EXHIBIT 10.102
VILLAGE FARMS OF PRESIDIO, L.P. GREENHOUSE PROJECT
MARFA, TEXAS
COMMERCIAL PACKING HOUSE
DESIGN AND CONSTRUCTION CONTRACT
between
AGRO POWER DEVELOPMENT, INC.
and
NC XXXXXXXX, INC.
JULY 10 ,1998
TABLE OF CONTENTS
Page
----
ARTICLE 1. THE PROJECT; EXTENT OF AGREEMENT
1.1 Services To Be Performed 1
1.2 Extent of Agreement. 1
1.3 Conflicting Provisions 2
1.4 Entire Agreement 2
1.5 Project Financing Agreements 2
ARTICLE 2. CONTRACTOR'S RESPONSIBILITIES
2.1 Contractor's Services in General 2
2.2 Summary of Contractor's Responsibilities 3
2.2.1 Familiarity with Conditions 3
2.2.2 Design and Engineering 3
2.2.3 Procurement 3
2.2.4 Construction 3
2.2.5 Consumables and Parts During Project Start-up 4
2.2.6 Training of Operators 4
2.2.7 Achieve Final Completion with All Due Diligence. 4
2.3 Particular Undertakings of the Contractor 4
2.3.1 Safety Precautions 4
2.3.2 Compliance with Governmental Approvals, Laws and Private Rights-of-Way
Requirements 5
2.3.3 Duties 5
2.3.4 Schedules 5
2.3.5 Protection of Property 5
2.3.6 Ingress and Egress 5
2.3.7 No Alcohol or Controlled Substances on Site 6
2.3.8 Miscellaneous Regulations 6
2.3.9 Access to Project Site 6
2.3.10 Site Logistics Plan 6
2.3.11 Functional and Design Verification Test Procedures 6
2.4 Submission of Reports 7
2.5 Obtaining Governmental Approvals and Private Rights-of-Way 7
2.6 Clean-up Responsibility 7
2.7 Patents, Copyrights and Royalties 8
2.8 Further Assurances 8
2.9 Interfaces 8
ARTICLE 3. GENERAL CONTRACTOR'S RESPONSIBILITIES
3.1 Documents and Surveys 9
3.2 Rights-of-Way 9
i
3.3 Required Approvals 9
3.4 Operations and Maintenance Personnel 9
3.5 Hazardous Wastes 9
3.6 Notice of Defect 9
3.7 No Alcohol or Controlled Substances on Site; Miscellaneous Regulations 10
3.8 Interfaces 10
3.9 Utilities and Consumables During Project Start-Up 10
3.10 Utilities During Construction 10
ARTICLE 4. SUBCONTRACTS
4.1 Major Specialty Consultants, Subcontractors and Equipment Suppliers 10
4.2 Purchase Orders and Subcontracts 11
4.3 Payments to Subcontractors 11
4.4 No Privity with Subcontractors 11
ARTICLE 5. CONTRACT PRICE
5.1 Contract Price 11
5.2 Limitation of General Contractor's Liability 11
ARTICLE 6. COMMENCEMENT OF THE PROJECT, PROJECT START-UP AND
COMPLETION
6.1 Commencement of Work 12
6.2 Project Start-up 12
6.3 Substantial Completion 12
6.4 Notice of Substantial Completion 12
6.5 Certificate of Substantial Completion 12
6.6 Acceptance of Project Upon Failure to Achieve Substantial Completion
Prior to Substantial Completion Deadline. 13
6.7 Acceptance of Project Upon Failure to Achieve Substantial Completion
Prior to the Contract Deadline. 13
6.8 Final Completion 13
6.9 Notice of Final Completion 13
6.10 Certificate of Final Completion 14
ARTICLE 7. GENERAL CONTRACTOR'S RIGHT TO PLACE THE FACILITY IN
COMMERCIAL OPERATION; CARE, CUSTODY AND CONTROL
7.1 General Contractor's Right 14
7.2 Project Revenues 14
7.3 Care, Custody and Control 14
ARTICLE 8. LIQUIDATED DAMAGES FOR FAILURE TO MEET
SCHEDULE GUARANTEES
ii
8.1 Schedule Guarantees 15
8.1.1 Substantial Completion 15
8.2 Liquidated Damages for Failure to Achieve Substantial Completion 15
8.3 Liquidated Damages Reasonable 15
8.4 Time for Payment 15
ARTICLE 9. LIMITATION OF CONTRACTOR'S LIABILITY
9.1 Limitation 16
9.2 Consequential Damages 16
ARTICLE 10. WARRANTIES AND GUARANTEES
10.1 Materials and Workmanship 16
10.2 Subcontractor Warranties 17
10.3 Engineering and Design 17
10.4 No Liens 17
10.5 Limitation of Warranties 17
ARTICLE 11. FORCE MAJEURE
11.1 Force Majeure Events 18
11.2 Limitation of Default 18
11.3 Excused Performance 18
11.4 Right to Terminate for Force Majeure 19
ARTICLE 12. CHANGES IN THE PROJECT AND SUSPENSION
12.1 Changes 19
12.1.1 Procedure for Changes 19
12.1.2 Change Orders 20
12.1.3 No Changes Due to Contractor Error 20
12.2 Other Changes 20
12.2.1 Changes in Laws, Approvals or Rights-of-Way 20
12.2.2 Changes Due to Delays in Interfaces or Force Majeure Events 20
12.3 Modifications 21
12.4 Contract Price Change 21
12.5 Continued Performance Pending Resolution of Disputes 21
12.6 Suspension 21
12.7 Suspension Process 22
12.8 Resumption of Work 22
12.9 Contract Changes Due to Suspension 22
12.10 Termination Due to Suspension 22
ARTICLE 13. PAYMENTS TO CONTRACTOR
13.1 Monthly Progress Payments 23
13.2 Waiver and Release of Liens 24
iii
13.3 Payment Upon Completion 24
13.4 Payment or Use Not Acceptance 24
13.5 Waiver by General Contractor 24
13.6 Waiver by Contractor 25
ARTICLE 14. INDEMNITY, INSURANCE AND WAIVER OF SUBROGATION
14.1 Indemnity 25
14.2 Contractor's Insurance 26
14.3 Property Insurance Loss Adjustment 27
14.4 Waiver of Subrogation 27
14.5 Subcontractor Insurance 27
14.6 General Contractor's Insurance 28
14.7 No Effect on Liability 28
ARTICLE 15. TERMINATION
15.1 Termination By General Contractor for Cause 28
15.2 Termination Upon Bankruptcy 29
15.3 Termination By General Contractor Without Cause 30
15.4 Termination Due to Suspension 30
15.5 Termination Due to Event of Force Majeure 31
ARTICLE 16. ASSIGNMENTS AND CHOICE OF LAW
16.1 No Assignment by Contractor 31
16.2 Assignment by General Contractor 31
16.3 Extension to Successors and Assigns 32
16.4 Choice of Law 32
ARTICLE 17. DRAWINGS, DOCUMENTS AND MATERIALS
17.1 General Contractor's Review 32
17.1.1 Submittal of Documents 32
17.1.2 Return of Plans and Drawings 33
17.2 Contractor's Duty 33
17.3 Final Documents and All Other Documents Furnished 33
17.4 Ownership of Drawings and Documents 33
17.4.1 Property of General Contractor 33
17.4.2 Reuse of Documents by General Contractor 34
17.5 Ownership of Materials 34
ARTICLE 18. MISCELLANEOUS PROVISIONS
18.1 Confidential Information 34
18.2 Uses of Premises 35
18.3 Independent Contractor 35
iv
18.4 Contractor's Obligations 35
18.5 New Developments 35
18.6 Representations 35
18.7 Rights Reserved by the General Contractor 35
18.8 Cumulative Remedies 36
18.9 Non-Waiver Clause 36
18.10 Severability 37
18.11 Amendments 37
18.12 Article and Section Headings 37
18.13 Notices 37
18.14 English as Official Language 38
18.15 Original and Counterparts 38
v
APPENDICES AND SCHEDULES
APPENDIX TITLE
-------- -----
A Definitions
B Project Site Documents
C Governmental Approvals and Private
Rights-of-Way
Attachment I Specified Permit Applications
D Form of Progress Report
E Boundaries of Interfaces
F Key Personnel of Contractor
G Major Specialty Consultants,
Subcontractors and Suppliers
H Major Milestone Schedule
I Form of Application for Payment
J Form of Waiver and Release of Lien
Rights
K Form of Consent to Assignment
L Documentation Requirements and List
of Documents to be Furnished by the
Contractor
M Initial Network Schedule
SCHEDULE I Project Description
SCHEDULE II Scope of Work
SCHEDULE III Technical Requirements
vi
VILLAGE FARMS OF PRESIDIO, L.P. GREENHOUSE PROJECT
COMMERCIAL PACKING HOUSE
DESIGN AND CONSTRUCTION CONTRACT
This VILLAGE FARMS OF PRESIDIO, L.P. PROJECT COMMERCIAL PACKING HOUSE
DESIGN AND CONSTRUCTION CONTRACT dated as of July 10, 1998 (this "Agreement") is
made by and between AGRO POWER DEVELOPMENT, INC., a NEW YORK corporation with
offices at 00 Xxxxx Xxxxx, X. Xxxxxxxxx Xxx Xxxxxx 00000 (the "General
Contractor"), and NC Xxxxxxxx Inc., a Texas corporation with offices at 2800
Xxxxxxxxx, Xxxxxxx, Xxxxx 00000 (the "Contractor").
