EXHIBIT 00.000
XXXXX, XXXXX PROJECT
COMMERCIAL DESIGN
AND
CONSTRUCTION CONTRACT
among
VILLAGE FARMS OF PRESIDIO, , L.P.,
as Owner,
AGRO POWER DEVELOPMENT, INC.,
as General Contractor
AUGUST 31, 1998
TABLE OF CONTENTS
Page
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ARTICLE 1. THE PROJECT; EXTENT OF AGREEMENT................................................................5
1.1. SERVICES TO BE PERFORMED.................................................................................5
1.2. EXTENT OF AGREEMENT......................................................................................6
1.3. CONFLICTING PROVISIONS...................................................................................6
1.4. ENTIRE AGREEMENT.........................................................................................6
1.5. PROJECT FINANCING AGREEMENTS.............................................................................6
1.6. EFFECTIVENESS............................................................................................6
ARTICLE 2. GENERAL CONTRACTOR'S RESPONSIBILITIES...........................................................7
2.1. GENERAL CONTRACTOR'S SERVICES IN GENERAL.................................................................7
2.2. SUMMARY OF GENERAL CONTRACTOR'S RESPONSIBILITIES.........................................................8
2.3. PARTICULAR UNDERTAKINGS OF THE GENERAL CONTRACTOR........................................................9
2.4. SUBMISSION OF REPORTS...................................................................................12
2.5. OBTAINING GOVERNMENTAL APPROVALS AND PRIVATE RIGHTS-OF-WAY..............................................13
2.6. CLEAN-UP RESPONSIBILITY.................................................................................13
2.7. PATENTS, COPYRIGHTS AND ROYALTIES.......................................................................13
2.8. FURTHER ASSURANCES......................................................................................14
2.9. INTERFACES..............................................................................................14
2.10. UTILITIES AND CONSUMABLES DURING PROJECT START-UP.......................................................14
ARTICLE 3. OWNER'S RESPONSIBILITIES.......................................................................15
3.1. DOCUMENTS AND SURVEYS...................................................................................15
3.2. RIGHTS-OF-WAY...........................................................................................15
3.3. REQUIRED APPROVALS......................................................................................15
3.4. OPERATIONS AND MAINTENANCE PERSONNEL....................................................................15
3.5. NOTICE OF DEFECT........................................................................................15
3.6. NO ALCOHOL OR CONTROLLED SUBSTANCES ON SITE; MISCELLANEOUS REGULATIONS..................................15
3.7. INTERFACES..............................................................................................15
ARTICLE 4. SUBCONTRACTS...................................................................................16
4.1. MAJOR SPECIALTY CONSULTANTS, SUBCONTRACTORS AND EQUIPMENT SUPPLIERS.....................................16
4.2. PURCHASE ORDERS AND SUBCONTRACTS........................................................................16
4.3. PAYMENTS TO SUBCONTRACTORS..............................................................................16
4.4. NO PRIVITY WITH SUBCONTRACTORS..........................................................................16
ARTICLE 5. CONTRACT PRICE.................................................................................17
5.1. CONTRACT PRICE..........................................................................................17
5.2. LIMITATION OF OWNER'S LIABILITY.........................................................................17
ARTICLE 6. COMMENCEMENT OF THE PROJECT, PROJECT START-UP AND COMPLETION...................................17
6.1. COMMENCEMENT OF WORK....................................................................................17
6.2. PROJECT START-UP........................................................................................17
6.3. SUBSTANTIAL COMPLETION..................................................................................17
6.4. NOTICE OF SUBSTANTIAL COMPLETION........................................................................18
6.5. CERTIFICATE OF SUBSTANTIAL COMPLETION...................................................................18
6.6. ACCEPTANCE OF PROJECT UPON FAILURE TO ACHIEVE SUBSTANTIAL COMPLETION PRIOR TO THE
SUBSTANTIAL COMPLETION DEADLINE.........................................................................18
6.7. ACCEPTANCE OF PROJECT UPON FAILURE TO ACHIEVE SUBSTANTIAL COMPLETION....................................18
6.8. FINAL COMPLETION........................................................................................19
6.9. NOTICE OF FINAL COMPLETION..............................................................................19
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6.10. CERTIFICATE OF FINAL COMPLETION.........................................................................19
ARTICLE 7. OWNER'S RIGHT TO PLACE THE FACILITY IN COMMERCIAL OPERATION; CARE, CUSTODY AND CONTROL.........19
7.1. OWNER'S RIGHT...........................................................................................19
7.2. PROJECT REVENUES........................................................................................20
7.3. CARE, CUSTODY AND CONTROL...............................................................................20
ARTICLE 8. SCHEDULE GUARANTEES............................................................................20
ARTICLE 9. LIMITATION OF LIABILITY........................................................................20
9.1. LIMITATION OF LIABILITY.................................................................................20
ARTICLE 10. WARRANTIES AND GUARANTEES......................................................................21
10.1. MATERIALS AND WORKMANSHIP............................................................................21
10.2. SUBCONTRACTOR WARRANTIES.............................................................................21
10.3. ENGINEERING AND DESIGN...............................................................................22
10.4. NO LIENS.............................................................................................22
10.5. LIMITATION OF WARRANTIES.............................................................................22
ARTICLE 11. FORCE MAJEURE..................................................................................22
11.1. FORCE MAJEURE EVENTS.................................................................................22
11.2. LIMITATION OF DEFAULT................................................................................23
11.3. EXCUSED PERFORMANCE..................................................................................23
11.4. RIGHT TO TERMINATE FOR FORCE MAJEURE.................................................................23
ARTICLE 12. CHANGES IN THE PROJECT AND SUSPENSION..........................................................24
12.1. CHANGES..............................................................................................24
12.2. OTHER CHANGES........................................................................................25
12.3. MODIFICATIONS........................................................................................25
12.4. CONTRACT PRICE CHANGE................................................................................26
12.5. CONTINUED PERFORMANCE PENDING RESOLUTION OF DISPUTES.................................................26
12.6. SUSPENSION...........................................................................................26
12.7. SUSPENSION PROCESS...................................................................................26
12.8. RESUMPTION OF WORK...................................................................................27
12.9. CONTRACT CHANGES DUE TO SUSPENSION...................................................................27
12.10. TERMINATION DUE TO SUSPENSION........................................................................27
ARTICLE 13. PAYMENTS TO GENERAL CONTRACTOR.................................................................27
13.1. INITIAL PAYMENT......................................................................................27
13.2. MONTHLY PROGRESS PAYMENTS............................................................................27
13.3. WAIVER AND RELEASE OF LIENS..........................................................................29
13.4. PAYMENT UPON COMPLETION..............................................................................29
13.5. PAYMENT OR USE NOT ACCEPTANCE........................................................................29
13.6. WAIVER BY OWNER......................................................................................29
13.7. WAIVER BY GENERAL CONTRACTOR.........................................................................30
13.8. GENERAL CONTRACTOR'S PERFORMANCE WITH RESPECT TO APPLICATIONS FOR PAYMENT............................30
ARTICLE 14. INDEMNITY, INSURANCE AND WAIVER OF SUBROGATION.................................................30
14.1. INDEMNITY............................................................................................30
14.2. GENERAL CONTRACTOR'S INSURANCE.......................................................................31
14.3. SUBCONTRACTOR INSURANCE..............................................................................32
14.4. GENERAL CONTRACTOR'S INSURANCE.......................................................................33
14.5. PROPERTY INSURANCE LOSS ADJUSTMENT...................................................................33
14.6. NO EFFECT ON LIABILITY...............................................................................33
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14.7. OWNER'S ELECTION REGARDING ALL RISK INSURANCE........................................................33
14.8. WAIVER OF SUBROGATION................................................................................34
ARTICLE 15. TERMINATION....................................................................................34
15.1. TERMINATION BY OWNER FOR CAUSE.......................................................................34
15.2. TERMINATION UPON BANKRUPTCY..........................................................................35
15.3. TERMINATION BY OWNER WITHOUT CAUSE...................................................................35
15.4. TERMINATION DUE TO SUSPENSION........................................................................36
15.5. TERMINATION DUE TO EVENT OF FORCE MAJEURE............................................................36
ARTICLE 16. ASSIGNMENTS AND CHOICE OF LAW..................................................................37
16.1. NO ASSIGNMENT BY GENERAL CONTRACTOR..................................................................37
16.2. ASSIGNMENT BY OWNER..................................................................................37
16.3. EXTENSION TO SUCCESSORS AND ASSIGNS..................................................................38
16.4. CHOICE OF LAW........................................................................................38
ARTICLE 17. DRAWINGS, DOCUMENTS AND MATERIALS..............................................................38
17.1. OWNER'S REVIEW......................................................................................38
17.2. GENERAL CONTRACTOR'S DUTY............................................................................39
17.3. FINAL DOCUMENTS AND ALL OTHER DOCUMENTS FURNISHED....................................................39
17.4. OWNERSHIP OF DRAWINGS AND DOCUMENTS..................................................................39
17.5. OWNERSHIP OF MATERIALS...............................................................................40
ARTICLE 18. MISCELLANEOUS PROVISIONS.......................................................................40
18.1. CONFIDENTIAL INFORMATION.............................................................................40
18.2. USES OF PREMISES.....................................................................................40
18.3. INDEPENDENT CONTRACTOR...............................................................................41
18.4. GENERAL CONTRACTOR'S OBLIGATIONS.....................................................................41
18.5. NEW DEVELOPMENTS.....................................................................................41
18.6. REPRESENTATIONS......................................................................................41
18.7. RIGHTS RESERVED BY THE OWNER.........................................................................42
18.8. CUMULATIVE REMEDIES..................................................................................42
18.9. NON-WAIVER CLAUSE....................................................................................43
18.10. SEVERABILITY.........................................................................................43
18.11. AMENDMENTS...........................................................................................43
18.12. ARTICLE AND SECTION HEADINGS.........................................................................43
18.13. NOTICES..............................................................................................43
18.14. ORIGINAL AND COUNTERPARTS............................................................................44
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APPENDICES AND SCHEDULES
APPENDIX A..............................................................45
APPENDIX B..............................................................45
APPENDIX C..............................................................45
APPENDIX D..............................................................45
APPENDIX E..............................................................45
APPENDIX F..............................................................45
APPENDIX G..............................................................45
APPENDIX H..............................................................45
APPENDIX I..............................................................45
APPENDIX J..............................................................45
SCHEDULE
1 Scope of Work
2 Technical Details
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MARFA, TEXAS PROJECT
COMMERCIAL DESIGN
AND CONSTRUCTION CONTRACT
This MARFA, TEXAS PROJECT COMMERCIAL DESIGN AND CONSTRUCTION CONTRACT dated
as of August 17, 1998 (this "Agreement") is made by and among VILLAGE FARMS OF
PRESIDIO, L.P., a Delaware limited partnership with offices at 0000 XxxxxxXxxx,
Xxxxxxxx, Xxxxx Xxxxxxxx 00000 (the "Owner"), and AGRO POWER DEVELOPMENT INC., a
New York corporation with offices at 00 Xxxxx Xxxxx, Xxxx Xxxxxxxxx, Xxx Xxxxxx
00000 (the "General Contractor").
RECITALS
A. The Owner desires to have designed and constructed a venlo style
approximately 26 acre greenhouse facility located in the vicinity of Marfa,
Texas which will be heated by natural gas with Liquid Propane Gas ("LPG") as a
backup fuel source and as more fully described in the Scope of Work (the
"Facility").
B. The General Contractor has agreed with the Owner to design, engineer,
procure, construct, start-up and demonstrate performance of the Facility.
C. The terms, conditions, specifications, prices and agreements between the
Owner and the General Contractor with respect to the services to be performed
under this Agreement are as more fully set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, and for other good and valuable consideration, the
parties hereto hereby agree as follows:
ARTICLE 1. THE PROJECT; EXTENT OF AGREEMENT
1.1. Services To Be Performed.
The General Contractor agrees to perform or cause to be performed all work and
services in connection with the design and engineering, procurement,
construction, start-up, demonstration of performance and personnel training with
respect to the Facility, all in strict accordance with, and for the Contract
Price stated in, this Agreement. The Facility, together with all equipment,
labor, services and materials to be furnished hereunder, is defined as the
"Project." The Project will be constructed on a 156-acre parcel of property
located in the County of Presidio, as is more fully described in Appendix B (the
"Project Site").
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1.2. Extent Of Agreement.
This Agreement consists of the following documents, and all schedules,
appendices and attachments thereto (collectively, the "Contract Documents"):
(a) Marfa, Texas, New York Project Commercial Design and Construction
Contract, including Appendices A through M (as the same may be amended
by Changes and Modifications); and
(b) Scope of Work attached hereto as Schedule 1 and the Technical Details
attached hereto as Schedule 2 (as the same may be amended by Changes
and Modifications, the "Scope of Work").
(c) Appendices A through M and Schedule 1 and Schedule 2 are incorporated
by reference herein and deemed to be a part of this Agreement. For
convenience of references a list of defined terms used in this
Agreement is attached as Appendix A.
1.3. Conflicting Provisions.
The Contract Documents are listed in Section 1.2 in their governing order. If
any conflict or inconsistency exists between or among Contract Documents, such
conflict or inconsistency shall be resolved in favor of the highest ranking
document. Any Changes and Modifications permitted under Article 12 shall rank
higher than the provisions they change and shall have the same priority of
classification as the original document or documents changed.
1.4. Entire Agreement.
This Agreement contains the entire agreement between the parties hereto, and
supersedes any and all prior agreements, proposals, negotiations or
representations pertaining to the Project.
1.5. Project Financing Agreements.
The Project Lender and Loan Documents shall be as follows:
(a) The Project Lender shall be Village Farms International Finance
Association , and it's respective successors and assigns.
