Sales Contract
THIS SALES CONTRACT (the "Contract") is made and entered into as of the
27th day of October, 1999, by and between World Business Investors Group (the
"Buyer"), an entity of legal status organized and existing to engage in commerce
under the laws of the country of Peru, and Daedalus Building Systems,
Incorporated (the "Seller"), a corporation organized and existing under the laws
of Delaware, United States of America. This Contract shall be designated
Contract Number 46-045-99.
WHEREAS, the Seller offered to sell and the Buyer has agreed to buy certain
structural units, components, finishings, and other items related to Daedalus
Building Systems(TM).
NOW THEREFORE, in consideration of the mutual covenants contained herein
and subject to the terms and conditions described herein, the Parties to this
Contract agree as follows:
1. Definitions. For the purpose of this Contract, the following terms shall have
the following meanings, unless otherwise defined; all other terms shall have the
usual and customary meaning ascribed to them.
a. "Dollars" or "$" shall mean the currency of the United States of
America.
b. "Incoterms 1990" means the definition for the referenced term as
adopted by the International Chamber of Commerce in Paris in 1990 or
subsequent adoptions.
c. "Components" shall mean such items as panels of the Daedalus Building
Systems(TM) and related fasteners that are required for assembly of a
structural unit, which does not include tools required to complete
assembly.
d. "Finishings" shall mean those materials used to finish the interior
surfaces of the structures and other items, such as sinks, showers, and
toilets.
2. Unit Pricing. Unit pricing, as specified in Annex "B," attached hereto and
made a part hereof, shall be fixed for the term of the Contract. Pricing is
valid for all units ordered and shipped within the effective period of the
Contract. Prices may be adjusted if delivery extends beyond the period specified
in Paragraph 6.
3. Purchase. The minimum amount of purchase provided under the Contract Value
will be 22,000,000 square feet (2,043,800 square meters) of panels of the
Daedalus Building Systems (Metal), pursuant to Annex A.
4. Contract Value. The Contract Value shall be in dollars and is based upon the
sales price as specified in Annex "A" which shall form an integral part of this
contract. The minimum contract value is one hundred twenty million and 00/100
Dollars ($120,000,000.00) and represents the purchase of a minimum of 22,000,000
square feet (2,043,800 square meters) of panels of the Daedalus Building Systems
(Metal), pursuant to Annex A, over three years, commencing at the date of this
contract.
a. Freight. Freight will be arranged by the seller and added to
the account of, and paid by, the buyer. Freight is not
considered as a part of the contract value.
b. Insurance. Estimated insurance will be paid by the Seller and
added to the account of, and paid by, the buyer. Insurance is
not considered as a part of the contract value.
c. Additional Costs. All additional costs for freight, insurance,
forwarding fees, and any other expenses that are pre-advised,
incurred by the seller and added to the account of the buyer,
or billed by the seller, are due and payable by the buyer
within 30 days of payment or billing by the seller. Additional
Costs are not considered as a part of the contract value.
5. Individual Purchase Orders. Execution of the Contract shall be through
issuance and use of Individual Purchase Orders, each Individual
Purchase Order issued for a minimum of ________ of panels, pursuant to
Annex A.
6. Effective Date. This Contract will enter into full force and effect on
the date written above.
7. Duration. The duration of this Contract will be from the effective date
and extend 36 months from the issuance of the first Individual Purchase
Order under the Contract.
8. Termination Date. The Contract shall terminate and be of no further
force and effect on the earlier of: (i) the Contract Value being paid
in full; or (ii) pursuant to the provision of Paragraph 12 below; or
(iii) in accordance with the provided Duration.
9. Payment Terms. Payment of the Contract Value hereunder shall be made as
set forth below:
a. Medium Term Financing. The Seller will assist the Buyer in
obtaining Medium Term Financing. However, it is understood and
agreed by the Parties that no assurances of success in
obtaining such Financing are made or offered by the Seller.
Payment of 85% of the value of the Individual Purchase Orders,
under Medium Term Financing, shall be financed under the
Guarantee Program of the Export-Import of the United States
("Ex-Im Bank") through a lending bank acceptable to the
Parties ("Lending Bank"). The term of the Medium Term
Financing shall be five years.
