Exhibit 10.4
SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (the "Agreement") made and entered into effective as
of the 30th day of March, 1998 (the "Effective Date"), by and between BRUKER
AXS, INC. with offices at 0000 Xxxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxx 00000
(hereinafter "BAXS") and Lockheed Xxxxxx Xxxxxxxxx Systems with offices at 0000
XxXxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000 (hereinafter "LMF").
WHEREAS, LMF is the owner of certain proprietary hardware, software and
technology and desires to develop, manufacture and market a stand-alone,
digital, charge-coupled device ("CCD") image acquisition camera (the "CCD
Camera") and various other related items (collectively the "Large Direct Imaging
Detector" or the "LDI Detector") for research and industry;
WHEREAS, BAXS desires to purchase the LDI Detector from LMF and LMF
desires to sell the LDI Detector to BAXS so that BAXS can integrate the LDI
Detector in its manufacture and sale of its diffraction systems under the terms
and conditions set forth in this Agreement; and
WHEREAS, BAXS desires to obtain a license to distribute the LDI Detector
and written documentation therefor, and LMF desires to grant BAXS a license to
distribute the LDI Detector and such documentation, all on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants, representations and conditions contained in this Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound, agree as
follows:
SECTION 1. DEFINITIONS.
For the purposes of this Agreement, the definitions set forth in this
Section shall apply to the respective capitalized terms:
1.1 "Agreement" - This Agreement, including any exhibits, appendices or
attachments attached hereto.
1.2 "LDI Detector" - The CCD Camera adapted for use in the Field of X-Ray
Diffraction as more fully described in both Exhibit A attached hereto and the
Specifications, and including the Hardware, Software and Maintenance
Modifications.
1.3 "Documentation" - Those printed instructions, manuals, and diagrams
pertaining to the LDI Detector and the Software, as described in Exhibit A.
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.
1.4 "End-User" - A customer of BAXS to whom BAXS or its distributors have
sold LDI Detectors either separately, or as part of its Diffraction Systems, for
use in the regular course of such customer's business, and/or for resale by an
OEM customer as part of such customer's system.
1.5 "Enhancement(s)" - Computer program modifications or additions, other
than Maintenance Modifications, that may be integrated with the Software or
Hardware or offered separately by LMF and that alter the functionality of the
Software or Hardware or add new functions thereto.
1.6 "EPROM" - A chip on which the stored memory can be erased and the chip
reprogrammed by "burning in" new Software.
1 .7 "Error" - A defect in the Software or Hardware that prevents the
Software or Hardware from functioning in substantial conformity with the
Specifications.
1.8 "Field of X-Ray Diffraction" - Any application which involves the
diffraction of x-rays by a sample in which the incident and measured diffracted
beam are of the same energies ("coherent scattering"), including, but not
limited to, single crystal diffraction, polycrystalline diffraction, and small
angle and wide angle scattering applications.
1.9 "Hardware" - All items of equipment available from LMF and specified
in Exhibit A, including all Maintenance Modifications thereto.
1.10 "Maintenance Modification(s)" - Changes to be integrated with the
Software or Hardware, which (i) correct any Errors therein, or fix "bugs" in the
Software, even though such Errors or "bugs" do not prevent the Hardware or
Software from functioning in substantial conformity with the Specifications, and
(ii) do not alter the functionality of the Hardware or Software or add any new
functions thereto.
1.11 "Marketing Territory" - The entire world.
1.12 "Object Code" - Computer programs assembled or compiled in magnetic
or electronic binary form on software media, which are readable and usable by
machines, but not generally readable by humans without reverse assembly, reverse
compiling, or reverse engineering.
1.13 "OEM"- A company which purchases hardware and software from a vendor
and adds value, in the form of applications software or other components, and
then resells both the hardware and software as a system.
1.14 "Software" - The computer software that is listed in the Exhibit A
attached hereto, including all Maintenance Modifications thereto.
- 2 -
1.15 "Source Code" - A computer software program written in higher-level
programming languages which is sometimes accompanied by English language comment
and is intelligible to trained programmers and may be translated to Object Code
for operation on computer equipment through the process of compiling.
1.16 "Specifications" - The LDI Detector functionality and performance
standards set forth in Exhibit A.
1.17 "Statement of Work" - The description of the development work to be
undertaken by LMF as set forth in Exhibit A attached hereto.
SECTION 2. AGREEMENT TO PURCHASE AND SELL; EXCLUSIVITY.
2.1 BAXS agrees to purchase the LDI Detector from LMF and LMF agrees to
sell the LDI Detector to BAXS during the term of this Agreement and any
extensions hereof in accordance with the terms and conditions set forth in this
Agreement.
2.2 Prices set forth in Exhibit B are exclusive of any and all United
States, state and local excise, sales, use or similar taxes and shipping and
insurance costs. When applicable, such items shall appear as separate additional
items on LMF invoices and shall be paid by BAXS.
2.3 The purchase and sale obligations in Section 2.1 shall be on an
exclusive basis for the Marketing Territory and for the Field of X-Ray
Diffraction for so long as the conditions set forth in Section 2.4 and Exhibit C
attached hereto are met. However, at all times when the LDI Detector is not
fully available to BAXS from LMF in accordance with the provisions hereof, BAXS
shall be free to purchase products from third parties which violate the
exclusivity set forth in this Section 2.3 without being in breach of this
Agreement or any provision hereof.
