PURCHASE CONTRACT
AGREEMENT made this 6th day of February 1998, by and between PracSys
Corp., a Massachusetts corporation having its principal place of business at
0X Xxxxxxxxxx Xxx, Xxxx 00, Xxxxx, Xxx Xxxxxxxxx 00000 ("PracSys"), and North
American Scientific, Inc. a California corporation having its principal
place of business at 0000 Xxxxxxxxx Xxxxxx, Xxxxx Xxxxxxxxx, Xxxxxxxxxx
00000 ("NASI").
RECITALS:
WHEREAS, NASI wishes to purchase certain equipment from PracSys as set
forth herein; and
WHEREAS, PracSys desires to sell such equipment to NASI; and
WHEREAS, PracSys and NASI desire to enter into a purchase contract with
respect to the foregoing.
NOW THEREFORE the parties agree as follows:
1. Sale by PracSys. PracSys shall perform preproduction engineering,
manufacture or have manufactured, deliver, install (unless installation
is excluded under the Special Conditions referred to below) and sell the
Equipment to NASI in accordance with the terms and conditions of the
Contract documents, and shall perform such other ancillary obligations
as are set forth therein.
2. Purchase by NASI. NASI shall purchase, receive and pay for the
Engineering and Equipment in accordance with the Contract Documents as
defined below, and shall perform such other ancillary obligations, as
are set forth therein.
3. Payment of Purchase Price. NASI shall pay the purchase price and such
other sums as may be stated in the Contract Documents, at the times
stated therein.
4. Special Manufacture. NASI recognizes that the Equipment will be
specially manufactured for NASI.
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5. Contract Documents and Entire Agreement. The entire and exclusive
agreement of the parties with respect to the subject matter hereof is
set forth in the documents listed in APPENDIX 1 hereto (the "Contract
Documents"). The Contract Documents are listed in descending order of
precedence, in case of any conflict among them. The Contract Documents
supersede all prior or contemporaneous discussions, representations or
writings, none of which shall have any legal effect except insofar as
they are listed in or expressly incorporated by reference in one of the
Contract Documents. The Contract Documents may be amended or
supplemented only in writing signed by the party to be charged. By
causing this contract to be executed, PracSys and NASI each acknowledges
that it has reviewed and that it accepts all of the terms, conditions
and provisions of the Contract Documents.
IN WITNESS WHEREOF the parties have caused this Purchase Contract to be
executed as of the first date set forth above.
PracSys Corp. North American Scientific, Inc.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ L. Xxxxxxx Xxxxxx
--------------------------------- ----------------------------------
Xxxxx X. Xxxxxxx, President & CEO L. Xxxxxxx Xxxxxx, President & CEO
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APPENDIX 1
LIST OF
CONTRACT DOCUMENTS
APPENDIX # OF PAGES DATE
-------- ---------- ----
List of Contract 1 1 2/4/98
Documents
Special Conditions 2 8 2/4/98
General Conditions 3 9 2/4/98
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APPENDIX 2
SPECIAL CONDITIONS
1. BUYER. North American Scientific, Inc. ("NASI")
2. EQUIPMENT. The equipment being sold hereunder consists of: Two PracSys
IP-6, complete integrated isotope production systems (the "Equipment");
each system includes a NHVGx linear accelerator, *** target end station,
processing equipment, shielding and control system. System number one
serial number shall be SN1 ("System #1") and system number two serial
number shall be SN2 ("System #2").
3. SITE.
3.1 The site where the Equipment is intended to be installed is as
follows, unless notified otherwise by NASI:
The Equipment is to be installed by PracSys at a production center (the
"Production Center") in the PracSys facility at Salem, New Hampshire
(the "Site").
3.2 Special requirements for site preparation not contained in General
Conditions:
Performance of all special site preparation requirements at the Site is
the responsibility of PracSys.
4. INSTALLATION, DELIVERY AND ACCEPTANCE.
PracSys is to install the Equipment at the Site as part of the contract.
In the event NASI directs that the Equipment be installed at a location
other than the Site, PracSys shall have no responsibility for site
preparation, installation, set up, calibration, securing permits or
licenses, bonding for decommissioning or any and all other post
acceptance installation responsibilities notwithstanding any provision
of this Agreement to the contrary. The dates for installation and
acceptance are as follows:
INSTALLATION System #1 To occur within *** after receipt of order.
System #2 To occur within *** after receipt of order.
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ACCEPTANCE Within 30 days following installation of
System #1 and System #2, respectively.
5. TRAINING. Operational training will be provided at the Production
Center by PracSys concurrently for its employees and NASI employees that
NASI elects to have participate. PracSys will provide complete training
on all aspects of the operation of the system and its daily maintenance.
This training is included in the Purchase Price. PracSys will provide
NASI with 30 days en notice of the date of scheduled training sessions
in which NASI may elect to participate. At any time PracSys is entitled
to the Revenue Participation pursuant to the Exclusivity and Purchase
Agreement dated as of December 31, 1997, as amended, by PracSys and NASI
(the "Exclusivity Agreement"), or in the event NASI shall exercise its
"March in Rights" pursuant to Section 8.6 of the Service Contract
between NASI and PracSys of even date herewith (the "Service Contract"),
PracSys shall provide additional training at NASI's request. NASI shall
reimburse PracSys for the reasonable expenses of any such additional
training.
6. DOCUMENTATION AND DATA. PracSys shall deliver to NASI and to the
Production Center complete written documentation sufficient for the
operation and daily standard maintenance for the equipment which will be
turned over to the production center manager or equivalent at the time
of acceptance of the equipment. The documentation will include the
as-built equipment specification ("Equipment Specification") which shall
specify maintenance and operating conditions referenced in the Warranty
provisions of the General Conditions.
