaul Outages. In the
event Owner is unable to reschedule such
maintenance within such twenty-five (25) day
period, after using reasonable efforts to do so,
Owner may terminate this Agreement.
D. Failure of the Operator to perform in
any material respect any service or obligation to
be performed by it hereunder or any representation
or warranty shall prove to be incorrect in any
material respect.
E. The appointment of a receiver,
liquidator or trustee for Operator by a court of
competent jurisdiction or an adjudication of
bankruptcy or insolvency by any such court or the
filing by Operator of a petition seeking an
adjudication of bankruptcy or insolvency.
F. Continuance of a Force Majeure by
Operator for more time than that allowed in
Section 12.01.
7.04 Termination By Operator For Cause. Operator may
terminate this Agreement upon written notice to Owner as
provided for in Section 7.05 upon the occurrence of any of the
following:
A. Failure to pay undisputed amounts due to
Operator under this Agreement in accordance with
Section V.
B. Failure of Owner to perform in any
material respect any service or obligation to be
supplied or performed by it or any representation
of warranty shall prove to be incorrect in any
material respect.
C. Failure of Owner to obtain the
Facilities Funding Date by June 30, 1997;
D. Continuance of a Force Majeure by Owner
for more time than that allowed in Section 12.01.
7.05 Written Notification of Termination. In the event a
written termination notice is given pursuant to Sections 7.03A.,
7.03D. or 7.04B., such notice shall set forth the circumstances
providing the basis for such termination and the Party which
receives such notice shall have thirty (30) days to remedy such
condition. In the event such circumstance is not corrected by
the Party receiving such notice, or the Party receiving such
notice has not taken substantive action acceptable to the other
Party in its sole discretion to correct the circumstances by the
end of such thirty (30) day period, this Agreement shall
terminate.
7.06 Termination Procedure. Neither Party may terminate
this Agreement except as provided in this Section VII. Operator
shall, in the event of termination, take all reasonable steps
necessary to assure an orderly transfer of operation and
maintenance responsibility to Owner or to Owner's designee
including, without limitation, the delivery of all of the
following to Owner or to any such designee:
A. All operation, maintenance or other
records, manuals and procedures associated with
the Facilities.
B. All tools, Consumables, spare parts and
equipment associated with the Facilities.
C. At the option of Owner or such designee,
assignments to Owner or such designee, in form
reasonably satisfactory to Owner or such designee,
of any agreements between Operator and third
parties relating to the performance of the
obligations of Operator under this Agreement.
7.07 Owner Cure of Operator's Default. In the event of a
default by Operator in its obligations hereunder, Owner may (but
shall not be required to) cure such default and may charge
Operator any additional incremental costs incurred by Owner to
cure such default. The exercise by Owner of this right shall not
waive any other rights of Owner hereunder.
SECTION VIII
INSURANCE AND INDEMNIFICATION
8.01 Insurance. Without limiting any of the obligations or
liabilities of the Operator, Operator shall at all times
throughout the term of this Agreement and any renewal thereof,
carry and maintain, or cause to be maintained, at its own
expense, insurance with at least the minimum insurance coverage
set forth below and such other additional insurance as may
reasonably be required from time-to-time by the Owner. All
insurance carried and maintained pursuant to this Agreement shall
be with insurers, and shall be in such form as shall be
satisfactory to the Lender.
A. Operator shall carry and maintain or
cause to be maintained worker's compensation
insurance (or other similar or equivalent social
insurance) written in accordance with the
governing insurance laws of the People's Republic
of China and employers' liability coverage in an
amount not less than $1,000,000 per occurrence in
the annual aggregate. The employers' liability
coverage shall not contain an occupational disease
exclusion.
B. Operator shall carry and maintain or
cause to be maintained comprehensive automobile
liability insurance covering all owned, non-owned
and hired vehicles. Such coverage shall be
written in an amount not less than $1,000,000
combined single limit per occurrence in the annual
aggregate.
C. Owner shall provide a Contractor's All
Risk (CAR) insurance policy for the Facilities
covering the general liability and builder's risk
exposure. The limit of liability insurance will
be $90,000,000 and Owner, Operator,
Subcontractors, and Financing Entities will be
named insureds.