2.4 If and for so long as BAXS shall continue to place orders with
requested delivery dates and take delivery of the number of units of the LDI
Detector as provided in Exhibit C, and provided LMF has not terminated its
exclusivity obligations hereunder pursuant to Section 2.5, LMF shall not
knowingly (i) market, sell or license in any way the LDI Detector or any product
based on the LDI Detector to any person or entity for use in the Field of X-Ray
Diffraction; or (ii) develop any equipment which has the same system concept as
the LDI Detector for use in the field of X-Ray Diffraction or the same
arrangement of components for use in the Field of X-Ray Diffraction for any
person or entity which is a supplier of X-ray diffraction equipment. If BAXS or
LMF identifies, during the period of exclusivity, that LMF, or its
representatives, has unknowingly sold and delivered the LDI Detector for use in
the Field of X-Ray Diffraction to a third party, such sale will count towards
the minimum number of units set forth in Exhibit C for the period in which the
sale was identified. BAXS acknowledges LMF's proprietary and intellectual
property rights in its CCD technology and
- 3 -
agrees that nothing contained in this Agreement shall be deemed to limit,
prejudice or be deemed as a waiver of any such rights by LMF, its successors or
assigns. LMF's obligations to BAXS under this Section 2.4 shall continue
throughout the term of this Agreement. For purposes of Exhibit C, each chip used
in a "Mosaic" or "Buttable" array shall count as one (1) unit.
2.5 Solely with respect to the exclusivity provisions provided in Section
2.4, in the event that BAXS does not continue to place orders of the minimum
number of units set forth in Exhibit C with requested delivery dates for any
particular period, LMF may, as its sole remedy, terminate its exclusivity
obligations under Section 2.4 by notice to BAXS. If within ninety (90) days
after such notice, BAXS has not cured the default, such termination shall be
effective for the remaining term of this Agreement and for any extensions
hereof. Any termination by LMF under this Section 2.5 shall have no effect on
either any currently outstanding orders or LMF's obligations to fulfill any
other orders of BAXS thereafter in accordance with this Agreement.
2.6 LMF shall develop the LDI Detector as set forth in Exhibit D attached
hereto.
2.7 Any changes to either the Statement of Work or to the LDI Detector
thereafter shall occur only with the mutual agreement of the parties.
SECTION 3. TERMS OF PAYMENT AND PRICING
3.1 The pricing for the LDI Detector shall be as set forth in Exhibit B
attached hereto. Prior to the implementation of any change to this Agreement or
orders hereunder, BAXS and LMF will mutually agree on (a) the changes to be
implemented, (b) any resulting cost impact, and (c) any resulting schedule
impact.
3.2 Milestone payments shall be made in accordance with the Milestone
Payment Schedule provided in Paragraph 2 of Exhibit D. Invoices shall be
rendered by LMF on the date of shipment of the LDI Detector hereunder (except in
the case of invoices for milestone payments or pursuant to Section 15). Payment
shall be made on invoices, in full, net thirty five (35) days after the date of
invoice. All proper invoices which are not paid within the required time period
shall bear interest at the rate of nine percent (9%) per annum. Final acceptance
of the LDI Detectors shall occur upon successful completion of the Acceptance
Test Procedure and shipment by LMF. Notwithstanding the foregoing provisions of
this Section 3.2, the following shall be applicable:
3.2.1 BAXS shall have the right to have a representative present at
all times and from time to time at LMF's facility to observe and, if necessary,
perform quality tests on the LDI Detectors prior to the shipment of LDI
Detectors by LMF.
- 4 -
3.2.2 Whether or not such BAXS representative has been present at
LMF. if the parties, acting in good faith, determine that LDI Detectors are
experiencing quality problems after arrival at BAXS, the parties will address
the situation.
SECTION 4. ORDERING.
4.1 LMF agrees to be prepared to ship the LDI Detectors. During the first
week of each month, BAXS shall provide LMF with monthly forecasts of LDI
Detectors BAXS estimates that it will need during the subsequent twelve (12)
month period in the form of a 12-month blanket purchase order for a specified
quantity of LDI Detectors.
4.1.1 The first six (6) months of the blanket purchase order shall
be deemed a firm order. Delivery dates of a firm order must be at least ninety
(90) days from the date that the firm order is placed and can be rescheduled by
mutual agreement between BAXS and LMF.
4.1.2 The succeeding six (6) months of the blanket purchase order
shall be deemed a 6-month forecast and can be rescheduled, at no cost to BAXS,
at least 90 days from the date of the rescheduling request.
4.1.3 Notwithstanding the other provisions of this Section 4.1,
upon the execution of this Agreement BAXS shall place a firm order with LMF
for the performance of the Statement of Work and for fifty (50) units of the
LDI Detector.
4.2 Purchase orders shall be directed to the attention of LMF's principal
location and LMF agrees to deliver the LDI Detectors ordered. Each purchase
order shall refer to and indicate that it is being submitted subject to the
terms and conditions of this Agreement. If the terms of BAXS' purchase order and
this Agreement differ, the terms of this Agreement shall prevail.
4.3 Purchase orders submitted under this Agreement will specify:
4.3.1 identity of the LDI Detector ordered;
4.3.2 the quantity of such LDI Detector ordered;
4.3.3 the full price for each such LDI Detectors;
4.3.4 shipping instructions;
4.3.5 date of expected delivery at BAXS' dock; and
4.3.6 any other special information required by this Agreement
or by the circumstances of the order.
4.4 All deliveries will be made F.O.B. LMF's facility at Milpitas,
California. CCD Systems shall be packed in accordance with LMF's best standard
commercial practices as approved by BAXS or in accordance with BAXS'
instructions, if any are given, so as to prevent damage during shipment. Title
and risk of loss shall, subject to proper packing and proper delivery of the LDI
Detectors to the carrier, pass to BAXS upon delivery to the
- 5 -
common carrier or BAXS' representative at the F.O.B. point. All transportation
charges shall be freight collect unless otherwise specified. Shipping
instructions will be designated by BAXS for each shipment. If not designated,
shipment will be with a carrier selected by LMF. BAXS will notify LMF in writing
relative to any shortage within thirty (30) days from BAXS' receipt of the
shipment.
4.5 LMF will deliver LDI Detectors ordered at such times as requested by
BAXS. LMF agrees to provide BAXS with timely notice of any delay in LDI Detector
production or delivery. BAXS' knowledge of such delays is not a waiver, direct
or implied, of LMF's production or delivery obligations hereunder.
