EXHIBIT 10.109
DEVELOPMENT SERVICES AGREEMENT
This DEVELOPMENT SERVICES AGREEMENT (this
"Agreement"), dated as of April 22, 1997, is by and between
PANDA ENERGY INTERNATIONAL, INC., a Texas corporation
("Panda International"), and PANDA GLOBAL HOLDINGS, INC., a
Delaware corporation ("Panda Global").
W I T N E S S E T H :
WHEREAS, Panda Global is engaged, directly or
through direct and indirect subsidiaries, in (a) the
development, equipping, financing, construction, ownership,
operation, maintenance and management of certain electric
power generation facilities, sources of fuel, pipeline and
other infrastructure projects ("Projects"); (b) the
marketing of electric power, thermal energy and fuel;
(c) the borrowing and lending of funds in connection with
the financing of any of the foregoing; and (d) any other
activities related or incidental thereto (collectively the
"Activities"); and
WHEREAS, Panda Global desires that Panda
International provide certain services required by Panda
Global for or in support of such Activities; and
WHEREAS, Panda International is willing to provide
such services;
NOW, THEREFORE, in consideration of the agreements
and covenants hereinafter set forth, and intending to be
legally bound hereby, the parties hereto covenant and agree
as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. As used herein, the
following terms shall have the following meanings:
"Administrative Services Agreement" means that
certain Administrative Services Agreement dated as of even
date herewith between Panda International and Panda Global.
"Applicable Laws" means all laws, statutes,
judgments, decrees, injunctions, writs and orders of any
court, arbitrator or governmental agency or authority and
rules, regulations, orders, interpretations and permits of
any governmental body, agency or authority or court or other
body having jurisdiction over the Projects or the Activities
of either party, the transmission of electricity in the
United States or other countries, and the performance of the
Activities or the Services or obligations to be performed
hereunder, as may be in effect from time to time.
"Competent Authority" means any court of law,
person, body or other authority having jurisdiction over
Panda Global, Panda International, any Project or any party
under or mentioned in any Project Document.
"Financial Closing" means, with respect to a
Project, (a) the first to occur of the closing of the
initial construction or long-term project financing for such
Project or (b) in the case of a Project that is acquired
after it has been constructed, the closing of the
acquisition financing with respect to the Project.
"Indentures" means, collectively, the Trust
Indenture dated as of April 22, 1997 by and between Panda
Global and Bankers Trust Company, as trustee, as
supplemented by the First Supplemental Indenture thereto
dated as of the same date, and the Trust Indenture dated as
of April 22, 1997 by and between Panda Global Energy Company
and Bankers Trust Company, as trustee, as supplemented by
the First Supplemental Indenture thereto dated as of the
same date.
"Person" means any individual, corporation,
partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, limited
liability company, or other business entity.
"Project Document" means any agreement with
respect to any Project, the Services or the Activities.
"Services" has the meaning set forth in Section
2.1(c) hereof.
"Subsidiary" means, with respect to any Person,
(i) any corporation, association or other business entity of
which at least 50% of the total voting power of shares of
capital stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by such Person or one or
more of the other Subsidiaries of that Person (or a
combination thereof), (ii) any partnership (a) the sole
general partner or the managing general partner of which is
such Person or a Subsidiary of such Person or (b) the only
general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof) and
(iii) any Person in which (a) at least a 25% direct or
indirect ownership or equivalent interest is held by such
Person or by one or more Subsidiaries of such Person (or a
combination thereof) and (b) such Person, directly or
indirectly, has a controlling influence over the management
and policies with respect to the Person, whether through the
ownership of voting securities, by contract or otherwise,
provided that no other entity has greater control than such
Person over the management and policies of the Person.
Section 1.2. Interpretation.
(a) All terms defined in this Agreement
shall have the defined meanings when used in any notice,
certificate or other document made or delivered pursuant
hereto.
(b) The words "hereof," "herein" and
"hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not
to any particular provision of this Agreement, and article
and section references are to this Agreement unless
otherwise specified.
ARTICLE II
SERVICES
Section 2.1. Services of Panda International.