RECITALS
A. The General Contractor intends to build and operate a commercial
Greenhouse facility in the County of Presidio ,Texas (the "Facility"). The
Facility will be fueled by natural gas and LPG.
B. The parties have negotiated and agreed upon the final terms, conditions,
specifications and prices for the engineering, procurement and construction of
the Packing House
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 Contractor agrees to perform or cause to be performed all work and services
in connection with the engineering and construction, with respect to the Packing
House, all in strict accordance with, and for the Contract Price stated in this
Agreement. The Packing House, together with all equipment, labor, services and
materials to be furnished hereunder, is defined as the "Project.' The Project
will be constructed on a 153-acre parcel of property located in the County of
Presidio, as is more fully described in Appendix B (the "Project Site").
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 Project Commercial Packing House Design And Construction
Contract, including Appendices A-N (as the same may be amended by Changes and
Modifications); and
(b) Scope of Work attached hereto as Schedule I and II (as the same may be
amended by
1
Changes and Modifications, the "Scope of Work").
(c) Drawing A-2, d.d. 3/17/98, by Contractor
Appendices A through M and Schedule I, II and III 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, Loan Documents and Project Engineer shall be as follows:
(a) The Project Lender shall be Village Farms International Finance
Association
(b) The Loan Documents shall include the Credit Agreement between the
Project Lender and the Owner (collectively, the "Loan Parties"), the
Collateral Agency Agreement among CoBank ACB as Collateral Agent, the
General Contractor and certain other parties, and such other
agreements and documents as the Loan Parties may agree are necessary
or desirable to evidence the bond and debt financing facility for the
Project.
ARTICLE 2 CONTRACTOR'S RESPONSIBILITIES
2.1 Contractor's Services in General.
The Contractor shall perform or cause to be performed, and be ultimately
responsible for, all engineering, procurement and construction services, , all
materials and equipment, all machinery, tools, labor, transportation, as set
forth herein and, except for the services and information specifically set forth
in Article 3 to be provided by the General Contractor, all other services and
items required to complete the Project in strict accordance with this Agreement
(the "Work"). All construction services of the Contractor shall be performed in
accordance with the Scope of
2
Work. The General Contractor shall have the right, in accordance herewith, to
review and approve any other engineering, procurement and construction services
necessary as a result of Changes and Modifications to complete the Project in
accordance with this Agreement. The General Contractor and its designees shall
have the right, but not the obligation, to review the Contractor's performance
to determine whether such performance complies with this Agreement. The General
Contractor's failure to review the Contractor's performance shall not diminish
any rights the General Contractor may have in respect of any deficiencies in the
Contractor's performance hereunder. Any 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
Contractor under the Contract Documents shall not be construed to limit in any
way the general undertakings of the Contractor as set forth herein.
2.2 Summary of 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 Packing House, (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 Texas as required by Law.
2.2.3 Procurement. The Contractor shall procure in the Contractor's name,
and not as agent for the General Contractor, 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
General Contractor.
2.2.4 Construction. The Contractor shall construct the Packing House and
3
provide all labor, equipment, materials, supplies and tools for such
performance. The Contractor shall cause the Work 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 General Contractor shall
approve or disapprove, which approval shall not be unreasonably withheld. The
Contractor has provided the General Contractor with the names and resumes of,
and the General Contractor has approved, the key personnel working on the
Project identified in Appendix F, and the General Contractor 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 Contractor and the General Contractor, shall not be removed or
reassigned prior to Completion, without the approval of the General Contractor.
The Contractor shall also employ, or cause Subcontractors to employ, in
connection with the construction , 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 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 Contractor
shall train the employees of the operations and maintenance contractor retained
by General Contractor with respect to the Packing house. 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 Packing house
under the Contractor's direction during Project Start-up. The Contractor also
shall prepare and provide to the General Contractor six (6) copies each of an
operations and maintenance manual for the Packing house. The Contractor shall
provide the General Contractor sixty (60) days prior written notice of the day
it will commence training of Packing house operations and maintenance personnel.
2.2.7 Achieve Final Completion with All Due Diligence. The 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 Contractor.
2.3.1 Safety Precautions. The 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 Contractor's safety manual, a copy of which shall
be provided to the General Contractor. All machinery and equipment and other
physical hazards shall be guarded in accordance with applicable Law and industry
construction standards. The Contractor shall develop and maintain a safety
program . Without limiting the generality of the foregoing:
4
2.3.1.1 The Contractor shall at no time and under no circumstances cause or
permit any employee of the 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 Contractor shall at no time and under no circumstances obstruct
public roadways without the prior written permission of the appropriate
authorities.
2.3.1.3 The 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 Contractor. The General Contractor's
receipt of the Contractor's safety manual or its review or approval of any
safety procedures or programs shall not relieve the Contractor of any of its
obligations hereunder.
2.3.2 Compliance with Governmental Approvals, Laws and Private
Rights-of-Way Requirements. The 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 Contractor's performance hereunder, including but not limited
to all notices required thereby.
2.3.3 Duties. The Contract Price (as defined in Section 5.1) includes
provisions for the payment of all moneys which will be payable by the Contractor
or the General Contractor in connection with the engineering, procurement and
construction of the Work because of gross receipts taxes or contributions,
duties and contributions imposed by any taxing authority upon materials,
supplies and equipment to be incorporated in the Project. The Contractor shall
pay all such gross receipt taxes, duties and contributions, and indemnifies the
General Contractor from any liability therefor. The 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 General Contractor.
2.3.4 Schedules. The 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 Contractor periodically shall
provide copies of its network schedules to General Contractor as set forth in
Section 2.4.1. The Contractor shall be responsible for maintaining all material
and equipment delivery schedules which affect the progress of the Project. The
Contractor shall closely supervise the work of Subcontractors and monitor
Subcontractor work and progress.
2.3.5 Protection of Property. The 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 the 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
5
occurred; provided, however, that the Contractor shall not be liable to restore
such damaged property to the extent damage is caused by the General Contractor
or the General Contractor's agents, invitees or contractors (other than the
Contractor and any Subcontractors).
2.3.6 Ingress and Egress. Where ingress and egress by the Contractor to the
Project Site require the Contractor to traverse public or private lands, the
Contractor shall limit the movement of its crews and equipment to such rights of
way as are identified in Appendix C, or which otherwise may be obtained by the
General Contractor or the 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 Contractor shall be
responsible for laying out the access to be used. The 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
any 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
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 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 Contractor's reasonable judgment it is
appropriate, the 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 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 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 Contractor or its Subcontractors, their employees, or agents without
the written approval of the General Contractor. The use of explosives will not
be permitted unless and until the Contractor has submitted to the General
Contractor a blasting plan which is in accordance with all applicable Laws,
Governmental Approvals and Private Rights-of-Way and the General Contractor has
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 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 Contractor shall permit representatives of
the Project Lender to visit the Project Site. Such visitors shall obey all
applicable Project Site rules. The General Contractor, the General Contractor's
Representatives and the Project Engineer shall have access to the Project Site
at all times.
6
2.3.10 Site Logistics Plan. The 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 Contractor shall prepare and submit to the General Contractor
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 Contractor's
trailers; (ii) vehicle parking; (iii) the site entry road; (iv) signs; and (vii)
the routing of truck deliveries. The General Contractor's approval of the Site
Logistics Plan will not be unreasonably withheld. Upon approval by the General
Contractor, the Contractor shall furnish three (3) copies of the Site Logistics
Plan to the General Contractor.
