EXHIBIT 10.94.04
OFFSHORE SERVICES AGREEMENT
CONSTRUCTION PHASE
THIS AGREEMENT for the performance of services is executed and made
effective as of January 1, 1998, between Tangshan Panda Heat and Power, 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 Xxxxxx International, a general partnership formed
pursuant to the laws of the State of Nevada, U.S.A. ("DFDI").
WHEREAS, Owner desires DFDI to provide certain U.S. support services for
the operation and maintenance of the Facilities (as defined in Exhibit "A") to
be located in Luannan County, near the city of Gujiaying, Hebei Province, the
People's Republic of China;
WHEREAS, Owner and DFDI desire to set forth the terms pursuant to which
DFDI shall provide certain U.S. support services for the operation and
maintenance of the Facilities; and
WHEREAS, all of such services are to be performed outside of the
Peoples Republic of China; and
WHEREAS, this Agreement covers such services which are to be provided
during the construction of the Facilities and prior to the commencement of
commercial operations.
NOW, THEREFORE, in consideration of the covenants hereinafter set forth,
the parties hereto mutually agree as follows:
1. DFDI shall perform the services described in Exhibit "A", attached hereto
and incorporated herein (the "Services").
2. For and in consideration of the performance of the Services, DFDI shall be
paid an aggregate lump sum amount of $757,778.00 (U.S. Dollars) paid in
accordance with the payment terms described in Exhibit "B", attached
hereto and incorporated herein. In the event Owner and DFDI agree on
changes in the scope of Services including an increase or decrease in the
Services, Exhibit "A", the aggregate lump sum amount and the payment terms
shall be adjusted to reflect such change.
3. DFDI warrants that it shall perform the Services in accordance with the
standards of care and diligence normally practiced by recognized
operations and maintenance firms in performing services of a similar
nature in existence at the time of performance of the Services. If,
during the twelve (12) month period following the end of the operation
year in which Services are performed, it is shown that there is an
error in the Services as a result of DFDI's failure to meet those
standards, and Owner has notified DFDI in writing of any such error
within that period, DFDI shall perform such corrective services within
the original scope of Services, as may be necessary to remedy such
error.
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4. DFDI shall maintain in force during the period that Services are performed
Workers' Compensation and Employer's Liability Insurance (limit of Five
Hundred Thousand Dollars ($500,000) each occurrence) in accordance with the
laws having jurisdiction over DFDI's employees who are engaged in the
Services. DFDI shall also maintain during such period Comprehensive General
Bodily Injury and Property Damage Liability, including automobile (owned,
non-owned or hired), Contractual and DFDI's Protective Liability Insurance
covering bodily injury to or death of persons and/or loss of or damage to
property of parties other than Owner in a combined single limit of One
Million Dollars ($1,000,000) for any one occurrence.
5. DFDI shall indemnify Owner against any and all claims, demands and causes
of action for injury to or death of persons or for damage to or destruction
of property (other than property of Owner for which Owner assumes
responsibility) the the extent resulting from the negligent acts or
omissions of DFDI. Except for DFDI's warranty obligation under paragraph 3
above, DFDI's liability under this Agreement shall not exceed amounts
recoverable under the scope and limits of the insurance coverages
specifically required to be maintained by DFDI under paragraph 4 above, and
Owner agrees to release DFDI from any and all further liability arising in
any manner from the Services. The parties hereby waive, and shall require
their insurers to waive, subrogation against the other party under any
applicable policy of insurance.
6. In performance of the Services, it is understood that if DFDI will be
supplied with certain information and/or data by Owner and/or others, that
DFDI will rely on same. It is agreed that the accuracy of such information
is not within DFDI's control, and DFDI shall not be liable for its
accuracy, nor for its verification, unless this Agreement is modified by
mutual agreement to provide for verification by DFDI.
7. The term of this Agreement shall commence on the effective date hereof and
shall terminate when the Facilities commence commercial operations.
8. Neither party shall be responsible or held liabile to the other for
indirect or consequential damages, including, but not limited to, loss of
profit, loss of investment, loss of product or business interruption. The
warranties, obligations, liabilities and remedies of the parties, as
provided herein, are exclusive and in lieu of any others available at law
or in equity. Indemnifications against, releases from, and limitations of
liability and waivers of subrogation shall apply notwithstanding the
default, negligence, (whether active, passive, joint or concurrent), strict
liability or other theory of legal liability of the party indemnified,
released or whose liability is limited and shall be effective to, and only
to, the maximum extent allowable by law and in the event such provision is
determined to exceed the maximum scope allowed by law, said provision shall
be interpreted and enforced so as to preserve the indemnity, release or
limitation to the maximum extent allowable. The parties agree to look
solely to each other with respect to performance of this Agreement. DFDI
may subcontract portions of the Services to its affiliated entities.