(a) Panda International shall perform and
provide to Panda Global and its Subsidiaries administrative
services in connection with the development of any Projects
being developed by Panda Global and its Subsidiaries that
have not reached Financial Closing and all Activities
related to such Projects, including, without limitation:
(i) reviewing potential sites and projects;
(ii) negotiating with governmental agencies and
other third parties to arrive at letters of intent and
preliminary joint venture and other such agreements or
arrangements relating to the Projects or Activities;
(iii) preparing preliminary feasibility studies
and reports;
(iv) conducting preliminary design and
engineering studies and reports including, without
limitation, conceptualization, analysis and
recommendation;
(v) preparing and monitoring all budgets and
estimated costs of development and construction;
(vi) selecting, contracting for, supervising,
managing and coordinating all engineers, architects,
lawyers, accountants, financial advisors, investment
bankers, agents, consultants, contractors,
subcontractors, equipment vendors, fuel suppliers and
other vendors and suppliers and also performing
services relating to all such functions directly
through its own employees or agents;
(vii) providing design criteria and other
information necessary for design, procurement and
construction services;
(viii) assisting architects, engineers,
contractors, construction firms, subcontractors and
vendors on costs, plans and development;
(ix) providing and maintaining all information
and equipment necessary for provision of the Services
hereunder;
(x) consulting and assisting in the arrangement
and placement of all insurance coverage relating to the
Projects;
(xi) arranging and negotiating for financing of
the Projects;
(xii) conducting and negotiating contracts and
other arrangements pertaining to the Activities,
including without limitation contracts for the
provision of fuel, equipment, materials, construction
services and operation and maintenance services;
(xiii) providing equipment, files, offices,
computers, furnishings, copiers, fax machines,
telephones and other audio and visual equipment and
devices, training, data processing, and other office
supplies and materials;
(xiv) providing accounting, budgeting,
engineering, tax, legal, investment consulting, public
and industrial relations, human resources management,
payroll, wage, health and benefit plans for the benefit
of any employees of the parties, insurance consulting,
business development, real estate, leasing, purchasing,
obtaining permits, approvals or licenses, and other
services in connection with the Activities and Services
and payroll, wage, health and benefit plans for any
employees of Panda Global and any Subsidiary of Panda
Global;
(xv) preparing and maintaining records of
accounts and of technical operations of facilities and
all reports, statements, data and information that may
be required from time to time under Project Documents
or by any governmental authority;
(xvi) opening and maintaining bank accounts and
performing cash management functions in connection with
the operation of facilities, including the payment of
costs, expenses, rentals and taxes incurred in
connection with the management of the Projects and
other facilities;
(xvii) preparing all federal, state, provincial,
local and foreign tax returns of Panda Global and its
Subsidiaries; and
(xviii) arranging for travel and living arrangements
incurred by Panda International employees, agents or
other personnel performing any Services hereunder;
(xix) arranging for the provision of litigation
services for Panda Global and its Subsidiaries (whether
or not such litigation services are related to a
Project or to any other matter);
(xx) obtaining and maintaining all governmental
permits, licenses and approvals required in connection
with Projects and the Activities; and
(xxi) any other services rendered in connection
with the Activities to the extent not otherwise
specifically described in this Agreement or in the
Administrative Services Agreement.
Such services are herein referred to as "Project
Administrative Services."
(b) Panda International shall perform and provide
to Panda Global and its Subsidiaries construction management
services in connection with the development of any Projects
being developed by Panda Global and its Subsidiaries that
have not reached Financial Closing and all Activities
related to such Projects, including, without limitation,
supervision and management of the design, engineering and
construction of facilities for any such Project, and taking
all steps as are necessary to assure that such facilities
are constructed in accordance with generally accepted
engineering practices, generally accepted construction
procedures, applicable construction contracts and Applicable
Laws and governmental permits, licenses and approvals, on
schedule and within budget. Such services are herein
referred to as "Construction Management Services." The
Project Administrative Services and Construction Management
Services are collectively hereinafter referred to as the
"Services." The parties hereto intend that the Services to
be rendered by Panda International under this Agreement and
the Services (as defined therein) to be rendered by Panda
International under the Administrative Services Agreement
shall encompass the totality of the services to be provided
by Panda International to Panda Global and its Subsidiaries
in connection with the Activities (as defined herein and in
the Administrative Services Agreement).
(c) Panda International shall at all times
provide or cause to be provided the Services in accordance
with and subject to standards, practices, methods and
procedures conforming to Applicable Laws and substantially
in accordance with all Project Documents. The Services
shall be provided on terms that are no less favorable to
Panda Global or its Subsidiaries, as the case may be, than
those that could have been obtained in a comparable
transaction on an arm's-length basis from a Person that is
not an Affiliate of Panda Global or its Subsidiaries, as
reasonably determined by Panda International.
(d) Panda International shall retain sole
responsibility for selection, hiring, dismissal, assigning
and supervising of all personnel (including the obtaining,
maintaining and (where necessary) renewing of work permits
and any other necessary permissions, registrations,
authorizations, licenses and permits in relation to such
personnel) required for the performance of the Services.