7. PURCHASE PRICE.
7.1 The preproduction engineering required for the specialty equipment
(the "Engineering") is separately priced in the amount of $ *** (the
"Preproduction Engineering Price").
7.2 The total purchase price (the "Purchase Price") for two (2) IP-6
Systems installed is $ *** . Each System includes the following:
NHVG-TM- accelerator complete with operating system, shielding and stand
with a nominal *** rating.
*** target end station and processing equipment.
Facilities modification, utility hook-ups and installation at the Site.
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8. PAYMENT TERMS.
8.1 The Preproduction Engineering Price is to be paid upon execution of
the Purchase Contract.
8.2 The Purchase Price for both Systems is to be paid as follows:
--------------------------------------------------------------------------------
MILE-
STONE DESCRIPTION AMOUNT
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1 Execution of Purchase Order $***
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2 Receipt of Long Lead Accelerator Items for Systems #1 & #2 $***
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3 Start of Accelerator Assembly Systems #1 & #2 $***
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4 System #1 Proton Beam Demonstration between 0.5-1mA $***
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5 System #2 Proton Beam Demonstration between 0.5-1mA $***
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6 Acceptance of System #1 $***
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7 Acceptance of System #2 $***
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In the event Milestone payments are delayed by NASI, PracSys shall have the
right to delay Equipment delivery and acceptance accordingly and submit a
change order for increases to the contract price.
PracSys hereby covenants and agrees that the Purchase Price payments made
to PracSys pursuant to this Agreement shall be applied solely for the
purpose of performance of this Agreement and that such payments shall not
be used by PracSys for any other business purpose without the prior written
consent of NASI. PracSys shall set aside a portion of the payments made to
PracSys pursuant to the Exclusivity Agreement and the Production
Engineering Price pursuant to this Agreement for payment to North Star
Research Corp. ("North Star") as necessary to satisfy the milestone and
other payment provisions of the North Star Contract (as defined in Section
9.3 below). PracSys shall make such payments to North Star promptly after
such payments become due pursuant to the North Star Contract, in order to
secure title to the North Star Accelerator (as defined in Section 9.3
below) as soon as reasonably practicable after the date hereof. In
addition, PracSys hereby covenants and agrees that no payments made to
PracSys pursuant to the Exclusivity Agreement or the Production Engineering
Price pursuant to this Agreement
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shall be applied against amounts owed by PracSys to Xxxxx X. Xxxxxxx and
Xxxxxx X. Xxxxxx, as reflected on the Long Term Obligations of the
Balance Sheet (as defined in Section 11 hereof), without the prior
written consent of NASI. These covenants terminate upon the acceptance
of System #2.
9. ACCEPTANCE.
9.1 At least 30 days prior to scheduled testing of Equipment for
acceptance, PracSys shall propose to NASI and PracSys and NASI shall act in
good faith to agree upon a detailed Equipment acceptance plan designed
to provide an acceptance testing procedure that will, upon successful
demonstration through the actual manufacture of product, assure that the
Equipment will consistently generate *** at a minimum rate of *** mCi per
hour per system. Acceptance shall occur upon evidence reasonably
satisfactory to NASI that the Equipment will consistently generate a
minimum rate of *** mCi per hour per system (the "Performance Criteria").
9.2 In the event acceptance of System #1 or System #2 is delayed more than
90 days beyond the respective scheduled acceptance date pursuant to Section
4 hereof, PracSys shall be responsible for contracting for delivery of the
Product from a third party or produce the Product with its or NASI's work
in process equipment (the "Alternate Supply"), sufficient to meet each
Monthly Production Estimate provided by NASI to PracSys pursuant to Section
2 of the Service Contract. In the event System #1 is accepted and System
#2 acceptance is delayed more than 90 days beyond its scheduled acceptance
date, PracSys would be required to provide the Alternate Supply only to the
extent the production of Product by System #1 is insufficient to meet the
Monthly Production Estimate. NASI will reimburse PracSys for the Product
at a per mCi price that would have resulted from the Service Contract based
on the volume delivered using the pricing factors set forth in Exhibit B of
the Service Contract. This shall be NASI's sole remedy for late acceptance
so long as PracSys provides the Product under these terms. Provided,
however, that (i) in the event PracSys shall be unable to provide such
Alternate Supply for any reason, including lack of financial resources and
(ii) NASI has perfected its process and facilities for the use of the
Product for the production of seeds for sale in commercial quantities to
the Market (the "Commercial Process"), then, after 10 days notice, NASI
may terminate this Agreement and transfer title to the work in progress to
PracSys and PracSys shall promptly refund contract payments made by NASI in
accordance with and to the extent set forth in the refund provisions of
Section 9.3 below.
9.3 Notwithstanding the mitigation of late acceptance of System #1 and
System #2 through PracSys providing for the Alternate Supply of the
Product, NASI may terminate
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this Purchase Contract for default if System #1 or System #2 are not
accepted, which acceptance NASI will not unreasonably withhold, within
six (6) months after the start of the Alternate Supply, after thirty
(30) days written notice by NASI.
Upon such termination, PracSys shall refund all contract payments made by
NASI hereunder and pursuant to the Exclusivity Agreement. However, if
System #1 or System #2 is accepted and the other system has not been
accepted within six (6) months after the start of the respective Alternate
Supply and NASI elects to terminate after 30 days written notice, then,
upon such partial termination, PracSys shall refund 50% of each of
milestones 1, 2, and 3 and 100% of milestone 4 or 5 and 6 or 7 as
applicable to the extent the contract payments had been made by NASI. In
the event of such partial termination, PracSys has no obligation to refund
the Preproduction Engineering payment or the exclusivity payment made by
NASI pursuant to the Exclusivity Agreement.
