<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 14, 2000
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
BRUKER DALTONICS INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 3826 04-3110160
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of Industrial Identification No.)
incorporation or organization) Classification Code Number)
</TABLE>
15 Fortune Drive
Billerica, MA 01821
(978) 663-3660
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
------------------------------
Frank H. Laukien, Ph.D.
Chairman, President and Chief Executive Officer
Bruker Daltonics Inc.
15 Fortune Drive
Billerica, MA 01821
(978) 663-3660
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
Richard M. Stein, Esquire Geoffrey B. Davis, Esquire
Hutchins, Wheeler & Dittmar Ropes & Gray
A Professional Corporation One International Place
101 Federal Street Boston, MA 02110
Boston, MA 02110 (617) 951-7000
(617) 951-6600
</TABLE>
------------------------------
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this Registration Statement. If any
of the securities being registered on this form are to be offered on a delayed
or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box. / /
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of earlier effective
registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the earlier
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to
Rule 434, check the following box. / /
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum
Title of Each Class of Aggregate Offering Amount of
Securities to be Registered Price(1) Registration Fee
<S> <C> <C>
Common Stock, $0.01 par value per share..................... $125,000,000 $33,000
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
------------------------------
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933, as amended, or until the registration statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said section 8(a), may determine.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE>
Subject to Completion, Dated April , 2000
[LOGO]
Shares
Common Stock
This is the initial public offering of Bruker Daltonics Inc., and we are
offering __________shares of our common stock. We anticipate the initial public
offering price will be between $ and $ per share.
We have applied to list our common stock on the Nasdaq National Market under the
symbol "BDAL."
Investing in our common stock involves risks. See "Risk Factors" beginning on
page 6.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public Commissions Bruker Daltonics
-------------------- -------------------- ----------------
<S> <C> <C> <C>
Per Share $ $ $
Total $ $ $
</TABLE>
We have granted the underwriters the right to purchase up to
additional shares to cover over-allotments.
Deutsche Banc Alex. Brown Warburg Dillon Read LLC
Thomas Weisel Partners LLC
The date of this prospectus is , 2000.
<PAGE>
INSIDE FRONT COVER
Enabling Life Science Tools for the Post-Genomic Era
Bruker Daltonics Logo image centered
- --Genetic Variation: SNPs, Pharmacogenomics and Personalized Medicine (image)
- --Proteomics (image)
- --Biomarkers, Substance Detection and Pathogen Identification (image)
- --Molecular Biology and Basic Medical Research (image)
- --Drug Discovery, Combinatorial Chemistry and High-throughput Screening (image)
- --Metabolic Profiling (image)
Our Broad Range of Applications (footer)
INSIDE FOLDOUT PANELS 1 AND 2
Bruker Daltonics logo (top left)
Bruker logo (top right)
<TABLE>
<CAPTION>
Our Related
Our Mass Spectrometry (MS) Technology Platforms + TechnologiesU Solutions for Target Markets
- ------------------------------------------------- -------------------- -------------------------------
(Our Array of Life Science Tools) (Our Diversified Customer Base)
<S> <C> <C>
MALDI-TOF MS (image) Consumables LIFE SCIENCE INDUSTRIES
ESI-TOF MS AnchorChip-TM- Pharmaceuticals (image)
Fourier Transform MS Microarrays Biotechnology
Ion Trap MS (image) (image) Agricultural Biotech (image)
Substance Detection and Pathogen Robotics (image) Molecular Diagnostics
Identification Tools (image) Automation OTHER LIFE SCIENCE MARKETS
Bioinformatics Universities (image)
(image) Medical Schools
Government (NIH, NSF, etc.)
Security and Defense
</TABLE>
<PAGE>
PROSPECTUS SUMMARY
THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION CONTAINED ELSEWHERE IN THIS
PROSPECTUS. THIS SUMMARY MAY NOT CONTAIN ALL OF THE INFORMATION THAT YOU SHOULD
CONSIDER BEFORE INVESTING IN OUR COMMON STOCK. YOU SHOULD CAREFULLY READ THE
ENTIRE PROSPECTUS, INCLUDING "RISK FACTORS" AND THE FINANCIAL STATEMENTS, BEFORE
MAKING AN INVESTMENT DECISION.
Bruker Daltonics
We are a leading developer and provider of innovative life science tools
based on mass spectrometry. Our substantial investment in research and
development allows us to design, manufacture and market a broad array of
products intended to meet the rapidly growing needs of our diverse customer
base. Our customers include pharmaceutical companies, biotechnology companies,
agricultural biotechnology companies, molecular diagnostics companies, academic
institutions and government agencies.
Mass spectrometers are sophisticated devices that provide highly accurate
molecular information. Our mass spectrometry-based systems often combine
automated front-end sample preparation robots, advanced mass spectrometry
instrumentation, reagent kits and other consumables and bioinformatics software.
Our systems offer integrated solutions for applications in multiple existing and
emerging markets including genomics and proteomics, metabolic and biomarker
profiling, drug discovery and development, molecular assays and diagnostics,
molecular and systems biology and basic medical research.
We market our life science systems both through our direct sales force and
through strategic distribution arrangements with Agilent Technologies,
PerkinElmer, Sequenom, MWG-Biotech and others.
We are also a worldwide leader in supplying mass spectrometry-based
systems for substance detection and pathogen identification in security and
defense applications.
Our Products
Our life science solutions incorporate four core mass spectrometry
technology platforms including matrix-assisted laser desorption ionization, or
MALDI, time-of-flight mass spectrometry, electrospray ionization, or ESI,
time-of-flight mass spectrometry, Fourier transform mass spectrometry and ion
trap mass spectrometry. We also employ our mass spectrometry technology in our
substance detection and pathogen identification systems.
Our Solutions
Our product lines integrate sophisticated mass spectrometers with
automated sample preparation and measurement and, where appropriate,
bioinformatics software to address many of the bioanalytical and bioinformatics
needs of the life science industry across a broad range of applications. Our
products have particular application to:
- genetic variation analysis, including such evolving areas as
pharmacogenomics and personalized medicine;
- proteomics;
- metabolomics;
- drug discovery based on high-throughput screening and combinatorial
chemistry; and
- drug development.
2
<PAGE>
Our automated systems allow our customers to generate and evaluate large
volumes of accurate, high-quality data on a cost-effective basis. We believe
that this enhanced throughput and high-quality data improves our customers'
ability to apply bioinformatics to validate lead targets, understand disease
pathways and analyze lead compounds. Our customers also use our products in
molecular biology and other basic medical research. In addition, our automated,
integrated mass spectrometry technology forms the basis of our substance
detection and pathogen identification products used in security and defense
markets. We believe that our products offer the following advantages to our
customers:
- high degree of automation;
- integrated solutions;
- accurate results;
- increased productivity; and
- cost efficiency.
Our Strategy
Our strategy is to continue to be a leading provider of mass spectrometry
and related systems for use in the life sciences, as well as in substance
detection and pathogen identification. Key elements of our strategy include:
- provide a broad array of tools for a wide range of applications;
- develop new platforms, enhanced products and new applications;
- build alliances and pursue acquisitions;
- generate recurring revenue;
- develop and expand our bioinformation business; and
- leverage our intellectual property.
Bruker Daltonics was incorporated in Massachusetts in February 1991, as
Bruker Federal Systems Corporation. In February 2000, we reincorporated in
Delaware as Bruker Daltonics Inc.
Our principal executive offices are located at 15 Fortune Drive,
Billerica, Massachusetts 01821, and our telephone number is (978) 663-3660.
Information about Bruker Daltonics is available at www.daltonics.bruker.com. The
information on our website is not incorporated by reference into and does not
form a part of this prospectus. Daltonics and the Daltonics logo are trademarks
of Bruker Daltonics. All other trademarks, tradenames or copyrights referred to
in this prospectus are the property of their respective owners.
3
<PAGE>
The Offering
<TABLE>
<S> <C>
Common stock offered by Bruker Daltonics..... shares
Common stock to be outstanding
after this offering........................ shares
Use of proceeds.............................. General corporate purposes, including
research and development, expansion of sales
and marketing capabilities and working
capital, funding potential strategic
acquisitions, and repayment of our
outstanding bank debt. For more detailed
information, see "Use of Proceeds" on
page 17.
Proposed Nasdaq National Market symbol....... BDAL
</TABLE>
The number of shares to be outstanding upon completion of this offering is
based on shares outstanding as of , 2000. This number
excludes 2,220,000 shares of common stock that will be reserved for issuance
under our stock option plan upon completion of this offering, of which 783,135
shares were subject to outstanding options.
For a more detailed description of our capitalization, please see
"Capitalization" on page 18. See "Risk Factors" and other information included
in this Prospectus for a discussion of factors you should consider before
investing in the shares of our common stock.
UNLESS OTHERWISE INDICATED, ALL INFORMATION IN THIS PROSPECTUS ASSUMES:
- THE UNDERWRITERS HAVE NOT EXERCISED THEIR OPTION TO PURCHASE ADDITIONAL
SHARES; AND
- THE SEVEN-FOR-ONE COMMON STOCK SPLIT COMPLETED IN FEBRUARY 2000.
4
<PAGE>
Summary Financial Data
(in thousands, except per share data)
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------------
1995 1996 1997 1998 1999
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Consolidated/Combined Statements of
Operations Data (1):
Net revenue........................... $ 32,125 $ 46,072 $ 51,125 $ 42,207 $ 64,690
Costs and operating expenses:
Cost of product revenue............. 16,424 20,329 24,538 19,672 31,618
Sales and marketing................. 2,806 6,123 7,178 7,435 11,345
General and administrative.......... 1,795 1,717 2,120 2,212 3,411
Research and development............ 9,419 8,812 9,166 13,049 15,138
Patent litigation costs............. -- 1,901 5,525 -- 538
---------- ---------- ---------- ---------- ----------
Total costs and operating
expenses...................... 30,444 38,882 48,527 42,368 62,050
---------- ---------- ---------- ---------- ----------
Operating income (loss) from
continuing operations............... 1,681 7,190 2,598 (161) 2,640
Other income.......................... 196 2 127 174 130
Interest expense, net................. (1,341) (1,032) (743) (901) (907)
---------- ---------- ---------- ---------- ----------
Income (loss) from continuing
operations before provision for
income taxes........................ 536 6,160 1,982 (888) 1,863
Provision for income taxes............ 9 2,265 1,627 -- 987
---------- ---------- ---------- ---------- ----------
Income (loss) from continuing
operations.......................... 527 3,895 355 (888) 876
Income from discontinued operations,
net of income taxes................. 372 368 209 383 373
---------- ---------- ---------- ---------- ----------
Net income (loss)..................... $ 899 $ 4,263 $ 564 $ (505) $ 1,249
========== ========== ========== ========== ==========
Net income (loss) per share-basic and
diluted
Income (loss) from continuing
operations........................ $ 0.01 $ 0.08 $ 0.01 $ (0.02) $ 0.02
Income from discontinued operations,
net of income taxes............... 0.01 0.01 0.00 0.01 0.01
---------- ---------- ---------- ---------- ----------
Net income (loss) per share........... $ 0.02 $ 0.09 $ 0.01 $ (0.01) $ 0.03
========== ========== ========== ========== ==========
Shares used in computing net income
(loss) per share-basic and
diluted............................. 45,500 45,500 45,500 45,500 45,500
</TABLE>
<TABLE>
<CAPTION>
December 31, 1999
--------------------------
Actual As Adjusted (2)
-------- ---------------
<S> <C> <C>
Consolidated Balance Sheet Data (1):
Cash and cash equivalents................................... $ 2,443
Working capital............................................. 12,080
Total assets................................................ 67,309
Total debt.................................................. 15,340
Total stockholders' equity.................................. 10,058
</TABLE>
- ----------
(1) In December 1998, Bruker Daltonics Inc. acquired Bruker Daltonik GmbH and
its subsidiary Bruker Saxonia Analytik GmbH. Since these companies were under
common ownership prior to the acquisition, the financial data is shown on a
combined basis for all years presented.
(2) The adjusted balance sheet data reflects the receipt of the net proceeds
from the sale of shares of common stock by Bruker Daltonics Inc. in
this offering at an assumed initial public offering price of $ per share, after
underwriting discounts and commissions and estimated offering expenses.
5
<PAGE>
RISK FACTORS
ANY INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU
SHOULD CONSIDER CAREFULLY THE FOLLOWING INFORMATION ABOUT THESE RISKS, TOGETHER
WITH THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, BEFORE YOU DECIDE
WHETHER TO BUY OUR COMMON STOCK. IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR,
OUR BUSINESS, RESULTS OF OPERATIONS AND FINANCIAL CONDITION COULD SUFFER
SIGNIFICANTLY. IN THIS CASE, THE MARKET PRICE OF OUR COMMON STOCK COULD DECLINE,
AND YOU MAY LOSE ALL OR PART OF THE MONEY YOU PAID TO BUY OUR COMMON STOCK.
Risks Related to Our Business
If our products fail to achieve and sustain sufficient market acceptance across
their broad intended range of applications in the life sciences, our business
will be significantly harmed.
Our business strategy depends on our ability to successfully commercialize
a broad range of products based on mass spectrometry for use in a variety of
life science applications. We have only recently commercially launched many of
our current products for sale to these markets, and many of our products have
achieved only limited sales. The commercial success of our life science products
depends on our obtaining continued and expanding market acceptance of our mass
spectrometry tools by pharmaceutical and biotechnology companies and academic
and government research laboratories across the wide range of applications
covered by our product offerings. We may fail to achieve or sustain substantial
market acceptance for our products across the full range of our intended life
science applications or in one or more of our principal intended life science
applications. Any such failure could materially harm our business. To succeed,
we must convince substantial numbers of pharmaceutical and biotechnology
companies and other laboratories to replace their existing techniques with mass
spectrometry techniques employing our systems. Limited funding available for
capital acquisitions by our customers, as well as our customers' own internal
purchasing approval policies, could hinder market acceptance of our products.
Our intended life science customers may be reluctant to make the substantial
capital investment generally needed to acquire our products or to incur the
training and other costs involved with replacing their existing systems with our
products. We also may not be able to convince our intended life science
customers that our systems are an attractive and cost-effective alternative to
other technologies and systems for the acquisition, analysis and management of
molecular information. Because of these and other factors, our products may fail
to gain or sustain market acceptance.
Our products compete in markets that are subject to rapid technological change,
and most of our products are based on a range of related mass spectrometry
technologies.
The market for life science discovery tools is characterized by rapid
technological change and frequent new product introductions. Rapidly changing
technology could make some or all of our life science product lines obsolete
unless we are able to continually improve our existing products and develop new
products. Because substantially all of our life science products are based on
mass spectrometry, we are particularly vulnerable to any technological advances
that would make mass spectrometry obsolete as the basis for bioanalytical
systems in any of our life science markets. To meet the evolving needs of our
customers, we must rapidly and continually enhance our current and planned
products and services and develop and introduce new products and services. Our
business model calls for us to derive a significant portion of our revenues each
year from products that did not exist in the previous year. However, we may
experience difficulties which may delay or prevent the successful development,
introduction and marketing of new products or product
6
<PAGE>
enhancements. In addition, our product lines are based on complex technologies
which are subject to rapid change as new technologies are developed and
introduced in the marketplace. We may have difficulty in keeping abreast of the
rapid changes affecting each of the different markets we serve or intend to
serve. If we fail to develop and introduce products in a timely manner in
response to changing technology, market demands or the requirements of our
customers, this failure could materially harm our business, results of operation
and financial condition, could be materially harmed. We offer and plan to offer
a broad product line and have incurred and expect to continue to incur
substantial expenses for development of new products and enhanced versions of
our existing products. The speed of technological change in our life science
markets may prevent us from being able to successfully market some or all of our
products for the length of time required to recover their often significant
development costs. Failure to recover the development costs of one or more
products or product lines could harm our business, results of operations and
financial condition.
We face substantial competition.
In each market, for each of our life science products, we face substantial
competition from major competitors, including competitors who also offer
products based on mass spectrometry technology. We expect that competition in
our life science markets will increase significantly as more biotechnology and
pharmaceutical companies adopt automated high-throughput bioanalytical
instruments as tools for drug discovery, drug development, proteomics, genomics
and metabolomics. Currently, our principal competition comes from established
companies providing products using existing technologies, including mass
spectrometry and other technologies, which perform many of the same functions
for which we market our products. Our competitors may develop or market products
that are more effective or commercially attractive than our current or future
products or that may render our products obsolete. Many of our competitors have
substantially greater financial, operational, marketing and technical resources
than we do.
In addition to the risks applicable to our life science products, our substance
detection and pathogen identification products are subject to a number of
additional risks, including lengthy product development and contract negotiation
periods and certain risks inherent in long-term government contracts.
Our substance detection and pathogen identification products are subject
to many of the same risks associated with our life science products, including
vulnerability to rapid technological change, dependence on mass spectrometry
technology and substantial competition. In addition, our substance detection and
pathogen identification products are generally sold to government agencies under
long-term contracts. These contracts generally involve lengthy pre-contract
negotiations and product development. We may be required to devote substantial
working capital and other resources prior to obtaining product orders. As a
result, we may incur substantial costs before we recognize revenue from these
products. Moreover, in return for larger, longer term contracts, our customers
for these products often demand more stringent acceptance criteria. Their
criteria may also cause delay in our ability to recognize revenue from sales of
these products. Furthermore, we may not be able to accurately predict in advance
our costs to fulfill our obligations under these long-term contracts. If we fail
to accurately predict our costs, due to inflation or other factors, this failure
may harm our results of operations. Any single long-term contract for our
substance detection and pathogen identification products may represent a
material portion of our total business volume, and the loss of any such contract
could have a material adverse effect on our results of operations. The presence
or absence of such contracts may cause substantial variation in
7
<PAGE>
our results of operations between fiscal periods and, as a result, our results
of operations for any given fiscal period may not be predictive of our results
for subsequent fiscal periods. The resulting uncertainty may have an adverse
impact on our stock price.
Our success depends on our ability to operate without infringing or
misappropriating the proprietary rights of others.
Our commercial success depends on avoiding the infringement of other
parties' valid patents and proprietary rights as well as the breach of any
licenses relating to our technologies and products. There are various
third-party patents which may relate to our technology. We may be found in the
future to infringe these or other patents or proprietary rights of third
parties, either with products we are currently marketing or developing or with
new products which we may develop in the future. As described below, a German
court has found that sales of our ion trap mass spectrometers in Germany
infringe the European patents held by a competitor. If a third party holding
rights under a patent successfully asserts an infringement claim with respect to
any of our current or future products, we may be prevented from manufacturing or
marketing our infringing product in the country or countries covered by the
patent we infringe, unless we can obtain a license from the patent holder. We
may not be able to obtain such a license on commercially reasonable terms, if at
all, especially if the patent holder is a competitor. In addition, even if we
can obtain such a license, it may be non-exclusive, which will permit others to
practice the same technology licensed to us. We may also be required to pay
substantial damages to the patent holder. Under certain circumstances in the
United States, these damages may include damages equal to triple the actual
damages experienced by the patent holder. If we have supplied infringing
products to third parties for marketing by them or licensed third parties to
manufacture, use or market infringing products, we may be obligated to indemnify
these third parties for any damages they are required to pay to the patent
holder and for any losses the third parties may sustain themselves as the result
of lost sales or license payments they are required to make to the patent
holder. Any successful infringement action brought against us may also adversely
affect marketing of the infringing product in other markets not covered by the
infringement action, as well as our marketing of other products based on similar
technology. Furthermore, we will suffer adverse consequences of a successful
infringement action against us even if the action is subsequently reversed on
appeal, nullified through another action, or resolved by settlement with the
patent holder. The damages or other remedies awarded, if any, may be
significant. As a result, any successful infringement action against us may harm
our business.
We are currently involved in several legal actions concerning technology for ion
trap mass spectrometry with a competitor and various affiliates of the
competitor, and a German court has decided that we have infringed two European
patents of the competitor.
We have been involved for several years in various litigation proceedings
with a competitor, Finnigan Corporation, and some of its affiliates regarding
the possible infringement by us of some patents of Finnigan concerning
technology for ion trap mass spectrometry. Finnigan is a subsidiary of
ThermoQuest Corporation which in turn is a subsidiary of Thermo Electron
Corporation. The various claims have been, will be or currently are being heard
in the United States International Trade Commission, the Court of Appeals for
the Federal Circuit, and are pending in the United States District Court for the
District of Massachusetts and in various German courts. In addition, we have
filed various infringement and antitrust actions against Finnigan and its
affiliates. In 1996, 1997, 1998 and 1999, total worldwide sales of our ion trap
mass spectrometry products constituted $2.7 million, $3.2 million, $5.0 million
and $8.2 million, respectively.
8
<PAGE>
A German court has recently decided that we and our strategic partner
Agilent have infringed two Finnigan patents by selling our ion trap mass
spectrometer products in Germany. As a result, if Finnigan posts a required
bond, both we and Agilent will be prohibited from selling our ion trap mass
spectrometer products in Germany. We will also be required to pay damages and
expenses to Finnigan in amounts to be determined by the German court in these
proceedings. In 1999, our German sales of ion trap mass spectrometry products
were $2.0 million. Finnigan is seeking to enforce the same European patents
against us and Agilent in proceedings in Germany that could prevent us from
distributing and delivering our ion trap mass spectrometry products in the
United Kingdom, France, Sweden and Switzerland, and similar patents are at issue
in the litigation brought by Finnigan in Massachusetts. Finnigan may also seek
to show we have committed infringement elsewhere. Should we be found to infringe
any patents of Finnigan or its affiliates in these proceedings, we may be liable
for monetary damages and could be required to obtain licenses to commercialize
our products or to redesign our products so that they do not infringe any of
these patents. If we are unable to obtain a license or adopt a non-infringing
product design, we could be prevented from developing, manufacturing and selling
some of our ion trap mass spectrometry products. We may also have an
indemnification obligation to Agilent. In these circumstances, our business
would not develop as contemplated, and our results would materially suffer. For
more information on our litigation with Finnigan and its affiliates, please see
"Business-Legal Proceedings."
We may be involved in other lawsuits to protect or enforce our patents that are
brought by us which would be expensive and time consuming.
In order to protect or enforce our patent rights, we may initiate patent
litigation against third parties. We may also become subject to interference
proceedings conducted in the patent and trademark offices of various countries
to determine the priority of inventions. The defense and prosecution, if
necessary, of intellectual property suits, interference proceedings and related
legal and administrative proceedings is costly and diverts our technical and
management personnel from their normal responsibilities. We may not prevail in
any of these suits. An adverse determination of any litigation or defense
proceedings could put our patents at risk of being invalidated or interpreted
narrowly and could put our patent applications at risk of not issuing.
Furthermore, because of the substantial amount of discovery required in
connection with intellectual property litigation, there is a risk that some of
our confidential information could be compromised by disclosure during this type
of litigation. For example, during the course of this kind of litigation, there
could be public announcements of the results of hearings, motions or other
interim proceedings or developments in the litigation. If securities analysts or
investors perceive these results to be negative, it could have a substantial
negative effect on the trading price of our stock.
If we are unable to effectively protect our intellectual property, third parties
may use our technology, which would impair our ability to compete in our
markets.
Our continued success will depend in significant part on our ability to
obtain and maintain meaningful patent protection for our products throughout the
world. We rely on patents to protect a significant part of our intellectual
property and to enhance our competitive position. However, our presently pending
or future patent applications may not issue as patents, and any patent
previously issued to us may be challenged, invalidated, held unenforceable or
circumvented. Furthermore, the claims in patents which have been issued or which
may be issued to us in the future may not be sufficiently broad to prevent third
parties
9
<PAGE>
from producing competing products similar to our products. In addition, the laws
of various foreign countries in which we compete may not protect our
intellectual property to the same extent as do the laws of the United States.
Failure to obtain adequate patent protection for our proprietary technology
could materially impair our ability to be commercially competitive.
In addition to patent protection, we also rely on protection of trade
secrets, know-how and confidential and proprietary information. To maintain the
confidentiality of trade secrets and proprietary information, we generally seek
to enter into confidentiality agreements with our employees, consultants and
strategic partners upon the commencement of a relationship with us. However, we
may not obtain these agreements in all circumstances. In the event of
unauthorized use or disclosure of this information, these agreements, even if
obtained, may not provide meaningful protection for our trade secrets or other
confidential information. In addition, adequate remedies may not exist in the
event of unauthorized use or disclosure of this information. The loss or
exposure of our trade secrets and other proprietary information would impair our
competitive advantages and could have a material adverse affect on our operating
results, financial condition and future growth prospects. Furthermore, others
may have, or may in the future independently develop, substantially similar or
superior know-how and technology.
We have agreed to share our name, portions of our intellectual property rights
and distribution channels with other entities under common control and to lock
in the price of products purchased from and sold to these entities.
We maintain a sharing agreement with 13 affiliated entities that requires
us to share portions of our intellectual property as it existed on February 28,
2000 and our distribution channels with these affiliated companies and their
affiliates. We also share the Bruker name with many of these affiliates and,
under several defined circumstances, we could lose the right to use the Bruker
name. The loss of the Bruker name could result in a loss of goodwill, brand
loyalty and sales of our products. In addition, we have agreed to maintain the
price of some products purchased from and sold to these affiliates for a period
of up to twelve years, subject to yearly adjustments equal to the increase in
the Consumer Price Index.
Our manufacture and sale of products could lead to product liability claims for
which we could have substantial liability.
The manufacture and sale of our products exposes us to product liability
claims if any of our products cause injury or are found otherwise unsuitable
during manufacturing, marketing, sale or customer use. A successful product
liability claim brought against us in excess of, or outside the coverage of, our
insurance coverage could have a material adverse effect on our business,
financial situation and results of operations. We may not be able to maintain
product liability insurance on acceptable terms, if at all, and insurance may
not provide adequate coverage against potential liabilities.
Our business could be harmed if our collaborations fail to advance our product
development.
Demand for our products will depend in part upon the extent to which our
collaborations with pharmaceutical and biotechnology companies are successful in
developing, or helping us to develop, new products and new applications for our
existing products. In addition, we collaborate with academic institutions on
product development. We have limited or no control over the resources that any
collaborator may devote to our products. Any of our present or future
collaborators may not perform their obligations as
10
<PAGE>
expected. If we fail to enter into or maintain appropriate collaboration
agreements or if any of these events occur, we may not be able to develop some
of our new products, which could harm our business.
We rely on strategic partners to market some of our products.
A substantial portion of our sales of selected products consists of sales
to third parties who incorporate our products in their systems. These third
parties are responsible for the marketing and sales of their systems. We have
little or no control over their marketing and sales activities or how they use
their resources. Our present or future strategic partners may or may not
purchase sufficient quantities of products from us or perform appropriate
marketing and sales activities. These failures by our present or future
strategic partners, or our inability to maintain or enter into new arrangements
with strategic partners for product distribution, could materially harm the
growth of our business and our ability to generate sufficient revenue.
Any reduction in the capital resources or government funding of our customers
could reduce our sales and harm our business.
A significant portion of our sales are capital purchases by our customers.
The spending policies of our customers could have a significant effect on the
demand for our products. These policies are based on a wide variety of factors,
including the resources available to make purchases, the spending priorities
among various types of equipment, policies regarding spending during
recessionary periods and changes in the political climate. Any changes in
capital spending or changes in the capital budgets of our customers could
significantly reduce demand for our products. The capital resources of our
biotechnology and other corporate customers may be limited by the availability
of equity or debt financing. Any significant decline in research and development
expenditures by our life science customers could harm our business.
We are dependent, both directly and indirectly, upon general health care
spending patterns, particularly in the research and development budgets of the
pharmaceutical and biotechnology industries, as well as upon the financial
condition of various governments and government agencies. Since our inception,
both we and our academic collaborators have benefited from various governmental
contracts and research grants. Whether we or our academic collaborators will
continue to be able to attract these grants depends not only on the quality of
our products, but also on general spending patterns of public institutions.
There exists the risk of a potential decrease in the level of governmental
spending allocated to scientific and medical research which could substantially
reduce or even eliminate our grants. Our status as a public company may reduce
our ability to obtain government research grants in the future. In addition, we
make a substantial portion of our sales to non-profit and government entities
which are dependent on continued high levels of government support for
scientific research. Any decline in this support could harm our business.
We may not be able to expand our sales and service staff to meet demand for our
products and services.
We need to expand our direct marketing and sales force as well as our
service and support staff. Our future revenue and profitability will depend on
our ability to expand our team of marketing and service personnel. Because our
products are technical in nature, we believe that our marketing, sales and
support staff must have scientific or technical expertise and experience.
Competition for employees with these skills is intense. We may not be able to
11
<PAGE>
continue to attract and retain sufficient qualified sales and service people,
and we may not be able to grow and maintain an efficient and effective sales,
marketing and support department. If we fail to continue to attract or retain
qualified people, then our business could suffer.
We plan significant growth, and there is a risk that we will not be able to
manage this growth.
Our success will depend on the expansion of our operations. Effective
growth management will place increased demands on our management, operational
and financial resources. To manage our growth, we must expand our facilities,
augment our operational, financial and management systems, and hire and train
additional qualified personnel. Our failure to manage this growth effectively
would harm our business, results of operations and financial condition.
If ethical and other concerns surrounding the use of genetic information, gene
therapy or genetically modified organisms become widespread, we may have less
demand for our products.
Genetic testing has raised ethical issues regarding confidentiality and
appropriate uses of the resulting information. For these reasons, governmental
authorities may limit or prohibit genetic testing. Gene therapy and genetically
modified organism content in food has raised safety concerns. Government
regulation or market forces could reduce the demand for our life science tools
for use in applications related to these markets. This could reduce the
potential markets for our products which could decrease our sales.
We are dependent upon various key personnel and must recruit additional
qualified personnel for a number of management positions.
Our success is highly dependent on the continued services of key
management, technical and scientific personnel. Our management and other
employees may voluntarily terminate their employment with us at any time upon
short notice. The loss of the services of any member of our senior management,
technical or scientific staff may significantly delay or prevent the achievement
of product development and other business objectives. Our chief executive
officer also is and has been chairman of the board of directors of an affiliated
company and a management officer of another affiliate, which may reduce the time
and attention he can devote to our management. In addition, our chief financial
officer serves as the Treasurer of one of our affiliated companies. Our future
success will also depend on our ability to identify, recruit and retain
additional qualified scientific, technical and managerial personnel. Competition
for qualified personnel is intense, particularly in the areas of information
technology, engineering and science, and the process of hiring suitably
qualified personnel is often lengthy. If we are unable to hire and retain a
sufficient number of qualified employees, our ability to conduct and expand our
business could be seriously reduced.
We are dependent in our operations upon a limited number of suppliers and
contract manufacturers.
We currently purchase components used in our mass spectrometry instruments
from a limited number of outside sources. The reliance on a limited number of
suppliers could result in time delays associated with redesigning a product due
to an inability to obtain an adequate supply of required components and reduced
control over pricing, quality and timely delivery. Any interruption in the
supply of components could have an adverse effect on our business, results of
operations and financial condition.
12
<PAGE>
If we fail to expand our international presence, our revenue will not grow as
expected.
International sales account and are expected to continue to account for a
significant portion of our total revenues. International expansion will require
that we hire additional personnel. If we fail to hire additional personnel or
develop and maintain relationships with foreign customers and partners, we may
not be able to expand our international sales and would suffer decreased
profits.
International sales and operations are and will remain subject to a number
of additional risks not typically present in domestic operations, including:
- changes in regulatory requirements;
- the imposition of government controls;
- political and economic instability or conflicts;
- costs and risks of deploying systems in foreign countries;
- limited intellectual property rights; and
- the burden of complying with a wide variety of complex foreign laws and
treaties.
Our international operations are and will remain subject to the risks
associated with the imposition of legislation and regulation relating to the
import or export of high technology products. We cannot predict whether tariffs
or restrictions upon the importation or exportation of our products will be
implemented by the United States or other countries. If these tariffs or
restrictions are imposed, our revenues or profits could suffer.
We may lose money when we exchange foreign currency received from international
sales into U.S. dollars.
A significant portion of our business is conducted in currencies other
than the US dollar, which is our reporting currency. As a result, currency
fluctuations among the US dollar and the currencies in which we do business have
caused and will continue to cause foreign currency transaction gains and losses.
We recognize foreign currency gains or losses arising from our operations in the
period incurred. We cannot predict the effects of exchange rate fluctuations
upon our future operating results because of the number of currencies involved,
the variability of currency exposures and the potential volatility of currency
exchange rates.
Various international tax risks could adversely affect our earnings.
We are subject to international tax risks. Distributions of earnings and
other payments received from our subsidiaries may be subject to withholding
taxes imposed by the countries where they are operating or are formed. If these
foreign countries do not have income tax treaties with the United States or the
countries where our subsidiaries are incorporated, we could be subject to high
rates of withholding taxes on these distributions and payments. We could also be
subject to being taxed twice on income related to operations in these non-treaty
countries. Because we are unable to reduce the taxable income of one operating
company with losses incurred by another operating company located in another
country, we may have a higher foreign effective income tax rate than that of
other companies in our industry. The amount of the credit that we may claim
against our U.S. federal income tax for foreign income taxes is subject to many
limitations which may significantly restrict our ability to claim a credit for
all of the foreign taxes we pay.
13
<PAGE>
If we make acquisitions, we will face risks that could harm our business.
If appropriate opportunities become available, we may acquire additional
technologies, products or businesses to expand our existing and planned product
lines and technologies. These acquisitions would expose us to the risks
associated with acquisitions including:
- the assimilation of new technologies, operations, sites and personnel;
- the diversion of resources from the our existing business and
technologies; and
- the inability to generate revenues to offset associated acquisition
costs.
Acquisitions may also result in the issuance of dilutive equity
securities, the incurrence or assumption of debt or additional expenses
associated with the amortization of acquired intangible assets or potential
business. Our failure to successfully address these risks could harm our
business, results of operations and financial condition.
Our recent acquisition of ProteiGene involves the purchase of unproven
technology which will require substantial resources to develop.
We recently acquired ProteiGene, a company in the early stages of
developing various biological analysis systems and databases. ProteiGene's
approach and technology are not yet proven, and there is a substantial risk that
efforts in developing ProteiGene's technology will not yield any marketable
products. In addition, the effort we expend on this development will utilize
resources which we could otherwise have used in more proven areas of technology.
Responding to claims relating to improper handling, storage or disposal of
hazardous chemicals and radioactive and biological materials which we use could
be time consuming and costly.
We use controlled hazardous and radioactive materials in our business. The
risk of accidental contamination or injury from these materials cannot be
completely eliminated. If an accident with these substances occurs, we could be
held liable for any damages that result. Additionally, an accident could damage
our research and manufacturing facilities resulting in delays and increased
costs.
Damages to our manufacturing facilities could adversely impact our ability to
effectively operate our business.
We maintain manufacturing facilities in Billerica, Massachusetts, Bremen,
Germany and Leipzig, Germany. Damage to any of these facilities due to fire,
weather, earthquake or other natural disaster, power loss, unauthorized entry or
other events could cause an interruption in the production of our products. A
prolonged interruption in our manufacturing operations could have a material
adverse impact on our ability to effectively operate our business. The insurance
we have purchased may not be sufficient to cover any losses incurred.
Our operating results may fluctuate significantly and any failure to meet
financial expectations may disappoint securities analysts or investors and
result in a decline in our common stock price.
Our operating results have fluctuated in the past and we expect they will
fluctuate in the future. These fluctuations could cause our common stock price
to decline. Some of the factors that could cause our operating results to
fluctuate include:
- recognition of non-recurring revenue due to completion of government
contracts or other revenues;
- demand for and market acceptance of our products;
- the timing, release and competitiveness of our products;
14
<PAGE>
- our competitors' announcements or introduction of new products, services
or technological innovations;
- disputes regarding patents or other intellectual property rights;
- securities class action or other litigation;
- adverse changes in the level of economic activity in the United States
and other major regions in which we do business; and
- general and industry-specific economic conditions, which may affect our
customers' research and development expenditures and use of our products.
If revenue declines in a period, whether due to a delay in recognizing
expected revenue or otherwise, our earnings may decline because many of our
expenses are relatively fixed in the short term. In particular, research and
development and selling, general and administrative expenses are not directly
affected by variations in revenue in a period.
Due to volatile and unpredictable revenues and operating expenses, we
believe that period-to-period comparisons of our results of operations may not
be a good indication of our future performance. It is possible that, in some
future periods, our operating results may be below the expectations of
securities analysts or investors. In such event, the market price of our common
stock could fluctuate significantly or decline.
Risks Related to This Offering
Concentration of ownership among our existing principal stockholders may prevent
new investors from influencing significant corporate decisions.
Following the completion of this offering, our five current stockholders
will beneficially own or control approximately percent of the outstanding
shares of our common stock. Accordingly, our current stockholders will have the
ability to control the outcome of corporate actions requiring stockholder
approval, including election of directors, any merger, consolidation or sale of
all or substantially all of our assets and any other significant corporate
transactions. The concentration of ownership may also delay or prevent a change
of control of the Company at a premium price if the current stockholders oppose
it. Please see "Management" and "Principal Stockholders" for details on our
stock ownership.
Our current stockholders have controlling interests in affiliated companies and
could take actions which might not be in the best interest of our other
stockholders.
Our five current stockholders are members of an extended family and are
also the direct or indirect owners of a number of affiliated companies along
with their respective subsidiaries. Our current stockholders, including our
chief executive officer, also hold positions as officers or directors of certain
of these affiliates. The interests of our current stockholders as the direct or
indirect owners of these affiliates may conflict with their interests as
stockholders of Bruker Daltonics. Our current stockholders, in their capacity as
Bruker Daltonics stockholders, will have no obligation to act in the best
interest of Bruker Daltonics or of other Bruker Daltonics stockholders, and they
may cause us to take actions not in the best interests of Bruker Daltonics or to
refrain from taking actions that are in our best interests.
The market price of our common stock may be highly volatile.
The trading price of our common stock is likely to be highly volatile and
could be subject to wide fluctuations in price in response to various factors,
many of which are beyond our control, including:
- developments concerning proprietary rights, including patents, by us or a
competitor;
15
<PAGE>
- conditions or trends in the life sciences;
- changes in the market valuations of life sciences or life science tool
companies; and
- developments concerning our various strategic collaborations.
In addition, the stock market in general, and the Nasdaq National Market
and the market for life science companies in particular, have experienced
extreme price and volume fluctuations that have often been unrelated or
disproportionate to the operating performance of these companies. Furthermore,
there has been particular volatility in the market prices of securities of
biotechnology and life science companies. These broad market and industry
factors may seriously harm the market price of our common stock regardless of
our operating performance. In the past, following periods of volatility in the
market, securities class action litigation has often been instituted against
these companies. The commencement of any litigation against us could result in
substantial costs and a diversion of management's attention and resources which
could seriously harm our ability to achieve our financial goals.
Anti-takeover provisions in our charter documents may limit the ability of
another party to acquire us which could cause our stock price to decline.
Various provisions of our certificate of incorporation and by-laws could
delay or prevent a third party from acquiring us, even if doing so might be
beneficial to our stockholders. These provisions provide for a classified board
of directors of which approximately one third of the directors will be elected
each year, allow the authorized number of directors to be changed only by a
resolution of the board of directors, establish advance notice requirements for
proposals that can be acted upon at stockholder meetings and limit who may call
stockholder meetings. These provisions may prevent a merger or acquisition that
would be attractive to stockholders and could limit the price investors would be
willing to pay in the future for our common stock.
New investors in our common stock will experience immediate and substantial
dilution.
The offering price of our common stock will be substantially higher than
the net tangible book value per share of our existing capital stock. As a
result, if you purchase common stock in this offering you will incur immediate
and substantial dilution of $ in net tangible book value per share of common
stock, based on an assumed public offering price of $ per share. You will
also experience additional dilution upon the exercise of outstanding stock
options. Please see "Dilution" for a more detailed discussion of the dilution
new investors will incur in this offering.
If our stockholders sell substantial amounts of our common stock after the
offering, the market price of our stock may decline.
The number of shares of common stock available for sale in the public
market is limited by restrictions under federal securities law and under lock up
agreements with our underwriters. These lock up agreements restrict our
stockholders from disposing of their shares for one hundred eighty days after
the date of this prospectus without the prior written consent of Deutsche Bank
Securities Inc. However, Deutsche Bank Securities Inc. may release all or any
portion of the common stock from the restrictions of the lock up agreements. Any
sales of substantial amounts of common stock after the offering, including
shares issued upon the exercise of outstanding options, may cause the market
price of our common stock to decline.
16
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains "forward-looking statements." These statements
may include statements regarding:
- our business strategy;
- plans for hiring additional personnel;
- entering into business combinations or strategic alliances;
- intellectual property;
- litigation results;
- adequacy of anticipated sources of funds, including the proceeds from
this offering; and
- other statements about our plans, objectives, expectations and intentions
contained in this prospectus that are not historical facts.
When used in this prospectus, the words "expects," "anticipates,"
"intends," "plans," "believes," "seeks," "estimates" and similar expressions are
generally intended to identify forward-looking statements. Because these
forward-looking statements involve risks and uncertainties, actual results could
differ materially from those expressed or implied by these forward looking
statements for a number of reasons, including those discussed under "Risk
Factors" and elsewhere in this prospectus. Following this offering, we assume no
obligation to update any forward-looking statements contained in this
prospectus.
17
<PAGE>
USE OF PROCEEDS
We estimate the net proceeds from the sale of the shares of common
stock offered by us will be $ , after deducting the estimated
underwriting discount and offering expenses. We intend to use the net proceeds
of this offering for general corporate purposes, including research and
development, expansion of sales and marketing capabilities and working capital,
potential strategic acquisitions and repayment of our outstanding bank loans. As
of December 31, 1999, we had outstanding debt, including long-term and
short-term, in the aggregate of $15.3 million. We intend to use approximately
$ million of the net proceeds of the offering to repay this debt. The interest
rate on our debt ranges from 4.7% to 7.9% with banks in Germany and the United
States. The long-term debt matures in 2003 and 2008. The amounts actually
expended for working capital purposes may vary significantly and will depend on
a number of factors, including the amount of our future revenues and the other
factors described under "Risk Factors." Accordingly, our management will retain
broad discretion in the allocation of the net proceeds of this offering. Pending
these uses, we intend to invest the proceeds in short-term, investment-grade,
interest-bearing investments.
DIVIDEND POLICY
We have never declared or paid cash dividends on our capital stock. We
currently anticipate that we will retain all available funds for use in our
business and do not anticipate paying any cash dividends in the foreseeable
future. Any determination to pay dividends in the future will be at the
discretion of our board of directors and will depend upon our financial
condition, results of operations and capital requirements.
18
<PAGE>
CAPITALIZATION
The table below sets forth the following information:
- our actual capitalization as of December 31, 1999; and
- our capitalization as adjusted to reflect the receipt of net proceeds
from our sale of shares of common stock at an assumed initial
public offering price of $ per share in this offering, less the
underwriting discounts and commissions and estimated offering expenses.
You should read this table in conjunction with the Financial Statements
and the other financial information included in this prospectus.
<TABLE>
<CAPTION>
December 31, 1999
--------------------------
Actual As Adjusted
-------- -----------
(in thousands)
<S> <C> <C>
Short-term and long-term obligations........................ $15,340 $
Stockholders' equity:
Common Stock, $0.01 par value; 100,000,000 shares
authorized, 45,500,000 shares issued and outstanding,
actual; and shares issued and outstanding, as
adjusted(1)............................................... 455
Additional paid-in-capital.................................. 6,045
Accumulated other comprehensive loss........................ (2,854)
Retained earnings........................................... 6,412
------- --------
Total stockholders' equity............................ 10,058
------- --------
Total capitalization................................ $25,398 $
======= ========
</TABLE>
- ------------
(1) The number of shares of common stock does not include 2,220,000 shares of
common stock reserved for issuance under our 2000 Stock Option Plan which was
adopted in February 2000. Options for 783,135 shares of common stock were
granted under the 2000 Stock Option Plan in February 2000.
19
<PAGE>
DILUTION
Our actual net tangible book value as of December 31, 1999, was
approximately $9.7 million, or approximately $0.21 per share of common stock.
After giving effect to the sale of shares of common stock offered by
this prospectus at an assumed price of $ per share and after deduction of the
underwriting discounts and estimated offering expenses, our adjusted net
tangible book value at December 31, 1999, would have been $ million, or $
per share of common stock.
Actual net tangible book value per share before the offering has been
determined by dividing net tangible book value (total tangible assets less total
liabilities) by the number of shares of common stock outstanding at
December 31, 1999, as adjusted for the subsequent seven-for-one stock split
completed in February 2000. The offering will result in an immediate increase in
net tangible book value of $ per share to existing stockholders and an
immediate dilution in net tangible book value of $ per share to new
investors. The following table illustrates this dilution on a per share basis:
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............. $
Actual net tangible book value per share as of
December 31, 1999....................................... $ 0.21
Increase per share attributable to new investors..........
------
Adjusted net tangible book value per share after this
offering..................................................
------
Dilution per share to new investors....................... $
======
</TABLE>
The following table summarizes, on an adjusted basis as of December 31,
1999, the difference between the number of shares of common stock purchased from
us, the total consideration paid and the average price per share paid by the
existing stockholders and by the new investors, before deducting underwriting
discounts and commissions and estimated offering expenses, at an assumed initial
public offering price of $ per share.
<TABLE>
<CAPTION>
Shares Purchased Total Consideration Average
---------------------- ------------------------ Price
Number Percent Amount Percent Per Share
----------- -------- ------------- -------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders............... 45,500,000 $ 6,500,000 $0.14
New investors.......................
---------- ------ ------------ ------
Total...........................
========== ====== ============ ======
</TABLE>
The above discussion and tables assume no exercise of stock options after
December 31, 1999.
If the underwriters exercise their over-allotment in full, the following
will occur:
- the number of shares of common stock held by existing stockholders will
decrease to approximately % of the total number of shares of our common
stock outstanding; and
- the number of shares held by new investors will increase to
shares, or approximately % of the total number of our common stock
outstanding after this offering.
20
<PAGE>
SELECTED FINANCIAL DATA
(in thousands, except per share data)
The consolidated and combined statements of operations data for each of
the years ended December 31, 1997, 1998, and 1999 and the consolidated and
combined balance sheet data as of December 31, 1997, 1998 and 1999 have been
derived from our audited financial statements included elsewhere in this
prospectus which, for 1998 and 1999, have been audited by Ernst & Young LLP,
independent auditors, and for 1997 have been audited by BDO, independent
auditors. The combined statements of operations data for the years ended
December 31, 1995 and 1996 and the combined balance sheet data as of
December 31, 1995 and 1996 have been derived from unaudited financial statements
not included in this prospectus. The financial statements for 1995 through 1998
are presented on a combined basis due to the common ownership of the Company and
its affiliated company in Germany, which was formally acquired in
December 1998. Historical results are not necessarily indicative of future
results. The data presented below have been derived from financial statements
that have been prepared in accordance with accounting principles generally
accepted in the United States and should be read with the consolidated and
combined financial statements, including the notes, and the "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included elsewhere in this prospectus.
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------------------------
1995 1996 1997 1998 1999
------------ ------------ ------------ ------------ ------------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Consolidated/Combined Statements of Operations
Data:
Product revenue............................... $ 30,076 $ 43,942 $ 49,247 $ 40,157 $ 60,620
Other revenue................................. 2,049 2,130 1,878 2,050 4,070
----------- ----------- ----------- ----------- -----------
Net revenue............................... 32,125 46,072 51,125 42,207 64,690
Costs and operating expenses:
Cost of product revenue..................... 16,424 20,329 24,538 19,672 31,618
Sales and marketing......................... 2,806 6,123 7,178 7,435 11,345
General and administrative.................. 1,795 1,717 2,120 2,212 3,411
Research and development.................... 9,419 8,812 9,166 13,049 15,138
Patent litigation costs..................... -- 1,901 5,525 -- 538
----------- ----------- ----------- ----------- -----------
Total costs and operating expenses........ 30,444 38,882 48,527 42,368 62,050
----------- ----------- ----------- ----------- -----------
Operating income (loss) from continuing
operations.................................. 1,681 7,190 2,598 (161) 2,640
Other income 196 2 127 174 130
Interest expense, net......................... (1,341) (1,032) (743) (901) (907)
----------- ----------- ----------- ----------- -----------
Income (loss) from continuing operations
before provision for income taxes........... 536 6,160 1,982 (888) 1,863
Provision for income taxes.................... 9 2,265 1,627 -- 987
----------- ----------- ----------- ----------- -----------
Income (loss) from continuing operations...... 527 3,895 355 (888) 876
Income from discontinued operations, net of
income taxes................................ 372 368 209 383 373
----------- ----------- ----------- ----------- -----------
Net income (loss)............................. $ 899 $ 4,263 $ 564 $ (505) $ 1,249
=========== =========== =========== =========== ===========
Net income (loss) per share--basic and
diluted.....................................
Income (loss) from continuing operations.... $ 0.01 $ 0.08 $ 0.01 $ (0.02) $ 0.02
Income from discontinued operations, net of
income taxes.............................. 0.01 0.01 0.00 0.01 0.01
----------- ----------- ----------- ----------- -----------
Net income (loss) per share................... $ 0.02 $ 0.09 $ 0.01 $ (0.01) $ 0.03
=========== =========== =========== =========== ===========
Shares used in computing net income (loss) per
share--basic and diluted.................... 45,500 45,500 45,500 45,500 45,500
</TABLE>
21
<PAGE>
SELECTED FINANCIAL DATA (Continued)
(in thousands, except per share data)
<TABLE>
<CAPTION>
As of December 31,
------------------------------------------------------------------------
1995 1996 1997 1998 1999
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Consolidated/Combined Balance Sheet Data:...
Cash and cash equivalents................... $ 1,715 $ 3,766 $ 2,021 1,135 $ 2,443
Working capital............................. (14,936) (14,759) (8,845) 6,338 12,080
Total assets................................ 49,134 62,105 52,249 63,841 67,309
Total debt.................................. 13,817 12,752 8,496 17,924 15,340
Total stockholders' equity.................. 6,312 9,996 9,870 10,340 10,058
</TABLE>
22
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
YOU SHOULD READ THE FOLLOWING DISCUSSION AND ANALYSIS OF OUR FINANCIAL
CONDITION AND RESULTS OF OPERATIONS TOGETHER WITH "SELECTED FINANCIAL DATA" AND
OUR FINANCIAL STATEMENTS AND RELATED NOTES APPEARING ELSEWHERE IN THIS
PROSPECTUS. THIS DISCUSSION AND ANALYSIS CONTAINS FORWARD-LOOKING STATEMENTS
THAT INVOLVE RISKS, UNCERTAINTIES AND ASSUMPTIONS. OUR ACTUAL RESULTS MAY DIFFER
MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A
RESULT OF MANY FACTORS, INCLUDING, BUT NOT LIMITED TO, THOSE SET FORTH UNDER
"RISK FACTORS" AND ELSEWHERE IN THIS PROSPECTUS.
Overview
We are a leading developer and provider of innovative life science tools
based on mass spectrometry. We are also a worldwide leader in supplying mass
spectrometry-based systems for substance detection and pathogen identification
in security and defense applications. We maintain technical centers in Europe,
North America and Japan, as well as customer support facilities in many
industrialized and developing countries. We allocate substantial capital and
resources to research and development and are party to various collaborations
and strategic alliances. Our diverse customer base includes pharmaceutical
companies, biotechnology companies, academic institutions and government
agencies.
Effective December 21, 1998, Bruker Daltonics Inc. acquired all of the
shares of Bruker Daltonik GmbH for $5.4 million. The transaction represented an
exchange between entities under common control and, accordingly, the assets
acquired and liabilities assumed have been accounted for at historical cost in a
manner similar to that of pooling-of-interests accounting. In addition, all
periods presented have been restated to reflect the businesses on a combined
basis.
Acquisitions
In December 1999, we acquired a 49% interest in ProteiGene from a related
party. ProteiGene is a biomarker research and development company specializing
in the application of mass spectrometry and bioinformatics for medical and
microbiology cell and tissue analysis. The acquisition cost was $50,000 in cash,
the estimated fair market value, and was accounted for as a purchase. In
March 2000, we acquired the remaining 51% interest in ProteiGene for $26,000
from an unrelated party.
In June 1999, we acquired substantially all of the assets of Viking
Instruments Corporation, a developer and manufacturer of transportable gas
chromatograph mass spectrometers. Customers use these instruments for laboratory
and field analysis of soil, air and water for the identification and
quantification of a wide variety of organic compounds and pollutants. Our
acquisition cost was $150,000 in cash, and we accounted for the transaction as a
purchase. In connection with the acquisition, we expensed $100,000 as purchased
in-process research and development, and we allocated $25,000 to intangibles,
$20,000 to inventory and $5,000 to fixed assets. We are amortizing the
intangibles over a period of five years and depreciating the fixed assets over
three-to-five years.
Discontinued Operations
In 1999, we decided to dispose of our analytical infrared sales group. In
March 2000, we completed the divestiture to a related party, Bruker Optik GmbH,
without a gain or loss. Our former analytical infrared sales group sold and
serviced instruments, not manufactured by us,
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in Germany only. The infrared sales group generated revenues of $2.7 million in
fiscal 1999. Amounts previously reported have been reclassified as discontinued
operations and are not included in this discussion.
Significant Accounting Policies
CUSTOMER DEPOSITS. Under the terms and conditions of contracts with many
of our customers, we require a portion of the purchase price in the form of an
advance deposit. We record these deposit amounts as a liability until the
associated revenue is recognized at the time of acceptance of the system.
REVENUE RECOGNITION. We recognize product revenue from system sales when
a product is accepted by the customer, typically when we meet the terms and
conditions of the contract. When we sell products through an independent
distributor, a strategic collaboration partner or an unconsolidated affiliate
which assumes responsibility for installation, we recognize the sale upon
shipment from our facilities. We recognize revenue from accessories and parts
upon shipment, and revenue from services when performed. We recognize other
revenue, which is largely comprised of research and development grants, as the
grant work is performed.
COST OF PRODUCT REVENUE. Cost of product revenue includes all direct
materials, direct labor, benefits and indirect costs related to generating
revenue. These indirect costs include indirect labor, materials and supplies,
equipment rental and depreciation of production equipment, test equipment and
facilities as related to production space revenue.
SALES AND MARKETING. Sales and marketing expenses include salaries, sales
commissions, benefits, travel, occupancy costs and related expenses for our
direct sales force, sales support and marketing functions. We have expanded our
sales and marketing organization substantially since 1997, adding subsidiaries
and sales representatives in China, France, Japan, Scandinavia, Switzerland, the
United Kingdom and Taiwan. Sales and marketing expenses also include costs
associated with supporting our distribution channel partners for our
time-of-flight and ion trap mass spectrometry products. We expect that sales and
marketing expenses will continue to increase in the future as we further expand
our global distribution capabilities and introduce new products.
GENERAL AND ADMINISTRATIVE. General and administrative expenses include
salaries, benefits and expenses for our executive, finance, legal, human
resources and internal systems support personnel. In addition, general and
administrative expenses include occupancy costs, fees for professional services
and depreciation of office equipment. We expect general and administrative
expenses to increase as we continue to expand our administrative infrastructure
to support the anticipated growth of our business, including the costs
associated with being a public company.
RESEARCH AND DEVELOPMENT. Research and development expenses include costs
for the development of new technologies and products. These expenses include
materials, salaries, benefits, occupancy costs and related expenses for
development personnel. We expense research and development costs as incurred. We
expect to increase spending on research and development in order to develop new
products and applications.
PATENT LITIGATION COSTS. Patent litigation costs include actual and
estimated legal fees associated with litigation in connection with our
intellectual property, particularly the Finnigan litigation. These costs may
increase depending upon the outcome of the current legal proceedings.
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Results of Operations
The following table sets forth certain items included in our results of
operations for the three years ended December 31, 1997, 1998 and 1999 expressed
as a percentage of our net revenue for these periods.
<TABLE>
<CAPTION>
Year Ended
December 31,
------------------------------
1997 1998 1999
-------- -------- --------
<S> <C> <C> <C>
Revenue:
Product revenue........................................... 96.3% 95.1% 93.7%
Other revenue............................................. 3.7 4.9 6.3
----- ----- -----
Net revenue........................................... 100.0 100.0 100.0
Costs and operating expenses:
Cost of product revenue................................... 48.0 46.6 48.9
Sales and marketing....................................... 14.0 17.6 17.5
General and administrative................................ 4.2 5.3 5.3
Research and development.................................. 17.9 30.9 23.4
Patent litigation costs................................... 10.8 0.0 0.8
----- ----- -----
Total costs and operating expenses.................... 94.9 100.4 95.9
----- ----- -----
Operating income (loss) from continuing operations.......... 5.1 (0.4) 4.1
Other income................................................ 0.3 0.4 0.2
Interest expense, net....................................... (1.5) (2.1) (1.4)
----- ----- -----
Income (loss) from continuing operations, before income
taxes..................................................... 3.9 (2.1) 2.9
Provision for income taxes.................................. 3.2 0.0 1.5
----- ----- -----
Income (loss) from continuing operations.................... 0.7 (2.1) 1.4
Income from discontinued operations, net of income taxes.... 0.4 0.9 0.5
----- ----- -----
Net income (loss)........................................... 1.1% (1.2)% 1.9%
===== ===== =====
</TABLE>
Year Ended December 31, 1999 Compared to Year Ended December 31, 1998
PRODUCT REVENUE. Product revenue increased $20.4 million, or 51.0%, to
$60.6 million in 1999 compared to $40.2 million in 1998. The increase in product
revenue in 1999 was fueled by strong demand for our life science products by
industrial, academic and government customers. Additionally, $8.1 million of our
1999 product revenue was due to the completion of a large non-recurring
substance detection contract.
OTHER REVENUE. Other revenue increased $2.1 million, or 98.6%, to
$4.1 million in 1999 compared to $2.0 million in 1998. This increase was
primarily due to additional grant funding for early stage research and
development from various governmental agencies. While we historically have
obtained significant funding under grant awards for early-stage research and
development activity, this funding may be significantly reduced in the future.
COST OF PRODUCT REVENUE. Cost of product revenue increased
$11.9 million, or 60.7%, to $31.6 million in 1999 compared to $19.7 million in
1998. The gross margin on product revenue was 47.8% in 1999 as compared to 51.0%
in 1998. The decrease in gross margin is due primarily to lower substance
detection and pathogen identification product revenue, which historically has
had higher gross margins than our life science systems. We are seeking to
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improve our gross margin by developing new, more integrated systems and higher
margin consumables for the life science market. In addition, we have redesigned
our next generation systems to reduce the cost of product revenue.
SALES AND MARKETING. Sales and marketing expenses increased
$3.9 million, or 52.6%, to $11.3 million in 1999 compared to $7.4 million in
1998. The increase was due to sales commissions and bonuses earned by our direct
sales force as a result of an increase in the number of units sold and the
expansion of our global distribution capabilities. The increase was also due to
an increase in sales personnel and the associated recruiting, training, travel,
commissions and office space costs necessary to support a larger sales
organization. We expect that sales and marketing capabilities expenses will
continue to increase in the future as we further expand our global distribution
and introduce new products.
GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
$1.2 million, or 54.2%, to $3.4 million in 1999 compared to $2.2 million in 1998
as we continued to expand our financial and administrative infrastructure. We
expect general and administrative expenses to increase as we continue to expand
our administrative infrastructure to support the anticipated growth of our
business, including expenses associated with being a public company.
RESEARCH AND DEVELOPMENT. Research and development expenses increased
$2.1 million, or 16.0%, to $15.1 million in 1999 compared to $13.0 million in
1998. The increase in 1999 spending was principally due to new products
introduced in March 2000. We expect to increase spending on research and
development in order to continue to develop new products and applications. We
also expect to make additional research and development investments in
connection with our acquisition of ProteiGene.
PATENT LITIGATION COSTS. Patent litigation costs were $537,817 in 1999.
This increase reflects a revised estimate of our legal costs associated with our
intellectual property litigation. We may incur additional litigation costs in
2000, primarily due to the Finnigan litigation.
INTEREST EXPENSE, NET. Interest expense increased $6,853, or 0.8%, to
$907,682 in 1999 compared to $900,829 in 1998. The interest expense is the
result of our long and short-term borrowings from banks in the United States and
Germany.
PROVISION FOR INCOME TAXES. Provision for income taxes were $986,887 in
1999 compared to $0 in 1998. The effective tax rate in 1999, was 53.0% which
reflected a blended tax rate from the various countries in which we operate. In
1999 we benefited from utilization of tax loss carryforwards in Germany. In the
United States, we were unable to recognize a tax benefit on our loss. There was
no income tax expense in 1998 as a result of the loss for the year.
INCOME FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES. Income from
discontinued operations net of income taxes decreased $9,937, or 2.6%, to
$373,477 in 1999 compared to $383,414 in 1998. Income from discontinued
operations is related to the disposal of our infrared sales group in
March 2000.
Year Ended December 31, 1998 Compared to Year Ended December 31, 1997
PRODUCT REVENUE. Product revenue decreased $9.0 million, or 18.5%, to
$40.2 million in 1998 compared to $49.2 million in 1997. The decrease in product
revenue in 1998 compared to
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1997 was primarily due to the completion of a significant substance detection
and pathogen identification production contract in 1997. The growth in product
revenue in our life science business did not entirely offset this decrease.
OTHER REVENUE. Other revenue increased $171,442, or 9.1%, to
$2.0 million in 1998 compared to $1.9 million in 1997. This increase was due to
additional grant funding for early-stage research and development grants from
various governmental agencies.
COST OF PRODUCT REVENUE. Cost of product revenue decreased $4.8 million,
or 19.8%, to $19.7 million in 1998 compared to $24.5 million in 1997. The gross
margin of product revenue was 51.0% in 1998 over 50.2% in 1997. The increase in
gross margin is primarily due to efficiencies that we introduced to the
production process.
SALES AND MARKETING. Sales and marketing expenses increased $256,788, or
3.6%, to $7.4 million in 1998 compared to $7.2 million in 1997. Sales and
marketing expenditures were consistent with those of the prior year.
GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
$92,802, or 4.4%, to $2.2 million in 1998 compared to $2.1 million in 1997.
General and administrative expenditures were consistent with those of the prior
year.
RESEARCH AND DEVELOPMENT. Research and development expenses increased
$3.8 million, or 42.4%, to $13.0 million in 1998 compared to $9.2 million in
1997. The increase in 1998 spending was due to an increase in the number of
engineering and development personnel and the associated recruiting, training
and laboratory space necessary to support the larger development team.
PATENT LITIGATION COSTS. In 1997, we increased by $5.5 million, our
reserve for all litigation costs we are likely to incur in connection with our
defense against Finnigan's patent infringement litigation, including appeals. In
1998, we did not increase our estimate for these costs.
INTEREST EXPENSE, NET. Interest expense increased $157,630, or 21.2%, to
$900,829 in 1998 compared to $743,199 in 1997. The interest expense is the
result of our long and short-term borrowings from banks in the United States and
Germany.
PROVISION FOR INCOME TAXES. Due to the net loss in 1998, we had no
provision for income taxes. In 1997, the effective tax rate was 82.1%, which
reflects an increase in statutory rates due to a non-recurring tax assessment in
Germany.
INCOME FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES. Income from
discontinued operations net of income taxes increased $174,563, or 83.6%, to
$383,414 in 1998 compared to $208,851 in 1997. Income from discontinued
operations is related to the disposal of our infrared sales group in
March 2000.
Liquidity and Capital Resources
Presently, we anticipate that our existing capital resources and the
expected proceeds from this offering will meet our operating and investing needs
through the end of 2001. Historically, we have financed our growth through a
combination of cash provided from operations, debt financing and issuance of
common stock. Cash provided from operating activities is our primary source of
liquidity. We generated $5.4 million in cash flow from operations during 1999,
used $6.5 million in 1998 and generated $12.7 million in 1997.
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<PAGE>
We used $4.4 million of cash in 1999, $2.9 million in 1998 and
$3.9 million in 1997 for capital expenditures. Such capital expenditures were
made to improve productivity and expand manufacturing capacity. We expect to
continue to make capital investments focused on enhancing the efficiency of our
operations and supporting our growth.
In August 1999, we entered into a revolving line of credit with Citizens
Bank in the United States in the amount of $2.5 million, of which $1.0 million
was outstanding as of December 31, 1999. This line, which is secured by portions
of our inventory, receivables and equipment in the United States, is used to
support working capital and expires July 31, 2001. We also maintained revolving
lines of credit in 1998 and 1999 of approximately $4.2 million and
$6.2 million, respectively, with German banks, of which $1.5 million was
outstanding as of December 31, 1999. Our German lines of credit are secured by a
portion of our inventory and receivables in Germany and are renewable in
June 2000. In 1998 we raised $5.8 million from the issuance of our common stock
which was used to acquire the stock of our affiliate, Bruker Daltonik GmbH.
No material capital expenditure commitments were outstanding as of
December 31, 1999. Our future capital uses and requirements depend on numerous
factors, including our success in selling our existing products, our progress in
research and development, our ability to introduce and sell new products, our
sales and marketing expenses, our need to expand production capacity, costs
associated with possible acquisitions, expenses associated with unforeseen
litigation, regulatory changes, and competition and technological developments
in the market.
Impact of Foreign Currencies
We sell our products in many countries and a substantial portion of our
sales and a portion of our costs and expenses are denominated in foreign
currencies, especially in Euro. In 1999, the U.S. dollar strengthened against
the Euro, and in 1998, the U.S. dollar strengthened against the German mark. In
both cases, this reduced our consolidated revenue growth rate, as expressed in
U.S. dollars. In addition, the currency fluctuations resulted in a foreign
currency translation gain of $0.6 million in 1998 and a loss of $1.3 million in
1999, which are included as a component of accumulated other comprehensive
income (loss) on our balance sheets.
Historically, our realized foreign exchange gains and losses have not been
material. Accordingly, we have not hedged our foreign currency position in the
past. However, as we expand our sales internationally, we plan to evaluate our
currency risks and we may enter into foreign exchange contracts from time to
time to mitigate foreign currency exposure.
Inflation
We do not believe inflation has had a material impact on our business or
operating results during the periods presented.
Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities." The provisions of the statement require the recognition
of all derivatives as either assets or liabilities in the statement of financial
position and the measurement of those instruments at fair value. The accounting
for changes in the fair value of a derivative depends on the intended use of the
derivative and the resulting designation. The Company is required to implement
the statement in the first quarter of fiscal 2001. We do not believe that this
new accounting standard will have a material impact on our financial statements.
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BUSINESS
Overview
Bruker Daltonics is a leading developer and provider of innovative life
science tools based on mass spectrometry. Our substantial investment in research
and development allows us to design, manufacture and market a broad array of
products intended to meet the rapidly growing needs of our diverse customer
base. Our customers include pharmaceutical companies, biotechnology companies,
agricultural biotechnology companies, molecular diagnostics companies, academic
institutions and government agencies.
Mass spectrometers are sophisticated devices that provide highly accurate
molecular information. Our mass spectrometry-based systems often combine
automated front-end sample preparation robots, advanced mass spectrometry
instrumentation, reagent kits and other consumables, and bioinformatics
software. Our systems offer integrated solutions for applications in multiple
existing and emerging markets including genomics and proteomics, metabolic and
biomarker profiling, drug discovery and development, molecular assays and
diagnostics, molecular and systems biology and basic medical research.
We market our life science systems both through our direct sales force and
through strategic distribution arrangements with Agilent Technologies,
PerkinElmer, Sequenom, MWG-Biotech and others. We are also a worldwide leader in
supplying mass spectrometry-based systems for substance detection and pathogen
identification in security and defense applications.
Industry Background
We design our products to address the rapidly evolving needs of the life
science industry. Public and private efforts to sequence the entire human genome
have led to advances that are fueling further investment in the discovery and
identification of single nucleotide polymorphisms, or SNPs, and other forms of
genetic variation. These developments, combined with other advances in
combinatorial chemistry and basic medical research, are spurring growth in the
following rapidly developing and emerging areas:
- PHARMACOGENOMICS, which uses genetic and genomic information to predict
the response of individual patients and patient populations to drugs;
- PERSONALIZED MEDICINE, which seeks to apply inexpensive, rapid molecular
diagnostic tests, or assays, to profile a patient's genetic composition
and enable the prescription of individualized drug therapy;
- PROTEOMICS, which involves the large-scale separation, identification and
characterization of proteins in order to understand how proteins are
created based on the information contained in genes;
- NEW METHODS OF DRUG DISCOVERY, which are based on the high-throughput
screening of large numbers of small organic compounds synthesized through
combinatorial chemistry against large numbers of targets identified
through genomics and proteomics;
- BIOMARKER DETECTION, OR BIO-BARCODING, which develops rapid and sensitive
assays for a broad range of cell and tissue types for applications
including infectious disease detection, human tissue assessment,
agricultural phenotype differentiation and pathogen identification, even
when the molecular mechanisms are not understood or the genomic sequence
is not available; and
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- METABOLIC PROFILING, OR METABOLOMICS, which analyzes the levels of
metabolites present in a cell or in biological fluids to draw
correlations between disease states, genetic modifications and variations
in metabolite levels.
In addition, increased levels of funding for basic medical research have
fueled demand by universities, medical schools and government agencies for
sophisticated bioanalytical systems, such as mass spectrometers. Funding has
also increased for substance detection and pathogen identification systems for
security and defense applications.
LIMITATIONS OF ALTERNATIVE LIFE SCIENCE TOOLS
Many of the bioanalytical tools available today, other than mass
spectrometry systems, have significant limitations when used for applications
including the detection of genetic variation, pharmacogenomics, proteomics, drug
discovery and biomarker detection. These limitations include lack of throughput
to accommodate the volume of analysis required, lack of automation,
time-consuming sample preparation and insufficient accuracy of the resulting
data. For example, the two leading methods traditionally used for DNA sequencing
and expression profiling are electrophoresis and hybridization. The error rate
of these techniques can increase the cost, complexity and time involved in
completing more demanding analyses.
Traditional protein science tools including Edman sequencing and
two-dimensional gel separations are time consuming, relatively inaccurate and
labor intensive. Additionally, many alternative life sciences tools can only be
utilized by expert scientists. For other emerging applications including
metabolic profiling and rapid biomarker detection, we believe there presently
are no automated, sensitive and accurate alternative tools available other than
mass spectrometry-based systems.
Increasingly, life science companies are looking to solutions that address
the limitations inherent in these alternative tools.
MASS SPECTROMETRY
Mass spectrometers are devices for measuring the mass, or weight, of a
molecule. Mass spectrometry systems employ an ionization source which creates
charged molecules and a mass separation/detection component which separates
these charged molecules on the basis of mass to detect their presence and
quantity. Mass spectrometry has been used in physics and chemistry for over
fifty years. Over the past fifteen years, mass spectrometry has emerged as a
powerful research tool in the life sciences. For example, mass spectrometers can
determine the identity, amount, structure, sequence and other biological
properties of small molecules, like drug candidates and metabolites, as well as
large biomolecules, like proteins or DNA.
While highly accurate, mass spectrometers historically have been limited
by the time and skill required to prepare samples, conduct each measurement and
analyze the data.
Our Solutions
Our product lines integrate sophisticated mass spectrometers with
automated sample preparation and measurement, and, where appropriate,
bioinformatics software to address many of the bioanalytical and bioinformatics
needs of the life sciences industry across a broad range of applications. Our
products have particular application to:
- genetic variation analysis, including such evolving areas as
pharmacogenomics and personalized medicine;
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- proteomics;
- metabolomics;
- drug discovery based on high-throughput screening and combinatorial
chemistry; and
- drug development.
Automated high-throughput mass spectrometry systems offer significant
advantages over other bioanalytical tools in these emerging and rapidly changing
markets. Our automated systems allow our customers to generate and evaluate
large volumes of accurate, high-quality data on a cost-effective basis. We
believe that this enhanced throughput and high-quality data improves our
customers' ability to apply bioinformatics to validate lead targets, understand
disease pathways and analyze lead compounds. Our customers also use our products
in molecular biology and other basic medical research. In addition, our
automated, integrated mass spectrometry technology forms the basis of our
substance detection and pathogen identification products used in security and
defense markets.
Our life science systems are based on four core mass spectrometry
technologies. Building on these core technologies, we offer a wide range of
systems that address key analytical needs in multiple applications across the
life sciences industry. We believe that our products offer the following
advantages to our customers:
HIGH DEGREE OF AUTOMATION. Our automated sample preparation and
measurement technology and sophisticated bioanalytic software allow our
customers to process high sample volumes with reduced reliance on highly-trained
scientific personnel.
INTEGRATED SOLUTIONS. We provide our customers with complete
bioanalytical solutions by integrating our mass spectrometry products with
front-end sample preparation, purification and separation methods, reagent kits
and other consumables and data interpretation bioinformatics software.
ACCURATE RESULTS. Our automated mass spectrometry systems generate large
volumes of highly accurate data with the selectivity and sensitivity our
customers demand. The high sensitivity of our products enables our customers to
pursue miniaturization and analysis of smaller samples, including what is known
as the lab-on-a-chip approach. The accuracy of the results reduces the need for
repeat analysis to eliminate errors.
INCREASED PRODUCTIVITY. Our high-throughput products are designed to
allow our life science customers to increase productivity by generating more
results in a shorter time period.
COST EFFICIENCY. We have achieved performance advances with our products
that are designed to result in increased information per analysis at a
significantly lower cost per analysis for our customers.
Our Strategy
Our strategy is to continue to be a leading provider of mass spectrometry
and related systems for use in life sciences, as well as in substance detection
and pathogen identification. Key elements of our strategy include:
PROVIDE A BROAD ARRAY OF TOOLS FOR A WIDE RANGE OF APPLICATIONS. In life
sciences, our strategy is to offer a broad range of products that provide
end-to-end solutions for applications in existing and emerging markets. Our
longer term strategy is to expand our enabling life science tools beyond our
current mass spectrometry-based product lines, and to
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extend our position as a leading provider of biological mass spectrometers to
related bioinformation business opportunities. We plan to selectively evaluate
new life science markets to which we may apply our core technologies and to
continue to develop and market our mass spectrometry systems for substance
detection and pathogen identification.
DEVELOP NEW PLATFORMS, ENHANCED PRODUCTS AND NEW APPLICATIONS. We plan to
continue our substantial investment in internal research and development. As a
result of this investment, in the past year we introduced an entirely new
technology platform, four next generation mass spectrometers, two new consumable
product lines and two bioinformatics software packages. We expect our
collaborations with key industrial and academic customers to continue to play a
strategic role in our research and development efforts and to assist us in
identifying and anticipating opportunities for enhanced products and emerging
applications.
BUILD ALLIANCES AND PURSUE ACQUISITIONS. We plan to continue to
co-develop selected products with strategic partners, especially when these
alliances expand our product lines and extend our marketing reach. As an
example, our collaboration with Agilent recently resulted in the introduction of
two bench-top ion trap instruments. We also intend to pursue strategic
acquisitions to extend our technology base. For example, in the past year, we
acquired ProteiGene and Viking to expand our biomarker and substance detection
technologies, respectively.
GENERATE RECURRING REVENUE. Our consumables and product service and
support provide an opportunity to generate recurring revenue. We seek to develop
additional consumables which enhance the ease of use and productivity of our
tools. For example, our reagents and assay kits make sample preparation easier
for our customers. We seek to increase recurring revenue from post-warranty
service to our growing industrial customer base as well as from training and
applications support.
DEVELOP AND EXPAND OUR BIOINFORMATION BUSINESS. We intend to expand our
presence in the bioinformation field through our wholly-owned subsidiary,
ProteiGene. We expect to create proprietary databases which our customers can
access by paying subscription fees, to collaborate in drug discovery with
customers in return for milestone and product royalty payments, and to offer
paid-for technology access partnerships to life science companies. We intend to
deploy our automated high-throughput mass spectrometry-based discovery tools in
an industrial-biology information production operation.
LEVERAGE OUR INTELLECTUAL PROPERTY. We expect to continue to pursue an
intellectual property strategy of obtaining extensive patent protection. As of
April 10, 2000, we owned or exclusively licensed 76 issued U.S. patents and 29
pending U.S. patent applications as well as 105 issued foreign patents and 77
pending foreign patent applications. We believe that maintaining extensive
intellectual property rights allows us to maintain a competitive advantage
through protecting access to key technologies. Where appropriate, we may pursue
an active licensing program to generate recurring revenue.
Our Products
MASS SPECTROMETRY
We base our life science solutions on four core mass spectrometry
technology platforms which include:
- matrix-assisted laser desorption ionization, or MALDI, time-of-flight
mass spectrometry;
- electrospray ionization, or ESI, time-of-flight mass spectrometry;
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- Fourier transform mass spectrometry; and
- ion trap mass spectrometry.
Time-of-Flight Mass Spectrometers measure mass based on the time it takes
for charged molecules to travel from the ionization source to the detection
component. These mass spectrometers currently have the highest sample throughput
and mass range of any mass spectrometer for use in the fields of genomics and
proteomics. Our time-of-flight mass spectrometry solutions make full use of this
potential for increased speed by automating the analysis, from initial sample
preparation to final bioinformatics data mining. Our time-of-flight solutions
combine high sensitivity, accuracy and throughput to generate large volumes of
accurate raw data for SNP detection and proteomics.
Our life science tools include both MALDI and ESI time-of-flight
instruments.
MALDI TIME-OF-FLIGHT MASS SPECTROMETERS offer a laser-based ionization
process of solid samples that combines large volume sample throughput with high
mass range and significant sensitivity. Our MALDI time-of-flight mass
spectrometers are useful for (a) SNP analysis; (b) genotyping; (c) personalized
medicine; (d) forensics; (e) proteomics and protein function analysis;
(f) protein, antisense and peptide analysis for drug discovery and development;
and (g) fast cell and tissue biomarker detection. We offer three MALDI
time-of-flight instruments:
REFLEX III-TM-. Our top-of-the-line MALDI time-of-flight instrument
offers modular research flexibility and automated sampling combined with high
sensitivity, resolution and accuracy.
BIFLEX III-TM-. The BIFLEX III provides high-end performance with high
throughput for industrial biology and drug discovery applications. Sequenom uses
this system in its industrial genomics MassArray system, and MWG-Biotech is
integrating it into a medium-throughput SNP detection system.
OMNIFLEX-TM-. Our first bench-top MALDI time-of-flight, introduced in
March 2000, is a walk-up multi-user instrument used in general-purpose mass
spectrometry laboratories. The OmniFLEX combines sensitivity, resolution and
accuracy, for a wide variety of routine and higher-end applications, with a
lower price than our other two products described above. We co-market this
product with PerkinElmer.
These products utilize our proprietary AnchorChip microarrays, which
employ patented microfluidics technology to improve sensitivity and reduce
analysis time per sample.
ESI TIME-OF-FLIGHT MASS SPECTROMETERS offer a non-destructive ionization
process, rapid data acquisition and a high mass range. ESI time-of-flight mass
spectrometers are useful for (a) identification, protein analysis and functional
complex analysis in proteomics and protein function; (b) molecular
identification in metabolomics and drug metabolite analysis; (c) combinatorial
chemistry high-throughput screening, or HTS; and (d) fast liquid chromatography
mass spectrometry, or LC/MS, in drug discovery and development.
BIOTOF II-TM-. We introduced our BioTOF II in March 2000. Our system
offers enhanced resolution and improved mass accuracy beyond what we believe is
currently achievable with other ESI time-of-flight systems.
FOURIER TRANSFORM MASS SPECTROMETERS utilize high-field superconducting
magnets to offer the highest resolution, selectivity and accuracy currently
achievable in mass spectrometry. Our systems based on this technology often
eliminate the need for time-consuming separation techniques in complex mixture
analyses. In addition, our systems can
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fragment molecular ions to perform exact mass analysis on all fragments to
determine molecular structure. Fourier transform mass spectrometers are useful
for (a) the study of the structure and function of biomolecules including
proteins, DNA and natural products; (b) complex mixture analysis including
combinatorial libraries; (c) high-throughput proteomics and metabolomics; and
(d) high-throughput drug screening.
APEX III-TM-. Our APEX III product line offers a choice of four magnetic
field strengths. An increase in field strength improves resolution, selectivity
and accuracy. These products allow a wide range of research capabilities while
maintaining simplicity of operation. Our recent software and automation
developments allow us to offer high-throughput, easy-to-use systems.
ION TRAP MASS SPECTROMETERS measure all ions simultaneously which improves
sensitivity relative to older quadrupole mass spectrometers. Ion trap mass
spectrometers are useful for (a) sequencing and identification based on
structural analysis; (b) quantitative liquid chromatography mass spectrometry;
(c) identification of combinatorial libraries; and (d) generally enhancing the
speed and efficiency of the drug discovery and development process.
ESQUIRE3000-TM-. Our esquire3000 ion trap mass spectrometer combines our
patented ion trap technology with ion source and liquid chromatography
technology from Agilent. It offers performance benefits over other ion trap
systems, including software integration with Agilent separation systems, faster
scan rates, higher sensitivity, a wider mass range and a simple Windows NT user
interface. We also manufacture a related product, the LC/MSD-trap, which is
distributed by Agilent.
CONSUMABLES
We sell consumables for processing, purifying and preparing samples prior
to mass spectrometric analyses. Additionally, our systems for substance
detection and pathogen identification use consumables for sample collection.
Consumables will provide an increasing recurring revenue stream as our installed
systems base grows. Our consumables include:
<TABLE>
<CAPTION>
Product Description
- ------------------------------------- ------------------------------------------------------------
<S> <C>
AnchorChips Microarrays that increase the sensitivity of MALDI analysis,
improve automation and minimize reagent consumption
GenoPureDS kit Purifies DNA prior to mass spectrometric analysis
GenoPureOligo kit Purifies oligonucleotides, or DNA fragments, prior to
analysis
Silicon wheels Sample collection device for substance detection
Quartz tubes Sample processing device for pathogen identification
Dryers and filters Air dryers and filters for our ion mobility spectrometers
</TABLE>
AUTOMATION AND SEPARATION PRODUCTS, TRAINING AND SERVICES
We sell a broad array of related products and services with our initial
system sales and during a product's lifetime. For substance detection systems,
we have developed training
34
<PAGE>
products, including complete system simulator installations. We offer
post-warranty service on either a pre-paid or per-call basis and sell repair and
replacement parts for our growing installed systems base. Our related products
include:
<TABLE>
<CAPTION>
Product Description
- ------------------------------------- ------------------------------------------------------------
<S> <C>
Reconnaissance Simulator Full-function systems simulator including simulation of
operational conditions
MM-1 Trainer Learning product simulating the functionality of an MM-1
mass spectrometer
HP1100 and 3D-CE Separation products family, including liquid chromatograph,
combinatorial chemistry accessory, capillary liquid
chromatograph and capillary electrophoresis system --
purchased from Agilent
MAP II and II/8 Single-needle and high-throughput eight-needle sample
preparation robots for MALDI -- adaptation of Gilson
technology
AutoXecute Automation software for use with our time-of-flight systems
</TABLE>
BIOINFORMATICS AND SOFTWARE
We have introduced automated control software to integrate separation
devices and robotics into our solutions. In addition, we provide bioinformatics
software to generate useable information from large volumes of raw data.
Finally, we offer intuitive data acquisition and analysis software on a Windows
NT platform to make our systems accessible to non-experts. Our related products
include:
<TABLE>
<CAPTION>
Product Description
- ------------------------------------- ------------------------------------------------------------
<S> <C>
HyStar NT Liquid chromatography mass spectrometry software to control
Agilent and Waters liquid chromatography systems, Gilson
robots, and the operation of an integrated liquid
chromatography/nuclear magnetic resonance/mass spectrometry
system
BioTools For biomolecule identification and sequencing
Mascot Fast, automated web-enabled protein identification from
protein databases--purchased from Matrix Science
AGCTools Interpretation software for DNA mass spectra for SNPs or
other genetic variation
PolymerTools Interpretation software for mass spectra for synthetic
polymer parameters
QuantAnalysis Software for quantification of metabolites and substances
</TABLE>
35
<PAGE>
SUBSTANCE DETECTION AND PATHOGEN IDENTIFICATION
We sell a wide range of portable analytical and bioanalytical detection
systems and related products. Our customers use these devices for nuclear,
biological pathogen and chemical defense applications, anti-terrorism, law
enforcement and process and facilities monitoring. Our substance detection and
pathogen identification products use many of the same technology platforms as
our life sciences products. For example, we developed our esquire products using
the same ion trap technology used in our chemical and biological mass
spectrometers. We also provide integrated, comprehensive detection suites which
include our multiple detection systems, consumables, training and simulators.
Our related products include:
<TABLE>
<CAPTION>
Product Description
- ------------------------------------- ------------------------------------------------------------
<S> <C>
MM-1 Mobile mass spectrometer for automatic detection of chemical
substances
CBMS Mobile ion trap mass spectrometers for automated
classification of biological pathogens and identification of
chemical agents
RAID-16 and RAID-S Portable and stationary automated ion mobility detectors for
chemical agents detection
SPME-RAID Trace detector for explosives
EM640 Series Transportable mass spectrometers for emergency response
Viking 573 Portable gas chromatography mass spectrometer for law
enforcement
RAPID II Long-range infrared detector for chemical substance clouds
SVG-2 Solid-state radiation detector
NIGAS Non-intrusive neutron activation detector for chemical
component analysis in closed containers
</TABLE>
Research and Development
PRODUCT AND APPLICATIONS DEVELOPMENT. We commit substantial capital and
resources to internal and collaborative research and development in order to
provide innovative life science solutions to our customers. The following are a
few examples of our recent research and development accomplishments:
- After a four-year development effort, we created a new technology
platform for orthogonal time-of-flight mass spectrometry. In March 2000,
we offered our second generation product derived from this ESI
time-of-flight platform, the BioTOF II;
- In March 2000, we introduced various next-generation systems based on our
existing Fourier transform mass spectrometry, ion trap mass spectrometry
and MALDI time-of-flight technology platforms. These new systems
typically had two-year development and engineering cycles. These products
have fewer parts, lower production costs and improved price/performance
ratios;
36
<PAGE>
- We have recently commercialized our AnchorChip microarrays. These
products incorporate our patented microfluidics technology which achieves
greater sensitivity in MALDI analyses; and
- We developed our ion source, known as ZeroAdjust Nanospray-TM-, to solve
ease of use and throughput constraints associated with traditional ESI
sources at ultra low flow rates. This development increases throughput
for proteomic applications.
GRANTS. Historically, we have been the recipient of various government
grants. We recently completed a five-year Advanced Technology Program grant from
the National Institute of Standards and Technology for the development of a Mass
Tag DNA Diagnostic Mass Spectrometer. We also have several ongoing, multi-year
research grants from the German Federal Government. We have generally retained
at least non-exclusive rights to any items or improvements we develop under
these grants.
Customers
We have a broad and diversified global life science customer base that
included over 400 customers at December 31, 1999. Our life science customers
accounted for approximately 60% of our net revenue in 1999. Our life science
customer base includes pharmaceutical, biotechnology, agricultural
biotechnology, molecular diagnostics and fine chemical companies, as well as
commercial laboratories, university laboratories, medical schools and other not-
for-profit research institutes and government laboratories. We sell our
substance detection and pathogen identification products and services to defense
departments and law enforcement and emergency response professionals. In fiscal
1999, our substance detection and pathogen identification customers represented
approximately 40% of our net revenue.
During 1998 and 1999, the U.S. Department of Defense Edgewood Chemical
Biological Center accounted for 12% and 13%, respectively, of our net revenue
and the South Korean government (through its prime contractor Daewoo Heavy
Industries) accounted for 18% and 15%, respectively, of our net revenue. Our
production contract with the U.S. Department of Defense Edgewood Chemical
Biological Center ended on March 31, 2000, and we do not currently anticipate
that our net revenue attributable to either of these customers will account for
greater than 10% of our net revenue in 2000.
Strategic Collaborations
We have several key technical collaborations and alliances for the
development and distribution of new or existing products. These collaborations
include:
AGILENT TECHNOLOGIES. In 1996, we commenced a collaboration with Agilent
Technologies (formerly Hewlett Packard) to develop and distribute ion trap
liquid chromatography mass spectrometry instrumentation. We manufacture and
distribute our esquire3000 product, and we jointly manufacture a related ion
trap product for distribution by Agilent. Under our agreement with Agilent,
neither party can conduct joint ion trap development with any other party and
each party can distribute its products without restriction.
PERKINELMER INSTRUMENTS. In March 2000, we began our alliance with
PerkinElmer to leverage PerkinElmer's global distribution capability to
co-market our OmniFlex time-of-flight products. We believe this alliance will
advance expansion into new markets, including pharmaceutical drug development,
protein, peptide and oligonucleotide product quality control, synthetic polymer
manufacturing, and quality testing in the food and beverage industries.
37
<PAGE>
SEQUENOM. In 1997, we began an alliance with Sequenom to develop
industrial genomics tools for high-throughput SNP analysis. Our BIFLEX III is
the basis for a co-labeled system called SpectroScan-TM- which is an important
component of the Sequenom MassARRAY system. Each party owns the rights to any
developments it makes under this collaboration.
MWG-BIOTECH. In 1999, we began our alliance with MWG-Biotech to
co-develop an integrated system for SNP analysis, including reagent kits,
high-volume sample preparation systems and our BIFLEX III, MALDI time-of-flight
system. The National Institute of Standards has selected this system to help
establish a standard SNP database laboratory. Each party owns any developments
it makes under this collaboration.
We have a number of other collaborations, including collaborations with
Matrix Sciences and Variagenics for technology enhancements. We own all
developments we make under these collaborations.
Sales and Marketing
MARKETING ACTIVITIES. Our primary marketing theme is "Enabling Life
Science Tools Based on Mass Spectrometry." We emphasize our solutions and
technology platforms rather than simply the provision of instruments. We pursue
an active marketing program through a large number of activities throughout the
year. Our key marketing vehicles include trade shows, advertising, our website,
newsletters and related activities.
DIRECT SALES CHANNELS. During the last three years, we have committed
significant resources to upgrade and expand our direct sales force and our
distribution channels worldwide. We have direct sales coverage throughout most
of the European Union, North America and much of the Pacific Rim. During the
past three years, we have hired and trained more than forty professional
technical sales staff for direct sales and marketing activities.
We have well-equipped application and demonstration facilities and
qualified application personnel who assist customers and provide product
demonstrations in specific application areas. We maintain our primary
demonstration facilities in the United States (Massachusetts and California),
Germany (Bremen and Leipzig), the United Kingdom and Japan. Demonstration
systems and applications scientists are also available in Australia, France,
Italy and Switzerland.
INDIRECT SALES CHANNELS. We have various international distributors and
independent sales representatives, including in the countries of South Korea,
Portugal and Israel and in the regions of Latin America and Eastern Europe. We
have adopted a distribution business model where we engage in strategic
distribution alliances with other companies to address certain market segments.
Our primary distribution alliances are:
- We manufacture for Agilent an ion trap mass spectrometer, which they
incorporate into their liquid chromatography mass spectrometry systems
for distribution into various industrial markets.
- We sell high-throughput MALDI time-of-flight mass spectrometers through
Sequenom into emerging industrial genomics markets for high-throughput
SNP analysis.
- We sell BIFLEX MALDI time-of-flight mass spectrometry systems through
MWG-Biotech for DNA/RNA applications, including SNP detection.
- We recently began co-marketing our OmniFLEX MALDI time-of-flight mass
spectrometers with PerkinElmer in a variety of industrial market
segments.
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<PAGE>
Sales Cycle and Backlog
The typical sales cycle for our life science systems is three to six
months for most product lines. However, the cycle can be in excess of a year
when a customer must budget the product into an upcoming fiscal year. Substance
detection and pathogen identification products can have multi-year sales cycles
for large production contracts.
We typically ship ordered products within twelve months after receipt of
the order. At December 31, 1998 and 1999, we had approximately $26.4 million and
$30.1 million, respectively, in orders which had not yet been shipped and
accepted by the customer.
Manufacturing
We manufacture and test the majority of our products in our three
principal ISO 9001 registered manufacturing facilities located in the United
States and Germany. We have considerable manufacturing flexibility at our
various facilities, and each facility can manufacture multiple products at the
same time. We maintain in-house key manufacturing know-how, technologies and
resources. Our facilities incorporate environmental chambers, CE mark compliance
test centers, clean room manufacturing for vacuum components, licensed
facilities for handling closed radioactive sources, computer-aided laser cutting
and vacuum welding. We maintain multiple suppliers for key components that are
not manufactured in-house.
Intellectual Property
Our intellectual property consists of patents, copyrights, trade secrets,
know-how and trademarks. Protection of our intellectual property is a strategic
priority for our business. As of April 10, 2000, we owned or exclusively
licensed 76 issued U.S. patents and 29 pending U.S. patent applications as well
as 105 issued foreign patents and 77 pending foreign patent applications. We
have exclusively licensed three patents, which cover time-of-flight mass
spectrometry with improved resolution and accuracy, from Indiana University.
We believe our owned and licensed patent portfolio provides us with a
competitive advantage. This portfolio permits us to maintain access to a number
of key technologies. We license our owned patent rights where appropriate. We
will enforce our patent rights against infringers if necessary.
The patent positions of life science tool companies involve complex legal
and factual questions. As a result, we cannot predict the enforceability of our
patents with certainty. In addition, we are aware of the existence from time to
time of patents in certain countries which, if valid, could impair our ability
to manufacture and sell our products in these countries.
We also rely upon trade secrets, know-how, trademarks, copyright
protection and licensing to develop and maintain our competitive position. We
generally require the execution of confidentiality agreements by our employees,
consultants and other scientific advisors. These agreements provide that all
confidential information made known during the course of a relationship with us
will be held in confidence and used only for our benefit. In addition, these
agreements provide that we own all inventions generated during the course of the
relationship.
We are a party to various government contracts. Under some of these
government contracts, the government may receive license or similar rights to
intellectual property developed under the contract. However, under government
contracts we enter we receive no less than non-exclusive rights to any items or
technologies we develop.
39
<PAGE>
Scientific Advisory Board
We have established an international Scientific Advisory Board to advise
us on strategic research and development and strategic marketing issues. The
members of the Board include:
- Jean Futrell, Ph.D., Director of the Department of Energy's Environmental
Molecular Sciences Laboratory in Richmond, Washington; former Chairman of
Chemistry and Biochemistry at the University of Delaware.
- Steven A. Hofstadtler, Ph.D., Director of Drug Discovery Technology, ISIS
Pharmaceuticals, Inc., Carlsbad, California.
- Joachim R. Wesener, Ph.D., Head of Mass Spectrometry at Bayer Central
Research, Leverkusen; Board Member of German Society for Mass
Spectrometry.
- Professor Helmut Meyer, University of Bochum, Germany; President of
Protagen AG, Bochum, Germany.
- Professor Peter Derrick, University of Warwick, United Kingdom; Director
of University of Warwick's Institute for Mass Spectrometry; Professor and
Chairman of the Department of Chemistry.
- Gunther Heinrich, Ph.D., CEO and President of EPIDAUROS AG, Bernried,
Germany.
We provide members of our Scientific Advisory Board a fee of $6,000 per
year and options at fair market value for 1,500 shares of our common stock.
These options vest in equal annual increments over the course of their
three-year tenure. We also reimburse Scientific Advisory Board members for
expenses reasonably incurred related to the services they provide us.
Competition
Our markets are highly competitive and we expect the competition to
increase. Currently, we compete with a variety of companies along each of our
product lines, including other companies that offer mass spectrometry-based
systems. We believe that the principal competitive factors in our markets are
technological applications expertise, product functionality, marketing
expertise, distribution capability, proprietary patent portfolios, cost and cost
effectiveness.
Our existing products and any products that we develop may compete in
multiple, highly competitive markets. Many of our potential competitors in these
markets have substantially greater financial, technical and marketing resources
than we do. They may offer or succeed in developing products that would render
our products or those of our strategic partners obsolete or noncompetitive. In
addition, many of these competitors have significantly greater experience in the
life sciences market. Our ability to compete successfully will depend on our
ability to develop proprietary products that reach the market in a timely manner
and are technologically superior to and/or are less expensive, or more cost
effective, than other currently marketed products. Current competitors or other
companies may possess or develop technologies and products that are more
effective than ours. Our technologies and products may be rendered obsolete or
uneconomical by technological advances or entirely different approaches
developed by one or more of our competitors.
40
<PAGE>
Employees
As of April 10, 2000, we employed over 400 full-time employees, with
approximately 80 employees in the United States and more than 320 employees
located primarily in Europe. Over 100 of these employees hold doctorates in
biology, chemistry or physics.
Facilities
Our three principal facilities incorporate manufacturing, research and
development, application and demonstration, marketing and sales and
administration functions. These are:
- a leased 25,000 square foot facility in Billerica, Massachusetts;
- an owned 50,000 square foot facility in Bremen, Germany; and
- an owned 50,000 square foot facility in Leipzig, Germany.
We lease additional centers for sales, applications and service support in
Fremont, California; Coventry, United Kingdom (Bruker Daltonics Ltd.);
Wissembourg, France (Bruker Daltonique S.A.); Stockholm, Sweden (Bruker
Daltonics Scandinavia A.B.); Faellanden, Switzerland (Bruker Daltonics GmbH);
Tsukuba, Japan (Nihon Bruker Daltonics K.K.); Beijing, People's Republic of
China and Taipei, Taiwan.
Government Regulation
We possess low-level radiation licenses for our facilities in Billerica,
Massachusetts and Leipzig, Germany. Some of our products, particularly in the
detection area, are subject to enhanced levels of export controls from the
United States and Germany. Apart from these two areas, we are not subject to
direct governmental regulation other than the laws and regulations generally
applicable to businesses in the jurisdictions in which we operate.
Legal Proceedings
FINNIGAN LITIGATION
Since December 31, 1996, we have been involved in patent litigation with a
competitor, Finnigan, a subsidiary of ThermoQuest and an indirect subsidiary of
Thermo Electron.
INTERNATIONAL TRADE COMMISSION INVESTIGATION AND APPEAL. In January 1997,
Finnigan filed a complaint with the United States International Trade Commission
alleging that our esquire mass spectrometer products which are based on our ion
trap technology and a related product sold by our strategic partner, Agilent
(formerly a division of Hewlett Packard), infringe Finnigan's U.S. Patents
No. 4,540,884, or the `884 patent, and U.S. Patent Re. 34,000, or the `000
patent. In February 1998, an administrative law judge initially found that some
claims of the `884 patent were not infringed, some claims of the `884 patent
were invalid, and that the `000 patent was invalid. In April 1998, the
Commission issued a final determination confirming the initial determination.
Finnigan appealed the determination for the `884 patent only to the Court of
Appeals for the Federal Circuit. In June 1999, this appeals court reversed the
finding of invalidity of some claims of the `884 patent, but affirmed that our
products did not infringe the `884 patent. The impact of this decision was to
leave in effect the order of the Commission denying Finnigan the relief it
sought.
PATENT INFRINGEMENT ACTION BY FINNIGAN IN UNITED STATES DISTRICT
COURT. In December 1996, Finnigan brought suit in the United States District
Court for the District of Massachusetts alleging that our esquire series of mass
spectrometer products and a related product marketed by Agilent infringe two
claims of the `000 patent and one claim of the `884
41
<PAGE>
patent. We have filed two motions for summary judgment. One motion seeks a
ruling that the claim of the `884 patent is not infringed. The other seeks a
ruling that the `000 patent is invalid. Finnigan has opposed these motions for
summary judgment and cross-moved for summary judgment that the claim of the `884
patent covers the method of operation of our esquire mass spectrometers and the
related Agilent product. A hearing on these motions is expected in June 2000.
OUR ANTITRUST ACTION AGAINST FINNIGAN AND OTHERS IN UNITED STATES DISTRICT
COURT. In May 1997, we filed a complaint in the United States District Court
for the District of Massachusetts alleging antitrust violations against
Finnigan, ThermoQuest and Thermo Instruments, another subsidiary of
ThermoElectron, based on Finnigan's actions in connection with several of its
patents. In January 2000, Finnigan filed a motion to dismiss. We have opposed
this motion. A hearing is scheduled for May 2000 on the motion to dismiss.
PATENT INFRINGEMENT ACTION BY FINNIGAN IN THE FEDERAL COURT IN DUSSELDORF,
GERMANY. In March 1999, Finnigan brought suit in Federal Court in Dusseldorf,
Germany alleging that our esquire series of mass spectrometer products and the
related Agilent product infringe three Finnigan European patents. The court
retained the claims alleging infringement in Germany but, on jurisdictional
grounds, transferred the claims alleging infringement in the United Kingdom,
France, Sweden and Switzerland to the Federal Court in Hamburg. In January and
February 2000, the Dusseldorf court held hearings on the infringement actions.
In March 2000, the court issued rulings that distribution and delivery of our
esquire series of products and of the related Agilent product for use in Germany
infringe two Finnigan patents. The court ordered us and Agilent to pay damages
in an amount to be determined and stayed its consideration of the third patent
pending the outcome of a nullity action we brought concerning the third patent.
The court has not yet issued written explanations of the reasoning for its
rulings. We expect that these explanations will be issued sometime in April or
May 2000. It is our intention to appeal the ruling if there is a reasonable
basis for an appeal. Under the court's order, if Finnigan elects to post a
required bond, we and Agilent will be prevented from selling our ion trap
devices in Germany. This restriction will continue until the Finnigan patents
expire, in 2003 for one of the patents and in 2007 for the other, unless the
patents are nullified, the infringement rulings are reversed on appeal, or we
design around the Finnigan patents. The damages for our past sales of ion trap
products in Germany to be determined by the Dusseldorf court are roughly
estimated at $240,000, and the attorneys' fees and costs that we may be required
to pay are roughly estimated at $105,000. The damages and costs that the
Dusseldorf Court actually assesses may be more or less than the amounts
estimated here.
PATENT INFRINGEMENT ACTION BY FINNIGAN IN THE FEDERAL COURT IN HAMBURG,
GERMANY. As noted above, the Dusseldorf Court transferred to the Federal Court
in Hamburg the claims alleging infringement in the United Kingdom, France,
Sweden and Switzerland. In these proceedings the substantive patent law of each
country will apply to the determination of the claims and defenses relating to
infringement in each country, respectively. As of April 10, 2000, no proceedings
have occurred in the Hamburg Court regarding these claims.
NULLITY ACTIONS AGAINST THE FINNIGAN PATENTS IN GERMANY. The same three
Finnigan patents asserted in the Dusseldorf actions are also the subject of
nullity actions we filed in the German Patent Court in Munich. In these actions
the Munich Court is being asked to determine the validity of the three Finnigan
patents as they apply in Germany. The Munich Court will not determine the
validity of the patents as the patents apply in France or the
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<PAGE>
United Kingdom. Hearings in the Munich nullity actions are anticipated to occur
in July 2000, with decisions expected to follow some months later. If we prevail
in the nullity actions, the rulings of the Dusseldorf Court will be withdrawn.
OUR PATENT INFRINGEMENT ACTION AGAINST FINNIGAN IN THE FEDERAL COURT IN
DUSSELDORF, GERMANY. In late 1999, we filed a complaint in the Federal Court in
Dusseldorf alleging that Finnigan's ion trap products infringe two of our
European patents. Hearings are scheduled for September 2000. One of our two
patents in this suit is the subject of a nullity action filed by Finnigan in the
German Patent Court in Munich. A hearing date has not yet been set for the
nullity action.
While we believe that our ion trap mass spectrometry products, including
our esquire series and the product sold by Agilent, should ultimately be held
not to infringe any claim of any valid Finnigan patent, we cannot predict the
outcome of the Finnigan litigation. In 1996, 1997, 1998 and 1999, our sales of
ion trap mass spectrometry products in Germany totaled $702,630, $727,276,
$810,767 and $2.0 million, respectively. In 1996, 1997, 1998 and 1999, our sales
of these products in other European countries totaled $448,561, $767,956,
$1.8 million and $2.6 million, respectively. In 1996, 1997, 1998 and 1999, our
sales of ion trap mass spectrometry products in the U.S. totaled $1.6 million,
$1.5 million, $2.1 million and $3.6 million, respectively. In 1996, 1997, 1998
and 1999, total worldwide sales of our ion trap mass spectrometry products
totaled $2.7 million, $3.2 million, $5.0 million and $8.2 million, respectively.
Also, under our agreement with Agilent, we may be required to indemnify Agilent
from any damages and expenses resulting from the Finnigan litigation. See "Risk
Factors--Our success depends on our ability to operate without infringing or
misappropriating the proprietary rights of others; and we are currently involved
in several legal actions concerning technology for ion trap spectrometry with a
competitor and various affiliates of the competitor, and a German court has
decided that we have infringed two European patents of the competitor."
GENERAL
We may, from time to time, be involved in other legal proceedings in the
ordinary course of business. We are not currently involved in any other pending
legal proceedings that, either individually or taken as a whole, could
materially harm our business, prospects, results of operations or financial
condition.
43
<PAGE>
MANAGEMENT
Directors and Executive Officers
Our directors and executive officers and their respective ages and
positions as of April 10, 2000 are as follows:
<TABLE>
<CAPTION>
Name Age Position
- ---- -------- ------------------------------------------
<S> <C> <C>
Frank H. Laukien, Ph.D. (1)............... 40 Chairman, President and Chief Executive
Officer
David E. Plunkett......................... 34 Chief Financial Officer and Treasurer
Dieter Koch, Ph.D......................... 60 Managing Director of Bruker Daltonik GmbH;
Managing Director
of Bruker Saxonia Analytik GmbH and
Director of Bruker Daltonics Inc.
Jochen Franzen, Ph.D. .................... 69 Managing Director, Bruker Daltonik GmbH
Hans-Jakob Baum........................... 47 Vice General Manager of Bruker Daltonik
GmbH
John Wronka, Ph.D. ....................... 44 Vice President
Gary Kruppa, Ph.D. ....................... 39 Vice President
Collin J. D'Silva (2)..................... 43 Director
Timothy J. Hansberry (2)(3)............... 56 Director
William A. Linton (2)(3).................. 52 Director
Richard M. Stein (1)(3)................... 48 Director and Secretary
Bernhard Wangler (1)...................... 49 Director
</TABLE>
- ------------
(1) Member of the executive committee
(2) Member of the audit committee
(3) Member of the compensation committee
FRANK H. LAUKIEN, PH.D. Dr. Laukien has been the Chairman, President and
Chief Executive Officer of Bruker Daltonics since the inception of our
predecessor company in February 1991. He has been a Managing Director of Bruker
Daltonik GmbH since August 1997. He has also served as Chairman of Bruker
AXS Inc., an affiliate of Bruker Daltonics, since October 1997 and as President
of Bruker Instruments, Inc., an affiliate of Bruker Daltonics, since June 1997.
He is a Professor of Mass Spectrometry at the University of Amsterdam.
Dr. Laukien holds a B.S. degree from the Massachusetts Institute of Technology,
as well as a M.A. and a Ph.D. in chemical physics from Harvard University.
DAVID E. PLUNKETT. Mr. Plunkett has been our Chief Financial Officer
since December 1999 and Treasurer since June 1997. In June 1991, he joined
Bruker Instruments, an affiliate of Bruker Daltonics, as Assistant Controller.
Mr. Plunkett was the Controller of Bruker Instruments from December 1992 until
December 1997. Since December 1997, Mr. Plunkett has also served as the
Treasurer of Bruker Instruments. Mr. Plunkett holds a B.S. degree in accounting
from Merrimack College.
DIETER KOCH, PH.D. Dr. Koch has been a Director of Bruker Daltonics since
August 1997. He is a Managing Director of Bruker Daltonik GmbH, now a
wholly-owned subsidiary of
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Bruker Daltonics, since June 1980. Dr. Koch has also been the Managing Director
of Bruker Saxonia Analytik GmbH, now a subsidiary of Bruker Daltonik, since
founding it in 1990. He is responsible for our substance detection and pathogen
identification product lines. He holds M.S. and Ph.D. degrees in chemistry from
the University of Cologne.
JOCHEN FRANZEN, PH.D. Dr. Franzen is a Managing Director of Bruker
Daltonik GmbH and has held this position since June 1980. He is responsible for
intellectual property and research activities at Bruker Daltonik GmbH. Prior to
1980 he served as Managing Director of Franzen Analysentechnik GmbH, a mass
spectrometry manufacturing company. Dr. Franzen served as President of the
German Society for Mass Spectrometry during 1997 and 1998. He holds an M.S.
degree from the University of Mainz and a Ph.D. in physics from the Max-Planck
Institute.
HANS-JAKOB BAUM. Mr. Baum has been a Vice General Manager of Bruker
Daltonik GmbH since August 1999. He is responsible for sales and product
applications. Mr. Baum joined Bruker Daltonik GmbH in June 1988 as a Product
Manager. From January 1991 until August 1997, he was Sales Director of Bruker
Daltonik. Before joining us, Mr. Baum was a Chemical Defense Officer in the
German Army.
JOHN WRONKA, PH.D. Dr. Wronka has been our Vice President since
June 1996. He is responsible for the general management of operations in the
U.S. Dr. Wronka joined Bruker Instruments, an affiliate of Bruker Daltonics, in
May 1989 as Mass Spectrometry Product Manager. He joined Bruker Daltonics as the
Mass Spectrometry Division Manager in July 1995 and served as a Division Manager
until June 1996. Prior to joining Bruker Instruments, Dr. Wronka was a Professor
and Instrumentation Manager for Northeastern University. He holds a B.S. from
St. Joseph's College and a Ph.D. in chemistry from the University of Delaware.
GARY KRUPPA, PH.D. Dr. Kruppa has served as our Vice President of the
Fourier Transform Mass Spectrometry Division since October 1998. He joined
Bruker Instruments, an affiliate of Bruker Daltonics, in November 1990 as an
applications scientist. He joined Bruker Daltonics in December 1994, and from
December 1994 until September 1998 he was a Product Manager. Before joining
Bruker Instruments, he was a research scientist at Ciba-Geigy, now Novartis, a
pharmaceutical and drug discovery company. Dr. Kruppa holds a B.S. degree from
the University of Delaware and a Ph.D. in chemical physics from the California
Institute of Technology.
COLLIN J. D'SILVA. Mr. D'Silva joined our board of directors in
February 2000. Mr. D'Silva is the President and Chief Executive Officer of
Transgenomic, Inc., a life science company involved in SNP discovery, in San
Jose, California. Mr. D'Silva has held these positions since 1997. From 1988 to
1997, Mr. D'Silva was President and Chief Executive Officer of CETAC
Technologies, Inc, a company designing instrumentation for elemental analysis.
Mr. D'Silva holds a B.S. degree and a Masters in Industrial Engineering from
Iowa State University.
TIMOTHY J. HANSBERRY. Mr. Hansberry joined our board of directors in
February 2000. From August 1998 to January 2000, Mr. Hansberry was President and
Chief Operating Officer of USTrust Bank and Vice Chairman and Chief Operating
Officer of UST Corp. From December 1995 until August 1998, Mr. Hansberry was
President and Chief Executive Officer of Affiliated Community Bancorp. From
October 1992 until December 1995, he was President and Chief Executive Officer
of Lexington Savings Bank. He is a Certified Public Accountant and holds a B.S.
in management from Boston University. Mr. Hansberry also holds a Masters in
Business Administration from Creighton University.
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<PAGE>
WILLIAM A. LINTON. Mr. Linton joined our board of directors in
February 2000. Mr. Linton is the Chairman and Chief Executive Officer of Promega
Corporation, a DNA consumables company, and has held these positions since 1978.
Mr. Linton received a B.S. degree from University of California, Berkeley in
1970.
RICHARD M. STEIN. Mr. Stein joined our board of directors in
February 2000 and is our Secretary. Mr. Stein has been an attorney with
Hutchins, Wheeler & Dittmar, a Boston-based law firm, since November 1992 and
became a stockholder of the firm on January 1, 1993. He served as the managing
stockholder of Hutchins, Wheeler & Dittmar from January 1995 until
December 1997. Mr. Stein received a B.A. degree from Brandeis University in 1973
and a J.D. from Boston College Law School in 1976.
BERNHARD WANGLER. Mr. Wangler joined our board of directors in
February 2000. Mr. Wangler has been a German tax consultant and principal
partner with Kanzlei Wangler in Karlsruhe, Germany since July 1993. He has been
a Certified Public Accountant in Germany since 1994. Mr. Wangler holds a
Bachelor of Economics and Commerce degree and a Masters degree in Business
Administration from the University of Mannheim, Germany.
Board Committees
The compensation committee of the board of directors of Bruker Daltonics
is comprised of Messrs. Hansberry, Stein and Linton. The compensation committee
reviews and evaluates the compensation and benefits of all of the officers of
Bruker Daltonics, reviews general policy matters relating to compensation and
employee benefits and makes recommendations concerning these matters to the
board of directors. The compensation committee also administers Bruker
Daltonics' stock option plan. See "--Benefit Plans."
The audit committee of the board of directors of Bruker Daltonics is
comprised of Messrs. Hansberry, D'Silva and Linton. The audit committee reviews,
with Bruker Daltonics independent auditors, the scope and timing of the
auditors' services, the auditors' report on Bruker Daltonics' financial
statements following completion of the audit, and Bruker Daltonics' internal
accounting and financial control policies and procedures. In addition, the audit
committee makes annual recommendations to the board of directors for the
appointment of independent auditors for the ensuing year.
The executive committee of the board of directors of Bruker Daltonics is
comprised of Messrs. Laukien, Stein and Wangler. The executive committee
facilitates the day-to-day management of Bruker Daltonics. The executive
committee handles all matters deemed appropriate from time to time by the
Chairman, other than matters including the approval of any asset sale, merger,
sale of securities or financing in excess of $5 million.
Election of Directors and Officers
Our board of directors consists of seven members. Our certificate of
incorporation provides for a classified board of directors divided into three
classes. The Class I directors' term of office will expire at the annual meeting
of stockholders to be held in 2001, the Class II directors' term of office will
expire at the annual meeting of stockholders to be held in 2002 and Class III
directors' term of office will expire at the annual meeting of stockholders to
be held in 2003. Messrs. Laukien and Koch will initially serve as Class I
directors; Messrs. Stein, Wangler and D'Silva will initially serve as Class II
directors; and Messrs. Hansberry and Linton will initially serve as Class III
directors. At each annual meeting of stockholders, beginning with the 2001
annual meeting, the successors to directors whose terms will then expire will be
elected to serve from the time of election and qualification until the third
annual meeting following election and until their successors have been duly
elected and qualified, or until
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their earlier resignation or removal, if any. To the extent there is an increase
or reduction in the number of directors, increase or decrease in directorships
resulting therefrom will be distributed among the classes so that, as nearly as
possible, each class will consist of an equal number of directors. Two directors
will be independent, as required by the rules of the Nasdaq National Market.
Executive officers are elected by, and serve at the discretion of, the
board.
Compensation of Directors
Our current non-employee directors receive $10,000 per calendar year and
an additional $5,000 per calendar year for each committee on which they serve.
They are also reimbursed for the expenses they incur in attending meetings of
the board or board committees. Although our directors are not entitled to any
specified number of options as a result of their positions as directors, we have
granted in the past, and intend to grant in the future, non-qualified stock
options to our non-employee directors.
Compensation Committee Interlocks and Insider Participation
None of our directors serves as a member of the board of directors or
compensation committee of any other company that has one or more executive
officers serving as a member of our board of directors or compensation
committee.
Executive Compensation
The following table sets forth the compensation earned by our Chief
Executive Officer and each of our other most highly compensated executive
officers (collectively, the "Named Executive Officers") during the year ending
December 31, 1997, 1998 and 1999:
Summary Compensation Table
<TABLE>
<CAPTION>
Name and Principal Position Year Salary ($) Bonus ($)(1)
- --------------------------- -------- ---------- ------------
<S> <C> <C> <C>
Frank H. Laukien (2)........................................ 1999 50,000 153,530
Chairman, President and 1998 0 197,364
Chief Executive Officer 1997 0 117,500
Dieter Koch (3)............................................. 1999 117,104 36,493
Managing Director, Bruker 1998 128,483 17,056
Daltonik GmbH; Managing 1997 139,653 --
Director, Bruker
Saxonia Analytik GmbH
Jochen Franzen (3).......................................... 1999 106,755 --
Managing Director, Bruker 1998 109,154 --
Daltonik GmbH 1997 107,914 --
John Wronka................................................. 1999 70,885 123,005
Vice President 1998 68,488 75,886
1997 65,854 76,941
Hans-Jakob Baum (3)......................................... 1999 93,683 32,680
Vice General Manager of 1998 96,078 28,426
Bruker Daltonik GmbH 1997 93,487 20,198
</TABLE>
- ------------
(1) Includes commissions paid.
(2) Frank H. Laukien's normalized salary for fiscal 2000 is $120,000.
(3) Amounts paid in Deutsch Mark and converted to United States Dollars based
on the average conversion rate for the respective year.
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<PAGE>
Benefit Plans
2000 STOCK OPTION PLAN
The 2000 Stock Option Plan, or the 2000 Plan, provides for the granting of
incentive stock options to our employees and non-qualified options, as defined
in Section 422 of the Internal Revenue Code, to our employees, directors,
advisors and consultants. The 2000 Plan was adopted and approved by our
directors and stockholders in February 2000. The 2000 Plan may be administered
by our board of directors or by our compensation committee. Either of the board
or the compensation committee has the authority to take the following actions:
(a) interpret and apply the 2000 Plan; and
(b) determine the eligibility of an individual to participate in the 2000
Plan.
Stock options are granted under stock option agreements which contain the
vesting schedules of the stock options. Non-qualified stock options are granted
with an exercise price of at least 50% of fair market value of the common stock
on the date of grant, and incentive stock options are granted with an exercise
price of at least 100% of the stock's fair market value on the date of grant. No
incentive stock options may be granted to an employee who, at the time of the
grant, owns more than 10% of the voting power or greater than 10% of a class of
Bruker Daltonics' outstanding stock, unless the purchase price of the stock is
not less than 110% of the stock's fair market value on the date of the grant and
the option, by its terms, shall not be exercisable more than five years from the
date it is granted.
Vested options may be exercised in full at one time or in part from time
to time in amounts of 50 shares or more. The payment of the exercise price may
be made as determined by the board or committee, and set forth in the option
agreement, by delivery of cash or a check. Bruker Daltonics may delay the
issuance of shares covered by the exercise of an option until the shares for
which the option has been exercised have been registered or qualified under the
applicable federal or state securities laws, or counsel for Bruker Daltonics has
opined that the shares are exempt from the registration requirements of
applicable federal or state securities laws.
The term of any option granted under the 2000 Plan is limited to either
five or ten years, depending on the nature of the option holder. Upon the
termination of an option holder's employment with Bruker Daltonics, his or her
options will terminate no more than 90 days after that option holder leaves the
employ of Bruker Daltonics. Options granted under the 2000 Plan are not
transferrable other than by will or the laws of descent and distribution. The
2000 Plan may be amended by our board of directors; provided, however, that the
board may not increase the number of shares reserved under the 2000 Plan without
the consent of our stockholders.
The compensation committee may grant up to 20% of the shares reserved for
option grants as restricted stock subject to repurchase rights rather than as
stock options.
The number of shares reserved for issuance upon the exercise of options
under the 2000 Plan is 2,220,000. As of April 10, 2000, 783,135 options were
outstanding under the 2000 Plan. Options granted vest over a term established by
the board of directors at the date of grant. None of these options begin to vest
prior to March 1, 2001. The outstanding options have an exercise price ranging
from $5.27 to $5.80 per share.
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<PAGE>
On February 29, 2000 we granted the following officers incentive stock
options to purchase the number of shares set forth below:
<TABLE>
<S> <C>
Frank H. Laukien............................................ 25,000
Dieter Koch................................................. 25,000
Jochen Franzen.............................................. 25,000
John Wronka................................................. 12,500
Hans-Jakob Baum............................................. 12,500
</TABLE>
All of the above options have an exercise price of $5.27 per share except
those granted to Frank Laukien which have an exercise price of $5.80 per share.
None of these options are currently exercisable.
401(K) PLAN
We participate with our affiliates in a tax qualified employee savings
plan which covers all of our employees in the United States who are at least
21 years old and have completed six months of eligible service. Eligible
employees may defer up to 15% of their earnings as a salary deferral
contribution to the plan, subject to the Internal Revenue Service's annual
contribution and compensation limits. We currently match employee contributions
dollar for dollar up to 3% of eligible compensation, which includes 100% of
salary and 50% of commissions, after the second full plan year of the
participant's employment. Our 401(k) plan is intended to qualify under
Section 401 of the Internal Revenue Code of 1986, as amended, so that
contributions by employees and by us to our 401(k) plan, and income earned on
plan contributions are not taxable to employees until withdrawn or distributed
from the plan, and so that contributions, including employee salary deferral
contributions, will be deductible by us when made. Our 401(k) also provides for
discretionary profit sharing. We may contribute up to 3% of a participant's
eligible compensation to profit sharing. In any given year that we conduct
profit sharing, participants are eligible for 1% after three years of service,
2% after four years of service and 3% after five or more years of service.
Limitation of Liability; Indemnification of Directors and Officers
As permitted by Delaware General Corporation Law, we have included in our
certificate of incorporation a provision to eliminate the personal liability of
our directors for monetary damages for breach or alleged breach of their
fiduciary duties as directors, other than breaches of their duty of loyalty,
actions not in good faith or which involve intentional misconduct, or
transactions from which they derive improper personal benefit. In addition, our
by-laws provide that we are required to indemnify our officers and directors
under certain circumstances, including those circumstances in which
indemnification would otherwise be discretionary, and we are required to advance
expenses to our officers and directors as incurred in connection with
proceedings against them for which they may be indemnified. At present, we are
not aware of any pending or threatened litigation or proceeding involving our
directors, officers, employees or agents in which indemnification would be
required or permitted, except that Jochen Franzen has been named as a defendant
in the Finnigan litigation. We believe that our certificate of incorporation and
by-law provisions are necessary to attract and retain qualified persons as
directors and officers.
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<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding the beneficial
ownership of our common stock as of April 10, 2000, and as adjusted to reflect
the sale of the common stock offered hereby by:
- each person (or group of affiliated persons) who is known by us to own
beneficially more than 5% of the outstanding shares of our common stock;
- each of our directors who own our common stock;
- our executive officers listed in the "Summary Compensation Table" who own
our common stock; and
- all directors and executive officers as a group.
Except as subject to community property laws where applicable, the persons
named in the table have sole voting and investment power with respect to all
shares of common stock shown as beneficially owned by them. Beneficial ownership
and percentage of ownership are calculated in accordance with the rules of the
Securities and Exchange Commission, or SEC.
<TABLE>
<CAPTION>
Percentage of
Shares Outstanding
----------------------
Number of Shares Before the After the
Name and Address of Beneficial Owner Beneficially Owned Offering Offering
- ------------------------------------ ------------------ ---------- ---------
<S> <C> <C> <C>
Named Executive Officers and Directors
Frank H. Laukien....................................... 9,100,000 20.0% %
c/o Bruker Daltonics
15 Fortune Drive
Billerica, MA 01821
All Directors and Executive Officers as a Group(1)..... 9,100,000 20.0% %
(12 persons, including the above)
5% Stockholders
Dirk D. Laukien........................................ 9,100,000 20.0% %
2634 Crescent Ridge Drive
The Woodlands, TX 77381
Isolde Laukien......................................... 9,100,000 20.0% %
8 Brigham Road
Lexington, MA 02713
Joerg C. Laukien....................................... 9,100,000 20.0% %
Uhlandstrasse IO
D-76275 Ettlingen-Bruchhausen
Germany
Marc M. Laukien........................................ 9,100,000 20.0% %
8 Crest View Road
Bedford, MA 01730
</TABLE>
- ----------
(1) As of April 10, 2000, David E. Plunkett, Dieter Koch, Ph.D., Jochen
Franzen, Ph.D., Hans-Jakob Baum, John Wronka, Ph.D., Gary Kruppa, Ph.D.,
Collin J. D'Silva, Timothy J. Hansberry, William A. Linton, Richard M.
Stein and Bernard Wangler were not beneficial owners of our common stock.
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<PAGE>
RELATED TRANSACTIONS
Affiliation and Shareholders
Bruker Daltonics is affiliated with Bruker Physik AG, Bruker
Optics, Inc., Bruker AXS Inc., Rhena Invest AG, Techneon AG, SBI Holding AG and
their respective subsidiaries, collectively referred to as the Bruker affiliated
companies, through common control at the shareholder level, as our current
stockholders also own these entities.
Frank H. Laukien, Ph.D., the Chairman, President and Chief Executive
Officer of Bruker Daltonics is also Chairman of the board of directors of Bruker
AXS and director and President of Bruker Instruments, a Bruker affiliated
company. Dr. Laukien is also a director of various Bruker affiliated companies
in Canada, Belgium, and the Netherlands. Additionally, Dr. Laukien beneficially
owns directly or indirectly more than 10% of the stock of each of the Bruker
affiliated companies. Until March 31, 2000, he was also the Chief Executive
Officer of Bruker AXS.
Dieter Koch, a director of Bruker Daltonics, is an officer in Bruker
Daltonik GmbH, a subsidiary of Bruker Daltonics, and Bruker Saxonia Analytik
GmbH, a subsidiary of Bruker Daltonik. Additionally, he owns 2% of Bruker
Saxonia Analytik GmbH.
Richard M. Stein, a director of Bruker Daltonics, is a stockholder of
Hutchins, Wheeler & Dittmar, a law firm which has been retained by Bruker
Daltonics for over five years.
Bernard Wangler, a director of Bruker Daltonics, provided tax consulting
services to our German affiliates for over five years. During fiscal 1997, 1998
and 1999, we paid his firm approximately $36,900, $142,800 and $170,000,
respectively in exchange for these services.
Sharing Agreement
Bruker Daltonics entered into a sharing agreement with 13 of the Bruker
affiliated companies, dated as of February 28, 2000. The Sharing Agreement
provides for the sharing of specified intellectual property rights, services,
facilities and other related items among the parties to the Agreement. The
following description of the Sharing Agreement is a summary and is qualified in
its entirety by the provisions of the Sharing Agreement, a copy of which has
been filed as an exhibit to the registration statement of which this prospectus
is a part.
Name
Pursuant to the terms of the Sharing Agreement, Bruker Analytik and Bruker
Physik have granted to the other parties to the Sharing Agreement a perpetual,
irrevocable, non-exclusive, royalty-free, non-transferable right and license to
use the name "Bruker" in connection with the conduct and operation of their
respective businesses, provided that the parties do not materially interfere
with any other party's use of the name, do not take any action which would
materially detract from the goodwill associated with the name and do not take
any action which would cause a lien to be placed on the name or the parties'
license rights. This license automatically becomes null and void with respect to
a party if that party files, or has filed against it, a petition in bankruptcy,
fails to comply with the relevant terms of the Sharing Agreement, suffers a
major loss of its reputation in its industry or the marketplace or undergoes a
change of control. However, once a party to the Sharing Agreement becomes a
public company and issues stock in excess of $25 million to the public, it will
not lose its license to the name Bruker in a subsequent change of control.
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<PAGE>
Intellectual Property
The parties to the Sharing Agreement also generally share technology and
other intellectual property rights, as they existed on or prior to February 28,
2000, subject to the terms of the Sharing Agreement. In addition, under the
Sharing Agreement each party, including us, has agreed to negotiate with any
other party who wishes to obtain an agreement permitting such party to make a
broader use of the first party's intellectual property that was in effect on or
prior to February 28, 2000. However, no party has any obligation to enter into
these agreements. Bruker Daltonics has a written agreement in place with Bruker
Optik defining the use, royalties and terms and conditions of the use of various
technology and related intellectual property.
Distribution
In various countries, including Australia, Belgium, Canada, India, Italy,
Netherlands, Mexico, Singapore, Spain and Thailand, Bruker Daltonics shares in
the worldwide distribution network of Bruker affiliated companies. In 2000, we
believe that less than 10% of our life sciences systems sales will be booked
through affiliated international Bruker sales offices. The Sharing Agreement
provides for the use of common distribution channels by the parties to the
agreement. The terms and conditions of sale and the transfer pricing for any
shared distribution will be on an arm's length basis as would be utilized in
typical transaction with a person or entity not a party to the agreement. The
Sharing Agreement also states that no common sales channel may have any
exclusivity in any country or geographic area.
Services
We also share various general and administrative expenses for items such
as umbrella insurance policies, retirement plans, accounting services and
leases, with various affiliates. These services are charged among Bruker
Daltonics and, the Bruker affiliated entities at arm's length conditions and
pricing, according to individual Sub-Sharing Agreements.
In 1997, Bruker Instruments provided personnel, administrative and other
services to us at a cost of $370,391, the estimated fair market value of these
services. In 1998 various Bruker affiliated companies provided personnel,
administrative and other services to us at a cost of approximately $227,000, the
estimated fair market value of these services. In 1999, various Bruker
affiliated companies and their subsidiaries provided personnel, administrative
and other services, and subleased space to us at a cost of approximately
$437,000, the estimated fair market value of these services.
We sublease our facility in Billerica, Massachusetts from Bruker
Instruments. We paid rent of $125,123, $131,962 and $221,221 for increasing
square footage at $8.85 per square foot, on a triple net basis for our sublease
of this facility in 1997, 1998 and 1999, respectively. Bruker Instruments leases
this facility from Umbrina Realty Trust. Frank H. Laukien, Dirk Laukien and Marc
Laukien each own one third of the beneficial interest of Umbrina Realty Trust.
Purchases and Sales
We purchase subunits or components from various affiliates at arm's length
commercial conditions and pricing. Examples include some FTIR components used in
our substance and pathogen detectors, miscellaneous electronics boards used in
Fourier transform mass spectrometers, sheet metal cabinets and some of the
superconducting magnets used for Fourier transform mass spectrometers. In 1997,
1998 and 1999, we purchased components from our affiliates for $3,019,177,
$3,913,662 and $3,208,752, respectively. However, a
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<PAGE>
significant portion of these purchases were due to the discontinued operations
of our previous infrared sales group. In 1997, 1998 and 1999, these purchases
for the discontinued operations were $986,714, $1,712,242 and $1,645,089. As
part of the Sharing Agreement, we will have a guaranteed continued supply of
these subunits or components for at least seven years, with spare parts for at
least 12 years, at commercially reasonable arm's length conditions and pricing.
We supply individual licenses to our HyStar software package to Bruker
affiliated companies for resale as part of its liquid chromatography/nuclear
magnetic resonance product offerings at commercially reasonable arm's length
conditions and pricing. As part of the Sharing Agreement, we guarantee a
continued supply of this software package (or its successor) for at least seven
years. In 1997, 1998 and 1999 we sold to our affiliates products in the amounts
of $14,256,695, $9,804,838 and $10,307,416, respectively. However, these sales
were primarily for resales of our products by our affiliates as described above
in the distribution paragraph. Since we incorporated our own direct sales
subsidiaries in 1999, we believe that less than 10% of our future sales will be
through our affiliates.
Other Transactions
In December 1999, we acquired 50,000 shares, or 49% of the stock, of
ProteiGene from Frank H. Laukien. We paid $50,000 for this stock, the estimated
fair market value and also the amount originally paid by Dr. Laukien for this
stock.
We completed the sale of our analytical infrared sales group in March 2000
to Bruker Optik GmbH, our affiliate. The purchase price for this sale was
$254,425, the net book value of the purchased assets and assumed liabilities.
Indebtedness
As of December 31, 1997, Bruker Daltonik GmbH had two demand loans
outstanding aggregating $8,262,617 from Techneon AG, an affiliated company. The
loans, which were secured by mortgages on our German real estate, accrued
interest at 5.3% and 7.5%.
As of December 31, 1997, Bruker Daltonics had a $50,000 demand loan
outstanding from Frank H. Laukien. The loan, which was unsecured, accrues
interest at prime (8.5% at December 31, 1997).
As of December 31, 1999, we had no indebtedness to any of our affiliates.
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<PAGE>
DESCRIPTION OF CAPITAL STOCK
Upon completion of the offering, our authorized capital stock will consist
of 100,000,000 shares of common stock, $0.01 par value per share, of which
shares will be outstanding ( shares if the Underwriters'
over-allotment is exercised in full), and 5,000,000 shares of preferred stock,
$0.01 par value per share, none of which will be outstanding at the time of this
offering. The following description of our capital stock and certain provisions
of our restated certificate of incorporation and by-laws is a summary and is
qualified in its entirety by the provisions of the certificate of incorporation
and by-laws, copies of which have been filed as exhibits to the registration
statement of which this prospectus is a part.
Common Stock
Holders of our common stock are entitled to one vote for each share held
on all matters submitted to a vote of the stockholders, including the election
of directors. Accordingly, holders of a majority of the shares of common stock
entitled to vote in any election of directors may elect all of the directors
standing for election if they choose to do so. The certificate of incorporation
does not provide for cumulative voting for the election of directors. Holders of
our common stock are entitled to receive ratably any dividends that may be
declared by the board of directors out of funds legally available and are
entitled to receive, pro rata, all assets of Bruker Daltonics available for
distribution to such holders upon liquidation. Holders of our common stock have
no preemptive, subscription or redemption rights.
Preferred Stock
We are authorized to issue "blank check" preferred stock, which may be
issued from time to time in one or more series upon authorization by our board
of directors. The board of directors, without further approval of the
stockholders, is authorized to fix the dividend rights and terms, conversion
rights, voting rights, redemption rights and terms, liquidation preferences and
any other rights, preferences, privileges and restrictions applicable to each
series of the preferred stock. The issuance of preferred stock, while providing
flexibility in connection with possible acquisitions and other corporate
purposes, could, among other things, adversely affect the voting power of the
holders of our common stock and, under certain circumstances, make it more
difficult for a third party to gain control of Bruker Daltonics, discourage bids
for our common stock at a premium or otherwise adversely affect the market price
of our common stock.
Various Certificate of Incorporation, By-law and Statutory Anti-Takeover
Provisions Affecting Stockholders
CLASSIFIED BOARD. Our board of directors is divided into three classes.
Initially Class I will serve until the annual meeting of stockholders in 2001,
Class II will serve until the annual meeting of stockholders in 2002 and
Class III will serve until the annual meeting of stockholders in 2003. Following
this initial transition period, each class will serve for three years, with one
class being elected each year. Removal of a member of the board of directors
with or without cause requires a majority vote of the board of directors or of
the stockholders. A majority of the remaining directors then in office, though
less than a quorum, and the stockholders, are empowered to fill any vacancy on
the board of directors. A majority vote of the stockholders is required to
alter, amend or repeal the foregoing provisions.
DIRECTORS LIABILITY. The certificate of incorporation provides that no
director shall be personally liable to us or our stockholders for monetary
damages for breach of fiduciary duty as a director notwithstanding any provision
of law imposing such liability, provided that, to
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<PAGE>
the extent provided by applicable law, the certificate of incorporation shall
not eliminate the liability of a director for (a) any breach of the director's
duty of loyalty to us or our stockholders; (b) acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law;
(c) acts or omissions in respect of certain unlawful dividend payments or stock
redemptions or repurchases; or (d) any transaction from which such director
derives improper personal benefit. The effect of this provision is to eliminate
the rights of Bruker Daltonics and our stockholders (through stockholders'
derivative suits against Bruker Daltonics) to recover monetary damages against a
director for breach of the fiduciary duty of care as a director (including
breaches resulting from negligent or grossly negligent behavior) except in the
situations described in clauses (a) through (d) above. The limitations
summarized above, however, do not affect the ability of Bruker Daltonics or our
stockholders to seek non-monetary-based remedies, such as an injunction or
rescission, against a director for breach of his fiduciary duty nor would such
limitations limit liability under the Federal securities laws. Our by-laws
provide that we shall, to the extent permitted by Delaware law indemnify and
advance expenses to the currently acting and former directors, officers,
employees and agents of Bruker Daltonics or of another corporation, partnership,
joint venture, trust or other enterprise if serving at our request arising in
connection with their acting in such capacities.
Various provisions described above may also have the effect of delaying
stockholder actions with respect to certain business combinations and the
election of new members to our board of directors. As such, the provisions could
have the effect of discouraging open market purchases of our common stock
because they may be considered disadvantageous by a stockholder who desires to
undertake a business combination with us or elect a new director to our board.
Statutory Business Combination Provision
Section 203 of the Delaware General Corporation Law prohibits a publicly
held Delaware corporation from consummating a "business combination," except
under certain circumstances, with an "interested stockholder" for a period of
three years after the date such person became an "interested stockholder"
unless:
- before such person became an interested stockholder, the board of
directors of the corporation approved the transaction in which the
interested stockholder became an interested stockholder or approved the
business combination;
- upon the closing of the transaction that resulted in the interested
stockholder's becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding shares held
by directors who are also officers of the corporation and shares held by
employee stock plans; or
- following the transaction in which such person became an interested
stockholder, the business combination is approved by the board of
directors of the corporation and authorized at a meeting of stockholders
by the affirmative vote of the holders of 66 2/3% of the outstanding
voting stock of the corporation not owned by the interested stockholder.
The term "interested stockholder" generally is defined as a person who,
together with affiliates and associates, owns, or, within the prior three years,
owned, 15% or more of a corporation's outstanding voting stock. The term
"business combination" includes mergers, asset sales and other similar
transactions resulting in a financial benefit to an interested stockholder.
Section 203 makes it more difficult for an "interested stockholder" to effect
various business combinations with a corporation for a three-year period. A
Delaware
55
<PAGE>
corporation may "opt out" of Section 203 with an express provision in its
original certificate of incorporation or an express provision in its certificate
of incorporation or by-laws resulting from an amendment approved by holders of
at least a majority of the outstanding voting stock. We have elected to "opt"
out of Section 203 in our certificate of incorporation. Therefore any
transaction between us and an interested stockholder is not subject to the
requirements of Section 203.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is .
56
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, Bruker Daltonics will have outstanding
shares of our common stock. Of these shares, the shares
offered hereby ( shares if the underwriters' over-allotment option is
exercised in full) will be freely tradable without restriction or further
registration under the Securities Act, unless purchased by "affiliates" of
Bruker Daltonics as that term is defined in Rule 144 described below. The
remaining 45,500,000 shares of common stock outstanding upon closing of the
offering are "restricted securities" as that term is defined in Rule 144.
In general, under Rule 144, as amended, a person who has beneficially
owned shares for at least one year is entitled to sell in "brokers'
transactions" or to market makers, within any three-month period commencing
90 days after the date of this prospectus, a number of shares that does not
exceed the greater of (a) one percent of the number of shares of common stock
then outstanding, approximately shares immediately after the
completion of this offering ( shares if the underwriters'
over-allotment option is exercised in full), or (b) generally, the average
weekly trading volume in our common stock during the four calendar weeks
preceding the required filing of a Form 144 with respect to such sale. Sales
under Rule 144 are generally subject to the availability of current public
information about Bruker Daltonics. Under Rule 701, persons who purchase shares
upon exercise of options granted prior to the effective date of this offering
are entitled to sell such shares 90 days after the effective date of this
offering in reliance on Rule 144, without having to comply with the holding
period requirements of Rule 144.
Each of our stockholders has agreed to certain restrictions on their
ability to sell, offer, contract or grant any option to sell, pledge, transfer
or otherwise dispose of shares of our common stock for a period of 180 days
after the date of this prospectus, without the prior written consent of Deutsche
Bank Securities Inc. All 45,000,000 of our outstanding shares, not including the
offered hereby, are subject to 180-day lockup agreements. These
shares are eligible for sale 180 days after the commencement of this
offering, subject to the requirements of Rule 144.
Prior to this offering, there has not been any public market for our
common stock. Future sales of substantial amounts of our common stock in the
public market could adversely affect the prevailing market prices and impair our
ability to raise capital through the sale of equity securities.
57
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the underwriting agreement, the
underwriters named below, through their representatives, Deutsche Bank
Securities Inc., Warburg Dillon Read LLC and Thomas Weisel Partners LLC, have
severally agreed to purchase from Bruker Daltonics the following respective
number of shares of common stock at a public offering price less the
underwriting discounts and commissions set forth on the cover page of this
prospectus:
<TABLE>
<CAPTION>
Underwriter Number of Shares
- ----------- ----------------
<S> <C>
Deutsche Bank Securities Inc...............................
Warburg Dillon Read LLC....................................
Thomas Weisel Partners LLC.................................
Total................................................
</TABLE>
The underwriting agreement provides that the obligations of the several
underwriters to purchase the shares of common stock offered hereby are subject
to various conditions precedent and that the underwriters will purchase all
shares of the common stock offered hereby, other than those covered by the
over-allotment option described below, if any of these shares are purchased. In
addition, the underwriting agreement provides that, in the event of a default by
an underwriter, in certain circumstances the purchase commitments of
non-defaulting underwriters may be increased or the underwriting agreement may
be terminated.
The underwriters propose to offer the shares of common stock to the public
at the public offering price set forth on the cover of this prospectus and to
dealers at a price that represents a concession not in excess of $ per share
under the public offering price. The underwriters may allow, and these dealers
may re-allow, a concession of not more than $ per share to other dealers. After
the initial public offering, representatives of the underwriters may change the
offering price and other selling terms.
We have granted to the underwriters an option, exercisable not later than
30 days after the date of this prospectus, to purchase up to
additional shares of common stock at the public offering price less the
underwriting discounts and commissions set forth on the cover page of this
prospectus. The underwriters may exercise this option only to cover
over-allotments made in connection with the sale of the common stock offered
hereby. To the extent that the underwriters exercise this option, each of the
underwriters will become obligated, subject to conditions, to purchase
approximately the same percentage of additional shares of common stock as the
number of shares of common stock to be purchased by it in the above table bears
to the total number of shares of common stock offered hereby. We will be
obligated, pursuant to the option, to sell these additional shares of common
stock to the underwriters to the extent the option is exercised. If any
additional shares of common stock are purchased, the underwriters will offer the
additional shares on the same terms as those on which the other shares are being
offered.
The underwriting fee is equal to the public offering price per share of
common stock less the amount paid by the underwriters to us per share of common
stock. The underwriting
58
<PAGE>
fee is currently expected to be % of the initial public offering price. We
have agreed to pay the underwriters the following fees, assuming either no
exercise or full exercise by the underwriters of the underwriters'
over-allotment option:
<TABLE>
<CAPTION>
Total Fees
---------------------------------------------
Without Exercise of With Full Exercise of
Fee Per Share Over-Allotment Option Over-Allotment Option
------------- --------------------- ---------------------
<S> <C> <C> <C>
Fees paid by Bruker Daltonics.......... $ $ $
</TABLE>
In addition, we estimate that our share of the total expenses of this
offering, excluding underwriting discounts and commissions, will be
approximately $ .
We have agreed to indemnify the underwriters against some specified types
of liabilities, including liabilities under the Securities Act, and to
contribute to payments the underwriters may be required to make in respect of
any of these liabilities.
Each of our officers and directors and all of our stockholders have agreed
not to offer, sell, contract to sell, or otherwise dispose of, or enter into any
transaction that is designed to, or could be expected to, result in the
disposition of any shares of our common stock or other securities convertible
into or exchangeable or exercisable for shares of our common stock or
derivatives of our common stock owned by these persons prior to this offering or
common stock issuable upon exercise of options or warrants held by these persons
for a period of 180 days after the effective date of the registration statement
of which this prospectus is a part without the prior written consent of Deutsche
Bank Securities Inc. This consent may be given at any time without public
notice. We have entered into a similar agreement with the representatives of the
underwriters. There are no agreements between the representatives and any of our
stockholders or affiliates releasing them from these lock-up agreements prior to
the expiration of the 180-day period.
The representatives of the underwriters have advised us that the
underwriters do not intend to confirm sales to any account over which they
exercise discretionary authority.
In order to facilitate the offering of our common stock, the underwriters
may engage in transactions that stabilize, maintain, or otherwise affect the
market price of our common stock. Specifically, the underwriters may over-allot
shares of our common stock in connection with this offering, thus creating a
short position in our common stock for their own account. A short position
results when an underwriter sells more shares of common stock than that
underwriter is committed to purchase. Additionally, to cover these
over-allotments or to stabilize the market price of our common stock, the
underwriters may bid for, and purchase, shares of our common stock in the open
market. Finally, the representatives, on behalf of the underwriters, may also
reclaim selling concessions allowed to an underwriter or dealer if the
underwriting syndicate repurchases shares distributed by that underwriter or
dealer. Any of these activities may maintain the market price of our common
stock at a level above that which might otherwise prevail in the open market.
These transactions may be effected on the Nasdaq National Market or otherwise.
The underwriters are not required to engage in these activities and, if
commenced, may end any of these activities at any time.
At our request, the underwriters have reserved for sale, at the initial
public offering price, up to shares, or %, of our common stock being
sold in this offering for our vendors, employees, family members of employees,
customers and other third parties. These purchasers are expected to agree not to
offer, sell, contract to sell, or otherwise dispose of, or enter into any
transaction that is designed to, or could be expected to, result in the
disposition of any shares of our common stock or other securities convertible
into or exchangeable or exercisable for shares of our common stock or
derivatives of our common
59
<PAGE>
stock acquired by these persons in this offering or common stock issuable upon
exercise of options or warrants held by these persons for a period of 180 days
after the effective date of the registration statement of which this prospectus
is a part without the prior written consent of Deutsche Bank Securities Inc. The
number of shares of our common stock available for sale to the general public
will be reduced to the extent these reserved shares are purchased. Any reserved
shares that are not purchased by these persons will be offered by the
underwriters to the general public on the same basis as the other shares in this
offering.
Pricing of This Offering
Prior to this offering, there has been no public market for the common
stock. Consequently, the initial public offering price for our common stock has
been determined by negotiation among us and the representatives of the
underwriters. Among the principal factors considered in determining the initial
public offering price were:
- prevailing market conditions;
- our results of operations in recent periods;
- the market capitalization and stage of development of other companies
that we and the representatives of the underwriters believe to be
comparable to our business; and
- estimates of our business potential.
The estimated initial public offering price range set forth on the cover
of this preliminary prospectus is subject to change as a result of market
conditions and other factors.
Thomas Weisel Partners LLC, one of the representatives of the
underwriters, was organized and registered as a broker-dealer in December 1998.
Since December 1998, Thomas Weisel Partners has been named as a lead or
co-manager on 153 filed public offerings of equity securities, of which 109 have
been completed, and has acted as a syndicate member in an additional 80 public
offerings of equity securities. Thomas Weisel Partners does not have any
material relationship with us or any of our officers, directors or other
controlling persons, except with respect to its contractual relationship with us
pursuant to the underwriting agreement entered into in connection with this
offering.
60
<PAGE>
CERTAIN UNITED STATES TAX CONSIDERATIONS FOR NON-UNITED STATES HOLDERS
There are federal income and estate tax consequences related to the
ownership and disposition of our common stock by a non-U.S. holder. A non-U.S.
holder is any person or entity that, for United States federal income tax
purposes, is either a non-resident individual, or other corporation
organized or created under non-U.S. law corporation, an estate that is not
on its worldwide income or a trust that is either not subject to
primary supervision over its administration by a United States court or not
subject to the control of a U.S. person with respect to substantial trust
decisions. Partnerships organized outside of the United States and their
partners should consult their own tax advisors about the consequences of holding
our common stock, as the tax treatment with respect to foreign partnerships and
their partners is complex.
Individuals may, in certain cases, be deemed to be resident aliens, as
opposed to non-resident aliens, by virtue of being present in the United States
for at least 31 days in the calendar year and for an aggregate of at least 183
days during a three-year period ending in the current calendar year (counting
for such purposes, all of the days present in the current year, one-third of the
days present in the immediately preceding year, and one-sixth of the days
present in the second preceding year). Resident aliens are generally subject to
United States federal income tax as if they were United States citizens.
This summary does not discuss all United States federal income tax
considerations that may be relevant to non-U.S. holders in light of their
particular circumstances or to non-U.S. holders that may be subject to special
treatment under United States federal income tax laws. This summary assumes that
non-U.S. holders hold their stock as capital assets. Furthermore, this summary
does not discuss aspects of United States federal income taxation that may be
applicable to holders of options to purchase our common stock, nor does it
address any aspects of non-U.S. taxation or United States state or local
taxation.
This summary is based on current provisions of the Internal Revenue Code
of 1986, as amended (the "Code"), existing, temporary and proposed regulations
promulgated thereunder, and administrative and judicial interpretations thereof,
all of which are subject to change, possibly with retroactive effect.
THIS SUMMARY IS OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO BE, AND
SHOULD NOT BE CONSTRUED TO BE, LEGAL, BUSINESS OR TAX ADVICE TO ANY PARTICULAR
SHAREHOLDER. SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE
UNITED STATES FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES OF THE
DESCRIBED TRANSACTIONS IN THEIR PARTICULAR CIRCUMSTANCES.
Dividends
In the event that dividends are paid on shares of our common stock,
dividends paid to a non-U.S. holder of our common stock generally will be
subject to United States withholding tax at a 30% rate, unless an applicable
income tax treaty provides for a lower withholding rate.
Currently, the applicable United States Treasury regulations presume,
absent actual knowledge to the contrary, that dividends paid to an address in a
foreign country are paid to a resident of such country for purposes of the 30%
withholding tax. However, recently finalized United States Treasury regulations
provide that in the case of dividends paid after December 31, 2000, United
States backup withholding tax at a 31% rate will be imposed on dividends paid to
non-U.S. holders if the certification or documentary evidence procedures
61
<PAGE>
and requirements set forth in such regulations are not satisfied directly or
through an intermediary. Further, in order to claim the benefit of an applicable
income tax treaty rate for dividends paid after December 31, 2000, a non-U.S.
holder must comply with certification requirements set forth in the recently
finalized United States Treasury regulations.
The 30% withholding tax does not apply to dividends paid to a non-U.S.
holder that provides a Form 4224 or, after December 31, 2000, a Form W-8ECI,
certifying that the dividends are effectively connected with the non-U.S.
holder's conduct of a trade or business within the United States. Instead, the
effectively connected dividends will generally be subject to regular United
States income tax as if the non-U.S. holder were a United States resident. If
the non-U.S. holder is eligible for the benefits of a tax treaty between the
United States and the holder's country of residence, any effectively connected
income will be subject to United States federal income tax only if it is
attributable to a permanent establishment in the United States mainlined by the
holder. A non-U.S. corporation receiving effectively connected dividends may
also be subject to an additional "branch profits tax" imposed at a rate of 30%
(or a lower treaty rate) on an earnings amount that is net of the regular tax.
A non-U.S. holder may obtain a refund of any excess amounts withheld by
filing an appropriate claim for refund along with the required information with
the Internal Revenue Service ("IRS").
Gain on Disposition of Common Stock
A non-U.S. holder generally will not be subject to United States federal
income or withholding tax requirements in respect of gain recognized on a
disposition of common stock unless:
(a) the gain is effectively connected with the conduct of a trade or
business of the non-U.S. holder within the United States or of a
partnership, trust or estate in which the non-U.S. holder is a
partner or beneficiary within the United States and, if certain tax
treaties apply, is attributable to a permanent establishment of the
non-U.S. holder, within the United States;
(b) the non-U.S. holder is an individual who holds our common stock as a
capital asset within the meaning of Section 1221 of the Internal
Revenue Code, is present in the United States for 183 or more days in
the taxable year of the disposition and meets certain other tax law
requirements;
(c) the non-U.S. holder is a United States expatriate required to pay tax
pursuant to the provisions of United States tax law; or
(d) we are or have been a "United States real property holding
corporation" for federal income tax purposes at any time during the
shorter of the five-year period preceding such disposition or the
period that the non-U.S. holder holds our common stock.
We believe that we are not, have not been and do not anticipate becoming,
a United States real property holding corporation for United States federal
income tax purposes.
A non-U.S. holder who is an individual and is described in clause (a) or
(c) above will be required to pay tax on the net gain derived from a sale of our
common stock at regular graduated United States federal income tax rates.
Further, a non-U.S. holder who is an individual and who is described in
clause (b) above generally will be subject to a flat 30% tax on the gain derived
from a sale. A non-U.S. holder that is a corporation and that is described
62
<PAGE>
in clause (a) above generally will be required to pay tax on its net gain at
regular graduated United States federal income tax rates. Such non-U.S. holder
may also have to pay a branch profits tax.
Federal Estate Tax
For United States federal estate tax purposes, an individual's gross
estate will include our common stock owned, or treated as owned, by an
individual. Generally, this will be the case regardless whether or not such
individual was a United States citizen or a United States resident. This general
rule of inclusion may be limited by an applicable estate tax or other treaty.
Information Reporting and Backup Withholding Tax
Under United States Treasury regulations, we must report annually to the
Internal Revenue Service and to each non-U.S. holder the amount of dividends
paid to such holder and the tax withheld with respect to such dividends. These
information reporting requirements apply whether withholding is required. Copies
of the information returns reporting such dividends and withholding may also be
made available to the tax authorities in the country in which the non-U.S.
holder is a resident under the provisions of an applicable income tax treaty or
agreement.
Dividends
Currently, the 31% United States backup withholding tax generally will not
apply:
(a) to dividends which are paid to non-U.S. holders and are taxed at the
regular 30% withholding tax rate as discussed above; or
(b) before January 1, 2001, to dividends paid to a non-U.S. holder at an
address outside of the United States unless the payor has actual
knowledge that the payee is a U.S. holder.
The recently finalized United States Treasury regulations provide that in
the case of dividends paid after December 31, 2000, a non-U.S. holder generally
will be subject to backup withholding tax at the rate of 31% unless:
(a) specified certification procedures are followed; or
(b) specified documentary evidence procedures are followed.
Sale or Exchange of Common Stock
U.S. information reporting and backup withholding generally will not apply
to a payment of proceeds of a disposition of common stock where the transaction
is effected outside the United States through a non-U.S. office of a non-U.S.
broker. However, information reporting requirements, but not backup withholding,
generally will apply to such a payment if the broker is:
- a U.S. person;
- a foreign person that derives 50% or more of its gross income for certain
periods from the conduct of a trade or business in the U.S.;
- a controlled foreign corporation as defined in the Code; or
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<PAGE>
- a foreign partnership with certain U.S. connections (for payments made
after December 31, 2000).
Information reporting requirements will not apply in the above cases if the
broker has documentary evidence in its records that the holder is a non-U.S.
holder and certain conditions are met or the holder otherwise establishes an
exemption.
A non-U.S. holder will be required to certify its non-U.S. status, in
order to avoid information reporting and backup withholding at a 31% rate on
disposition proceeds, where the transaction is effected by or through a U.S.
office of a broker.
The tax liability of persons subject to backup withholding will be reduced
by the amount of tax withheld. When withholding results in an overpayment of
taxes, a refund may be obtained if the required information is furnished to the
IRS.
64
<PAGE>
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be passed
upon for Bruker Daltonics by Hutchins, Wheeler & Dittmar, A Professional
Corporation, Boston, Massachusetts. Richard M. Stein, a stockholder of Hutchins,
Wheeler & Dittmar, holds options to purchase 3,000 shares of the common stock of
Bruker Daltonics and will purchase shares of common stock in this
offering. Mr. Stein is also a Director and the Secretary of Bruker Daltonics.
Certain legal matters in connection with the offering will be passed upon for
the underwriters by Ropes & Gray, Boston, Massachusetts.
EXPERTS
BDO, independent auditors, have audited our combined financial statements
as of and for the year ended December 31, 1997, as set forth in their report.
Ernst & Young LLP, independent auditors, have audited our consolidated and
combined financial statements as of and for the years ended December 31, 1998
and 1999, as set forth in their report. We have included our financial
statements in this prospectus and elsewhere in this registration statement in
reliance on BDO and Ernst & Young LLP's reports, given upon their authority as
experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement on Form S-1 with the Securities and
Exchange Commission, or SEC, for our common stock that we are offering by this
prospectus. This prospectus does not contain all of the information set forth in
the registration statement and the exhibits and schedules thereto. For further
information with respect to us and our common stock, we make reference to the
registration statement and to the exhibits and schedules filed therewith.
Statements contained in this prospectus as to the contents of any contract or
any other document referred to are not necessarily complete, and in each
instance, reference is made to the copy of such contract or other document filed
as an exhibit to the registration statement, each such statement being qualified
in all respects by such reference. A copy of the registration statement may be
inspected by anyone without charge at the SEC's principal office in Washington,
D.C., and copies of all or any part of the registration statement may be
obtained from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,
Washington, D.C. 20549, upon payment of certain fees prescribed by the SEC.
Please call the SEC at 1-800-SEC-0330 for further information on the operation
of the public reference rooms. The SEC maintains a web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the SEC. The address of the web site
is http://www.sec.gov. Upon completion of the offering, we will be subject to
the information reporting requirements of the Securities Exchange Act of 1934,
as amended and, in accordance therewith, will file reports, proxy statements and
other information with the SEC.
We intend to furnish our stockholders with annual reports containing
financial statements audited by our independent public accountants and quarterly
reports for the first three fiscal quarters of each fiscal year containing
unaudited interim financial information.
65
<PAGE>
BRUKER DALTONICS INC.
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Report of Ernst & Young LLP, Independent Auditors for the
years ended
December 31, 1998 and 1999................................ F-2
Consolidated Balance Sheets as of December 31, 1998 and
1999...................................................... F-3
Combined / Consolidated Statements of Operations for the
years ended
December 31, 1998 and 1999................................ F-4
Combined / Consolidated Statements of Stockholders' Equity
for the years ended
December 31, 1998 and 1999................................ F-5
Combined / Consolidated Statements of Cash Flows for the
years ended
December 31, 1998 and 1999................................ F-6
Notes to Financial Statements for the years ended December
31, 1998
and 1999.................................................. F-7
Report of BDO, Independent Auditors for the year ended
December 31, 1997......................................... F-20
Report of Ernst & Young LLP, Independent Auditors for the
year ended December 31, 1997.............................. F-21
Combined Balance Sheet as of December 31, 1997.............. F-22
Combined Statement of Operations for the year ended December
31, 1997.................................................. F-23
Combined Statement of Stockholders' Equity for the year
ended December 31, 1997................................... F-24
Combined Statement of Cash Flows for the year ended December
31, 1997.................................................. F-25
Notes to Financial Statements for the year ended December
31, 1997.................................................. F-26
</TABLE>
All financial data schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not required
under the related instructions or are inapplicable and therefore have been
omitted.
F-1
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
The Board of Directors
Bruker Daltonics Inc.
We have audited the accompanying consolidated balance sheets of Bruker
Daltonics Inc. (the Company), as of December 31, 1998 and 1999, the related
combined statements of operations, stockholders' equity, and cash flows for the
year ended December 31, 1998, and the related consolidated statements of
operations, stockholders' equity, and cash flows for the year ended
December 31, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Bruker
Daltonics Inc. at December 31, 1998 and 1999, and the results of its operations
and its cash flows for each of the years then ended, in conformity with
accounting principles generally accepted in the United States.
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
March 11, 2000
F-2
<PAGE>
BRUKER DALTONICS INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
---------------------------
1998 1999
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 1,134,916 $ 2,443,142
Accounts receivable, less allowances for doubtful accounts
of $157,198 in 1998 and $113,861 in 1999................. 9,743,922 12,203,888
Inventories............................................... 17,033,673 25,441,844
Deferred income taxes..................................... 369,150 899,000
Other assets.............................................. 1,055,375 532,446
----------- -----------
Total current assets.................................. 29,337,036 41,520,320
----------- -----------
Restricted cash............................................. 5,895,871 --
Property, plant and equipment, net.......................... 28,365,580 25,350,543
Intangible and other assets................................. 242,827 438,197
----------- -----------
Total assets...................................... $63,841,314 $67,309,060
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term bank borrowings................................ $ 2,941,239 $ 2,496,350
Accounts payable.......................................... 3,254,786 6,661,399
Due to affiliated companies............................... 147,239 1,496,240
Accrued expenses.......................................... 1,720,043 3,805,486
Accrued payroll........................................... 1,656,727 1,741,669
Customer deposits......................................... 9,872,513 8,323,465
Warranty reserves......................................... 3,206,621 4,739,013
Income taxes payable...................................... 199,982 176,690
----------- -----------
Total current liabilities............................. 22,999,150 29,440,312
----------- -----------
Deferred revenue............................................ 99,841 393,371
Long-term debt.............................................. 14,982,498 12,843,582
Deferred income tax liabilities............................. 8,667,382 8,785,712
Contingent liabilities...................................... 6,752,312 5,788,434
Stockholders' equity:
Common stock, $0.01 par value, authorized 100,000,000
shares, issued and outstanding 45,500,000 shares in 1998
and 1999................................................. 455,000 455,000
Additional paid-in capital................................ 6,045,000 6,045,000
Accumulated other comprehensive loss...................... (1,322,828) (2,854,829)
Retained earnings......................................... 5,162,959 6,412,478
----------- -----------
Total stockholders' equity............................ 10,340,131 10,057,649
----------- -----------
Total liabilities and stockholders' equity........ $63,841,314 $67,309,060
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
F-3
<PAGE>
BRUKER DALTONICS INC.
COMBINED / CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------
1998 1999
------------ ------------
COMBINED CONSOLIDATED
<S> <C> <C>
Product revenue............................................. $40,157,261 $60,620,349
Other revenue............................................... 2,049,740 4,070,101
----------- -----------
Net revenue....................................... 42,207,001 64,690,450
----------- -----------
Costs and operating expenses:
Cost of product revenue................................... 19,672,357 31,617,724
Sales and marketing....................................... 7,434,968 11,345,265
General and administrative................................ 2,212,594 3,411,138
Research and development.................................. 13,048,670 15,138,114
Patent litigation costs................................... -- 537,817
----------- -----------
Total costs and operating expenses................ 42,368,589 62,050,058
----------- -----------
Operating income (loss) from continuing operations.......... (161,588) 2,640,392
Other income................................................ 173,737 130,219
Interest expense, net....................................... (900,829) (907,682)
----------- -----------
Income (loss) from continuing operations before provision
for income taxes.......................................... (888,680) 1,862,929
Provision for income taxes.................................. -- 986,887
----------- -----------
Income (loss) from continuing operations.................... (888,680) 876,042
Income from discontinued operations, net of income taxes.... 383,414 373,477
----------- -----------
Net income (loss)........................................... $ (505,266) $ 1,249,519
=========== ===========
Net income (loss) per share-basic and diluted
Income (loss) from continuing operations.................. $ (0.02) $ 0.02
Income from discontinued operations, net of income
taxes................................................... 0.01 0.01
----------- -----------
Net income (loss) per share................................. $ (0.01) $ 0.03
=========== ===========
Shares used in computing net income (loss) per share-basic
and diluted............................................... 45,500,000 45,500,000
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE>
BRUKER DALTONICS INC.
COMBINED / CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock
----------------------- Accumulated
Bruker Bruker Additional Other Total
Daltonics Daltonik Paid-in Retained Comprehensive Stockholders'
Inc. GmbH Capital Earnings Income (Loss) Equity
--------- ----------- ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance as of December
31, 1997............. $ 52,500 $3,489,184 $ 697,500 $7,600,096 $(1,969,494) $ 9,869,786
Issuance of common
stock............... 402,500 -- 5,347,500 -- -- 5,750,000
Payments to
stockholders in
connection with
reorganization of
business............ -- (3,489,184) -- (1,931,871) -- (5,421,055)
Foreign currency
translation
adjustment.......... -- -- -- -- 646,666 646,666
Net loss............. -- -- -- (505,266) -- (505,266)
-----------
Net comprehensive
income.............. -- -- -- -- -- 141,400
-------- ---------- ---------- ---------- ----------- -----------
Balance as of December
31, 1998............. 455,000 -- 6,045,000 5,162,959 (1,322,828) 10,340,131
Foreign currency
translation
adjustment.......... -- -- -- -- (1,532,001) (1,532,001)
Net income........... -- -- -- 1,249,519 -- 1,249,519
-----------
Net comprehensive
loss................ -- -- -- -- -- (282,482)
-------- ---------- ---------- ---------- ----------- -----------
Balance as of December
31, 1999............. $455,000 $ -- $6,045,000 $6,412,478 $(2,854,829) $10,057,649
======== ========== ========== ========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
F-5
<PAGE>
BRUKER DALTONICS INC.
COMBINED / CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------
1998 1999
----------- ------------
COMBINED CONSOLIDATED
<S> <C> <C>
Operating activities:
Income (loss) from continuing operations.................... $ (888,680) $ 876,042
Adjustments to reconcile income (loss) from continuing
operations to net cash provided by (used in) continuing
operations:
Depreciation and amortization........................... 2,604,582 3,486,625
Deferred income taxes................................... 526,061 875,095
Charge for purchase of in-process research and
development........................................... -- 100,000
Changes in operating assets and liabilities:
Accounts receivable................................... (6,272,587) (3,605,416)
Inventories........................................... (1,802,029) (10,264,776)
Other assets.......................................... (862,924) 91,990
Accounts payable and accrued expenses................. (479,955) 6,374,182
Warranty reserve...................................... 1,758,596 2,033,985
Contingent liabilities................................ (367,257) --
Income taxes payable.................................. (525,681) (469)
Deferred revenue...................................... (281,799) 294,710
Customer deposits..................................... 66,098 4,680,139
----------- ------------
Net cash provided by (used in) continuing operations........ (6,525,575) 4,942,107
Net cash provided by (used in) discontinued operations...... (9,068) 495,126
----------- ------------
Net cash provided by (used in) operating activities..... (6,534,643) 5,437,233
Investing activities:
Purchases of property and equipment......................... (2,887,675) (4,235,677)
Acquisition of business..................................... -- (200,000)
----------- ------------
Net cash used in investing activities................... (2,887,675) (4,435,677)
Financing activities:
Proceeds from long-term debt................................ 14,212,750 --
Proceeds from short-term borrowings......................... 2,603,898 1,000,000
Payments on short-term borrowings........................... (50,000) (1,086,700)
Advances from (payments to) affiliated companies............ (8,616,816) 444,370
Issuance of common stock.................................... 5,750,000 --
Payments to stockholders.................................... (5,435,012) --
----------- ------------
Net cash provided by financing activities............... 8,464,820 357,670
Effect of exchange rate changes............................. 70,979 (51,000)
----------- ------------
Net change in cash and cash equivalents..................... (886,519) 1,308,226
Cash and cash equivalents at beginning of year.............. 2,021,435 1,134,916
----------- ------------
Cash and cash equivalents at end of year.................... $ 1,134,916 $ 2,443,142
=========== ============
Supplemental cash flow information:
Cash paid for interest.................................... $ 1,018,765 $ 1,231,867
Cash paid for taxes....................................... 152,821 463,987
</TABLE>
The accompanying notes are an integral part of these statements.
F-6
<PAGE>
BRUKER DALTONICS INC.
NOTES TO FINANCIAL STATEMENTS
1. Description of Business
Bruker Daltonics Inc. and its wholly-owned subsidiaries (the "Company")
design, manufacture and market proprietary life science systems based on its
mass spectrometry core technology platforms. The Company also sells a broad
range of field analytical systems for substance detection and pathogen
identification. The Company maintains major technical centers in Europe, North
America and Japan. Bruker Daltonics allocates substantial capital and resources
to research and development and is party to various collaborations and strategic
alliances. The Company's diverse customer base includes pharmaceutical
companies, biotechnology companies, academic institutions and government
agencies.
These financial statements represent the consolidated accounts of Bruker
Daltonics Inc., and its wholly-owned subsidiaries as of December 31, 1998 and
1999 and for the year ended December 31, 1999, and the combined accounts of
Bruker Daltonics Inc., and its affiliated companies for the year ended
December 31, 1998 (see Note 3). All significant intercompany accounts and
transactions have been eliminated in consolidation and combination,
respectively.
2. Summary of Significant Accounting Policies
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with original
maturities of 90 days or less at date of purchase to be cash equivalents. Cash
and cash equivalents are carried at cost, which approximates fair market value
at year end.
RESTRICTED CASH
At December 31, 1998, $5,895,871 of cash was restricted as part of an
advance deposit for a product distribution agreement between Bruker Daltonik
GmbH and Hewlett-Packard Company (HP). The original advance was $6,680,002, from
which the Company withdrew amounts for payment as products were delivered and
accepted by HP. This deposit was reduced to $1,200,000 in the second quarter of
1999 and is no longer restricted. The Company has included the entire balance of
$5,895,871 in customer deposits as of December 31, 1998.
CONCENTRATION OF CREDIT RISK
Financial instruments which subject the Company to credit risk consist of
cash and cash equivalents and accounts receivables. The risk with respect to
cash and cash equivalents is minimized by the Company's policy of investing in
short-term financial instruments issued by highly-rated financial institutions.
The risk with respect to accounts receivable is minimized by
F-7
<PAGE>
BRUKER DALTONICS INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. Summary of Significant Accounting Policies (Continued)
the credit worthiness of the Company's customers. The Company performs periodic
credit evaluations of its customers' financial condition and generally does not
require collateral. Credit losses have been within management's expectations.
For the years ended December 31, 1998 and 1999, two customers accounted for an
aggregate of 32% and 30%, respectively, of the Company's product revenue.
Accounts receivables for these two customers accounted for an aggregate of 40%
and 3% of total receivables as of December 31, 1998 and 1999, respectively.
INVENTORIES
Inventories are stated at the lower of cost or market with cost determined
by the first-in, first-out, ("FIFO") method.
Inventories include demonstration equipment which the Company offers to
current and potential customers. The Company amortizes its demonstration
equipment over a three year period. Amortization expense for demonstration
equipment was $258,844 and $306,792 for the years ended December 31, 1998 and
1999, respectively.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost and are being depreciated
on a straight-line basis over the estimated useful lives of the assets as
follows:
<TABLE>
<S> <C>
Buildings............................ 25 years
Machinery and equipment.............. 5--10 years
Furniture and fixtures............... 3--5 years
Leasehold improvements............... Shorter of 15 years or the life of
the lease
</TABLE>
SOFTWARE COSTS
Purchased software is capitalized at cost and is amortized over the
estimated useful life, generally three years. Software developed for use in the
Company's products is expensed as incurred and is classified as research and
development expense.
OTHER ASSETS
Other assets consist principally of patents and licenses. Patents, patent
applications and rights are stated at acquisition cost. Amortization of patents
is recorded using the straight-line method over the legal lives of the patents,
generally for periods ranging up to ten years. Accumulated amortization of these
assets amounted to $983,702 and $1,120,840, as of December 31, 1998 and 1999,
respectively.
LONG-LIVED ASSETS
The Company reviews long-lived assets for impairment, in accordance with
Statement of Financial Accounting Standard (SFAS) No. 121, "Accounting for the
Impairment of Long-Lived Assets to Be Disposed Of," whenever events or
circumstances indicate that the
F-8
<PAGE>
BRUKER DALTONICS INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. Summary of Significant Accounting Policies (Continued)
carrying amount of an asset may not be recoverable. Assets are written-down to
fair value when the carrying costs exceed this amount. Any impairment losses are
determined based upon estimated future cash flows and fair values. To date, no
such indicators of impairment have been identified.
WARRANTY COSTS
The Company provides a one year parts and labor warranty with the purchase
of equipment. The anticipated cost for this one year warranty is accrued upon
recognition of the sale and is included as a current liability on the
accompanying balance sheets.
CUSTOMER DEPOSITS
Under the terms and conditions of contracts with certain customers, the
Company requires an advance deposit. These deposit amounts are recorded as a
liability until revenue is recognized against the specific contract at time of
acceptance of the system.
EARNINGS PER SHARE
Basic earnings per share is calculated by dividing net earnings by the
weighted-average number of common shares outstanding during the period. The
diluted earnings per share computation includes the effect of shares which would
be issuable upon the exercise of outstanding stock options, reduced by the
number of shares which are assumed to be purchased by the Company from the
resulting proceeds at the average market price during the period. At
December 31, 1998 and 1999 there were no stock options outstanding, therefore
basic and diluted earnings per share are equivalent.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company's financial instruments consist primarily of cash and cash
equivalents, accounts receivable, accounts payable and long-term debt. The
carrying amounts of the Company's cash and cash equivalents, accounts receivable
and accounts payable approximate fair value due to their short-term nature. The
fair value of long-term debt is estimated based on current interest rates
offered to the Company for financing arrangements with similar maturities. The
recorded value of these financial instruments approximate their fair value at
December 31, 1998 and 1999.
FOREIGN CURRENCY TRANSLATION
In accordance with Statement of Financial Accounting Standards ("SFAS")
No. 52, "Accounting for Foreign Exchange," all balance sheet accounts of foreign
subsidiaries are translated into United States dollars at the current exchange
rate, and income statement items are translated at the average exchange rate for
the period; resulting translation adjustments are made directly to accumulated
other comprehensive income (loss) in stockholders' equity. Realized exchange
gains and losses are included in current operations and were not material.
F-9
<PAGE>
BRUKER DALTONICS INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. Summary of Significant Accounting Policies (Continued)
REVENUE RECOGNITION
Revenue is recognized from system sales when a product is accepted by the
customer, except when sold through an independent distributor, a strategic
collaboration partner or an unconsolidated Bruker affiliate which assumes
responsibility for installation, in which case the system sale is recognized
upon shipment from the Company's facilities. Revenue from accessories and parts
is recognized upon shipment, and revenue from services when performed.
The Company also offers to its customers warranty and service agreements
extending beyond the initial year of warranty for a fee. These fees are recorded
as deferred revenue and amortized into income over the life of the agreements.
Other revenues, which are principally comprised of research and
development grants, are recognized as grant work is performed.
ADVERTISING COSTS
Advertising costs are expensed as incurred. Advertising expenses included
in sales and marketing were $452,466 and $363,567 for the years ended
December 31, 1998 and 1999, respectively.
INCOME TAXES
The Company provides for income taxes under the liability method
prescribed by SFAS No. 109, "Accounting for Income Taxes." Under this method,
deferred tax assets and liabilities are determined based on the difference
between the financial statements and tax basis of assets and liabilities using
enacted tax rates in effect for the year in which the difference is expected to
reverse. Valuation allowances are established when necessary to reduce deferred
tax assets to the amounts expected to be realized.
ACCOUNTING DEVELOPMENTS
In June 1998, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities."
The provisions of the statement require the recognition of all derivatives as
either assets or liabilities in the statement of financial position and the
measurement of those instruments at fair value. The accounting for changes in
the fair value of a derivative depends on the intended use of the derivative and
the resulting designation. The Company is required to implement the statement in
the first quarter of fiscal 2001. The Company does not believe that this new
accounting standard will have a material impact on the financial statements.
In fiscal 1999, the Company adopted SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." The statement established
annual and interim reporting standards for an enterprise's operating segments
and related disclosures about its products and services, geographic areas and
major customers. The adoption of the statement did not affect the results of
operations or financial position of the Company.
F-10
<PAGE>
BRUKER DALTONICS INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
3. Acquisitions
BRUKER DALTONIK GMBH
Effective December 21, 1998, Bruker Daltonics Inc. acquired all the assets
of Bruker Daltonik GmbH formerly known as Bruker Franzen Analytik GmbH (a
manufacturer of mass spectrometers) for $5,435,012 funded through the issuance
of 5,750,000 shares of common stock for $1.00 per share to existing
shareholders. The operations of Bruker Daltonik GmbH and its subsidiary, Bruker
Saxonia Analytik GmbH, based in Germany, are included in the 1998 combined
statements of operations for comparative purposes. The transaction represented
an exchange between entities under common control and, accordingly, the assets
acquired and liabilities assumed have been accounted for at historical cost in a
manner similar to a pooling-of-interests.
PROTEIGENE, INC.
On December 6, 1999, the Company acquired a 49% interest in
ProteiGene, Inc. from an officer of the Company for $50,000, the estimated fair
market value. ProteiGene is a bioanalytical research and development company
specializing in applications of mass spectrometry and bioinformatics in medical
and microbiologic diagnostics. ProteiGene is developing products to be used in
the care of patients suffering from routine and exotic infections, organ
transplant rejection, and genetic and environmental diseases including cancers
and auto-immune conditions where standard microbiologic and histopathologic
diagnostics have proven ineffective.
VIKING INSTRUMENTS CORPORATION
On June 22, 1999, the Company purchased, out of bankruptcy court, the
assets of Viking Instruments Corporation, a developer and manufacturer of
transportable gas chromatrograph mass spectrometers (GC/MS). These transportable
GC/MS instruments are used for laboratory and field analysis of soil, air and
water for the identification and quantification of a wide variety of organic
compounds and pollutants. The acquisition cost was $150,000, and the results of
operations are included in the accompanying consolidated financial statements
from the date of acquisition.
The pro forma net sales and results of operations for the ProteiGene and
Viking Instruments acquisitions, had they occurred at the beginning of 1998, are
not significant, and accordingly, have not been provided.
F-11
<PAGE>
BRUKER DALTONICS INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
4. Inventories
The components of inventories were as follows:
<TABLE>
<CAPTION>
December 31,
---------------------------
1998 1999
------------ ------------
<S> <C> <C>
Raw materials.................................... $ 3,924,861 $ 5,849,464
Work-in-process.................................. 8,833,788 10,776,494
Finished goods................................... 4,275,024 8,815,886
----------- -----------
$17,033,673 $25,441,844
=========== ===========
</TABLE>
5. Property, Plant and Equipment
Property, plant and equipment consisted of the following:
<TABLE>
<CAPTION>
December 31,
---------------------------
1998 1999
------------ ------------
<S> <C> <C>
Land........................................... $ 1,726,893 $ 1,480,358
Buildings...................................... 26,975,800 24,165,161
Office furniture, machinery and equipment...... 18,443,195 18,327,638
Leasehold improvements......................... 11,085 11,085
------------ ------------
47,156,973 43,984,242
Less accumulated depreciation and
amortization................................. (18,791,393) (18,633,699)
------------ ------------
$ 28,365,580 $ 25,350,543
============ ============
</TABLE>
Depreciation expense for the years ended December 31, 1998 and 1999 was
$2,464,693 and $3,317,282, respectively. Amortization of leasehold improvements
is included with depreciation in the accompanying financial statements.
6. Income Taxes
The components of income (loss) from continuing operations before
provision for income taxes consisted of the following for the years ended
December 31, 1998 and 1999:
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------
1998 1999
----------- -----------
<S> <C> <C>
United States..................................... $ 229,908 $(1,527,000)
Foreign........................................... (1,118,588) 3,389,929
----------- -----------
$ (888,680) $ 1,862,929
=========== ===========
</TABLE>
F-12
<PAGE>
BRUKER DALTONICS INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
6. Income Taxes (Continued)
Significant components of the provision for income taxes for the years
ended December 31, 1998 and 1999 were as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------
1998 1999
---------- ---------
<S> <C> <C>
Current:
Federal.......................................... $ 96,536 $ --
State............................................ 11,464 --
Foreign.......................................... -- 72,000
--------- --------
108,000 72,000
--------- --------
Deferred:
Federal.......................................... (26,000) --
State............................................ (82,000) --
Foreign.......................................... -- 914,887
--------- --------
(108,000) 914,887
--------- --------
Total income taxes on continuing operations.. $ -- $986,887
========= ========
</TABLE>
The reconciliation of income tax computed at the United States federal
statutory tax rate to income tax expense for the years ended December 31, 1998
and 1999 was as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------
1998 1999
---------- ---------
<S> <C> <C>
Income tax (benefit) at statutory rate............. 34.0% 34.0%
Add (deduct):
Change in valuation allowance.................... (30.5) 35.6
Permanent differences............................ (1.6) 1.2
Foreign income tax at differing rates............ -- (8.9)
Other............................................ (1.9) (9.0)
--------- --------
-- 52.9%
========= ========
</TABLE>
F-13
<PAGE>
BRUKER DALTONICS INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
6. Income Taxes (Continued)
The components of the Company's deferred income taxes were as follows:
<TABLE>
<CAPTION>
December 31,
-------------------------
1998 1999
----------- -----------
<S> <C> <C>
Deferred tax assets:
Inventory....................................... $ 301,000 $ 880,000
Warranty accrual................................ 55,000 257,000
Allowance for doubtful accounts................. 10,000 11,000
R & D tax credit carryforward................... 175,000 225,000
Net operating loss carryforward................. 29,000 171,000
Other........................................... 49,000 456,000
----------- -----------
619,000 2,000,000
Valuation allowance............................... (99,000) (763,000)
----------- -----------
Net deferred tax.................................. 520,000 1,237,000
Deferred tax liabilities:
Patent litigation costs......................... (2,793,000) (4,023,000)
Excess tax over book depreciation............... (5,998,000) (4,939,000)
Other........................................... (27,000) (162,000)
----------- -----------
Total deferred tax liabilities.................... (8,818,000) (9,124,000)
----------- -----------
Net deferred tax liability........................ $(8,298,000) $(7,887,000)
=========== ===========
</TABLE>
For financial reporting purposes, a valuation allowance of $99,000 and
$763,000 for December 31, 1998 and 1999, respectively, has been recognized to
offset deferred tax assets since uncertainty exists with respect to future
realization of deferred tax assets.
As of December 31, 1999, the Company had approximately $225,000 and
$428,000 of research and development tax credits and net operating loss
carryforwards, respectively, available to reduce future federal tax liabilities.
These credits expire at various dates through the year 2019.
Undistributed earnings of foreign subsidiaries aggregated approximately
$8.1 million at December 31, 1999, which, under existing law, will not be
subject to United States tax until distributed as dividends. Because the
earnings have been or are intended to be indefinitely reinvested in foreign
operations, no provision has been made for United States income taxes that may
be applicable thereto.
7. Financing Arrangements
In August 1999, the Company entered into a revolving line of credit with
Citizens Bank in the amount of $2,500,000. This line, which is secured by
certain inventory, receivables and equipment in the United States, is used to
provide working capital and expires July 31, 2001. Interest on this line of
credit is at the lower of LIBOR plus 175 basis points (7.91% at
F-14
<PAGE>
BRUKER DALTONICS INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
7. Financing Arrangements (Continued)
December 31, 1999) or the Prime Rate (8.5% at December 31, 1999). There is no
commitment fee on the unused portion of the line. As of December 31, 1999, the
Company had $1,000,000 outstanding on this line of credit.
The Company also maintained revolving lines of credit in 1998 and 1999,
respectively, of approximately $4,200,000 and $6,200,000, among German banks at
interest rates ranging between 7.5% and 6.1%. At December 31, 1998 and 1999,
$2,941,239 and $1,496,350, respectively, was outstanding against these revolving
lines of credit. The lines are secured by certain inventory and accounts
receivable in Germany and are renewable in June 2000.
The weighted average interest rate for all outstanding borrowings under
the Company's lines of credit was 7.01% and 7.06% at December 31, 1998 and 1999,
respectively.
The Company has three notes payable with outstanding balances aggregating
$14,982,498 and $12,843,582 as of December 31, 1998 and 1999, respectively. One
note ($5,137,434 at December 31, 1999), with an interest rate of 5.10%, is
payable in full in 2003. The other two notes ($7,706,148 in the aggregate at
December 31, 1999), have an interest rate of 4.65% and are due in 2008. The
notes are payable to Commerzbank in Germany. Interest is due monthly and all
obligations are collateralized by the land and buildings of Bruker Daltonik
GmbH.
8. Segment and Geographic Information
The Company operates in one business segment and engages in the design,
manufacturing and marketing of proprietary life science systems, process
analysis systems, and analytical instruments based primarily on mass
spectrometry technology.
GEOGRAPHIC AREAS
Information concerning principal geographic areas is as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------
1998 1999
------------ ------------
<S> <C> <C>
NET PRODUCT REVENUES FROM EXTERNAL CUSTOMERS
Germany........................................ $26,621,316 $31,694,883
United States.................................. 13,535,945 22,166,224
Other.......................................... -- 6,759,242
----------- -----------
$40,157,261 $60,620,349
=========== ===========
</TABLE>
F-15
<PAGE>
BRUKER DALTONICS INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
8. Segment and Geographic Information (Continued)
Net product revenues are attributable to geographic areas based on the
region of sale.
<TABLE>
<CAPTION>
December 31,
---------------------------
1998 1999
------------ ------------
<S> <C> <C>
LONG-LIVED ASSETS (EXCLUDING INTANGIBLE ASSETS)
Germany........................................ $28,037,374 $24,283,757
United States.................................. 328,206 484,006
Other.......................................... -- 672,935
----------- -----------
$28,365,580 $25,440,698
=========== ===========
NET ASSETS
Germany........................................ $ 9,307,408 $11,320,044
United States.................................. 6,821,503 5,294,422
Other.......................................... -- 357,091
----------- -----------
16,128,911 16,971,557
Elimination entries............................ (5,788,780) (6,913,908)
----------- -----------
$10,340,131 $10,057,649
=========== ===========
</TABLE>
9. Discontinued Operations
In 1999, the Company decided to discontinue its Fourier Transform-Infrared
(FT-IR) business. The FT-IR business unit sells and services FT-IR instruments
to a variety of markets outside the Company's core technology platform of mass
spectrometry. The Company plans to complete the sale of its FT-IR business to
Bruker Optik GmbH, an affiliated entity, in the first half of 2000 for a price,
which approximates the net book value of the assets and liabilities of the
business.
Summary results for the discontinued operations for the years ended
December 31, 1998 and 1999 are as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------
1998 1999
----------- -----------
<S> <C> <C>
Net product revenues............................ $2,853,737 $2,741,815
Total costs and expenses........................ (2,214,492) (2,119,423)
Provision for income taxes...................... (255,831) (248,915)
---------- ----------
Income from discontinued operations............. $ 383,414 $ 373,477
========== ==========
</TABLE>
The assets and liabilities of the discontinued operations as of
December 31, 1998 and 1999 consisted of inventories ($30,930 and $31,650,
respectively) and accounts payable ($24,317 and $146,686, respectively).
F-16
<PAGE>
BRUKER DALTONICS INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
10. Related-Party Transactions
The Company is affiliated, through common shareholders, with several other
entities which use the Bruker name. The Company and its affiliates have entered
into a sharing agreement which provides for the sharing of specified
intellectual property rights, services, facilities and other related items.
The Company recognized sales to affiliated entities of $9,804,838 in 1998
and $10,307,416 in 1999 and purchases from affiliated entities of $3,913,662 in
1998 and $3,208,752 in 1999.
In 1998 and 1999, various Bruker affiliates provided administrative and
other services (including office space-see note 12) to the Company at a cost of
approximately $227,000 and $437,000, respectively, based on its assessment of
the estimated fair market value of such services.
11. Employee Benefit Plans
The Company maintains or sponsors various defined contribution retirement
plans that cover domestic and international employees. The Company may make
contributions to these plans at its discretion. Retirement benefits earned are
generally based on years of service and compensation during active employment.
Eligibility is generally determined in accordance with local statutory
requirements. However, the level of benefits and terms of vesting may vary among
plans. The Company contributed $66,110 and $122,548 in 1998 and 1999,
respectively.
12. Commitments and Contingencies
LEASES
The Company leases office space from related parties, under agreements
expiring on various dates through 2004. The Company's principal office lease
expires in 2000. These lease obligations for the next five years are as follows:
<TABLE>
<S> <C>
2000........................................................ $188,321
2001........................................................ 3,971
2002........................................................ 3,971
2003........................................................ 3,971
2004........................................................ 3,971
--------
$204,205
========
</TABLE>
Rent expense for the years ended December 31, 1998 and 1999 was $131,962
and $283,860, respectively.
LICENSE AGREEMENTS
The Company has entered into license agreements allowing the Company to
utilize certain patents. If these patents are used in connection with a
commercial product sale, the
F-17
<PAGE>
BRUKER DALTONICS INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
12. Commitments and Contingencies (Continued)
Company pays royalties ranging from 0.15% to 5.00% on the related product
revenues. Licensing fees for the years ended December 31, 1998 and 1999 were
$146,166 and $178,327, respectively.
GRANTS
The Company has a grant from the National Institute of Standards and
Technology (NIST) Advanced Technology Program, which commenced on March 1, 1995
and ran through February 28, 2000. This grant is for the development of a DNA
sequencing time-of-flight mass spectrometer with a total project cost of
$7 million, of which $3.5 million will be reimbursed from NIST. The Company's
expenditures were $1.3 million and $2.1 million in 1998 and 1999, respectively.
Amounts reimbursed from NIST were $594,000 and $1 million in 1998 and 1999,
respectively, and are classified in other revenues.
The Company's wholly-owned subsidiary, Bruker Daltonik GmbH and its
subsidiary Bruker Saxonia Analytik GmbH, are the recipients of six grants from
German government authorities. The grants were made in connection with the
Company's development of specific spectrometers and components of spectrometers.
Total grants awarded amount to $4.8 million and expire through December 31,
2001. Amounts received under these grants during 1998 and 1999 totaled
$1.5 million and $3 million, respectively, and are classified in other revenues.
Total expenditures related to these grants were $3 million and $3.2 million in
1998 and 1999, respectively.
LEGAL
The Company's wholly-owned subsidiary, Bruker Daltonik GmbH, has a
$6.8 million and $5.8 million accrued liability at December 31, 1998 and 1999,
respectively, related to certain patent infringement litigation filed by a
competitor. In 1997, the competitor initiated an action in the United States
District Court of Massachusetts alleging patent infringement against the Company
and Hewlett-Packard. The competitor has also filed a request for an
investigation of its patent infringement claims with the United States
International Trade Commission (ITC) and has filed suit against the Company in
Germany, France and the United Kingdom. The Massachusetts patent action has been
pending the final determination of the ITC action while the actions in Germany,
France and the United Kingdom are on going.
In 1998, the ITC found in favor of the Company and in 1999 the Court of
Appeals for the Federal Circuit confirmed, in part, the ITC decision in favor of
the Company. The Company has filed counterclaims in relation to these patent
claims and in 1999 filed an anti-trust suit against the competitor in
Massachusetts Federal Court. The Company believes that it has a meritorious
defense to the competitor's claims and intends to vigorously defend itself.
Based on a review of the current facts and circumstances, management of
the Company and its subsidiary believe that the amount of the accrued liability
is a reasonable estimate of the exposure to loss associated with these matters,
representing, principally, anticipated legal fees. While acknowledging the
uncertainties of litigation, the Company believes that these
F-18
<PAGE>
BRUKER DALTONICS INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
12. Commitments and Contingencies (Continued)
matters will be resolved without a material effect on the Company's financial
position or results of operations. However, an unfavorable outcome of these
matters could result in a material adverse impact on the Company's financial
statements.
Other lawsuits, claims and proceedings of a nature considered normal to
its businesses are pending against the Company and its subsidiary. The Company
believes the outcome of these proceedings will not have a material impact on the
Company's financial position or results of operations.
13. Subsequent Events
STOCK SPLIT
On February 14, 2000, the Board of Directors of Bruker Daltonics, Inc.
authorized a seven-for-one stock split in the form of a stock dividend.
Shareholders of record received six additional shares of common stock for every
share they owned. All common shares and per share data in the accompanying
financial statements have been restated to reflect the stock split.
STOCK OPTIONS
In February 2000, the Board of Directors adopted and the Stockholders
approved the 2000 Stock Option Plan ("the Plan"). The Plan provides for the
issuance of up to 2,220,000 shares of Common Stock in connection with stock
options or other awards under the Plan. The Plan allows a committee of the Board
of Directors (the "Committee") to grant incentive stock options, non-qualified
stock options, stock appreciation rights and stock awards (including the use of
restricted stock and phantom shares). The Committee has the authority to
determine which employees will receive the rewards, the amount of the awards,
and other terms and conditions of the award. In February 2000, the Committee
granted stock options for 783,135 shares of common stock, which vest over
three-to-five year periods.
F-19
<PAGE>
Report of BDO, Independent Auditors
The Board of Directors
Bruker Daltonics Inc.
We have audited the accompanying combined balance sheet as of
December 31, 1997 of the entities listed in Note 1, and the related combined
statements of operations, stockholders' equity, and cash flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit. We did not audit the financial statements of
Bruker Daltonics Inc., which statements reflect total assets of approximately
$5.5 million as of December 31, 1997 and total revenues of approximately
$14.7 million for the year then ended. Those statements were audited by other
auditors whose report has been furnished to us, and our opinion, insofar as it
relates to data included for Bruker Daltonics Inc., is based solely on the
report of other auditors.
We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, based on our audit and the report of other auditors, the
financial statements referred to above present fairly, in all material respects,
the combined financial position at December 31, 1997 of the entities listed in
Note 1, and the results of their operations and their cash flows for the year
then ended, in conformity with accounting principles generally accepted in the
United States.
April 6, 2000
<TABLE>
<S> <C> <C>
/s/ BDO von Riegen, Lienau, Sucker & Partner GmbH
Wirtschaftsprufungsgesellschaft
(Sucker) (Dr. Lienau)
Wirtschaftsprufer Wirtschaftsprufer
</TABLE>
F-20
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
The Board of Directors
Bruker Daltonics Inc.
We have audited the balance sheet of Bruker Daltonics Inc. (formerly Bruker
Analytical Systems, Inc.) (the Company) as of December 31, 1997, and the related
statements of income, stockholders' equity, and cash flows for the year then
ended (not presented separately herein). These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with the auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bruker Daltonics Inc. at
December 31, 1997, and the results of its operations and its cash flows for the
year then ended in conformity with accounting principles generally accepted in
the United States.
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
February 3, 2000
F-21
<PAGE>
BRUKER DALTONICS INC.
COMBINED BALANCE SHEET
<TABLE>
<CAPTION>
December 31,
------------
1997
------------
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 2,021,435
Accounts receivable, less allowance for doubtful accounts
of $1,028................................................ 2,449,755
Inventories............................................... 14,436,816
Deferred tax asset........................................ 133,176
Other assets.............................................. 135,743
-----------
Total current assets.................................. 19,176,925
-----------
Restricted cash............................................. 6,680,002
Property, plant and equipment, net.......................... 26,173,305
Intangible and other assets................................. 218,396
-----------
Total assets...................................... $52,248,628
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings..................................... $ 182,881
Accounts payable.......................................... 4,290,956
Due to affiliated companies, net.......................... 8,218,007
Accrued expenses.......................................... 1,494,795
Accrued payroll........................................... 1,340,363
Customer deposits......................................... 10,470,046
Warranty reserve.......................................... 1,269,862
Note payable to stockholder............................... 50,000
Income taxes payable...................................... 705,513
-----------
Total current liabilities............................. 28,022,423
-----------
Deferred revenue............................................ 381,640
Deferred tax liability...................................... 7,323,929
Contingent liabilities...................................... 6,650,850
Stockholders' equity:
Bruker Daltonics Inc.
Common stock $.01 par value, authorized 7,000,000 shares,
issued and outstanding 5,250,000 shares.................. 52,500
Additional paid-in capital................................ 697,500
Bruker Daltonik GmbH
Common stock no par value, authorized 1 share, issued and
outstanding 1 share...................................... 3,489,184
Accumulated other comprehensive loss...................... (1,969,494)
Retained earnings......................................... 7,600,096
-----------
Total stockholders' equity............................ 9,869,786
-----------
Total liabilities and stockholders' equity........ $52,248,628
===========
</TABLE>
The accompanying notes are an integral part of these statements.
F-22
<PAGE>
BRUKER DALTONICS INC.
COMBINED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended
December 31,
------------
1997
------------
<S> <C>
Product revenue............................................. $49,246,709
Other revenue............................................... 1,878,298
-----------
Net revenue................................................. 51,125,007
Costs and operating expenses:
Cost of product revenue................................... 24,537,719
Sales and marketing....................................... 7,178,180
General and administrative................................ 2,119,792
Research and development.................................. 9,166,087
Patent litigation costs................................... 5,525,306
-----------
Total costs and operating expenses.................. 48,527,084
Operating income from continuing operations................. 2,597,923
Other income................................................ 127,255
Interest expense, net....................................... (743,199)
-----------
Income before provision for income taxes.................... 1,981,979
Provision for income taxes.................................. 1,626,785
-----------
Income from continuing operations........................... 355,194
Income from discontinued operations, net of income taxes.... 208,851
-----------
Net income.................................................. $ 564,045
===========
</TABLE>
The accompanying notes are an integral part of these statements.
F-23
<PAGE>
BRUKER DALTONICS INC.
COMBINED STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock
------------------------ Accumulated
Bruker Bruker Additional Other Total
Daltonics Daltonik Paid-in Retained Comprehensive Stockholders'
Inc. GmbH Capital Earnings Loss Equity
---------- ----------- ---------- ----------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Balance as of December 31,
1996 (unaudited)........... $ 7,000 $3,489,184 $ 93,000 $7,036,051 $ (628,822) $9,996,413
Issuance of common stock... 45,500 -- 604,500 -- -- 650,000
Foreign currency
translation adjustment... -- -- -- -- (1,340,672) (1,340,672)
Net income................. -- -- -- 564,045 -- 564,045
----------
Net comprehensive loss..... -- -- -- -- -- (776,627)
------- ---------- -------- ---------- ----------- ----------
Balance as of December 31,
1997....................... $52,500 $3,489,184 $697,500 $7,600,096 $(1,969,494) $9,869,786
======= ========== ======== ========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
F-24
<PAGE>
BRUKER DALTONICS INC.
COMBINED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended
December 31,
------------
1997
------------
<S> <C>
Operating activities:
Income from continuing operations........................... $ 355,194
Adjustments to reconcile income from continuing operations
to net cash provided by continuing operations:
Depreciation and amortization............................. 2,572,850
Deferred income taxes..................................... 1,024,312
Changes in operating assets and liabilities:
Accounts receivable..................................... 4,393,788
Inventories............................................. (325,147)
Other assets............................................ 780,460
Accounts payable and accrued expenses................... 1,556,147
Warranty reserve........................................ (1,080,366)
Contingent liabilities.................................. 3,585,381
Income taxes payable.................................... 663,583
Deferred revenue........................................ 248,820
Customer deposits....................................... (1,409,458)
------------
Net cash provided by continuing operations.................. 12,365,564
Net cash provided by discontinued operations................ 320,904
------------
Net cash provided by operating activities............... 12,686,468
Investing activities:
Purchases of property and equipment......................... (3,911,879)
------------
Net cash used in investing activities................... (3,911,879)
Financing activities:
Payments on line of credit.................................. (5,399,472)
Changes in due to affiliated companies...................... (5,366,415)
Issuance of common stock.................................... 650,000
------------
Net cash used in financing activities................... (10,115,887)
Effect of exchange rate changes............................. (403,760)
------------
Net decrease in cash and cash equivalents................... (1,745,058)
Cash and cash equivalents at beginning of year.............. 3,766,493
------------
Cash and cash equivalents at end of year.................... $ 2,021,435
============
Supplemental cash flow information:
Cash paid for interest.................................... $ 1,252,112
Cash paid for income taxes................................ 517,461
</TABLE>
The accompanying notes are an integral part of these statements.
F-25
<PAGE>
BRUKER DALTONICS INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
1. Description of Business
These financial statements represent the combined accounts of Bruker
Daltonics Inc. (formally Bruker Analytical Systems, Inc.) and Bruker Daltonik
GmbH (formally Bruker-Franzen Analytik GmbH) including its subsidiary Bruker
Saxonia Analytik GmbH (collectively "Bruker Daltonics" or the "Company"), for
the year ended December 31, 1997. All significant intercompany accounts and
transactions have been eliminated in combination.
The Company designs, manufactures and markets proprietary life science
systems based on its mass spectrometry core technology platforms. The Company
also sells a broad range of field analytical systems for pathogen identification
and substance detection. The Company maintains major technical centers in Europe
and North America. Bruker Daltonics allocates substantial amounts to research
and development and are parties to various collaborations and strategic
alliances. The Company's diverse customer base includes pharmaceutical and
biotechnology companies, academic institutions and government agencies.
2. Summary of Significant Accounting Policies
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with original
maturities of 90 days or less at date of purchase to be cash equivalents. Cash
and cash equivalents are carried at cost, which approximates fair market value
at year end. The Company has repurchase agreements with a bank. The repurchase
agreements are collateralized by investments principally consisting of U.S.
Government Agency securities in the amount of at least 100% of such obligation.
RESTRICTED CASH
At December 31, 1997, $6,680,002 of cash was restricted as part of an
advance deposit for a product distribution agreement between Bruker Daltonik
GmbH and Hewlett-Packard Company (HP). The Company withdrew amounts for payment
as products were delivered and accepted by HP.
CONCENTRATION OF CREDIT RISK
Financial instruments which subject the Company to credit risk consist of
cash and cash equivalents and accounts receivables. The risk with respect to
cash and cash equivalents is minimized by the Company's policy of investing in
short-term financial instruments issued by highly-rated financial institutions.
The risk with respect to accounts receivable is minimized by
F-26
<PAGE>
BRUKER DALTONICS INC.
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
2. Summary of Significant Accounting Policies (Continued)
the credit worthiness of the Company's customers. The Company performs periodic
credit evaluations of its customers' financial condition and generally does not
require collateral. Credit losses have been within management's expectations.
For the year ended December 31, 1997, two customers accounted for an aggregate
of 31% of the Company's product revenue. Accounts receivables, as of
December 31, 1997, for these two customers accounted for an aggregate of 28% of
total receivables.
INVENTORIES
Inventories are stated at the lower of cost or market with cost determined
by the first-in, first-out, ("FIFO") method.
Inventories include demonstration equipment which the Company offers to
current and potential customers. The Company amortizes its demonstration
equipment over a three year period. Amortization expense for demonstration
equipment was $105,981 for the year ended December 31, 1997.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost and are being depreciated
on a straight-line basis over the estimated useful lives of the assets as
follows:
<TABLE>
<S> <C>
Buildings................................................... 25 years
Machinery and equipment..................................... 5--10 years
Furniture and fixtures...................................... 3--5 years
</TABLE>
SOFTWARE COSTS
Purchased software is capitalized at cost and amortized over the estimated
useful life, generally three years. Software developed for use in the Company's
products is expensed as incurred and is classified as research and development
expense.
OTHER ASSETS
Other assets consist principally of patents and licenses. Patents, patent
applications and rights are stated at acquisition cost. Amortization of patents
is recorded using the straight-line method over the legal lives of the patents,
generally for periods ranging up to ten years. Accumulated amortization of these
assets amounted to $694,104 as of December 31, 1997.
LONG-LIVED ASSETS
The Company reviews long-lived assets for impairment, in accordance with
Statement of Financial Accounting Standard (SFAS) No. 121, "Accounting for the
Impairment of Long-Lived Assets to Be Disposed Of," whenever events or
circumstances indicate that the carrying amount of an asset may not be
recoverable. Assets are written-down to fair value when the carrying costs
exceed this amount. Any impairment losses are determined based upon estimated
future cash flows and fair values. To date, no such indicators of impairment
have been identified.
F-27
<PAGE>
BRUKER DALTONICS INC.
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
2. Summary of Significant Accounting Policies (Continued)
WARRANTY COSTS
The Company provides a one year parts and labor warranty with the purchase
of equipment. The anticipated cost for this one year warranty is accrued upon
recognition of the sale and is included as a current liability on the
accompanying balance sheets.
CUSTOMER DEPOSITS
Under the terms and conditions of contracts with certain customers, the
Company requires an advance deposit. These deposit amounts are recorded as a
liability until revenue is recognized against the specific contract at time of
acceptance of the system.
FOREIGN CURRENCY TRANSLATION
In accordance with Statement of Financial Accounting Standards ("SFAS")
No. 52, "Accounting for Foreign Exchange," all balance sheet accounts of foreign
subsidiaries are translated into United States dollars at the current exchange
rate, and income statement items are translated at the average exchange rate for
the period; resulting translation adjustments are made directly to accumulated
other comprehensive income in stockholders' equity. Realized exchange gains and
losses are included in current operations and were not material.
REVENUE RECOGNITION
Revenue is recognized from system sales when a product is accepted by the
customer, except when sold through a non-combined Bruker affiliate that assumes
responsibility for installation, in which case the system sale is recognized
upon shipment. Revenue from accessories and parts is recognized upon shipment,
and revenue from services, when actually performed.
The Company also offers to its customers extended warranty and service
agreements extending beyond the initial year of warranty for a fee. These fees
are recorded as deferred revenue and amortized into income over the life of the
contract.
ADVERTISING COSTS
Advertising costs are expensed as incurred. Advertising expenses included
in sales and marketing were $256,360 for the year ended December 31, 1997.
RESEARCH AND DEVELOPMENT COSTS
Research and development costs are expensed as incurred.
INCOME TAXES
The Company provides for income taxes under the liability method
prescribed by SFAS No. 109, "Accounting for Income Taxes." Under this method,
deferred tax assets and liabilities are determined based on the difference
between the financial statements and tax basis of
F-28
<PAGE>
BRUKER DALTONICS INC.
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
2. Summary of Significant Accounting Policies (Continued)
assets and liabilities using enacted tax rates in effect for the year in which
the difference is expected to reverse. Valuation allowances are established when
necessary to reduce deferred tax assets to the amounts expected to be realized.
ACCOUNTING DEVELOPMENTS
In 1997, the Company adopted SFAS No. 130, "Reporting Comprehensive
Income," which establishes rules for reporting of comprehensive income and its
components. The components of comprehensive income that relate to the Company
are net earnings and foreign currency translation adjustments.
In June 1997, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities."
The provisions of the statement require the recognition of all derivatives as
either assets or liabilities in the statement of financial position and the
measurement of those instruments at fair value. The accounting for changes in
the fair value of a derivative depends on the intended use of the derivative and
the resulting designation. The Company is required to implement the statement in
the first quarter of fiscal 2001. The Company does not believe that this new
accounting standard will have a material impact on the financial statements.
3. Inventories
The components of inventories at December 31, 1997 were as follows:
<TABLE>
<CAPTION>
December 31,
------------
1997
------------
<S> <C>
Raw materials............................................... $ 3,808,502
Work-in-process............................................. 4,269,997
Finished goods.............................................. 6,358,317
-----------
$14,436,816
===========
</TABLE>
4. Property, Plant and Equipment
Property, plant and equipment at December 31, 1997 consisted of the
following:
<TABLE>
<CAPTION>
December 31,
------------
1997
------------
<S> <C>
Land........................................................ $ 1,118,789
Buildings................................................... 24,899,552
Office furniture, machinery and equipment................... 16,639,063
------------
42,657,404
Less accumulated depreciation............................... (16,484,099)
------------
$ 26,173,305
============
</TABLE>
Depreciation expense for the year ended December 31, 1997 was $2,340,780.
F-29
<PAGE>
BRUKER DALTONICS INC.
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
5. Income Taxes
The components of income before provision for income taxes consisted of
the following for the year ended December 31, 1997:
<TABLE>
<CAPTION>
Year Ended
December 31,
-------------
1997
-------------
<S> <C>
United States............................................... $ 129,039
Foreign..................................................... 1,852,940
----------
$1,981,979
==========
</TABLE>
Significant components of the provision (benefit) for income taxes for the
year ended December 31, 1997 are as follows:
<TABLE>
<CAPTION>
Year Ended
December 31,
-------------
1997
-------------
<S> <C>
Current:
Federal................................................... $ 14,752
State..................................................... 3,950
Foreign................................................... 27,311
----------
46,013
----------
Deferred:
Federal................................................... (49,806)
Foreign................................................... 1,630,578
----------
1,580,772
----------
Total income taxes on continuing operations................. $1,626,785
==========
</TABLE>
The reconciliation of income tax computed at the U.S. federal statutory
tax rates to income tax expense for the year ended December 31, 1997 was as
follows:
<TABLE>
<CAPTION>
Year Ended
December 31,
-------------
1997
-------------
<S> <C>
Income tax (benefit) at statutory rate...................... $ 674,000
Add (deduct)
Tax differentials on foreign earnings..................... 985,000
State income taxes........................................ 4,000
Other..................................................... (36,215)
----------
$1,626,785
==========
</TABLE>
F-30
<PAGE>
BRUKER DALTONICS INC.
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
5. Income Taxes (Continued)
The components of the Company's deferred income taxes at December 31, 1997
were as follows:
<TABLE>
<CAPTION>
December 31,
-------------
1997
-------------
<S> <C>
Deferred tax assets:
Inventory................................................. $ 131,610
Warranty accrual.......................................... 49,000
Net operating loss credit carryforward.................... 1,523,000
Other..................................................... 498,637
-----------
2,202,247
Deferred tax liabilities:
Patent litigation costs................................... (3,385,000)
Excess tax over book depreciation......................... (6,004,000)
Other..................................................... (4,000)
-----------
Total deferred tax liabilities.............................. (9,393,000)
-----------
Net deferred tax liability.................................. $(7,190,753)
===========
</TABLE>
As of December 31, 1997, the Company had approximately $3 million of net
operating loss tax credit carryforwards available to reduce future tax
liabilities. These credits expire through the year 2013.
6. Financing Arrangements
The Company maintains revolving lines of credit, of approximately
$5,300,000 among German banks at interest rates ranging between 7.25% and 7.50%.
At December 31, 1997, $182,881 were outstanding against these revolving lines of
credit. The lines are renewable annually in October 1998.
7. Segment and Geographic Information
The Company operates in one business segment and engages in the design,
manufacturing and marketing of proprietary life science systems, process
analysis systems, and analytical instruments based primarily on mass
spectrometry technology.
F-31
<PAGE>
BRUKER DALTONICS INC.
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
7. Segment and Geographic Information (Continued)
GEOGRAPHIC AREAS
Information concerning principal geographic areas for 1997 are as follows:
<TABLE>
<CAPTION>
Year Ended
December 31,
-------------
1997
-------------
<S> <C>
Net product revenues from external customers
Germany................................................... $36,019,815
United States............................................. 13,226,894
-----------
Combined.................................................. $49,246,709
===========
</TABLE>
Net product revenues are attributable to geographic areas based on the
region of sale.
<TABLE>
<CAPTION>
December 31,
------------
1997
------------
<S> <C>
Long-lived assets (excluding intangible assets)
Germany................................................... $26,026,746
United States............................................. 146,559
-----------
Combined.................................................. $26,173,305
===========
Net assets
Germany................................................... $ 9,146,007
United States............................................. 841,695
-----------
9,987,702
Elimination entries....................................... (117,916)
-----------
Combined.................................................. $ 9,869,786
===========
</TABLE>
8. Discontinued Operations
The Company plans to complete the sale of its FT-IR business to Bruker Optik
GmbH in the first half of 2000. The FT-IR business sells and services FT-IR
instruments to a variety of markets, outside the Company's core technology
platform of mass spectrometry.
Summary results for the discontinued operations for the year ended
December 31, 1997 are as follows:
<TABLE>
<CAPTION>
Year Ended
December 31,
------------
1997
------------
<S> <C>
Net product revenues........................................ $1,643,857
Total costs and expenses.................................... 1,295,352
Provision for income taxes.................................. 139,654
----------
Income from discontinued operations......................... $ 208,851
==========
</TABLE>
F-32
<PAGE>
BRUKER DALTONICS INC.
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
8. Discontinued Operations (Continued)
The assets and liabilities of the discontinued operations as of
December 31, 1997 consisted of accounts payable of $385,869.
9. Related-Party Transactions
As of December 31, 1997, Bruker Daltonik GmbH has two demand loans
outstanding aggregating $8,262,617 to Techneon AG, an affiliated company. The
loans, which are unsecured, bear interest at 5.25% and 7.50%.
At December 31, 1997, the Group had a $50,000 demand note to the President
of the Group. The note, which is unsecured, bears interest at prime (8.50% at
December 31, 1997).
The Company recognized sales to affiliated entities of $14,256,695 and
purchases from affiliated entities of $3,019,177 in 1997.
In 1997, Bruker Instruments, Inc., a related party, provided
administrative and other services to the Company at a cost of $370,391 based on
its assessment of the estimated fair market value of such services.
10. Employee Benefit Plans
The Company maintains or sponsors various defined contribution retirement
plans that cover domestic and international employees. The Company may make
contributions to these plans at its discretion. Retirement benefits earned are
generally based on years of service and compensation during active employment.
Eligibility is generally determined in accordance with local statutory
requirements. However, the level of benefits and terms of vesting may vary among
plans. The Company contributed $49,037 in 1997.
11. Commitments and Contingencies
LEASES
The Company leases office and production space from Bruker
Instruments, Inc. under a renewable lease. The term of this lease, which was
entered into on June 27, 1996, is for three years and four months with one year
extensions thereafter. Total rent expense was $125,123 in 1997.
Future minimum rental payments under the Company's operating lease,
excluding real estate taxes, insurance and operating costs paid by the Company,
are $131,962, $213,782 and $184,350 for 1998, 1999 and 2000, respectively.
GRANTS
The Company has a grant from the National Institute of Standards and
Technology (NIST) Advanced Technology Program, which commenced on March 1, 1995
and runs through February 28, 2000. This grant is for the development of a DNA
sequencing time-of-flight mass spectrometer with a total project cost of
$7.0 million, of which $3.5 million will be reimbursed from NIST. The Company's
expenditures were $953,852 in 1997. Amounts reimbursed from NIST were $487,780,
and are classified in other revenues.
F-33
<PAGE>
BRUKER DALTONICS INC.
NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)
11. Commitments and Contingencies (Continued)
Bruker Daltonik GmbH and its subsidiary Bruker Saxonia Analytik GmbH, are
the recipients of five grants from German government authorities. The grants
were made in connection with the Company's development of specific spectrometers
and components of spectrometers. Grants range from $1,203,382 to $6,183,027 and
aggregate $16,483,699. The grants expire from December 31, 1997 through
January 31, 2001. Aggregate expenditures during the year ended December 31, 1997
totaled $3,744,857. Amounts reimbursed in the aggregate during 1997 totaled
$1,390,518 and are classified in other revenues. At December 31, 1997, the
Company had no grants receivable.
LEGAL
Various lawsuits, claims and proceedings of a nature considered normal to
its businesses are pending against the Company and its subsidiary. The most
significant of these are described below.
The Company has a $6.7 million accrued liability at December 31, 1997
related to certain patent infringement litigation filed by a competitor. In
1997, the competitor initiated an action in the United States District Court of
Massachusetts alleging patent infringement against the Company and
Hewlett-Packard. The competitor has also filed a request for an investigation of
its patent infringement claims with the United States International Trade
Commission (ITC) and has filed suit against the Company in Germany, France and
the United Kingdom. The Massachusetts patent action has been pending the final
determination of the ITC action while the actions in Germany, France and the
United Kingdom are on going.
Based on a review of the current facts and circumstances, management of
the Company believe that the amount of the accrued liability is a reasonable
estimate of the exposure to the loss associated with these matters,
representing, principally, anticipated legal fees. While acknowledging the
uncertainties of litigation, the Company believes that these matters will be
resolved without a material effect on the Company's financial position or
results of operations. However, an unfavorable outcome of these matters could
result in a material adverse impact on the Company's financial statements.
F-34
<PAGE>
You should rely only on the information contained in this prospectus. We have
not authorized anyone to provide information different from that contained in
this prospectus. We are offering to sell, and seeking offers to buy, shares of
common stock only in jurisdictions where offers and sales are permitted. The
information contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus or of any sale
of our common stock.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
--------
<S> <C>
Prospectus Summary............... 2
The Offering..................... 4
Summary Financial Data........... 5
Risk Factors..................... 6
Special Note Regarding
Forward-Looking Statements..... 17
Use of Proceeds.................. 18
Dividend Policy.................. 18
Capitalization................... 19
Dilution......................... 20
Selected Financial Data.......... 21
Management's Discussion and
Analysis of Financial Condition
and Results of Operations...... 23
Business......................... 29
Management....................... 44
Principal Stockholders........... 40
Related Transactions............. 51
Description of Capital Stock..... 54
Shares Eligible for Future
Sale........................... 57
Underwriting..................... 58
Tax Matters...................... 61
Legal Matters.................... 65
Experts.......................... 65
Where You Can Find More
Information.................... 65
Index to Financial Statements.... F-1
</TABLE>
Until , 2000 (25 days after the date of this prospectus), all
dealers that buy, sell or trade in these securities, whether or not
participating in this offering, may be required to deliver a prospectus. Dealers
are also obligated to deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.
[LOGO]
Shares
Common Stock
Deutsche Banc Alex. Brown
Warburg Dillon Read LLC
Thomas Weisel Partners LLC
Prospectus
, 2000
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses (other than the underwriting discount) payable in
connection with the sale of the common stock offered hereby are as follows, all
of which will be paid by the Company:
<TABLE>
<CAPTION>
AMOUNT
--------
<S> <C>
SEC registration fee........................................ $33,000
NASD filing fee............................................. *
Nasdaq National Market fee.................................. *
Printing expenses........................................... *
Legal fees and expenses..................................... *
Accounting fees and expenses................................ *
Transfer agent and registrar fees and expenses.............. *
Miscellaneous............................................... *
-------
Total....................................................... $ *
=======
</TABLE>
- ------------
* To be completed by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware
provides as follows:
A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact the he is or was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a director, officer,
employee or agent or another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suite or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interest
of the corporation, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorney's fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and a manner he
reasonably believed to in or not opposed to the best interest of the corporation
and except that no indemnification shall be made in respect to any claim, issue
or matter as to which such person shall have been adjudged to be
II-1
<PAGE>
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
In addition, pursuant to our certificate of incorporation and bylaws, we
shall indemnify our directors and officers against expenses (including judgments
or amounts paid in settlement) incurred in any action, civil or criminal, to
which any such person is a party by reason of any alleged act or failure to act
in his capacity as such, except as to a matter as to which such director or
officer shall have been finally adjudged not to have acted in good faith in the
reasonable belief that his action was in the best interest of the corporation.
The underwriting agreement between Bruker Daltonics and the underwriters
of this offering provides that the underwriters are obligated, under certain
circumstances, to indemnify our directors, officers and controlling persons
against certain liabilities, including liabilities under the Securities Act.
Reference is made to the form of Underwriting Agreement filed at Exhibit 1.1
hereto.
We maintain directors and officers liability insurance for the benefit of
our directors and certain of our officers.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
During the three year period ending December 31, 1999, Bruker Daltonics
has issued the following securities, none of which has been registered under the
Securities Act:
1. On February 1, 1997, we sold 350,000 shares of common stock to Frank H.
Laukien for a purchase price of $500 and a capital contribution of $49,500.
2. On June 30, 1997, we sold 1,750,000 shares of common stock to Isolde
Laukien for a purchase price of $2,500 and a capital contribution of
$247,500; 1,050,000 shares of common stock to Joerg C. Laukien for a
purchase price of $1,500 and a capital contribution of $148,500; 1,050,000
shares of common stock to Marc M. Laukien for a purchase price of $1,500
and a capital contribution of $148,500; and 350,000 shares of common stock
to Dirk D. Laukien for a purchase price of $500 and a capital contribution
of $49,500.
3. On December 21, 1998, we sold 5,750,000 shares of common stock for $11,500
and a capital contribution of $1,138,500 to each of Frank H. Laukien,
Isolde Laukien, Joerg C. Laukien, Marc M. Laukien and Dirk D. Laukien.
4. As of April 10, 2000, options to purchase 783,135 shares of common stock
were outstanding under Bruker Daltonics' 2000 Stock Option Plan. None of
the options are exercisable within 60 days. All of these options were
granted in February 2000 to officers, directors, employees and advisors of
Bruker Daltonics.
The sales of securities set forth in paragraphs one to three above were
exempt from the registration requirements of the Securities Act in reliance on
Section 4(2) thereof, or Regulation D promulgated thereunder, as transactions by
an issuer not involving a public offering. The sale of securities set forth in
paragraph four above was exempt from the registration requirements of the
Securities Act in reliance on Rule 701 promulgated under Section 3(b) of the
Securities Act as transactions by an issuer pursuant to compensatory benefit
plans and contracts relating to compensation as provided under such Rule 701.
The
II-2
<PAGE>
granting of stock options described in paragraph four above did not require
registration under the Securities Act, or an exemption therefrom, insofar as
such grants did not involve a "sale" of securities as such term is used in
Section 2(3) of the Securities Act.
II-3
<PAGE>
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
NO. DESCRIPTION OF DOCUMENTS
--- ------------------------------------------------------------
<C> <S>
*1.1 Form of Underwriting Agreement
2.1 Asset Purchase Agreement dated July 1, 1996 between the
Registrant and Spectrospin AG
2.2 Share Purchase Agreement dated December 9, 1998 among the
Registrant, Bruker Physik AG and the estate of Dr.
Guenther R. Laukien
2.3 Asset Purchase Agreement dated May 28, 1999 between the
Registrant and Viking Instruments Corp
2.4 ProteiGene Share Purchase Agreement dated December 6, 1999
between the Registrant and Frank H. Laukien
2.5 ProteiGene Share Purchase Agreement dated March 1, 2000
between the Registrant and Sidney R. Kaufman
3.1 Amended and Restated Certificate of Incorporation of the
Registrant
3.2 Amended and Restated Bylaws of the Registrant
*4.1 Specimen stock certificate representing shares of common
stock of the Registrant
*5.1 Opinion of Hutchins, Wheeler & Dittmar, A Professional
Corporation
10.1 2000 Stock Option Plan
10.2 Sharing Agreement dated as of February 28, 2000 among the
Registrant and 13 affiliates of the Registrant
+10.3 Collaboration and OEM Agreement dated March 6, 2000 between
PerkinElmer Instruments LLC and its Affiliates and the
Registrant and its Affiliates
+10.4 Cooperation Agreement dated November 15, 1999 between Bruker
Daltonik GmbH and MWG-Biotech AG
+10.5 License Agreement dated August 10, 1998 between the
Registrant and Indiana University's Advanced Research &
Technology Institute
10.6 Lease dated June 27, 1996 between the Registrant and Bruker
Instruments, Inc., as amended
+10.7 ITMS Collaboration Agreement by and between Hewlett-Packard,
the Registrant and Bruker Daltonik GmbH, dated April 28,
1999
+10.8 Collaboration Agreement dated December 4, 1997 between
Bruker-Franzen Analytik GmbH and Sequenom Instruments GmbH
*10.9 Agreement by and between the Registrant and Bruker Optik
GmbH dated March 30, 2000
21.1 Subsidiaries of the Registrant
23.1 Consent of Ernst & Young LLP
23.2 Consent of BDO
23.3 Consent of Hutchins, Wheeler & Dittmar, A Professional
Corporation (included in Exhibit 5.1)
24.1 Power of Attorney (included on page II-5)
27.1 Financial Data Schedule
</TABLE>
- ---------
* To be filed by amendment
II-4
<PAGE>
+ Confidential treatment requested as to certain portions, which portions
have been omitted and filed separately with the Commission.
All other schedules for which provisions are made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore have
been omitted.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes to provide to the
underwriters at the closing of this offering specified in the underwriting
agreement certificates in such denomination and registered in such names as
required by the underwriters to permit proper delivery to each purchaser.
The undersigned registrant hereby undertakes that: (1) for purposes of
determining any liability under the Securities Act, the information omitted from
the form of prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it was declared
effective; and (2) for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to provisions described in Item 14 above, or otherwise, the
registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused this amended registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in Billerica, Massachusetts, on
April 14, 2000.
<TABLE>
<S> <C> <C>
BRUKER DALTONICS INC.
By: /s/ FRANK H. LAUKIEN, PH.D.
-----------------------------------------
Frank H. Laukien, Ph.D.
PRESIDENT, CHIEF EXECUTIVE OFFICER AND
CHAIRMAN
</TABLE>
We, the undersigned officers and directors of Bruker Daltonics, hereby
severally constitute and appoint each of Frank H. Laukien and David E. Plunkett
to sign for us and in our names in the capacities indicated below, the
Registration Statement on Form S-1 filed herewith and any and all pre-effective
and post-effective amendments to said Registration Statement, and, in connection
with any registration of additional securities pursuant to Rule 464(b) under the
Securities Act of 1933, to sign any abbreviated registration statement and any
and all amendments thereto, and to file the same, with all exhibits thereto and
other documents in connection therewith, in each case, with the Securities and
Exchange Commission, and generally do all such things in our names and on our
behalf in our capacities consistent with the provisions of the Securities Act of
1933, as amended, and all requirements of the Securities and Exchange
Commission.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<C> <S> <C>
President and Chief Executive
/s/ FRANK H. LAUKIEN, PH.D. Officer and Chairman of the
------------------------------------------- Board (Principal Executive April 14, 2000
Frank H. Laukien, Ph.D. Officer)
/s/ DAVID E. PLUNKETT Chief Financial Officer
------------------------------------------- (Principal Financial and April 14, 2000
David E. Plunkett Accounting Officer)
/s/ DIETER KOCH, PH.D.
------------------------------------------- Director April 14, 2000
Dieter Koch, Ph.D.
/s/ BERNHARD WANGLER
------------------------------------------- Director April 14, 2000
Bernhard Wangler
/s/ TIMOTHY J. HANSBERRY
------------------------------------------- Director April 14, 2000
Timothy J. Hansberry
/s/ WILLIAM A. LINTON
------------------------------------------- Director April 14, 2000
William A. Linton
/s/ COLLIN D'SILVA
------------------------------------------- Director April 14, 2000
Collin D'Silva
/s/ RICHARD M. STEIN
------------------------------------------- Director April 14, 2000
Richard M. Stein
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
NO. DESCRIPTION OF DOCUMENTS
- --- ------------------------------------------------------------
<C> <S>
*1.1 Form of Underwriting Agreement
2.1 Asset Purchase Agreement dated July 1, 1996 between the
Registrant and Spectrospin AG
2.2 Share Purchase Agreement dated December 9, 1998 among the
Registrant, Bruker Physik AG and the estate of Dr.
Guenther R. Laukien
2.3 Asset Purchase Agreement dated May 28, 1999 between the
Registrant and Viking Instruments Corp.
2.4 ProteiGene Share Purchase Agreement dated December 6, 1999
between the Registrant and Frank H. Laukien
2.5 ProteiGene Share Purchase Agreement dated March 1, 2000
between the Registrant and Sidney R. Kaufman
3.1 Amended and Restated Certificate of Incorporation of the
Registrant
3.2 Amended and Restated Bylaws of the Registrant
*4.1 Specimen stock certificate representing shares of common
stock of the Registrant
*5.1 Opinion of Hutchins, Wheeler & Dittmar, A Professional
Corporation
10.1 2000 Stock Option Plan
10.2 Sharing Agreement dated as of February 28, 2000 among the
Registrant and 13 affiliates of the Registrant
+10.3 Collaboration and OEM Agreement dated March 6, 2000 between
PerkinElmer Instruments LLC and its Affiliates and the
Registrant and its Affiliates
+10.4 Cooperation Agreement dated November 15, 1999 between Bruker
Daltonik GmbH and MWG-Biotech AG
+10.5 License Agreement dated August 10, 1998 between the
Registrant and Indiana University's Advanced Research &
Technology Institute
10.6 Lease dated June 27, 1996 between the Registrant and Bruker
Instruments, Inc., as amended
+10.7 ITMS Collaboration Agreement by and between Hewlett-Packard,
the Registrant and Bruker Daltonik GmbH, dated April 28,
1999
+10.8 Collaboration Agreement dated December 4, 1997 between
Bruker-Franzen Analytik GmbH and Sequenom Instruments GmbH
*10.9 Agreement by and between the Registrant and Bruker Optik
GmbH dated March 30, 2000
21.1 Subsidiaries of the Registrant
23.1 Consent of Ernst & Young LLP
23.2 Consent of BDO
23.3 Consent of Hutchins, Wheeler & Dittmar, A Professional
Corporation (included in Exhibit 5.1)
24.1 Power of Attorney (included on page II-5)
27.1 Financial Data Schedule
</TABLE>
- ------------
* To be filed by amendment
+ Confidential treatment requested as to certain portions, which portions
have been omitted and filed separately with the Commission.
<PAGE>
Exhibit 2.1
FTMS ASSET PURCHASE AGREEMENT
BETWEEN SPECTROSPIN AG, FALLANDEN,
SWITZERLAND ("SAG"), AND BRUKER ANALYTICAL
SYSTEMS, INC., BILLERICA, MA, USA ("BASI")
1. AS OF JULY 1ST, 1996, BASI HEREBY ASSUME SAG'S LIABILITY, VALUED AS A
US $100,000 SAG LIABILITY, FOR PROVIDING SERVICE, INCLUDING WARRANTY
SERVICE, SPARE PARTS, AND UPGRADES, TO THE CUSTOMERS LISTED IN
ATTACHMENT A, TO WHICH SAG HAS SOLD FOURIER TRANSFORM MASS SPECTROMETRY
("FTMS") EQUIPMENT OVER THE YEARS.
2. SAG HAS TRANSFERRED ITS REMAINING SUBUNIT AND COMPONENT FTMS INVENTORY,
UNDER BASI PURCHASE ORDER BE601441, DATED APRIL 11, 1996, WITH A
NEGLIGIBLE SAG BOOK VALUE, TO BASI FOR A TOTAL AMOUNT OF $100,000. THIS
AMOUNT OF US $100,000 WILL BE THE FINAL AND ONLY INVOICE TO BE ISSUED
BY SAG TO BASI FOR BE601441, AND ALL OTHER INVOICES FOR THIS PURCHASE
ORDER NO. WILL BE CREDITED OUT BY SAG.
3. AS OF JULY 1ST, 1996, SAG HEREBY TRANSFERS AND / OR EXCLUSIVELY
LICENSES TO BASI ALL ITS WORLDWIDE FTMS INTELLECTUAL PROPERTY RIGHTS,
INCLUDING BUT NOT LIMITED TO FTMS INVENTIONS, PATENTS, PATENT
APPLICATIONS, COPYRIGHTS, TRADEMARKS AND TRADEMARK APPLICATIONS, AND
ALL FTMS KNOW-HOW, TRADE-SECRETS, TECHNICAL AND BUSINESS INFORMATION
RELATING TO FTMS, VALUED AT US $100,000.
4. SAG MAKES NO WARRANTIES AND REPRESENTATIONS ABOUT USEABILITY OF
INVENTORIES, UPPER LIMIT ON TRANSFERRED SERVICE LIABILITY, VALIDITY AND
ENFORCEABILITY OF INTELLECTUAL PROPERTY, OR ANY OTHER WARRANTY, UNLESS
EXPLICITLY STATED IN THIS AGREEMENT. BASI DOES NOT ASSUME ANY PRODUCT
OR PATENT LIABILITY FOR SAG SALES, OR ANY OTHER SAG CONTRACTUAL OR
OTHER LIABILITY, IF ANY, UNLESS EXPLICITLY AGREED UPON IN THIS
AGREEMENT.
FOR SAG: FOR BASI:
/s/ WERNER SCHITTENHELM /s/ JOHN WRONKA
- --------------------------- ------------------------
WERNER SCHITTENHELM, DIRECTOR DR. JOHN WRONKA, V.P.
<PAGE>
ATTACHMENT A: LIST OF SAG FTMS CUSTOMERS
<PAGE>
<TABLE>
<CAPTION>
Institution and Address Installation Spectrometer
- ------------------------- ------------ -------------
- ------------------------- ------------ -------------
<S> <C> <C>
Dr. Rick Willis 11.95 BioAPEX 47E
Australian Institute of Marine Sciences ESI, MALDI, APCI
PMB No. 3 NanoSPRAY
Townsville, M.C. GC, EI/CI, SIMS
Q1d. 4810 AUSTRALIA QEA, Pulsed Valves
Phone: 61 77 789 375
Fax: 61 66 625 752
EMAIL: [email protected]
Prof. Jon Amster 1.96 BioAPEX 70e
University of Georgia ESI and MALDI
Chemistry Department
Athens, GA 30602
Phone: 706 542-2001
Fax: 706-542-9454
EMAIL: [email protected]
Prof. Terrance B. McMahon 6.95 CMS to APEX Upgrade
Department of Chemistry
University of Waterloo
Waterloo, Ontario N2L 3G1 CANADA
Phone: 519 888 4591
Fax: 519 746 0435
EMAIL: [email protected]
Prof. Einar Uggerud 6.95 BioAPEX 47e
University of Oslo ESI and MALDI
Postboks 1033 Blindern EI/CI
N-0315-Oslo Laser Vaporization Cluster
Norway Source
Phone: 47 22 85 55 37
Fax: 47 22 85 54 41
email: [email protected]
Prof. Roger Giese 2.95 APEX 47e with GC/MS
Barnett Institute
Mugar Building
Northeastern University
Boston, MA 02115 USA
Phone: 617 373 3227
Fax: 617 373 8720
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Chinese University of Hong Kong 10.94 BioAPEX 47e
Department of Chemistry Electrospray Ionization
Dr. Dominic Chan MALD Ionization
Shatin, New Territories
HONG KONG
Phone: 85 2 2 609 6344
Fax: 85 2 2 603 5057
University of Florida 2.94 APEX 70e
Department of Chemistry Infinity Cell
Professor John Eyler EI/CI Source
Gainesville, Florida Glow Discharge
USA Electrospray Ionization
Phone: 904 392-0532
Fax: 904 392-0872
Brigham Young University 1.94 APEX 47e
Department of Chemistry Infinity Cell
Dr. Dave Dearden EI/CI Source
Salt Lake City, Utah Pulsed Valve
USA
Phone: 801 378 2355
Fax: 801 378 5474
EMAIL: [email protected]
FOM-AMOLF 11.93 APEX 70e
Atomic and Molecular Physics Infinity Cell
Professor Jaap Boon EI/CI Source
Kruislaan 407 Pyrolysis Source
1098 SJ Amsterdam
THE NETHERLANDS
Phone: 31 20 608 1234
Fax: 31 20 668 4106
EMAIL: [email protected]
Prof. Luc VanVaeck 92 APEX 47e
Department of Chemistry Laser MicroFocus
University of Antwerp
Universiteitsplein 1
B-2160 Wilrijk
BELGIUM
Phone: 32 3 820 2348
Fax: 32 3 820 2249
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Agency for Defense Development 92 APEX 70e
Dept. ATRC-6-6 EI/CI Source
Dr. Hwang SIMS Ionization
Yuseong, Taejon Excimer Laser Dissociation
THE REPUBLIC OF KOREA
University of Rome `La Sapienza' 92 APEX 47e
Institute of Pharmaceutical Chemistry Infinity Cell
Professor Fulvio Cacace Nd:YAG Laser Desorption
Piazza Aldo Moro 5 EI/CI Source
00185 Rome
ITALY
Phone: 39 49 913 698
Fax: 39 49 913 888
Technical University of Berlin CMS 70X
Institute for Organic Chemistry EI/CI Source
Professor Helmut Schwarz GC Interface
Strasse des 17 Juni 135 FAB Ionization
1000 Berlin Two Pulsed Valves
GERMANY Laser Desorption
Phone: 49 30 314 23483
Fax: 49 30 314 21102
Technical University of Munich CMS 47X
Institute for Physical and Theoretical Laser Desorption
Chemistry
Professor Vladimir Bondybey
Lichtenbergstrasse 4
8046 Garching
GERMANY
Phone: 49 89 3209 3426
Fax: 49 89 3209 3418
Email: Dr. Gereon Niedner-
Scahttebourg, [email protected].
chemie.tu-muenchen.de
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Miami University CMS 47X
Dr. Carolyn Cassady EI/CI Source
Dept. of Chemistry Pulsed Valve
112, Hughes Hall
Oxford, Ohio 45056
USA
Phone: 513 529 2494
Fax: 513 529 1667
University of Waterloo CMS 47X
Department of Chemistry Infinity Cell
Professor Terry McMahon Pulsed Valve
Waterloo, Ontario N2L 3G1
CANADA
Phone: 519 888 4591
University of Bielefeld CMS 47X
Faculty for Chemistry Infinity Cell
Professor H.-Fr. Gruetzmacher EI/CI Source
Universitaetstrasse 25 Laser Desorption
4800 Bielefeld
GERMANY
Phone: 49 521 106 2072
Fax: 49 521 106 6146
email: [email protected]
bielefeld
University of Bremen CMS 70
Natural Sciences II Laser Desorption
Prof. K.-P. Wanczek
Loebenerstrasse
2800 Bremen 33
GERMANY
Phone: 49 421 218 3402
Fax: 49 421 218 7215
University of Amsterdam CMS 47X
Institute for Mass Spectrometry EI/CI Source
Professor Nico Nibbering FAB Ionization
Nieuwe Achtergacht 129
1018 Amsterdam
THE NETHERLANDS
Phone: 31 205 255 457
Fax: 31 205 256 971
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Wiomi Pty. Ltd. CMS 47X
Dr. D.M. Kemp GC Interface
P.O. Box 3063 SIMS Ionization
0001 Pretoria
SOUTH AFRICA
Ecole Polytechnique CMS 47X
Chemistry Department EI/CI Source
Prof. Audier Pulsed Valve
91128 Palaiseau
FRANCE
Phone: 33 1 693 34878
Fax: 33 1 693 33010
Academy of Internal Affairs CMS 47X
Institute of Criminalistics GC Interface
Mrs. Krystyna Zawalska FAB Ionization
Ksawerov 13 Laser Desorption
00-904 Warsaw
POLAND
SASOL Technology Ltd. CMS 47X
Instrumental Techniques EI/CI Source
Research & Development GC Interface
Dr. Abrie Augustyn Laser Desorption
9570 Sasolburg
SOUTH AFRICA
Technical University Darmstadt CMS 47
Institute for Physical Chemistry
Dr. Manfred Irion
Petersenstrasse 20
6100 Darmstadt
GERMANY
Phone: 49 61 511 65438
Fax: 49 6151 166015
Consejo Superior de Investigaciones CMS 47
Cientificas Pulsed Valve
Instituto Rocasolano
Dr. J.-L. Abboud
Serrano 119
28006 Madrid
SPAIN
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Russian Academy of Sciences CMS 47
Institute of Chemical Physics
Professor V.L. Talrose
Ul. Kosygina 4
117987 Moscow GSP-1
RUSSIA
University of New South Wales CMS 47
School of Chemistry Solid Probe
Professor Gary Willett Nd:YAG Laser Desorption
Kensington 2033
NSW AUSTRALIA
Phone: 61 2 697 4723
Fax: 61 2 662 2835
University of Nice CMS 47
Laboratory for Physical Organic
Chemistry
Dr. Jean-Francois Gal
Parc Valrose
06034 Nice Cedex
FRANCE
Phone: 33 93 529 852
Fax: 33 93 529 919
Institute of Chemical and Biological CMS 47
Physics
Professor E.T. Lipmaa
Lenini Priestee 10
2000001 Tallinn
ESTONIA
Institute for Catalysis CMS 47
Dr. S. Iwanow
Prospekt Nauki 7
630090 Novosibirsk 90
RUSSIA
</TABLE>
<PAGE>
EXHIBIT 2.2
CERTIFIED COPY
/crest/
Document
of
Dr. Stiegeler
Notary
Karlsruhe Notary's Offices
Helmholtzstrasse 9 - 76133 Karlsruhe
P. O. Box 46 08 - 76030 Karlsruhe
Telephone: 07 21/9 26-62 63
DOCUMENT REGISTER 2 UR 4682/98
Bruker Daltonics, Inc.,
44 Manning Road, Billerica, MA 01821
USA
Order No. 1115 document cover (VB 2.79)
<PAGE>
2 UR 4682/98
PUBLIC DOCUMENT
of
Dr. Stiegeler
Notary
NOTARY'S OFFICE 2, KARLSRUHE
Helmholtzstrasse 9, 76133 Karlsruhe
Telephone: 0721/926-6263
concerning the
TRANSFER OF AN
INTEREST IN A GmbH
PLACE OF NOTARIAL RECORDING:
Helmholtzstrasse 9-11, Karlsruhe
DATE OF NOTARIAL RECORDING:
December ninth,
nineteen hundred ninety-eight
- December 9, 1998 -
<PAGE>
Present:
1. Ms. Isolde Laukien nee Mahler, born January 4, 1940, residing at
Silberstreifen 8, 76287 Rheinstetten
acting as sole executive of
BRUKER-PHYSIK AKTIENGESELLSCHAFT
located in Rheinstetten (Silberstreifen 4, 76287 Rheinstetten)
listed in the Commercial Register of the Karlsruhe Amtsgericht [District
Court], HRB 84.
The notary has certified this power of representation based on inspection
of the Commercial Register of the Karlsruhe District Court on December 4,
1998.
2. Mr. Jorg Laukien, born December 10, 1954, residing at Uhlandstrasse 10,
76275 Ettlingen,
acting on his own account, and for account of
the other heirs of the late Prof. Dr. Gunter Rudi Fritz Laukien
as listed in the joint certificate of inheritance dated July 21, 1997
(Notary's Office 2, Karlsruhe - Probate Court - 2 GRN 157/97), the original
of which is present today, a photocopy of which is attached to this
document, the conformity of which with the original is hereby certified,
based on the power of attorney dated May 15, 1998, submitted in the
original, returned, and a photocopy of which is attached to this document,
the conformity of which with the original is hereby certified.
3. Mr. Frank H. Laukien, born February 4, 1960, residing at 12 Smith Hill
Road, Lincoln, MA 01773, USA,
acting as President and Authorized Representative for
BRUKER DALTONICS, INC., 44 MANNING ROAD, BILLERICA, MASSACHUSETTS 01821
who submitted the originals of the elements of proof adjoining this
document.
After their identities were established by means of Federal identity
cards/passports, the persons appearing before me made the following declaration:
<PAGE>
-3-
AT THE REQUEST OF THE PERSONS APPEARING BEFORE ME, I HEREBY DOCUMENT THEIR
DECLARATIONS, WHICH THEY MADE WHILE BEING PRESENT TOGETHER AT THE SAME TIME, AS
FOLLOWS:
I.
PRELIMINARY REMARKS
1. The
BRUKER DALTONIK GmbH
company, with headquarters in Bremen, is listed in the Commercial Register
of the Bremen District Court HRB 8150.
2. The nominal capital of the company is DM 5,000,000.00.
3. The nominal capital is held as follows:
a) Bruker Physik AG
Rheinstetten,
A participating share in the amount of DM 1,275,000.00
b) Community of heirs of Prof. Dr. G. Laukien
A participating share in the amount of DM 3,725,000.00
4. According to information from the parties concerned, the nominal capital is
fully paid in.
<PAGE>
-4-
II.
TRANSFER OF INTEREST
The appearing parties as defined in paragraph 1 above hereby transfer their
interest in the amount of DM 1,275,000.00 in the above-mentioned GmbH, along
with all rights and in rem components in exclusive rights, to the appearing
parties as defined in paragraph 3 above.
The appearing parties as defined in paragraph 2 above hereby transfer their
interest in the amount of DM 3,725,000.00 in the above-mentioned GmbH, along
with all rights and in rem components in exclusive rights, to the appearing
parties as defined in paragraph 3 above.
Agreement has been reached concerning this transfer of rights. The transferee
accepts this transfer. Security of the trade relationship is not desired.
III.
TERMS/CONSIDERATION
1. The transfer made today is effective as of today's date.
2. The transferee is entitled to the claim on a pro rata share in annual net
profits for previous years and the current year, unless already paid out to
the shareholders.
3. The contract price for the transferred interests is DM 9,030,000.00 (in
words: nine million thirty thousand). Of that amount, the community of
heirs receives DM 6,727,350.00 and Bruker Physik AG receives DM
2,302,650.00.
4. The contract price must be paid by December 31, 1998.
- 5 -
<PAGE>
-5-
IV.
GUARANTEE
The transferor guarantees only the existence of the interest, the fact that it
is paid up in the amount indicated, and the free and unfettered transfer of
rights. More extensive liability, specifically for the quality of the business
undertakings of the company, is ruled out.
V.
CONSENT
Pursuant to the partnership agreement, no consent of the company/shareholders is
required for today's transfer of interest. By way of precaution, this consent is
hereby given.
The manager here present, Mr. Frank Laukien, hereby accepts the application for
transfer.
VI.
COSTS
All costs associated with this document and any inheritance taxes shall be paid
by the appearing party as defined in paragraph 3 above. The bill of charges
shall be sent to the Wangler Law Offices.
VII.
CONCLUSION
The notary informed those present of the Beurkundungsgesetz [Document
Authentication Act], specifically section 16 GmbHG [Law on Limited Liability
Companies], section 24 GmbHG, and the joint and several liability for costs of
the interested parties. According to information provided by the interested
parties, the company has real property in Bremen and Leipzig.
<PAGE>
-6-
The interested parties expressly waived verification by the notary of the
information regarding the content of the partnership agreement.
The notary recommended that tax professionals be consulted for purposes of
obtaining tax advice and information.
CONCLUSION:
1. The notary provided the requisite information. Specifically, he informed
the parties of the liability of transferors and transferees with respect to
shares not fully paid in, the risk of advance performance, as well as the
need to document any collateral agreements.
The notary mentioned the duty of the general manager, pursuant to section
40 GmbHG, to file a revised shareholder list with the registration court.
2. The following are to be distributed:
- a certified photocopy to each of the interested parties;
- a certified photocopy to the Bremen Tax Office, pursuant to section 54
EStDV [Income Tax Implementing Regulation]
- a certified photocopy for information to: Wangler Law Offices,
Kriegsstrasse 133, 76135 Karlsruhe
- announcement of the transfer to the registration court, Bremen
District Court
- 2 certified photocopies to the Bremen Tax Office
- Real Property Transfer Tax Office -
- 2 certified photocopies to the Leipzig Tax Office
- Real Property Transfer Tax Office -.
The notary read the foregoing document aloud to the interested parties; it was
approved by them, and signed by hand by them and by the notary, as follows:
/signatures/
<PAGE>
ACKNOWLEDGMENT OF TRANSLATION
April 13, 2000
The undersigned officer of the Registrant hereby acknowledges on behalf
of the Registrant that the foregoing translation of the Share Purchase
Agreement dated December 9, 1998 among the Registrant, Bruker Physik AG and
the estate of Dr. Guenther R. Laukien is a fair and accurate English
translation from German of the original executed agreement.
BRUKER DALTONICS INC.
By: /s/ David E. Plunkett
--------------------------------
Name: David E. Plunkett
Title: Treasurer
<PAGE>
Exhibit 2.3
Thomas Kuehn, Ph.D., President
May 28, 1999
May 28, 1999
VIA TELECOPIER (301) 320-1690
Thomas Kuehn, Ph.D., President
Viking Instruments Corporation
c/o Woodmont Asset Management, Inc.
6403 Kirby Road
Bethesda, MD 20817
Dear Dr. Kuehn:
As you are aware, on May 25, 1999, the Bankruptcy Court extended the time
to submit offers to purchase the business and assets of Viking Instruments
Corporation ("Viking") until June 8, 1999. The following constitutes Bruker's
final offer for it or its nominee to acquire from Viking the business and
certain assets of Viking for One Hundred Fifty Thousand Dollars ($150,000.00)
cash, including an initial advance in the amount of up to Thirty Thousand
Dollars ($30,000.00) as post-petition debtor-in-possession financing to be
credited to the purchase price (such initial advance being referred to herein as
the "DIP Financing"), subject to the terms set forth in this letter. This offer
replaces and supercedes all previous offers to Viking.
Bruker continues to believe that a prompt approval of a sale to it and
closing of the transaction remain absolutely critical to the viability of this
offer. Every day of delay runs the risk of further diminishing the goodwill of
Viking and its value as an ongoing business. Bruker believes that this offer is
in the best interests of all parties, including Viking's employees, creditors,
vendors and customers, and urge that it be considered promptly. It is urgent
that the steps referred to below proceed as expeditiously as possible if this
transaction is to succeed.
<PAGE>
Thomas Kuehn, Ph.D., President
May 28, 1999
I. Objectives
Bruker has certain key objectives which must be realized if this offer to
purchase the business and certain assets of Viking is to be consummated.
First, it is critical that the goodwill of the business be preserved.
Thus, Bruker would contemplate a closing as soon as practicable but not later
than June 23, 1999. In the interim, it is important that satisfactory
arrangements be made to preserve relationships with existing customers of
Viking.
Second, a significant asset of Viking is its organization. All parties
must act quickly if the Viking organization, with its many skills and talents,
is to remain intact. As a condition to the closing of the transaction, Bruker
would expect that the following Viking employees would become employees of, or
consultants to, Bruker: Thomas Kuehn, Ph.D.; Mark Wilson, Ph.D.; Yuchi Huang,
Ph.D., Brian Eckenrode, Ph.D.; Paul Groves; and Ken Cope (the "Employees"). As
set forth below, Bruker contemplates that, between the time this offer is
accepted and the close of business on June 7, 1999, it shall obtain from each of
the Employees agreements (on terms acceptable to Bruker in its sole discretion)
that the Employees will make themselves available to be employed by, or
consultants to, Bruker.
Third, Bruker must be able to acquire the tangible and intangible assets
described below free and clear of all liens, claims, interests and encumbrances
of any kind. Bruker understands that, on October 29, 1998, Viking filed under
Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code"). Given
Viking's present financial condition, Bruker believes that the transactions
outlined in this letter will not be possible except under the umbrella of court
supervision.
Fourth, it is contemplated that after the closing Viking's business will
be integrated into Bruker as a focused business unit. Brian Abraham, Ph.D. of
Bruker will oversee the transition of the assets and business acquired pursuant
to this offer to Bruker's operations in Massachusetts.
To accomplish these objectives, Bruker is prepared to purchase certain
assets of Viking, and pending consummation of this purchase (and subject to the
limitations contained herein) to provide Viking, as additional consideration for
the purchase, with the DIP Financing.
- 2 -
<PAGE>
Thomas Kuehn, Ph.D., President
May 28, 1999
II. The Acquisition
A. Assumption of Liabilities. Bruker will not assume any liabilities of Viking
of any kind.
B. Included Assets. Bruker will acquire all of Viking's assets other than the
Excluded Assets identified below (the "Included Assets"), including, without
limitation the following:
a. Intangible Assets. The assets to be acquired include all
intangible assets of Viking of every kind, including but not
limited to (i) all Viking trademarks and associated goodwill,
including registration and applications for registrations,
renewals and extensions; (ii) all patents, patent
applications, interest in inventions, know-how, trade secrets,
confidential information, techniques, specifications,
schematics, and logic diagrams including, without limitation,
all patents for or related to the Transportable Gas
Chromatograph Mass Spectometer; (iii) interest in customer
lists, sales prospect lists including, without limitation, all
files and records related to transactions with customers of
all kinds; (iv) copyrights and interest in copyrightable
subject matter, including, without limitation, all works of
authorship, software, firmware, microcode, computer programs,
documentation and designs, and unregistered trade names
including SpectraTrak, SpectraScan, Viking GC/MS, and Viking
Instrument; (v) all rights, including without limitation, all
intellectual property rights, under Viking's contracts with
its employees, contractors and consultants; (vi) all right,
title and interest in SpectraScan(TM) Software Operating
System for SpectraTrak 573 System including the object and
source code and the copyrights thereto; and (vii) all right,
title and interest in SpectraTrak(TM) Model 573 Transportable
GC/MS Design Package including mechanical design drawings,
electrical and wiring harness design drawings and bill of
materials.
b. Machinery, Equipment, Furnishing, Fixtures, and Supplies. The
transaction would include all machinery, equipment (including,
without limitation, computers, printers and laboratory
equipment), furniture, fixtures, and supplies of Viking.
c. Work in Process. In addition, the transaction includes an
assignment of so much of Viking's present work in process as
shall not have been filled as of the closing of this
transaction and any additional work in process which may be
developed by Viking during the period of the DIP Financing and
not filled as of the closing of this transaction, subject to
any required consents of third parties (collectively, the
"Work In Process"), including but not limited to unfilled
purchase orders and other contract rights related to the order
from Viking customers for Viking products; provided, however,
that Bruker reserves the right not to accept an assignment of
those Work In Process orders which Bruker, upon further review
and in its sole discretion, determines not to accept for
credit or any other reason.
- 3 -
<PAGE>
Thomas Kuehn, Ph.D., President
May 28, 1999
Bruker shall notify Viking in writing on or before June 22,
1999 whether it intends not to accept any Work In Process
orders.
d. Certain Leases and Executory Contracts. In addition, the
transaction would include the assumption and assignment of
such leases and executory contracts of Viking as Bruker may
deem appropriate, which leases and executory contracts shall
be identified by Bruker at any time before closing or within
30 days thereafter. Viking shall take any and all steps,
including obtaining any necessary orders from the Bankruptcy
Court, and pay any and all cure and/or compensation amounts,
necessary to effectuate the assumption and assignment of the
identified leases and executory contracts.
e. Inventory. All inventory, including without limitation: all
raw materials; all finished products; all manufacturing
inventory including, without limitation, all SpectraTrak(TM)
Model 573 GL sub-assemblies, SpectraTrak(TM) Model 572 chassis
components and GL sub-assemblies and all mechanical,
electronic, and vacuum components and parts; all open stock;
all service parts inventory including, without limitation, all
new and used parts for SpectraTrak(TM) Models 600, 620,
SpectraTrak(TM) Model 572 Transportable GC/MS and
SpectraTrak(TM) Model 772 Process GC/MS, SpectraScan operating
system software master duplication disks for SpectraTrak(TM)
Models 620, 672, 572 and 772 and operating, maintenance,
specifications, and design documents and manuals for
out-of-production ST600, 620, 672, 572, 772 and other
prototype products.
f. Listed Assets. Without limiting any of the foregoing, the
Included Assets includes the assets listed on the attached
Exhibit A.
C. Excluded Assets. The transaction would exclude (1) all causes of action
pursuant to Section 544, 547, 548, 549 and 550 of the Bankruptcy Code (11 U.S.C.
ss.ss.101 et seq.) ("Avoidance Actions"), (2) any cash of Viking on hand as of
the closing of the sale, (3) any accounts receivable and (4) any executory
contracts not specifically assumed and assigned to Bruker in accordance with the
terms of this Letter Agreement.
D. Purchase Price. In consideration for the Included Assets, Bruker shall pay
Viking One Hundred Fifty Thousand Dollars ($150,000.00) (the "Purchase Price")
in immediately available funds at the closing of the sale the Assets subject to
the satisfaction of the conditions set forth below.
E. Conditions This offer is subject to the following conditions, all of which
must be satisfied by the date indicated, or if no date is indicated, prior to
the closing, unless waived in writing by Bruker:
- 4 -
<PAGE>
Thomas Kuehn, Ph.D., President
May 28, 1999
1. It shall have been accepted in writing by Viking or Viking's
successor in interest entitled to so accept by signing and returning
to the undersigned a copy of this letter no later than 5:00 p.m.
(Boston time) on June 2, 1999.
2. The sale of the Assets shall have been authorized and confirmed by
order of a Bankruptcy Court Judge having authority to do so (the
"Sale Order") on or before June 8, 1999, upon proper notice to all
creditors of Viking's bankruptcy estate and other parties entitled
to such notice by the Federal Rules of Bankruptcy Procedure or by
the Local Bankruptcy Rules of the United States Bankruptcy Court for
the Eastern District of Virginia, or otherwise by operation of law,
with the appeal period from such order having finally passed without
a notice of appeal having been filed, or each appeal having been
dismissed or withdrawn within thirty (30) days after such notice was
filed. At Bruker's option, the closing may take place if an appeal
is filed, but no stay pending appeal has been issued.
3. The Sale Order referenced above shall have authorized the transfer
of title to the Included Assets free and clear of liens,
encumbrances, interests, security interests, taxes and adverse
claims of every nature and character. To the extent a complaint must
be filed in the Bankruptcy Court to accomplish the foregoing, a
judgment shall have entered thereon in the Plaintiffs favor and
proof of service on all Defendants shall have been filed of record
with the Bankruptcy Court. In addition, the Sale Order shall contain
a specific finding that Bruker is purchasing the Assets in good
faith; (b) be substantially similar to the form of order attached
hereto as Exhibit B, and (c) otherwise be satisfactory to Bruker.
4. The DIP Financing shall have been authorized and confirmed by an
interim and final order of a Bankruptcy Court Judge having authority
to do so (the "DIP Financing Order") entered contemporaneously with
the entry of the Sale Order, upon proper notice to all creditors of
Viking's bankruptcy estate and other parties entitled to such notice
by the Federal Rules of Bankruptcy Procedure or by the Local
Bankruptcy Rules of the United States Bankruptcy Court for the
Eastern District of Virginia, or otherwise by operation of law, with
the appeal period from such order having finally passed without a
notice of appeal having been filed, or each appeal having been
dismissed or withdrawn within thirty (30) days after such notice was
filed. At Bruker's option, funding under the DIP Financing may take
place if an appeal is filed, but no stay pending appeal has been
issued.
5. The DIP Financing Order shall have authorized the DIP Financing on
the terms and conditions set forth below. In addition, the DIP
Financing Order shall contain a specific finding that Bruker is
furnishing the DIP Financing in good faith; (b) be substantially
similar to the form of order attached hereto as Exhibits C, and (c)
otherwise be satisfactory to Bruker.
6. A Bankruptcy Court having jurisdiction over Viking's Chapter 11 case
and authority to do so shall have entered the Procedure Order (as
hereinafter defined).
- 5 -
<PAGE>
Thomas Kuehn, Ph.D., President
May 28, 1999
7. After the acceptance of this offer, Bruker shall have met with the
Employees and, no later than June 7, 1999, shall have received from
each of the Employees agreements that the Employees will make
themselves available to be employed by, or consultants to, Bruker on
terms acceptable to Bruker.
8. Bruker shall have the right to rescind this Offer if between the
date hereof and the Closing there shall be a material adverse change
in the condition of the Included Assets, irrespective of whether or
not they shall have been insured; provided, however, that Bruker,
with respect to each of the Included Assets not in the same
condition, shall have the right at its election to complete the
purchase contemplated hereby and either (a) become entitled to all
insurance proceeds collected or to be collected by reason of damage
to or loss of the respective Asset or (b) receive a credit against
the Purchase Price for the diminution in the fair market value of
the respective Asset by reason of damage to or loss of such Asset.
So long as the value of the Assets shall not have been diminished by
more than Twenty-Five Thousand Dollars ($25,000.00) in the aggregate
as a result of changes in their condition, Bruker shall not exercise
its right to rescind this Offer and, thereby terminate this
Agreement, but rather will complete the purchase and exercise one of
the options above.
9. There shall be no injunction, restraining order, or order of any
nature issued by a court of competent jurisdiction, restraining or
preventing the carrying out of the transactions contemplated hereby,
and no proceeding challenging this transaction shall have been
instituted or threatened.
10. Execution of security documentation for the DIP Financing referred
to below, in form and substance satisfactory to Bruker.
11. Unless extended by Bruker, as provided below, closing not later than
June 23, 1999 (the "Closing Date").
12. By June 7, 1999, Bruker shall have received (a) the certified
year-end financials of Viking for fiscal year 1998, and (b) the
financials of Viking for January, February and March, 1999
(collectively, the "Financials"); and further said Financials shall
not vary from the representations made to Bruker regarding the
condition of Viking.
13. Bruker being satisfied (in its absolute discretion) with the results
of a due diligence investigation to be completed by Bruker and/or
its representative by 6:00 p.m. (Boston time) June 22, 1999 (the
"Diligence Deadline") including but not limited to satisfaction that
Bruker will have available to it all resources necessary for the
continued operation of Viking's business on acceptable terms. If
Bruker is not satisfied with its due diligence, it shall so notify
Viking in writing by the Diligence Deadline and upon such notice
this offer and the Sale Order shall be of no further force or
effect, and neither Viking nor Bruker shall have any liability or
obligation to the other arising from or related to this offer and
the Sale
- 6 -
<PAGE>
Thomas Kuehn, Ph.D., President
May 28, 1999
Order and the transaction contemplated hereby, other than in respect
of the DIP Financing. In addition, Bruker shall have the right in
its sole discretion on or before the Diligence Deadline not to
accept any Work In Process order. Bruker shall have no liability for
or any obligation under any Work In Process not accepted.
14. On or before the Closing Date, Viking shall obtain authority from
the Bankruptcy Court or from its landlord that authorizes Bruker to
enter and occupy the premises located at 44901 Falcon Place, Suite
116, Dulles, Virginia (the "Premises") from the Closing Date up to
and including August 31, 1999, to operate Viking's business and/or
to remove the Included Assets on terms where Bruker's only
obligation is to pay on Viking's behalf, in accordance with the
terms of its lease for the Premises, the current rent due under that
lease for the period from the Closing Date through and including
August 31, 1999.
15. Promptly upon Viking's acceptance of this offer, Viking will proceed
to seek authority from the Bankruptcy Court (a) to sell the Included
Assets and obtain the DIP Financing and otherwise to perform in
accordance with this offer and (b) use its best efforts to obtain a
Bankruptcy Court order approving the sales procedures described in
Article IV of this offer (the "Procedure Order").
F. Closing of Acquisition. There shall be a closing of the acquisition within
thirty (30) business days following the entry of the Sale Order of the
Bankruptcy Court as contemplated under the Conditions sections of this offer;
provided that the closing shall occur no later than June 23, 1999 except as
provided below. If the closing shall not have occurred by such date, Bruker
shall have the right, at its sole election and from time to time, to extend such
period for one or more additional periods of not more than 10 days each by
giving written notice thereof to Viking prior to the expiration of the then
current period, except that Bruker may not, without the written consent of
Viking, extend such period for more than 90 days from the date of this letter.
At the closing, Viking shall execute and deliver to Bruker such bills of sale,
assignments and other instruments of transfer and documentation as Bruker may
request, in form and substance acceptance to Bruker.
III. The DIP Financing
As additional consideration for the purchase contemplated hereby, Bruker
would provide to Viking, from and after the entry of the Sale Order through the
date of the acquisition, but in any event, no longer than through June 23, 1999,
financing for its post-petition operations in an amount not to exceed Thirty
Thousand Dollars ($30,000.00), subject to the following terms and conditions:
1. All DIP Financing extended by Bruker to Viking shall bear interest
at a rate per annum of 12% (such interest rate being referred to
herein as the "Interest Rate"); provided, however, that such
interest shall be waived and shall not be payable by Viking except
if the closing of the sale of the Included Assets to Bruker shall
not
- 7 -
<PAGE>
Thomas Kuehn, Ph.D., President
May 28, 1999
have occurred by June 23, 1999, the DIP Financing and all
accumulated interest thereon shall be immediately due and payable.
2. No DIP Financing shall be used to pay any pre-petition liabilities,
except as otherwise agreed to in writing by Bruker and approved by
the Bankruptcy Court.
3. Before the DIP Financing is extended, Bruker must be granted by
order of the Bankruptcy Court the following security interests and
protections to secure such DIP Financing (including any interest
payable pursuant to the provisions of this agreement and reasonable
costs of collection, including reasonable attorneys' fees) on such
terms and subject to such documentation as shall be acceptable to
Bruker:
a. The DIP Financing shall be secured by a first priority
security interest and lien in favor of Bruker on all assets of
Viking whether now owned or hereinafter acquired, pursuant to
ss.364(c)(2) of the Bankruptcy Code, which security interest
and lien shall be valid, fully perfected and enforceable by
action of law, provided, however, that this security interest
and lien shall not extend to Avoidance Actions and shall be
subordinate only to Hewlett-Packard Company's security
interest on certain Viking assets and securing a claim of not
more than $24,000.00;
b. The DIP Financing shall be an obligation of Viking with
priority over all administrative expenses of the kind
specified in ss.ss.503(b) or 507(b) of the Bankruptcy Code,
pursuant to ss.364(c)(1) of the Bankruptcy Code; and
c. Bruker shall be deemed to be a good faith lender, pursuant
to ss.364(e) of the Bankruptcy Code.
4. As a condition to such DIP Financing, the Bankruptcy Court must have
entered the DIP Financing Order in the form attached as Exhibit C,
which among other things, prescribes various events of default and
authorizes the borrowing by Viking and granting to Bruker the
security interests and protections described above, and Bruker must
be provided a certified copy of such orders.
5. During the period any DIP Financing is outstanding, and as a
condition to the extension of such DIP Financing by Bruker, Viking
shall provide Bruker with copies of Viking's monthly reports of cash
flow and expenditures filed with the United States Trustee's office,
such copies to be provided to Bruker when and as filed with such
office; and, by the third business day of each week, a report
substantially the same as such reports filed with the United States
Trustee, containing substantially the same information with respect
to the preceding week.
6. The proceeds of any DIP Financing provided by Bruker to Viking shall
be used and applied only in accordance with a weekly budget of cash
receipts and disbursements for the period June 9, 1999 through and
including June 23, 1999,
- 8 -
<PAGE>
Thomas Kuehn, Ph.D., President
May 28, 1999
prepared by Viking and submitted to Bruker for approval at least
twenty-four (24) hours earlier than the earliest to occur of (a) the
first date scheduled for a hearing on the DIP Financing and (b) June
8, 1999. Bruker's advances under the DIP Financing shall be made
weekly in accordance with the expected needs under such an approved
budget. It shall be an event of the default and the full amount of
all DIP Financing together with accrued interest at the Interest
Rate shall immediately become due if for any individual week,
without Bruker's written consent, (1) Viking's actual cash receipts
are less than ninety percent (90%) of budgeted cash receipts in any
one week or less than eighty-five percent (85%) of budgeted cash
receipts from the beginning of the budget through any given date; or
(2) Viking's actual disbursements for any budgeted line item in any
one week exceed budgeted amounts for that line item in that week by
more than 10%, or (3) Viking's actual disbursements for all budgeted
line items on a cumulative basis at any given time during the budget
period exceed all budgeted disbursements as of that time by 25%. By
Wednesday of each week, Viking shall provide Bruker with a report
showing any variance between its actual performance and its budget
performance through the prior Friday on a weekly and cumulative
basis.
7. Notwithstanding anything to the contrary contained elsewhere herein,
all outstanding DIP Financing plus interest at the Interest Rate
shall become immediately due and payable upon the sale of all or any
material portion of the Included Assets, individually or
collectively, to one or more persons or entities other than Bruker
or its nominee, or the termination of this offer pursuant to Article
II, ss.ss.8 and 13.
8. Any DIP Financing which does not otherwise become due and payable by
Viking in accordance with the foregoing provisions shall be repaid
by Viking on the sale or other disposition of any assets in which
Bruker is granted a security interest hereunder.
9. In addition to any other rights granted to it hereunder, Bruker
shall have the right to obtain and make copies of all files and
records of Viking related to any assets in which Bruker is granted a
security interest hereunder for the purpose of collecting any monies
owed to Bruker under the DIP Financing; and, if Viking sells or
otherwise disposes of any such assets, it shall make reasonable
arrangements to allow Bruker continued access to such files and
records for such purposes.
10. As a condition to the DIP Financing, the Bankruptcy Court shall have
entered the Sale Order authorizing the sale of the Included Assets
to Bruker.
11. At a closing of the sale of the Included Assets to Bruker in
accordance with the terms of this offer, the DIP Financing (without
interest) shall be credited against the Purchase Price.
IV. Sale of the Assets to a Third Party
- 9 -
<PAGE>
Thomas Kuehn, Ph.D., President
May 28, 1999
1. Bruker understands that its offer in this letter will be subject to
higher and better counteroffers before the Bankruptcy Court. Notwithstanding
this, Bruker, by this offer, has evidenced its strong desire to assist Viking in
resolving its immediate financial problems and, in doing so, has incurred, and
may in the future incur, material risks and costs, including but not limited to
the risks and costs of the DIP Financing, due diligence and negotiations with
the Employees which Bruker would not have offered or incurred except as part of
its integrated purchase offer set forth herein. Accordingly, in the event that a
third party submits a higher and better counteroffer, which is accepted by
Viking and approved by the Bankruptcy Court, Viking shall, concurrently with the
closing of such third party acquisition, pay or cause to be paid to Bruker: (i)
the full amount of all DIP Financing outstanding at the date of such third party
closing together with accrued interest at the Interest Rate from the date such
DIP Financing was provided plus (ii) the sum of Fifteen Thousand Dollars
($15,000.00), such amount representing an agreed amount to compensate Bruker for
its risks, costs and expenses associated with this transaction, including but
not limited to attorneys' fees. Furthermore, for a counteroffer to qualify as a
higher and better counteroffer, it must be at least five percent (5%) greater
than the Purchase Price.
2. Bruker also understands that Viking's acceptance of this offer is
subject to the condition that if there are any qualified counter-offers for the
Included Assets that the highest and best final offer for the Included Assets
shall be determined by traditional auction procedures rather than by the use of
sealed bids and hereby consents to such sale procedures.
3. As a condition to this transaction, the Bankruptcy Court must enter the
Procedure Order approving the provisions of this Article IV and the time line
for this transaction as set forth above such that the Sale Order is entered by
June 8, 1999.
- 10 -
<PAGE>
Thomas Kuehn, Ph.D., President
May 28, 1999
V. General
1. This agreement shall be governed by the laws of the Commonwealth of
Massachusetts, without giving effect to principles of conflicts of
laws.
2. This agreement may be executed in multiple counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
3. This agreement may not be amended or modified without the prior
written agreement of the parties. No waiver of any provision
contained herein shall be effective unless in writing and signed by
the party against which such waiver is sought to be enforced, nor
shall a waiver in any instance operate as a general waiver unless
expressly stated in such signed writing.
4. This agreement shall be binding upon the parties hereto and their
respective successors and assigns; provided, however, that Viking
may not assign any of its interests hereunder without the prior
written consent of Bruker.
5. Neither party shall be liable to the other for any consequential
damages arising out of or in connection with this agreement.
6. The provisions of this agreement and any rights, duties and
obligations pursuant hereto shall survive (a) the closing
contemplated hereby, (b) any sale to a third party, and/or (c) the
entry of any order which may be entered (i) confirming any plan of
reorganization, (ii) converting this case from Chapter 11 to Chapter
7, or (iii) dismissing this case; and the terms and provisions of
this agreement as well as the rights, duties and obligations
pursuant hereto shall continue in full force and effect
notwithstanding any such sale or the entry of any such order.
7. All notices, requests, demands or other communications required or
permitted hereunder shall be in writing and shall be deemed to have
been duly given when delivered by hand or mailed, first class
certified mail with postage prepaid or by overnight receipted
courier service, or when sent by confirmed telefax, to the intended
recipient at the address for notices specified below or, as to
either party, at such other address as shall be designated by such
party in any notice to the other party:
- 11 -
<PAGE>
Thomas Kuehn, Ph.D., President
May 28, 1999
If to Bruker:
Frank H. Laukien, Ph.D., President
Bruker Daltonics, Inc.
44 Manning Road
Billerica, MA 01821
with a copy to:
Andrew M. Troop, Esq.
Hutchins, Wheeler & Dittmar
A Professional Corporation
101 Federal Street
Boston, Massachusetts 02110
Fax: (617) 951-1295
If to Viking:
Viking Instruments Corporation
44901 Falcon Place, Suite 116
Dulles, Virginia 20166
Attention: Thomas Kuehn, Ph.D., President
Fax:
with a copy to:
John E. Carter, P.C.
10560 Main Street, Suite 311
P.O. Box 890
Fairfax, VA 22030
Fax:
- 12 -
<PAGE>
Thomas Kuehn, Ph.D., President
May 28, 1999
VI. Conclusion
Again, if this offer is acceptable, please so indicate by executing
a copy of this letter and returning it to Bruker no later than 5:00 p.m. (Boston
time) on June 2, 1999. If this offer is not accepted in writing by that time,
the offer shall be of no further force or effect.
Very truly yours,
BRUKER DALTONICS, INC.
By: /s/ Frank H. Laukien
------------------------------
Frank H. Laukien, Ph.D.
Its President, Duly Authorized
Agreed and Accepted:
By: /s/ Thomas J. Kuehn
-------------------------
Thomas Kuehn, Ph.D.
Its President, Duly Authorized
Date: June 2, 1999
--------------
- 13 -
<PAGE>
List of Assets for Sale by
Viking Instruments Corporation
1. Transportable Gas Chromatograph Mass Spectrometer Patent
a. International publication #WO 90/15658, "Miniaturized Mass Spectrometer
System" Awarded 12/27/90
b. US Patent #5,313,061, "Miniaturized Mass Spectrometer System" Awarded
5/17/94
c. European Patent #0476062, "Miniaturized Mass Spectrometer System" Dated
6/6/90
d. German Patent #690283041.0, "Miniaturized Mass Spectrometer System" Dated
6/6/90
e. UK Patent #2249662, "Miniaturized Mass Spectrometer System" Dated 6/6/90
f. Canada Patent #2,058,763-6, "Miniaturized Mass Spectrometer System"
Awarded 4/21/98
g. Japan Patent #Hei-2-509224, "Miniaturized Mass Spectrometer System",
(Pending)
2. SpectraTrak(TM) Model 573 Transportable GC/MS Design Package (Incomplete)
a. Mechanical design drawings
b. Electrical and wiring harness design drawings
c. Bill of materials
d. Operating and maintenance manual not available
e. Assembly drawings or schematics not available
f. Requires HP5973 mass selective detector OEM component kit for manufacture
and operation
3. SpectraScan(TM) Software Operating System for SpectraTrak 573 System
(Incomplete)
a. Copyright of user interface and code
b. Master duplication disk
c. Undocumented assembly code
d. Software manual not available
e. Requires OEM version of HP Chemstation 3.x license for operation
f. Requires OEM version of NIST mass spectral library license for operation
g. Requires Windows 95 and other software utility licenses for operation
4. Manufacturing Inventory and Open Stock
a. Miscellaneous SpectraTrak(TM) Model 573 GC subassemblies (2 sets)
b. Miscellaneous SpectraTrak(TM) Model 572 chassis components and GC
subassemblies (2 sets)
c. Miscellaneous mechanical, electronic, and vacuum components and parts
d. Inventory excludes any components, parts, and instruments manufactured by
Hewlett Packard
5. Service Parts Inventory, Documentation, and Service Contracts
a. Miscellaneous new and used parts for SpectraTrak(TM) Models 600, 620, and
672 Transportable GC/MS (1989-1997) with rack-mounted transport case
design
b. Miscellaneous new and used parts for SpectraTrak(TM) Model 572
Transportable GC/MS (1997-1998)
c. Miscellaneous new and used parts for SpectraTrak(TM) Model 772 Process
GC/MS (1995-1998)
d. SpectraScan operating system software master duplication disks for
SpectraTrak models 620, 672, 572, and 772 (requires HP Chemstation 2.x,
Windows 3.1, and other software utility licenses for operation)
e. Operating, maintenance, specifications, and design documents and manuals
for out-of-production and obsolete ST600, 620, 672, 572, 772 and other
prototype products
f. Service inventory excludes components, parts, and instruments manufactured
by Hewlett Packard
g. Current and on-going service contracts and warranty obligations
6. Marketing and Sales Assets
a. Customer list
b. Sales prospect list
c. Product literature and brochure copyrights
d. Unregistered software copyrights
e. Unregistered tradenames: "SpectraTrak", "SpectraScan", "Viking GC/MS",
"Viking Instruments"
<PAGE>
Exhibit 2.4
AGREEMENT
This Agreement, dated as of December 6th, 1999, is concluded by and
among Frank H. Laukien, with an address at 12 Smith Hill Road, Lincoln, MA 01773
(the "Seller"), and Bruker Daltonics, Inc., a Massachusetts Corporation with its
principal place of business at 15 Fortune Drive, Manning Park, Billerica, MA
01821 (the "Buyer").
WHEREAS, the Seller owns fifty thousand (50,000) shares (the "Shares")
of the Common Stock, $.01 par value per share, of ProteiGene, Inc., a Delaware
corporation (the "Company"); and
WHEREAS, the Buyer desires to purchase from the Seller the Shares,
NOW THEREFORE, in consideration of mutual covenants, promises and
agreements contained herein, as well as other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged by each of the parties
hereto, and intending to be legally bound hereby, the parties hereto agree as
follows:
1.0 PURCHASE AND SALE OF SHARES
No later than December 6th, 1999 (the "Closing"), the Seller will sell
to the Buyer the Shares for an aggregate purchase price of fifty thousand
dollars ($50,000). At or before the Closing, the Buyer shall make payment of the
aggregate purchase price to the Seller and the Seller shall deliver to each
Buyer a certificate representing the Shares purchased by the Buyer. The parties
shall also exchange such other documents and instruments as may be reasonably
requested by any of them.
2.0 REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Buyers as follows:
2.1 ORGANIZATION AND CORPORATE POWER. The Company and the Buyer are
each duly organized, validly existing and in good standing under the laws of the
jurisdictions of their organization and have all requisite power and authority
to own their properties and to carry on their businesses as presently conducted.
The Company and the Buyer are duly licensed or qualified to do business as a
foreign entity in each jurisdiction wherein the character of their property, or
the nature of the activities presently conducted by them, makes such
qualification necessary.
2.2 AUTHORIZATION. The Seller has all necessary power and has taken, or
will take before the Closing, all necessary action required for the due
authorization, execution, delivery and performance by the Seller of this
Agreement and any other agreements or instruments executed by the Seller in
connection herewith or therewith (collectively the "Related Agreements"), the
consummation of the transactions contemplated herein or therein, and for the due
authorization, issuance and delivery of the Shares. This
<PAGE>
Agreement and the Related Agreements will each be a valid and binding obligation
of the Seller enforceable in accordance with its respective terms.
2.3 GOVERNMENT APPROVALS. No consent, approval, license or
authorization of, or designation, declaration or filing with, any court or
governmental authority is or will be required on the part of the Seller in
connection with the execution, delivery and performance by the Seller of this
Agreement and any of the Related Agreements.
2.4 COMPLIANCE WITH LAWS AND OTHER INSTRUMENTS. The Seller is in
compliance with all of the provisions of this Agreement, and in all material
respects with the provisions of each mortgage, indenture, lease, license, other
agreement or instrument, judgment, decree, judicial order, statute, and
regulation by which it is bound or to which any of its properties are subject.
The execution, delivery or performance of this Agreement and the Related
Agreements with or without the giving of notice or passage of time, or both,
will not violate, or result in any breach of, or constitute a default under, or
result in the imposition of any encumbrance upon any asset of the Seller or the
Company pursuant to any provision of the charter or by-laws of the Seller or the
Company, or any statute, rule or regulation, contract, lease, judgment, decree
or other document or instrument by which the Seller or the Company is bound or
to which any of their respective properties are subject.
2.5 DISCLOSURES. Neither this Agreement, the Related Agreements, nor
any other agreement, document or written statement made by the Seller and
furnished by the Seller to the Buyer in connection with the transactions
contemplated hereby, contains any untrue statement of material fact or omits to
state any material fact necessary to make the statements contained herein or
therein not misleading.
2.6 SHARES. The Seller owns the entire right, title and interest in and
to the Shares, free and clear of any liens and encumbrances of any nature
whatsoever. The Shares are validly issued, fully paid and non-assessable.
3.0 REPRESENTATIONS AND WARRANTIES OF THE BUYERS
The Buyer hereby warrants to the Seller the following:
3.1 AUTHORIZATION. The Buyer has all requisite corporate power and
authority and has taken all necessary corporate action required for the due
authorization, execution, delivery and performance of this Agreement and the
Related Agreements and the consummation of the transactions contemplated herein
or therein. This Agreement and the Related Agreements to which the Buyer is a
party constitute legal, valid and binding obligations of such Buyer, enforceable
against such Buyer in accordance with their respective terms.
3.2 GOVERNMENT APPROVALS. No consent, approval, license or
authorization of, or designation, declaration or filing with, any court or
governmental authority is or
<PAGE>
will be required on the part of the Buyer in connection with the execution,
delivery and performance by the Buyer of this Agreement and the Related
Agreements.
3.3 INVESTMENT REPRESENTATIONS. The Buyer is acquiring the Shares
solely for its own account as an investment and not with a view to any
distribution or resale thereof in violation of the Securities Act of 1933, as
amended (the "Act"). The Buyer has been advised that the Shares have not been
registered under the Act or under the provisions of any state securities or
"blue sky" law. The Buyer, by accepting the Shares, agrees and acknowledges that
it will not transfer such Shares unless such transfer is made (i) pursuant to an
effective registration statement under the Act and in compliance with all
applicable state securities or "blue sky" laws, or (ii) pursuant to an available
exemption from registration under, or otherwise in compliance with the Act and
all applicable state securities or "blue sky" laws. The Buyer has been further
advised and understands that no public market now exists for any of the
securities issued by the Company and that a public market may never exist for
the Shares. The Buyer is an accredited investor for purpose of the Act.
4.0 CONDITIONS OF BUYER'S OBLIGATION
4.1 EFFECT OF CONDITIONS. The obligation of the Buyer to purchase and
pay for the Shares at or before the Closing shall be subject to the satisfaction
of each of the conditions stated in the following Sections of this Article.
4.2 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Seller contained in this Agreement shall be true and correct on the date
of the Closing, with the same effect as though made on and as of that date.
4.3 PERFORMANCE. The Seller shall have performed and complied with all
of the agreements, covenants and conditions contained in this Agreement required
to be performed at or prior to the Closing.
4.4 NO MATERIAL ADVERSE CHANGE. The business, properties, assets and
condition (financial or otherwise) of the Seller and the Company shall not have
been materially adversely affected since the date of this Agreement whether by
fire, casualty, act of God or otherwise, and there shall have been no other
changes in the business, properties, assets, condition (financial or otherwise),
management or prospects of the Seller and the Company that would have a material
adverse effect on their respective businesses or assets.
5.0 CONDITIONS OF SELLER'S OBLIGATION
5.1 EFFECT OF CONDITIONS. The obligation of the Seller to sell the
Shares at the Closing shall be subject at its election to the satisfaction of
each of the conditions stated in the following Section of this Article.
<PAGE>
5.2 REPRESENTATIONS AND WARRANTIES; PERFORMANCE. The representations
and warranties of the Buyer contained in this Agreement shall be true and
correct on the date of such Closing with the same effect as though made on and
as of that date.
6.0 TERMINATION
This Agreement may be terminated, and the transactions contemplated
hereby abandoned, at any time prior to the Closing by the written agreement of
the Seller and the Buyer.
7.0 MISCELLANEOUS
7.1 SURVIVAL OF REPRESENTATIONS. The representations, warranties,
covenants and agreements made herein or in any certificates or documents
executed in connection herewith shall survive for three (3) months after
Closing.
7.2 AMENDMENTS AND WAIVERS. Amendments or additions to this Agreement
may be made and compliance with any term, covenant, agreement, condition or
provision set forth herein may be omitted or waived (either generally or in a
particular instance and either retroactively or prospectively) upon the written
consent of the Seller and the Buyer.
7.3 NOTICES. All notices, requests, consents, reports and demands shall
be in writing and shall be hand delivered, sent by facsimile or other electronic
medium, or mailed, postage prepaid, to the Seller or the Buyer at the address
set forth below or to such other address as may be furnished in writing to the
other parties hereto. All such notices and communications shall be deemed to
have been duly given three (3) business days after being deposited in the mail,
postage prepaid, if mailed, one (1) business day after being sent by overnight
courier, delivery charges prepaid; when receipt acknowledged, if telecopied or
sent by electronic medium; and upon delivery, if delivered by hand.
The Seller: Frank H. Laukien, Ph.D.
12 Smith Hill Road
Lincoln, MA 01773
Fax: 781-259-1235
The Buyers: Bruker Daltonics, Inc.
15 Fortune Drive
Billerica, MA 01821
Fax: 978-667-0985
Attn: President or Treasurer
7.4 EXPENSES. Each party hereto will pay its own expenses in connection
with the transactions contemplated hereby.
<PAGE>
7.5 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original but all of which shall
constitute but one and the same instrument. One or more counterparts of this
Agreement or any exhibit hereto may be delivered via telecopier, with the
intention that they shall have the same effect as an original counterpart
hereof.
7.6 EFFECT OF HEADINGS. The article and section headings herein are for
convenience only and shall not affect the construction hereof.
7.7 GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the internal laws of the Commonwealth of
Massachusetts without giving effect to the conflicts of laws principles thereof.
IN WITNESS WHEREOF, the parties have executed hereto this Agreement as
of the date first written above.
SELLER:
FRANK H. LAUKIEN
By: /s/ Frank H. Laukien
---------------------------
BUYER:
BRUKER DALTONICS, INC.
By: /s/ David E. Plunkett
---------------------------
David E. Plunkett
Title: TREASURER
------------------------
<PAGE>
Exhibit 2.5
AGREEMENT
This Agreement, dated as of March 1, 2000 by and between Sidney R.
Kaufman of Natick, Massachusetts (the "Seller") and Bruker Daltonics Inc., a
Delaware corporation with its principal place of business in Billerica,
Massachusetts (the "Buyer").
WHEREAS, the Seller owns twenty-six thousand (26,000) shares (the
"Shares") of the Common Stock, $.01 par value per share, of the Buyer; and
WHEREAS, the Buyer desires to purchase from the Seller the Shares;
NOW, THEREFORE, in consideration of mutual covenants, promises and
agreements contained herein, as well as other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged by each of the parties
hereto, and intending to be legally bound hereby, the parties hereto agree as
follows:
1.0 PURCHASE AND SALE OF SHARES
No later than March 1, 2000 (the "Closing"), the Seller will sell to
the Buyer the Shares for an aggregate purchase price of Twenty-Six Thousand
Dollars ($26,000). At or before the Closing, the Buyer shall make payment of the
aggregate purchase price to the Seller and the Seller shall deliver to Buyer a
certificate representing the Shares purchased by the Buyer. The parties shall
also exchange such other documents and instruments as may be reasonably
requested by any of them.
2.0 REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants to the Buyer as follows:
2.1 GOVERNMENT APPROVALS. No consent, approval, license or
authorization of, or designation, declaration or filing with any court or
governmental authority is or will be required on the part of the Seller in
connection with the execution, delivery and performance by the Seller of this
Agreement.
2.2 COMPLIANCE WITH LAWS AND OTHER INSTRUMENTS. The Seller is in
compliance with all of the provisions of this Agreement, and in all material
respects with the provisions of each mortgage, indenture, lease, license, other
agreement or instrument, judgment, decree, judicial order, statute, and
regulation by which he is bound or to which any of his properties are subject.
The execution, delivery or performance of this Agreement with or without the
giving of notice or passage of time, or both, will not violate, or result in any
breach of or constitute a default under, or result in the imposition of any
encumbrance upon any asset of the Seller pursuant to any statute, rule or
regulation, contract, lease, judgment, decree or other document or instrument by
which the Seller is bound or to which any of his properties are subject.
2.3 DISCLOSURES. Neither this Agreement nor any other agreement,
document or written statement made by the Seller is furnished by the Seller to
the Buyer in connection with the transactions contemplated hereby, contains any
untrue statement of material fact
<PAGE>
or omits to state any material fact necessary to make the statements contained
herein or therein not misleading.
2.4 SHARES. The Seller owns the entire right, title and interest in and
to the Shares, free and clear of any liens and encumbrances of any nature
whatsoever. The Shares are validly issued, fully paid and non-assessable.
3.0 REPRESENTATIONS AND WARRANTIES OF THE BUYERS
The Buyer hereby warrants to the Seller the following:
3.1 AUTHORIZATION. The Buyer has all requisite corporate power and
authority and has taken all necessary corporate action required for the due
authorization, execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein. This Agreement constitutes
the legal, valid and binding obligations of the Buyer enforceable against Buyer
in accordance with its terms.
3.2 GOVERNMENTAL APPROVALS. No consent, approval, license or
authorization of, or designation, declaration or filing with, any court or
governmental authority is or will be required on the part of the Buyer in
connection with the execution, delivery and performance by the Buyer of this
Agreement.
4.0 MISCELLANEOUS
4.1 SURVIVAL OF REPRESENTATIONS. The representations, warranties,
covenants and agreements made herein or in any certificates or documents
executed in connection herewith shall survive for three (3) months after
Closing.
4.2 AMENDMENTS AND WAIVERS. Amendments or additions to this Agreement
may be made and compliance with any term, covenant, agreement, condition or
provision set forth herein may be omitted or waived (either generally or in a
particular instance and either retroactively or prospectively) upon the written
consent of the Seller and the Buyer.
4.3 EXPENSES. Each party hereto will pay its own expenses in connection
with the transactions contemplated hereby.
4.4 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original but all of which shall
constitute but one and the same instrument. One or more counterparts of this
Agreement or any exhibit hereto may be delivered via telecopier, with the
intention that they shall have the same effect as an original counterpart
hereof.
4.5. EFFECT OF HEADINGS. The article and section headings herein are
for convenience only and shall not affect the construction hereof.
4.6 GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the internal laws of the Commonwealth of
Massachusetts without giving effect to the conflicts of laws principles thereof.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
BRUKER DALTONICS INC.
By: /s/ DAVID E. PLUNKETT /s/ SIDNEY R. KAUFMAN
---------------------------- --------------------------------
David E. Plunkett Sidney R. Kaufman
Treasurer
-3-
<PAGE>
Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
BRUKER DALTONICS INC.
------------------------------
FIRST: The name of this corporation shall be:
Bruker Daltonics Inc.