SECTION 5. LICENSES GRANTED.
LMF hereby grants to BAXS, and BAXS hereby accepts, a nonexclusive,
nontransferable right and license to use and employ the Software, including all
Maintenance Modifications, and to distribute the Software as embedded firmware,
either separately as embedded firmware alone (including, without limitation, as
EPROM chip upgrades), or as part of the LDI Detector, and the right to
sublicense others, including BAXS' distributors and/or End Users, in the
Marketing Territory and in the Field of X-Ray Diffraction during the term of
this Agreement and any extensions or renewals hereof; provided, however, that
the license to use the Software granted herein is limited to use in connection
with the LDI Detector. LMF further grants to BAXS a right and license to use the
Software for marketing and demonstration purposes and for the training of
customers.
SECTION 6. CONFIDENTIALITY OF INFORMATION; PROTECTION AND SECURITY.
6.1 Subject to Section 12 hereof, BAXS shall use all reasonable efforts to
protect and defend the proprietary nature of the LDI Detector. Except as
expressly provided otherwise in this Agreement, BAXS shall not copy, modify,
transcribe, store, translate, sell, lease, or otherwise transfer or distribute
any of the Software, in whole or in part, without prior authorization in writing
from LMF.
6.2 LMF shall retain all copyrights, trademarks, trade secrets, patents,
mask works and all other intellectual property embodied in the LDI Detector and
in any Maintenance Modifications or Enhancements to the LDI Detector. LMF may
file patent applications related to the Hardware and Software, including
Maintenance Modifications and Enhancements, but is not required to do so.
6.3 By operation of and performance under this Agreement, each party may
have access to information that is identified as confidential by the other (the
"Confidential Information"). The Confidential Information shall mean any of the
discloser's trade secrets and other competitively sensitive data or information
disclosed under this Agreement, including, without limitation, technical or
nontechnical data, formulas, patterns, compilations.
- 6 -
programs, devices, methods, techniques, drawings, processes, financial data,
financial plans, product and marketing plans or lists of actual or potential
customers or suppliers. Any Confidential Information which is disclosed orally
to the other party shall be identified in writing as such by the disclosing
party no later than ten (10) days after the date of the oral disclosure.
6.4 A party's Confidential Information shall not include Information
which: (a) is or becomes a part of the public domain through no act or omission
of the receiving party; (b) was known by the receiving party prior to such
disclosure by the disclosing party; (c) is lawfully disclosed to the receiving
party by a third party without restriction on such disclosure; (d) with respect
to information that is the same as or substantially identical to the
Confidential Information, is independently developed and is so documented by the
receiving party; (e) is required to be disclosed by law, except to the extent
eligible for special treatment under an appropriate protective order and subject
to the receiving party's obligation to notify the disclosing party of the
requirement in a timely manner; or (f) is approved for disclosure by prior
written consent of an authorized representative of the disclosing party.
6.5 The parties agree, both during the term of this Agreement and for
three (3) years after the termination of this Agreement, to hold each other's
Confidential Information in confidence for so long as such information continues
to be a trade secret. During this period, the parties agree not to disclose or
make each other's Confidential Information available, in any form, to any third
party or to use each other's Confidential Information for any purpose other than
as permitted by this Agreement. Each party agrees to take all reasonable steps
to ensure that Confidential Information is disclosed or distributed by its
employees or agents only on a need-to-know basis and not in violation of any
provision of this Section 6.
SECTION 7. QUALITY ASSURANCE.
7.1 LMF agrees to maintain a formal Quality Assurance Program in
accordance with its approved Quality Assurance Manual. Further, LMF agrees to
ensure that all LDI Detectors are subjected to any additional mutually agreed
quality assurance tests identified by BAXS. Within one hundred eighty (180) days
of the Effective Date, LMF shall be subject to a preliminary quality
certification audit by BAXS. On a periodic basis or upon determination of need
based upon problems, LMF shall be subject to a quality audit. These audits, to
be performed by a BAXS representative, shall serve to verity that LMF is
maintaining or improving quality and operational capabilities.
7.2 LMF agrees to maintain workmanship standards that have been
demonstrated to BAXS quality assurance personnel and to notify BAXS quality
assurance personnel of any material changes in its workmanship standards.
- 7 -
7.3 LMF shall only provide refurbished or repaired units to BAXS in
response to BAXS' orders for new units if the refurbished or repaired units are
the same as and equivalent to new units in all respects.
SECTION 8. AGENCY APPROVALS
LMF agrees that all LDI Detectors sold hereunder meet Underwriters
Laboratories, Inc. ("UL") and the Canadian Underwriters Laboratories, Inc.
("CUL") specifications and have been approved by each entity and labeled
accordingly. LMF shall provide each End-User with a copy of the UL and CUL
approval certifications. LMF will obtain any mutually agreed to equivalent
international certification (i.e. CE).
SECTION 9. WARRANTIES.
9.1 LMF warrants that the LDI Detectors sold hereunder will conform to the
Specifications and will be free from defects in material and workmanship under
normal use, storage and service when stored or installed in accordance with
instructions provided by LMF for a period of fifteen (15) months from the date
of shipment from LMF's facility or twelve (12) months from the date of
successful installation at the End-User's site, whichever is shorter. BAXS may
pass this warranty on to each End-User. This warranty shall not apply and will
be considered void if BAXS, its distributors or end users mishandle, misuse,
abuse or attempt unauthorized repairs of the LDI Detector. This warranty shall
not apply and will be considered void if BAXS, its distributors or end users,
modify or alter the LDI Detector without the written consent of LMF.