Alternatively, NASI may elect not to terminate the Purchase Contract for
default pursuant to the provisions of either Section 9.2 or 9.3, above,
but, upon the above events of default and after 30 days notice, may remove
the work in progress, and take title to and remove any special tools, jigs,
molds, fixtures, equipment, technical data, books, records, computer
software and other records relating to the manufacture of the Equipment
(the "Work In Progress") for the purpose of completing the manufacture of
the Equipment(the "March In Termination"). PracSys shall cooperate in the
removal. If NASI shall be entitled to exercise its March in Termination
rights with respect to System #1, NASI shall also be entitled
simultaneously to exercise such March in Termination rights with respect to
System #2. In the event of March In Termination, NASI will complete the
manufacture at its own expense and PracSys will not be entitled to any
additional payments including any Revenue Participation payment pursuant to
the Exclusivity Agreement.
In the event of March In Termination, PracSys grants to NASI a non
exclusive, royalty-free, world wide license to manufacture, use and sell
without limitation the two Systems hereunder. PracSys represents and
covenants that it has and will continue to have the requisite power to
grant such sub-license.
As security for the performance of its obligations under this Agreement,
and for the refund when due of all payments now or hereafter made by NASI
pursuant to this Purchase Contract or the Exclusivity Agreement, PracSys
hereby grants to NASI a continuing first priority security interest in all
rights, title and interest of PracSys now existing or hereafter acquired
in, to and under each of the following: (i) the NHVGx PET accelerator (the
"North Star Accelerator") being produced for PracSys by North Star
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Research Corp. ("North Star") pursuant to a contract between PracSys and
North Star executed by PracSys July 1, 1996, (the "North Star
Contract"), (ii) the North Star Contract, and (iii) all products and
proceeds of any of the foregoing, and PracSys hereby pledges,
hypothecates, assigns, sets over and delivers to NASI, and grants NASI a
first priority security interest in, the common stock of Florida PET
Center, Inc. (or such other entity to which title to the North Star
Accelerator is transferred by PracSys) held by PracSys or its
affiliates, whether through PET Scan Services, LLC, or otherwise (the
"Pledged Securities" and with (i), (ii) and (iii) above, the
"Collateral") including any dividends or distributions on the Pledged
Securities or any securities issued in addition to, or in exchange or
substitution therefor (which shall constitute part of the Pledged
Securities) and all voting and other rights pertaining to the Pledged
Securities (provided that, prior to a default, PracSys or its affiliate
shall have the right to exercise such voting or other like rights in a
manner which does not prejudice the rights of NASI hereunder).
All certificates and instruments representing or evidencing any Pledged
Securities shall be promptly delivered by PracSys to NASI and shall be
accompanied by stock powers or other instruments of transfer or assignment,
undated and duly executed in blank, all in form and substance satisfactory
to NASI. NASI shall have the right, at any time after default of refund of
payments by PracSys in its discretion and without notice to PracSys, and
without limitation to any other rights, to transfer to or to register in
the name of NASI or its nominee, any or all of the Pledged Securities. To
the extent PracSys now or hereafter owns or holds any right, title and
interest in any Pledged Securities through one or more persons or entities,
PracSys shall cause such persons or entities to pledge, collaterally assign
and deliver to NASI such Pledged Securities, by written instrument in form
and substance reasonably satisfactory to NASI.
PracSys acknowledges and agrees that NASI's payment pursuant to the
Exclusivity Agreement above is to be applied by it to purchase the
Collateral referenced in clause (i) above, and accordingly the parties
acknowledge and agree that the foregoing security interest in such
Collateral is a purchase money security interest.
Without the prior written consent of NASI, PracSys shall not sell, assign,
transfer, pledge, or otherwise encumber or dispose of any of the Collateral
or any right or interest therein. In addition, PracSys shall, at its own
expense, promptly execute, acknowledge and deliver all such instruments,
and take all such actions, as NASI from time to time may reasonably request
in order to preserve, protect, maintain and perfect NASI's security
interest in the Collateral and other rights of NASI intended to be created
by this Agreement. Furthermore, PracSys shall defend its title to the
Collateral and NASI's lien thereon against the claims of any other person
or entity so long as any of the obligations secured
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hereby remain outstanding. NASI shall release the security interest
granted pursuant to (i) above upon evidence satisfactory to NASI that
Florida PET Center, Inc. shall have received financing in the amount of
at least $2,500,000. Subject to the terms hereof, NASI shall within 15
days after the acceptance of both Systems execute and deliver to PracSys
a written release of the security interests granted hereunder.
10. SERVICE CONTRACT. If NASI chooses to deliver, install and operate the
Equipment at any single site other than the production center located at
the PracSys, Salem, New Hampshire facility, NASI may at its option,
contract with PracSys to provide maintenance services for the Equipment at
the site for so long as PracSys shall be entitled to receive Revenue
Participation pursuant to the Exclusivity Agreement. NASI shall reimburse
PracSys for the reasonable expenses of such maintenance services.
11. REPRESENTATIONS AND WARRANTIES.
A. PracSys is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation; has all
requisite power to own, lease, license and operate its assets, properties
and business and to carry on its business, as now conducted and proposed to
be conducted; and is duly qualified or licensed to do business as a foreign
corporation and is in good standing in every jurisdiction in which the
nature of its business or the location of its properties requires such
qualification or licensing.
B. PracSys has taken all actions necessary to authorize it to enter into
and perform fully its obligations under this Agreement and to consummate
the transactions contemplated hereby. This Agreement is the legal, valid
and binding obligation of PracSys, enforceable in accordance with its
terms, subject, as to enforcement of remedies, to applicable bankruptcy,
insolvency, moratorium, reorganization and similar laws affecting
creditors' rights generally and to general equitable principles.