(e) Panda International may replace or remove any
personnel involved in the provision of the Services without
the approval of Panda Global. The selection of replacement
personnel shall be at the sole discretion of Panda
International.
(f) Panda International may engage such persons,
firms or companies (including Subsidiaries and other
affiliates of Panda International and their employees and
agents) as it deems necessary for the purpose of performing
the Services.
(g) Notwithstanding anything in this Agreement to
the contrary, the management and business of Panda Global
shall at all times be subject to the overall direction of
the Board of Directors of Panda Global.
Section 2.2. Authority of Panda International.
Panda International shall have all such authority to act on
behalf of Panda Global and its Subsidiaries as is necessary
to provide the Services and to fulfill its other obligations
pursuant to this Agreement.
Section 2.3. Obligations of Panda Global. Panda
Global shall do and cause to be done all such acts and
things within its power as may be necessary or desirable to
enable Panda International promptly and efficiently to
provide or cause to be provided the Services and comply with
its other obligations hereunder and shall not do or permit
anything which may prevent or restrict Panda International
from such performance or compliance. Without limiting the
generality of the previous sentence, Panda Global shall:
(i) pay or cause the prompt payment to Panda
International of all sums due to it under this
Agreement; and
(ii) observe and perform, and cause each of its
Subsidiaries to observe and perform, all its
obligations under all Project Documents to which it is
a party, except to the extent that observance or
performance is excused thereunder pursuant to the terms
thereof.
Section 2.4. Payment for Services.
(a) Subject to Section 2.4(e), from time to time,
during the term of this Agreement, promptly upon receipt of
an invoice therefor, Panda Global shall reimburse Panda
International for its costs in performing the Services
(whenever and howsoever such costs were incurred),
including, without limitation, labor costs of Panda
International's officers, directors, employees, agents,
contractors, consultants or any other person engaged by it,
allocable to such Services and overhead costs allocable to
such Services and the costs incurred by Panda International
and such persons in providing such Services and in engaging
other persons, firms or companies (including affiliates of
Panda International and their employees and agents) for the
purpose of performing such Services. Allocated overhead
costs shall be determined in accordance with Panda
International's standard method of computing overhead, but
in any event shall be allocated on a reasonable basis.
Labor costs shall include, without limitation, salaries,
wages, bonuses and expenses incurred in connection with
employee health and benefit plans (other than stock option,
stock ownership or deferred compensation plans) maintained
or adopted by Panda International for the benefit of its
employees. With respect to Services provided by a
Subsidiary of Panda International or by a third-party
provider, Panda International may direct that payment for
such Services be made by Panda Global or a Subsidiary of
Panda Global directly to such Subsidiary or other third-
party provider, and Panda Global or a Subsidiary of Panda
Global shall make such payment as so directed.
(b) In addition to reimbursement for the cost of
Services performed following the date of this Agreement,
Panda International shall be entitled to be reimbursed for
its costs in performing Services prior to the date of this
Agreement with respect to Panda Global or any entity that is
as of the date hereof (including, without limitation, the
Luannan Facility) or hereafter becomes a Subsidiary of Panda
Global, including without limitation reimbursement from
funds available to Panda Global Energy Company, a Cayman
Islands exempted company; provided, however, that the total
amount of such reimbursement related to the Luannan Facility
between the date of this Agreement and the Luannan
Commercial Operation Date may not exceed $7,500,000 and any
such reimbursement shall be applied as promptly as
reasonably practicable to the payment of costs incurred by
Panda International in performing Services for Panda Global
or a Subsidiary of Panda Global which are not, and shall not
be, the subject of any other claim for reimbursement under
this Section 2.4, and provided, further, that any such
reimbursement may be effected by paying invoices directly
from the Issuer Equity Distribution Fund or the Company
Equity Distribution Fund.
(c) If any payment to Panda International, or to
any Subsidiary of Panda International, which becomes due
under this Agreement remains unpaid after the date on which
funds are available to make such payments under the
Indentures, such payment shall accrue interest daily at the
rate of 2% per annum above the base rate declared from time
to time by Xxxxxx Guaranty Trust Company of New York from
the day after the date on which payment was due until the
date payment is actually received. The right of either
party to receive interest in respect of the late payment of
any sum due shall be without prejudice to such other rights
which it may have in respect of such late payment.