2.3.11 Functional and Design Verification Test Procedures. The Contractor
shall prepare and submit to the General Contractor and the Project Engineer 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 General Contractor's and Project
Engineer's approval of such protocols will not be unreasonably withheld or
delayed.
2.4 Submission of Reports.
2.4.1 The Contractor shall prepare and submit to the General Contractor (a)
within ten days after the end of each calendar month and as part of the
Application for Payment provided pursuant to Section 13.1.1, 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
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 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 Contractor shall keep, and furnish to the General Contractor
and/or Project Lender at General Contractor's or Project Lender's request, such
books, records and accounts containing such information as may be necessary to
(i) determine that work is progressing according to schedule and (ii) provide
adequate documentary support (A) for the General Contractor's future tax
accounting purposes and (B) for the purpose of confirming that progress payments
are due hereunder. The Contractor shall notify the General Contractor 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 General Contractor.
2.4.2 Prior to the execution and delivery of this Agreement, the Contractor
shall have provided to the General Contractor its most recent annual unaudited
financial statements.
2.5 Obtaining Governmental Approvals and Private Rights-of-Way.
7
The Contractor shall, to the extent reasonably required, assist the General
Contractor to obtain those Governmental Approvals and Private Rights-of-Way
required to be obtained by the General Contractor, as are set forth in Appendix
C. The Contractor has delivered, or will deliver prior to the time necessary,
evidence satisfactory to the General Contractor that the Contractor has obtained
all Governmental Approvals required to be obtained by the Contractor, as are set
forth in Appendix C, including but not limited to permits, licenses or
certificates from Texas state industrial insurance authorities, Texas employment
security authorities and Texas contractors authorities.
2.6 Clean-up Responsibility.
The 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
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 General Contractor and consistent with all Governmental Approvals, Laws and
Private Rights-of-Way. Prior to the issuance of the Certificate of Final
Completion, the Contractor shall remove from the Project Site all tools,
construction equipment, machinery and surplus materials belonging to the
Contractor or any Subcontractor not necessary to the continued operation of the
Facility.
2.7 Patents, Copyrights and Royalties.
The Contractor shall pay all royalties and license fees for materials, methods
and systems incorporated in the Project. The Contractor hereby indemnities,
fully protects and saves the General Contractor harmless from, and agrees to
defend the General Contractor against, any and all loss, cost and damage which
the General Contractor may hereafter suffer or pay out by reason of any claims
or suits against the General Contractor arising out of claims of infringement of
any domestic or foreign patent rights, trademarks or copyrights, or misuse of
confidential information, by the Contractor in performing its obligations
hereunder. The Contractor and the General Contractor 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 Contractor
shall undertake the defense of any such suit, action or claim, and the General
Contractor shall cooperate with the Contractor in such defense. The Contractor
shall have charge and direction of the defense of such suit, action or claim,
and the General Contractor shall have the right to be represented therein by
advisory counsel of its own selection and at its own expense. Neither the
Contractor nor the General Contractor 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 Packing house, or part
thereof, is held in such suit to constitute infringement or the use thereof is
enjoined, the Contractor shall at its own expense and at its option either
procure for the General Contractor the right to continue using the Packing
house, or part thereof, or replace the same with a non-infringing part or modify
it so that it becomes non-infringing. Contractor's obligations to indemnify,
defend and save harmless General Contractor hereunder shall not apply to claims
of patent, trademark or copyright infringement, or misuse of
8
confidential information, relating to Changes or Modifications in the Work made
to the General Contractor's express specifications, as to which General
Contractor shall indemnify, defend and save harmless Contractor pursuant to the
procedures set forth above in this Section 2.7.
2.8 Further Assurances.
The Contractor shall promptly execute and deliver all further instruments and
documents, and take all further action, including but not limited to assisting
the General Contractor in filing a notice of completion with the local lien
recording offices, that may be necessary or that the General Contractor may
reasonably request (and which is consistent with this Agreement) in order to
effectuate the Contractor's obligations hereunder or the purposes or intent of
this Agreement.
2.9 Interfaces.
The Contractor shall use its best efforts to assist the General Contractor to
coordinate the timely installation and start-up of such connections, utilities,
crossings and the like as necessary to construct and operate the Packing house,
to the extent such items are not part of the Work. These interfaces shall
include but not be limited to the interconnections of the Packing house with the
Greenhouse and utilities, either similar or dissimilar, required to assure
operability of the Packing house. The boundaries of such interfaces shall be as
generally described in Appendix E.
ARTICLE 3 GENERAL CONTRACTOR'S RESPONSIBILITIES
3.1 Documents and Surveys.
The General Contractor has furnished to the 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 General Contractor 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 Packing House and for ingress and
egress of the Contractor necessary to construct the Packing House and otherwise
to perform its obligations under this Agreement.
3.3 Required Approvals.
The General Contractor 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 General Contractor
shall cause the
9
Packing House Lessee to hire personnel to be trained and to perform operations
and maintenance of the Packing House during Project Start-up and Commercial
Operation.
3.5 Hazardous Wastes.
The General Contractor shall remove, or cause to be removed, and dispose, or
cause to be disposed of, at General Contractor's expense and in accordance with
Law, any debris, soil or other materials consisting of or contaminated by
hazardous wastes as defined by Law, and shall provide replacement fill or other
suitable materials and services as necessary at General Contractor's expense;
provided, however, that if such waste or contamination is present due solely to,
or is caused solely by, the acts or omissions of Contractor or any
Subcontractors, in such case the Contractor shall remove and, dispose of such
debris, soil or other materials in accordance with Law and shall provide
replacement fill or other suitable material and services as necessary, at its
expense.
3.6 Notice of Defect.
If the General Contractor becomes aware of any fault or defect in the Packing
House or nonconformance with the Contract Documents, it shall give prompt
written notice thereof to the Contractor and thereafter the Contractor shall
promptly correct such fault or defect and/or cure such nonconformance; provided,
however, that the General Contractor shall have no duty to inspect the Packing
House or to compare the Packing House with the Contract Documents, and its
failure to notify the Contractor of discoverable faults, defects or
nonconformance pursuant to this Section 3.6 because of failure to inspect or
compare shall not relieve the Contractor from any duties, obligations or
liabilities hereunder.
3.7 No Alcohol or Controlled Substances on Site;
Miscellaneous Regulations.
While on the Project Site, all personnel of the General Contractor and its
separate contractors, including the Packing House Lessee, 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 Contractor. General Contractor
shall ensure that its personnel and those of its invitees, agents and separate
contractors, including the Packing House Lessee, do not interfere with the
performance of the Work.
3.8 Interfaces.
The General Contractor shall, to the extent reasonably required to maintain the
Project schedule, assist the Contractor in coordinating the Contractor's work
with the work to be performed by others with respect to the Project (to the
extent the same may affect Contractor), including but not limited to the
interconnection or interfaces with the Pipeline.
3.9 Utilities and Consumables During Project Start-Up.
10
The General Contractor shall supply the utilities and consumables (except
lubricants and spare parts) necessary for Project Start-Up.
3.10 Utilities During Construction.
During the period of construction, the General Contractor shall make available
sufficient quantities of electric power and water. The Contractor shall be
responsible for the payments of the above items pertaining to the use thereof.
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 subcontractors
that the Contractor is considering for subcontracts in connection with the
Project. The General Contractor has approved each such subcontractor listed in
Appendix G, and the Contractor shall request review of, and the General
Contractor shall have the right to review, any subcontractor proposed to replace
one of those listed on Appendix G. The General Contractor and the Contractor
shall mutually agree on any such replacement. The Contractor may from time to
time delete one or more equipment vendors or subcontractors from said lists, and
may with prior approval of General Contractor, which shall not be unreasonably
withheld, add one or more subcontractors or suppliers to said lists.
4.2 Purchase Orders and Subcontracts.
All material purchase orders and subcontracts issued by the Contractor under
this Agreement shall provide, in form and substance reasonably acceptable to
General Contractor, that in the event this Agreement is terminated, upon tender
by the General Contractor or its designee of the Contractor's performance to any
Subcontractor, such purchase order or subcontract shall continue in full force
and effect in favor of the General Contractor or such designee, as appropriate.
4.3 Payments to Subcontractors.
Except as provided in Section 4.2, the Contractor shall be solely responsible
for paying each Subcontractor and any other person or entity to whom any amount
is due from the Contractor for services or supplies in connection with the
Project.
