Exhibit 10.6
Legal Department
1075/97 Ks
July 31, 1997
10800674
CONTRACT
between
AXS - Analytical X-Ray Systems GmbH
Xxxxxxxxxxxx 00
00000 Xxxxxxxxx
("AXS")
and
Siemens Aktiengesellschaft
Berlin and Munich
Medical Technology Division
Xxxxxxxxxxxxxx 0
00000 Rudolstadt
("Siemens")
on order development
and subsequent production and delivery
PREAMBLE
Siemens has extensive experience in the development and production of X-ray
emitters for materials analysis.
AXS is interested in having Siemens develop and produce a specific spectrometry
emitter for AXS.
Siemens is prepared to undertake this task.
The parties to the contract therefore agree as follows:
1. DEFINITIONS
1.1 The term "PRODUCT" refers to the 1,000 W spectrometry emitter described
in broad terms in APPENDIX 1 of this contract (Performance Standard).
1.2 The term "WORK" refers to the totality of the work done to perform the
development of the PRODUCT up to the proof of functionality as
specified in Item 3.2 below.
1.3 "RESULTS" are the patentable and non-patentable results in written
and/or oral form, including software, that are created during the
performance of the WORK pursuant to Item 2, particularly the PRODUCT as
a whole developed for AXS under this contract and the parts contained
in this product that are created during the performance of the work
pursuant to Item 3. Technical knowledge possessed by Siemens at the
start of this contract or created at Siemens during this contract but
independent of it ("background knowledge") is naturally not included in
the term "RESULTS."
2. AWARDING OF CONTRACT
AXS hereby awards Siemens the contract and Siemens undertakes to
develop the PRODUCT for
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
EXHIBIT, WHICH PORTIONS HAVE BEEN OMITTED AND REPLACED WITH [**] AND FILED
SEPARATELY WITH THE COMMISSION.
AXS according to the provisions of this contract and to produce it and
deliver it to AXS, subject to the successful completion of the WORK as
provided in Item 8.
3. PERFORMANCE OF WORK
3.1 Based upon the performance standard, Siemens shall produce a total of
four (4) prototypes of the PRODUCT and deliver them to AXS by the end
of the seventh (7th) month after the start of the contract.
Siemens shall promptly transmit test reports on the function test and
technical data to AXS.
3.2
3.2.1 Within four (4) weeks after receipt, AXS shall inspect these prototypes
for conformity with the specifications (Appendix 1) and shall inform
Siemens in writing of the inspection results.
3.2.2 If the prototypes meet the specifications pursuant to Appendix 1, AXS
shall transmit a release report to Siemens within two (2) weeks after
completion of the inspection. If AXS does not comment within the period
specified in Item 3.2.1, the prototypes shall be deemed to have no
defects.
3.2.3 If the prototypes do not meet the specification, Siemens shall
eliminate such defects after receiving the test report and shall
deliver to AXS a corresponding number of prototypes that have been
corrected accordingly. This shall take place no later than two (2)
months after the prototypes have been rejected. Siemens shall correct
the defects free of charge, unless the defects are due to a
specification that contains defects.
3.3 Upon transmission of the release report, the WORK shall be successfully
completed.
3.4 General rules that apply to the performance of the WORK:
3.4.1 Siemens shall maintain close contact with AXS during the performance of
the WORK. AXS must be notified immediately of any problems that arise
which may cause deviations from the schedule or other stipulations, so
that the parties can work together to find a suitable solution for the
issues that have arisen.
3.4.2 Siemens shall strive as it customarily does in its own interests within
the company to achieve the best possible results in performing the
WORK.
3.5 If Siemens wishes to award subcontracts for the performance of the
WORK,
- Siemens shall bear full responsibility, including financial
responsibility, for the subcontracted work;
- Siemens shall incorporate the results of the subcontracted work
into the RESULTS and ensure that they are available to AXS in the
manner of Siemens' own work as provided in the present contract
and shall further ensure that the subcontractor must release the
results to Siemens in their entirety and is not permitted to use
them for other purposes;
- Before Siemens makes available to the subcontractor information
that it may have obtained from AXS, Siemens shall pledge the
subcontractor to confidential handling pursuant to Item 6 and
shall require that the information be used only for the purposes
of the awarded subcontract.
3.6 Siemens shall strive to implement expansions of or changes to the
PRODUCT that are requested by AXS even during serial production,
provided that the partners have reached a suitable agreement on the
effects of such expansions and/or changes on the PRODUCT, deadlines,
[**] Indicates that information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.
development costs, and product prices.
4. DEVELOPMENT COSTS
AXS shall contribute DEM 200,000.00 (two hundred thousand Deutsche
marks) plus currently applicable VAT to the development costs incurred
by Siemens in connection with the WORK. Payment shall be made according
to the payment schedule in APPENDIX 2, specifically within two (2)
weeks after receipt of the corresponding invoice in each case, to the
Siemens bank account designated therein.
Payment of the above amount simultaneously covers delivery of the four
(4) prototypes.
5. RIGHTS TO RESULTS
5.1 When created, the RESULTS shall become the property of Siemens. If the
RESULTS contain patentable inventions, also including patentable ideas,
Siemens shall, at its discretion, apply for or pursue patents in its
name in any countries of its choice.
Siemens shall inform AXS in an appropriate manner regarding any such
patent applications it intends to file and the countries in which the
applications are to be filed. AXS shall have the right to comment and
to make suggestions.
5.2 If Siemens does not apply for a patent on an invention contained in the
RESULTS or does not apply for a patent on the invention in a given
country, or if it does not desire to maintain a patent granted to it on
the basis of such an application, it shall offer AXS, in a timely
manner, the opportunity to take over the patent or the patent
application. The costs associated with the takeover shall be the
responsibility of AXS. In exchange for suitable remuneration, Siemens
shall be entitled to rights of joint use of any such patents/patent
applications taken over by AXS.
5.3 If the RESULTS are protected by proprietary rights, Siemens shall have
the exclusive, geographically and temporally unlimited right,
transferable by Siemens alone, to use the RESULTS in an altered or
unaltered form for all types of use, and to grant rights to third
parties for all types of use at its discretion. The types of use shall
include, in particular, rights to reproduce, distribute, and display,
and to present, exhibit, demonstrate, and broadcast, in addition to the
rights to transmission by means of video, audio, and data recording
media and the transmission of film and radio transmissions.
6. CONFIDENTIALITY
6.1 Siemens shall use the information and documents provided by AXS,
including those received by Siemens prior to the signing of this
contract, only for the purposes of this contract, and shall treat this
information and these documents as confidential, as it would treat its
own documents and information that are subject to confidentiality.
Siemens shall have fulfilled its duty of confidentiality if it has
taken this due care.
For its part, AXS shall treat information and documents provided by
Siemens, including those received by AXS prior to the signing of this
contract, and the RESULTS with the same confidentiality.
6.2 The obligations contained in Item 6.1 shall remain in effect even after
termination of the contract. They shall not apply to information and
documents that have become incorporated into the prior art accessible
to the public through no fault of the recipient, nor to those which the
recipient demonstrates were already part of the recipient's internal
prior art when obtained from the other party or became part of the
internal prior art subsequently with no connection to the present
contract.
[**] Indicates that information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.
If a party wishes to make public reference to the cooperative venture,
it must coordinate this in advance with the other party.
7. FORCE MAJEURE
The parties shall be released from all responsibilities for
non-fulfillment of their obligations under this contract in the event
of and for the duration of an act of a force majeure.
A "an act of force majeure" shall be any event that occurs independent
of the will of a party and prevents the party irremediably from
fulfilling one or more obligations under the contract (examples: war,
unrest, natural or transportation disasters). Strikes and their effects
are deemed equivalent to an act of force majeure if they do not pertain
exclusively to the company.
If a disparity arises concerning the performances to be made by both
sides under this contract due to one party's being prevented from
fulfilling this contract due to an act of force majeure, the parties
shall attempt to reach agreement on a suitable settlement. If they are
unable to reach agreement within a reasonable period of time (no more
than six (6) months after the invitation), then the party that is not
prevented from fulfilling its obligations by an act of force majeure
shall have the right to early termination of this contract by means of
a registered letter at any time prior to the elimination of the
obstacle and the disparity.
8. PRODUCTION AND DELIVERY
8.1 Following successful completion of the WORK pursuant to Item 3.3
- Siemens shall supply AXS with PRODUCTS in accordance with the
delivery orders issued to Siemens by AXS as provided in the
present Item 8 and
- AXS shall purchase PRODUCTS from Siemens as provided in the
present Item 8.
In regard to this Item 8, Siemens' exclusive partner on the AXS side
shall be the AXS Purchasing Department.
8.2 The unit price per PRODUCT shall be DEM [**] plus VAT as required by
law.
Prices may be modified as necessary due to changes in costs. However,
prices may not be increased prior to December 31, 1999. The percentage
increase in these prices must not exceed the percentage increase in the
prices of comparable Siemens products.
The prices are understood to be ex works, exclusive of shipping,
packaging, and insurance.
For orders, the prices valid on the date of the order shall apply.
8.3 Delivery quantities and times
Details on delivery times and delivery or order quantities are
established annually in individual orders, separately in each case.
AXS shall inform Siemens no later than July 1, 1998 of its expected
need for PRODUCTS for the calendar year 1999. Subsequently, for
purposes of advance planning and to ensure short delivery times, AXS
shall inform Siemens of its expected need for additional deliveries
pursuant to Item 8.1 for the next six (6) months at the beginning of
each calendar quarter. These notifications are not binding.
[**] Indicates that information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.
8.4 Warranty
In the event of defects in the PRODUCTS delivered by Siemens in
accordance with Item 8.1, Siemens' conclusive liability shall consist
of replacing or repairing, free of charge, all of the defective
PRODUCTS or their parts of which it is notified within the warranty
period.
Shipping/packaging costs, including any incidental costs such as
import/export duties, shall be the responsibility of Siemens in
warranty cases. The warranty period shall be twelve (12) months from
delivery to the customer, although not more than eighteen months from
the date when the shipment leaves the Siemens production facility.
Siemens shall number the PRODUCTS sequentially.
8.5 Delivery of spare parts
AXS shall project its need for spare parts for PRODUCTS on an annual
basis and in advance. Siemens shall supply AXS with spare parts for
PRODUCTS even after the termination of this contract. This obligation
shall end at the conclusion of seven (7) years after the last delivery
of series PRODUCTS to AXS. Siemens shall offer AXS a final supply in a
timely manner prior to the end of this seven (7) year period.
8.5.2 Spare parts covered by this contract may also include the delivery of
parts that can be installed in the PRODUCTS supplied pursuant to Item
8.1 without the need for modifications of their form according to the
specifications.
8.6 Technical modifications
Where necessary or expedient and in consultation with AXS, Siemens
shall make technical modifications to the objects it delivers pursuant
to Item 8.1. If Siemens intends to make such modifications, AXS must be
informed in a timely manner if these modifications will affect
installation, operation, maintenance, and/or repair. In the event of
modifications requested by AXS, AXS shall be responsible for any
resulting costs.
Changes in costs resulting from technical modifications shall be taken
into account in an appropriate manner in the prices pursuant to Item
8.2.
8.6 Service
In principle, AXS itself shall be responsible for service to its
customers. In the event that service is required, if there are
difficulties with the PRODUCTS supplied pursuant to Item 8.1 that AXS
cannot resolve with its own personnel, Siemens shall be prepared to
provide specialized personnel under the conditions and at the rates
that are in effect at the time, upon request and to the best of its
ability.
8.8 Other delivery conditions
Unless otherwise expressly agreed upon in the above provisions,
deliveries of PRODUCTS are subject to the current "General Delivery
Conditions for Products and Services in the Electronics Industry"
("green delivery conditions").
8.9 The present contract shall not limit Siemens in its activities in the
spectrometry emitter field. If, however, during the first three (3)
years after successful completion of the WORK, AXS has ordered the
following minimum unit quantities of PRODUCTS for delivery in the year
in question:
- First year, 20 (twenty) units
- Second year, 40 (forty) units
- Third year, 55 (fifty-five) units,
[**] Indicates that information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.
then Siemens shall deliver PRODUCTS to third parties (affiliated
companies--meaning companies in which Siemens holds a 50% interest in
terms of voting rights or capital, as long as this interest is
held--are not third parties in the meaning of Item 8.9) only with the
express prior consent of AXS; AXS shall not unfairly withhold its
consent, but can cause it to be dependent upon the payment of an
appropriate share of the profit, to be established on a case-by-case
basis. The total payments to be made by Siemens under this provision
shall be limited to DEM 200,000.00 (two hundred thousand Deutsche
marks) plus currently applicable VAT.
Billing and payment of the fees shall occur at the end of every second
(2nd) month following the end of each year after successful completion
of the WORK.
Siemens shall maintain proper financial records on all transactions
subject to these fees. AXS shall have the right to have the relevant
Siemens documents audited for accuracy by a sworn auditor acceptable to
Siemens (e.g. KPMG). If an audit discloses errors to the detriment of
AXS equal to 5% (five percent) of the amount of the last statement to
AXS, Siemens shall be responsible for the costs of the audit;
otherwise, AXS shall bear the costs.
8.10 If after the introduction of the euro in Germany, the Deutsche mark is
still used as a subordinate unit of currency to the euro, accounting
and payments between the parties shall be made exclusively in euros as
of the October 1 subsequent to the introduction of the euro. The
official exchange rate shall be binding for this purpose. The
introduction of the euro shall have no effect on the validity of this
contract.
9. TERM OF THE CONTRACT
9.1 This contract shall take effect upon being signed by both parties.
9.2 The contract shall be valid until November 30, 2001. Orders submitted
up to that date shall remain unaffected by the expiration of the
contract.
9.3 Each party shall have the right to terminate the contract without prior
notice by means of a registered letter at any time,
9.3.1 if the other party has committed a culpable breach of the provisions of
this contract and has not eliminated this breach and, as far as
possible, its consequences within 30 (thirty) days after a written
warning, and the parties have not agreed upon other arrangements within
the stated period of 30 (thirty) days;
9.3.2 if an application for the initiation of composition or bankruptcy
proceedings or similar proceedings has been filed concerning the assets
of the other party;
9.3.3 if the party of the second part comes under the controlling influence
of a third party, technically or commercially, and the party of the
first part believes that this is detrimental to its interests. Each
party shall notify the other party in writing immediately if a third
party acquires such a controlling influence.
9.4 The provisions of Nos. 5 and 6 shall remain unaffected by the
termination of the contract, irrespective of the reason for the
termination.
10. LIABILITY
Siemens shall bear unlimited liability for damages to persons for which
it is responsible; in the event of property damage for which it is
responsible, it shall reimburse expenses for the restoration of the
property, up to a maximum of DEM 1,000,000.00 per instance of damage.
[**] Indicates that information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.
Warranty claims and claims for damages by AXS other than those
expressly contained in this contract shall be precluded, irrespective
of the legal basis, particularly claims for damages due to interruption
of operations, lost profit, and loss of information and data, unless
liability is required due to willful misconduct, gross negligence, or
the absence of warranted characteristics.
11. OTHER PROVISIONS
11.1 There are no ancillary agreements.
11.2 Any changes or additions to this contract must be made in writing. Any
waiver of this requirement of written form must be made in writing.
11.3 If a provision of this contract is or becomes invalid, the remaining
content of the contract shall be unaffected thereby.
The parties shall attempt to replace the invalid provision with a valid
provision that approaches as nearly as possible the commercial effect
of the invalid provision.
12. ARBITRATION
Unless otherwise provided in the applicable delivery conditions, the
following arbitration clause shall apply to the present contract:
Final resolution of all disputes arising in connection with this
contract or concerning its validity shall be reached in accordance with
the Arbitration Tribunal Code of the German Arbitration Institute
(DEUTSCHE INSTITUTION FUR SCHIEDSGERICHTSBARKEIT e. V., DIS) in Bonn,
without the possibility of recourse to legal action. The arbitration
tribunal may also issue a binding ruling on the validity of this
arbitration agreement.
The arbitrators must apply material German law.
Karlsruhe Rudolstadt 14, 1997
AXS - Analytical X-ray Systems GmbH Siemens Aktiengesellschaft
[signature] [signature]
[**] Indicates that information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.
APPENDIX 1
Performance Standard Version 2 Page 1 of 3
TOPIC: 1 KW END-WINDOW X-RAY EMITTER WITH SELF-CONTAINED COOLING CIRCUIT
Release: July 28, 1997 Xxxxxx Xxxxxxxxxx [signature]
Date Name (Created by) Signature
Note: When a new version is released, it does not incorporate this performance
standard!
1. DESCRIPTION
End-window x-ray emitter with a high-voltage anode and self-contained
cooling system.
2. SPECIFICATION OF ELECTRICAL DATA
Tube load (with DC voltage) [**]
Tube voltage [**]
Tube current [**]
Cathode [**]
Emissions characteristic of [**]
Damping resistance (at 20 kHz) [**]
[**]
[**] Indicates that information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.
Performance Standard Version 2 dated July 28, 1997, page 2 of 3
Topic: 1 kW end-window x-ray emitter with self-contained cooling circuit
3. SPECIFICATION OF ANALYTICAL DATA
Anode material [**]
Ring burner area (exterior diameter) [**]
Spectral contamination [**]
Max. loss of intensity (Rh L) [**]
Guaranteed useful life [**]
Radiation output window [**]
Load fluctuation (vacuum/1.1 bar) [**]
Temperature load window [**]
4. EMITTER DIMENSIONS
Tube head similar to drawing (attached),
therefore
Anode sample distance in SRS MIDI [**]
Length and diameter [**]
Final dimensions To be determined by the
end of 8/97
5. RADIATION LEAKAGE
Dose output (emitter head shielded with lead) [**]
Unit inspection of emitters
(1) Can be enlarged if the load window is increased accordingly.
(2) If other materials are used, the measurement must be extended for these
materials.
[**] Indicates that information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.
Performance Standard Version 2 dated July 28, 1997, page 3 of 3 Topic: 1 kW
end-window x-ray emitter with self-contained cooling circuit
6. COOLING SYSTEM
Self-contained cooling system with heat exchanger for ambient air
Dimensions To be determined by
end of 8/97
Cooling fluid [**]
Useful life of deionization cartridges [**]
Permissible ambient air temperature [**]
Max. power usage [**]
Sensors [**]
Interface To be determined by
end of 8/97
7. TRANSPORTATION AND STORAGE
Permissible air pressure [**]
Permissible humidity [**]
Permissible temperature range [**]
Permissible temperature gradient [**]
Permissible storage period [**]
8. OPERATING CONDITIONS
[**]
Attachment: Drawing of tube head
[**] Indicates that information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.
[see diagram] [**]
Attachment to Performance Standard dated July 28, 1997, Version 2
Topic: 1 kW end-window x-ray emitter with self-contained cooling circuit
APPENDIX 2
PAYMENT SCHEDULE:
Milestones: Planned deadline: AXS pays:
Feasibility study August 1, 1997 [**]
Design specification drawn up November 1, 1997 [**]
Delivery of 4 prototypes March 1, 1998 [**]
Start of delivery October 15, 1998 [**]
[**] Indicates that information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.
ACKNOWLEDGMENT OF TRANSLATION
August 14, 2001
The undersigned officer of the Registrant hereby acknowledges on behalf
of the Registrant that the foregoing translation of the Development Agreement
between Bruker AXS GmbH and Siemens Aktiengesellschaft Berlin und Munchen
Bereich Medizinische Technik is a fair and accurate English translation from
German of the original executed agreement.
BRUKER AXS INC.
By: /s/ Xxxxxx Xxxxx
----------------------------------
Xxxxxx Xxxxx, President and Chief
Executive Officer