(b) The Loan Documents shall include the Loan Agreement between the
Project Lender and the Owner (collectively, the "Loan Parties"), the
other Loan Documents (as such term is defined in the Loan Agreement),
and such other agreements and documents as the Loan Parties require in
connection with the debt financing facility for the Project.
1.6. Effectiveness.
This Agreement shall not become effective until the financing transaction
contemplated by the Loan Documents shall have closed and the initial funding by
the Project Lender thereunder shall have occurred.
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ARTICLE 2. GENERAL CONTRACTOR'S RESPONSIBILITIES
2.1. General Contractor's Services In General.
Subsequent to recording of the Leasehold Deed of Trust (as defined in the Loan
Agreement) and within ten (10) days after the beginning of the Work (as defined
in the Loan Agreement), the General Contractor and the Owner shall be required
to execute and record the Notice of Commencement of Construction in accordance
with the statutory requirements of Texas law and Section 9.2.10 of the Loan
Agreement. The General Contractor shall perform or cause to be performed, and be
ultimately responsible for, all design and engineering, procurement and
construction services, all razing, demolition and debris removal and disposal
services, all site security services (from the commencement of work at the
Project Site through Final Completion), all materials and equipment, all
machinery, tools, labor, transportation, start-up services, functional and
design verification tests, personnel training as set forth herein and, except
for the services and information specifically set forth in Article 3 to be
provided by the Owner, all other services and items required to complete the
Project in strict accordance with this Agreement (the "Work"). All design and
engineering and construction services of the General Contractor shall be
performed in accordance with the Scope of Work. The Owner shall have the right,
in accordance herewith, to review and approve any design and engineering,
procurement and construction services necessary as a result of Changes and
Modifications to complete the Project in accordance with this Agreement. The
Owner shall have the right, but not the obligation, to review the General
Contractor's performance to determine whether such performance complies with
this Agreement. The Owner's failure to review the General Contractor's
performance shall not diminish any rights the Owner may have in respect of any
deficiencies in the General Contractor's performance hereunder. Any design and
engineering or other professional service to be performed pursuant to this
Agreement which must be performed by licensed personnel shall be performed by
licensed personnel as required by Law. The enumeration of specific duties and
obligations to be performed by the General Contractor under the Contract
Documents shall not be construed to limit in any way the general undertakings of
the General Contractor as set forth herein.
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2.2. Summary Of General Contractor's Responsibilities.
2.2.1. Familiarity With Conditions. The Contractor has made a careful
examination of (i) the Project Site, as is more fully described in Appendix B,
(ii) the Scope of Work and Specifications, (iii) the location and nature of the
proposed construction, (iv) the kind and character of the soil, soil loading
conditions, subsurface conditions and terrain to be encountered, (v)
transportation facilities, (vi) the conditions of the roads, (vii) the kind of
facilities required before and during construction of the Greenhouse, (viii)
labor conditions, (ix) the local weather conditions based upon previous weather
data, and (x) all other matters which a prudent contractor should have
discovered upon reasonable investigation. The Contractor based upon such
examination hereby accepts the risk of mistake or error relating to the matters
referred to in clauses (i) through (x) above, and acknowledges and agrees that
no Contract Price increase, performance or scheduling alleviation will be
granted by the General Contractor under this Agreement as a result of any such
mistake or error.
2.2.2. Design And Engineering. The Contractor shall provide or cause to be
provided in a diligent and competent manner all design and engineering services
which shall be necessary or advisable (including geotechnical investigations)
for the expeditious, economical and sound design and completion of the Project
in accordance with the terms of this Agreement, with due consideration given to
all Governmental Approvals (including the relevant provisions in the Specified
Permit Applications), Private Rights-of-Way and Laws. The Contractor's design
and engineering services include, but are not limited to, the preparation of
complete detailed drawings and other documents, including surveys, schedules and
estimates required. for Final Completion of the Project, and coordination with
Subcontractors. All engineering work shall be performed by or under the
supervision of professional engineers licensed to perform such engineering
services in the State of New York as required by Law.
2.2.3. Procurement. The General Contractor shall procure in the General
Contractor's name, and not as agent for the Owner, and make payment and be
responsible for, all services of Subcontractors and materials, equipment and
supplies manufactured on-site and off-site, and related services for the
Project. This provision shall not preclude the assignment of Subcontractor
warranties to the Owner.
2.2.4. Construction. The General Contractor shall construct the Facility
and provide all labor, equipment, materials, supplies and tools for such
construction. The General Contractor shall handle and warehouse (according to
manufacturers' recommendations) equipment, materials and supplies for the
Project. The General Contractor shall cause the Work on the Facility to receive
constant supervision by a competent site manager (the "Site Manager") or a
competent assistant to the Site Manager, one of whom shall be on the Project
Site at all times during performance of construction activities and whom the
Owner shall approve or disapprove, which approval shall not be unreasonably
withheld. The General Contractor has provided the Owner with the names and
resumes of, and the Owner has approved, the key personnel working on the Project
identified in Appendix F, and the Owner shall have the right to approve any
replacements thereof. The Site Manager and the key personnel referred to in the
preceding sentence shall be assigned to the Project until Completion thereof
and, provided they are performing in a manner acceptable to the General
Contractor and the Owner, shall not be removed or reassigned prior to
Completion, without the
8
approval of the Owner. The General Contractor shall also employ, or cause
Subcontractors to employ, in connection with the construction of the Facility,
capable, experienced and reliable foremen and such skilled workmen as may be
required for the various classes of work to be performed.
2.2.5. Consumables And Parts During Project Start-up. The General
Contractor shall supply lubricants and spare parts as necessary for Project
Start-up.
2.2.6. Training Of Operators. Prior to Project Start-up, the General
Contractor shall train the employees of the operations and maintenance
contractor retained by the Owner with respect to the Facility. Training shall
include classroom and on-the-job training which shall commence sufficiently in
advance of Project Start-up to prepare these personnel to operate the Facility
under the General Contractor's direction during Project Start-up. The General
Contractor also shall prepare and provide to the Owner two (2) copies of an
operations and maintenance manual for the Facility. The General Contractor shall
provide the Owner thirty (30) days prior written notice of the day it will
commence training of Facility operations and maintenance personnel.
2.2.7. Achieve Final Completion With All Due Diligence. The General
Contractor shall construct and endeavor to achieve Final Completion of the
Project with all due diligence, in all respects in strict accordance with this
Agreement and in full compliance with all Governmental Approvals (including the
relevant provisions in the Specified Permit Applications), Private
Rights-of-Way, and applicable Laws including without limitation zoning,
environmental protection, use and land use, building and safety laws, ordinances
and regulations.
2.3. Particular Undertakings Of The General Contractor.
2.3.1. Safety Precautions. The General Contractor shall at all times take
all reasonable precautions for the safety of employees engaged in services
hereunder and of the public, shall comply with all applicable safety Laws, and,
to the extent not inconsistent therewith, shall comply with the safety rules and
regulations contained in the General Contractor's safety manual, a copy of which
shall be provided to the Owner . The General Contractor shall have
responsibility for safety and security at the Project Site during the term of
this Agreement. All machinery and equipment and other physical hazards shall be
guarded in accordance with applicable Law and industry construction standards.
The General Contractor shall develop and maintain a safety program complete with
a fire protection program. Without limiting the generality of the foregoing:
2.3.1.1. The General Contractor shall at no time and under no circumstances
cause or permit any employee of the General Contractor to perform any work upon
energized electrical lines or equipment, or upon poles carrying energized
electrical lines or equipment, or upon pressurized piping, unless otherwise
specified in the Contract Documents.
2.3.1.2. The General Contractor shall at no time and under no circumstances
obstruct public roadways without the prior written permission of the appropriate
authorities.
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2.3.1.3. The General Contractor shall provide and maintain all such guard
lights and other protection for the public as may be required by applicable
Laws, Governmental Approvals and Private Rights-of-Way, or as may be advisable
in the exercise of reasonable prudence by the General Contractor. The Owner's
receipt of the General Contractor's safety manual or its review or approval of
any safety procedures or programs shall not relieve the General Contractor of
any of its obligations hereunder.
2.3.2. Compliance With Governmental Approvals, Laws And Private
Rights-of-Way Requirements. The General Contractor shall comply with the
requirements of all Governmental Approvals (including the relevant provisions in
the Specified Permit Applications), Laws, and Private Rights-of-Way requirements
applicable as of the time of the General Contractor's performance hereunder,
including but not limited to all notices required thereby. The Facility will be
built in conformance with applicable Laws.
2.3.3. Duties. The Contract Price (as defined in Section 5.1) includes
provisions for the payment of all monies which will be payable to the General
Contractor by the Owner in connection with the design, engineering, procurement,
construction, start-up and functional and design verification tests of the
Facility because of gross receipts taxes or contributions, customs duty, import
duty and similar taxes, duties and contributions imposed by any taxing authority
upon materials, supplies and equipment to be incorporated in the Project. The
General Contractor shall pay all such gross receipt taxes, duties and
contributions, and indemnifies the Owner from any liability therefor. The
General Contractor shall furnish to the appropriate authorities all required
information and reports in connection with such gross receipt taxes, duties and
contributions, and shall promptly furnish copies of all such information and
reports to the Owner.
2.3.4. Schedules. The General Contractor shall prepare and maintain
detailed network schedules of the work to be performed hereunder, such schedules
to be generally in accordance with Appendix M. These schedules shall be marked
periodically (but not less frequently than monthly) to show design status,
equipment deliveries, work accomplished and systems completed. The General
Contractor periodically shall provide copies of its network schedules to the
Owner as set forth in Section 2.4.1. The General Contractor shall be responsible
for maintaining all material and equipment delivery schedules which affect the
progress of the Project. The General Contractor shall closely supervise the work
of Subcontractors and monitor Subcontractor work and progress.
2.3.5. Protection Of Property. The General Contractor shall do all things
reasonably necessary or expedient to properly protect any and all parallel,
converging and intersecting lines, railroad or utility equipment, highways and
any and all property of others from damage, and in the event that any such
lines, railroad equipment, highways or other property are damaged in the course
of the construction of the Facility the General Contractor shall at its own
expense restore any and all of such damaged property immediately to as good a
condition as it was found before such damage occurred; provided, however, that
the General Contractor shall not be liable to restore such damaged property to
the extent damage is caused by the Owner or the Owner's agents, invitees or
contractors (other than the General Contractor and any Subcontractors).
2.3.6. Ingress And Egress. Where ingress and egress by the General
Contractor to the Project Site require the General Contractor to traverse public
or private lands, the General Contractor shall limit the movement of its crews
and equipment to such rights of way as are
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identified in Appendix C, or which otherwise may be obtained by the Owner or the
General Contractor, and shall observe any and all restrictions on such use
contained in Governmental Approvals and Private Rights-of-Way governing such
rights of way. Within such rights of way, the General Contractor shall be
responsible for laying out the access to be used. The General Contractor shall
cause as little damage as possible to crops or property on such rights of way,
shall endeavor to avoid marring the lands and shall restore such lands as
required by applicable Laws, Governmental Approvals or Private Rights-of-Way
granting documents. All fences which must be opened or moved during the
construction of the Project shall be replaced in as good condition as they were
found.
2.3.7. No Alcohol Or Controlled Substances On Site. No personnel of the
General Contractor or any Subcontractor on the Project Site shall be under the
influence of or in possession of any alcoholic beverage or controlled substance
(except as prescribed by a physician so long as the performance or safety of the
Project is not affected thereby). The General Contractor shall advise its
employees, and cause Subcontractors to advise their employees, of this
requirement before they enter on the Project Site. When in the General
Contractor's reasonable judgment it is appropriate, the General Contractor
shall, and shall cause Subcontractors to, cause each of their employees who will
have access to the Project Site to take controlled substance test conducted in
accordance with applicable Laws. The General Contractor shall promptly remove
from the Project Site any employee in violation of this Section 2.3.7 or who has
failed the controlled substance test.
2.3.8. Miscellaneous Regulations. While on the Project Site, no personnel
of the General Contractor or any Subcontractor shall carry firearms, weapons, or
explosives, have animals, or have any of the above in vehicles utilized in the
Work by the General Contractor or its Subcontractors, their employees, or agents
without the written approval of the Owner . The use of explosives will not be
permitted unless and until the General Contractor has submitted to the Owner a
blasting plan which is in accordance with all applicable Laws, Governmental
Approvals and Private Rights-of-Way and the Owner have reviewed such plan. While
engaged in the Work, personnel shall remain on established roads and obey speed
limits in connection with the performance of this Agreement, unless such
performance requires persons or vehicles to depart from such roads and such
departure is permitted by Law and under the terms of the applicable Private
Rights-of-Way. The General Contractor shall be responsible for the enforcement
of the foregoing regulations.
2.3.9. Access To Project Site. From time to time during normal business
hours and upon reasonable notice, the General Contractor shall permit
representatives of the Project Lender to visit the Project Site. Such visitors
shall obey all applicable Project Site rules. The Owner and their respective
designated representatives shall have unrestricted access to the Project Site at
all times.
2.3.10. Site Logistics Plan. The General Contractor will be responsible for
organizing its activities at the Project Site so as to provide proper space for
the storage of materials and equipment and construction operations. Within
twenty (20) days after the date of execution of this Agreement and prior to
mobilization, the General Contractor shall prepare and submit to the Owner for
its approval a site logistics plan (the "Site Logistics Plan"), which will show,
at a minimum, the proposed location of the following: (i) the General
Contractor's trailers; (ii) temporary utilities; (iii) vehicle parking; (iv)
staging and laydown areas; (v) the site entry road; (vi) signs; and (vii) the
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routing of truck deliveries. The Owner's 's approval of the Site Logistics Plan
will not be unreasonably withheld. Upon approval by the Owner , the General
Contractor shall furnish three (3) copies of the Site Logistics Plan to the
Owner .