4.4 No Privity with Subcontractors.
The General Contractor shall have no contractual obligation to, and shall not,
except in respect of
11
rights assigned by the contractor pursuant to Section 10.2, be deemed to be in
privity with any Subcontractor. General Contractor's approval or disapproval of
a Subcontractor pursuant to Section 4.1 hereof shall not relieve or release the
Contractor of any its duties, obligations or liabilities under the terms of this
Agreement.
ARTICLE 5 CONTRACT PRICE
5.1 Contract Price.
As full consideration to the Contractor for the full and complete performance of
the Project and all costs incurred in connection therewith, the General
Contractor shall pay and the Contractor shall accept, the sum of One Million
Four Hundred and Seventy-Five Thousand Dollars ($1,475,000) payable pursuant to
Article 13, subject to adjustment in accordance with Article 12 (the "Contract
Price").
5.2 Limitation of General Contractor's Liability.
The General Contractor shall not under any circumstances be liable for the
payment to the Contractor of any amounts in excess of the Contract Price, any
sums due and payable pursuant to the indemnification provisions of Article 14
hereof, 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 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 General Contractor.
6.2 Project Start-up.
"Project Start-up" is that period (i) commencing on the date that the 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 Contractor shall provide
the General Contractor with at least sixty (60) 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 Contractor shall submit
for approval by the General Contractor and Project Engineer 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 General Contractor may have its own or its designee's personnel on
site to observe and verify all procedures and testing activities conducted.
12
6.3 Substantial Completion.
The Contractor shall achieve Substantial Completion of the Project on or before
the "Substantial Completion Deadline". Time is of the essence with respect to
such deadline. "Substantial Completion" shall mean (a) ( the Contractor has
completed all other Work on the Project under this Agreement except for the
balance of Project startup and clean up; (b) ( General Contractor has
acknowledged to the Contractor that the functional and design verification tests
have been successfully completed; (c) the Contractor has delivered to the
General Contractor a punch-list relating to those areas of the Packing House
other than the Greenhouse and Nursery, and consisting of minor items that are
not essential to the safe and prudent operation of the Packing house
(collectively with additional items identified by General Contractor, the "Final
Punch-List"), which Final Punch-List shall not have an aggregate cost exceeding
$50,000; and (d) the General Contractor has delivered to the Contractor a
Certificate of Substantial Completion.
6.4 Notice of Substantial Completion.
When the Contractor believes that it has achieved Substantial Completion, it
shall deliver to the General Contractor a notice thereof (the "Notice of
Substantial Completion").
6.5 Certificate of Substantial Completion.
The General Contractor shall, within five business days following the receipt of
the Notice of Substantial Completion inspect all Work, and either (a) deliver to
the Contractor a certificate certifying that clauses (a) and (b) 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 General
Contractor receives such Notice of Substantial Completion from the Contractor,
or (b) if the requirements for Substantial Completion have not been satisfied,
notify the 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 Contractor shall promptly take such action
or perform such additional work as will achieve Substantial Completion and shall
issue to the General Contractor another Notice of Substantial Completion
pursuant to Section 6.7. Such procedure shall be repeated as necessary until the
earlier of (i) the issuance by the General Contractor of a Certificate of
Substantial Completion, which certificate shall not be unreasonably withheld, or
(ii) the issuance by General Contractor 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 Contractor has not achieved Substantial Completion, the
Contractor may request in writing that the General Contractor accept the Project
by issuing a certificate of acceptance for the Project (the "Certificate of
Acceptance"). The General Contractor will, within five business days following
receipt of the Contractor's request therefor, either issue a Certificate of
Acceptance (at which time "Acceptance" shall be deemed to occur) or decline to
do so. Contractor's request for the issuance of a Certificate of Acceptance
shall not be unreasonably denied by General
13
Contractor. Acceptance by General Contractor shall not relieve Contractor of its
obligations to achieve Final Completion or to pay liquidated damages pursuant to
Section 8.2 and 8.3 hereof.
6.7 Acceptance of Project Upon Failure to Achieve Substantial Completion
Prior to the Contract Deadline.
If the Contractor has not requested, or the General Contractor has declined to
issue, a Certificate of Acceptance pursuant to Section 6.9, the Contractor shall
be obligated to take such action or perform such additional work as will be
necessary to achieve Substantial Completion. Provided the General Contractor has
not terminated this Agreement pursuant to Article 16, if by the date which is
thirty (30) days after the Substantial Completion Deadline, the Contractor after
exercising due diligence has not achieved Substantial Completion, on such date
the General Contractor shall accept the Project ("Acceptance") by issuing a
Certificate of Acceptance. Such Acceptance by General Contractor shall not
relieve General Contractor of its obligation to achieve Final Completion or to
pay liquidated damages pursuant to Section 8.2 and 8.3 hereof.
6.8 Final Completion.
The Contractor shall achieve Final Completion of the Project on or before the
Contract Deadline. Time is of the essence with respect to such deadline. "Final
Completion" shall mean (a) Substantial Completion (or Acceptance) have been
achieved; (b) clean-up has been completed; (c) the General Contractor has
delivered to the Contractor a Certificate of Final Completion.
6.9 Notice of Final Completion.
When the Contractor believes that it has achieved Final Completion, it shall
deliver to the General Contractor a notice thereof (the "Notice of Final
Completion").
6.10 Certificate of Final Completion
The General Contractor shall, within five business days following the receipt of
the Notice of Final Completion inspect all Work, and either (a) deliver to the
Contractor a certificate certifying that clauses (a) through (c) of Section 6.8
have been satisfied (the "Certificate of Final Completion"), in which case Final
Completion will have been achieved as of the date the General Contractor
receives such Notice of Final Completion from the Contractor, or (b) if the
requirements for Final Completion have not been satisfied, notify the 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
Contractor shall promptly take such action or perform such additional work as
will achieve Final Completion and shall issue to the General Contractor another
Notice of Final Completion pursuant to Section 6.9. Such procedure shall be
repeated as necessary until the issuance by the General Contractor of a
Certificate of Final Completion, which certificate shall not be unreasonably
withheld.
ARTICLE 7 GENERAL CONTRACTOR'S RIGHT TO PLACE THE FACILITY IN COMMERCIAL
OPERATION; CARE, CUSTODY AND CONTROL
14
7.1 General Contractor's Right.
The parties currently contemplate that the Packing House shall be occupied and
placed in Commercial Operation upon Substantial Completion. However, at any time
after the Substantial Completion Deadline the General Contractor or the Packing
House Operator may occupy any portion of the Packing House which is complete.
Moreover, at any time on or after ......., 19.., the General Contractor shall
have the right to place the Packing House in Commercial Operation, whether or
not the Contractor has achieved Substantial Completion or Acceptance. After the
General Contractor shall have placed the Packing House in Commercial Operation,
the General Contractor shall so notify the Contractor, and the Packing House
Operator shall thereafter operate the Packing House. The placing of the Packing
House in Commercial Operation by the General Contractor shall not excuse the
Contractor from completing all remaining Work on the Project nor constitute a
waiver of any of the Contractor's obligations under this Agreement. In the event
the General Contractor places the Packing House in Commercial Operation prior to
Substantial Completion or Acceptance, the General Contractor shall afford the
Contractor reasonable access to the Packing House to complete all remaining Work
on the Project.
7.2 Project Revenues.
The Contractor shall not be entitled to any revenues associated with the sale of
any fruit, vegetables, flowers or other produce from the Packing House.
7.3 Care, Custody and Control.
Care, custody and control of the Packing House shall pass from the Contractor to
the General Contractor upon the issuance of the Certificate of Substantial
Completion or the Certificate of Acceptance, or upon General Contractor's
election to place the Packing House in Commercial Operation, as the case may be.
General Contractor shall assume the risk of physical loss or damage to the Work
from and after the issuance of the Certificate of Substantial Completion or the
Certificate of Acceptance or the placing of the Packing House into Commercial
Operation, as the case may be. The 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 Packing House to General
Contractor.
ARTICLE 8 LIQUIDATED DAMAGES FOR FAILURE TO MEET SCHEDULE GUARANTEES
8.1 Schedule Guarantees. The Contractor provides the following schedule
guarantees:
8.1.1 Substantial 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.
8.2 Liquidated Damages for Failure to Achieve Substantial Completion.
15
As General Contractor's sole and exclusive remedy for Contractor's failure to
achieve Substantial Completion on or before the Substantial Completion Deadline,
the Contractor shall pay the following liquidated damages.
8.2.1 If the Contractor fails to achieve Substantial Completion on or
before the Substantial Completion Deadline, the Contractor shall pay to the
General Contractor, as liquidated damages, in addition to the sums set forth in
Section 8.2, the sum of $2,500 per day for each day that Substantial Completion
is delayed beyond the Substantial Completion Deadline.