D. Following Final Acceptance, Owner shall
procure and maintain all risk property insurance
(including boiler and machinery and business
interruption insurance) naming Operator as an
additional insured and providing a waiver of
subrogation in favor of Operator and designated
Subcontractors. Subject to Owner's approval, such
insurance may also include such other Persons as
may be requested by Operator as additional
insureds.
E. Commercial General Liability Insurance.
Owner shall provide coverage for Owner and
Operator against claims for third party bodily
injury (including death) and third party property
damage. Such insurance shall provide coverage for
products - completed operations, blanket
contractual, explosion, collapse and underground
coverage, broad form property damage and personal
injury insurance. The policy will provide a
combined single limit of liability of $20,000,000
per occurrence and in the aggregate for bodily
injury and property damage.
F. Owner shall furnish Operator and in turn
Operator shall furnish Owner with evidence of the
insurance required hereunder, in the form of
insurance certificates. All such insurance
certificates shall represent that the policies may
not be canceled or changed with respect to the
requirements of this Section 8.01 without thirty
(30) days prior written notice to Operator or its
permitted assigns.
G. All deductibles or self-insured
retentions under its respective policies shall be
the sole responsibility of the Operator.
H. Any insurance carried and maintained in
accordance with this Agreement shall be endorsed
to provide that:
i. Owner and any Lender to the
Facilities, shall be named as additional
insureds with respect to insurance carried
pursuant to items A. employers liability
(only if possible) and B. Any obligation
imposed upon the Operator (including the
liability to pay premiums) shall be the sole
obligation of the Operator and not that of
the Owner or Lender;
ii. The interest of the Owner and
any Lender to the Facilities shall not be
invalidated by any action or inaction of the
Operator or any other person and all policies
shall insure the Owner and Lender regardless
of any breach or violation by the Operator or
any other Person of any warranties,
declarations, or conditions in such policies;
iii. The insurer thereunder waives
all rights of subrogation against the Owner,
any Lender to the Facilities, and the
Utility, any right of setoff and counterclaim
and any other right to deduction due to
outstanding premium, whether by attachment or
otherwise;
iv. Such insurance shall be
primary without right of contribution of any
other insurance carried by or on behalf of
the Owner, any Lender, and the Utility with
respect to their interests as such in the
Facilities;
v. Inasmuch as such policies are
written to cover more than one insured, all
terms, conditions, insuring agreements and
endorsements (other than the limits of
liability) shall operate in the same manner
as if there were a separate policy covering
each insured; and
vi. If such insurance is canceled
for any reason whatsoever, including
nonpayment of premium, or any substantial
change is made in the coverage that affects
the interests of the Owner, any Lender, and
the Utility, such cancellation or change
shall not be effective as to the Owner, such
Lender, and the Utility, until thirty (30)
days after receipt by the Owner, Lender, and
the Utility of written notice sent by
registered mail from such insurer of such
cancellation or change; provided, however,
that such thirty (30) day period shall be
reduced to ten (10) days in the case where
cancellation results from the nonpayment of
premiums.
J. On or before the execution of this
Agreement and annually thereafter, Operator shall
arrange for furnishing Owner and third party for
which Owner makes written request with approved
certification of all required insurance. Such
certification shall be executed by each insurer or
by an authorized representative of each insurer.
Such certification or notice, as the case may be,
shall identify insurers, the type of insurance,
the insurance limits and the policy term and shall
specifically list the special endorsements in
Section 8.01D. above. Operator will furnish Owner
and any third party with copies of all insurance
policies, binders, and cover notes or other
evidence of such insurance relating to the
Facilities in the event of a claim.
K. Concurrently with the furnishing of the
certification referred to in item J. above,
Operator will furnish Owner and any third party at
the request of Owner with a report of each insurer
or insurance broker stating that all premiums then
due from the Operator have been paid and that in
the opinion of such insurer or insurance broker,
the insurance then carried and maintained with
respect to the Facilities is in accordance with
the terms of this Agreement. Furthermore,
Operator will cause an insurer or insurance broker
to advise Owner and any third party promptly in
writing of any default in the payment of any
premiums or any other act or omission on the part
of the Operator or any other person of which such
broker has actual knowledge which might invalidate
or render unenforceable, in whole or in part, any
insurance provided hereunder. Owner and/or such
third party may, at their sole option, obtain such
insurance if not obtained by the Operator and, in
such event, Operator shall reimburse Owner and/or
such third party upon demand for the cost thereof.
