SALE AND PURCHASE AGREEMENT
between
RIGID AIRSHIPS DESIGN N.V.
as Seller
SYNFUEL TECHNOLOGY, INC.
as Buyer
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XXXXX & XXXXXXX/XXXXX & XXXXXXXX
XXXXXXXXXXX 00
0000 XX XXXXXXXXX
THE NETHERLANDS
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TABLE OF CONTENTS
PAGE
Article 1. Definitions 4
Article 2. Agreement to Sell and Payment 6
Article 3. Collection 7
Article 4. Condition of Airships 8
Article 5. Ground Inspection 8
Article 6. Demonstration Flight 9
Article 7. Discrepancies Correction 9
Article 8. Indemnification 10
Article 9. Assignable Warranties 11
Article 10. Conditions Precedent 11
Article 11. Representations and Warranties 11
Article 12. Limits to Liability of Rigid 12
Article 13. Taxes 12
Article 14. Compliance with Export Regulations 13
Article 15. Termination Events 13
Article 16. Notices 15
Article 17. Assignment 16
Article 18. Miscellaneous 16
Schedule 1 Specification of the Airships 18
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SALE AND PURCHASE AGREEMENT
The undersigned:
1. the public limited company RIGID AIRSHIP DESIGN N.V. ("RIGID"),
incorporated in the Netherlands and having its registered office in
(3512 BL) Utrecht, The Netherlands at Janskerkhof 12, represented by
its managing director Xx. X.X. Xxxxxxx;
and
2. the company existing under the laws of the state of Nevada, United
States of North America, SYNFUEL TECHNOLOGY, INC. ("BUYER"), having its
registered office in Salt Lake City, Utah, United States of America;
parties 1 and 2 jointly and individually referred to as "Parties" and "Party";
WHEREAS:
A. Rigid designs, produces and sells airships of a rigid structure;
B. Buyer has requested Rigid to design and produce two airships (THE
"AIRSHIPS") of a rigid structure;
C. Rigid will produce the "Airships", the technical details of which will
substantially be in accordance with the Specification set out in
Schedule 1 and subsequently wishes to sell to Buyer the Airships on the
terms and conditions set out in this agreement (the "Agreement");
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D. Buyer wishes to purchase the Airships from Rigid on the terms and
conditions set out in the Agreement;
HAVE AGREED AS FOLLOWS:
ARTICLE 1. DEFINITIONS
In the Agreement and the Schedule which is an integral part thereof and to which
the Agreement refers the following terms are defined below:
o Acceptance Certificate: a certificate in which Buyer acknowledges
acceptance of the Airships, the terms and conditions of which
certificate will be agreed upon by Parties at a later date;
o Agreement: this agreement;
o Airships: rigid type Airships with a length of 180 meters, which is
identified in SCHEDULE 1;
o Buyer: Synfuel Technology, Inc.;
o Certificate of Airworthiness: a valid certificate of airworthiness as
granted by the aviation authorities;
o Collection: collection of an Airship by SNFL;
o Collection Date I: a date to be agreed on by Parties in the period
which ends two years after the date that the first prototype of a rigid
airship will be fully certified by the aviation authorities, in
accordance with all the rules and regulations applicable;
o Collection Date II: a date six months after Collection Date I;
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o Deposit: the amount of US$4,000,000 (four million US dollars) to be
paid by Buyer to Rigid as a non refundable deposit for the two
Airships;
o Ground Inspection: a ground inspection in order that Buyer may
reasonably satisfy itself that the Airship is in the condition
specified in SCHEDULE 1;
o Manuals: the manuals, catalogues, drawings and other documents to be
provided by Rigid to Buyer;
o Party(ies): Rigid and/or Buyer;
o Payment Schedule: the payment schedule as described in article 2.2 of
this Agreement;
o Purchase Price: NLG 120,000,000 (one hundred and twenty million
Netherlands guilders), therefor NLG 60,000,000 (sixty million
Netherlands guilders) per Airship, excluding any additional amounts for
improvements and requests from the Buyer to be agreed upon separately
by the Parties;
o Specification: the specification of the Airships set out in SCHEDULE 1;
o Taxes: any and all taxes assessed by any national or local government
in connection with the ownership, sale or use of the airships;
o Technical Records: all records, logs, technical data and other
documents relating to the Airships which are required by the Rigid
appointed aviation authority to be maintained in relation to the
Airships;
o Value Added Tax: value added tax in accordance with Netherlands VAT
regulations and any and all similar taxes;
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ARTICLE 2. AGREEMENT TO SELL AND PAYMENT
2.1 Subject to the terms and conditions set out in this Agreement and the
Schedules, Rigid hereby agrees to sell to Buyer and Buyer hereby agrees
to purchase the Airships and take delivery respectively on Collection
Date I and on Collection Date II for the Purchase Price. Buyer shall
provide, at Rigid's first request, evidence satisfactory to and from a
source acceptable to Rigid that Buyer has access to funds necessary to
pay the (remainder of) the Purchase Price to Rigid.