8.3 Liquidated Damages Reasonable.
The General Contractor and the Contractor hereby acknowledge and agree that the
terms, conditions and amounts fixed pursuant to this Article 8 for liquidated
damages are reasonable, considering the damages that the General Contractor
would sustain in the event of the Contractor's failure to achieve the above
schedule guarantees. These amounts are agreed upon and fixed as liquidated
damages because of the difficulty of ascertaining as of the date hereof the
exact amount of damages that would be sustained in such event. Notwithstanding
the first sentences of Section 8.2 and 8.3, such payment of liquidated damages
shall not affect the General Contractor's rights provided in Article 15.
Liquidated damages for failure to achieve the schedule guarantees set forth in
Section 8.1 shall not be reduced by any revenues received by the General
Contractor from the sale of produce from the Packing House.
8.4 Time for Payment.
The Contractor shall pay liquidated damages required under this Article 8 on the
first business day following the end of each month in which such liquidated
damages accrue. If the Contractor fails to make timely payment of liquidated
damages, interest on any unpaid amount shall accrue from the due date at the
lesser of (a) the then prevailing Base Rate plus two percent (2%) per annum and
(b) the maximum permitted legal interest rate at the time prevailing and
applicable hereto.
ARTICLE 9 LIMITATION OF CONTRACTOR'S LIABILITY
9.1 Limitation.
The total aggregate liability of the Contractor with respect to its obligations
hereunder, including but not limited to warranty obligations, liquidated
damages, and its obligation to complete the Work, shall be limited to the
Contract Price.
9.2 Consequential Damages.
16
Contractor shall not be liable for indirect, consequential, incidental, special
or punitive damages, including but not limited to damages to delay in or loss of
use of profits or products, lost income, or obligations of General Contractor to
third parties.
ARTICLE 10 WARRANTIES AND GUARANTEES
10.1 Materials and Workmanship.
The Contractor warrants to the General Contractor that A 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 General Contractor's sole
remedy for any breach of this warranty, the Contractor agrees to correct within
ten (10) days after receipt of notice for General Contractor, 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 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 Contractor's warranty shall not
apply to damage arising from the Packing House Lessee's failure to comply with
prudent operating and maintenance practices in the commercial packing house
industry. For the purposes of this Section to 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) "potholing" of pavement; (v) mechanical or electrical equipment
which does not operate in a satisfactory, quiet and efficient manner as
determined by the General Contractor 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
Packing House Lessee.
10.2 Vendor and Supplier Warranties.
The Contractor shall, for the protection of the General Contractor, 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 General Contractor. Such guarantees and
warranties shall be in accordance with reasonable commercial packing house
17
industry standards, shall be assignable to the General Contractor, 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 General
Contractor to the full extent of the terms thereof after assignment. The
Contractor shall enforce such guarantees and warranties to the fullest extent
thereof on behalf of the General Contractor until such time as they are assigned
to the General Contractor. 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 Contractor shall assign to the General Contractor all the
Contractor's rights under Subcontractor guarantees and warranties and shall
deliver to the General Contractor copies of all contracts providing for such
guarantees and warranties.
10.3 Engineering and Design.
The 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. For a period of one year from the earlier of Final Completion or the
commencement of Commercial Operation, the Contractor shall, as the General
Contractor'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 General Contractor
specifying such deficiencies.
10.4 No Liens.
The Contractor warrants and guarantees that title to all work, materials,
supplies and equipment provided hereunder will pass to the General Contractor
upon payment by 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 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 CONTRACTOR'S PERFORMANCE HEREUNDER, AND THE 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 General Contractor or the 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
18
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,
pestilence, epidemic, lightning and other natural catastrophes; war, riot, civil
disturbance or disobedience, action or inaction of legislative, 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.
Neither party shall be considered in default in the performance of any of the
agreements contained in this Agreement, except for the General Contractor's or
the 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 either 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 non-performing party, within five (5) days after the occurrence of
the Force Majeure Event, gives the other party 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 either 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 non-performing 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 either party as a result of a Force Majeure
Event exceeds sixty (60) days, the party whose performance is unaffected by the
Force Majeure Event may terminate this Agreement pursuant and subject to the
terms of Section 15.4 hereof; provided, however that
19
the Contractor may not terminate this Agreement pursuant to Section 15.4 hereof
if and to the extent that a Change relating to such Force Majeure Event shall
have been approved by the General Contractor and the Contractor pursuant to
Section 12.2.2 hereof.
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 General Contractor, 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 schedule of Major Milestones
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
General Contractor may initiate Changes. If the General Contractor wishes to
make a Change pursuant to this Section 12.1, it shall submit a written proposal
therefor to the Contractor. At no cost to the General Contractor, the Contractor
shall promptly review the General Contractor's proposal and provide the General
Contractor, 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 schedule of
Major Milestones. 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
Contractor proposes to incorporate the time impact on non-critical path items
into the schedule without schedule alleviation. If, in the Contractor's opinion,
Project schedule and/or performance may be maintained or adjustments thereof
minimized only by increasing the Contract Price, the Contractor shall, in such
notice, set forth possible trade-offs among or between Project cost, schedule
and performance so that the General Contractor may make an informed choice among
such alternatives in deciding whether to issue a Change Order. The Contractor
shall provide similar information to the General Contractor upon requesting a
Change pursuant to Section 12.2. The General Contractor shall promptly review
the information provided by the Contractor pursuant to this Section 12. 1.1 and
thereupon may issue a Change Order approving and authorizing such proposed
Change, in which event the cost, scheduling and performance alternative included
in the Contractor's notice described above and chosen by the General Contractor
shall be binding on the Contractor. The Contractor shall use all reasonable
efforts to minimize any effect adverse to the General Contractor of any Change
on Project cost, scheduling and performance. The Change Order issued by the
General Contractor will authorize an extension in the Substantial Completion
Deadline and/or the Contract Deadline only if the Contractor establishes, to the
General Contractor's reasonable satisfaction, that the nature of the
20
proposed Change would necessitate such extension. All Changes, whether initiated
by the General Contractor or the 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 Contractor
signed by a duly authorized officer of the General Contractor authorizing a
Change in the Project. Upon execution and delivery of this Agreement, the
General Contractor shall deliver to the Contractor written notice signed by the
President of the General Contractor, stating which officers are authorized to
approve Change Orders. If and when, after execution and delivery of this
Agreement, another officer is selected by the General Contractor to approve
Change Orders, the General Contractor shall deliver to the Contractor another
notice signed by the President of the General Contractor so authorizing such new
officer to approve Change Orders. For the purpose of determining who has
authority to approve Change Orders, the Contractor shall be entitled to rely on
the latest notice delivered by the General Contractor pursuant to this Section
12.1.2 and received by the 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 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 Contractor may (and, if requested by the
General Contractor, shall) submit a written request for a Change to the General
Contractor, such Change to be incorporated into the Project upon approval by the
General Contractor, 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 Force Majeure Events. In the event and to
the extent that (i) a Force Majeure Event prevents the Contractor's performance
hereunder, and all of the requirements of Section 11.3 (a) through (d) are
satisfied, the Contractor shall be entitled to (and if requested by General
Contractor, shall 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 Schedule of Major Milestones
set forth in Appendix H to this Agreement shall be adjusted to the extent of the
actual and verifiable effects, if any, which Contractor demonstrates to the
reasonable satisfaction of the General Contractor that such delay or Force
Majeure Event has had upon 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
General
21
Contractor may order and the Contractor may propose, subject to approval by the
General Contractor, 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, Nursery Substantial Completion Deadline the Substantial
Completion Deadline, and the Contract Deadline.
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 General Contractor pursuant to the schedule of Progress
Payments adjusted accordingly:
12.4.1 By the General Contractor's acceptance of a lump sum proposed by the
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 Contractor shall provide the General
Contractor with such purchase orders, invoices and other documents and records
as may enable the General Contractor to verify, to its reasonable satisfaction,
the cost to the Contractor of effecting such Change. All equipment, materials
and other items required as a result of such Change shall be purchased by the
Contractor at competitive market prices. The General Contractor shall, upon
verifying the cost to the Contractor of effecting such Change, add to the
Contract Price the amount thereof plus a fee of (i) ten percent (10%) if and to
the extent the Change is performed directly by the Contractor, or (ii) five
percent (5%) if and to the extent the Change is performed by a Subcontractor.
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 Contractor shall
proceed with the performance of such Change or Modification.