C. PracSys has full power and authority to execute and deliver this
Agreement and to perform its obligations under and to consummate the
transactions contemplated by this Agreement. The execution, delivery, and
performance by PracSys of this Agreement (i) have been duly authorized and
approved by all necessary corporate action on the part of PracSys, its
officers, directors and shareholders, or (ii) will not violate any
provision of law and will not conflict with, or result in a breach of, any
of the terms of, or constitute a default under, PracSys's Certificate of
Incorporation, Bylaws, or any contract or agreement, whether written or
oral, judgment, decree, order, or other restriction to which PracSys is a
party or by which it or any of its properties is bound.
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D. PracSys has in all material respects complied with, and is now in all
material respects in compliance with, all laws and orders applicable to it.
Except to the extent, if any, disclosed in writing to NASI, PracSys holds
all business licenses, permits, franchises, orders and government approvals
material, excluding permits and licenses specific to the production of
radioactive materials and the operation of equipment used to produce
radioactive materials, to or necessary for the conduct of PracSys's
business as presently conducted or as proposed to be conducted, other than
those permits, if any, the absence of which would not have an adverse
effect on PracSys's business, operation or financial condition. Each
license and permit is in full force and effect; PracSys is not and has at
all times in the past been in all material respects in full compliance with
each thereof; and no proceeding is pending or, to the best of PracSys's
knowledge, threatened, to revoke, amend or limit any thereof. There are no
pending or, the best of PracSys's knowledge, threatened proceedings by or
before any governmental authority which involve new special assessments,
assessment districts, bonds, taxes, condemnation actions, laws or orders or
similar matters which, if instituted, could reasonably be expected to have
a material adverse effect upon the condition (financial or otherwise),
assets, liabilities, business or prospectus of PracSys.
E. All documents and other papers delivered or to be delivered, to NASI
by or on behalf of PracSys in connection with this Agreement and the
transactions contemplated herein are, and at the time of delivery will be,
true, correct and complete in all material respects. The information
furnished to NASI by or on behalf of PracSys in connection with this
Agreement and the transactions contemplated herein does not, and will not
contain any untrue statement of a material fact and does not, and will not,
omit to state any material fact necessary to make the statements made, in
context in which they are made, not false or misleading. There is no fact
known to PracSys which PracSys has not disclosed to NASI in writing which
could reasonably be expected to have a material adverse effect upon the
condition (financial or otherwise), assets, liabilities, business,
operations, properties or prospects of PracSys.
F. PracSys has delivered to NASI its unaudited balance sheet as of
December 31, 1997, (the "Balance Sheet"). which has been certified in
accordance with this paragraph by the chief financial officer of PracSys.
The Balance Sheet sets out and fairly describes in all material respects
the financial condition of PracSys as of the Balance Sheet date and is a
true and accurate description thereof. Since the date of the Balance
Sheet, there has been no material adverse change, individually or in the
aggregate, in the business, assets, condition, financial or otherwise or
net worth of PracSys. In addition, since the date of the Balance Sheet,
PracSys has not incurred any liabilities of any type which in the aggregate
exceed $50,000 whether absolute or contingent. PracSys, effective with the
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execution of this agreement, will maintain a standard system of accounting
established and administered in accordance with generally accepted
accounting principles.
G. There are no actions, suits, or proceedings pending or, to the best of
the knowledge of PracSys, threatened against PracSys, at law or at equity
or before any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality.
PracSys has good and marketable title to, or a valid license interest in,
all intellectual property used in or material to PracSys's business, and no
person has asserted any right or interest adverse to PracSys in respect of
any of PracSys's intellectual property rights which would have a material
adverse effect on PracSys and its business, other than those rights, if
any, that have been disclosed to NASI by PracSys in writing. The conduct
of PracSys of its business does not, and as proposed to be conducted will
not, infringe upon or violate the intellectual property rights of any
other person or entity, and there has not been any claim to such effect.
The manufacture, use and sale of the Systems by PracSys or NASI pursuant to
this Agreement (including without limitation pursuant to the March In
Termination rights pursuant to section 9.3 hereof) and the Service
Contract, do not and will not conflict with any agreement to which PracSys
is a party, including, but not limited to, the License Agreement dated
December 6, 1995, by and between PracSys and North Star or the North Star
Contract.
I. Other than disclosed to NASI in writing, PracSys has not granted any
security interest to any third party, and nor has any security interest
been filed or asserted, with respect to any of PracSys's assets. Other
than disclosed to NASI in writing, PracSys is not currently in default of
any obligation for money borrowed or in default of any other agreement, and
PracSys knows of no threatened default with respect to any such agreement
and reasonably believes no basis exists upon which any such default could
be asserted.
12. NOTICES. The addresses for notices (see paragraph 17 of General
Conditions) are as follows:
PracSys: Xxxxx X. Xxxxxxx, President & CEO
PracSys Corp.
8E Industrial Way
Xxxx 00
Xxxxx, Xxx Xxxxxxxxx 00000
Telephone (000) 000-0000
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Facsimile (000) 000-0000
NASI: L. Xxxxxxx Xxxxxx, President & CEO
North American Scientific, Inc.