2.3.11. Functional And Design Verification Test Procedures. The General
Contractor shall prepare and submit to the Owner for approval, at least sixty
(60) days prior to expected commencement of Project Start-up, detailed protocols
for the performance of functional and design verification testing of the
Project. The Owner's approval of such protocols will not be unreasonably
withheld or delayed.
2.4. Submission Of Reports.
2.4.1. Monthly Reports. The General Contractor shall prepare and submit to
the Owner :
(a) within ten days after the end of each calendar month and as part of
the Application for Payment provided pursuant to Section 13.1.2, a
written monthly progress report in a form generally in accordance with
Appendix D hereto, which report shall include, as a minimum,
(i) a description of the status of supplies, Subcontractors' activities
and engineering, procurement and construction progress as compared
with the Project schedule (and, if appropriate, an updated schedule),
(ii) an identification and evaluation of problem areas (including but not
limited to an evaluation of any factors which are anticipated to have
a material effect on the Project schedule or which may in the opinion
of the General Contractor require Modifications),
(iii)a report of any changes in the representations set forth in Section
18.6 which cause a material adverse effect on the General Contractor's
ability to perform its obligations under this Agreement,
(iv) a detailed description of Work accomplished and progress payments
already received as compared with planned expenditures for such Work,
and
(b) status reports on material and equipment deliveries and scheduled
deliveries. In addition, the General Contractor shall keep, and
furnish to the Owner, and/or Project Lender at Project Lender's
request, such books, records and accounts containing such information
as may be necessary to
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(i) determine that work is progressing according to schedule and
(ii) provide adequate documentary support
(A) for the Owner's future tax accounting purposes and for the purpose of
confirming that progress payments are due hereunder. The General
Contractor shall notify the Owner of all accidents which occur at the
Project Site within twenty-four (24) hours after they occur, and
thereafter provide such written reports relating thereto as may be
reasonably requested by the Owner.
2.4.2. Financial Statements. Prior to the execution and delivery of this
Agreement, the General Contractor shall have provided to the Owner its most
recent annual unaudited financial statements.
2.5. Obtaining Governmental Approvals And Private Rights-of-Way.
The General Contractor shall, to the extent reasonably required, assist the
Owner to obtain those Governmental Approvals and Private Rights-of-Way required
to be obtained by the Owner, as are set forth in Appendix C. The General
Contractor has delivered, or will deliver prior to the time necessary, evidence
satisfactory to the Owner that the General Contractor has obtained all
Governmental Approvals required to be obtained by the General Contractor, as are
set forth in Appendix C, including but not limited to permits, licenses or
certificates from The State of Texas industrial insurance authorities, Texas
employment security authorities and Texas contractors authorities.
2.6. Clean-Up Responsibility.
The General Contractor shall at all times keep the Project Site free from
accumulation of waste materials and rubbish resulting from operations and
perform daily site clean-up. Prior to the issuance of the Certificate of Final
Completion, the General Contractor shall remove from the Project Site all waste
materials and rubbish and shall perform all other clean-up services to the
reasonable satisfaction of the Owner and consistent with all Governmental
Approvals, Laws and Private Rights-of-Way. Prior to the issuance of the
Certificate of Final Completion, the General Contractor shall remove from the
Project Site all tools, construction equipment, machinery and surplus materials
belonging to the General Contractor or any Subcontractor not necessary to the
continued operation of the Facility.
2.7. Patents, Copyrights And Royalties.
The General Contractor shall pay all royalties and license fees for materials,
methods and systems incorporated in the Project. The General Contractor hereby
indemnifies, fully protects and saves the Owner harmless from, and agrees to
defend the Owner against, any and all loss, cost and damage which the Owner may
hereafter suffer or pay out by reason of any claims or suits against the Owner
arising out of claims of infringement of any domestic or foreign patent rights,
trademarks or copyrights, or misuse of confidential information, by the General
13
Contractor in performing its obligations hereunder. The General Contractor and
the Owner each shall advise the other promptly in writing of any notice of such
claim or the commencement of any suit or action based upon such claim. Upon
receipt of such notice, the General Contractor shall undertake the defense of
any such suit, action or claim, and the Owner shall cooperate with the General
Contractor in such defense. The General Contractor shall have charge and
direction of the defense of such suit, action or claim, and the Owner shall have
the right to be represented therein by advisory counsel of its own selection and
at its own expense. Neither the General Contractor nor the Owner may settle or
compromise any such suit, action or claim without the prior written consent of
the other party if such settlement or compromise would obligate such other party
to make any payment or part with any property, to assume any obligation or grant
any license or other right, or to be subject to any injunction. In case the
Facility, or part thereof, is held in such suit to constitute infringement or
the use thereof is enjoined, the General Contractor shall at its own expense and
at its option either procure for the Owner the right to continue using the
Facility, or part thereof, or replace the same with a non-infringing part or
modify it so that it becomes non-infringing.
General Contractor's obligations to indemnify, defend and save harmless the
Owner hereunder shall not apply to claims of patent, trademark or copyright
infringement, or misuse of confidential information, relating to Changes or
Modifications in the Work made to the Owner's express specifications, as to
which the Owner shall indemnify, defend and save harmless General Contractor
pursuant to the procedures set forth above in this Section 2.7.
2.8. Further Assurances.
The General Contractor shall promptly execute and deliver all further
instruments and documents, and take all further action, including but not
limited to assisting the Owner in filing a notice of completion with the local
lien recording offices, that may be necessary or that the Owner may reasonably
request (and which is consistent with this Agreement) in order to effectuate the
General Contractor's obligations hereunder or the purposes or intent of this
Agreement.
2.9. Interfaces.
The General Contractor shall be responsible for the timely installation and
start-up of such connections, utilities, crossings and the like as necessary to
construct and operate the Facility, to the extent such items are not part of the
Work. These interfaces shall include but not be limited to the interconnections
of the Facility with the gas pipeline and utilities, either similar or
dissimilar, required to assure operability of the Facility. The boundaries of
such interfaces shall be as generally described in Appendix E.
2.10. Utilities And Consumables During Project Start-Up.
The Owner shall supply the utilities and consumables (except lubricants and
spare parts) necessary for Project Start-Up.
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ARTICLE 3. OWNER'S RESPONSIBILITIES
3.1. Documents and Surveys.
The Owner has furnished to the General Contractor the documents describing the
Project Site, which documents are attached as Appendix B, and will provide any
revisions or amendments thereto promptly upon receipt.
3.2. Rights-Of-Way.
The Owner shall secure, by purchase, lease, permit, easement or other license or
grant, and shall preserve and maintain, all necessary Private Rights-of-Way and
public rights of way for the Facility and for ingress and egress of the General
Contractor necessary to construct the Facility and otherwise to perform its
obligations under this Agreement.
3.3. Required Approvals.
The Owner shall secure and pay for, and shall maintain in full force and effect,
those Governmental Approvals and Private Rights-of-Way set forth in Appendix C.
3.4. Operations And Maintenance Personnel.
At least four (4) weeks in advance of Project Start-Up, the Owner and the
Greenhouse Operator shall hire personnel to be trained and to perform operations
and maintenance of the Facility during Project Start-up and Commercial
Operation.
3.5. Notice Of Defect.
If the Owner becomes aware of any fault or defect in the Facility or
nonconformance with the Contract Documents, it shall give prompt written notice
thereof to the General Contractor and thereafter the General Contractor shall
promptly correct such fault or defect and/or cure such nonconformance; provided,
however, that its failure to notify the General Contractor of discoverable
faults, defects or nonconformance pursuant to this Section 3.5 because of
failure to inspect or compare shall not relieve the General Contractor from any
duties, obligations or liabilities hereunder.
3.6. No Alcohol Or Controlled Substances On Site; Miscellaneous
Regulations.
While on the Project Site, all personnel of the Owner and its separate
contractors, shall obey the regulations and other requirements provided in
Sections 2.3.7 and 2.3.8 and all other safety requirements established by the
General Contractor. The Owner shall ensure that its personnel and those of its
invitees, agents and separate contractors, do not interfere with the performance
of the Work.
3.7. Interfaces.
The Owner shall, to the extent reasonably required to maintain the Project
schedule, assist the General Contractor in coordinating the General Contractor's
work with the work to be performed by others with respect to the Project (to the
extent the same may affect General Contractor).
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ARTICLE 4. SUBCONTRACTS
4.1. Major Specialty Consultants, Subcontractors And Equipment Suppliers.
Set forth in Appendix G and in the Scope of Work are lists of all major
equipment vendors and equipment subcontractors that the General Contractor is
considering for subcontracts in connection with the Project. The Owner have
approved each such vendor or subcontractor listed in Appendix G, and the General
Contractor shall request review of, and the Owner shall have the right to
review, any equipment vendor or subcontractor proposed to replace one of those
listed on Appendix G. The Owner and the General Contractor shall mutually agree
on any such replacement. The General Contractor may from time to time delete one
or more equipment vendors or subcontractors from said lists, and may with prior
approval of the Owner , which shall not be unreasonably withheld, add one or
more subcontractors or suppliers to said lists.
The General Contractor also shall provide to the Owner , before the date it
sends out requests for proposals to perform labor subcontracts, a list of
pre-qualified labor subcontractors proposed to be offered an opportunity to bid.
The Owner shall have the right to approve or disapprove any Subcontractor on
this list; provided, however, that the Owner's approval shall not be
unreasonably withheld.
4.2. Purchase Orders And Subcontracts.
All material purchase orders and subcontracts issued by the General Contractor
under this Agreement shall provide, in form and substance reasonably acceptable
to the Owner , that in the event this Agreement is terminated, upon tender by
the Owner or its designee of the General Contractor's performance to any
Subcontractor, such purchase order or subcontract shall continue in full force
and effect in favor of the Owner or such designee, as appropriate. Copies of all
such internal purchase orders and subcontracts issued by the General Contractor
shall be provided to the Owner upon their issuance.
4.3. Payments To Subcontractors.
Except as provided in Section 4.2, the General Contractor shall be solely
responsible for paying each Subcontractor and any other person or entity to whom
any amount is due from the General Contractor for services or supplies in
connection with the Project.
4.4. No Privity With Subcontractors.
The Owner shall have no contractual obligation to, and shall not, except in
respect of rights assigned by the General Contractor pursuant to Section 10.2,
be deemed to be in privity with any Subcontractor. The Owner's approval or
disapproval of a Subcontractor pursuant to Section 4.1 hereof shall not relieve
or release the General Contractor of any its duties, obligations or liabilities
under the terms of this Agreement.
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ARTICLE 5. CONTRACT PRICE
5.1. Contract Price.
As full consideration to the General Contractor for the full and complete
performance of the Project and all costs incurred in connection therewith, the
Owner shall pay and the General Contractor shall accept, the sum of THIRTEEN
MILLION TWO HUNDRED SIXTEEN THOUSAND AND TWO HUNDRED FIFTY Dollars
($13,216,250.00) payable pursuant to Article 13, subject to adjustment in
accordance with Article 12 (the "Contract Price").
5.2. Limitation Of Owner's Liability.
The Owner shall not under any circumstances be liable for the payment to the
General Contractor of any amounts in excess of the Contract Price, any sums due
and payable pursuant to the indemnification provisions of Article 14 hereof with
respect to claims by third parties, and any interest due and payable pursuant to
the terms of this Agreement.
ARTICLE 6. COMMENCEMENT OF THE PROJECT, PROJECT START-UP AND COMPLETION
6.1. Commencement Of Work.
The General Contractor shall commence the services required under this Agreement
promptly upon receipt of a written notice to proceed with the Work (the "Notice
to Proceed") from the Owner, which notice will not be given until such time as
the Leasehold Deed of Trust (as defined in the Loan Agreement) has been recorded
in the appropriate real estate records. At such time, the General Contractor and
the Owner shall execute and deliver to the Project Lender the Notice of
Commencement of Construction as required under applicable New York law and
Section 9.2.10 of the Loan Agreement. The General Contractor shall achieve the
Major Milestones in accordance with the Major Milestone Schedule. Time is of the
essence with respect to the Major Milestone Schedule.
6.2. Project Start-Up.
"Project Start-up" is that period (i) commencing on the date that the General
Contractor first begins the checkout of systems and equipment for readiness,
calibration, functional and design verification testing, and other initial
operations functions, and (ii) ending upon Final Completion. The General
Contractor shall provide the Owner with at least forty (40) days prior written
notice of the expected commencement of Project Start-up. At least thirty (30)
days prior to the expected commencement of Project Start-up, the General
Contractor shall submit for approval by the Owner copies of the proposed
functional and design verification testing protocols; approval of such protocols
shall not be unreasonably withheld or delayed. During Project Start-up, the
Owner and the Greenhouse Operator may each have its own or its designee's
personnel on site to observe and verify all procedures and testing activities
conducted.
6.3. Substantial Completion.
The General Contractor shall achieve Substantial Completion of the Project on or
before the "Substantial Completion Deadline", as described in Appendix G. Time
is of the essence with
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respect to such deadline. "Substantial Completion" shall mean (a) the General
Contractor has completed all other Work on the Project under this Agreement
except for the balance of Project Start-up and clean up; (b) the Owner has
acknowledged to the General Contractor that the functional and design
verification tests have been successfully completed; (c) the General Contractor
has delivered to the Owner another punch-list relating to those areas of the
Facility other than the Headhouse consisting of minor items that are not
essential to the safe and prudent operation of the Facility (collectively with
additional items identified by the Owner, the "Final Punch-List"), provided that
the condition in this clause (d) shall not be deemed satisfied if such Final
Punch-List has an aggregate cost to complete exceeding $100,000; and (e) the
Owner have delivered to the General Contractor a Certificate of Substantial
Completion.