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9. Any delays in or failure of performance by DFDI shall not constitute a
default hereunder if such delays or failures of performance are caused by
occurrences beyond the reasonable control of DFDI, including but not
limited to: acts of God or the public enemy; expropriation or confiscation;
compliance with any order of any governmental authority; act of war,
rebellion or sabotage or damage resulting therefrom; fires, floods,
explosion, accidents, riots; strikes or other concerted acts of workmen,
whether direct or indirect; or any other causes, whether similar or
dissimilar, which are beyond the reasonable control of DFDI. The contract
price and/or schedule shall be subject to the equitable adjustment in the
event that the cost of or the time required to perform the Services
increase as a result of the foregoing causes.
10. Owner shall have the right to audit and inspect DFDI's records and accounts
covering costs hereunder at all reasonable times during the course of the
Services and for a period of one (1) year after the end of the operation
year in which Services are performed, provided, however, that the purpose
of any such audit shall be only for verification of such costs and that
DFDI shall not be required to keep records of or provide access to those of
its costs covered by fixed rates, or of costs which are expressed in terms
of percentages of other costs.
11. The cost of any non-U.S. or People's Republic of China duties, taxes or
licenses arising directly out of or that are applicable to the Services
shall be paid by the Owner. Amounts payable to DFDI shall be without
reduction for and free of non-U.S. taxes, duties or other similar
assessments. Any such taxes imposed upon DFDI or any of its employees, or
their affiliates, shall be reimbursable costs to DFDI payable by Owner.
Reimbursement of taxes imposed upon employees shall be made in accordance
with Fluor Daniel's International Assignment Policy Supplement 9, Section
9.5, Expatriate Taxation Policy, effective April 1, 1996. It is anticipated
by both parties that all Services provided under this Agreement are to be
free of People's Republic of China VAT and Withholding Tax. Should this not
be the case, both parties shall agree to mutually acceptable adjustments to
the terms of the compensation.
12. Tangshan Panda, Tangshan Pan-Western, Tangshan Cayman and Tangshan Pan-Sino
shall be jointly and severally liable for the obligations of the Owner
under this Agreement.
13. This Agreement and the attached Exhibits constitute the complete basis for
this Agreement. No other representations of any kind, oral or otherwise,
have been made. This Agreement shall be interpreted under the laws of the
State of Texas, excluding its conflict of laws provisions.
14. 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
TANGSHAN PANDA HEAT AND POWER, LTD.,
a Chinese Joint Venture company
By: Xxxxxx X. Xxxxxx
Title: Director
TANGSHAN PAN-WESTERN HEAT AND POWER CO., LTD.,
a Chinese Joint Venture company
By: Xxxxxx X. Xxxxxx
Title: Director
TANGSHAN CAYMAN HEAT AND POWER CO., LTD.,
a Chinese Joint Venture company
By: Xxxxxx X. Xxxxxx
Title: Director
TANGSHAN PAN-SINO HEAT CO., LTD.,
a Chinese Joint Venture company
By: Xxxxxx X. Xxxxxx
Title: Director
DUKE/FLUOR XXXXXX INTERNATIONAL,
a general partnership
By: Xxxxxxx X. Xxxxx
Title: Vice President
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EXHIBIT "A"
SCOPE OF SERVICES
The following services may be provided by Contractor under this Off-Shore
Agreement:
A. Offshore support of overall job management
B. Offshore management oversight of 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
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EXHIBIT "B"
COMPENSATION AND PAYMENT TERMS
Compensation is calculated in accordance with Duke/Fluor Xxxxxx International
Standard Home Office Billing Schedule in effect as of January 1, 1998, as may
hereafter be adjusted on an annual basis. Current scope of services in Exhibit
"A" shall be for the annual lump sum amount of $846,889.00 to be paid in 12
equal monthly installments beginning March 1, 1998. DFDI will invoice and Owner
will pay for all Work completed between October 8, 1997 and March 1, 1998.
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. 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.
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