8.02 Risk of Loss. Owner shall bear the risk of physical
loss or damage to the Facility, including all materials,
equipment and supplies (including temporary materials, equipment
and supplies) purchased for permanent installation in or use
during construction of the Facility, regardless of whether Owner
has title thereto. Operator and Subcontractors shall have no
liability at any time for loss or damage to property of Owner, or
in custody of Owner, and Owner releases Operator and their
Subcontractors there from. Operator and their Subcontractors
shall also have no liability for any loss of, or damage to the
Facility, as it is the intent of the Parties to rely on the
proceeds of Owner's insurance as satisfaction for any loss or
damage to the Facility, and Owner releases Operator and their
Subcontractors for any such loss or damage.
8.03 Indemnification.
A. Subject to the scope and limits of the
insurance coverages listed in Section 8.01 above;
Operator agrees to defend and indemnify Owner, any
lenders, and the Utility and their respective
directors, officers and employees (collectively
"Indemnitee") against, and hold them harmless from
any and all claims, suits, liabilities and legal
expenses (collectively "Claims") resulting from or
in connection with Operator's performance,
negligent performance, or non-performance of its
obligations hereunder except where such Claims
were caused by the sole negligence or willful
misconduct of an Indemnitee, provided that
Operator shall be promptly notified in writing so
such claim or suit brought against such Indemnitee
and shall be permitted to participate in the
defense thereof.
B. Subject to the scope and limits of the
insurance coverages listed in Section 8.01 above;
Owner agrees to defend and to indemnify Operator
and its directors, officers and employees
(collectively "Operator Indemnitee") against, and
to hold them harmless from any and all Claims,
resulting from or in connection with Owner's
performance, negligent performance, or non-
performance of its obligations hereunder, except
where, such claims were caused by the sole
negligence or willful misconduct of the Operator
Indemnitee, provided that the same notification
to, and opportunity to participate, specified in
Section 7.05A. above is afforded to Owner.
C. Owner agrees to defend and to indemnify
Operator Indemnitee against and to hold them
harmless from any and all claims, resulting from
or in connection with Operator Indemnitee acting
under the EPC Contractor's supervision and
direction, the EPC's Contractor's performance,
negligent performance or non-performance of its
obligations pursuant to Section 2.02, except where
such claims where caused by Operator's
Indemnitee's failure to comply with the directions
given by EPC Contractor and/or the sole negligence
or willful misconduct of Operator's Indemnitee.
D. Indemnities against, releases from,
assumptions of, and limitations on liability
expressed in this Agreement, as well as waivers of
subrogation rights, shall apply even in the event
of the fault, negligence or strict liability of
the Party indemnified or released or whose
liability is limited or assumed or against whom
rights of subrogation are waived and shall extend
to the partners of each Party, their Affiliates,
and their respective officers, directors,
employees, and agents.
8.04 Additional Insured. Any Lender and the Utility shall
be named as an additional insured under the foregoing policies of
insurance.
8.05 Pre-Existing Contamination. Anything herein to the
contrary notwithstanding, title to, ownership of, and legal
responsibility and liability for any and all pre-existing
contamination shall at all times remain with Owner. "Pre-
existing contamination" is any hazardous or toxic substance
present at the site or sites concerned which was not brought onto
such site or sites by Operator. Owner agrees to release, defend,
indemnify and hold Operator harmless from and against any and all
liability which may in any manner arise in any way directly or
indirectly caused by such pre-existing contamination except if
such liability arises from Operator's gross negligence or willful
misconduct.
8.06 Damage Limitation. Except as expressly provided
herein, Operator nor Owner shall have liability to the other
party hereunder for indirect, incidental or consequential
damages, including, without limitation, loss of revenues,
liability for loss of use of the Facility or existing property,
loss of profits, loss of product or business interruption,
howsoever caused, including breach of contract, tort (including
negligence), strict liability or otherwise.
SECTION IX
PERMITS AND LICENSES
9.01 Owner Permits and Licenses. Owner shall be responsible
for obtaining and maintaining all permits, approvals and
licenses, required to be in the name of Owner, necessary for the
operation and maintenance of the Facilities (unless specifically
determined to be within the scope of work undertaken by
Operator). Operator shall cooperate with Owner in obtaining and
maintaining such permits and licenses and in preparing reports
required thereunder. Operator shall promptly advise Owner of any
required permits and licenses or renewals of which it becomes
aware.