12.6 Suspension.
The General Contractor may, by written notice to the 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.
22
Upon receipt of a notice given pursuant to Section 12.6, the 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;
(c) promptly make every reasonable effort to obtain suspension upon terms
satisfactory to the General Contractor of all orders, subcontracts and
rental agreements to the extent they relate to performance of
suspended;
(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 General Contractor to resume suspended work, the
Contractor shall immediately resume performance under this Agreement to the
extent required in such notice.
12.9 Contract Changes Due to Suspension.
If the Contractor believes that any suspension or resumption of suspended Work
justifies a Change in the Contract Price, Substantial Completion Deadline, the
Contract Deadline or any other affected obligations of the Contractor hereunder,
the Contractor must, within 30 days after receipt of the notice of suspension or
resumption as the case may be, submit to the General Contractor a written
statement setting forth the justification for such a Change in reasonable
detail. If a Change is justified, the General Contractor shall issue a Change
Order under which the Contract Price, Substantial Completion Deadline, the
Contract Deadline and any other affected obligations of the 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 General Contractor of all or a material portion of the
Work exceeds sixty (60) days the Contractor may terminate this Agreement in the
manner set forth in Section 13.3 hereof.
ARTICLE 13 PAYMENTS TO CONTRACTOR
23
13.1 Monthly Progress Payments.
Progress payments shall be made by the General Contractor to the Contractor
according to the following procedure:
13.1.1 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
Contractor shall submit to the General Contractor 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 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 General
Contractor to the Contractor, shall reflect work on the Project actually
accomplished through the preceding calendar month. The 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 Contractor will not include in such Application for Payment
a xxxx for labor until such labor has been performed.
13.1.2 The General Contractor shall pay to the Contractor, twenty (20) days
after receipt of the Application for Payment, the amount determined pursuant to
Section 13.1.1 for Work performed during the month prior to the month in which
the Application for Payment is tendered, less Retainage (all such monthly
amounts paid by the General Contractor being herein referred to as "Progress
Payments"), subject to adjustment as provided in Section 13.1.3.
13.1.3 If the General Contractor disagrees with the 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 Contractor's and the General Contractor's estimates of actual progress) does
not exceed $50,000.00, the General Contractor shall pay the Contractor such
disputed amount pursuant to Section 13.1.2 as part of the pertinent Progress
Payment, twenty (20) days after receipt of the Application for Payment. Any
disputed amounts in excess of $50,000.00 may be withheld from the Contractor by
the General Contractor, provided, however, that amounts withheld by the General
Contractor pursuant to this Section 13.1.3 shall be paid to the Contractor when
the Contractor has demonstrated, in an Application for Payment completed to the
reasonable satisfaction of the General Contractor, that actual progress
requiring such payment has been achieved.
13.1.4 "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. All Retainage shall be retained by the General Contractor and
paid by the General Contractor to the Contractor in accordance with Section
13.4.
13.1.5 If the General Contractor fails to make its Progress Payments
hereunder on or before the date due, or if the General Contractor withholds
payment of any amount pursuant to Section 13.1.3, 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.
24
13.1.6 The General Contractor shall have no obligation to make any payment
to the Contractor while the Contractor is in material breach of this Agreement.
In addition, the General Contractor may withhold payment to the Contractor to
the extent reasonably necessary to protect the General Contractor from loss due
to: (i) detective Work not remedied; (ii) claims for payment or liens asserted
by the Contractor or any Subcontractor; (iii) the failure of the Contractor to
promptly pay any Subcontractor; (iv) damage to the person or property of any
separate contractor, agent, invitee or the General Contractor; or (v) reasonable
doubt on the General Contractor's part that the Project can be completed for the
balance of the Contract Price yet unpaid.
13.1.7 As promptly as possible after the Notice to Proceed, the Contractor
shall send the General Contractor and Project Lender a notice specifying all
Packing house 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 receipt of the notice and the General
Contractor's and Project Lender's approval of the amounts and items specified
therein, set aside or otherwise designate for application to such equipment
purchases sufficient funds to pay for the Packing house equipment described in
the notice, and shall send the General Contractor and the Contractor written
confirmation of the same.
13.2 Waiver and Release of Liens.
The Contractor shall furnish to General Contractor, and shall require each
and every Subcontractor engaged to supply services or materials in an amount
greater than $50,000 in connection with the Project to furnish to the Contractor
for delivery to General Contractor, at the time of submission of each
Application for Payment 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 substantially in the form of Appendix 1. 71c effectiveness of such
waivers shall be conditioned upon Contractor's receipt of payment from General
Contractor. If the Contractor fails to furnish a legally effective waiver or
fails to have any Lien released or discharged forthwith, in lieu thereof the
Contractor shall furnish a bond or other collateral satisfactory to the General
Contractor to indemnify the General Contractor against any loss resulting from
such Lien. In addition, until such release, discharge or bonding, the General
Contractor may withhold from any payment due the Contractor an amount sufficient
to discharge any or all such Liens or claims.
13.3 Payment Upon Completion.
Upon delivery of the Certificate of Final Completion, the General Contractor
shall pay the unpaid Retainage due to the Contractor (the "Final Payment").
13.4 Payment or Use Not Acceptance.
No payment made by the General Contractor shall Constitute an acceptance of any
of the Work not in accordance with this Agreement and the Scope of Work.
13.5 Waiver by General Contractor.
25
The making of the Final Payment shall constitute a waiver of all claims by the
General Contractor except:
(i) those arising from unsettled liens, security interests or other
encumbrances;
(ii) those arising from any warranties, guarantees and indemnities
provided hereunder; and
(iii) those arising from Final Punch-List and clean-up items.
13.6 Waiver by Contractor.
Acceptance of the Final Payment shall constitute a waiver of all claims by the
Contractor except for unpaid Retainage and unresolved claims for Changes
previously asserted in writing by the Contractor.
ARTICLE 14 INDEMNITY, INSURANCE AND WAIVER OF SUBROGATION
14.1 Indemnity.
14.1.1 Indemnity by Contractor. The Contractor hereby indemnifies and holds
harmless the General Contractor, and its 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 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 Contractor hereunder, (c) in respect of any
taxes levied on the Contractor or in respect of the 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 Contractor which
are payable by the Contractor for Work on the Project performed pursuant to this
Agreement.
14.1.2 Indemnity by General Contractor. The General Contractor hereby
indemnifies and holds harmless the Contractor and its 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 General Contractor in connection herewith, (b)
because of violation of Law to be complied with by General Contractor hereunder,
or (c) in respect of any taxes levied on the General Contractor or in respect of
the General Contractor'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 due diligence and in good faith, the defense of any
such suit against such party,
26
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 Contractor's Insurance. At its own expense, the 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 Contractor's performance of this Agreement. Such insurance shall be placed
with responsible and reputable insurance companies qualified to do business in,
the State of Texas 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.
Deductible amounts shall be the responsibility of the Contractor. The Contractor
shall also be responsible for fifty percent (50%) of the deductible amounts with
respect to the Builder's Risk Insurance described in Section 14.6 hereof. If the
General Contractor purchases Builder's Risk Insurance with deductibles in excess
of those specified in Section 14.6, the Contractor's responsibility for such
deductibles shall be limited to fifty percent (50%) of the deductible amounts
specified in Section 14.6.
Type Coverage/Amount
Workers' Compensation Insurance As required by the State
including occupational of 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
Comprehensive Automobile
Liability, including coverage
for all owned, hired
and non-owned vehicles $1,000,000 combined single
27
limit, per occurrence
Excess Liability $5,000,000 per occurrence
14.2.1 Evidence of Coverage. The Contractor shall provide certificates of
insurance to the General Contractor evidencing all insurance policies required
pursuant to this Section 14.2. The certificates evidencing Comprehensive General
Liability, Comprehensive Automobile Liability and Excess Liability shall each
certify that:
(1) During the Contractor's performance under this Agreement, the General
Contractor 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 Contractor's performance of this Agreement;
(2) such insurance is primary insurance with respect to the interests of
the General Contractor and the Project Lender, and any other insurance
maintained by them is excess and not contributory with this insurance; and
(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 General Contractor 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 General Contractor and the Project Lender.
14.3 Property Insurance Loss Adjustment.
Any insured loss shall be adjusted with the General Contractor and the
Contractor and made payable to the General Contractor and the Contractor as
their interests may appear, subject to any applicable mortgagee clause.
14.4 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
28
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.
14.5 Subcontractor Insurance.
The 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 Contractor hereunder, adequate coverage in accordance with the
Contractor's normal practice or the Contractor shall maintain such coverage
under its own insurance policies.