6.4. Notice Of Substantial Completion.
When the General Contractor believes that it has achieved Substantial
Completion, it shall deliver to the Owner a notice thereof (the "Notice of
Substantial Completion").
6.5. Certificate Of Substantial Completion.
The Owner shall, within five business days following the receipt of the Notice
of Substantial Completion inspect all Work, and either (a) deliver to the
General Contractor a certificate certifying that clauses (a) through (e) of
Section 6.3 have been satisfied (the "Certificate of Substantial Completion"),
in which case Substantial Completion will have been achieved as of the date the
Owner receive such Notice of Substantial Completion from the General Contractor,
or (b) if the requirements for Substantial Completion have not been satisfied,
notify the General Contractor in writing that Substantial Completion has not
been achieved, stating in detail the reasons therefor. In the event that
Substantial Completion has not been achieved, the General Contractor shall
promptly take such action or perform such additional work as will achieve
Substantial Completion and shall issue to the Owner another Notice of
Substantial Completion pursuant to Section 6.4. Such procedure shall be repeated
as necessary until the earlier of (i) the issuance by the Owner of a Certificate
of Substantial Completion, which certificate shall not be unreasonably withheld,
or (ii) the issuance by the Owner of a Certificate of Acceptance.
6.6. Acceptance Of Project Upon Failure To Achieve Substantial Completion
Prior To The Substantial Completion Deadline.
If, on or before the date which is fifteen (15) days after the Substantial
Completion Deadline, the General Contractor has not achieved Substantial
Completion, the General Contractor may request in writing that the Owner accept
the Project by issuing a certificate of acceptance for the Project (the
"Certificate of Acceptance"). The Owner will, within five business days
following receipt of the General Contractor's request therefor, either issue a
Certificate of Acceptance (at which time "Acceptance" shall be deemed to occur)
or decline to do so. Acceptance by the Owner shall not relieve General
Contractor of its obligations to achieve Final Completion.
6.7. Acceptance Of Project Upon Failure to Achieve Substantial Completion.
If the General Contractor has not requested, or the Owner have declined to
issue, a Certificate of Acceptance pursuant to Section 6.6, the General
Contractor shall be obligated to take such action or perform such additional
work as will be necessary to achieve Substantial Completion. Such
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Acceptance by the Owner shall not relieve General Contractor of its obligation
to achieve Final Completion.
6.8. Final Completion.
The General Contractor shall achieve Final Completion of the Project on or
before the "Contract Deadline" which is twenty-five (25) days after the
Substantial Completion Deadline. Time is of the essence with respect to such
deadline. "Final Completion" shall mean (a) Substantial Completion (or
Acceptance) have been achieved; (b) Project Start-up has been completed; (c) the
items identified on the Final Punch-List have been completed by the General
Contractor and approved by the Owner ; (d) clean-up has been completed; (e) the
Owner has delivered to the General Contractor a Certificate of Final Completion.
6.9. Notice Of Final Completion.
When the General Contractor believes that it has achieved Final Completion, it
shall deliver to the Owner a notice thereof (the "Notice of Final Completion").
6.10. Certificate Of Final Completion.
The Owner shall, within five business days following the receipt of the Notice
of Final Completion inspect all Work, and either (a) deliver to the General
Contractor a certificate certifying that clauses (a) through (e) of Section 6.11
have been satisfied (the "Certificate of Final Completion") and the Owner, and
the General Contractor shall further execute and deliver to the Project Lender
the Affidavit of Completion in compliance with Texas law and Section 9.3.2 of
the Loan Agreement and take such further action as is required under Texas law
to identify Final Completion, in which case Final Completion will have been
achieved as of the date the Owner receive such Notice of Final Completion from
the General Contractor, or (b) if the requirements for Final Completion have not
been satisfied, notify the General Contractor in writing that Final Completion
has not been achieved, stating in detail the reasons therefor. In the event that
Final Completion has not been achieved, the General Contractor shall promptly
take such action or perform such additional work as will achieve Final
Completion and shall issue to the Owner another Notice of Final Completion
pursuant to Section 6.9. Such procedure shall be repeated as necessary until the
issuance by the Owner of a Certificate of Final Completion, which certificate
shall not be unreasonably withheld.
ARTICLE 7. OWNER'S RIGHT TO PLACE THE FACILITY IN COMMERCIAL OPERATION;
CARE, CUSTODY AND CONTROL
7.1. Owner's Right.
The parties currently contemplate that the Facility shall be occupied and placed
in Commercial Operation upon Substantial Completion. However, at any time after
the Substantial Completion Deadline, the Owner or the Greenhouse Operator may
occupy any portion of the Facility which is complete. Moreover, at any time on
or after August 31, 1998, the Owner shall have the right to place the Facility
in Commercial Operation, whether or not the General Contractor has achieved
Substantial Completion or Acceptance. After the Owner shall have placed the
Facility in Commercial Operation, the Owner shall so notify the General
Contractor, and the Greenhouse Operator shall thereafter operate the Facility.
The placing of the Facility in Commercial
19
Operation by the Owner shall not excuse the General Contractor from completing
all remaining Work on the Project nor constitute a waiver of any of the General
Contractor's obligations under this Agreement. In the event the Owner places the
Facility in Commercial Operation prior to Substantial Completion or Acceptance,
the Owner shall afford the General Contractor reasonable access to the Facility
to complete all remaining Work on the Project.
7.2. Project Revenues.
The General Contractor shall not be entitled to any revenues associated with the
sale of any fruit, vegetables, flowers or other produce from the Greenhouse.
7.3. Care, Custody And Control.
Care, custody and control of the Facility shall pass from the General Contractor
to the Owner upon the issuance of the Certificate of Substantial Completion or
the Certificate of Acceptance, or upon the Owner's election to place the
Facility in Commercial Operation, as the case may be. The Owner shall assume the
risk of physical loss or damage to the Work resulting from the action of the
Owner or its employees from and after the issuance of the Certificate of
Substantial Completion or the Certificate of Acceptance or the placing of the
Facility into Commercial Operation, as the case may be. The General Contractor
shall be obligated to replace, repair or reconstruct any of the Work which is
damaged, destroyed or lost prior to the passage of care, custody and control of
the Facility to the Owner.
ARTICLE 8. SCHEDULE GUARANTEES
8.1 Subbstantial Completion.
The Contractor guarantees that Substantial Completion shall be achieved on or
before the Substantial Completion Deadline, as such date may be modified in
accordance with Article 12 hereof.
ARTICLE 9. LIMITATION OF LIABILITY
9.1. Limitation Of Liability.
9.1.1. Limitation. The total aggregate liability of the General Contractor
with respect to its obligations hereunder, including but not limited to warranty
obligations and its obligation to physically and mechanically complete the
Facility, shall be limited to an amount equal to the Contract Price. The
foregoing limitations shall not apply to any amounts payable to, or arising out
of or relating to any claim made by, any person other than the Owner; it being
the express intention of the parties to limit the liability of the General
Contractor only with respect to claims arising in connection with its
performance or non-performance of this Agreement (except its obligations under
Section 14.1.1), and not with respect to claims arising in connection with
damage or injury to third parties or the property of third parties including
those under Section 14.1.1.
9.1.2. Consequential Damages. No party shall be liable to any other party
for indirect, consequential, incidental, special or punitive damages, including
but not limited to damages due to delay in or loss of use of profits or
products, lost income, or obligations of the other
20
to third parties, except, in the case of the General Contractor, to the extent
such damages may be deemed included within the liquidated damages payable
pursuant to Sections 8.2 and 8.3 hereof.
ARTICLE 10. WARRANTIES AND GUARANTEES
10.1. Materials And Workmanship.
The General Contractor warrants to the Owner that all machinery, equipment,
materials and other items furnished under this Agreement will be new and of good
quality, free from improper workmanship and defective materials and shall
conform to the requirements of this Agreement. As the Owner's sole remedy for
any breach of this warranty, the General Contractor agrees to correct within ten
(10) days after receipt of notice from the the Owner, and without additional
compensation, any Work performed hereunder that, at any time for a period of one
year after the earlier of Final Completion or the commencement of Commercial
Operation, proves to be improper or defective in material or workmanship or not
in conformance with the requirements of this Agreement. If any machinery,
equipment, materials or other items furnished under this Agreement are replaced
during the last six months of the original warranty relating thereto, the
warranty for such items shall be deemed extended until six months after the date
of replacement. In addition to correcting the improper, nonconforming or
defective Work itself, the General Contractor shall bear all costs and expenses
associated with correcting such warranted Work including without limitation
necessary trouble shooting, disassembly, transportation, reassembly and
retesting, as well as reworking, repair or replacement of such Work, and
disassembly and reassembly of adjacent work when necessary to give access to the
improper, defective or nonconforming Work. The General Contractor's warranty
shall not apply to damage arising from the Greenhouse Operator's failure to
comply with prudent operating and maintenance practices in the commercial
greenhouse industry. For the purposes of this Section 10.1, improper workmanship
and defective materials shall be deemed to include, but shall not be limited to,
the following: (i) faulty or defective materials, and defective, careless or
unskilled execution of the Work; (ii) damage by exposure to foreseeable weather,
windborne water or surface drainage; (iii) degradation such as uncontrolled
cracking or spatting of concrete, unit masonry, cast and natural stone,
millwork, plaster, glass and applied finishes such as paint and special
coatings; (iv) "pot-holing" of pavement; (v) mechanical or electrical equipment
which does not operate in a satisfactory, quiet and efficient manner as
determined by the Owner in its reasonable discretion, or which does not perform
the functions specified in the Scope of Work or Specifications; or (vi) unusual
injury or deterioration of the Work when in normal use by the Greenhouse
Operator.
10.2. Subcontractor Warranties.
The General Contractor shall, for the protection of the Owner and its successors
and assigns, obtain from all Subcontractors guarantees and warranties with
respect to machinery, equipment, materials and other items used and installed
hereunder, which guarantees and warranties shall not be amended, modified or
otherwise discharged without the prior written consent of the Owner . Such
guarantees and warranties shall be in accordance with reasonable commercial
greenhouse industry standards, shall be assignable to the Owner, shall cover a
period of not less than one year from the earlier of Final Completion or the
commencement of Commercial Operation, and shall be made available to the Owner
to the full extent of the terms thereof after assignment. The General Contractor
shall enforce such guarantees and warranties to the fullest extent thereof on
21
behalf of the Owner until such time as they are assigned to the Owner. Upon the
earlier to occur of (i) issuance of the Certificate of Final Completion, or (ii)
termination of this Agreement pursuant to Article 15, the General Contractor
shall assign to the Owner all the General Contractor's rights under
Subcontractor guarantees and warranties and shall deliver to the Owner copies of
all contracts providing for such guarantees and warranties.
10.3. Engineering And Design.
The General Contractor warrants and guarantees that it shall perform all of its
engineering and design services in accordance with sound engineering practice,
Governmental Approvals and applicable Laws and that, when complete, the Project
will be free of all deficiencies caused by errors or omissions in engineering or
design (other than errors or omissions in the engineering or design of the
growing systems specified by the Owner in Schedule 1). For a period of one year
from the earlier of Final Completion or the commencement of Commercial
Operation, the General Contractor shall, as the Owner's sole remedy for breach
of this warranty, at its own expense correct any such efforts and omissions and
resulting deficiencies in the Project as soon as reasonably possible after
receipt of notice from the Owner specifying such deficiencies.
10.4. No Liens.
The General Contractor warrants and guarantees that title to all work,
materials, supplies and equipment provided hereunder will pass to the Owner upon
payment by the Owner to the General Contractor therefor free and clear of all
liens, claims, security interests, charges and any other encumbrances or
preferential arrangements, including without limitation the lien or retained
security title of a conditional vendor ("Liens"), and that none of such work,
materials, supplies or equipment will be acquired by the General Contractor
subject to any agreement under which a Lien is retained by any person or entity
except as otherwise provided by Law.
10.5. Limitation Of Warranties.
EXCEPT AS PROVIDED HEREIN, THERE ARE NO WARRANTIES OR GUARANTEES, EXPRESS OR
IMPLIED, RELATING TO THE GENERAL CONTRACTOR'S PERFORMANCE HEREUNDER, AND THE
GENERAL CONTRACTOR DISCLAIMS ANY IMPLIED WARRANTIES OR WARRANTIES IMPOSED BY LAW
(OTHER THAN WARRANTIES OF TITLE).
ARTICLE 11. FORCE MAJEURE
11.1. Force Majeure Events.
As used in this Agreement, a "Force Majeure Event" means any act or event that
prevents the performance of the Owner or the General Contractor under this
Agreement or the compliance with any conditions required by the other party
under this Agreement if such act or event is beyond the reasonable control of
the party relying thereon as justification for such nonperformance or
noncompliance and such party has been unable to overcome such act or event by
the exercise of due diligence, including but not limited to (but subject to the
foregoing) flood, drought, unusually severe weather, earthquake, storm, fire,
explosion, sabotage or threat of sabotage of the Facility, the Greenhouse or the
pipeline, pestilence, epidemic, lightning and other natural catastrophes; war,
riot, civil disturbance or disobedience, action or inaction of legislative,
22
judicial, or regulatory agencies, or other proper authority, which may conflict
with the terms of this Agreement; failure, threat of failure or sabotage of
equipment supplied by Subcontractors for temporary services during performance
of the Work which has been maintained in accordance with good engineering and
operating practices applicable thereto; or loss or shortage of utilities.
Economic hardship and strikes, work stoppages or labor disturbances are
explicitly excluded as Force Majeure Events.
11.2. Limitation Of Default.
No party shall be considered in default in the performance of any of the
agreements contained in this Agreement, except for the Owner's or the General
Contractor's obligations to pay money when and to the extent the failure of
performance shall be caused by a Force Majeure Event.