2.2 Payment to Rigid by Buyer of the Purchase Price and all other sums
payable for additional services shall be effected in accordance with
the following Payment Schedule:
o NLG 24,000,000 (twenty-four million Netherlands guilders) on July 31,
1999;
o NLG 24,000,000 (twenty-four million Netherlands guilders) on July 31,
2000;
o NLG 18,000,000 (eighteen million Netherlands guilders) within 2 (two)
days upon Ground Inspection of the first Airship for SNFL;
o NLG 18,000,000 (eighteen million Netherlands guilders) within 2 (two)
days upon Ground Inspection of the second Airship for SNFL;
o half of the remainder of the Purchase Price upon Collection of the
first Airship for SNFL; o half of the remainder of the Purchase Price
upon Collection of the second Airship for SNFL;
o full payment for additional work upon collection of each Airship.
2.3 The Buyer will pay to Rigid on November 16, 1998 the Deposit, which is
non-refundable.
2.4 All sums payable hereunder by Buyer shall be paid in accordance with
the Payment Schedule in full without any deduction, withholding,
counterclaim or set off.
2.5 All sums payable hereunder are exclusive of Value Added Tax.
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2.6 Any amounts due from Buyer to Rigid shall, if not paid on the due date
therefore as stipulated in the Payment Schedule, thereafter bear
interest at the statutory interest rate increased with 2% (two percent)
per annum from and including the due date to but excluding the date of
payment calculated on the basis of a three hundred and sixty (360) day
year and thirty (30) day months.
ARTICLE 3. COLLECTION
3.1 Collection of the first Airship to be completed shall be made by Buyer
from Rigid on Collection Date I and Collection of the second Airship to
be completed shall be made by Buyer from Rigid on Collection Date II,
at Lelystad, the Netherlands, or such other location as may be agreed
in writing between the Parties.
3.2 The time for completion by Rigid of the Airships shall not be of the
essence. Therefore, in the event of late completion by Rigid of one or
both of the Airships, Rigid must be granted an additional reasonable
term to satisfy its obligations and formally be declared in default by
SNFL in case Rigid fails to fulfill its obligations within
aforementioned reasonable term.
3.3 At respectively Collection Date I and Collection Date II Buyer shall
deliver to Rigid a signed Acceptance Certificate which shall constitute
conclusive evidence for all purposes that the Airship collected is
satisfactory and has been collected by Buyer from Rigid in accordance
with the requirements of the Agreement.
3.4 Upon Collection by SNFL from Rigid of the respective Airship, the title
to such Airship and all risks of loss and damage shall by and upon
Collection pass from Rigid to Buyer.
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ARTICLE 4. CONDITION OF AIRSHIPS
4.1 The Airships shall be accepted by Buyer on Collection in the condition
in which they are offered by Rigid under this Agreement, subject only
to article 4.2 below.
4.2 At Collection Date I and Collection Date II the respective Airships
shall have the Certificate of Airworthiness (C.o.A.) And shall have a
C.o.A. for passenger use issued by competent aviation authorities of
the United States of America or the aviation authorities of the country
of ultimate destination of the respective Airships.
4.3 The Airship shall remain on the Netherlands Register of Aircraft until
the respective Airship is collected. Immediately following Collection
of such Airship hereunder Rigid will take all appropriate action at its
expense to ensure that such Airship is deregistered from the
Netherlands Register of Aircraft.
