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 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
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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
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Annex C
Individual Purchase Order
Name
Individual Purchase Order No.:
Address Date:
Country
Telephone: 011- Facsimile: 011-
================================================================================
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
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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