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EXHIBIT 10.17
AIRCRAFT PURCHASE AND SALE AGREEMENT
This purchase agreement made on this, 18(th) day of December 1996
BETWEEN: Pacific Research & Engineering (the "Buyer") and VisionAire Corporation
(the "Seller").
In consideration of the mutual covenants herein contained, Buyer and Seller
agree to the provisions of this Aircraft Purchase and Sale Agreement (the
"Agreement") as follows:
Purchase Price. Payment and Delivery
Seller shall sell and deliver to Buyer, and Buyer shall take delivery of and pay
for one VISIONAIRE VANTAGE, Serial Number 69 (the "Aircraft"), as described in
the Airplane Specifications dated September, 1995 attached hereto and made a
part of this Agreement by reference. The price of the Aircraft shall be One
Million Six Hundred Thousand U.S. Dollars ($1,600,000.00) payable to Seller as
follows:
Initial Deposit at execution of Agreement $ 10,000.00
Additional Deposit due upon Proof-of-Concept aircraft first flight $ 50,000.00
Additional Deposit due 12 months prior to Preliminary
Delivery Date of Aircraft $ 100,000.00
Additional Deposit due 6 months prior to Scheduled Delivery Date of Aircraft $ 160,000.00
Balance due at time of delivery $ 1,280,000.00
THE UNDERSIGNED BUYER HAS READ THE TERMS AND PROVISIONS SET OUT ON THE REVERSE
SIDE HEREOF AND AGREES THAT SUCH TERMS AND PROVISIONS ARE INCLUDED IN AND ARE
PART OF THIS AGREEMENT ALL AS IF FULLY SET FORTH ON THE FACE HEREOF.
Accepted By:
Buyer: Pacific Research & Engineering Corporation
By: Xxxx Xxxxxxxx
Seller: VisionAire Corporation
By: Xxxxx X. Puree
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Article 1 DEPOSITS AND PAYMENTS
1.1 The Deposits set forth in the face hereof are to be drawn to the order of
"Magna Trust Company, Escrow Agent for VisionAire Corporation". Buyer's funds
will be deposited in an interest bearing escrow account until Seller notifies
the Escrow Agent, with a copy to Buyer, that the Aircraft meets the GUARANTEED
PERFORMANCE PARAMETERS and is ready for delivery, at which time all deposits in
escrow together with all earnings on the escrow account, will be released to
Seller.
1.2 Except as set forth in Articles 2.2, 3.2 and 5.1, in the event that (i) this
Agreement is terminated by Buyer for any cause whatsoever, (ii) following 21
days written notice to Buyer providing Buyer an opportunity to cure, Buyer fails
to pay the deposits and balance on the Aircraft and other charges under this
Agreement when due, or (iii) Buyer fails or refuses to take delivery of the
Aircraft within 21 days after Seller has tendered the Aircraft for delivery and
such failure or refusal is not due to any defect, discrepancy or non-conformity,
Seller shall retain $60,000 plus all interest earned on the Escrow Fund (or the
balance of the Escrow Fund, whichever is less) as liquidated damages for
default, not as forfeiture or penalty; whereupon this Agreement shall be
terminated and the balance of the Escrow Fund, if any, shall be returned to the
Buyer.
1.3 In addition to the purchase price set forth in the face hereof, Buyer agrees
to pay for all optional equipment and modifications selected by Buyer, and all
taxes, excises, tariffs, and charges assessed upon the manufacture or sale of
the Aircraft and required by law to be paid.
1.4 All deposits and payments set forth in the face hereof shall be made in U.S.
dollars by wire transfer or by other method acceptable to Seller.
Article 2
SELLER'S OBLIGATIONS
2.1 Seller represents it will obtain a Type Certificate issued in accordance
with FAR Part 23 of the Federal Aviation Regulations of the United States
Federal Aviation Administration. In addition, (i) Seller shall execute and
deliver to Buyer, at time of delivery, an FAA xxxx of sale and such other
instruments of conveyance and ownership as are customary to evidence Buyer's
ownership of the Aircraft and the transfer of title thereto to Buyer; and (ii)
Seller shall obtain and deliver to Buyer all certificates and instruments,
including an FAA Airworthiness Certificate.
2.2 The Aircraft will generally conform to the specifications and shall at least
meet the GUARANTEED PERFORMANCE PARAMETERS as described in the Airplane
Specifications dated September, 1995. In the event that the Aircraft does not
meet the GUARANTEED PERFORMANCE PARAMETERS Buyer may elect to terminate this
Agreement and be entitled to the remedies outlined in Article 2.5, whereupon
this Agreement shall become null and void.
2.3 Seller shall provide one copy of all technical and service publications, and
training for one pilot and one maintenance technician. Pilot training shall be
arranged as soon as possible after delivery of the Aircraft and shall be
conducted by FlightSafety International or other recognized training provider
designated to perform type rating of the Vantage aircraft.