(d) Panda Global shall be entitled to conduct an
audit and review of all fees, costs and expenses payable
hereunder, together with all supporting documentation. Any
such audit shall be conducted by a nationally recognized
accounting firm acceptable to Panda International. If such
audit reveals that Panda Global has paid sums to Panda
International to which, in accordance with the provisions of
this Agreement, Panda International was not entitled, then
Panda International shall forthwith repay such sums to Panda
Global together with interest accrued thereon at the rate
specified in Section 2.4(c) and shall at the same time pay
to Panda Global any reasonable fees, costs and expenses
involved in carrying out such audit where the amount of the
repayment exceeds by at least $25,000 the amount first paid
to Panda International.
(e) Notwithstanding anything provided elsewhere
herein, Panda Global shall be obligated to make payments to
Panda International (or as directed by Panda International)
under invoices received from Panda International only when
funds are available to Panda Global for such payments
pursuant to the terms of the Indentures. Panda
International agrees to provide Panda Global with such
documentation and certificates as may be requested by Panda
Global in order to comply with the requirements of the
Indentures for the release of funds to make payments under
this Agreement.
ARTICLE III
TERM AND TERMINATION
Section 3.1. Term. The term of this Agreement
shall commence as of the date hereof and, unless earlier
terminated as provided herein or by mutual written agreement
of the parties hereto, shall terminate on March 31, 2007.
Section 3.2. Termination.
(a) This Agreement may be terminated by either
party with or without cause, provided that such party has
given 120 days' written notice to the other party and the
Trustee. Furthermore, this Agreement may be terminated
immediately by either party upon the institution of
voluntary or involuntary proceedings in bankruptcy,
reorganization, dissolution or liquidation of the other
party.
ARTICLE IV
INSURANCE
Section 4.1. Insurance. During the term of this
Agreement, Panda International shall maintain public
liability and worker's compensation insurance with insurers
of recognized financial responsibility in such amounts and
providing such coverages as shall be customary for companies
engaged in similar businesses.
ARTICLE V
LIMITATION OF LIABILITY
Section 5.1. Limitation of Liability. Neither
party shall be liable to the other party for any special or
consequential damages arising from or connected with its
performance hereunder or any breach of its obligations
hereunder.
ARTICLE VI
INDEMNIFICATION
Section 6.1. Indemnification.
(a) Panda Global shall indemnify, defend and hold
Panda International, its directors, officers, employees and
agents and its and their successors, assigns and personal
representatives (collectively, the "Indemnitees") harmless
from and against all damages, losses or expenses, claims or
causes of action of every kind or character suffered or paid
as a result of any and all claims, demands, suits,
penalties, causes of action, proceedings, judgments,
administrative and judicial orders and liabilities
(including reasonable fees of counsel incurred in any
litigation or otherwise) (collectively, "Losses") assessed,
incurred or sustained by or against such indemnified party
with respect to or arising out of any action taken or
omitted to be taken in connection with the Services or
otherwise in connection with this Agreement, except to the
extent that (i) any such Losses result from or arise out of
any action taken or omitted to be taken not in good faith or
not in a manner the Indemnitee reasonably believed to be in
or not opposed to the best interests of Panda Global or
(ii) any such Losses result from or arise out of the gross
negligence or willful misconduct of the indemnified party.
(b) In the event of the occurrence of any event
which is an indemnifiable event pursuant to this Section
6.1, Panda Global will notify the indemnifying party
promptly. If such event involves the claim of any third
person not a party hereto and Panda Global confirms in
writing its responsibility therefor, Panda Global will have
sole control over, and will assume all expenses with respect
to, the defense or settlement of such claim; provided, that
(i) Panda International will be entitled, at its expense, to
participate in the defense of such claim and to employ
counsel at its own expense to assist in the handling of such
claim, (ii) Panda Global will obtain the prior written
approval of Panda International before entering into any
settlement of such claim or ceasing to defend against such
claim, if, pursuant to or as a result of such settlement or
cessation, injunctive or similar relief would be imposed
against Panda Global, and (iii) Panda Global will not be
entitled to control (but will be entitled to participate at
its own expense in the defense of), and Panda International
will be entitled to have sole control over, the defense or
settlement of any claim to the extent (and only to the
extent) the claim seeks an order, injunction or other
equitable relief against Panda International which, if
successful, could materially interfere with the business,
assets, liabilities, obligations, prospects, financial
condition or results of operations of Panda International.
If Panda Global does not assume sole control over the
defense or settlement of such claim as provided in this
Section 6.1(b), Panda International will have the right to
defend and settle the claim in such manner as it may deem
appropriate at the cost and expense of Panda Global, and
Panda Global will promptly reimburse Panda International
therefor in accordance with this Section 6.1.