9.2 If any LDI Detectors are defective in materials or workmanship, or do
not conform to the Specifications, BAXS shall have the right to return them to
LMF. The defective LDI Detectors will be returned, with a description of the
failure, freight collect. The defective LDI Detectors will either be repaired or
replaced, at LMF's option and at no charge to BAXS, within twenty (20) working
days of receipt, and returned freight prepaid to BAXS. LMF shall notify BAXS if
the LDI Detector will be replaced. If the failure occurs within sixty (60) days
of installation at BAXS' customer's site, then the defective LDI Detector must
be repaired or replaced with a new unit of LDI Detector within the schedule
described above.
9.3 Should LMF, for any reason, fail to honor the warranty provisions
herein, LMF shall be deemed in breach of this Agreement and shall have thirty
(30) days from receipt of notice from BAXS to cure such breach. BAXS may pursue
any and all other remedies available to it under the law or in equity, in a
cumulative manner and not in the alternative. LMF acknowledges that BAXS has an
independent reputation with its customers which BAXS may desire to protect
despite any breach by LMF.
9.4 LMF DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
(WITHOUT LIMITATION) ANY WARRANTIES AS TO THE SUITABILITY
- 8 -
OR MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY LDI DETECTOR OR
SOFTWARE FURNISHED HEREUNDER. IN NO EVENT SHALL LMF BE LIABLE FOR ANY LOST OR
ANTICIPATED PROFITS, OR ANY INCIDENTAL, EXEMPLARY, SPECIAL, OR CONSEQUENTIAL
DAMAGES, WHETHER OR NOT LMF WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
SECTION 10. DELIBERATELY OMITTED.
SECTION 11. TECHNICAL SUPPORT AND DOCUMENTATION.
The technical support and documentation requirements will be agreed upon
during the development phase of the LDI Detector.
SECTION 12. INTELLECTUAL PROPERTY INDEMNITY.
12.1 Except as hereinafter limited, LMF shall defend at is own expense and
indemnify BAXS from and against any liability arising out of any claim that any
LDI Detector purchased hereunder infringes a valid patent or is in violation or
infringement of any copyright, trade secret, or other proprietary rights of
third parties, provided that BAXS shall have promptly given LMF timely written
notice thereof and reasonable cooperation, information and assistance in
connection therewith, and LMF shall have sole control and authority with respect
to defense, settlement, or compromise thereof. BAXS may, at its option and
expense, participate in the defense and settlement of any such claim or
liability under this Agreement; however, if BAXS agrees to a settlement of such
claim or liability without the written consent of LMF, LMF shall have no
obligation to indemnify BAXS in connection with such settlement. Should LDI
Detectors delivered hereunder become or, in LMF's opinion, be likely to become
the subject of such a claim LMF may, at its option, either procure for BAXS the
right to continue using such LDI Detectors or replace or modify the LDI
Detectors so that they become non-infringing or refund a pro-rata amount of the
purchase price paid by BAXS based on a 36 month straight amortization.
12.2 LMF will not indemnify or hold harmless BAXS if an infringement
occurs due to:
12.2.1 modification or alteration of the LDI Detector not performed
or authorized by LMF;
12.2.2 use of the LDI Detector for other than its intended purpose
in the Field of X-Ray Diffraction;
12.2.3 Combination of the LDI Detector with other products not
supplied by LMF; or
- 9 -
12.2.4 adherence to BAXS' specifications other than the
Specifications.
SECTION 13. LDI DETECTOR ENHANCEMENTS AND UPGRADES; NEW LDI DETECTORS.
LMF shall provide BAXS with information regarding future Enhancements to
be made to the LDI Detector and Software. These Enhancements, upon agreement of
the parties, will be included in this Agreement as part of the LDI Detector. As
soon as reasonably possible after each phase of testing of Enhancements, LMF
agrees to make such Enhancements and/or information regarding the testing
performed with such, available to BAXS for analysis and review. The purpose of
this provision is to allow BAXS to be aware of, and familiar with, Enhancements
prior to their release. LMF further agrees that all Software, including Object
Code, related to all such mutually agreed upon Enhancements is included in the
Proprietary Data licensed under Section 5. Prior to the implementation of any
change to this Agreement or orders hereunder, BAXS and LMF will mutually agree
on (a) the changes to be implemented, (b) any resulting cost impact, and (c) any
resulting schedule impact.
SECTION 14. REPAIRS AND REFURBISHMENT.
The repair and refurbishment requirements will be agreed upon during the
development phase of the LDI Detector.
SECTION 15. TERM AND TERMINATION.
15.1 The initial term of this Agreement begins on the Effective Date
and expires on the completion of the delivery of the first fifty (50)
production units of the LDI Detector, unless terminated earlier as set forth
in this Agreement. At the end of the initial term, the term of this Agreement
shall be automatically renewed for a series of successive one (1) year terms
unless notice of non-renewal is provided by one party to the other at least
ninety (90) days prior to any such renewal date, provided that as long as
BAXS maintains exclusivity pursuant to Sections 2.3 and 2.4 by purchasing the
minimum quantities provided for therein, LMF shall have no right to prevent
the renewal of this Agreement.
15.2 Either party may terminate this Agreement and any outstanding orders
issued hereunder without further liability on its part if the other party, at
any time and in any material respect, fails to comply with and perform pursuant
to the terms and conditions of this Agreement (subject to all notice and cure
provisions in Section 15.3).
15.3 Should either party commit a material breach of its obligations
hereunder, or should any of the representations of either party in this
Agreement prove to be untrue in any material respect, the other party may, at
its option, terminate this Agreement, by thirty (30) days' notice of
termination, which notice shall identify and describe the basis for such
termination. If prior to the expiration of such period, the defaulting party
cures such default, termination shall not take place.