14.6 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 qualified to do business in the
State of Texas, builder's risk insurance as described below and worker'
compensation, general liability and automobile liability insurance in amounts
comparable to the coverages carried by the Contractor hereunder, and excess
liability insurance in the amount of $5,000,000. General Contractor shall
provide certificates of insurance to the Contractor evidencing all insurance
policies required under this Section 14.6.
Builder's Risk Contract Price
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 General
Contractor, and (b) shall name the Contractor and each of the banks comprising
the Project Lender as insured parties 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 14.1.2, such policies (a) shall name Contractor as an additional
insured, and (b) shall be primary and not excess to or contributing with any
insurance maintained by the Contractor.
14.7 No Effect on Liability.
The requirement that the Contractor, Subcontractors or General Contractor
furnish certain minimum insurance coverages is not to be interpreted as in any
way limiting the liability of the Contractor or General Contractor 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.
ARTICLE 15 TERMINATION
15.1 Termination By General Contractor for Cause. In the event:
29
(a) at any time prior to issuance of the Certificate of Final Completion,
the 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 Contractor fails to achieve a Major Milestone within thirty
(30) days after the corresponding milestone date indicated in Appendix H, or (H)
at any time prior to the issuance of the Certificate of Final Completion an
unexcused act or omission of the 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 (H), the Contractor fails to cure such default
within fifteen (15) days after receiving notice thereof from the General
Contractor (unless such default is of a nature that it cannot be cured within
such fifteen (15) day period, in which case the Contractor shall be in
compliance herewith if it presents a plan for such cure which is reasonably
acceptable to General Contractor, 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 General Contractor or such longer
period as General Contractor 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 General Contractor 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 Contractor shall be
liable to the General Contractor 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 General Contractor has provided a
notice setting forth the amount thereof. The General Contractor may take
possession of and utilize, in completing the Project, any materials, tools,
supplies, equipment and appliance, belonging to the Contractor or any of its
Subcontractors that are at the Project Site. In such event, the General
Contractor may exercise any rights, claims or demands that the 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 Contractor does hereby, to the extent possible,
assign, transfer and set over unto the General Contractor all such rights,
claims and demands and agrees to execute whatever documents the General
Contractor deems appropriate to effect such assignment, transfer or set-over.
Neither such exercise by General Contractor of rights, claims or demands against
third persons, nor such assignment, transfer or set over by Contractor, shall
relieve Contractor of its liability to pay General Contractor'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 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
30
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 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 Contractor
under any bankruptcy law as now or hereafter in effect, then, if the Contractor
is unable to diligently perform and does not continue so to perform its
obligations hereunder, this Agreement may be terminated by the General
Contractor who may then exercise any and all rights provided in Section 15.1.
15.3 Termination By General Contractor Without Cause.
The General Contractor may cancel this Agreement at any time for its convenience
upon thirty (30) days' prior written notice to the Contractor. In the event of
such cancellation, the General Contractor shall pay the Contractor for all the
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 Contractor's reasonable overhead and lost profits on the
Project, less any amounts previously paid by the General Contractor; provided,
however, that in no event shall the General Contractor'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 $ 200,000
2 months $ 300,000
3 months $ 400,000
After 3 months Actual costs, not to exceed unpaid balance of
Contract Price
The Contractor shall submit to the General Contractor all invoices and other
documentation as is sufficient to verify the amount to be paid under this
Section 15.3. The General Contractor shall pay such amount to the Contractor,
and shall release the letter of credit provided pursuant to Section 9.1 hereof,
within thirty (30) days of receipt of such documentation. The Contractor shall
mitigate to the fullest extent reasonably possible all expenses to be borne by
the General Contractor under this Section 15.3.
In the event of such cancellation, the General Contractor may further elect to
assume any or all of the obligations, commitments and unsettled claims that the
Contractor has previously undertaken or incurred in good faith in connection
with performance of the Contractor's obligations hereunder. The 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
General Contractor may require for the purpose of fully vesting in the General
Contractor the rights and benefits of the Contractor under such obligations,
commitments or claims.
15.4 Termination Due to Suspension.
31
If the General Contractor elects to suspend performance of all or a material
part of the Work and the duration of such suspension exceeds sixty (60) days,
the Contractor may terminate this Agreement, provided it gives the General
Contractor written notice of its intent to terminate not less than thirty (30)
days prior to the end of such sixty (60) day period and General Contractor fails
to order a resumption of suspended Work before the sixty (60) day period
expires. In such event, the Contractor shall be compensated for all Work
satisfactorily performed through the date of termination, plus its reasonable
costs associated with suspension of the Work and a fee equal to ten percent
(10%) of such suspension costs. In the event of such termination, the General
Contractor may elect to assume any or all of the obligations, commitments and
unsettled claims that the Contractor has previously undertaken or incurred in
good faith in connection with performance of the Contractor's obligations
hereunder. The 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 General Contractor may require for
the purpose of fully vesting in the General Contractor the rights and benefits
of the 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 either party as a result
of a Force Majeure Event exceeds sixty (60) days, or (H) the total number of
days in which a material suspension of performance by either 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 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 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 and a fee equal to ten
percent (10%) of such suspension costs. However, such termination shall not
relieve Contractor of its obligation to pay liquidated damages which become due
and payable prior to the termination hereof pursuant to Sections 8.2 or 8.3
hereof. In the event of termination by either party pursuant to this Section
15.5, the General Contractor may elect to assume any or all of the obligations,
commitments and unsettled claims that the Contractor has previously undertaken
or incurred in good faith in connection with performance of the Contractor's
obligations hereunder. The 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 General Contractor may require for
the purpose of fully vesting in the General Contractor the rights and benefits
of the Contractor under such obligations, commitments or claims.
ARTICLE 16 ASSIGNMENTS AND CHOICE OF LAW
16.1 No Assignment by Contractor.
32
The 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 Contractor's obligations
hereunder or any part thereof, except as specifically provided herein, without
the prior approval in writing of the General Contractor. If the Contractor, with
the consent of the General Contractor, shall enter into a subcontract with any
Subcontractor for the performance of any part of this Agreement, the Contractor
shall be as fully responsible to the General Contractor for the acts and
omissions of such Subcontractor and of persons employed by such subcontractor as
the 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
General Contractor's rights to assign its interest in this Agreement or the
Project under Section 16.2.
16.2 Assignment by General Contractor.
The General Contractor shall be entitled to freely assign this Agreement and its
rights, titles and interests hereunder, to:
(a) any affiliate of the General Contractor (including any joint venture or
general or limited partnership in which the General Contractor 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
Packing House; or
(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 General Contractor, the
assignee shall expressly assume in writing all of the obligations of General
Contractor hereunder. Upon the request of the General Contractor, the Contractor
shall acknowledge in writing any permitted assignment described in clause (b)
above and the right of any permitted assignee to enforce this Agreement against
the 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.
33
ARTICLE 17 DRAWINGS, DOCUMENTS AND MATERIALS
17.1 General Contractor'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 General Contractor 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 I.
17.1.1 Submittal of Documents. The Contractor shall prepare and submit to
the General Contractor in accordance with Appendix L, the Packing house 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 Packing house (collectively, the "Plans and Drawings'), and design
calculations for the Packing house. The preliminary and/or approved for
construction issue of the above documents will provide the General Contractor
with Project definition, and provide the 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
Contractor also shall submit to the General Contractor 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 Contractor pursuant to Section 17. 1.1 shall be
returned by the General Contractor to the Contractor as soon as possible in the
exercise of General Contractor's best efforts, but no later than fifteen (15)
working days after receipt, stamped either:
(a) "Returned Without Comment"; or
(b) "Returned with Comments".
Review by the General Contractor under this Section 17.1.2 of the submitted
Plans and Drawings shall be solely in the discretion of the General Contractor.
Failure of the General Contractor to return Plans and Drawings to the 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 General
Contractor's concerns or questions regarding the contents of such document. The
Contractor may elect to proceed with the Work set forth in such Plans and
Drawings prior to the return of the same by General Contractor, but shall do so
at the Contractor's sole risk and expense. The Contractor shall respond to the
General Contractor advising its disposition of the General Contractor's comments
within five (5) days after receipt thereof.