11.3. Excused Performance.
If any party is rendered wholly or partly unable to perform its obligations
under this Agreement because of a Force Majeure Event, that party will be
excused from whatever performance is affected by the Force Majeure Event to the
extent so affected; provided that:
(a) the nonperforming party, within five (5) days after the occurrence of
the Force Majeure Event, gives the other parties written notice
describing the particulars of such occurrence, including an estimation
of its expected duration and probable impact on the performance of the
affected party's obligations hereunder, and continues to furnish
timely regular reports with respect thereto during the continuation of
and upon the termination of the Force Majeure Event;
(b) the suspension of performance is of no greater scope and of no longer
duration than is reasonably required by the Force Majeure Event;
(c) the obligations of any party which arose before the occurrence causing
the suspension of performance and the performance of which is not
prevented by the occurrence, shall not be excused as a result of such
occurrence; and
(d) the nonperforming party uses its best efforts to remedy its inability
to perform and mitigate the effect of such event and resumes its
performance at the earliest practical time after cessation of such
occurrence.
11.4. Right To Terminate For Force Majeure.
If a suspension of performance by any party as a result of a Force Majeure Event
exceeds sixty (60) days, the parties whose performance is unaffected by the
Force Majeure Event may terminate this Agreement pursuant and subject to the
terms of Section 15.5 hereof; provided, however that the General Contractor may
not terminate this Agreement pursuant to Section 15.5 hereof if and to the
extent that a Change relating to such Force Majeure Event shall have been
approved by the Owner and the General Contractor pursuant to Section 12.2.2
hereof.
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ARTICLE 12. CHANGES IN THE PROJECT AND SUSPENSION
12.1. Changes.
At any time and from time to time prior to the issuance of the Certificate of
Final Completion, the Owner, without invalidating or amending this Agreement,
may order changes in the Project within the general scope of this Agreement
consisting of additions, deletions or other revisions (such changes, and the
changes permitted under Section 12.2, being referred to collectively herein as
"Changes"), in which event the Contract Price, the Substantial Completion
Deadline, the Contract Deadline, and the Major Milestone Schedule set forth in
Appendix H to this Agreement shall be adjusted accordingly, if necessary,
pursuant to Section 12.1.1. No Change will be effected without an authorized
Change Order (as defined in Section 12.1.2).
12.1.1. Procedure For Changes. Except as provided in Section 12.2, only the
Owner may initiate Changes. At no cost to the Owner, the General Contractor
shall promptly review the Owner's proposal and provide the Owner , within five
(5) days thereafter, with notice in writing of the effect, if any, such proposed
Change would have on the Contract Price, the Substantial Completion Deadline,
the Contract Deadline, and the Major Milestone Schedule. Such notice also shall
include an analysis demonstrating (i) the time impact, if any, of the proposed
Change on the critical path items yet to be completed (including the influence
of such Change on the current dates scheduled for Substantial Completion and
Final Completion) and (ii) how the General Contractor proposes to incorporate
the time impact on non-critical path items into the schedule without schedule
alleviation. If, in the General Contractor's opinion, Project schedule and/or
performance may be maintained or adjustments thereof minimized only by
increasing the Contract Price, the General Contractor shall, in such notice, set
forth possible trade-offs among or between Project cost, schedule and
performance so that the Owner may make an informed choice among such
alternatives in deciding whether to issue a Change Order. The Owner shall
promptly review the information provided by the General Contractor pursuant to
this Section 12.1.1 and thereupon the Owner may issue a Change Order approving
and authorizing such proposed Change, in which event the cost, scheduling and
performance alternative included in the General Contractor's notice described
above and chosen by the Owner shall be binding on the General Contractor. The
General Contractor shall use all reasonable efforts to minimize any effect
adverse to the Owner of any Change on Project cost, scheduling and performance.
The Change Order issued by the Owner will authorize an extension in the
Substantial Completion Deadline and/or the Contract Deadline only if the General
Contractor establishes, to the Owner's 's reasonable satisfaction, that the
nature of the proposed Change would necessitate such extension. All Changes,
whether initiated by the Owner or the General Contractor under Section 12.2,
shall be authorized by a Change Order, and shall be performed pursuant to this
Agreement. Any change in the Project necessitated by any change in Laws,
Governmental Approvals or Private Rights-of-Way after the effective date hereof
shall be treated as a Change pursuant to this Article 12 unless the change
necessitated comes within the definition of Modification, in which case it shall
be treated as a Modification pursuant to this Article 12.
12.1.2. Change Orders. A "Change Order" is a written order to the General
Contractor signed by a duly authorized representative of the Owner authorizing a
Change in the Project. Upon execution and delivery of this Agreement, the Owner
shall deliver to the General Contractor written notice signed by the Owner ,
stating which officers or representatives are authorized to
24
approve Change Orders. If and when, after execution and delivery of this
Agreement, another officer is selected by either the Owner to approve Change
Orders, such party shall deliver to the General Contractor another notice signed
by such party so authorizing such new officer or representative to approve
Change Orders. For the purpose of determining who has authority to approve
Change Orders, the General Contractor shall be entitled to rely on the latest
notice delivered by the Owner pursuant to this Section 12.1.2 and received by
the General Contractor.
12.1.3. No Changes Due To Contractor Error. Notwithstanding anything in
this Article 12 to the contrary, no Changes shall be issued to correct errors or
omissions on the part of the General Contractor which result in construction not
in accordance with the Contract Documents as they existed at the time of such
error or omission.
12.2. Other Changes.
12.2.1. Changes In Laws, Approvals Or Rights-Of-Way. In the event and to
the extent a change in Laws, Governmental Approvals or Private Rights-of-Way
necessitates a change in the Work, the General Contractor may (and, if requested
by the Owner shall submit a written request for a Change to the Owner, such
Change to be incorporated into the Project upon approval by the Owner , which
approval shall not be unreasonably withheld, by issuance of a Change Order
pursuant to Section 12.1.1.
12.2.2. Changes Due To Delays In Interfaces Or Force Majeure Events. In the
event and to the extent that (i) completion of interfaces or interconnections
with third parties are delayed due to causes beyond the control of the General
Contractor, and General Contractor's performance is adversely affected thereby,
or (ii) a Force Majeure Event prevents the General Contractor's performance
hereunder, and all of the requirements of Section 11.3 (a) through (d) are
satisfied, the General Contractor shall be entitled to (and if requested by the
Ownershall request) a Change pursuant to, and to the extent authorized by, this
Section 12.2.2. In such event, the Contract Price, the Substantial Completion
Deadline, the Contract Deadline, and the Major Milestone Schedule set forth in
Appendix H to this Agreement shall be adjusted to the extent of the actual and
verifiable effects, if any, which General Contractor demonstrates to the
reasonable satisfaction of the Owner that such delay or Force Majeure Event has
had upon General Contractor's performance of its obligations hereunder. Such
Change shall be incorporated into the Project by issuance of a Change Order
pursuant to Section 12.1.1.
12.3. Modifications.
Without invalidating or amending this Agreement, the Owner may order and the
General Contractor may propose, subject to approval by the Owner , modifications
in the Project within the general scope, and consistent with the intent, of the
Contract Documents (such modifications being referred to herein as
"Modifications") consisting of additions, deletions or other revisions, so long
as such Modifications do not adversely affect the Contract Price, the
Substantial Completion Deadline, and the Contract Deadline.
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12.4. Contract Price Change.
A Contract Price increase, if any, resulting from a Change in the Project shall
be determined in one or more of the following ways and paid by the Owner
pursuant to the schedule of Progress Payments adjusted accordingly:
12.4.1. By the acceptance by the Owner of a lump sum proposed by the
General Contractor properly itemized and supported by sufficient substantiating
data to permit evaluation; or
12.4.2. If the method set forth in Section 12.4.1 is not agreed upon after
good faith negotiation by the parties, the General Contractor shall provide the
Owner with such purchase orders, invoices and other documents and records as may
enable the Owner to verify, to their reasonable satisfaction, the cost to the
General Contractor of effecting such Change. All equipment, materials and other
items required as a result of such Change shall be purchased by the General
Contractor at competitive market prices.
12.5. Continued Performance Pending Resolution Of Disputes.
Notwithstanding a dispute regarding the adequacy of a Contract Price increase or
schedule adjustment for a proposed Change, or whether a Modification should be a
Change because it affects the Contract Price or schedule, the General Contractor
shall proceed with the performance of such Change or Modification.
12.6. Suspension.
The Owner may, by written notice to the General Contractor, suspend at any time
the performance of all or any portion of the Work to be performed under this
Agreement so long as (a) the Substantial Completion Deadline and the Contract
Deadline are extended an amount of time equal to the actual and verifiable
impact on the Project schedule caused by such suspension and (b) the suspension
of any material part on the Project schedule caused by such suspension and (b)
the suspension of any material part of the Work shall be for a period not to
exceed sixty (60) days. Suspension of the Work under this Agreement may be
accomplished only by the written notice described in this Section 12.6.
12.7. Suspension Process.
Upon receipt of a notice given pursuant to Section 12.6, the General Contractor
shall, unless the notice requires otherwise:
(a) immediately discontinue work on the date and to the extent specified
in such notice;
(b) place no further orders or subcontracts for equipment, material,
services, or other items with respect to suspended work other than to
the extent required in such notice and to the extent required to
protect the Work;
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(c) promptly make every reasonable effort to obtain suspension upon terms
satisfactory to the Owner of all orders, subcontracts and rental
agreements to the extent they relate to performance of suspended work;
(d) continue to protect and maintain the work performed including those
portions on which work has been suspended; and
(e) take any other reasonable steps to minimize costs associated with such
suspension.
12.8. Resumption Of Work.
Upon receipt of notice from the Owner to resume suspended work, the General
Contractor shall immediately resume performance under this Agreement to the
extent required in such notice.
12.9. Contract Changes Due To Suspension.
If the General Contractor believes that any suspension or resumption of
suspended Work justifies a Change in the Contract Price, the Substantial
Completion Deadline, the Contract Deadline or any other affected obligations of
the General Contractor hereunder, the General Contractor must, within 30 days
after receipt of the notice of suspension or resumption as the case may be,
submit to the Owner a written statement setting forth the justification for such
a Change in reasonable detail. If a Change is justified, the Owner shall issue a
Change Order under which the Contract Price, the Substantial Completion
Deadline, the Contract Deadline and any other affected obligations of the
General Contractor under this Agreement shall be equitably adjusted to
compensate for the effect of the suspension.
12.10. Termination Due To Suspension.
If a suspension by the Owner of all or a material portion of the Work exceeds
sixty (60) days the General Contractor may terminate this Agreement in the
manner set forth in Section 15.4 hereof.
ARTICLE 13. PAYMENTS TO GENERAL CONTRACTOR
13.1. Initial Payment.
Promptly after issuance of the Notice to Proceed, the General Contractor shall
submit to the Owner an initial payment request supported by an invoice
reflecting an amount of which has been determined pursuant to the Application
for Payment, the form of which is attached hereto as Appendix I.
13.2. Monthly Progress Payments.
Progress payments shall be made by the Owner to the General Contractor according
to the following procedure:
13.2.1. On or before the tenth day of each calendar month beginning with
the first month following receipt of the initial payment under Section 13.1, the
General Contractor shall submit to the Owner an "Application for Payment," which
shall include (i) the monthly progress report prepared pursuant to Section 2.4.1
(a), and (ii) an invoice reflecting an amount which has
27
been determined pursuant to the Application for Payment, the form of which is
attached as Appendix I, which amount, together with all previous amounts paid by
the Owner to the General Contractor, shall reflect work on the Project actually
accomplished through the preceding calendar month. The General Contractor agrees
that it will not include in any Application for Payment a xxxx for materials or
equipment until such materials or equipment have been delivered to the Project
Site. Similarly, the General Contractor will not include in such Application for
Payment a xxxx for labor until such labor has been performed.
13.2.2. The Owner shall pay to the General Contractor, within ten (10) days
after receipt of the Application for Payment, the amount determined pursuant to
Section 13.2.1 for Work performed during the month prior to the month in which
the Application for Payment is tendered, less 10% retainage to be withheld by
the Project Lender from payments to the General Contractor, or subcontractors
(all such monthly amounts paid by the Owner being herein referred to as
"Progress Payments"), subject to adjustment as provided in Section 13.2.3.
"Retainage" shall be ten percent (10%) of the amount of each monthly payment or
other payment to be made by the General Contractor pursuant to Sections 13.1 and
13.2.
13.2.3. If the Owner disagrees with the General Contractor's estimate of
actual Project progress (as reflected in an Application for Payment) and the
cumulative total of all amounts in dispute (reflecting the difference between
the General Contractor's and the Owner's estimates of actual progress) does not
exceed $50,000.00, the Owner shall pay the General Contractor such disputed
amount pursuant to Section 13.2.2 as part of the pertinent Progress Payment
within ten (10) days after receipt of the Application for Payment and any
disputed amounts in excess of the cumulative total of $50,000 may be withheld
from the General Contractor by the Owner, provided, however, that amounts
withheld by the Owner pursuant to this Section 13.2.3 shall be paid to the
General Contractor when the General Contractor has demonstrated, in an
Application for Payment completed to the reasonable satisfaction of the Owner ,
that actual progress requiring such payment has been achieved.
13.2.4. If the Owner fails to make its Progress Payments hereunder on or
before the date due, or if the Owner withholds payment of any amount pursuant to
Section 13.2.3, and it is subsequently determined that such withholding was not
justified hereunder, interest on any unpaid amount shall accrue from the due
date at the lesser of (a) the Base Rate plus two percent (2%) per annum or (b)
the maximum permitted legal interest rate at the time prevailing and applicable
thereto.