- 10 -
15.4 BAXS shall have the right to terminate this Agreement at any time for
any reason upon at least ten (10) days prior notice to LMF. Upon any such
termination, the following shall be applicable:
15.4.1 In the event there is a termination under this Section 15.4
prior to the delivery of the first acceptable production unit of the LDI
Detector, the amount payable to LMF as a result of such termination shall be as
follows:
15.4.1.1 In the event LMF fails to achieve Milestone 2 or
Milestone 3 shown on Exhibit D, (a) BAXS shall have the right to terminate this
Agreement immediately upon notice to LMF without any further obligation or
liability on the part of BAXS of any nature whatsoever, and (b) LMF may retain
any Milestone payments previously received by it.
15.4.1.2 In the event LMF achieves Milestone 2 shown on
Exhibit D and BAXS terminates this Agreement under this Section 15.4 prior to
the time LMF achieves Milestone 3 shown on Exhibit D, other than a
termination for a failure of LMF to achieve Milestone 3 shown on Exhibit D,
(a) LMF may retain the [**] Milestone 1 payment previously received by it,
and (b) BAXS shall pay to LMF an amount equal to LMF's nonrecurring
engineering costs actually incurred hereunder in connection with the
development of the LDI Detector, less [**], upon presentation by LMF to BAXS
of all supporting documentation and back-up records requested by BAXS,
provided that in no event shall any such payment by BAXS exceed [**].
15.4.1.3 In the event LMF achieves Milestone 3 shown on
Exhibit D and BAXS terminates this Agreement under this Section 15.4 prior to
the time LMF delivers its first production unit, other than for a failure to
deliver an acceptable production unit. (a) LMF may retain the [**] payment
for Milestones 1 and 2, and (b) BAXS shall pay to LMF an amount equal to
LMF's non-recurring engineering costs actually incurred hereunder in
connection with the development of the LDI Detector, less [**], upon
presentation by LMF to BAXS of all supporting documentation and back-up
reasonably requested by BAXS, provided that in no event shall any such
payment by BAXS exceed [**].
15.4.2 In the event there is a termination under this Section
15.4 after the delivery of the first acceptable production unit of the LDI
Detector and before BAXS has paid for the first fifty (50) production units
of the LDI Detector, the following shall be payable by BAXS to LMF:
15.4.2.1 BAXS shall pay to LMF [**] less (a) all milestone
payments made by BAXS under Exhibit D, and (b) an amount equal to [**]
multiplied by the number of units of the LDI Detector paid for by BAXS as of
such time.
[**] Indicates that information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.
- 11 -
15.4.2.2 BAXS shall pay to LMF an amount equal to the
actual costs incurred by LMF in purchasing raw materials and for the actual
cost of any work in process, all solely to the extent related to the
production by LMF of the first fifty (50) units of the LDI Detector to be
purchased by BAXS which have not yet been paid for by BAXS: provided,
however, that BAXS shall have the option of (a) deducting from such payment
an amount equal to the fair market value of each item as mutually agreed
upon, or (b) requiring that all such items be delivered to BAXS. LMF shall
provide to BAXS all supporting documentation and back-up records as BAXS may
require in connection with the determination of such amount.
15.4.2.3 BAXS shall pay to LMF a fee of [**] of the costs
actually incurred by LMF for the work performed by LMF in preparing for
production of the first fifty (50) LDI Detectors.
15.4.3 In the event there is a termination under this Section
15.4 after BAXS has paid LMF for the first fifty (50) LDI Detectors. BAXS
shall have no liability to LMF under this Section 15.4 other than to pay for
orders previously placed by BAXS hereunder in accordance with the provisions
of this Agreement.
15.5 Termination of this Agreement shall not relieve either party of the
obligations incurred hereunder pursuant to Sections 5, 6, 9, 10, 12, and 15,
which Sections shall survive such termination.
SECTION 16. LABELING; MARKS.
16.1 LMF agrees to affix any labels, numbering, or symbols to the LDI
Detectors, packaging, Software and Documentation, as reasonably requested by
BAXS. BAXS will provide the artwork to be utilized by LMF hereunder.
16.2 LMF recognizes the right of BAXS to the names "BRUKER" and other BAXS
symbols, trademarks, trade names, logos and any variance thereof and those of
its affiliates ("BAXS Marks"). LMF agrees not to use BAXS Marks without the
express written consent of BAXS. LMF agrees not to raise or cause to be raised
any question concerning the validity of BAXS Marks, and to notify BAXS promptly
of any unauthorized use of BAXS Marks by a third party.
16.3 BAXS recognizes the right of LMF to the names "Lockheed Xxxxxx
Xxxxxxxxx" and other LMF symbols, trademarks, trade names, logos and any
variance thereof and those of its affiliates ("LMF Marks"). BAXS agrees not to
use LMF Marks without the express written consent of LMF. BAXS agrees not to
raise or cause to be raised any question concerning the validity of LMF Marks,
and to notify LMF promptly of any unauthorized use of LMF Marks by a third
party.
[**] Indicates that information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.
- 12 -
SECTION 17. MISCELLANEOUS.
17.1 Force Majeure. The obligations of the parties hereunder shall be
suspended by the occurrence of any unforeseeable event beyond the control of the
parties which renders performance impossible or onerous, such as acts of God,
riot, sabotage, fire, explosion, flood, casualty, inability to obtain suitable
and sufficient labor or materials, or law or regulation restricting performance.
17.2 Press Release; Confidentiality of Agreement. No press releases or any
other announcement will be made by either party regarding this Agreement unless
both parties reasonably agree to its contents in writing. Neither party will,
without the prior written consent of the other party, in any public manner refer
to the BAXS purchase and resale of LDI Detectors hereunder.
Furthermore, the contents of this Agreement shall be deemed to be
confidential and neither party shall disclose such to any third party without
the prior written consent of the other party.
17.3 No Waiver of Conditions. Failure of either party to insist upon
strict performance of any of the terms and conditions hereunder or the delay in
exercising any of its remedies shall not constitute a waiver of such terms and
conditions nor a waiver of any default nor a waiver of any remedy.
17.4 Compliance with Laws. LMF will comply with all applicable federal,
state and local laws, including but not limited to those which specifically
represent that any product to be delivered hereunder will be produced and sold
to BAXS in compliance with all labor, health and safety laws, and all
regulations issued pursuant to such statutes, as amended and applicable.
17.5 Export Authorization. Unless otherwise agreed to by LMF in writing,
BAXS shall assume all responsibility for obtaining any required export
authorizations necessary to export from the United States any LDI Detectors
purchased hereunder or technical data or documents to be supplied hereunder by
LMF. BAXS shall not re-export LDI Detectors or technical data or documentation
supplied by LMF, directly or through others, or the product of such data, to the
proscribed countries for which such prohibition exists pursuant, to sections of
the U.S. Export Administration Regulations unless properly authorized by the
U.S. Government.
17.6 No Joint Venture. The relationship of the parties under this
Agreement shall be and shall at all times remain one of independent contractor
only. Neither party is an employee, agent, or joint venture partner of the other
party. Neither party shall have the authority to assume or create obligations on
behalf of the other party with respect to the LDI Detectors or otherwise, and
shall not take any action which has the affect of creating the appearance of its
having such authority.
- 13 -
17.7 Terms and Conditions of Sale. As referenced in Section 4, all
purchase orders for LDI Detectors shall be subject to the terms and conditions
of this Agreement. No other conditions or modifications of terms and conditions
of this Agreement shall be effective unless specifically agreed to in writing by
authorized representatives of both parties. Failure of either party to object to
provisions contained in any purchase order or other communication from the other
party shall not be construed as a waiver of these terms nor an acceptance of any
such provision.
17.8 Severability. If any one or more of the provisions, or portions of
provisions of this Agreement shall be deemed by any court or quasi-judicial
authority to be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions, or portions of
provisions contained herein shall not in any way be affected or impaired
thereby.
17.9 Notices. All notices from one party to the other shall be in writing
and either personally delivered or sent via certified mail, postage prepaid and
return receipt requested to:
LMF: Lockheed Xxxxxx Xxxxxxxxx Systems
0000 XxXxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: _________________________
BAXS: Bruker AXS, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attn: Xxxx Xxxx
or to such other person or places as either party may designate from time to
time by notice hereunder. Such notices shall be deemed effective upon personal
delivery or deposit in the mails in accordance herewith.
17.10 Limitation of Liability. NEITHER LMF NOR BAXS SHALL BE LIABLE FOR
ANY INDIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT
LIMITED TO LOSS OF PROFITS OR REVENUE, LOSS OF USE OF THE LDI DETECTOR OR ANY
ASSOCIATED HARDWARE OR SOFTWARE, OR COST OF SUBSTITUTED FACILITIES, EQUIPMENT OR
SERVICES WHICH ARISE OUT OF PERFORMANCE OR FAILURE TO PERFORM ANY OBLIGATION
CONTAINED WITHIN THIS AGREEMENT, WHETHER THE CLAIM IS IN CONTRACT, TORT
(INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE.
17.11 Captions. The captions or headings in this Agreement are for
reference only and shall have no substantive effect.
- 14 -
17.12 Assignment. Neither party shall delegate any duties nor assign any
rights or claims under this Agreement, without prior written consent of the
other party, which consent will not be unreasonably withheld, and any such
attempted delegation or assignment shall be of no effect.
17.13 Governing Law. The construction and performance of this Agreement
shall be solely governed by the laws of the State of California without giving
effect to any conflict of laws provisions.
17.14 Entire Agreement. This Agreement, together with its Exhibits and
other material incorporated herein by reference, sets forth the entire and only
agreement between BAXS and LMF concerning the subject matter hereof.
17.15 Authority. BAXS and LMF each represent to the other that it has due
and proper authority to make and perform all duties and obligations set forth
and contemplated by this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed by the duly
authorized officers/designees of the parties on the Effective Date.
BRUKER AXS, INC. LOCKHEED XXXXXX XXXXXXXXX SYSTEMS
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxx X. Xxxxx
-------------------------- --------------------------
Title: President Title: Director of Contracts
----------------------- -----------------------
- 15 -
EXHIBITS
Exhibit A: Description of the LDI Detector, Specifications and Statement of Work
Exhibit B: Order and Price Schedule
Exhibit C: Exclusivity - Quantity Schedule/minimum quantity requirements
Exhibit D: Development of LDI Detector
- 16 -
EXHIBIT A
DESCRIPTION OF THE LDI DETECTOR, SPECIFICATIONS
AND STATEMENT OF WORK
- 17 -
TABLE OF CONTENTS
Purpose ................................................
Applicable Documents ...................................
Requirements ...........................................
Electronics Design Approach ............................
Sensor Operation .......................................
Specification ..........................................
Enhancements ...........................................
Design Reviews .........................................
Program Planning .......................................
Technical Interchanges .................................
Data ...................................................
Monthly Status Report ..................................
Acceptance Test Procedure ..............................
Acceptance Test Data ...................................
Certificate of Conformance .............................
Deliverables ...........................................
Maintenance and Product Support ........................
- 18 -
1.0 PURPOSE
This Exhibit A defines the tasks to be performed by LMF, the deliverable items
and delivery schedule for the LDI Detector development.
2.0 APPLICABLE DOCUMENTS
The following documents of the exact issue form part of this Exhibit A to the
extent that they are referenced herein:
Quality Requirements: ISO-9000
3.0 REQUIREMENTS
3.1 ELECTRONICS DESIGN APPROACH
The CCD sensor will be mounted in a [**] housing with approximately [**] (to
be confirmed) [**] feedthroughs. Within the housing, the feedthroughs connect
to a [**] which connects the [**] to the sensor.
The feedthroughs connect to the [**] which will be attached to the [**]
enclosure. The [**] will house [**] (to be confirmed) [**].
This design approach of the [**] allows for a [**]. To reduce development
time, LMF will adapt an existing [**] and an existing [**] for this project.
The [**] will require changes to its [**] and firmware changes to its [**].
The [**] will require changes to [**] to allow for different [**].
The other [**] will require new design and development. In developing this
system, the main emphasis is to design the [**] such that the main component
of [**] is dominated by the [**] from the [**]. Thus, the most crucial [**]
is the [**]. The other [**] and [**] and [**] play an important role in the
system design, but are mainly based on [**].
[**] Indicates that information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.
- 19 -
3.2 SENSOR OPERATION
In order to maximize system performance, the [**] and [**] must be optimized.
In this application, the [**] is defined as the [**]. Ideally, this [**]
would be at least [**] with a [**] of less than [**]. Since it appears that
dramatic improvements in the [**] appear limited at this time, the [**] is
assumed [**]. The current test system, based on measurement made on a similar
[**] should have a [**] of approximately [**]. Therefore, to meet the [**]
requirements for [**], the [**] would ideally be at most [**].
[**] will be employed for two reasons. The first is that this will [**] the
[**] so that the [**] is limited to within [**]. The second reason is to [**]
the [**]. This, in turn, [**] the [**] which is important to maximize
efficiency [**].
The [**] has [**] outputs. In order to [**] the [**] required for any single
[**], all [**] outputs will be utilized [**]. This will [**] for each [**] of
what would otherwise be required. This will [**], but also the [**] since [**].
The other major component of [**] is [**]. In addition to the use of [**]
outputs, the [**] will be [**] to [**] the [**] to an acceptable level. With
sufficient [**], the [**] can also be [**].
3.3 SPECIFICATION
The following matrix provides the specification parameters, design goals, and
specification that is acceptable to LMF:
------------------------------------------------------------------------------------------
PARAMETER GOAL LMF SPECIFICATION
------------------------------------------------------------------------------------------
Active Area [**] [**]
------------------------------------------------------------------------------------------
Demagnification [**] [**]
------------------------------------------------------------------------------------------
Readout (software or jumper [**] [**]
selectable)
------------------------------------------------------------------------------------------
[**] Indicates that information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.
- 20 -
[**]
3.4 ENHANCEMENTS
LMF shall provide BAXS with information regarding future Enhancements to be made
to the LDI Detector and Software. These Enhancements, upon agreement of the
parties, will be included in this Agreement as part of the LDI Detector. As soon
as reasonably possible after each phase of testing of Enhancements, LMF agrees
to make such Enhancements and/or information regarding the testing performed
with such, available to BAXS for analysis and review. The purpose of this
provision is to allow BAXS to be aware of, and familiar with, Enhancements prior
to their release. LMF further agrees that all software, including Object Code,
related to all such mutually agreed upon Enhancements is included in the
Proprietary Data licensed under Section 5. Prior to implementation of any
Enhancement or other change, BAXS and LMF will mutually
[**] Indicates that information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.
- 21 -
agree on i.) the specific Enhancement to be implemented, ii.) any resulting cost
impact, and iii.) any resulting schedule impact.
3.5 DESIGN REVIEWS
The following reviews shall be conducted during the course of the development
contract:
A Program Kick Off meeting shall take place at LMF within the first two
(2) weeks of contract award. This shall be a one (1) day meeting to
review and clarify any open issues regarding the product
definition/specification, schedule, introduction of key personnel, SOW
and any other issues germane to the successful completion of the
purchase order.
A System Requirements Review shall take place at BAXS within the first
four (4) weeks of contract award to allow LMF personnel to discuss BAXS
system requirements, test equipment, interface issues, and any other
issues germane to the successful completion of the purchase order. It is
anticipated that this meeting shall be for two (2) days.
A Preliminary Design Review (PDR) shall be conducted at LMF on or about 15
May 1998. The duration of the PDR shall be not more than two (2) days.
The purpose of the meeting is to present the design of the LDI Detector
to BAXS personnel prior to manufacture of the two (2) prototype LDI
Detectors. Upon approval of the preliminary design by BAXS, LMF shall
proceed with the manufacture of the prototype LDI Detectors.
A Critical Design Review (CDR) shall be conducted at LMF on 30 September
1998. The duration of the CDR shall be not more than two (2) days. The
purpose of the meeting is to present the final design of the LDI
Dectector to BAXS inclusive of any design changes that may have resulted
from prototype testing. Upon approval of the final design by BAXS. LMF
shall proceed with the manufacture of the LDI Detectors.
A Production Readiness Review (PRR) shall be conducted at LMF in
accordance with a mutually acceptable schedule. This review shall take
place before LMF begins the manufacture of LDI Detectors. The purpose of
the review shall be to present, review, and approve the final design and
production specification before going forward with production. Both
parties recognize that in order to improve the delivery schedule of
products, BAXS may authorize the purchase of certain material in advance
of agreeing on a final design. In this event, should there be subsequent
changes in the design which render the material obsolete or necessitate
rework, BAXS shall be responsible for these additional costs plus
reasonable profit.
- 22 -
3.6 PROGRAM PLANNING
LMF shall develop and maintain a detailed schedule for all activities associated
with the program. The schedule shall include a timeline plan for all events and
a flow diagram that depicts all required tasks and the interralationship of the
tasks. Said schedule and flow diagram shall be in contractor format and shall be
updated and included with the Monthly Status Report.
Both LMF and BAXS shall assign a management team for this effort that shall
cover the following areas:
LMF: BAXS:
---- ----
Engineering:
Production:
Contracts:
Program Manager:
Quality Control
LMF and BAXS shall identify the lead person for each functional area shown above
so that an open line of communication can be maintained over the course of the
program.
It is understood that the program manager shall have overall responsibility for
the technical and schedule performance of all activities associated with the
purchase order. The contracts manager will be the single point contact
representative for the each organization.