2.4 Changes to Aircraft. Seller may, prior to the Scheduled Delivery Date and
without Buyer's consent, substitute the kind, type or source of any material,
part, accessory or equipment and make such changes and modifications to the
aircraft as it deems appropriate to improve the Aircraft, its maintainability or
appearance, or to prevent delays in manufacture or delivery, provided that such
change or modification shall not adversely affect the purchase price or the
Aircraft Specifications attached hereto as Exhibit A. It is further understood
and agreed between Seller and Buyer that the Airplane Specifications are
preliminary in form and content except for GUARANTEED PERFORMANCE PARAMETERS and
are subject to revision by the Seller upon development of final data for the
VISIONAIRE VANTAGE Aircraft, at which xxxx Xxxxxx shall provide Buyer a copy of
the Final Aircraft Specifications for incorporation herein and to supersede and
replace said preliminary Aircraft Specifications.
2.5 Buyer's exclusive remedy and Seller's liability for any failure to perform
any part of this Agreement is limited to the return of the Escrow Fund or, in
the event the Escrow Fund has been paid to the Seller, return of all deposits
made by Buyer.
Article 3 DELIVERY
3.1 The Preliminary Delivery Date for the aircraft is December 31,1999. The
Scheduled Delivery Date shall be established by the Seller at least 180 days
prior to the delivery of the aircraft and shall be no later than the Preliminary
Delivery Date, as adjusted pursuant to Article 3.2. If for any reason Seller
should fail to make delivery within one hundred eighty (180) days after December
31, 1999, adjusted if necessary for the delays described in Articles 3.2 and
3.3, Buyer may elect to terminate this Agreement and be entitled to the remedies
outlined in Article 2.5, whereupon this Agreement shall become null and void.
3.2 In the event of any delay on the part of the Seller in the performance of
its obligations and responsibilities under the provisions of this Agreement, due
directly or
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indirectly to acts of God or any fire, flood, earthquake, or be entitled to the
liquidated damages outlined in Article ___ other action of the elements, or
other catastrophe or accident, war, strikes, insurrection, or any legislation,
order, or regulation of any governmental authority, or
3.3 Prior to acceptance of the Aircraft, Buyer may elect to subject the Aircraft
to an inspection and flight evaluation. Such flight evaluation shall be
performed at Seller's plant location. The flight evaluation shall be conducted
by a qualified pilot, type rated for the Aircraft, and shall not exceed two
hours duration. The cost of the flight evaluation of the Aircraft shall be borne
by the Seller. In the event Buyer's inspection and flight evaluation of the
Aircraft reveals any defect, discrepancy or non-conformity, Buyer shall so
notify Seller and Seller shall have a reasonable time to correct any such
defect, discrepancy or non-conformity, and, if necessary, the Scheduled Delivery
Date shall be adjusted accordingly. Acceptance of the Aircraft shall constitute
Buyer's agreement that the Aircraft conforms to the specifications, standards
and other requirements of this Agreement. Risk of loss or damage shall pass from
Seller to Buyer, upon execution by Buyer of receipt acknowledging delivery of
the Aircraft.
3.4 Seller will send Buyer written notice of the Scheduled Delivery Date. Place
of delivery shall be VisionAire Corporation plant location, or at such other
location mutually acceptable to the parties hereto. The full balance due on the
Aircraft and all other charges shall be paid at the time the Aircraft is
delivered to Buyer, Buyer has accepted delivery pursuant to Article 3.3, and
Seller has met its other obligations set forth in Article 2 (except for pilot
and maintenance technician training which is anticipated to occur after delivery
of the Aircraft). If Buyer does not accept delivery of the Aircraft according to
Article 3.3, Buyer is deemed in default of a material term and condition of this
Agreement and Seller may terminate this Agreement.