9.02 Operator Permits and Licenses. Operator shall be
responsible for obtaining and maintaining all permits, approvals
and licenses required to be in the name of Operator and otherwise
required to be obtained by Operator in the performance of his
duties hereunder.
SECTION X
INDEPENDENT CONTRACTOR
At all times, Operator shall perform the requirements of
this Agreement as an independent contractor to the Owner.
Operator shall have full responsibility for the control and
direction of its employees, servants and agents. Operator shall
be fully and solely responsible for the payment of such
employees, servants and agents and for the payment of all
obligations incurred by Operator in performing the requirements
of this Agreement. This Agreement is not intended to and shall
not create a partnership of any kind or type. Except for as
provided in Section 2.08, Operator shall not be an agent for and
may not bind Owner. Owner shall not be an agent for and may not
bind Operator.
SECTION XI
COORDINATION AND ACCESS
11.01 Access. Owner shall provide Operator and its
employees, agents, and sub-contractors with full and free access
to the Facilities at all times to perform its obligations under
this Agreement. Operator shall furnish Owner with a list of
employees engaged in operation and maintenance of the Facilities
and shall inform Owner in writing of all changes thereto.
Operator, its employees, agents and subcontractors shall comply
with all safety and other requirements established by Operator
and Owner in connection with such access.
11.02 Coordination; Required Level of Performance.
Operator's personnel will interface with Owner's Representative
and with appropriate representatives of the Utility. Operator
shall accept daily instructions from the Utility, steam
purchasers, and Owner as to projected requirements, subject to
the design limits of the Facilities. In the event of any
interruption of the operation of the Facilities or in the event
Operator is unable to operate the Facilities so as to meet the
such requirements of the Utility, steam purchasers, and Owner,
Operator shall immediately notify Owner of the circumstance and
shall exert its best efforts to restore the Facilities to its
required operating level.
SECTION XII
FORCE MAJEURE
12.01 Force Majeure. Neither Party shall be responsible
or liable for or subjected to a termination of this Agreement for
or deemed in breach of this Agreement as a result of any delay or
deficiency in the performance of its obligations hereunder to the
extent that such delay or deficiency is due to circumstances
beyond its reasonable control. "Force Majeure Event" shall mean
any event that is not foreseeable and for which the damages
caused by the event are not reasonably preventable by the Party
declaring Force Majeure and cannot be overcome such that it
adversely affects one Party's performance of its obligations
under this Agreement, including, without limitation, unusually
severe weather conditions (i.e., lightening, hurricane or
typhoon); any natural disasters such as fire or earthquakes, any
labor difficulty not involving employees of any parties hereto,
any labor difficulty involving employees of parties hereto to the
extent such employees are members of a labor union and such labor
difficulty is in violation of a labor contract or in violation of
applicable laws; any labor difficulty involving employees of
parties hereto, not caused by the act or the failure to act on
the part of the relevant party hereto, to the extent such
employees are in the process of becoming members of a labor
union; war; inability to obtain fuel for the Facilities; riots;
requirements, actions or failures to act on the part of
governmental authorities preventing performance; any
modifications or changes in law, regulations or rules made by the
government of The People's Republic of China or any other local
government or their agencies which directly or indirectly affect
either Parties' performance of its obligations under this
Agreement; inability despite due diligence to obtain required
licenses or approvals; accident; fire; damage to or breakdown of
necessary facilities; or transportation delays or accidents (such
causes hereinafter called "Force Majeure"); provided that:
A. The non-performing party shall give the
other party written notice within a reasonable
time after the discovery of the Force Majeure
describing the particulars of the occurrence;
B. The suspension of performance is of no
greater scope and of no longer duration than is
required by the Force Majeure but under no
circumstances shall the Force Majeure exceed one
hundred and eighty (180) days; however, if such
Force Majeure is declared by Operator and results
in the inability of the Facilities to furnish
Dependable Capacity to the Utility as required by
the Power Agreement;
C. The Party with a deficiency in its
performance uses its best efforts to remedy such
deficiency and to mitigate the effect of the Force
Majeure Event. If the Force Majeure Event is
labor related, Operator shall use best efforts to
hire new employees or enter into new subcontracts;
D. When the non-performing Party is able to
resume performance of its obligations under this
Agreement that Party shall give the other Party
written notice to that effect;
E. If Operator declares Force Majeure,
Owner shall have the immediate right to enter the
site at Owner's discretion to operate and maintain
the Facilities until such time as the Force
Majeure is resolved; and
F. The Force Majeure shall not excuse
failure to apply money obligations nor shall it
excuse any deficiency in performance to the extent
caused by any negligent or intentional act, error,
or omission, or failure to comply with any law,
rule, regulation, order or ordinance.