4.4 The Airships may be collected with tanks empty but if on Collection the
tanks are not empty Buyer will on taking Collection pay to Rigid the
cost to Rigid of the fuel in the tanks.
ARTICLE 5. GROUND INSPECTION
The Airships shall be made available to Buyer for the Ground Inspection at
Lelystad, the Netherlands. The Manuals and Technical Records shall be made
available to Buyer for inspection during such period prior to Collection thereof
as Buyer reasonably requires. Such inspections shall be conducted in
coordination with Rigid's personnel and Buyer shall be allowed reasonable
access, upon prior notice, to the airships to accomplish an inspection to
determine that the Airships are in the condition set forth in article 4 of this
Agreement. Buyer shall immediately state orally and confirm in writing within 4
(four) hours of the relevant inspection to Rigid any and all claims of
discrepancy. If Buyer fails to do so, Buyer shall not be entitled to refuse to
take Collection of the Airships.
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ARTICLE 6. DEMONSTRATION FLIGHT
6.1 Prior to Collection Date I and Collection Date II, the respective
Airship will be flown by Rigid for such periods as may be required to
demonstrate to Buyer the function of the Airships and its equipment in
accordance with Rigid's production flight test procedures. The
aggregate duration of such flights will not be less than 1,5 hours or
more than 4 hours. Five persons designated by Buyer may participate in
such flights as observers.
6.2 Rigid may use the Airships for flight and ground tests prior to
Collection to Buyer, without reduction in the Purchase Price, if such
tests are deemed necessary by Rigid to:
6.2.1 obtain or maintain the Certificate of Airworthiness for the
Airships. Rigid will advise Buyer of any flight or ground
tests contemplated by this paragraph 6.2.1; or
6.2.2 evaluate Airships improvement changes that may be offered for
production or retrofit incorporation in any Airships. Rigid
will obtain Buyer's consent and approval, which will not be
unreasonably withheld, of any ground or flight tests
contemplated by this paragraph 6.2.2.
6.3 The expenses for the inspection flights shall be borne by Buyer, except
for the tests as mentioned in article 6.2, which shall be borne by
Rigid.
ARTICLE 7. DISCREPANCIES CORRECTION
7.1 In the event any of the discrepancies referred to in article 5 are not
corrected by Rigid prior to Collection Buyer shall be obliged to accept
and collect the respective Airship and Buyer and Rigid shall develop a
list of agreed discrepancies, necessary corrections or corrective
procedures and a schedule for disposition thereof, or agree on
compensation to be paid in lieu
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of corrections; provided that such discrepancies shall be corrected by
or on behalf of Rigid within 5 (five) days of respectively Collection
Date I or Collection Date II, unless agreed compensation has been paid
as aforesaid. Buyer undertakes to cooperate with Rigid in the
correction of such discrepancies. Should Rigid fail in its obligations
under this article 7 Rigid shall indemnify Buyer for the costs incurred
by Buyer in connection with the correction of such discrepancies.
7.2 After Collection Rigid shall not be liable in any way whatsoever for
any physical discrepancies other than those set out in any
discrepancies lists compiled pursuant to articles 5 or 7.
ARTICLE 8. INDEMNIFICATION
8.1 Rigid hereby agrees to indemnify and hold harmless Buyer, its officers,
agents and employees from and against all liabilities, damages, losses,
costs and expenses for:
8.1.1 all injuries to and deaths of persons, and
8.1.2 loss or damage to tangible property of third parties arising
out of or in connection with the operation of the Airships
during tests or flights conducted prior to Collection provided
that this indemnity shall not be effective with regard to loss
or damages to tangible property of third parties, injuries to
or deaths of officers, agents or employees of Buyer if caused
solely by the negligence or willful misconduct of Buyer, its
officers, agents or employees.
8.2 Buyer agrees to indemnify and hold harmless Rigid, its officers,
agents, employees from and against all losses for injury to or death or
loss or damage to property of any of Buyer's officers agents, employees
from and against all losses for injury to or death of or loss or damage
to property of any of Buyer's officers, agents or employees arising out
of or in connection with the inspections, tests or flights conducted
after Collection, unless caused solely by the negligence or willful
misconduct of Rigid, its officers, agents or employees.