13.2.5. The Owner shall have no obligation to make any payment to the
General Contractor while the General Contractor is in material breach of this
Agreement. In addition, the Owner may withhold payment to the General Contractor
to the extent reasonably necessary to protect the Owner from loss due to: (i)
defective Work not remedied; (ii) claims for payment or liens asserted by the
General Contractor or any Subcontractor; (iii) the failure of the General
Contractor to promptly pay any Subcontractor; (iv) damage to the person or
property of any separate contractor, agent, invitee of the Owner or (v)
reasonable doubt on the Owner's part that the Project can be completed for the
balance of the Contract Price yet unpaid.
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13.2.6. As promptly as possible after the Notice to Proceed, the General
Contractor shall send the Owner a notice specifying all Facility equipment to be
ordered from outside vendors, indicating the time such equipment is to be
ordered and specifying the General Contractor's cost thereof. The Project Lender
shall, upon the Owner's and Project Lender's approval of the amounts and items
specified, set aside or otherwise designate for application to such equipment
purchases sufficient funds to pay for the Facility equipment described in the
notice, and shall send the Owner, and the General Contractor written
confirmation of the same.
13.3. Waiver And Release Of Liens.
The General Contractor shall protect and keep free and clear from Liens the land
upon which the Facility is to be constructed, and any and all interests and
estates therein, and all improvements and materials arising out of or in
connection with performance by the General Contractor, or Subcontractor,
including services or furnishing of any materials hereunder. The General
Contractor shall furnish to the Owner, and shall require each and every
Subcontractor engaged to supply services or materials in an amount greater than
$50,000 (or any lesser amount if requested by the Owner) in connection with the
Project to furnish to the General Contractor for delivery to the Owner, upon the
making of the initial payment pursuant to Section 13.1 and at the time of
submission of each Application for Payment a recordable partial waiver of its
right to assert Liens on the Project, such waiver to be substantially in the
form of Appendix J-1 and as a precondition to the making of the Final Payment, a
recordable waiver of its right to assert Liens on the Project, such waiver to be
in substantially the form of Appendix J-2. Effectiveness of such waivers shall
be conditioned upon General Contractor's receipt of payment from the Owner of
payments then due to the General Contractor under this Agreement. If the General
Contractor fails to furnish, or cause any Subcontractor to furnish, a legally
effective waiver or fails to have any Lien released or discharged forthwith, in
lieu thereof the General Contractor shall furnish a bond or other collateral
satisfactory to the Owner to indemnify the Owner against any loss resulting from
such Lien. In addition, until such release, discharge or bonding, the Owner may
withhold from any payment due the General Contractor an amount sufficient to
discharge any or all such Liens or claims.
13.4. Payment Upon Completion.
Upon delivery of the Certificate of Final Completion, recordation of the
Affidavit of Completion and satisfaction of other statutory requirements in
accordance with 9.3.2 of the Loan Agreement, and the passing of at least 30 days
since the date of Final Completion, the Owner shall pay the unpaid portion of
the Contract Price due to the General Contractor (including the amount, if any,
of equal cost savings represented by the difference between the Contract Price
and the amount previously paid to the General Contractor).
13.5. Payment Or Use Not Acceptance.
No payment made or any partial or entire use of the Facility by the Owner shall
constitute an acceptance of any of the Work not in accordance with this
Agreement and the Scope of Work.
13.6. Waiver By Owner.
The making of the Final Payment shall constitute a waiver of all claims by the
Owner except:
29
(a) those arising from unsettled liens, security interests or other
encumbrances;
(b) those arising from any warranties, guarantees and indemnities provided
hereunder; and
(c) those arising from Final Punch-List and clean-up items.
13.7. Waiver By General Contractor.
Acceptance of the Final Payment shall constitute a waiver of all claims by the
General Contractor except for unresolved claims for Changes previously asserted
in writing by the General Contractor.
13.8. General Contractor's Performance With Respect To Applications For
Payment.
The General Contractor is responsible to prepare and submit, in appropriate form
and order and in a timely manner, all the necessary forms and supporting
documentation (if any), on behalf of the General Contractor, to the Owner
required in this Article 13 or by the Project Lender under the Loan Agreement to
ensure the timely payment of all amounts owed to the General Contractor, and all
subcontractors, vendors, or suppliers related to the construction of the
Project.
ARTICLE 14. INDEMNITY, INSURANCE AND WAIVER OF SUBROGATION
14.1. Indemnity.
14.1.1. Indemnity By General Contractor. The General Contractor hereby
indemnifies and holds harmless the Owner and their respective successors and
assigns and their respective shareholders, directors, officers and employees
(each being hereinafter referred to as an "Indemnified Party") from and against
any and all loss, cost (including reasonable attorneys' fees), damage, injury,
liability, claims, demands, interest and causes of action (a) for bodily injury
or property damage that may arise from the General Contractor's operations under
this Agreement, except to the extent arising from the negligence or misconduct
of such Indemnified Party, (b) because of any violation of Law to be complied
with by the General Contractor hereunder, (c) in respect of any taxes levied on
the General Contractor or in respect of the General Contractor's net income or
(d) in respect to any demands or Liens by Subcontractors for nonpayment of
amounts due as a result of furnishing materials or work to the General
Contractor which are payable by the General Contractor for Work on the Project
performed pursuant to this Agreement.
14.1.2. Indemnity By Owner. The Owner hereby indemnifies and holds harmless
the General Contractor, and their respective shareholders, directors, officers
and employees (each being hereinafter referred to as an "Indemnified Party")
from and against any and all loss, cost (including reasonable attorneys' fees),
damage, injury, liability, claims, demands, interest and causes of action (a)
for bodily injury or property damage to the extent such may arise from the
negligence or misconduct of the Owner in connection herewith, (b) because of
violation of Law to be complied with by the Owner hereunder, or (c) or in
respect of the Owner's net income.
14.1.3. Procedure. When required to indemnify an Indemnified Party in
accordance with this Agreement, the indemnifying party shall assume on behalf of
such party, and conduct with
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due diligence and in good faith, the defense of any such suit against such
party, whether or not the indemnifying party be joined therein; provided,
however, that without relieving the indemnifying party of its obligations
hereunder, the Indemnified Party may elect to participate, at its expense, in
the defense of any such suit.
14.2. General Contractor's Insurance.
At its own expense, the General Contractor shall secure and maintain during the
term of this Agreement the following insurance with the coverage amounts
indicated for occurrences during and arising out of the General Contractor's
performance of this Agreement. Such insurance shall be placed with responsible
and reputable insurance companies authorized to do business in the State of
Texas with a Best's rating of A- or better and shall be effective as of at least
thirty (30) days prior to the date of the Notice to Proceed and maintained until
Final Completion, except Products Liability/Completed Operations coverage, which
shall be maintained for three years beyond Final Completion. Deductible amounts
shall be the responsibility of the General Contractor.
Type Coverage/Amount
---- ---------------
Workers' Compensation Insurance As required by the State
including occupational Texas
disease coverage
Employer's Liability $500,000 each accident
$500,000 each employee-disease
$500,000 policy limit-disease
Comprehensive General Liability, $1,000,000 per occurrence
with the following coverages:
Premises--Operations; Independent
Contractors and Subcontractors
Protective; Products/Completed
Operations; Broad Form Property
Damage; Contractual Liability
(Broad Form) Including Third Party
Coverage; Explosion, Collapse,
Underground Hazard, and Personal
Injury
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Type Coverage/Amount
---- ---------------
Comprehensive Automobile $1,000,000 combined single
Liability, including coverage limit, per occurrence
for all owned, hired and non-
owned vehicles
Excess Liability $5,000,000 per occurrence
14.2.1. Evidence Of Coverage. The General Contractor shall provide
certificates of insurance to the Owner and the Project Lender evidencing all
insurance policies required pursuant to this Section 14.2. Owner shall also
reserve the right to be provided a copy of the entire policy upon request. The
certificates evidencing Comprehensive General Liability, Comprehensive
Automobile Liability, Excess Liability, and All Risk Property insurance shall
each certify that:
14.2.1.1. During the General Contractor's performance under this Agreement,
the Owner and the Project Lender shall be named as additional insureds and loss
payees under such policies (without any representation or warranty by or
obligation upon such entities) as their interests may appear for occurrences
during and arising out of the General Contractor's performance of this
Agreement;
14.2.1.2. Such insurance is primary insurance with respect to the interests
of the Owner and the Project Lender, and any other insurance maintained by them
is excess and not contributory with this insurance; and
14.2.1.3. Such policies provide that (a) the inclusion of more than one
corporation, person, organization, firm or entity as insured thereunder shall
not in any way affect the rights of any such corporation, person, organization,
firm or entity as respects any claim, demand, suit or judgment made, brought or
recovered, by or in favor of any other insured, or by or in favor of any
employee of such other insured, and (b) each corporation, person, organization,
firm, or entity is protected thereby in the same manner as though a separate
policy had been issued to each, but nothing therein shall operate to increase
the insurance company's liability as set forth elsewhere in the policy beyond
the amount for which the insurance company would have been liable if only one
person or interest had been named as insured.
14.2.2. Contents Of Certificates. The certificates evidencing all insurance
provided under this Section 14.2 shall each certify that (a) under such policy
there will be no recourse against the Owner or any of the banks comprising the
Project Lender or any of their assignees for payment of a premium and (b) such
policy may not be canceled or materially altered by the insurance company
without giving 60 days' prior written notice of cancellation or alteration to
the Owner and the Project Lender.
14.3. Subcontractor Insurance.
The General Contractor shall require all Subcontractors to obtain, maintain and
keep in force, during the time in which they are engaged in performing services
to be furnished by the General Contractor hereunder, adequate coverage in
accordance with the General Contractor's normal practice or the General
Contractor shall maintain such coverage under its own insurance policies.
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14.4. General Contractor's Insurance.
General Contractor shall procure at its own expense and maintain in full force
and effect from and after the issuance of the Notice to Proceed, with
responsible and reputable insurance companies authorized to do business in the
State of Texas with a Best's rating of A- or better, builder's risk insurance as
described below and worker' compensation, general liability and automobile
liability insurance in amounts specified in Section 14.2. The General Contractor
shall provide certificates of insurance to the Owner evidencing all insurance
policies required under this Section 14.6.
Builder's Risk
Facility:
Real and Personal Property Replacement Cost
Deductibles: $ 25,000
The certificate evidencing the builder's risk insurance shall certify that the
policy (a) provides for all losses to be paid directly to the Owner, and (b)
shall name the General Contractor and each of the banks comprising the Project
Lender as additional insureds thereunder (without any representation or warranty
by or obligation upon such entities) as their interests may appear. As to the
remaining coverages, with the exception of workers' compensation, and only as to
matters within the scope of the General Contractor's indemnity under Section
14.1.1, such policies (a) shall name the Owner as an additional insured, and (b)
shall be primary and not excess to or contributing with any insurance maintained
by the Owner.
14.5. Property Insurance Loss Adjustment.
Any insured loss shall be adjusted with the Owner, and the General Contractor
and made payable to the Owner, and the General Contractor as their interests may
appear, subject to any applicable mortgagee clause.
14.6. No Effect On Liability.
The requirement that the General Contractor, Subcontractors or the Owner furnish
certain minimum insurance coverages is not to be interpreted as in any way
limiting the liability of the General Contractor or the Owner as the case may
be, nor does either party, by furnishing or requiring evidence of certain
minimum insurance, assume, or intend to assume, any liability that it would not
otherwise have in the absence of such a requirement.
14.7. Owner's Election Regarding All Risk Insurance.
The Owner may elect, at its complete and sole discretion, to provide the above
described All Risk Insurance program. If the Owner elects to provide such
insurance coverage a Change Order will be issued in accordance with Section 12.1
hereof.
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14.8. Waiver Of Subrogation.
All insurance policies supplied by either party to this Agreement shall include
a waiver of any right of subrogation of the insurers thereunder against the
other party and any of the banks comprising the Project Lender, and of any right
of the insurers to any set-off or counterclaim or any other deduction, whether
by attachment or otherwise, in respect of any liability of any such person
insured under such policy.
ARTICLE 15. TERMINATION
15.1. Termination By Owner For Cause.
In the event:
(a) at any time prior to issuance of the Certificate of Final Completion,
the General Contractor shall abandon or, except as permitted in
Sections 12.6 and 12.7, otherwise cease efforts to achieve Final
Completion in a diligent manner; or
(b) (i) the General Contractor fails to achieve a Major Milestone within
thirty (30) days after the corresponding milestone date indicated in
Appendix H, or
(ii) at any time prior to the issuance of the Certificate of Final
Completion an unexcused act or omission of the General Contractor has
materially affected its ability to complete the Project pursuant to
this Agreement by the Contract Deadline and such unexcused act or
omission persists for a period of thirty (30) days, and in the case of
either (b)(i) or b(ii), the General Contractor fails to cure such
default within fifteen (15) days after receiving notice thereof from
the Owner (unless such default is of a nature that it cannot be cured
within such fifteen (15) day period, in which case the General
Contractor shall be in compliance herewith if it presents a plan for
such cure which is reasonably acceptable to the Owner, commences such
cure within such fifteen (15) day period, and diligently pursues such
cure to completion within sixty (60) days after the aforestated notice
from the Owner or such longer period as the Owner may accept in its
sole discretion); or
(c) all items on the Final Punch-List and all clean-up have not been
completed by the Contract Deadline;
then the Owner may, without prejudice to any legal or equitable remedy it may
have, terminate this Agreement, take possession of the Project Site and complete
the Project by whatever reasonable method it may deem expedient, and the General
Contractor shall be liable to the Owner for any and all cost or expense in
excess of the unpaid portion of the Contract Price occasioned thereby, such
amount to be payable within thirty (30) days after the Owner has provided a
notice setting forth the
34
amount thereof. The Owner may take possession of and utilize, in completing the
Project, any materials, tools, supplies, equipment and appliance, belonging to
the General Contractor or any of its Subcontractors that are at the Project
Site. In such event, the Owner may exercise any rights, claims or demands that
the General Contractor may have against third persons in connection with this
Agreement (including but not limited to tender of performance to Subcontractors
as described in Section 4.2) and for such purpose, the General Contractor does
hereby, to the extent possible, assign, transfer and set over unto the Owner all
such rights, claims and demands and agrees to execute whatever documents the
Owner deems appropriate to effect such assignment, transfer or set-over. Neither
such exercise by the Owner of rights, claims or demands against third persons,
nor such assignment, transfer or set over by General Contractor, shall relieve
General Contractor of its liability to pay the Owner's costs or expenses to
complete the Project in excess of the unpaid portion of the Contract Price.