12.02 Extension of Agreement by Force Majeure. Except
as otherwise provided, in no event will any condition of Force
Majeure extend this Agreement beyond its stated Term.
SECTION XIII
ARBITRATION
Any unresolved dispute that may arise between the Parties
regarding this Agreement shall be settled by arbitration. The
arbitration shall be conducted in accordance with the Commercial
Rules of the American Arbitration Association. Venue for any
arbitration proceedings shall be in Dallas, Texas. In such
proceedings, the arbitrator shall have the authority to include
in his award reimbursement of attorney fees and costs to the
prevailing Party. Such award shall be final and binding upon the
parties and may be entered and enforced in any court of
appropriate jurisdiction.
SECTION XIV
OPERATOR AND OWNER REPRESENTATIONS AND WARRANTIES
14.01 Representations and Warranties of Operator.
Operator represents and warrants, as of the date hereof, as
follows:
A. It is a corporation duly organized,
validly existing and in good standing under the
laws of the State of Nevada, is duly qualified to
do business in and is in good standing in the
State of Nevada and shall be qualified to do
business in the People's Republic of China within
one hundred twenty (120) days after Notice of
Proceed to the Commercial Operation Date, and in
any other jurisdiction where it is required to be
so qualified;
B. It has taken all necessary action to
authorize the execution, delivery and performance
of its obligations under this Agreement, which
action has not been superseded or modified, and
this Agreement constitutes the legal, valid and
binding obligation of Operator, enforceable in
accordance with its terms;
C. The execution, delivery and performance
of this Agreement do not violate (i) its articles
of incorporation or by-laws or any resolution of
its Board of Directors or other committees charges
with the governance of its affairs, (ii) any
contract to which it or, to the best of its
knowledge, any of its Affiliates is a party or
(iii) any law, rule, regulation, order writ,
judgment, injunction, decree or determination
affecting Operator or any of its properties;
D. It has not filed any petition for relief
under the bankruptcy laws of the United States of
America, or any other sovereign nation has not
made nor is making an assignment for the benefit
of creditors, initiated nor been the subject of
any proceeding seeking to have a receiver or
trustee appointed to liquidate or manage its
affairs, and none of its properties is subject to
the jurisdiction of any bankruptcy court of the
United States of America or any receivership
proceeding;
E. No litigation is pending or, to its
knowledge, threatened which seeks to restrain it
from performing its obligations hereunder or the
adverse outcome of which would materially affect
its business or its ability to perform its
obligations hereunder;
F. No authorization or approval or other
action by, and notice to or filing with, any
government agency or regulatory body is required
for the due execution, delivery and performance by
Operator of this Agreement which have not been
obtained;
G. It or one of its Affiliates is
experienced in the operation, maintenance and
repair of electrical generating facilities, has
complied with the provisions of all applicable
laws, including, without limitation, environmental
laws, respecting the operation of such facilities
and has not been and is not currently subject to
any judgment or settlement of any claim imposing
significant liability on it for noncompliance with
law or mismanagement in its operation of any
electric power generating facility; and
H. It is familiar with the terms of the
Power Agreement and steam sales agreements if
Operator is to operate the steam sales agreements
which affect or relate to the operation of the
Facilities.
