Design And Construction Contract

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 STURGEON, 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


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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


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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


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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


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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


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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 10 Alvin Court, E. Brunswick New Jersey 08816 (the "General Contractor"), and NC Sturgeon Inc., a Texas corporation with offices at 2800 Windecker, Midland, Texas 79711 (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


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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


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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 ...