Article 4 WARRANTY
4.1 Seller warrants (the Warranty) that the Aircraft shall parts, delay or
failure of subcontractors or suppliers for conform to the GUARANTEED PERFORMANCE
any reason whatsoever, delay in obtaining any type PARAMETERS defined in the
Aircraft Specifications approval or any Airworthiness Certificates by reason of
dated September, 1995 and shall be free from defects in any law or governmental
order or regulation, requiring material, design and manufacture. Seller's sole
obligation any modification in the Aircraft in order to obtain the type and
liability under this Warranty is limited to correction, approval, or any other
cause whatsoever beyond Seller's by repair, replacement, or rework, of any
defects control, Seller shall not be responsible for any such specified above at
Seller's repair facility or such other delays, and the time required for the
performance of any facility designated by Seller. obligation in this Agreement
shall be extended for a period equal to the period during which such cause
4.2 The Warranty period applicable to items produced by occurred, provided,
however, if any of the foregoing the Seller or to Seller's detailed
specifications (exclusive events result in delays exceeding 180 days in the of
exterior finish and cabin furnishings) shall be to the aggregate, Buyer may
elect to terminate this Agreement item's first scheduled replacement or overhaul
due date and be entitled to the liquidated damages outlined in or for 1,500
flight hours or three years from delivery of Article 2.5. Seller shall exercise
good faith, best efforts the Aircraft, whichever occurs first. The warranty
period and due diligence to avoid any delays and to promptly applicable to
airframe structures (fuselage, empanage, overcome any delays that are
unavoidable,
4.3 Seller shall be relieved of any liability with respect to any claim under
the Warranty if Buyer fails to promptly notify Seller or provide satisfactory
evidence of the claimed defect or if such claim results from any of the
following: (a) the Aircraft is not operated or maintained in compliance with
applicable provisions of Seller's flight manual, maintenance manual, and servi&e
bulletins; (b) the cause of a defect is due to repairs or modifications to the
Aircraft made by Buyer or any party not duly authorized by Seller; (c) the
Aircraft is subject to misuse, abuse or accident or is not properly stored or
protected against the elements when not in use. Buyer shall not be entitled to
the benefits of the Warranty if Buyer does not maintain complete records of
operations and maintenance of the Aircraft and make such records available to
the Seller upon Seller's request.
4.4 The Warranty shall not apply to any engines or engine accessories installed
in the Aircraft. Any engine warranty shall be provided directly by the engine
manufacturer (Xxxxx & Xxxxxxx of Canada) to Buyer, shall be the sole
responsibility of the engine manufacturer and shall be in effect and applicable
at time of delivery of the Aircraft. The Warranty shall not apply to any
avionics equipment installed in the Aircraft. Any avionics equipment warranty
shall be provided directly by the avionics equipment manufacturer to Buyer, and
shall be the sole responsibility of the avionics equipment manufacturer.
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4.5. Seller does not warrant, and is hereby relieved of any obligation for, any
accessory or equipment incorporated in the Aircraft by anyone other than Seller
and not furnished pursuant to this Agreement.
4.6 Upon notice to Seller of title transfer, which notice must be given in
writing within 90 days of said transfer, the Warranty shall run to Buyer, and to
all persons to whom title of the aircraft may be transferred during the Warranty
periods set forth in Article 4.2.
THERE ARE NO EXPRESS OR IMPLIED WARRANTIES BY SELLER WHICH EXTEND BEYOND THE
DESCRIPTION ON THE FACE HEREOF. THERE ARE NO WARRANTIES OF MERCHANTABILITY OR
OTHERWISE. THE EXTENT OF VISIONAIRE'S LIABILITY UNDER THIS WARRANTY IS LIMITED
TO REPAIR, REWORK OR REPLACEMENT OF DEFECTS. SELLER SHALL NOT BE LIABLE FOR ANY
CQNSEQUENTIAL, INCIDENTAL, PUNITIVE AND/OR OTHER DAMAGES ARISING OUT OF THE
SALE, USE OR OPERATION OF THE AIRCRAFT COVERED BY THIS AGREEMENT.
Article 5 MISCELLANEOUS
5.1 Termination. In the event that Seller has filed a petition in bankruptcy, a
petition for the appointment of a receiver, an assignment for the benefit of
creditors, admitted insolvency, or the suspension of business on account of
insolvency, the Buyer may terminate this Agreement by written notice and shall
be entitled to an immediate return of the Escrow Fund, including interest. In
the event that Buyer has filed a petition in bankruptcy, a petition for the
appointment of a receiver, an assignment for the benefit of creditors, admitted
insolvency, or the suspension of business on account of insolvency, the Seller
may terminate this Agreement by written notice and shall retain $60,000 plus all
interest earned on the Escrow Fund (or the balance of the Escrow Fund, whichever
is less) as liquidated damages for default, not as forfeiture or penalty;
whereupon this Agreement shall be terminated and any remaining balance in the
Escrow Fund shall be paid to the Buyer.
5.2 Agreement. This Agreement and related Escrow Agreement are the only contract
controlling the sale and purchase of the Aircraft and contain all agreements
between Buyer and Seller, whether oral or written. Buyer hereby acknowledges
receipt of a copy of this Agreement. If any of the provisions of this Agreement
are for any reason declared by judgment of a court of competent jurisdiction to
be unenforceable or ineffective, those provisions shall be deemed severable from
the other provisions of this Agreement and the remainder of this Agreement shall
remain in full force and effect. This Agreement, including the rights of Buyer
hereunder, may be assigned by Buyer upon Buyer providing prior written
notification to Seller. This Agreement shall be governed by and~ interpreted in
accordance with the laws of the State of Missouri, United States of America.