14.02 Representations and Warranties of Owner. Each of
Tangshan Panda, Tangshan Pan-Western, Tangshan Cayman, and
Tangshan Pan-Sino represents and warrants, as of the date hereof,
as follows:
A. It is a foreign joint venture company
duly organized, validly existing and in good
standing under the laws of the People's Republic
of China;
B. It has taken all necessary action to
authorize the execution, delivery and performance
of its obligations under this Agreement, which
action has not been superseded or modified, and
this Agreement represents the valid and binding
obligation of Owner, enforceable in accordance
with its terms;
C. The execution, delivery and performance
of this Agreement do not violate (i) its Joint
Venture Contracts, Articles of Association, or by-
laws or any resolution of its Board of Directors
or other committees charges with the governance of
its affairs, (ii) any contract to which it is a
party or (iii) any law, rule, regulation, order,
writ, judgment, injunction, decree or
determination affecting Owner or any of its
properties;
D. It has not filed any petition for relief
under the bankruptcy laws of the United States of
America or any other sovereign nation, has not
made nor is making an assignment for the benefit
of creditors, has not initiated nor been the
subject of any proceeding seeking to have a
receiver or trustee appointed to liquidate or
manage its affairs, and none of its properties is
subject to the jurisdiction of any bankruptcy
court of the United States of America or any
receivership proceeding;
E. No litigation is pending or, to its
knowledge, threatened which seeks to restrain the
performance of its obligations hereunder or the
adverse outcome of which could materially affect
its business or its ability to perform its
obligations hereunder; and
F. No authorization or approval or other
action by, and notice to or filing with, any
government agency or regulatory body is required
for the due execution, delivery and performance by
Operator of this Agreement which have not been
obtained.
SECTION XV
NOTICES
All notices, approvals, consents, requests and other
communications hereunder shall be in writing and shall be deemed
to have been given when delivered to the other Party by
registered, certified, or express mail, return receipt requested,
postage prepaid, or by telecopy, addressed as follows:
If to Operator:
DUKE/FLUOR ▇▇▇▇▇▇ INTERNATIONAL SERVICES
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: Vice President, Operations and Maintenance
DUKE/FLUOR ▇▇▇▇▇▇
One Coliseum Centre
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: Vice President, Operations and Maintenance
If to Owner:
Tangshan Panda Heat and Power Co., Ltd.
Luannan County
Hebei Province
The People's Republic of China
ATTN: Director of Operations
Tangshan Pan-Western Heat and Power Co., Ltd.
Luannan County
Hebei Province
The People's Republic of China
ATTN: Director of Operations
Tangshan Cayman Heat and Power Co., Ltd.
Luannan County
Hebei Province
The People's Republic of China
ATTN: Director of Operations
Tangshan Pan-Sino Heat Co., Ltd.
Luannan County
Hebei Province
The People's Republic of China
ATTN: Director of Operations
Either Party may change or augment their above address by
written notice given as provided herein.
SECTION XVI
APPLICABLE LAW
16.01 Choice of Law. This Agreement shall be deemed to
have been made in Dallas, Texas and to be performed in China. It
shall be construed in accordance with the laws of the State of
Texas without application of its conflicts of laws provisions.
16.02 Certain Legal Representations and Undertakings.
Each of Operator and Owner represent, undertake and warrant that
it will not engage in and that no funds shall be used directly or
indirectly for any illegal payments or activities under the laws
of The People's Republic of China or of the United States of
America.
Payments made to any person shall not be used for any
improper or unlawful purposes, including any form of comical
bribe, kickback, or influence payment. Without limiting the
generality of the foregoing, it is expressly understood that
neither Operator nor Owner shall, directly or indirectly, give,
pay, offer, promise nor authorize the giving or payment of, any
money or anything of value to any officer or employee of any
government or any department, agency, or instrumentality thereof,
to any person acting in an official capacity for or on behalf of
any government or any department, agency or instrumentality, to
any political party official, or to any candidate for political
office for the purpose of influencing any act or decision in
order to assist the Partnership in obtaining, retaining or
directing business to the Partnership, or any other person or
entity. No party shall establish or maintain any undisclosed or
unrecorded funds or assets nor falsify or cause the making of any
artificial entries in any books or records in connection with any
services performed under this Agreement.
In addition to the foregoing provisions, each of Operator
and Owner expressly undertake that in connection with any
inspection or audit of the records of either party, to insure
compliance with the provisions hereof, the audited party shall
cooperate fully with the auditing party or its designee, shall
refrain from making any false or misleading statements, and shall
not omit to state, or cause any person to omit to state, any
material facts necessary in order to make the statements made, in
light of the circumstances under which they were made, not
misleading.