0000 Xxxxxxxxx Xxxxxx
Xxxxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone (000) 000-0000
Facsimile (000) 000-0000
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APPENDIX 3
GENERAL CONDITIONS
1. DELIVERY, RISK OF LOSS AND TITLE. If the Equipment is not being installed
by PracSys at the Site, then unless otherwise stated in the Special
Conditions, such Equipment is delivered f.o.b. point of shipment and NASI
shall be responsible for all expenses for preparing for shipment, packing
and moving the equipment from the location of Equipment acceptance to the
point of shipment. If Equipment is being installed by PracSys, then unless
otherwise stated in the Special Conditions, such Equipment is delivered at
site when it is accepted. Where the scheduled delivery of Equipment is
delayed by NASI, PracSys may deliver such Equipment by moving it to storage
for the account of and at the sole risk of NASI. When NASI is ready to
receive the Equipment, PracSys shall arrange at NASI's expense for removing
the equipment from storage and shipping it to NASI. Shipping dates are
based on prompt receipt of all necessary information from NASI. PracSys
reserves the right to make delivery in installments. Except as otherwise
provided in the Special Conditions, and except for the security interest
provided for in paragraph 3 below, risk of loss or damage shall pass to
NASI upon delivery. However, risk of loss shall remain with PracSys while
the Systems are installed at the PracSys Production Center. Subject to its
right to terminate this contract in the event of non-acceptance or
otherwise pursuant to this Agreement and to pass title back to PracSys,
NASI shall have title to the Work-in-Progress of each System from the date
of execution of this Contract.
During the manufacture of the Systems at the Production Center and upon
installation of the Systems, the Systems or the Work-in-Progress shall be
segregated from the rest of the facility by partitions or prominent floor
markings. A nameplate with model and serial numbers will be clearly
affixed to each system identifying NASI ownership.
NASI is responsible for removing the Equipment from the Site at the end of
the Term of the Service Contract or at an earlier termination date. NASI
shall reimburse PracSys for no more than the actual cost of posting
performance bonds, if any reasonably requested in the licensing and
permitting process to secure compliance with this removal obligation.
2. PAYMENT. NASI shall pay the Preproduction Engineering Price and the
Purchase Price as provided in the Special Conditions paragraph 8, Payment
Terms.
If shipment or delivery is delayed by NASI, payment shall become due on the
date PracSys is prepared to make delivery. Delays in delivery or
nonconformities in any
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installments shall not relieve NASI of its obligation to accept and pay
for remaining installments.
3. SECURITY INTEREST. As security for payment of all amounts due from time to
time under the Purchase Contract (the "Obligations"), NASI hereby grants to
PracSys a purchase money security interest in the Equipment and each
component thereof (the "Collateral"). NASI (a) represents and warrants
that its only offices and places of business are at the address shown in
the Contract Documents; and (b) agrees that (i) it will not transfer or
permit the transfer of the Collateral or any interest therein without the
prior written consent of PracSys, (ii) it will give PracSys prior written
notice of any change in corporate name or structure or in location of NASI
or the Collateral from the address referred to above, (iii) it will
promptly notify PracSys of any execution, levy, attachment, distraint or
seizure of or on the Collateral, (iv) it will execute and deliver to
PracSys financing statements in proper form for filing prior to shipment of
the Equipment or any component thereof, and (v) in the event of a failure
by NASI to pay the Obligations when due, or to comply with this paragraph
PracSys shall have all of the rights and may exercise all of the remedies
of a secured party, holder of a purchase money security interest, under the
laws of the Commonwealth of Massachusetts.
When requested by NASI, PracSys shall promptly cooperate in the filing by
NASI of a UCC financing statement for information purposes evidencing
NASI's title to each of the Systems and the Work-in-Progress.
4. TAXES. In addition to any price specified herein, NASI shall pay the gross
amount of any present or future sales, use, excise, value-added, or other
similar tax applicable to the price, sale or delivery of any equipment or
services furnished hereunder or to their use by PracSys or NASI, or NASI
shall furnish PracSys with evidence of exemption acceptable to the taxing
authorities. PracSys hereby represents and the parties hereby agree that
the sale shall take place in the State of New Hampshire.
5. CHANGES. NASI shall have the right to request in writing changes to the
configuration, design or delivery date of the Equipment, or additions to
or deletions from the general scope of supply hereunder. PracSys will
then prepare a change order reflecting all contract modifications
resulting from such request including but not limited to prices,
delivery schedules and warranties. PracSys shall have no obligation to
proceed with such request or change order until and unless the parties
have agreed in writing to the terms of such change order.
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MATERIAL HAS BEEN SEPARATELY FILED WITH THE COMMISSION.
6. EXCUSABLE DELAY. If delivery or installation of the Equipment is
prevented, restricted, interfered with or otherwise delayed by reason of
any cause beyond the reasonable control of PracSys or its subcontractors
or suppliers, including without limit: (i) fire, explosion, strike,
lockout by others, labor strike or similar dispute, casualty or
accident, lack of appropriate space on any available ship when the
Equipment is ready for shipment, epidemic, cyclone, drought, flood,
shortages of raw materials or power, or (ii) war, revolution, civil
commotion, acts of public enemies, blockade or embargo, or (iii) any law
or proclamation, regulation, ordinance, demand or requirement of any
applicable government or any subdivision thereof or representative of
any such government, then, and in that event, PracSys shall promptly
notify NASI of all resulting delays. Upon such notice, PracSys shall,
for the duration of its disability, be excused from the performance of
such of its obligations as are prevented, restricted, interfered with or
otherwise delayed by reason of any such cause and PracSys shall not be
deemed to be in default and not be subject to any liability or damage.
7. RIGHT TO INSPECT. NASI at its election and at its own expense may
inspect the manufacturing facility and components thereof at PracSys's
plant or plants during construction and factory tests, with reasonable
notice to PracSys, and at reasonable times.
8. ACCEPTANCE.
8.1 Representatives of NASI and PracSys shall sign each designated item
or test in the acceptance document as each is passed.
8.2 PracSys will supply all testing and calibration equipment for use
during these acceptance tests.
8.3 When all tests set forth in the relevant portion of the Contract
Documents for the Equipment (or a subsystem thereof subject to separate
testing and acceptance) are complete to the reasonable satisfaction of
NASI and have been signed by NASI'S representative, NASI will have
accepted the Equipment.
9. WARRANTY.
9.1 Except as set forth in paragraph 9.3 below and Paragraph 10 of
Appendix 2, PracSys warrants to NASI that the Equipment (i) shall, at
the date of completion of the acceptance tests for that equipment or
subsystem thereof (if there is a separate acceptance test for the
subsystem), comply with the requirements of the Performance Criteria and
(ii) shall, for a period of one year from the date of completion of the
acceptance tests be free from defect
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in material and workmanship when maintained and operated in accordance
with the Equipment Specifications, as the same may be changed from time
to time by mutual agreement.
9.2 Except as set forth in Paragraph 10 of Appendix 2, should the
Equipment or a separately accepted subsystem thereof covered by this
warranty fail to comply with the warranty during the aforesaid warranty
periods under normal and proper use and maintenance, PracSys shall, upon
receipt of prompt notice thereof, promptly correct such noncompliance at
its option by either repair or replacement. PracSys shall bear the cost
and risk of loss during transport for (i) any defective equipment or
parts thereof being returned to PracSys's factory or other site with
PracSys's prior consent and (ii) any repaired or replacement items being
returned to NASI. Replaced equipment or parts thereof shall become the
property of PracSys.
9.3 If the Equipment includes a computer system with standard data
processing systems and commercially available input and output devices,
all of which are subject to manufacturers' warranties, these
manufacturers' warranties shall be made available to NASI, and PracSys
shall not have any warranty obligations to NASI in respect of such
system beyond what is provided in these manufacturers' warranties.
PracSys shall notify NASI of the availability of manufacturers'
maintenance contracts that cover computer equipment after the expiration
of the manufacturers' warranties and NASI shall have the responsibility
for obtaining such maintenance contracts as it shall desire.
9.4 Any services provided hereunder and not covered by the Equipment
warranty, and any documentation or data to be delivered hereunder, are
warrantied for one year after performance or delivery to have been
performed or prepared in a workmanlike manner. If any such service,
documentation or data was not performed or prepared in the manner
warranted and such nonconformity appears during the one year period,
PracSys shall re-perform the services or revise the documentation or data
in a nonconforming manner.
9.5 Pracsys MAKES NO WARRANTIES OTHER THAN AS SET FORTH IN THIS
PARAGRAPH 9. ALL IMPLIED WARRANTIES ARE HEREBY DISCLAIMED, INCLUDING ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
CORRECTION OF NONCONFORMITIES OR DEFECTS AS PROVIDED ABOVE SHALL BE
NASI'S EXCLUSIVE REMEDY AND SHALL CONSTITUTE FULFILLMENT OF ALL
LIABILITIES OF PracSys OR ITS SUBCONTRACTORS OR AFFILIATES WHETHER IN
WARRANTY, CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE WITH
RESPECT TO THE QUALITY OF EQUIPMENT OR SERVICES FURNISHED HEREUNDER.
*** REDACTED PORTION. CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED
MATERIAL HAS BEEN SEPARATELY FILED WITH THE COMMISSION.
10. Infringement.
10.1 PracSys shall defend, hold harmless and indemnify NASI from and
against any and all liability and expense by reason of any third party
claim, suit, action or proceeding for infringement of any third party
proprietary rights including, but not limited to, copyrights, trade
secrets rights, or patents arising in connection with the manufacture,
installation, sale or use of the Equipment including any and all
judgments or decrees which may be rendered against NASI and reasonable
attorney's fees and settlements made arising out of any such claim,
suit, action, or proceeding, provided, however, that:
10.1.1 PracSys shall not be responsible for any settlement of any
such claim, suit, action or proceeding made without its prior
written consent, which shall not unreasonably be withheld;
10.1.2 This indemnity shall not extend to any alleged infringement
based upon the combination of the Equipment or any portion thereof
with other items or things not furnished hereunder unless PracSys
(a) knew of NASI's specific intention to combine the Equipment or
any portion thereof with a specific item and (b) in connection
therewith PracSys may be held reasonably to have been aware that
such a combination would constitute an infringement and PracSys did
not so advise NASI; and
10.1.3 This indemnity shall not extend to any alleged infringement
based upon a modification to the Equipment by NASI unless PracSys
directs that the modification be made or unless Pracsys (a) knew of
NASI's specific intention to modify the Equipment or any portion
thereof and (b) in connection therewith PracSys may be held
reasonably to have been aware that such a modification would cause
an infringement and Pracsys did not so advise NASI.
10.2 PracSys shall defend at its own expense all suits, actions or
proceedings brought against NASI with respect to the matters listed in
paragraph 10.1 above. NASI shall have the right, at its option and at
its sole expense, to participate in the defense of any such claim, suit,
action or proceeding, without relieving PracSys of any obligation
hereunder. NASI shall promptly notify PracSys in writing after any such
claim is made or suit is brought and shall cooperate with PracSys in
writing after any such claim is made or suit is brought and shall
cooperate with PracSys, and PracSys agrees to reimburse NASI for its
reasonable out-of-pocket expenses incurred in connection with such
cooperation, provided PracSys has agreed to the nature of the
cooperation in advance.
*** REDACTED PORTION. CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED
MATERIAL HAS BEEN SEPARATELY FILED WITH THE COMMISSION.
10.3 If, however, as a consequence of a final determination of any suit
for infringement or any court decision involving any injunction
resulting from or arising in connection with the manufacture, sale or
use of the Equipment or any part thereof furnished or employed by
PracSys hereunder, NASI is enjoined or limited in any material manner in
the use of said Equipment or material part thereof, PracSys shall, at
its option and at its own expense.
10.3.1 Procure for NASI the right to continue use of said Equipment
or part; or
10.3.2 So modify the Equipment or part as to render it
non-infringing without any significant effect on the use thereof; or
10.3.3 Replace the Equipment or part with a materially equivalent
non-infringing product.
10.4 In the event PracSys is unable, after diligent good faith efforts,
to provide any of the remedies provided for in clauses 10.3.1 through
10.3.3 hereof, PracSys may in fulfillment of its obligation under this
paragraph remove such Equipment or part and refund to NASI the purchase
price thereof.
10.5 THIS PARAGRAPH SETS FORTH THE SOLE OBLIGATIONS OF PracSys AND ITS
SUBCONTRACTORS AND AFFILIATES, AND THE EXCLUSIVE REMEDIES OF NASI, WITH
RESPECT TO INFRINGEMENT OF THIRD PARTY PROPRIETARY RIGHTS. IN NO EVENT
SHALL PracSys OR ITS SUBCONTRACTORS OR AFFILIATES BE LIABLE TO NASI FOR
LOSS OF USE, REVENUE, OR PROFIT OR ANY OTHER DIRECT, INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING FROM ANY SUCH INFRINGEMENT.
11. DISCLAIMER OF LIABILITY. IN NO EVENT SHALL PracSys OR ITS SUBCONTRACTORS
OR AFFILIATES BE LIABLE FOR SPECIAL, INDIRECT, CONSEQUENTIAL, OR
INCIDENTAL DAMAGES IN CONNECTION WITH THIS AGREEMENT OR THE EQUIPMENT,
SERVICES OR INFORMATION SUPPLIED HEREUNDER (INCLUDING LIABILITIES BASED
XXXX XXXXXXXX, XXXXXXXX, XXXXXXXXXX, XXXX, XXXXXX LIABILITY OR
OTHERWISE) INCLUDING WITHOUT LIMITATION LIABILITY FOR LOSS OF USE,
REVENUE OR PROFIT, COST OF ALTERNATIVE SUPPLY AND OR FACILITIES,
DOWNTIME COSTS OR CLAIMS OF CUSTOMERS.
*** REDACTED PORTION. CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED
MATERIAL HAS BEEN SEPARATELY FILED WITH THE COMMISSION.
12. INSURANCE. Immediately upon execution of this Agreement, except as
otherwise provided in this paragraph, PracSys, at its own expense, shall
obtain and maintain appropriate insurance as follows:
12.1 "All risk" property damage insurance covering the replacement cost
value of the Equipment while located on the premises of PracSys, or its
subcontractors prior to acceptance.
12.2 Comprehensive General Liability Insurance for property damage and
bodily injury liabilities with a combined single limit of not less than
$1,000,000.
12.3 A Workers' Compensation policy as required by the state or other
jurisdiction where the Equipment is to be installed, insuring employees
of PracSys, or its subcontractors, performing work for NASI at the Site.
12.4 "All risk" property damage insurance covering the period the
Equipment is in transit to and is being installed at the Site. The
PracSys insurance policies shall remain in force until acceptance, shall
be for 110% of the purchase price of the Equipment and shall be in the
joint names of NASI, PracSys and its subcontractors.
12.5 NASI shall be added as a named insured under said insurance as
respects their interests in the Equipment, including the "All risk" and
"Comprehensive General Liability Insurance" policies specified in
paragraphs 12.1 and 12.2 above. Each said insurance policy shall
specifically provide that it may not be canceled or materially altered
without thirty (30) days prior written notice to NASI.
12.6 PracSys shall furnish NASI with appropriate Certificates of
Insurance in forms acceptable to NASI within sixty (60) days of the date
hereof. PracSys shall make its policies available for inspection by
NASI. PracSys shall not reduce limits on any policy required by the
Contract Documents below those stated in the Certificates of Insurance
initially furnished to NASI so long as those insurance policies cover
activities under the Contract Documents.
12.7 The insurance described in paragraphs 12.2, 12.3 be required only
if PracSys is responsible for installation. The property insurance
described in paragraphs 12.1 and 12.4 above does not cover a computer
system if separately identified in the Special Conditions, or items
which are shipped direct from third party vendors.
***REDACTED PORTION. CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL
HAS BEEN SEPARATELY FILED WITH THE COMMISSION.
12.8 Neither PracSys nor its subcontractors or affiliates shall have
any liability for personal injuries or death or damage to property
occurring to NASI's personnel or property arising from the installation
or use of the Equipment, or components thereof, to be delivered
hereunder except to the extent that such injuries, death, or property
damage are caused by a defect in the design, manufacture or installation
of the Equipment or by the negligence of employees, agents consultants
and all other persons under the control of PracSys or its subcontractors.
13. SITE PREPARATION AND OTHER RESPONSIBILITIES OF PRACSYS.
13.1 PracSys shall have the sole responsibility for securing approvals
(a) for the design of the shielding required to maintain any radiation
leakage at safe levels and (b) for systems required to handle the
disposition of radioactive waste.
13.2 PracSys shall carry out and complete its work required for Site
preparation as defined in the Contract Documents. PracSys shall complete
such work prior to the scheduled arrival of the Equipment or any
component thereof.
13.3 PracSys shall be solely responsible for assuring that all
licenses, permits, approvals, consents and other authorization that may
be required by all Federal, state and local governmental authorities for
the installations and operation of the Equipment or any component at the
production site are obtained.
13.4 It is understood by the parties that PracSys can not and will not
require PracSys personnel to subject themselves to radiation exposure
beyond safe radiation dose limits and that if such a situation arises,
PracSys shall stop work until other personnel are available. Any delays
that result from radiation exposure shall be deemed to be excusable
delays.
14. PROPRIETY INFORMATION.
14.1 Information including data and documentation ("Information") in
whatever form disclosed by PracSys and identified as confidential or
proprietary or which by its nature would be regarded as confidential or
proprietary shall be and remain the property of PracSys. NASI shall have
a royalty-free license to use such Information in connection with the
use, operation and maintenance of the Equipment. NASI shall respect the
confidential and proprietary nature of such Information, shall not
disclose it to third parties or permit its dissemination to its own
employees other than those having a need to know, shall limit and
control the copying of such Information and shall keep all copies
*** REDACTED PORTION. CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL
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(which shall be numbered) in a secure place when not in use, shall
require its employees to respect the confidential and proprietary nature
of the Information, and shall treat such Information with a caution and
care not less than that with which it treats its own confidential or
proprietary information and will use similar means to protect it from
unauthorized disclosure.
14.2 Without limiting the foregoing, NASI shall not use such
Information for the purpose of designing or manufacturing any equipment
or parts unless the same is necessary to the operation of the Equipment
and PracSys has not been able to provide the needed equipment or parts.
14.3 No information, data or material shall be considered confidential
or proprietary if (i) it is in the public domain without fault of NASI
or its employees or is made publicly available by PracSys (ii) is
disclosed to NASI by another party under no obligation to maintain its
confidentiality, (iii) if it was already known to NASI, such prior
knowledge to be demonstrated only by written documents in existence
prior to the date of disclosure or (iv) if it corresponds in substance
to information which NASI independently develops.
14.4 Information including data and documentation ("Information") in
whatever form disclosed by NASI and identified as confidential or
proprietary or which by its nature would be regarded as confidential or
proprietary shall be and remain the property of NASI. PracSys shall have
a royalty-free license to use such Information in connection with the
use, operation and maintenance of the Equipment. PracSys shall respect
the confidential and proprietary nature of such Information, shall not
disclose it to third parties or permit its dissemination to its own
employees other than those having a need to know, shall limit and
control the copying of such Information and shall keep all copies (which
shall be numbered) in a secure place when not in use, shall require its
employees to respect the confidential and proprietary nature of the
Information, and shall treat such Information with a caution and care
not less than that with which it treats its own confidential or
proprietary information and will use similar means to protect it from
unauthorized disclosure.
14.5 Without limiting the foregoing, PracSys shall not use such
Information for the purpose of designing or manufacturing any equipment
or parts unless the same is necessary to the operation of the Equipment
and NASI has not been able to provide the needed equipment or parts.
14.6 No information, data or material shall be considered confidential
or proprietary if it is in the public domain without fault of PracSys Sys
or its employees or is made publicly
*** REDACTED PORTION. CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL
HAS BEEN SEPARATELY FILED WITH THE COMMISSION.
available by NASI or is disclosed to PracSys by another party under no
obligation to maintain its confidentiality, or if it was already known
to PracSys, such prior knowledge to be demonstrated only by written
documents in existence prior to the date of disclosure.
15. WAIVER OF AUTOMATIC STAY. PracSys hereby waives any right to prevent
NASI from obtaining immediate relief from any automatic stay imposed
pursuant to Section 362 of the Bankruptcy Code, or otherwise, on or
against the exercise of the rights and remedies otherwise available to
NASI as provided herein, in the Contract Documents, or as otherwise
provided at law or in equity; (i) PracSys hereby consents to NASI's
relief from any aforementioned stay and to NASI's exercise of the rights
otherwise available to NASI herein or in the Contract Documents; and
(ii) PracSys shall not seek or apply for any expansion of the provisions
of Section 362 of the Bankruptcy Code or any injunction against NASI's
exercise of its rights herein or in the Contract Documents.
16. GOVERNING LAW. All questions relating to this Purchase Contract,
including the validity, interpretation and performance thereof, shall be
decided in accordance with the laws of the Commonwealth of
Massachusetts, United States of America.
17. NOTICES. Any notice under the Contract shall be in writing and shall be
given by personal delivery, first class air mail, air courier service,
telex, telefacsimilie or commercial cable and shall be addressed to the
addresses set forth in the Special Conditions.
18. SEVERABILITY. If any term or provision of the Contract is held to be
illegal or unenforceable, then the Contract, except for such part or
parts thereof, shall continue to be in full force and effect to the
extent possible without the illegal or unenforceable provision.
19. WAIVER. The failure by either party to enforce at any time or for any
period of time any of the provisions hereof shall not be a waiver of
such provisions nor of the right of such party thereafter to enforce
each and every such provision.
20. BENEFITS OF AGREEMENT. The Purchase Contract of which these conditions
form a part shall inure to the benefit of an be binding upon each of the
parties hereto and their respective successors and assigns, but neither
the rights nor the duties of either party hereunder may be assigned in
whole or part without the prior written consent of the other party.
*** REDACTED PORTION. CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL
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21. ARBITRATION.
21.1 If a dispute arises out of or related to this Agreement, or the
breach thereof, and if the dispute cannot be settled through
renogotiation, the parties agree first to try in good faith to settle the
dispute by mediation administered by the American Arbitration
Association under its Commercial Mediation Rules before resorting to
arbitration, litigation or some other dispute resolution procedure.
21.2 All disputes, controversies or differences which may arise between
the parties, out of or in relation to or in connection with this
Agreement, or for the breach thereof, shall be finally settled by
arbitration proceedings held in Boston, Massachusetts, and conducted in
accordance with the rules and procedures of the American Arbitration
Association. The award shall be final and binding on all parties hereto.
Judgment upon the award rendered may be entered in any court having
jurisdiction, or application may be made to such court for judicial
acceptance of the award or order of enforcement as the case may be.
*** REDACTED PORTION. CONFIDENTIAL TREATMENT REQUESTED. THE REDACTED MATERIAL
HAS BEEN SEPARATELY FILED WITH THE COMMISSION.