The Buyer shall be responsible for obtaining the remaining 15%
non-Ex-Im Bank financing portion of the Individual Purchase
Orders. The 15% non-Ex-Im Bank financing portion shall be the
down payment portions of the Individual Purchase Orders not
covered by the Ex-Im Bank Medium Term Financing. The down
payments shall be paid coincident with issuance of the
Individual Purchase Orders.
b. Payment. Payment of 85% of the Contract Value under Medium
Term Financing is as follows. This 85% payment shall be
divided into: (i) a 70% letter of credit; and (ii) a 15%
advance payment:
i. Seventy percent (70%) of the value of the Individual
Purchase Orders is to be paid under a confirmed Irrevocable
Letter of Credit subject to the Uniform Customs and Practice
for Documentary Credits, Publication 500, as published and
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updated from time to time by the International Chamber of
Commerce. The Letter of Credit shall be confirmed by a
financial institution acceptable to the Seller. The amount of
the Letter of Credit shall be equal to seventy percent (70%)
of the value of the Individual Purchase Orders and shall be
available for three hundred sixty (360) days. Any Letter of
Credit and amounts due thereunder are payable in U.S dollars.
The Beneficiary under all Letters of Credit shall be Daedalus
Building Systems, Incorporated, 8653 Richmond Highway,
Alexandria, Virginia 22309-4206, USA.
A. The Letter of Credit shall be advised to the Beneficiary and
confirmed by a commercial bank acceptable to the Seller.
B. The Letter of Credit shall be negotiated by the Beneficiary
through the confirming bank.
C. All fees with respect to the services rendered by the paying
and confirming bank in advising, confirming and negotiating
the Letter of Credit and the documents thereunder shall be for
the account of the Seller.
D. Partial drawing is to be permitted.
E. Documents to be presented for payment:
I. Commercial Invoice
II. Certificate of Origin
III. On Board Bill of Lading
IV. Sight Draft Drawn on the Buyer
ii. All amounts paid under the Letter of Credit in respect of
Section 9. a.(i) above will be financed by the Lending Bank as
follows:
A. All amounts paid under the Letter of Credit shall be evidenced
by a promissory note payable to the Lending Bank, in form and
substance acceptable to the Lending Bank, issued by the Buyer.
Such promissory note shall provide for principal repayment
over a period of five years.
B. Equal payments of principal, with concurrent payments of
interest thereon, at an interest rate of ______ percent (%)
per annum (to be established by the Lending Bank), shall be
payable no less frequently than semiannually commencing no
later than one hundred eighty (180) days from the date of the
On Board Bill of Lading, evidencing the shipment of goods
covered by the Contract Value.
iii. The promissory note, as described in Paragraph
8(b)(ii)(A) shall be delivered by the Buyer to the Seller at
the time of the Buyer's presentation of an Individual Purchase
Order as provided in Paragraph 11.b hereof. Such promissory
note is to be executed but is not to be dated with respect to
either the execution date or the first repayment date. Upon
the issuance of an On Board Bill of Lading, the Seller and/or
Lending Bank will complete the promissory note by inserting
the date of the On Board Bill of Lading as the execution date
and one hundred eighty (180) days from the On Board Bill of
Lading date as the date of first repayment. The buyer will
sign any and all documents required to effect the foregoing
and will designate the seller and/or the lending bank the
necessary authority to complete and deliver the note.
iv. Advance Payment. Payment of fifteen percent (15%) of the
value of the Individual Purchase Orders will be made by the
Buyer to the Seller, in cash and in a form satisfactory to the
Seller, evidencing an advance payment on the Contract. The
advance payment shall be due and payable at the time of
closing of the Medium Term Financing.
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10. Terms of Sale. The sale of the Units shall be on Incoterms 1990, FOB
Ontario, Canada.
a. The Buyer will arrange for and prepay, as may be required,
transportation, insurance, and freight forwarding charges,
which will be added to the account of, and paid by, the buyer,
as provided in Paragraph 4. The Buyer shall be responsible for
obtaining insurance in such amounts and types as required by
the Lending Bank.
b. The Seller will assist the Buyer in providing all available
documentation necessary to clear the goods from customs as
soon as possible.
11. Procedures. In addition to the operational and logistical procedures
described in other sections of this Contract, the Parties also agree as
follows:
a. The Buyer agrees to obtain any and all necessary import
permits and to provide a copy of such permits to the Seller
immediately upon receipt of such Permits by the Buyer.
b. The Buyer agrees to submit an Individual Purchase Order to the
Seller to initiate each order under the Contract. The
Individual Purchase Order is required to be in the form of
Annex C, attached hereto.
c. The Buyer agrees to timely consummate and enter into force all
Medium Term Financing for the first Individual Purchase Order,
as provided for in Paragraph 9.a, above, no later than one
hundred twenty (120) days from the Effective Date. Failure by
the Buyer to fully consummate the Medium Term Financing and
pay the advance payment as provided for herein, including the
execution and entry into force of all applicable
documentation, shall cause this Contract to terminate
immediately and become null and void without notice to either
the Buyer or Seller as of the expiry date of such time period.