SECTION XVII
NON-WAIVER
The failure of Owner or of Operator to enforce any of the
terms and conditions or to exercise any right or privilege under
this Agreement shall not be construed as waiving any such term or
condition or right or privilege and the same shall continue and
remain in force and effect as if no such failure to enforce or
exercise has occurred. No waiver shall be valid unless so stated
in writing.
SECTION XVIII
TITLE
Title to all tools, equipment, supplies and parts purchased
by Operator and of all reports, record logs and documentation
prepared by Operator pursuant to this Agreement shall pass
directly upon payment by Owner. Said tools, equipment, supplies
and parts shall be and become the property of Owner free of all
liens and encumbrances except as provided for in Section 2.14
SECTION XIX
ASSIGNMENT
Operator may not assign either its rights or duties under
this Agreement without the prior written consent of Owner and
Lender which shall not be unreasonably withheld. Operator shall
execute all consents to assignment reasonably required by Lenders
to the Facilities.
SECTION XX
MISCELLANEOUS
20.01 Confidentiality. All Proprietary Information of a
Party (the "Transferor") which is disclosed to or otherwise
received or obtained by the other Party (the "Transferee")
incident to this Agreement is disclosed, and shall be held, in
confidence, and the Transferee shall not publish or otherwise
disclosed any Proprietary Information to any person for any
reason or purpose whatsoever or use any Proprietary Information
for its own purposes or for the benefit of any person, without
the prior written approval of the Transferor for a period of
eight (8) years from the date of receipt of such Proprietary
Information; provided, however, that the Proprietary Information
may be disclosed to any prospective financier of the Facilities
for purposes of obtaining financing for the development,
construction, operation or maintenance of the Facilities; and,
provided further that nothing herein shall limit the right of the
Transferee to provide any Proprietary Information to any court or
governmental authority having jurisdiction over or asserting a
right to obtain such information, provided that (i) such court or
governmental authority orders that such Proprietary Information
be provided, and (ii) the Transferee promptly advises the
Transferor of any request for such information by such
governmental authority and cooperates in giving the Transferor an
opportunity to present objections, requests for limitation,
and/or requests for confidentiality or other restrictions on
disclosure or access, to such court or governmental authority.
The term "Proprietary Information" means all written
information which has been or is disclosed by the Transferor, or
by an affiliate, officer, employee, agent, representative,
consultant, contractor, subcontractor or partner of the
Transferor, or which other becomes known to the Transferee or
other party in a confidential relationship with the Transferee,
and which (x) relates to matters such as patents, trade secrets,
research and development activities, draft or final contracts or
other business arrangements, books and records, budgets, cost
estimates, pro forma calculations, engineering work project,
environmental compliance, pricing information, operations and
maintenance procedures, private processes and other similar
information, as they may exist from time-to-time, or (y) the
Transferor expressly designates in writing to be confidential.
However, Proprietary Information shall exclude:
A. Information that, at the time of disclosure
hereunder is in the public domain, other than any such
information which entered the public domain by breach
of this Agreement or in violation of applicable law;
B. Information that, after disclosure hereunder,
enters the public domain, other than information that
entered the public domain by breach of this Agreement
or any other agreement, or in violation of applicable
law;
C. Information, other than that obtained from third
parties, that prior to disclosure hereunder, was
already in the recipient's possession, either without
limitation on disclosure to others or subsequently
becoming free of such limitation;
D. Information obtained by the recipient from a third
party having an independent right to disclose the
information; or
E. Information that is obtained through independent
research without use of or access to the Property
Information.
20.02 Joint Several Liability. Tangshan Panda, Tangshan
Pan-Western, Tangshan Cayman, and Tangshan Pan-Sino, shall be
jointly and severally liable for the obligations under this
Agreement.
20.03 Amendments. All amendments to this Agreement must
be written and must be signed by both parties hereto. Owner
shall give Operator written notice of any relevant amendments to
the Loan Documents in a timely manner. If an amendment or sub-
agreement to the Power Agreement, or an amendment to the Loan
Documents materially adversely affects the performance of the
Parties to this Agreement, the Parties shall negotiate in good
faith to amend this Agreement accordingly, including, but not
limited to, appropriate modifications to the Contract Price
Adjustments and Terminations for Default provisions, however,
such amendment(s) shall preserve the rights of the Parties
hereto.