(c) Notwithstanding anything provided in Section
6.1(a) and (b), no Indemnitee shall be entitled to
indemnification hereunder to the extent that any Losses
otherwise subject to indemnification are covered by
insurance.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.1. Representations and Warranties.
Panda International and Panda Global each represents and
warrants to the other that (a) it is a corporation duly
organized, validly existing and in good standing under the
laws of the state of its incorporation and is in good
standing in all other jurisdictions where necessary in light
of the business and properties it conducts and owns and
intends to conduct and own, and has full power, authority
and legal right to incur the obligations provided for in
this Agreement; (b) the execution, delivery and performance
of this Agreement does not and will not (i) require any
consent or approval of its shareholders, (ii) violate any
provision of its charter or by-laws, or any law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award presently in effect, (iii) result in
a breach of or constitute a default under its charter or by-
laws or any indenture or loan or credit agreement or other
material agreement, lease or instrument to which it is a
party or by which it or its properties may be bound or
affected, or (iv) result in, or require, the creation or
imposition of any mortgage, deed of trust, pledge, lien,
security interest or other charge or encumbrance of any
nature upon or with respect to any of the properties now
owned or hereafter acquired by it; and (c) upon execution
and delivery hereof, this Agreement is the legal, valid and
binding obligation enforceable against it in accordance with
the terms hereof, except as the enforceability hereof may be
limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other such laws affecting the
rights of creditors generally and subject to general
equitable principles.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Further Assurances. If either party
reasonably determines or is reasonably advised that any
further instruments, actions or things are necessary or
desirable to carry out the terms of this Agreement, upon the
request of such party the other party shall execute and
deliver all such instruments, perform all such actions and
provide all such things reasonably necessary and proper to
carry out the terms of this Agreement.
Section 8.2. Entire Agreement. This Agreement
contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all
prior negotiations and understandings. Neither of the
parties shall be bound by or be deemed to have made any
representations, warranties or commitments except those
contained herein or in the documents delivered pursuant
hereto.
Section 8.3. Counterparts. This Agreement may be
executed in any number of counterparts and each such
counterpart shall be deemed to be an original instrument,
but all such counterparts together shall constitute one
agreement.
Section 8.4. GOVERNING LAW. THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK
Section 8.5. Assignability. The terms and
provisions of this Agreement, and the respective rights,
obligations and duties hereunder of Panda Global and Panda
International are not assignable by either Panda Global or
Panda International and any assignment thereof shall be
void, except (i) Panda International, without relieving
itself of any liability hereunder, may engage agents or
subcontractors to provide the services described herein,
(ii) Panda International may assign any and all of its
rights to payments made, due or to become due hereunder, and
(iii) Panda Global, without relieving itself of any
liability hereunder, may assign its rights and obligations
hereunder to any direct or indirect Subsidiary of Panda
Global or to any party that provides financing to Panda
Global or any direct or indirect Subsidiary of Panda Global.
Section 8.6. Binding Effect. This Agreement
shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted
assigns. This Agreement is not made for the benefit of any
person or entity not a party hereto, and nothing in this
Agreement shall be construed as giving any person or entity,
other than the parties hereto and their respective
successors and permitted assigns, any right, remedy or claim
under or in respect of this Agreement or any provision
hereof.
Section 8.7. Headings. The headings used in this
Agreement are for convenience only and shall not affect the
construction of any of the terms of this Agreement.
Section 8.8. Notices. All notices or other
communications which are required or permitted hereunder
shall be in writing and shall be deemed sufficiently given
if delivered personally, or by courier, or sent by facsimile
or by registered or certified mail, postage prepaid, as
follows:
If to Panda International:
Panda Energy International, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
If to Panda Global:
Panda Global Holdings, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: General Counsel
or to such other person or address as the addressee may have
specified in a notice duly given to sender as provided
herein. Such notice of communication shall be deemed to
have been given as of the date received.
Section 8.9. Amendment. Neither party hereto
shall be bound by any termination, amendment, supplement,
waiver or modification of any term hereof unless such party
shall have consented thereto in writing.
Section 8.10. No Implied Waiver. No delay or
failure on the part of any party in exercising any right,
remedy, power or privilege provided herein or by statute or
at law or in equity shall operate as a waiver thereof, and
no partial or single exercise thereof shall preclude any
other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.
IN WITNESS WHEREOF, each of the parties hereto has
caused this Agreement to be duly executed on its behalf on
the date first above written.
PANDA ENERGY INTERNATIONAL, INC.
By
Name:
Title:
PANDA GLOBAL HOLDINGS, INC.
By
Name:
Title:
