Commercial Design And Construction Contract

EXHIBIT 10.101


MARFA, TEXAS PROJECT


COMMERCIAL DESIGN


AND


CONSTRUCTION CONTRACT


among


VILLAGE FARMS OF PRESIDIO, , L.P.,
as Owner,


AGRO POWER DEVELOPMENT, INC.,
as General Contractor


AUGUST 31, 1998


TABLE OF CONTENTS


Page
---- ARTICLE 1. THE PROJECT; EXTENT OF AGREEMENT................................................................5


1.1. SERVICES TO BE PERFORMED.................................................................................5
1.2. EXTENT OF AGREEMENT......................................................................................6
1.3. CONFLICTING PROVISIONS...................................................................................6
1.4. ENTIRE AGREEMENT.........................................................................................6
1.5. PROJECT FINANCING AGREEMENTS.............................................................................6
1.6. EFFECTIVENESS............................................................................................6


ARTICLE 2. GENERAL CONTRACTOR'S RESPONSIBILITIES...........................................................7


2.1. GENERAL CONTRACTOR'S SERVICES IN GENERAL.................................................................7
2.2. SUMMARY OF GENERAL CONTRACTOR'S RESPONSIBILITIES.........................................................8
2.3. PARTICULAR UNDERTAKINGS OF THE GENERAL CONTRACTOR........................................................9
2.4. SUBMISSION OF REPORTS...................................................................................12
2.5. OBTAINING GOVERNMENTAL APPROVALS AND PRIVATE RIGHTS-OF-WAY..............................................13
2.6. CLEAN-UP RESPONSIBILITY.................................................................................13
2.7. PATENTS, COPYRIGHTS AND ROYALTIES.......................................................................13
2.8. FURTHER ASSURANCES......................................................................................14
2.9. INTERFACES..............................................................................................14
2.10. UTILITIES AND CONSUMABLES DURING PROJECT START-UP.......................................................14


ARTICLE 3. OWNER'S RESPONSIBILITIES.......................................................................15


3.1. DOCUMENTS AND SURVEYS...................................................................................15
3.2. RIGHTS-OF-WAY...........................................................................................15
3.3. REQUIRED APPROVALS......................................................................................15
3.4. OPERATIONS AND MAINTENANCE PERSONNEL....................................................................15
3.5. NOTICE OF DEFECT........................................................................................15
3.6. NO ALCOHOL OR CONTROLLED SUBSTANCES ON SITE; MISCELLANEOUS REGULATIONS..................................15
3.7. INTERFACES..............................................................................................15


ARTICLE 4. SUBCONTRACTS...................................................................................16


4.1. MAJOR SPECIALTY CONSULTANTS, SUBCONTRACTORS AND EQUIPMENT SUPPLIERS.....................................16
4.2. PURCHASE ORDERS AND SUBCONTRACTS........................................................................16
4.3. PAYMENTS TO SUBCONTRACTORS..............................................................................16
4.4. NO PRIVITY WITH SUBCONTRACTORS..........................................................................16


ARTICLE 5. CONTRACT PRICE.................................................................................17


5.1. CONTRACT PRICE..........................................................................................17
5.2. LIMITATION OF OWNER'S LIABILITY.........................................................................17


ARTICLE 6. COMMENCEMENT OF THE PROJECT, PROJECT START-UP AND COMPLETION...................................17


6.1. COMMENCEMENT OF WORK....................................................................................17
6.2. PROJECT START-UP........................................................................................17
6.3. SUBSTANTIAL COMPLETION..................................................................................17
6.4. NOTICE OF SUBSTANTIAL COMPLETION........................................................................18
6.5. CERTIFICATE OF SUBSTANTIAL COMPLETION...................................................................18
6.6. ACCEPTANCE OF PROJECT UPON FAILURE TO ACHIEVE SUBSTANTIAL COMPLETION PRIOR TO THE
SUBSTANTIAL COMPLETION DEADLINE.........................................................................18
6.7. ACCEPTANCE OF PROJECT UPON FAILURE TO ACHIEVE SUBSTANTIAL COMPLETION....................................18
6.8. FINAL COMPLETION........................................................................................19
6.9. NOTICE OF FINAL COMPLETION..............................................................................19


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6.10. CERTIFICATE OF FINAL COMPLETION.........................................................................19


ARTICLE 7. OWNER'S RIGHT TO PLACE THE FACILITY IN COMMERCIAL OPERATION; CARE, CUSTODY AND CONTROL.........19


7.1. OWNER'S RIGHT...........................................................................................19
7.2. PROJECT REVENUES........................................................................................20
7.3. CARE, CUSTODY AND CONTROL...............................................................................20


ARTICLE 8. SCHEDULE GUARANTEES............................................................................20


ARTICLE 9. LIMITATION OF LIABILITY........................................................................20


9.1. LIMITATION OF LIABILITY.................................................................................20


ARTICLE 10. WARRANTIES AND GUARANTEES......................................................................21


10.1. MATERIALS AND WORKMANSHIP............................................................................21
10.2. SUBCONTRACTOR WARRANTIES.............................................................................21
10.3. ENGINEERING AND DESIGN...............................................................................22
10.4. NO LIENS.............................................................................................22
10.5. LIMITATION OF WARRANTIES.............................................................................22


ARTICLE 11. FORCE MAJEURE..................................................................................22


11.1. FORCE MAJEURE EVENTS.................................................................................22
11.2. LIMITATION OF DEFAULT................................................................................23
11.3. EXCUSED PERFORMANCE..................................................................................23
11.4. RIGHT TO TERMINATE FOR FORCE MAJEURE.................................................................23


ARTICLE 12. CHANGES IN THE PROJECT AND SUSPENSION..........................................................24


12.1. CHANGES..............................................................................................24
12.2. OTHER CHANGES........................................................................................25
12.3. MODIFICATIONS........................................................................................25
12.4. CONTRACT PRICE CHANGE................................................................................26
12.5. CONTINUED PERFORMANCE PENDING RESOLUTION OF DISPUTES.................................................26
12.6. SUSPENSION...........................................................................................26
12.7. SUSPENSION PROCESS...................................................................................26
12.8. RESUMPTION OF WORK...................................................................................27
12.9. CONTRACT CHANGES DUE TO SUSPENSION...................................................................27
12.10. TERMINATION DUE TO SUSPENSION........................................................................27


ARTICLE 13. PAYMENTS TO GENERAL CONTRACTOR.................................................................27


13.1. INITIAL PAYMENT......................................................................................27
13.2. MONTHLY PROGRESS PAYMENTS............................................................................27
13.3. WAIVER AND RELEASE OF LIENS..........................................................................29
13.4. PAYMENT UPON COMPLETION..............................................................................29
13.5. PAYMENT OR USE NOT ACCEPTANCE........................................................................29
13.6. WAIVER BY OWNER......................................................................................29
13.7. WAIVER BY GENERAL CONTRACTOR.........................................................................30
13.8. GENERAL CONTRACTOR'S PERFORMANCE WITH RESPECT TO APPLICATIONS FOR PAYMENT............................30


ARTICLE 14. INDEMNITY, INSURANCE AND WAIVER OF SUBROGATION.................................................30


14.1. INDEMNITY............................................................................................30
14.2. GENERAL CONTRACTOR'S INSURANCE.......................................................................31
14.3. SUBCONTRACTOR INSURANCE..............................................................................32
14.4. GENERAL CONTRACTOR'S INSURANCE.......................................................................33
14.5. PROPERTY INSURANCE LOSS ADJUSTMENT...................................................................33
14.6. NO EFFECT ON LIABILITY...............................................................................33


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14.7. OWNER'S ELECTION REGARDING ALL RISK INSURANCE........................................................33
14.8. WAIVER OF SUBROGATION................................................................................34


ARTICLE 15. TERMINATION....................................................................................34


15.1. TERMINATION BY OWNER FOR CAUSE.......................................................................34
15.2. TERMINATION UPON BANKRUPTCY..........................................................................35
15.3. TERMINATION BY OWNER WITHOUT CAUSE...................................................................35
15.4. TERMINATION DUE TO SUSPENSION........................................................................36
15.5. TERMINATION DUE TO EVENT OF FORCE MAJEURE............................................................36


ARTICLE 16. ASSIGNMENTS AND CHOICE OF LAW..................................................................37


16.1. NO ASSIGNMENT BY GENERAL CONTRACTOR..................................................................37
16.2. ASSIGNMENT BY OWNER..................................................................................37
16.3. EXTENSION TO SUCCESSORS AND ASSIGNS..................................................................38
16.4. CHOICE OF LAW........................................................................................38


ARTICLE 17. DRAWINGS, DOCUMENTS AND MATERIALS..............................................................38


17.1. OWNER'S REVIEW......................................................................................38
17.2. GENERAL CONTRACTOR'S DUTY............................................................................39
17.3. FINAL DOCUMENTS AND ALL OTHER DOCUMENTS FURNISHED....................................................39
17.4. OWNERSHIP OF DRAWINGS AND DOCUMENTS..................................................................39
17.5. OWNERSHIP OF MATERIALS...............................................................................40


ARTICLE 18. MISCELLANEOUS PROVISIONS.......................................................................40


18.1. CONFIDENTIAL INFORMATION.............................................................................40
18.2. USES OF PREMISES.....................................................................................40
18.3. INDEPENDENT CONTRACTOR...............................................................................41
18.4. GENERAL CONTRACTOR'S OBLIGATIONS.....................................................................41
18.5. NEW DEVELOPMENTS.....................................................................................41
18.6. REPRESENTATIONS......................................................................................41
18.7. RIGHTS RESERVED BY THE OWNER.........................................................................42
18.8. CUMULATIVE REMEDIES..................................................................................42
18.9. NON-WAIVER CLAUSE....................................................................................43
18.10. SEVERABILITY.........................................................................................43
18.11. AMENDMENTS...........................................................................................43
18.12. ARTICLE AND SECTION HEADINGS.........................................................................43
18.13. NOTICES..............................................................................................43
18.14. ORIGINAL AND COUNTERPARTS............................................................................44


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APPENDICES AND SCHEDULES


APPENDIX A..............................................................45 APPENDIX B..............................................................45 APPENDIX C..............................................................45 APPENDIX D..............................................................45 APPENDIX E..............................................................45 APPENDIX F..............................................................45 APPENDIX G..............................................................45 APPENDIX H..............................................................45 APPENDIX I..............................................................45 APPENDIX J..............................................................45


SCHEDULE


1 Scope of Work
2 Technical Details


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MARFA, TEXAS PROJECT


COMMERCIAL DESIGN


AND CONSTRUCTION CONTRACT


This MARFA, TEXAS PROJECT COMMERCIAL DESIGN AND CONSTRUCTION CONTRACT dated as of August 17, 1998 (this "Agreement") is made by and among VILLAGE FARMS OF PRESIDIO, L.P., a Delaware limited partnership with offices at 9912 MonroeRoad, Matthews, North Carolina 28105 (the "Owner"), and AGRO POWER DEVELOPMENT INC., a New York corporation with offices at 10 Alvin Court, East Brunswick, New Jersey 08816 (the "General Contractor").


RECITALS


A. The Owner desires to have designed and constructed a venlo style approximately 26 acre greenhouse facility located in the vicinity of Marfa, Texas which will be heated by natural gas with Liquid Propane Gas ("LPG") as a backup fuel source and as more fully described in the Scope of Work (the "Facility").


B. The General Contractor has agreed with the Owner to design, engineer, procure, construct, start-up and demonstrate performance of the Facility.


C. The terms, conditions, specifications, prices and agreements between the Owner and the General Contractor with respect to the services to be performed under this Agreement are as more fully set forth herein.


NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained, and for other good and valuable consideration, the parties hereto hereby agree as follows:


ARTICLE 1. THE PROJECT; EXTENT OF AGREEMENT


1.1. Services To Be Performed.


The General Contractor agrees to perform or cause to be performed all work and services in connection with the design and engineering, procurement, construction, start-up, demonstration of performance and personnel training with respect to the Facility, all in strict accordance with, and for the Contract Price stated in, this Agreement. The Facility, together with all equipment, labor, services and materials to be furnished hereunder, is defined as the "Project." The Project will be constructed on a 156-acre parcel of property located in the County of Presidio, as is more fully described in Appendix B (the "Project Site").


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1.2. Extent Of Agreement.


This Agreement consists of the following documents, and all schedules, appendices and attachments thereto (collectively, the "Contract Documents"):


(a) Marfa, Texas, New York Project Commercial Design and Construction
Contract, including Appendices A through M (as the same may be amended
by Changes and Modifications); and


(b) Scope of Work attached hereto as Schedule 1 and the Technical Details
attached hereto as Schedule 2 (as the same may be amended by Changes
and Modifications, the "Scope of Work").


(c) Appendices A through M and Schedule 1 and Schedule 2 are incorporated
by reference herein and deemed to be a part of this Agreement. For
convenience of references a list of defined terms used in this
Agreement is attached as Appendix A.


1.3. Conflicting Provisions.


The Contract Documents are listed in Section 1.2 in their governing order. If any conflict or inconsistency exists between or among Contract Documents, such conflict or inconsistency shall be resolved in favor of the highest ranking document. Any Changes and Modifications permitted under Article 12 shall rank higher than the provisions they change and shall have the same priority of classification as the original document or documents changed.


1.4. Entire Agreement.


This Agreement contains the entire agreement between the parties hereto, and supersedes any and all prior agreements, proposals, negotiations or representations pertaining to the Project.


1.5. Project Financing Agreements.


The Project Lender and Loan Documents shall be as follows:


(a) The Project Lender shall be Village Farms International Finance
Association , and it's respective successors and assigns.


(b) The Loan Documents shall include the Loan Agreement between the
Project Lender and the Owner (collectively, the "Loan Parties"), the
other Loan Documents (as such term is defined in the Loan Agreement),
and such other agreements and documents as the Loan Parties require in
connection with the debt financing facility for the Project.


1.6. Effectiveness.


This Agreement shall not become effective until the financing transaction contemplated by the Loan Documents shall have closed and the initial funding by the Project Lender thereunder shall have occurred.


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ARTICLE 2. GENERAL CONTRACTOR'S RESPONSIBILITIES


2.1. General Contractor's Services In General.


Subsequent to recording of the Leasehold Deed of Trust (as defined in the Loan Agreement) and within ten (10) days after the beginning of the Work (as defined in the Loan Agreement), the General Contractor and the Owner shall be required to execute and record the Notice of Commencement of Construction in accordance with the statutory requirements of Texas law and Section 9.2.10 of the Loan Agreement. The General Contractor shall perform or cause to be performed, and be ultimately responsible for, all design and engineering, procurement and construction services, all razing, demolition and debris removal and disposal services, all site security services (from the commencement of work at the Project Site through Final Completion), all materials and equipment, all machinery, tools, labor, transportation, start-up services, functional and design verification tests, personnel training as set forth herein and, except for the services and information specifically set forth in Article 3 to be provided by the Owner, all other services and items required to complete the Project in strict accordance with this Agreement (the "Work"). All design and engineering and construction services of the General Contractor shall be performed in accordance with the Scope of Work. The Owner shall have the right, in accordance herewith, to review and approve any design and engineering, procurement and construction services necessary as a result of Changes and Modifications to complete the Project in accordance with this Agreement. The Owner shall have the right, but not the obligation, to review the General Contractor's performance to determine whether such performance complies with this Agreement. The Owner's failure to review the General Contractor's performance shall not diminish any rights the Owner may have in respect of any deficiencies in the General Contractor's performance hereunder. Any design and engineering or other professional service to be performed pursuant to this Agreement which must be performed by licensed personnel shall be performed by licensed personnel as required by Law. The enumeration of specific duties and obligations to be performed by the General Contractor under the Contract Documents shall not be construed to limit in any way the general undertakings of the General Contractor as set forth herein.


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2.2. Summary Of General Contractor's Responsibilities.


2.2.1. Familiarity With Conditions. The Contractor has made a careful examination of (i) the Project Site, as is more fully described in Appendix B, (ii) the Scope of Work and Specifications, (iii) the location and nature of the proposed construction, (iv) the kind and character of the soil, soil loading conditions, subsurface conditions and terrain to be encountered, (v) transportation facilities, (vi) the conditions of the roads, (vii) the kind of facilities required before and during construction of the Greenhouse, (viii) labor conditions, (ix) the local weather conditions based upon previous weather data, and (x) all other matters which a prudent contractor should have discovered upon reasonable investigation. The Contractor based upon such examination hereby accepts the risk of mistake or error relating to the matters referred to in clauses (i) through (x) above, and acknowledges and agrees that no Contract Price increase, performance or scheduling alleviation will be granted by the General Contractor under this Agreement as a result of any such mistake or error.


2.2.2. Design And Engineering. The Contractor shall provide or cause to be provided in a diligent and competent manner all design and engineering services which shall be necessary or advisable (including geotechnical investigations) for the expeditious, economical and sound design and completion of the Project in accordance with the terms of this Agreement, with due consideration given to all Governmental Approvals (including the relevant provisions in the Specified Permit Applications), Private Rights-of-Way and Laws. The Contractor's design and engineering services include, but are not limited to, the preparation of complete detailed drawings and other documents, including surveys, schedules and estimates required. for Final Completion of the Project, and coordination with Subcontractors. All engineering work shall be performed by or under the supervision of professional engineers licensed to perform such engineering services in the State of New York as required by Law.


2.2.3. Procurement. The General Contractor shall procure in the General Contractor's name, and not as agent for the Owner, and make payment and be responsible for, all services of Subcontractors and materials, equipment and supplies manufactured on-site and off-site, and related services for the Project. This provision shall not preclude the assignment of Subcontractor warranties to the Owner.


2.2.4. Construction. The General Contractor shall construct the Facility and provide all labor, equipment, materials, supplies and tools for such construction. The General Contractor shall handle and warehouse (according to manufacturers' recommendations) equipment, materials and supplies for the Project. The General Contractor shall cause the Work on the Facility to receive constant supervision by a competent site manager (the "Site Manager") or a competent assistant to the Site Manager, one of whom shall be on the Project Site at all times during performance of construction activities and whom the Owner shall approve or disapprove, which approval shall not be unreasonably withheld. The General Contractor has provided the Owner with the names and resumes of, and the Owner has approved, the key personnel working on the Project identified in Appendix F, and the Owner shall have the right to approve any replacements thereof. The Site Manager and the key personnel referred to in the preceding sentence shall be assigned to the Project until Completion thereof and, provided they are performing in a manner acceptable to the General Contractor and the Owner, shall not be removed or reassigned prior to Completion, without the


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approval ...