20.04 Invalidity. If any provision of this Agreement
shall be found to be invalid by any court of competent
jurisdiction, such finding shall not invalidate any other
provision hereof.
20.05 Successors & Assigns. This Agreement shall inure
to the benefit of and shall be binding upon the parties hereto
and upon their respective successors and assigns.
20.06 Entire Agreement. This Agreement contains the
entire agreement and understanding between the parties as to the
subject matter of this Agreement and merges and supersedes all
prior agreements, commitments, representations, and discussion
between the Parties pertaining to the subject matter of this
Agreement.
20.07 Survival. The provisions of this Agreement which
by their nature are intended to survive the cancellation,
completion or termination of the Agreement shall continue as
valid and enforceable commitments of the Parties notwithstanding
any such cancellation, completion or termination.
20.08 WAIVER OF CONSUMER RIGHTS. The Parties HEREBY
WAIVE THEIR RIGHTS under the Deceptive Trade Practices Consumer
Protection Act, Section 17.41 et seq., Business and Commerce
Code, a law that gives consumers special rights and protections.
After both Parties have consulted with attorneys of their own
selection, they voluntarily consent to this waiver.
20.09 Limitations Application. Neither Party makes any
representations, covenants, warranties or guarantees, express or
implied, other than expressly set forth herein. The Parties'
rights, liabilities, responsibilities and remedies with respect
to the Services, whether in contract or otherwise, shall be
exclusively those expressly set forth in this Agreement.
20.10 Third Party Beneficiaries. Excluding rights any
lenders to the Facilities, this Agreement is not intended to
create any third party beneficiary or rights.
20.11 Off-Shore Services. The Parties agree to
negotiate in good faith to: (i) amend this Agreement by deleting
services to be provided outside of the People's Republic of
China; and (ii) to execute a separate off-shore services
agreement covering such services. The resulting agreements will
include all aspects of the rights, obligations and services
described herein.
20.12 Counterparts. This Agreement may be executed in
more than one counterpart, each of which shall be deemed to be an
original but all of which taken together shall be deemed a single
instrument.
Executed on the first day above-written.
DUKE/FLUOR ▇▇▇▇▇▇ INTERNATIONAL SERVICES
By:
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
TANGSHAN PANDA HEAT AND POWER COMPANY, LTD.
By:
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Manager
Title: Authorized Legal Representative
TANGSHAN PAN-WESTERN HEAT AND POWER COMPANY, LTD.
By:
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Manager
Title: Authorized Legal Representative
TANGSHAN CAYMAN HEAT AND POWER COMPANY, LTD.
By:
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Manager
Title: Authorized Legal Representative
TANGSHAN PAN-SINO HEAT COMPANY, LTD.
By:
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Manager
Title: Authorized Legal Representative
EXHIBIT A
1. Electric Energy Purchase and Sales Agreement dated as of
September 22, 1995
[See Exhibit 10.84 to the Registration Statement on Form S-1
to which this exhibit is attached.]
2. General Interconnection Agreement as of September 22, 1995
[See Exhibit 10.83 to the Registration Statement on Form S-1
to which this exhibit is attached.]
3. Supplemental Agreement dated February 10, 1996
[See Exhibit 10.85 to the Registration Statement on Form S-1
to which this exhibit is attached.]
EXHIBIT B
HOME OFFICE SUPPORT
The following services may be typically provided by the
Operator's home office and shall be considered Reimbursable
Costs:
A. Overall job management
B. Annual Operations audit and report
C. Engineering review of plant performance and efficiency
D. Maintenance planning assistance programs
E. Inventory tracking control programs
F. Contract administration and interpretation assistance
G. Troubleshooting support
H. Site safety and hazardous materials programs
I. Capital project engineering support (includes
conceptualization, analysis, and recommendation and
does not include detailed engineering for such
projects, which will be performed as required as a
separate contract)
J. Problem analysis and resolution
K. Warranty administration assistance
L. Travel and living expenses of home office personnel
EXHIBIT C
EXCERPTS FROM LOAN AGREEMENT
[See Exhibit 10.87 to the Registration Statement on Form S-1 to which
this exhibit is attached.]