ARTICLE 9. ASSIGNABLE WARRANTIES
On Collection Rigid will, subject to any necessary consents being forthcoming,
assign to Buyer the full benefits of all assignable warranties then subsisting
(if any).
ARTICLE 10. CONDITIONS PRECEDENT
The obligation of Rigid to sell the Airships to Buyer under the Agreement is
subject to the further conditions that the representations and warranties set
out in article 11.2 are true and correct as if each were made with respect to
facts and circumstances existing immediately prior to Collection.
ARTICLE 11. REPRESENTATIONS AND WARRANTIES
11.1 Rigid represents and warrants to Buyer that immediately prior to
Collection it will be the legal and beneficial owner of the Airships
and that on Collection the Airships will be free from all charges and
encumbrances.
11.2 Buyer represents and warrants to Rigid that:
a. Buyer is duly formed and validly existing under the laws of the state
of Nevada, United States of America and has full power to carry on its
business and to enter into and perform its obligations under this
Agreement and has complied with all statutory requirements relative to
its business.
b. Buyer has taken all necessary corporate action to authorize the
execution and delivery of the Agreement.
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c. The execution, delivery and performance of the Agreement does not and
will not contravene any contractual restrictions or any existing
applicable law or regulation binding on Buyer.
ARTICLE 12. LIMITS TO LIABILITY OF RIGID
12.1 Buyer agrees and acknowledges that no conditions, warranties,
representations or terms as to the state, condition or airworthiness of
the Airships have been, or will be given by Rigid to Buyer, except as
expressly provided in the Agreement.
12.2 Buyer agrees and acknowledges that Rigid shall only be liable for
damages resulting directly from failures in the construction of the
Airships (such as repair and replacement of defect parts) and not be
liable for any consequential damages resulting from the aforementioned
failures in the construction of the Airships.
ARTICLE 13. TAXES
13.1 Rigid shall bear all taxes ("Taxes") assessed by any national or local
government in connection with Rigid's ownership and the operation and
use of the Airships or any part at any time before Collection.
13.2 Buyer shall be responsible for and shall indemnify and keep Rigid
indemnified fully on demand from and against the payment of all Taxes
whether imposed by the Netherlands government or otherwise arising in
connection with the sale of the Airships hereunder (excluding any tax
which may be assessed or levied on Rigid by the Netherlands government
as a result of the sale of the airships or any part thereof by Rigid),
or the ownership, export, operation or use of the airships or any part
thereof after Collection.
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ARTICLE 14. COMPLIANCE WITH EXPORT REGULATIONS
14.1 Buyer undertakes and agrees that it will not at any time or in any way
deal with the Airships or any part thereof and will use its best
endeavors to ensure that no other party deals with the Airships or any
part thereof in any way which is in breach of any relevant import or
export regulations of the United States of America and any of its
states and the Netherlands. Buyer shall indemnify and hold harmless
Rigid against all losses incurred by Rigid as a result of any breach by
Buyer of its obligations under article 15.
14.2 Buyer undertakes that, prior to Collection Date I, it will provide
Rigid with full particulars of the intended use and country of ultimate
destination of both the Airships or any part including details of any
intended resale or reshipment of the Airships and Buyer undertakes that
it will not cause or permit any part of the Airships to be diverted
from its ultimate intended destination without there having being
secured all authorizations of any and all governments of countries
involved.