Such termination will be deemed to be a breach of contract and
will not afford either the Buyer or the Seller any claim for
any damages whatsoever.
d. The Buyer agrees to submit an Individual Purchase Order for a
minimum of _______ unfinished, basic structural units,
pursuant to Annex A, or structural equivalents, and agrees to
accept partial shipments.
e. The first container shipped in accordance with the initial
Individual Purchase Order of the Contract will contain
articles designated for "inspection and acceptance" in
accordance with specifications agreed upon by the Parties.
Further shipments under the initial Individual Purchase Order
will commence upon completion of inspection and acceptance of
assembled structures, which both parties agree to assemble as
soon and as rapidly as possible.
f. Subject to the terms hereof and the availability of an ocean
vessel, the Seller agrees to ship a completed order within
three hundred sixty (360) days of receipt and acceptance by
the Seller of a Individual Purchase Order.
12. Cancellation and Termination. Other than by breach by the Parties
hereto, except as provided in Section 11.c. hereof, either party may
cancel this Contract after three hundred sixty (360) days from the
Effective Date. Such intent to cancel must be conveyed to the other
Party in writing, as provided herein, sixty (60) days prior to the date
of cancellation.
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13. Penalties. Material breach of this Contract by either Party shall give
rise to a claim by the damaged Party. Such claim shall be limited to
the actual cost of damages and expenses associated with the claim, but
in no event shall such claim exceed ten percent (10%) of the value of
any Individual Purchase Order hereunder. The Seller's obligation to
repair or replace existing housing units or components thereof shall be
the Buyer's sole and exclusive remedy under the Contract.
14. Force Majeure. In the event of a Force Majeure, which affects the
performance of either Party hereunder, the Contract shall be
temporarily suspended and automatically extended for the period of
suspension. Force Majeure shall only include war, natural catastrophes,
and other occurrences, including new legislation, which forecloses or
prevents the possibility of further performance under the Contract.
Force Majeure shall not include labor disputes, civil commotion or poll
congestion.
15. Disputes. All disputes arising in connection with this contract shall
be finally settled under the Rules of Conciliation and Arbitration of
the International Chamber of Commerce by one or more arbitrators
appointed in accordance with the Rules. The Parties hereto agree that
all rulings under the Rules shall be binding and enforceable with no
further appeal whatsoever and any right of judicial action on any
matter subject to arbitration hereunder is hereby waived. However, any
judicial court may enforce the resolution of the arbitrator(s) and any
Party shall have the right to sue in court to enforce an arbitration
award. Notwithstanding any possible issue submitted for Arbitration, in
all cases the location of arbitration shall be in Northern Virginia.
This paragraph shall survive any termination of this Contract.
16. Notices. All notices to each Party under this Contract shall be in
writing, in the English language, and delivered to the address
designated in the signature block of this Contract. Notices shall be
deemed given when sent by registered mail or by telefax communications,
which are electronically acknowledged as received.
17. Warranty. All units sold under this Contract are warranted to be free
from defects in material and workmanship and shall conform to
applicable U.S. Standards. The warranty of the Seller does not apply to
defects not caused by the Seller, including but not limited to acts of
God, abuse, improper assembly or installation. All notices for claims
of defects, under this warranty, must be made to the Seller in writing
within thirty (30) days of the discovery of the defect by the Buyer.
The sole responsibility of the Seller shall be, at its option, to
replace or repair the defective housing unit and auxiliary buildings.
This warranty shall commence from the date of transfer of title to the
Buyer and shall last for a period of one (1) year. All housing units
and auxiliary buildings and components thereof shall be deemed to be
irrevocably accepted by the Buyer, thirty (30) days after the date of
installation at the site or sites. With the exception of title, no
other warranties, expressed or implied, whether of merchantability or
fitness for a particular purpose, other than those set forth above,
shall apply to the units or components thereof' sold hereunder, and no
alteration or modification of the foregoing shall be binding against
the Seller unless signed by an executive officer of the Seller.
18. Law. This contract shall he governed by and construed in accordance
with the laws of the Commonwealth of Virginia, U.S.A.
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19. Assignment. This Contract is assignable by either Party upon receipt by
the assigning Party of an acceptance from the other Party of a written
notice of assignment from the assigning Party to the Party being
notified. Such notice of acceptance shall not unreasonably be withheld.
20. Authority. Each Party warrants and covenants to the other that it has
full power, authority, and legal right and has taken all other legal
action necessary to authorize the execution of this Contract and
perform the undertakings hereunder.