17.2 Contractor's Duty.
Review (or lack thereof) by the General Contractor, its designees or the Project
Engineer of any Project documents provided by the Contractor, and the fact that
the General Contractor, its
34
designees or the Project Engineer has not discovered any errors reflected in
such Project documents, shall not relieve or release the 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 Contractor shall
furnish the General Contractor with all final (including as-built) documents
pertaining to the design, construction and operation of the Packing house, which
documents are listed in Appendix L. If this Agreement is terminated prior to
Final Completion, the Contractor shall furnish the General Contractor 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 General Contractor. All drawings, tracings,
specifications and other documents prepared by or for the Contractor in respect
of the Project and all drawings, tracings, specifications, calculations,
memoranda, data, notes and other materials containing information supplied by
the General Contractor which shall come into the Contractor's possession during
its performance hereunder, shall be the sole and exclusive property of the
General Contractor, and such documents and other materials shall be returned to
the General Contractor upon the earliest of the General Contractor's placing the
Packing house in Commercial Operation pursuant to Article 7, Final Completion or
termination of this Agreement. Subject to Section 18. 1, the 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 Contractor in respect of the Project.
17.4.2 Reuse of Documents by General Contractor. All drawings, tracings,
specifications, and other documents prepared by or for the 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 General Contractor
or others on extensions of this Project or on any other project. Any reuse
without written verification or adaptation by the Contractor for the specific
purpose intended will be at General Contractor's sole risk and without liability
or legal exposure to the Contractor, and General Contractor shall indemnify and
hold harmless the 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 General Contractor upon payment therefor by
General Contractor, so that the General Contractor 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 General Contractor; provided,
however, that construction equipment, small tools and other equipment owned by
the 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.
35
ARTICLE 18 MISCELLANEOUS PROVISIONS
18.1 Confidential Information.
The General Contractor and the 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 General Contractor or the
Contractor, as the case may be, by the other party and designated in writing as
confidential. The Contractor further agrees to require its Subcontractors and
employees to enter into appropriate non-disclosure agreements relating to such
confidential information a may be communicated to them by the 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 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
General Contractor. The 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 General
Contractor.
18.2 Uses of Premises.
The 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 General Contractor, and shall not unreasonably
encumber the premises with its materials and construction equipment.
18.3 Independent Contractor.
The Contractor shall be an independent contractor with respect to the Project,
or any part thereof, and in respect of all work to be performed hereunder.
Neither the Contractor nor its Subcontractors, nor the employees of either,
employed on the Project shall be deemed to be agents, representatives, employees
or servants of the General Contractor by reason of their performance hereunder
or in any manner dealt with herein. The General Contractor and the Contractor
hereby covenant and agree that in the approval of key employees or major
equipment vendors of Contractor, approving or furnishing of plans and
specifications, should any be furnished by the General Contractor, or in the
making of inspections by the General Contractor, or in the taking of any other
action or the exercise of any right pursuant to this Agreement, the General
Contractor is acting for and on its own behalf and not as agent of the
Contractor. The General Contractor and the Contractor hereby further covenant
and agree that, in the performance of work hereunder by the Contractor, it shall
not do any act or make any
36
representation to any person or persons to the effect that the Contractor, or
any of its agents, representatives or Subcontractors, is the agent of the
General Contractor.
18.4 Contractor's Obligations.
The approval and consent by the General Contractor to the Contractor's entering
into any subcontract shall not relieve the Contractor of any of its duties,
liabilities or obligations hereunder, and the 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 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 General
Contractor, and, if accepted by the General Contractor, 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 or Bylaws 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 Contractor hereby represents to the General Contractor that, as
of the effective date of this Agreement (and such representations of the
Contractor shall, with any changes reported to the General Contractor pursuant
to Section 2.4.1(a) (iii), be deemed reaffirmed in each Application for
Payment):
(a) The Contractor is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Texas and duly qualified to do
business in and in good standing under the laws of the State of Texas.
(b) The unaudited consolidated balance sheets of the Contractor and its
affiliates as at December 31, 1996, and the related statements of income and
retained earnings of the Contractor for the fiscal year then ended, copies of
which have been furnished to the General Contractor,
37
fairly present the financial condition of the Contractor and its affiliates as
of such dates and the results of operations of the 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 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 General Contractor.
The General Contractor reserves the right to require the removal from the
Project Site of any employee of the Contractor or of any Subcontractor if in the
reasonable judgment of the General Contractor such removal shall be necessary in
order to protect the interests of the General Contractor.
18.8 Cumulative Remedies.
Except as expressly provided otherwise herein, every right or remedy herein
conferred upon or reserved to the General Contractor or 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.
18.9 Non-Waiver Clause.
It is understood and agreed that any delay, waiver or omission by the General
Contractor or the 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 General Contractor or the
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 General Contractor and the 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 both the General
Contractor and the Contractor.
38
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 General Contractor: If to the Contractor:
Agro Power Development, Inc. NC Xxxxxxxx, Inc.
10 Xxxxx Court 0000 Xxxxxxxxx
X. Xxxxxxxxx XX 00000 Xxxxxxx, XX 00000
Attn: President Attn: President
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.
18.14 English as Official Language.
All notices and other communications made and documents developed pursuant to
this Agreement shall be in the English language. If this Agreement or any such
communications or documents are translated into any other language, the English
version shall control - In the event design work for any part of the Project is
performed in non-English speaking countries, English-speaking interpreter(s)
acceptable to the General Contractor shall be made available by the Contractor
at the Contractor's cost during all telephone conversations and meetings
involving the General Contractor and such non-English speaking persons providing
such work.
18.15 Original and Counterparts.
This Agreement may be executed in two 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
39
executed* this Marfa Texas Project Commercial Packing House Design and
Construction Contract, all as of the date and year first above written.
For Agro Power Development, Inc. For NC Xxxxxxxx, Inc.
("General Contractor") ("Contractor")
------------------------------ ----------------------
Xxxxxx Van Zeyst, President
----------
*The duties and obligations of the General Contractor and Contractor contained
herein are expressly conditioned on the Owner successfully closing the Loan
Transaction with the Project Lender discussed in Section 1.5, and review without
objections by Cogentrix Energy, Inc..
40
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 6.6 and 6.7 hereof.
"Agreement" shall mean this Village Farms of Presidio, L.P. Greenhouse Project
Commercial Design and Construction Contract dated as of July 10 , 1998 between
APD Inc., and NC Xxxxxxxx, Inc.
"Application for Payment" shall refer to the document mentioned in Section
13.1.1 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 NatWest, N.A. in New Jersey from time to time as its base rate.
"Certificate of Acceptance" shall have the meaning set forth in Section 6.6 of
this Agreement.
"Certificate of Final Completion" shall have the meaning set forth in Section
6.10 of this Agreement.
"Certificate of Substantial Completion" shall have the meaning set forth in
Section 6.5 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 General
Contractor notifies the Contractor that the Greenhouse Operator has commenced
the occupation and use of the Packing House for commercial purposes.
"Contract Deadline" shall have the meaning set forth in Section 6.7 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.
"Facility" shall have the meaning set forth in the Recitals to this Agreement.
"Final Completion" shall have the meaning set forth in Section 6.8 of this
Agreement.
41
"Final Payment" shall have the meaning set forth in Section 131.3 of this
Agreement.
"Force Majeure Event" shall have the meaning set forth in Section 11.1 of this
Agreement.
"Contractor" shall mean NC Xxxxxxxx, Inc.
"General Contractor "shall mean Agro Power Development
"Good Commercial Industry Practices" means the practices, methods and acts
(including but not limited to the practices, methods and acts engaged in or
approved by a significant portion of the commercial industry for similarly
situated sites in the United States with characteristics similar to those of the
Packing House Construction) that at a particular time, in the exercise of
reasonable judgment, would have been expected to accomplish the desired result
in a manner consistent with Laws, reliability, safety, environmental protection,
economy and expediency.
"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 Project, as set forth in Appendix C.
"Greenhouse" shall mean the commercial greenhouse of approximately 41 enclosed
acres of growing area to be designed and constructed by Others .
"Packing House" 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.
"Indemnified Party" shall have the meaning set forth in Sections 14. 1.1 and
14.1.2 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 Project.
"Liens" shall have the meaning set forth in Section 10.4 of this Agreement.
"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.
"Manual" shall have the meaning set forth in Appendix L of this Agreement.
"Modifications" shall have the meaning set forth in Section 12.3 of this
Agreement.
42
"Notice of Final Completion" shall have the meaning set forth in Section 6.9 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 Village Farms of Presidio, L.P and its successors and
permitted assigns.
"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" to shall have the meaning set forth in Section 13.1.2 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.
"Retainage" shall have the meaning set forth in Section 13.2.4 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,
material men, consultants and subcontractors providing materials and services in
connection with the Project.
"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.
43