ARTICLE 15. TERMINATION EVENTS
Without prejudice to any other remedies than available to it Rigid shall have
the right to terminate the Agreement by notice in writing to Buyer taking effect
forthwith on or after occurrence of any of the following events:
a. Any breach by Buyer of any of its obligations under this agreement; or
b. Buyer fails to make payment of the Deposit or fails to meet the
installments of the Purchase Price as stipulated in the Payment
Schedule; or
c. Any representation or warranty made by Buyer contained in the Agreement
or in any
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document or certificate furnished to Rigid in connection herewith shall
prove to have been untrue or incorrect in any material respect; or
d. Buyer makes or offers to make any arrangements or composition with or
for the benefit of its creditors; or
e. Buyer ceases or threatens to cease to carry on business or suspends or
threatens to suspend operations or is or becomes unable to pay its
debts or commits any act of insolvency or bankruptcy; or
f. a petition or resolution for the making of an administrative order for
the bankruptcy, winding up or dissolution of Buyer (other than a
winding up for the purposes of reconstruction or amalgamation of a
solvent company) is presented or passed; or
g. Buyer files a voluntary petition in bankruptcy or insolvency; or
h. a supervisor, administrator or other incumbrancer takes possession of
or is appointed over the whole or any part of the assets of Buyer; or
i. Any distress, execution or other process shall be levied or enforced
upon or sued against the whole or any substantial part of the property,
undertaking, or assets of Buyer and is not discharged within 15
(fifteen) days; or
j. Buyer shall make any general arrangement or composition with its
creditors to take or suffer any similar action in consequence of debt;
or
k. Any action is taken or procedure is commenced in any jurisdiction by or
in relation to Buyer which is similar to or analogous with any above
mentioned action or procedure.
ARTICLE 16. NOTICES
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16.1 All notices, requests, claims, demands and other communications
hereunder shall be in writing and delivered to the Parties in person or
sent by registered or certified mail, postage prepaid or by facsimile
as follows:
a. Rigid:
Xx. X.X. Xxxxxxx
Xxxxxxxxxxx 00
0000 XX Xxxxxxx
Xxx Xxxxxxxxxxx
fax: x00 00 000 00 00
b. Buyer:
Synfuel Technology Inc.
Salt Lake City, Utah
U.S.A.
Fax:
Either Party may change its address for the purpose of the Agreement by
giving written notice thereof to the other Parties.
16.2 Any notice or demand shall be deemed to have been received two clear
business days after the date of dispatch if sent by letter or the date
of delivery if delivered personally or simultaneously with the
transmission if given or made by telex or facsimile provided the
recipient's answer back code has been made by telex or facsimile
provided the recipient's answerback code has been received at the close
of transmission and further provided in each case that the date of
receipt is a Business Day failing which such notice or demand shall be
deemed to have been received on the Business Day falling immediately
thereafter.
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ARTICLE 17. ASSIGNMENT
Buyer may not assign any of its right hereunder without the prior written
consent of Rigid.
ARTICLE 18. MISCELLANEOUS
18.1 The terms and conditions of the Agreement supersede those of all
previous agreements, understandings and arrangements, whether written
or oral, between Rigid and Buyer relating to the sale of the Airships
and shall not be varied otherwise than by an instrument in writing of
even date herewith or subsequent hereto executed by the Parties or by
their duly authorized representatives.
18.2 No failure or delay on the part of either Party in exercising any power
or right hereunder shall operate as a waiver thereof nor shall any
single or partial exercise of any such right or power preclude any
other or further exercise of any such right or power.
18.2 No failure or delay on the part of either Party in exercising any power
or right hereunder shall operate as a waiver thereof nor shall any
single or partial exercise of any such right or power preclude any
other or further exercise of any such right or power.
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18.3 If any term or condition of the Agreement shall to any extent be
invalid or unenforceable the remainder of the Agreement shall not be
affected thereby and each other term and condition shall be valid and
enforceable to the fullest extent permitted by law.
18.4 The Agreement may be executed in two counterparts each of which shall
constitute an original and when taken together shall constitute one
instrument.
18.5 The Agreement shall be governed by and construed in all respects in
accordance with Netherlands law.
IN WITNESS WHEREOF, the Parties have caused this Agreement in
_______________fold to be executed and delivered as of ____________.
----------------------------------
Rigid Airships Design N.V.
By:
-----------------------------
Title:
-----------------------------
----------------------------------
Synfuel Technology, Inc.
By:
-----------------------------
Title:
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SCHEDULE 1 TO THE SALE AND PURCHASE AGREEMENT
SPECIFICATION OF THE AIRSHIP:
o length: 180 meter
o max. diameter: 30 meter
o max. hull volume: 83,000 cub. meter
o max. helium volume: 75,000 cub. meter
o powerplants: 6
o propellers: 6 of which 4 vector
o max. airspeed: 145 km/hour
o cruising speed: 120 km/hour
o useful lift: circa 35 tons