15.2. Termination Upon Bankruptcy.
If (a) the General Contractor shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy law now or hereafter in effect or
seeking the appointment of a custodian of it or any substantial part of its
property, or shall consent to any such relief or to the appointment of or taking
possession by any such custodian in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due, or shall
take any corporate action to authorize any of the foregoing or (b) an
involuntary case or other proceeding shall be commenced against the General
Contractor seeking liquidation, reorganization or other relief with respect to
it or its debts under any bankruptcy law now or hereafter in effect or seeking
the appointment of a custodian of it or any substantial part of its property,
and such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of sixty (60) days, or an order for relief shall be
entered against the General Contractor under any bankruptcy law as now or
hereafter in effect, then, if the General Contractor is unable to diligently
perform and does not continue so to perform its obligations hereunder, this
Agreement may be terminated by the Owner who may then exercise any and all
rights provided in Section 15.1.
15.3. Termination By Owner Without Cause.
The Owner) may cancel this Agreement at any time for its convenience upon thirty
(30) days' prior written notice to the General Contractor. In the event of such
cancellation, the Owner shall pay the General Contractor for all the General
Contractor's actual costs incurred to the date of cancellation, including the
costs incurred for undelivered material and equipment and other similar Project
obligations and for the General Contractor's reasonable overhead on the Project
to the date of cancellation, less any amounts previously paid by the Owner;
provided, however, that in no event shall the Owner's liability for such actual
costs exceed the amount set forth below with respect to the calendar month after
issuance of the Notice to Proceed in which cancellation occurs.
1 month $1,200,000.00
2 months $1,800,000.00
35
3 months $3,400,000.00
After 3 months Actual costs, not to exceed unpaid balance
of Contract Price
The General Contractor shall submit to the Owner all invoices and other
documentation as is sufficient to verify the amount to be paid under this
Section 15.3. The Owner shall pay such amount to the General Contractor within
thirty (30) days of receipt of such documentation. The General Contractor shall
mitigate to the fullest extent reasonably possible all expenses to be borne by
the Owner under this Section 15.3.
In the event of such cancellation, the Owner may further elect to assume
any or all of the obligations, commitments and unsettled claims that the General
Contractor has previously undertaken or incurred in good faith in connection
with performance of the General Contractor's obligations hereunder. The General
Contractor shall to the extent reasonably possible, as a condition to receiving
cancellation payments referred to in this Section, execute and deliver such
papers and take all such steps, including the legal assignment of its
contractual rights, as the Owner may require for the purpose of fully vesting in
the Owner the rights and benefits of the General Contractor under such
obligations, commitments or claims.
15.4. Termination Due To Suspension.
If the Owner elects to suspend performance of all or a material part of the Work
and the duration of such suspension exceeds sixty (60) days, the General
Contractor may terminate this Agreement, at any time after it gives the Owner
not less than thirty (30) days prior written notice of its intent to terminate
and the Owner fails to order a resumption of suspended Work before the later of
the expiration of the sixty (60) day suspension period or such thirty (30) day
notice period. In such event, the General Contractor shall be compensated for
all Work satisfactorily performed through the date of termination, plus its
reasonable costs associated with suspension of the Work. In the event of such
termination, the Owner may elect to assume any or all of the obligations,
commitments and unsettled claims that the General Contractor has previously
undertaken or incurred in good faith in connection with performance of the
General Contractor's obligations hereunder. The General Contractor shall to the
extent reasonably possible, as a condition to receiving the termination payments
referred to in this Section, execute and deliver such papers and take all such
steps, including the legal assignment of its contractual rights, as the Owner
may require for the purpose of fully vesting in the Owner the rights and
benefits of the General Contractor under such obligations, commitments or
claims.
15.5. Termination Due To Event Of Force Majeure.
If either (i) a material suspension of performance by the General Contractor or
the Owner as a result of a Force Majeure Event exceeds sixty (60) days, or (ii)
the total number of days in which a material suspension of performance by either
such party as a result of all Force Majeure Events in the aggregate exceeds
sixty (60) days, the party whose performance is unaffected by the Force Majeure
Event may terminate this Agreement, provided it gives the other party written
notice of its intent to terminate not less than thirty (30) days prior to the
end of the applicable period and the other Party fails to resume performance
before the period expires; provided, however, that the
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General Contractor's right to terminate under this Section 15.5 shall be subject
to the limitations set forth in Section 11.4 hereof. Upon such termination, the
General Contractor shall be compensated for all Work satisfactorily performed
through the date of termination, plus its reasonable costs associated with the
Force Majeure Event suspension. In the event of termination by either party
pursuant to this Section 15.5, the Owner may elect to assume any or all of the
obligations, commitments and unsettled claims that the General Contractor has
previously undertaken or incurred in good faith in connection with performance
of the General Contractor's obligations hereunder. The General Contractor shall,
to the extent reasonably possible, as a condition to receiving termination
payments referred to in this Section, execute and deliver such papers and take
all such steps, including the legal assignment of its contractual rights, as the
Owner may require for the purpose of fully vesting in the Owner the rights and
benefits of the General Contractor under such obligations, commitments or
claims.
ARTICLE 16. ASSIGNMENTS AND CHOICE OF LAW
16.1. No Assignment By General Contractor.
The General Contractor shall not assign this Agreement or any interest in any
funds that may be due or become due hereunder or enter into any contract with
any person, firm or corporation for the performance of the General Contractor's
obligations hereunder or any part thereof, except as specifically provided
herein, without the prior approval in writing of the Owner and the Project
Lender. If the General Contractor, with the consent of the Owner , shall enter
into a subcontract with any Subcontractor for the performance of any part of
this Agreement, the General Contractor shall be as fully responsible to the
Owner for the acts and omissions of such Subcontractor and of persons employed
by such subcontractor as the General Contractor would be for its own acts and
omissions and those of persons directly employed by it. Nothing in this Section
16.1 shall be read to limit the Owner's rights to assign its interest in this
Agreement or the Project under Section 16.2.
16.2. Assignment By Owner.
The Owner shall be entitled to freely assign this Agreement and its rights,
titles and interests hereunder, to:
(a) any affiliate of the Owner (including any joint venture or general or
limited partnership in which the Owner or its affiliate is a general partner) ;
or
(b) any person, corporation, bank, trust, company, association or other
business or governmental entity (including but not limited to the Project
Lender) as security in connection with obtaining or arranging financing for the
Facility;
(c) any successor entity (whether by merger, by consolidation, by sale of
substantially all the assets or by the enforcement of the security interest
described in (b) above).
Upon each permitted assignment described in this Section 16.2 (other than in
clause (b) above) by the Owner, the assignee shall expressly assume in writing
all of the obligations of the Owner hereunder. Upon the request of the Owner,
the General Contractor shall acknowledge in writing
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any permitted assignment described in clause (b) above and the right of any
permitted assignee to enforce this Agreement against the General Contractor.
Such acknowledgment of a permitted assignment described in clause (b) shall be
substantially in the form of Appendix K hereto.
16.3. Extension To Successors And Assigns.
Each and all of the covenants and agreements herein contained shall extend to
and be binding upon the successors and permitted assigns of the parties hereto.
16.4. Choice Of Law.
This Agreement shall be governed by and construed in accordance with the laws of
the State of Texas, excluding conflict-of-laws provisions which would direct the
application of the laws of another state. The parties agree that all actions or
proceedings arising in connection with this Agreement shall be tried and
litigated in any Texas state court or any federal court sitting in the State of
Texas.
ARTICLE 17. DRAWINGS, DOCUMENTS AND MATERIALS
17.1. Owner's Review.
All plans and drawings, calculations, specifications and other related design,
construction, performance test and start-up information, and results of any
supporting design, construction, performance test and start-up calculations,
prepared in connection with engineering, construction, performance test and
start-up services, shall be delivered to the Owner as such documents are
completed, as specified in Appendix L. The procedure for submittal and review of
such documents shall be as set forth in Sections 17.1.1 and 17.1.2 and Schedule
1.
17.1.1. Submittal Of Documents. The General Contractor shall prepare and
submit to the Owner in accordance with Appendix L, the Greenhouse plans and
drawings, which shall include, but not be limited to, plot plans, general
arrangements drawings, architectural drawings including Headhouse layout
drawings, piping and instrumentation diagrams, and electrical one-line diagrams
of the Facility (collectively, the "Plans and Drawings"), and design
calculations for the Facility. The preliminary and/or approved for construction
issue of the above documents will provide the Owner with Project definition, and
provide the General Contractor with (i) the information and data required to
prepare purchase specifications and data sheets for major equipment and (ii) the
definition required to complete construction drawings the General Contractor
also shall submit to the Owner preliminary and final checked calculations when
prepared.
17.1.2. Return Of Plans And Drawings. One copy of each of the Plans and
Drawings submitted by the General Contractor pursuant to Section 17. 1.1 shall
be returned by the Owner to the General Contractor as soon as possible in the
exercise of the Owner's best efforts, but no later than fifteen (15) working
days after receipt, stamped either:
(a) "Returned Without Comment"; or
(b) "Returned with Comments".
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Review by the Owner under this Section 17.1.2 of the submitted Plans and
Drawings shall be solely in the discretion of the Owner . Failure of the Owner
to return Plans and Drawings to the General Contractor within such fifteen (15)
working day period shall be construed as having returned the same without
comment. Plans and Drawings which are returned marked "Returned with Comments'
shall bear comments which specify in detail the Owner's concerns or questions
regarding the contents of such document. The General Contractor may elect to
proceed with the Work set forth in such Plans and Drawings prior to the return
of the same by the Owner, but shall do so at the General Contractor's sole risk
and expense. The General Contractor shall respond to the Owner advising its
disposition of the Owner's 's comments within five (5) days after receipt
thereof.
17.2. General Contractor's Duty.
Review (or lack thereof) by the Owner or it's designees of any Project documents
provided by the General Contractor, and the fact that the Owner or their
designees has not discovered any errors reflected in such Project documents,
shall not relieve or release the General Contractor of any of its duties,
obligations or liabilities under the terms of this Agreement.
17.3. Final Documents And All Other Documents Furnished.
Upon the issuance of the Certificate of Final Completion, the General Contractor
shall furnish the Owner with all final (including as-built) documents pertaining
to the design, construction and operation of the Facility, which documents are
listed in Appendix L. If this Agreement is terminated prior to Final Completion,
the General Contractor shall furnish the Owner with any and all final (including
as-built) documents which have been prepared, and the most up-to-date versions
of documents which are not yet final. All other documents, drawings and
materials shall be submitted in the form and as required in Appendix L.
17.4. Ownership Of Drawings And Documents.
17.4.1. Property Of Owner. All drawings, tracings, specifications and other
documents prepared by or for the General Contractor in respect of the Project
and all drawings, tracings, specifications, calculations, memoranda, data, notes
and other materials containing information supplied by the Owner which shall
come into the General Contractor's possession during its performance hereunder,
shall be the sole and exclusive property of the Owner, and such documents and
other materials shall be returned to the Owner upon the earliest of the Owner's
placing the Facility in Commercial Operation pursuant to Article 7, Final
Completion or termination of this Agreement. Subject to Section 18.1, the
General Contractor shall have the right to retain and use, solely and
specifically for the Project, a reproducible set of all drawings, tracings,
specifications and other documents prepared by or for the General Contractor in
respect of the Project.
17.4.2. Reuse Of Documents By Owner. All drawings, tracings,
specifications, and other documents prepared by or for the General Contractor
pursuant to this Agreement are instruments of service with respect to this
Project. They are not intended or represented to be suitable for reuse by the
Owner or others on extensions of this Project or on any other project. Any reuse
without written verification or adaptation by the General Contractor for the
specific purpose intended will be at the Owner's sole risk and without liability
or legal exposure to the General
39
Contractor, and the Owner shall indemnify and hold harmless the General
Contractor against all claims, damages, losses, and expenses including
attorneys' fees, arising out of or resulting from such unauthorized reuse.
17.5. Ownership Of Materials.
Title to all materials and equipment incorporated or to be incorporated in
construction shall vest in the Owner upon payment therefor by the Owner, so that
the Owner will have full title to said materials and equipment at such times and
that upon Final Payment title to the completed Facility will have vested in the
Owner; provided, however, that construction equipment, small tools and other
equipment owned by the General Contractor or third parties not necessary to the
completion of the Project or continued operation of the Facility shall remain
the sole property of their respective owners. The General Contractor shall
deliver to the Owner all instruments necessary to transfer title to the Facility
to the Owner, including such materials and equipment, upon Final Payment.