3.7 TECHNICAL INTERCHANGES
LMF shall support technical interchanges at its facility or via telephone
conferences. Technical interchanges requiring travel which may be required by
BAXS shall be subject to a change in the purchase order price to accommodate the
additional travel costs.
4.0 DATA
LMF shall provide the following data:
Monthly Status Reports
Acceptance Test Procedure
Acceptance Test Results
Certificate of Conformance
Program Schedule and Flow Diagram
- 23 -
4.1 MONTHLY STATUS REPORTS
The monthly status reports shall be in contractor format and shall include the
following information:
Progress made during the month.
Schedule problems and related work arounds.
Planned activities for the next month.
4.2 ACCEPTANCE TEST PROCEDURE
LMF shall prepare an Acceptance Test Procedure (ATP) for the production LDI
Detector to be submitted to BAXS for review and approval thirty (30) days prior
to the shipment of the first production LDI Detector. Production LDI Detectors
shall be tested in accordance with the approved ATP to verify compliance with
the requirements of this Agreement.
4.3 ACCEPTANCE TEST DATA
LMF shall provide acceptance test data with every production LDI Detector
delivered. This data shall be submitted on the test data sheet included in the
ATP document.
4.4 CERTIFICATE OF CONFORMANCE
LMF shall submit a Certificate of Conformance (COC) indicating compliance of the
product to the Specifications with each production LDI Detector delivered.
4.5 PROGRAM SCHEDULE AND FLOW DIAGRAM
LMF shall develop and maintain a detailed schedule for all activities associated
with the program. The schedule shall include a timeline plan for all events and
a flow diagram that depicts all required tasks and the interralationship of the
tasks. Said schedule and flow diagram shall be in contractor format and shall be
updated and included with the Monthly Status Report.
- 24 -
5.0 DELIVERABLES
LMF shall provide the following deliverable items:
DESCRIPTION QUANTITY DELIVERY DATE
----------- -------- -------------
Engineering Prototype LDI Detector Two (2) 7/31/98
Pre-production LDI Detector Three (3) No later than 11/30/98
Production LDI Detector Fifty (50) 4 per month beginning 4 months after design approval
Monthly Status Reports Lot Monthly
Acceptance Test Procedure Lot TBD During KickOff
Program Schedule and Flow Diagram Lot Due at KickOff Update with Monthly Status Report
Acceptance Test Data Fifty (50) With LDI Detector Delivery
Certificate of Conformance Fifty (50) With LDI Detector Delivery
6.0 MAINTENANCE AND PRODUCT SUPPORT
LMF and BAXS shall conduct discussions regarding a maintenance and repair
strategy associated with this program during the NRE phase. The SOW shall be
modified to reflect this strategy prior to the delivery of the first production
units. This modification will be subject to the changes clause of this
Agreement.
[**] Indicates that information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.
- 25 -
EXHIBIT B
PRICING
1. The firm fixed price for the non-recurring engineering associated
with this Agreement is [**] of which [**] shall be payable in accordance with
the Milestone Payment Schedule in Exhibit D. The remaining [**] shall be
amortized over the initial fifty (50) production order in the amount of [**]
per unit, which amount is included in the unit price set forth in Paragraph 2
of this Exhibit B.
2. The firm fixed price for the first fifty (50) production units of
the LDI Detector shall be [**].
3. Option I* to be exercised by August 30, 1999:
[**]
4. Option II* to be exercised by August 30, 2000:
[**]
*Prices for Options I and II are based upon the specific quantities
listed, reasonably continuous production and the fact that Option II cannot be
exercised without first having exercised Option I.
[**] Indicates that information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.
- 26 -
EXHIBIT C
EXCLUSIVITY
BAXS shall place the following orders for LDI Detectors with LMF in order
to maintain the exclusivity set forth in Sections 2.3 and 2.4 of this Agreement:
1. During the twelve (12) month period commencing with the delivery of
the first acceptable production unit of the LDI Detector (the "Initial
Period"), BAXS shall order for delivery within the Initial Period at least
fifty (50) units of the LDI Detector.
2. During the twelve (12) month period following the Initial Period,
BAXS shall order for delivery within such twelve (12) month period at least
[**] units of the LDI Detector.
3. During the next succeeding twelve (12) month period, BAXS shall
order for delivery within such twelve (12) month period at least [**] units
of the LDI Detector.
4. During the next succeeding twelve (12) month period, BAXS shall
order for delivery within such twelve (12) month period at least [**]units of
the LDI Detector.
[**] Indicates that information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.
- 27 -
EXHIBIT D
DEVELOPMENT OF LDI DETECTOR
LMF shall develop the LDI Detector in accordance with the following:
1. The LDI Detector shall comply with the Specifications. The development
of the LDI Detector shall occur as detailed in the Statement of Work.
2. The following milestone payment and delivery schedule shall be
applicable, it being understood that time is of the essence in connection with
all such development:
-----------------------------------------------------------------------------------------
MILESTONE DATE BAXS PAYMENT
-----------------------------------------------------------------------------------------
1. Start development Effective Date [**]
-----------------------------------------------------------------------------------------
2. Delivery and acceptance July 31, 1998 [**]
of two (2) prototypes
-----------------------------------------------------------------------------------------
3. Delivery and acceptance November 30, 1998 [**]
of three (3) pre-production
units.
-----------------------------------------------------------------------------------------
4. Delivery of first March 31, 1999 Payment under section 3 of
production units Agreement
-----------------------------------------------------------------------------------------
3. On or about November 15, 1998, BAXS shall provide LMF with mutually
acceptable test equipment to permit LMF to test the LDI Detector with x-ray
diffraction. The test equipment shall be capable of performing all required
tests called out in the Acceptance Test Procedure. BAXS shall provide the
necessary technical assistance to train and support LMF in the installation,
check-out and maintenance of the test equipment.
[**] Indicates that information has been omitted and filed separately with the
Commission pursuant to a request for confidential treatment.
- 28 -