21. Amendment. Amendments to this Contract must be in writing and signed by
an executive officer of the Seller and the Buyer. No other actions or
approvals shall constitute amendments to this Contract.
22. Conflicts. This Contract, including the Annex attached hereto, and all
amendments hereto, may be executed in both English and _______ language
versions. In the event of conflict between the versions, the English
version shall control. In the event of conflict between this Contract,
including the Annexes attached hereto, and any working drawings, plans,
product descriptions, publications or other representations, the
Contract and Annex will control.
23. Entire Contract. This document represents the entire Contract between
the Parties. The Parties agree to enter into all other contracts,
conform to all local laws and requirements, and perform other actions,
which are necessary to fulfill their obligations under this Contract.
IN WITNESS THEREOF, the Parties hereto have caused this Agreement to be
duly executed as of the date first written above.
For the Seller: /s/ For the Buyer: /s/
------------------- -------------------
The Daedalus Project, Incorporated World Business Investors Group
Edward A. McCulloch Ing. Edgar Espinoza Chacon
President Presidente del Directorio
8653 Richmond Highway Alamanda 199 Surco
Alexandria, Virginia 22309 USA Lima, Peru
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ANNEX A
General Specifications--Daedalus Building Systems (Metal)
1. Daedalus Building Systems (Metal). The Daedalus Building Systems
(Metal) consists of panels , consisting of structural units assembled
from panels, which are fabricated from recycled composites.
2. Basic structural unit. The basic structural unit of the Daedalus
Building Systems (Metal) is an unfinished structure, consisting of
metal panels with polyurethane.
3. Structural Panel. The standard structural panel of the Daedalus
Building Systems (Metal) is a composite panel that is approximately
1.25 X 1.25 X .10 meters, weighing approximately 10 kilograms.
4. Structural equivalent. A structural equivalent of the "basic structural
unit" is any structure that:
a. is combination or configuration of structures that would utilize the
same, or greater number of full size panels of the Daedalus Building
Systems (Metal), i.e., 60 panels
b. sixty or more full size panels of the Daedalus Building Systems
(Metal)
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ANNEX B
Pricing
Type Dimensions Area Area Price Price Price Price Price Price
Unit in feet sq. sq. (USD) per (USD) (USD) (USD) Per (USD) per
Meters feet unfinished square per finished square square
structures meter square structures meter foot
foot
Basic 12.38x12.38 14 153.1 $1875.00 $133.93 $12.24 $2,300.00 $164.29 $15.02
Structural
Unit,
single
Unit
Hybrid 16.51x12.38 18.75 201.7 $2,000.00 $106.67 $9.91 $2,500.00 $133.33 $12.39
Single
Unit
Enlarged 20.63x12.38 23.44 252.2 $2300.00 $98.12 $9.12 $2,900.00 $123.72 $11.50
Single
Unit
Double 24.75x12.38 28.12 302.5 $2,750.00 $97.80 $9.09 $3,450.00 $122.69 $11.40
Unit
Triple 37.12x12.38 42.19 453.9 $3,900.00 $92.44 $.59 $4,900.00 $116.14 $10.80
Unit
Peruvian 37.12x12.38 51.56 554.7 $4,750.00 $92.12 $8.56 %5950.00 $115.39 $10.73
Special
Unit I
Peruvian 37.12x12.38 56.25 605.2 $5,150.00 $91.54 $8.51 $6,450.00 $114.67 $10.66
Special
Unit II
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Annex C
Individual Purchase Order
Name
Individual Purchase Order No.:
Address Date:
Country
Telephone: 011-51-1- Facsimile: 011-51-1
================================================================================
To: The Daedalus Project, Inc.
8653 Richmond Highway Contract Reference: 00000000
Alexandria, Virginia 22309 USA Daedalus Reference: Pro forma No.
Point of Contact:
- --------------------------------------------------------------------------------
Item Quantity Model No. Description Unit Price Extension
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL
- --------------------------------------------------------------------------------
0 0
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total FOB Ontario, Canada : Export packed in 40 ft. container: $
Export processing, packaging, prepaid inland/ocean freight
to ____________ & forwarder's handling charges ex-works: $
Freight and insurance $
Estimated total costs: $
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Estimated gross weight: Estimated cube: 2,560 cubic feet/73
4575kg./10100 lbs. cubic meters
- --------------------------------------------------------------------------------
Banking Information
First Virginia Bank
International Department
6400 Arlington Blvd.
Falls Church, Virginia 22046
USA
Fax: 703-241-3464
ABA#:
Account #:
The Daedalus Project, Inc.
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