ARTICLE 18. MISCELLANEOUS PROVISIONS
18.1. Confidential Information.
The Owner and the General Contractor agree to hold in confidence, except as may
be reasonably necessary from time to time to their performance hereunder, obtain
financing for the Project or fulfill requirements of government authorities, any
information supplied to the Owner or the General Contractor, as the case may be,
by the other party and designated in writing as confidential. The General
Contractor further agrees to require its Subcontractors and employee to enter
into appropriate non-disclosure agreements relating to such confidential
information a may be communicated to them by the General Contractor. The
provisions of this Section 18.1 shall not apply to information within any one of
the following categories or any combination thereof: (a) information which was
in the public domain prior to the receiving party's receipt thereof from the
disclosing party or which subsequently becomes part of the public domain by
publication or otherwise except by the receiving party's wrongful act; (b)
information which the receiving party demonstrates was lawfully in its
possession prior to receipt thereof from the disclosing party through no breach
of any confidentiality obligation; or (c) information received by the receiving
party from a third party having no obligation of confidentiality with respect
thereto. The General Contractor shall not publish information or photographs
regarding the Project and shall not permit or accompany any third party not
connected with the Project onto the Project Site without the express written
permission of the Owner. The General Contractor shall not take, or permit to be
taken any photographs of the Project Site (except for the sole purpose of
performing its obligations hereunder) without the prior written consent of the
Owner.
18.2. Uses Of Premises.
The General Contractor shall confine its apparatus, the storage of materials and
construction equipment and the operations of its workers to limits imposed by
applicable Laws, Governmental Approvals and Private Rights-of-Way, or the
reasonable directions of the Owner and shall not unreasonably encumber the
premises with its materials and construction equipment.
40
18.3. Independent Contractor.
The General Contractor and the Owner shall be independent contractors with
respect to the Project, or any part thereof, and in respect of all Work to be
performed hereunder. Neither the General Contractor nor its Subcontractors, nor
the employees of either (acting in such capacities), employed on the Project
shall be deemed to be agents, representatives, employees or servants of the
Owner by reason of their performance hereunder or in any manner dealt with
herein. The Owner and the General Contractor hereby covenant and agree that in
the approval of key employees or major equipment vendors of General Contractor,
approving or furnishing of plans and specifications, should any be furnished by
the Owner, or in the making of inspections by the Owner, or in the taking of any
other action or the exercise of any right pursuant to this Agreement, the Owner
are acting for and on the Owner's behalf and not as agent of the General
Contractor. The Owner and the General Contractor each hereby further covenant
and agree that, in the performance of work hereunder by the General Contractor,
it shall not do any act or make any representation to any person or persons to
the effect that the General Contractor, or any of its agents, representatives or
Subcontractors, is the agent of the Owner.
18.4. General Contractor's Obligations.
The approval and consent by the Owner to the General Contractor's entering into
any subcontract shall not relieve the General Contractor of any of its duties,
liabilities or obligations hereunder, and the General Contractor shall be liable
to the same extent as if no such subcontract had been entered into.
18.5. New Developments.
During the term of this Agreement, the General Contractor's program of research
and development may result in potential improvements to the Work to be performed
hereunder. Any such potential improvements shall be offered to the Owner, and,
if accepted by the Owner shall be treated as a Change or Modification pursuant
to Article 12.
18.6. Representations.
18.6.1. Each party hereby represents to the other that:
(a) it has legal power and authority to enter into and carry out the terms
of this Agreement, which constitutes a legal, valid and binding
obligation of it enforceable against it in accordance with its terms;
provided, however, that the enforcement of the rights and remedies
herein is subject to bankruptcy and other similar laws of general
application affecting the rights and remedies of creditors and that
the remedy of specific performance or of injunctive relief is subject
to the discretion of the court before which any proceedings therefor
may be brought; and
(b) the consummation of the transactions contemplated by, and compliance
with all the terms and provisions of, this Agreement will not violate
any provisions of such party's certificate of incorporation,
41
bylaws or operating agreement and will not result in a breach of the
terms and provisions of, or constitute a default under, any other
agreement or undertaking by such party or by which it or any of its
property is bound or any order of any court or administrative agency
entered in any proceedings in which it is or has been a party.
18.6.2. The General Contractor hereby represents to the Owner that, as of
the effective date of this Agreement (and such representations of the General
Contractor shall, with any changes reported to the Owner pursuant to Section
2.4.1(a)(iii), be deemed reaffirmed in each Application for Payment):
(a) The General Contractor is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of New York
and duly qualified to do business in and in good standing under the
laws of the State of New York.
(b) The unaudited consolidated balance sheets of the General Contractor
and its affiliates as of December 29, 1996, and the related statements
of income and retained earnings of the General Contractor for the
fiscal year then ended, copies of which have been furnished to the
Owner, fairly present the financial condition of the General
Contractor and its affiliates as of such dates and the results of
operations of the General Contractor and its affiliates for the
periods ended on such dates, all in accordance with generally accepted
accounting principles consistently applied; and since such dates there
has been no material adverse change in such condition or operations.
(c) The General Contractor is not presently contemplating (i) the
commencement of a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy law in effect, (ii) the appointment of
a custodian of it or any substantial part of its property, (iii) a
general assignment for the benefit of creditors, (iv) not generally
paying its debts as they become due, or (v) corporate action to
authorize any of the foregoing.
18.7. Rights Reserved By The Owner.
The Owner reserves the right to require the removal from the Project Site of any
employee of the General Contractor or of any Subcontractor if in the reasonable
judgment of the Owner such removal shall be necessary in order to protect the
interests of the Owner.
18.8. Cumulative Remedies.
Except as expressly provided otherwise herein, every right or remedy herein
conferred upon or reserved to the Owner or the General Contractor shall be
cumulative, shall be in addition to every right and remedy now or hereafter
existing at law or in equity or by statute, and the pursuit of any right or
remedy shall not be construed as an election.
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18.9. Non-Waiver Clause.
It is understood and agreed that any delay, waiver or omission by the Owner, or
the General Contractor to exercise any right or power arising from any breach or
default by the other party of any of the terms or provisions of this Agreement
shall not be construed to be a waiver by the Owner or the General Contractor of
any subsequent breach or default of the same or other terms or provisions on the
part of the other party.
18.10. Severability.
In the event that any of the provisions, or portions or applications thereof, of
this Agreement are held to be unenforceable or invalid by any court of competent
jurisdiction, the Owner and the General Contractor shall negotiate an equitable
adjustment in the provisions of this Agreement with a view toward effecting the
purpose of this Agreement, and the validity and enforceability of the remaining
provisions, or portions or applications thereof, shall not be affected thereby.
18.11. Amendments.
No amendments or modifications of this Agreement shall be valid unless evidenced
in writing and signed by duly authorized representatives of the Owner and the
General Contractor.
18.12. Article And Section Headings.
The Article and Section headings have been inserted for convenience of reference
only and shall not in any manner affect the construction, meaning or effect of
anything herein contained nor govern the rights and liabilities of the parties
hereto.
18.13. Notices.
Except as otherwise provided herein, all notices and demands pertaining to or
required to be given under this Agreement shall be in writing and shall be
delivered by hand, telecopy or overnight courier, or mailed by registered or
certified mail, postage prepaid, properly addressed as follows:
If to the Owner: If to the General Contractor:
Village Farms of Presidio, L.P. Agro Power Development, Inc.
c/o Agro Power Development, Inc. 10 Xxxxx Court
0000 Xxxxxx Xx.. Xxxxx 000 Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Xxxxxxxx, Xxxxx Xxxxxxxx 00000 Attn: President
Attn: Xxxxxxx Xxxxxxx Telecopy No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Such notices shall be effective on the day received at the addresses specified
above. The parties hereto, by like notice in writing, may designate, from time
to time, another address or office to which notices shall be given pursuant to
this Agreement.
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18.14. Original And Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original for all purposes, but all of which shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the duly authorized officers of the parties hereto have
executed this Marfa, Texas Project Commercial Design and Construction Contract,
all as of the date and year first above written.
VILLAGE FARMS OF PRESIDIO, L.P.
("Owner")
By:
--------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
AGRO POWER DEVELOPMENT INC.
("General Contractor")
By:
--------------------------------
Name: Xxxxxxx X. XxXxxxxx
Title: Chief Executive Officer
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APPENDIX A
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings (such meanings as necessary to be equally applicable to both the
singular and plural forms of the terms defined):
"Acceptance" shall have the meaning set forth in Sections 6.9 and 6.10 hereof.
"Agreement" shall mean this MARFA, TEXAS Facility Commercial Design and
Construction Contract dated as of August 17, 1998 among Village Farms of
Presidio, L.P., and Agro Power Development, Inc.
"Application for Payment" shall refer to the document mentioned in Section
13.2.1 of this Agreement and having the form attached as Appendix I.
"Base Rate" means, for any period, the fluctuating rate of interest announced
publicly by NationsBank Carolinas, N.A. of Charlotte, North Carolina from time
to time as its base rate.
"Certificate of Acceptance" shall have the meaning set forth in Section 6.9 of
this Agreement.
"Certificate of Final Completion" shall have the meaning set forth in Section
6.13 of this Agreement.
"Certificate of Substantial Completion" shall have the meaning set forth in
Section 6.8 of this Agreement.
"Change Order" shall have the meaning set forth in Section 12.1.2 of this
Agreement.
"Changes" shall have the meaning set forth in Section 12.1 of this Agreement.
"Commercial Operation" shall mean the point in time at which the Owner notifies
the General Contractor that the Owner and the Greenhouse Operator have commenced
the occupation and use of the Facility for commercial purposes.
"Contract Deadline" shall have the meaning set forth in Section 6.11 of this
Agreement.
"Contract Documents" shall have the meaning set forth in Section 1.2 of this
Agreement.
"Contract Price" shall have the meaning set forth in Section 5.1 of this
Agreement.
"Day(s)" or "day(s)" shall mean a calendar day or days.
45
"Facility" shall have the meaning set forth in the Recitals to this Agreement.
"Final Completion" shall have the meaning set forth in Section 6.11 of this
Agreement.
"Final Payment" shall have the meaning set forth in Section 13.4 of this
Agreement.
"Final Punch-List" shall have the meaning set forth in Section 6.6 of this
Agreement.
"Force Majeure Event" shall have the meaning set forth in Section 11.1 of this
Agreement.
"Gas Utility" shall mean West Texas Gas, Distribution Company.
"General Contractor" shall mean Agro Power Development, Inc.
"Governmental Approval" means an authorization, consent, approval, license,
permit, certificate, exemption of or filing or registration with any
governmental authority or other legal or regulatory body, required in connection
with the development, construction, Final Completion or the short- or long-term
operation of the Facility, as set forth in Appendix C.
"Greenhouse" shall mean the commercial greenhouse of approximately 26.3 enclosed
acres of growing area to be designed and constructed by General Contractor for
the Owner, as is described more fully in the Scope of Work.
"Greenhouse Operator" shall mean Agro Power Development, Inc., a New York
Corporation, which will operate the Greenhouse under a contract with the Owner.
"Headhouse" shall mean the separate structure housing the office and the
heating, packaging and control systems for the Greenhouse, as is more fully
described in the Scope of Work.
"Heating System" shall mean the boilers complete with stacks, and the complete
heating distribution system as described in Schedules 1 and 2.
"Indemnified Party" shall have the respective meanings set forth in Sections
14.1.1, 14.1.2 and 14.1.3 of this Agreement.
"Law" or "Laws" shall mean one or more of the Federal, state and municipal laws,
ordinances, rules and regulations, and any other applicable governmental or
industry codes and standards, which would affect work on, or the intended
operation of, the Facility.
"Liens" shall have the meaning set forth in Section 10.4 of this Agreement.
"Loan Agreement" shall mean that certain loan agreement dated August 17, 1998 by
and between Village Farms International Finance Association and Village Farms of
Presidio, L.P.
46
"Loan Documents" and "Loan Parties" shall have the meanings set forth in Section
1.5 of this Agreement.
"Major Milestone(s)" shall mean one or more major milestones as set forth in
Appendix H hereto.
"Major Milestone Schedule" shall mean the date on which a Major Milestone is to
be achieved as set forth on Appendix H hereto.
"Manual" shall have the meanings set forth in Appendix L of this Agreement.
"Modifications" shall have the meaning set forth in Section 12.3 of this
Agreement.
"Notice of Final Completion" shall have the meaning set forth in Section 6.12 of
this Agreement.
"Notice of Substantial Completion" shall have the meaning set forth in Section
6.4 of this Agreement.
"Notice to Proceed" shall have the meaning set forth in Section 6.1 of this
Agreement.
"Owner" shall mean the owner of Village Farms of Presidio, L.P., a Delaware
limited partnership.
"Plans and Drawings" shall have the meaning set forth in Section 17.1.1 of this
Agreement.
"Private Rights-of-Way" shall mean all permits, easements, licenses, private
rights of way, and utility and railroad crossing rights required in connection
with the Project.
"Progress Payment" shall have the meaning set forth in Section 13.2.2 of this
Agreement.
"Project" shall have the meaning set forth in Section 1.1 of this Agreement.
"Project Lender" shall have the meaning set forth in Section 1.5 of this
Agreement.
"Project Site" shall have the meaning set forth in Section 1.1 of this
Agreement.
"Project Start-up" shall have the meaning set forth in Section 6.2 of this
Agreement.
"Scope of Work" shall have the meaning set forth in Section 1.2(b) of this
Agreement.
"Site Logistics Plan" shall have the meaning set forth in Section 2.3.10 of this
Agreement.
"Site Manager" shall have the meaning set forth in Section 2.2.4 of this
Agreement.
"Specified Permit Applications" shall mean those applications for Governmental
Approvals and related materials set forth in Attachment I to Appendix C.
"Subcontractors" shall mean all third-party engineers, vendors, suppliers,
materialmen, consultants and subcontractors providing materials and services in
connection with the Project.
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"Substantial Completion" shall have the meaning set forth in Section 6.3 of this
Agreement.
"Substantial Completion Deadline" shall have the meaning set forth in Section
6.3 of this Agreement.
"Work" shall have the meaning set forth in Section 2.1 of this Agreement.