SECOND: Its registered office in the State of Delaware is to be located
at 1209 Orange Street, in the City of Wilmington, County of New Castle, 19801,
and its registered agent at such address is: THE CORPORATION TRUST COMPANY.
THIRD: The purpose or purposes of the corporation shall be:
To carry on any and all business and to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is 105,000,000 shares, which shares shall be divided
into two classes consisting of: (i) 100,000,000 shares of Common Stock (with
$.01 par value per share) ("Common Stock") and (ii) 5,000,000 shares of
Preferred Stock (with $.01 par value per share) ("Blank Check Preferred Stock").
The designations and the powers, preferences and rights, and the
qualifications, limitations or restrictions of the Common Stock and the
Preferred Stock shall be as follows:
A. COMMON STOCK
1. VOTING RIGHTS. Except as otherwise required by law or this
Certificate of Incorporation, each holder of Common Stock shall have one vote in
respect of each share of Common Stock held by him of record on the books of the
Corporation for the election of directors and on all matters submitted to a vote
of stockholders of the Corporation.
2. DIVIDENDS. The holders of shares of Common Stock shall be entitled
to receive, when and if declared by the Board of Directors, out of the assets of
the Corporation which are by law available therefor, dividends payable either in
cash, in property or in shares of capital stock, subject, however, to the
limitations contained in Part B below.
3. DISSOLUTION, LIQUIDATION OR WINDING UP. After distribution in full
of the preferential amount, if any, to be distributed to the holders of series
of the Blank Check Preferred Stock (in accordance with the relative preferences
among such series) in the event of involuntary liquidation, distribution,
dissolution or winding-up, of the Corporation, the holders of the Common Stock
shall be entitled to receive all of the remaining assets of the Corporation,
tangible and intangible, or whatever kind available for distribution to
stockholders, ratably in proportion to the number of shares of Common Stock held
by them respectively.
<PAGE>
B. BLANK CHECK PREFERRED STOCK
1. ISSUANCE. Shares of Blank Check Preferred Stock may be issued from
time to time in one or more series as designated by the Board of Directors, each
of said series to be distinctly designated. Shares of Blank Check Preferred
Stock may be issued when deemed by the Board of Directors to be necessary to
protect the Corporation from an actual, threatened or potential hostile or
undesired takeover or takeover attempt. All shares of any one series of the
Blank Check Preferred Stock shall be alike in every particular, except that
there may be different dates from which dividends, if any, thereon shall be
cumulative, if made cumulative. The voting powers, if any, and the designations,
relative preferences, participating, optional or other special rights or
privileges of each such series, and the qualifications, limitations or
restrictions thereof, if any, may differ from those of any and all other series
at any time outstanding.
2. AUTHORITY OF THE BOARD OF DIRECTORS. The Board of Directors is
authorized, subject to limitations prescribed by law and the provisions of this
Article FOURTH, to provide for the issuance of the shares of the Blank Check
Preferred Stock in series, and by filing a certificate pursuant to the
applicable law of the State of Delaware, to establish from time to time the
number of shares to be included in each such series, and to fix in the
resolution or resolutions providing for the issue of such stock adopted by the
Board of Directors of the Corporation the voting powers, if any, and the
designations, relative preferences, participating, optional or other special
rights or privileges, and the qualifications, limitations or restrictions of
such series, including, but without limiting the generality of the foregoing,
the following:
(a) The distinctive designation of, and the number of shares of the
Blank Check Preferred Stock which shall constitute such series. The
designation of a series of preferred stock need not include the
words "preferred" or "preference" and may be designated "special" or
other distinctive term. Unless otherwise provided in the resolution
issuing such series, the number of shares of any series of the Blank
Check Preferred Stock may be increased or decreased (but not below
the number of shares thereof then outstanding) by the Board of
Directors in the manner prescribed by law;
(b) The rate and times at which, and the terms and conditions upon
which, dividends, if any, on the Blank Check Preferred Stock of such
series shall be paid, the extent of the preference or relation, if
any, of such dividends to the dividends payable on any other class
or classes, or series of the same or other classes of stock and
whether such dividends shall be cumulative or non-cumulative and, if
cumulative, the date from which such dividends shall be cumulative;
(c) Whether the series shall be convertible into, or exchangeable
for, at the option of the holders of the Blank Check Preferred Stock
of such series or the Corporation or upon the happening of a
specified event, shares of any other class or classes or any other
series of the same or any other class or classes of stock of the
Corporation, and the terms and conditions of such conversion or
exchange, including provisions for the adjustment of any such
conversion rate in such events as the Board of Directors shall
determine;
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<PAGE>
(d) Whether or not the Blank Check Preferred Stock of such series
shall be subject to redemption at the option of the Corporation or
the holders of such series or upon the happening of a specified
event, and the redemption price or prices and the time or times at
which, and the terms and conditions upon which, the Blank Check
Preferred Stock of such series may be redeemed;
(e) The rights, if any, of the holders of the Blank Check Preferred
Stock of such series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets, dissolution
or winding-up, of the Corporation;
(f) The terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Blank Check Preferred Stock of such
series; and
(g) Subject to subparagraph 5 of Paragraph C hereof, whether such
series of the Blank Check Preferred Stock shall have full, limited
or no voting powers including, without limiting the generality of
the foregoing, whether such series shall have the right, voting as a
series by itself or together with other series of the Blank Check
Preferred Stock or all series of the Blank Check Preferred Stock as
a class, to elect one or more directors of the Corporation if there
shall have been a default in the payment of dividends on any one or
more series of the Blank Check Preferred Stock or under such other
circumstances and on such conditions as the Board of Directors may
determine.
C. OTHER PROVISIONS.
1. No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series of
stock or of other securities of the Corporation shall have any preemptive right
to purchase or subscribe for any unissued stock of any class or series or any
additional shares of any class or series to be issued by reason of any increase
of the authorized capital stock of the Corporation of any class or series, or
bonds, certificates of indebtedness, debentures or other securities convertible
into or exchangeable for stock of the Corporation of any class or series, or
carrying any right to purchase stock of any class or series, but any such
unissued stock, additional authorized issue of shares of any class or series of
stock or securities convertible into or exchangeable for stock, or carrying any
right to purchase stock, may be issued and disposed of pursuant to resolution of
the Board of Directors to such persons, firms, corporations or associations
(including such holders or others) and upon such terms as may be deemed
advisable by the Board of Directors in the exercise of its sole discretion.
2. The relative powers, preferences and rights of each series of the
Blank Check Preferred Stock in relation to the powers, preferences and rights of
each other series of the Blank Check Preferred Stock shall, in each case, be as
fixed from time to time by the Board of Directors in the resolution or
resolutions adopted pursuant to authority granted in Paragraph B hereof. The
consent, by class or series vote or otherwise, of the holders of such of the
series of the Blank Check Preferred Stock as are from time to time outstanding
shall not be required for the issuance by the Board of Directors of any other
series of the Blank Check Preferred Stock whether or not the powers, preferences
and rights of such other series shall be fixed by the Board
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<PAGE>
of Directors as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided, however, that the
Board of Directors may provide in the resolution or resolutions as to any series
of the Blank Check Preferred Stock adopted pursuant to Paragraph B hereof, the
conditions, if any, under which the consent of the holders of a majority (or
such greater proportion as shall be fixed therein) of the outstanding shares of
such series shall be required for the issuance of any or all other series of the
Blank Check Preferred Stock.
3. Subject to the provisions of subparagraph 2 of this Paragraph C,
shares of any series of the Blank Check Preferred Stock may be issued from time
to time as the Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of Directors.
4. Shares of authorized Common Stock may be issued from time to time as
the Board of Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.
5. The number of authorized shares of Common Stock and of the Blank
Check Preferred Stock, without a class or series vote, may be increased or
decreased from time to time (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority of the stock
of the Corporation entitled to vote thereon.
FIFTH: The name and mailing address of the sole incorporator is as
follows:
NAME MAILING ADDRESS
---- ---------------
Nancy A. Valente c/o Hutchins, Wheeler & Dittmar
A Professional Corporation
101 Federal Street
Boston, Massachusetts 02110
The names and mailing addresses of the persons who are to serve as the
Directors until the first annual meeting of the stockholders or until successors
are elected and qualified are as follows:
NAME MAILING ADDRESS
---- ---------------
Frank H. Laukien 44 Manning Road
Billerica, MA 01821
Richard M. Stein 74 Kirkstall Road
Newtonville, MA 02460
Timothy J. Hansberry 97 Adams Street
Lexington, MA 02420
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<PAGE>
Bernhard Wangler Kriegsstr. 133
76135 Karlsruhe, Germany
Dr. Dieter Koch Fahrenheitstrasse 4, D-28359
Bremen, Germany
Collin D'Silva 2032 Concourse Drive
San Jose, California 95131
William Linton 2800 Woods Hollow Road
Madison, Wisconsin 53711
The number of Directors shall be fixed from time to time exclusively by
the Board of Directors pursuant to a resolution adopted by the Board of
Directors. The Directors of the Corporation shall be divided into three classes:
Class I, Class II and Class III. Each class shall consist, as nearly as may be
possible, of one-third of the whole number of the Board of Directors. If the
Board of Directors is not evenly divisible by three, the Board of Directors
shall determine the number of Directors to be elected to each class. The initial
members of Class I shall hold office for a term to expire at the Annual Meeting
of the Stockholders to be held in 2001; the initial members of Class II shall
hold office for a term to expire at the Annual Meeting of the Stockholders to be
held in 2002, the initial members of Class III shall hold office for a term to
expire at the Annual Meeting of the Stockholders to be held in 2003, and in the
case of each class, until their respective successors are duly elected and
qualified. At each annual election held commencing with the annual election in
2001, the Directors elected to succeed those whose terms expire shall be
identified as being of the same class as the Directors they succeed and shall be
elected to hold office for a term to expire at the third Annual Meeting of the
Stockholders after their election, and until their respective successors are
duly elected and qualified. If the number of Directors changes, any increase or
decrease in Directors shall be apportioned among the classes so as to maintain
all classes as equal in number as possible, and any additional Director elected
to any class shall hold office for a term which shall coincide with the terms of
the other Directors in such class and until his successor is duly elected and
qualified.
SIXTH: In furtherance and not in limitation of the powers conferred by
the laws of the State of Delaware:
A. The Board of Directors of the corporation is expressly
authorized to adopt, amend, or repeal the by-laws of the
Corporation.
B. Elections of Directors need not be by written ballot unless the
by-laws of the corporation shall so provide.
C. The books of the Corporation may be kept at such place within
or without the State of Delaware as the by-laws of the
Corporation may provide or as may be designated from time to
time by the Board of Directors of the Corporation.
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<PAGE>
SEVENTH: Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
EIGHTH: The Corporation hereby elects in this original certificate of
incorporation not to be governed by Section 203 of the General Corporation Law
of Delaware.
NINTH: Except as stated in Article Tenth of this certificate of
incorporation, the corporation reserves the right to amend or repeal any
provision contained in this certificate of incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon a stockholder
herein are granted subject to this reservation.
TENTH: No director shall be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director
notwithstanding any provision of law imposing such liability; provided, however,
that, to the extent required by applicable law, this provision shall not
eliminate the liability of a director (i) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the General Corporation Law of Delaware, or
(iv) for any transaction from which the director derived an improper personal
benefit. No amendment to or repeal of this provision shall apply to or have any
effect on the liability or alleged liability of any director for or with respect
to any acts or omissions of such director occurring prior to such amendment or
repeal.
ELEVENTH: The Corporation is to have perpetual existence.
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<PAGE>
IN WITNESS WHEREOF, the undersigned, being the incorporator
hereinbefore named, has executed, signed, and acknowledged this certificate of
incorporation this 4th day of February, 2000.
/s/ Nancy A. Valente
----------------------------
Nancy A. Valente
Sole Incorporator
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<PAGE>
Exhibit 3.2
BY-LAWS
---------
OF
BRUKER DALTONICS INC.
-----------------------
(A Delaware Corporation)
<PAGE>
BY-LAWS
OF
BRUKER DALTONICS INC.
(A Delaware Corporation)
<TABLE>
<CAPTION>
<S> <C>
ARTICLE 1........................................................................4
Section 1.1 Contents.........................................................4
Section 1.2 Certificate in Effect............................................4
ARTICLE 2........................................................................4
Section 2.1 Place............................................................4
Section 2.2 Annual Meeting...................................................5
Section 2.3 Notice of Stockholder Business...................................5
Section 2.4 Special Meetings.................................................6
Section 2.5 Notice of Meetings...............................................7
Section 2.6 Affidavit of Notice..............................................7
Section 2.7 Quorum...........................................................7
Section 2.8 Voting Requirements..............................................8
Section 2.9 Proxies and Voting...............................................8
Section 2.10 Action Without Meeting..........................................8
Section 2.11 Stockholder List................................................9
Section 2.12 Record Date....................................................10
ARTICLE 3.......................................................................11
Section 3.1 Number; Election and Term of Office.............................11
Section 3.2 Duties..........................................................11
Section 3.3 Compensation....................................................12
Section 3.4 Reliance on Books...............................................12
ARTICLE 4.......................................................................12
Section 4.1 Place...........................................................12
Section 4.2 Annual Meeting..................................................12
Section 4.3 Regular Meetings................................................13
Section 4.4 Special Meetings................................................13
Section 4.5 Quorum..........................................................13
Section 4.6 Action Without Meeting..........................................13
Section 4.7 Telephone Meetings..............................................14
ARTICLE 5.......................................................................15
Section 5.1 Designation.....................................................15
Section 5.2 Records of Meetings.............................................16
ARTICLE 6.......................................................................16
Section 6.1 Method of Giving Notice.........................................16
Section 6.2 Waiver..........................................................16
ARTICLE 7.......................................................................17
Section 7.1 In General......................................................17
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Section 7.2 Election of President, Secretary and Treasurer..................17
Section 7.3 Election of Other Officers......................................17
Section 7.4 Salaries........................................................17
Section 7.5 Term of Office..................................................17
Section 7.6 Duties of President and Chairman of the Board...................18
Section 7.7 Duties of Vice President........................................18
Section 7.8 Duties of Secretary.............................................19
Section 7.9 Duties of Assistant Secretary...................................19
Section 7.10 Duties of Treasurer............................................20
Section 7.11 Duties of Assistant Treasurer..................................20
ARTICLE 8.......................................................................20
Section 8.1 Directors.......................................................21
Section 8.2 Officers........................................................22
ARTICLE 9.......................................................................22
Section 9.1 Issuance of Stock...............................................22
Section 9.2 Right to Certificate; Form......................................22
Section 9.3 Facsimile Signature.............................................23
Section 9.4 Lost Certificates...............................................23
Section 9.5 Transfer of Stock...............................................24
Section 9.6 Registered Stockholders.........................................24
ARTICLE 10......................................................................24
Section 10.1 Third Party Actions............................................24
Section 10.2 Derivative Actions.............................................25
Section 10.3 Expenses.......................................................26
Section 10.4 Authorization..................................................26
Section 10.5 Advance Payment of Expenses....................................26
Section 10.6 Non-Exclusiveness..............................................27
Section 10.7 Insurance......................................................27
Section 10.8 Constituent Corporations.......................................27
Section 10.9 Additional Indemnification.....................................28
ARTICLE 11......................................................................28
ARTICLE 12......................................................................28
ARTICLE 13......................................................................29
ARTICLE 14......................................................................29
ARTICLE 15......................................................................29
</TABLE>
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<PAGE>
BRUKER DALTONICS INC.
BY-LAWS
ARTICLE 1
CERTIFICATE OF INCORPORATION
SECTION 1.1 CONTENTS. The name, location of principal office and purposes
of the Corporation shall be as set forth in its Certificate of Incorporation.
These By-laws, the powers of the Corporation and of its Directors and
stockholders, and all matters concerning the conduct and regulation of the
business of the Corporation shall be subject to such provisions in regard
thereto, if any, as are set forth in said Certificate of Incorporation. The
Certificate of Incorporation is hereby made a part of these By-laws.
SECTION 1.2 CERTIFICATE IN EFFECT. All references in these By-laws to the
Certificate of Incorporation shall be construed to mean the Certificate of
Incorporation of the Corporation as from time to time amended, including (unless
the context shall otherwise require) all certificates and any agreement of
consolidation or merger filed pursuant to the Delaware General Corporation Law,
as amended.
ARTICLE 2
MEETINGS OF STOCKHOLDERS
SECTION 2.1 PLACE. All meetings of the stockholders may be held at such
place either within or without the State of Delaware as shall be designated from
time to time by the Board of Directors, the Chairman of the Board of Directors
or the President and stated in the notice of the meeting or in any duly executed
waiver of notice thereof.
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<PAGE>
SECTION 2.2 ANNUAL MEETING. Annual meetings of stockholders, shall be
held on the 2nd Tuesday of April in each year, if not a legal holiday, and if a
legal holiday, then on the next secular day following, at 10:00 A.M., or at such
other date and time as shall be designated from time to time by the Board of
Directors, the Chairman of the Board of Directors or the President and stated in
the notice of the meeting. If such annual meeting has not been held on the day
herein provided therefor, a special meeting of the stockholders in lieu of the
annual meeting may be held, and any business transacted or elections held at
such special meeting shall have the same effect as if transacted or held at the
annual meeting, and in such case all references in these By-laws, except in this
Section 2.2, to the annual meeting of the stockholders shall be deemed to refer
to such special meeting.
SECTION 2.3 NOTICE OF STOCKHOLDER BUSINESS. To be properly brought before
the meeting, business must be of a nature that is appropriate for consideration
at an Annual Meeting and must be (i) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors, or
(ii) otherwise properly brought before the meeting by or at the direction of the
Board of Directors, or (iii) otherwise properly brought before the meeting by a
stockholder. In addition to any other applicable requirements, for business to
be properly brought before the Annual Meeting by a stockholder, the stockholder
must have given timely notice thereof in writing to the Secretary of the
Corporation. To be timely, each such notice must be given either by personal
delivery or by United States mail, postage prepaid, to the Secretary of the
Corporation not later than (1) with respect to a matter to be brought before an
Annual Meeting of Stockholders or a Special Meeting in Lieu of an Annual
Meeting, not later than the close of business on the 90th day nor earlier than
the close of business on the 120th day
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<PAGE>
prior to the date set forth in the By-laws for the Annual Meeting and (2) with
respect to a matter to be brought before a Special Meeting of the Stockholders
not in lieu of an Annual Meeting, the close of business on the tenth day
following the date on which notice of such meeting is first given to
stockholders. The notice shall set forth (i) information concerning the
stockholder, including his or her name and address, (ii) a representation that
the stockholder is entitled to vote at such meeting and intends to appear in
person or by proxy at the meeting to present the matter specified in the notice,
and (iii) such other information as would be required to be included in a proxy
statement soliciting proxies for the presentation of such matter to the meeting.
Notwithstanding anything in these By-laws to the contrary, no business
shall be transacted at the Annual Meeting except in accordance with the
procedures set forth in this section; provided, however, that nothing in this
section shall be deemed to preclude discussion by any stockholder of any
business properly brought before the Annual Meeting in accordance with these
By-laws.
SECTION 2.4 SPECIAL MEETINGS. Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called by the President, the Chairman of
the Board, or by the Board of Directors and shall be called by the President or
Secretary at the request in writing of a majority of the Directors then in
office. Such request shall state the purpose or purposes of the proposed
meeting, which need not be the exclusive purposes for which the meeting is
called. The stockholder shall not have the right, in their capacity as
stockholders, to call a special meeting of the stockholders.
SECTION 2.5 NOTICE OF MEETINGS. A written notice of all meetings of
stockholders stating the place, date and hour of the meeting and, in the case of
a special meeting, the purpose or
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<PAGE>
purposes for which the special meeting is called, shall be given to each
stockholder entitled to vote at such meeting. Except as otherwise provided by
law, such notice shall be given not less than ten nor more than sixty days
before the date of the meeting. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
SECTION 2.6 AFFIDAVIT OF NOTICE. An affidavit of the Secretary or an
Assistant Secretary or the transfer agent of the Corporation that notice of a
stockholders meeting has been given shall, in the absence of fraud, be prima
facie evidence of the facts stated therein.
SECTION 2.7 QUORUM. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
Certificate of Incorporation. If, however, such quorum shall not be present or
represented by proxy at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, except as hereinafter provided, until a quorum
shall be present or represented. At such adjourned meeting at which a quorum
shall be present or represented any business may be transacted which might have
been transacted at the original meeting. If the adjournment is for more than
thirty days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
SECTION 2.8 VOTING REQUIREMENTS. When a quorum is present at any meeting,
the vote of the holders of a majority of the stock having voting power present
in person or represented by proxy shall decide any question brought before such
meeting, unless the question is one upon
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<PAGE>
which by express provision of any applicable statute or of the Certificate of
Incorporation, a different vote is required in which case such express provision
shall govern and control the decision of such question.
SECTION 2.9 PROXIES AND VOTING. Unless otherwise provided in the
Certificate of Incorporation, each stockholder shall at every meeting of the
stockholders be entitled to one vote in person or by proxy for each share of the
capital stock having voting power held by such stockholder, but no proxy shall
be voted on after three years from its date, unless the proxy provides for a
longer period. Persons holding stock in a fiduciary capacity shall be entitled
to vote the shares so held, and persons whose stock is pledged shall be entitled
to vote the pledged shares, unless in the transfer by the pledgor on the books
of the Corporation he shall have expressly empowered the Pledgee to vote said
shares, in which case only the pledgee, or his proxy, may represent and vote
such shares. Shares of the capital stock of the Corporation owned by the
Corporation shall not be voted, directly or indirectly.
SECTION 2.10 ACTION WITHOUT MEETING. Unless otherwise provided in the
Certificate of Incorporation, until the closing of an underwritten public
offering of the Corporation's Common Stock (a "Public Offering") any action
referred or permitted to be taken at any annual or special meeting of
stockholders may be taken without a meeting, without prior notice and without
vote, if a consent in writing, setting forth the action so taken, is signed by
the holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote on such action were present and voted. Prompt
notice of the taking of corporate action without a meeting by less than
unanimous written consent shall be given to those stockholders who have not
consented in writing.
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<PAGE>
Effective upon the closing of a Public Offering, any action required or
permitted to be taken at any annual or special meeting of stockholders may be
taken without a meeting, without prior notice and without vote, only if all
stockholders entitled to vote on the matter consent to the action in writing and
written consents are filed with the records of the meetings of the stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.
SECTION 2.11 STOCKHOLDER LIST. The officer who has charge of the stock
ledger of the Corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present. The original or duplicate stock ledger shall be the only evidence as to
who are the stockholders entitled to examine such list, the stock ledger or the
books of the Corporation, or to vote in person or by proxy at any meeting of
stockholders.
SECTION 2.12 RECORD DATE. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights
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<PAGE>
in respect of any change, conversion or exchange of stock or for the purpose of
any other lawful action, the Board of Directors may fix, in advance, a record
date, which shall not be more than sixty nor less than ten days before the date
of such meeting, nor more than sixty days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
If no record date is fixed by the Board of Directors:
(a) The record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held.
(b) The record date for determining stockholders entitled to
express consent to corporate action in writing without a meeting, when no prior
action by the Board of Directors is necessary, shall be the day on which the
first written consent is expressed.
(c) The record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
ARTICLE 3
DIRECTORS
SECTION 3.1 NUMBER; ELECTION AND TERM OF OFFICE. There shall be a Board
of Directors of the Corporation consisting of not less than one member, the
number of members to be determined by resolution of the Board of Directors,
unless the Certificate of Incorporation fixes
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the number of Directors, in which case a change in the number of Directors shall
be made only by amendment of the Certificate. The Board of Directors shall be
divided into such classes for such terms as are provided for in the Certificate
of Incorporation. Subject to any limitation which may be contained within the
Certificate of Incorporation, the number of the Board of Directors may be
increased at any time by vote of a majority of the Directors then in office. The
Directors shall be elected at the annual meeting of the stockholders at which
the term of office of the class to which they have been elected expires, except
as provided in paragraph (c) of Section 8.1, and each Director elected shall
hold office until his successor is elected and qualified or until his earlier
resignation or removal. Directors need not be stockholders.
SECTION 3.2 DUTIES. The business of the Corporation shall be managed by
or under the direction of its Board of Directors which may exercise all such
powers of the Corporation and do all such lawful acts and things as are not by
statute or by the Certificate of Incorporation or by these By-laws directed or
required to be exercised or done by the stockholders.
SECTION 3.3 COMPENSATION. Unless otherwise restricted by the Certificate
of Incorporation or these By-laws, the Board of Directors shall have the
authority to fix the compensation of Directors. The Directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors and
may be paid a fixed sum for attendance at each meeting of the Board of Directors
or a stated salary as Directors. No such payment shall preclude any Director
from serving the Corporation in any other capacity and receiving compensation
therefor. Members of special or standing committees may be allowed like
compensation for attending committee meetings.
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SECTION 3.4 RELIANCE ON BOOKS. A member of the Board of Directors or a
member of any committee designated by the Board of Directors shall, in the
performance of his duties, be fully protected in relying in good faith upon the
books of account or reports made to the Corporation by any of its officers, or
by an independent certified public accountant, or by an appraiser selected with
reasonable care by the Board of Directors or by any committee, or in relying in
good faith upon other records of the Corporation.
ARTICLE 4
MEETINGS OF THE BOARD OF DIRECTORS
SECTION 4.1 PLACE. The Board of Directors of the Corporation may hold
meetings, both regular and special, either within or without the State of
Delaware.
SECTION 4.2 ANNUAL MEETING. The first meeting of each newly elected
Board of Directors shall be held immediately following the annual meeting of
stockholders or any special meeting held in lieu thereof, and no notice of
such meeting shall be necessary to the newly elected Directors in order
legally to constitute the meeting.
SECTION 4.3 REGULAR MEETINGS. Regular meetings of the Board of Directors
may be held without notice at such time and at such place as shall from time to
time be determined by the Board.
SECTION 4.4 SPECIAL MEETINGS. Special meetings of the Board may be called
by the President on two days' notice to each Director either personally or by
mail or by email; special meetings shall be called by the President or Secretary
in like manner and on like notice on the written request of two Directors unless
the Board consists of only one Director, in which case
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special meetings shall be called by the President or Secretary in like manner
and on like notice on the written request of the sole Director.
SECTION 4.5 QUORUM. At all meetings of the Board a majority of the
Directors then in office shall constitute a quorum for the transaction of
business and the act of a majority of the Directors present at any meeting at
which there is a quorum shall be the act of the Board of Directors, except as
may be otherwise specifically provided by statute or by the Certificate of
Incorporation. If a quorum shall not be Present at any meeting of the Board of
Directors, the Directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.
SECTION 4.6 ACTION WITHOUT MEETING. Unless otherwise restricted by the
Certificate of Incorporation or these By-laws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all members of the Board or committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board or committee.
SECTION 4.7 TELEPHONE MEETINGS. Unless otherwise restricted by the
Certificate of Incorporation or these By-laws, members of the Board of
Directors, or any committee designated by the Board of Directors, may
participate in a meeting of the Board of Directors, or any committee, by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the meeting.
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ARTICLE 5
COMMITTEES OF DIRECTORS
SECTION 5.1 DESIGNATION.
(a) The Board of Directors may, by resolution passed by a
majority of the whole Board, designate one or more committees, including, if the
Board of Directors deems appropriate, an audit committee and a compensation
committee, each committee to consist of one or more of the Directors of the
Corporation. The Board may designate one or more Directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee.
(b) In the absence or disqualification of a member of a
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member.
(c) Any such committee, to the extent provided in the resolution
of the Board of Directors designating the committee, shall have and may exercise
all the powers and authority of the Board of Directors in the management of the
business and affairs of the corporation, and may authorize the seal of the
Corporation to be affixed to all papers which may require it; but no such
committee shall have the power or authority in reference to amending the
Certificate of Incorporation, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets, recommending to the
stockholders a dissolution of the Corporation or a revocation of a dissolution,
or amending the By-laws of the Corporation; and, unless the resolution or the
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Certificate of Incorporation expressly so provide, no such committee shall have
the power or authority to declare a dividend or to authorize the issuance of
stock. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board of Directors.
SECTION 5.2 RECORDS OF MEETINGS. Each committee shall keep regular
minutes of its meetings and report the same to the Board of Directors when
required.
ARTICLE 6
NOTICES
SECTION 6.1 METHOD OF GIVING NOTICE. Whenever, under any provision of the
law or of the Certificate of Incorporation or of these By-laws, notice is
required to be given to any Director or stockholder, such notice shall be given
in writing by the Secretary or the person or persons calling the meeting by
leaving such notice with such Director or stockholder at his residence or usual
place of business or by mailing it addressed to such Director or stockholder, at
his address as it appears on the records of the Corporation, with postage
thereon prepaid, and such notice shall be deemed to be given at the time when
the same shall be deposited in the United States mail. Notice to Directors may
also be given by email.
SECTION 6.2 WAIVER. Whenever any notice is required to be given under any
provision of law or of the Certificate of Incorporation or of these By-laws, a
waiver thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent thereto. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends the meeting for
the express purpose of
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objecting at the beginning of the meeting to the transaction of any business
because the meeting is not lawfully called or convened.
ARTICLE 7
OFFICERS
SECTION 7.1 IN GENERAL. The officers of the Corporation shall be chosen
by the Board of Directors and shall include a President, a Secretary and a
Treasurer. The Board of Directors may also choose a Chairman of the Board, one
or more Vice Presidents, Assistant Secretaries and Assistant Treasurers. Any
number of offices may be held by the same person, unless the Certificate of
Incorporation or these By-laws otherwise provide.
SECTION 7.2 ELECTION OF PRESIDENT, SECRETARY AND TREASURER. The Board of
Directors at its first meeting after each annual meeting of stockholders shall
choose a President, a Secretary and a Treasurer.
SECTION 7.3 ELECTION OF OTHER OFFICERS. The Board of Directors may
appoint such other officers and agents as it shall deem appropriate who shall
hold their offices for such terms and shall exercise such powers and perform
such duties as shall be determined from time to time by the Board.
SECTION 7.4 SALARIES. The salaries of all officers and agents of the
Corporation may be fixed by the Board of Directors.
SECTION 7.5 TERM OF OFFICE. The officers of the Corporation shall hold
office until their successors are chosen and qualify or until their earlier
resignation or removal. Any officer elected or appointed by the Board of
Directors may be removed at any time in the manner specified in Section 8.2.
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SECTION 7.6 DUTIES OF PRESIDENT AND CHAIRMAN OF THE BOARD. The Chairman
of the Board shall be the Chief Executive Officer of the Corporation. The
President shall report to the Chairman of the Board and the Chief Executive
Officer and shall preside at all meetings of the stockholders and, if he is a
Director, at all meetings of the Board of Directors. Subject to the control and
direction of the Directors, the President shall have general and active
management of the business of the Corporation and shall see that all orders and
resolutions of the Board of Directors are carried into effect. The President
shall execute bonds, mortgages and other contracts requiring a seal, under the
seal of the Corporation, except where required or permitted by law to be
otherwise signed and executed and except where the signing and execution thereof
shall be expressly delegated by the Board of Directors to some other officer or
agent of the Corporation. The Chairman of the Board, if any, shall make his
counsel available to the other officers of the Corporation, shall be authorized
to sign stock certificates on behalf of the Corporation, shall preside at all
meetings of the Directors at which he is present, and, in the absence of the
President at all meetings of the stockholders, and shall have such other duties
and powers as may from time to time be conferred upon him by the Directors.
SECTION 7.7 DUTIES OF VICE PRESIDENT. In the absence of the President or
in the event of his inability or refusal to act, the Vice President (or in the
event there be more than one Vice President, the Vice Presidents in the order
designated by the Directors, or in the absence of any designation, then in the
order of their election) shall perform the duties of the President not otherwise
conferred upon the Chairman of the Board, if any, and when so acting, shall have
all the powers of and be subject to all the restrictions upon the President. The
Vice Presidents shall
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perform such other duties and have such other powers as the Board of Directors
may from time to time prescribe.
SECTION 7.8 DUTIES OF SECRETARY. The Secretary shall attend all meetings
of the Board of Directors and all meetings of the stockholders and record all
the proceedings of the meetings of the Corporation and of the Board of Directors
in a book to be kept for that purpose and shall perform like duties for the
standing committees when required. He shall give, or cause to be given, notice
of all meetings of the stockholders and special meetings of the Board of
Directors, except as otherwise provided in these By-laws, and shall perform such
other duties as may be prescribed by the Board of Directors or President, under
whose supervision he shall be. He shall have charge of the stock ledger (which
may, however, be kept by any transfer agent or agents of the Corporation under
his direction) and of the corporate seal of the Corporation.
SECTION 7.9 DUTIES OF ASSISTANT SECRETARY. The Assistant Secretary, or if
there be more than one, the Assistant Secretaries in the order determined by the
Board of Directors (or if there be no such determination, then in the order of
their election) shall, in the absence of the Secretary or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
Secretary and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
SECTION 7.10 DUTIES OF TREASURER. The Treasurer shall have the custody of
the corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the
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Board of Directors, taking proper vouchers for such disbursements, and shall
render to the President and the Board of Directors, at its regular meetings, or
when the Board of Directors so requires, an account of all of his transactions
as Treasurer and of the financial condition of the Corporation. If required by
the Board of Directors, he shall give the Corporation a bond in such sum and
with such surety or sureties as shall be satisfactory to the Board of Directors
for the faithful performance of the duties of this office and for the
restoration to the Corporation, in case of his death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
Corporation.
SECTION 7.11 DUTIES OF ASSISTANT TREASURER. The Assistant Treasurer, or
if there shall be more than one, the Assistant Treasurers in the order
determined by the Board of Directors (or if there be no such determination, then
in the order of their election), shall, in the absence of the Treasurer or in
the event of his inability or refusal to act, perform the duties and exercise
the powers of the Treasurer and shall perform such other duties and have such
other powers as the Board of Directors may from time to time prescribe.
ARTICLE 8
RESIGNATIONS, REMOVALS AND VACANCIES
SECTION 8.1 DIRECTORS.
(a) RESIGNATIONS. Any Director may resign at any time by giving
written notice to the Board of Directors or the President or the Secretary. Such
resignation shall take effect at the time specified therein; and unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.
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(b) REMOVALS. Subject to any provisions of the Certificate of
Incorporation, any Director or the entire Board of Directors may be removed with
or without cause, at any meeting called for the purpose, by vote of the holders
of a majority of the shares entitled to vote for the election of Directors, or a
majority vote of the Board of Directors. This Section 8.1(b) may not be altered,
amended or repealed except by the holders of a majority of the shares of stock
issued and outstanding and entitled to vote for the election of the Directors.
(c) VACANCIES. Vacancies occurring in the office of Director and
newly created Directorships resulting from any increase in the authorized number
of Directors shall be filled by a majority of the Directors then in office,
though less than a quorum, unless previously filled by the stockholders entitled
to vote for the election of Directors, and the Directors so chosen shall hold
office subject to the By-laws until the next annual meeting of Stockholders at
which the term of office of the class to which they have been elected expires
and until their successors are duly elected and qualify or until their earlier
resignation or removal. If there are no Directors in office, then an election of
Directors may be held in the manner provided by statute.
SECTION 8.2 OFFICERS. Any officer may resign at any time by giving
written notice to the Board of Directors or the President or the Secretary. Such
resignation shall take effect at the time specified therein; and unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective. The Board of Directors may, at any meeting
called for the purpose, by vote of a majority of their entire number, remove
from office any officer of the Corporation or any member of a committee, with or
without cause. Any vacancy occurring in the office of President, Secretary or
Treasurer shall be filled by the Board of Directors and the
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officers so chosen shall hold office subject to the By-laws for the unexpired
term in respect of which the vacancy occurred and until their successors shall
be elected and qualify or until their earlier resignation or removal.
ARTICLE 9
CERTIFICATE OF STOCK
SECTION 9.1 ISSUANCE OF STOCK. The Directors may, at any time and from
time to time, if all of the shares of capital stock which the Corporation is
authorized by its Certificate of Incorporation to issue have not been issued,
subscribed for, or otherwise committed to be issued, issue or take subscriptions
for additional shares of its capital stock up to the amount authorized in its
Certificate of Incorporation. Such stock shall be issued and the consideration
paid therefor in the manner prescribed by law.
SECTION 9.2 RIGHT TO CERTIFICATE; FORM. Every holder of stock in the
Corporation shall be entitled to have a certificate, signed by, or in the name
of the Corporation by, the Chairman of the Board, the President or a Vice
President and the Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary of the Corporation, certifying the number of shares owned by
him in the Corporation; provided that the Directors may provide by one or more
resolutions that some or all of any or all classes or series of the
Corporation's stock shall be uncertified shares. Certificates may be issued for
partly paid shares and in such case upon the face or back of the certificates
issued to represent any such partly paid shares, the total amount of the
consideration to be paid therefor, and the amount paid thereon shall be
specified.
SECTION 9.3 FACSIMILE SIGNATURE. Any of or all the signatures on the
certificate may be facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile
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signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
SECTION 9.4 LOST CERTIFICATES. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or to give the Corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the Corporation
with respect to the certificate alleged to have been lost, stolen or destroyed.
SECTION 9.5 TRANSFER OF STOCK. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignation or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
SECTION 9.6 REGISTERED STOCKHOLDERS. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares, and shall not be bound to recognize any equitable or other claim to
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or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by the laws of Delaware.
ARTICLE 10
INDEMNIFICATION
SECTION 10.1 THIRD PARTY ACTIONS. The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Corporation) by reason of the fact that he is or was a Director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
SECTION 10.2 DERIVATIVE ACTIONS. The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or
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suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was a Director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
Corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
SECTION 10.3 EXPENSES. To the extent that a Director, officer, employee
or agent of the Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in Sections 10.1 and 10.2,
or in defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith.
SECTION 10.4 AUTHORIZATION. Any indemnification under Sections 10.1 and
10.2 (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the
Director, officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in Sections 10.1
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and 10.2. Such determination shall be made (a) by the Board of Directors by a
majority vote of a quorum consisting of Directors who were not parties to such
action, suit or proceeding, or (b) if such a quorum is not obtainable, or, even
if obtainable a quorum of disinterested Directors so directs, by independent
legal counsel in a written opinion, or (c) by the stockholders.
SECTION 10.5 ADVANCE PAYMENT OF EXPENSES. Expenses incurred by an officer
or Director in defending a civil or criminal action, suit or proceeding may be
paid by the Corporation in advance of the final disposition of such action, suit
or proceeding as authorized by the Board of Directors in the specific case upon
receipt of an undertaking by or on behalf of such officer or Director to repay
such amount unless it shall ultimately be determined that he is entitled to be
indemnified by the Corporation as authorized in this Article 10. Such expenses
incurred by other employees and agents may be so paid upon such terms and
conditions, if any, as the Board of Directors deems appropriate.
SECTION 10.6 NON-EXCLUSIVENESS. The indemnification provided by this
Article 10 shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any by-law, agreement, vote of
stockholders or disinterested Directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a Director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
SECTION 10.7 INSURANCE. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a Director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer,
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employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of this Article 10.
SECTION 10.8 CONSTITUENT CORPORATIONS. The Corporation shall have power
to indemnify any person who is or was a director, officer, employee or agent of
a constituent corporation absorbed in a consolidation or merger with this
Corporation or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, in the same manner as hereinabove
provided for any person who is or was a Director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise.
SECTION 10.9 ADDITIONAL INDEMNIFICATION. In addition to the foregoing
provisions of this Article 10, the Corporation shall have the power, to the full
extent provided by law, to indemnify any person for any act or omission of such
person against all loss, cost, damage and expense (including attorney's fees) if
such person is determined (in the manner prescribed in Section 10.4 hereof) to
have acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interest of the Corporation.
ARTICLE 11
EXECUTION OF PAPERS
Except as otherwise provided in these By-laws or as the Board of
Directors may generally or in particular cases otherwise determine, all deeds,
leases, transfers, contracts, bonds, notes,
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checks, drafts and other instruments authorized to be executed on behalf of the
Corporation shall be executed by the President or the Treasurer.
ARTICLE 12
FISCAL YEAR
The fiscal year of the Corporation shall be fixed by resolution of the
Board of Directors.
ARTICLE 13
SEAL
The Corporate seal shall have inscribed thereon the name of the
Corporation, the year of its organization and the word "Delaware". The seal may
be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.
ARTICLE 14
OFFICES
In addition to its principal office, the Corporation may have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation may
require.
ARTICLE 15
AMENDMENTS
Except as otherwise provided herein, these By-laws may be altered,
amended or repealed or new By-laws may be adopted by the stockholders or by the
Board of Directors, when such power is conferred upon the Board of Directors by
the Certificate of Incorporation, at any regular meeting of the stockholders or
of the Board of Directors, or at any special meeting of the stockholders or of
the Board of Directors if notice of such alteration, amendment, repeal or
adoption of new By-laws is contained in the notice of such special meeting, or
by the written
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consent of a majority in interest of the outstanding voting stock of the
Corporation or by the unanimous written consent of the Directors. If the power
to adopt, amend or repeal by-laws is conferred upon the Board of Directors by
the Certificate of Incorporation, it shall not divest or limit the power of the
stockholders to adopt, amend or repeal by-laws.
741443
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Exhibit 10.1
BRUKER DALTONICS INC.
2000 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN.
This stock option plan (the "2000 Stock Option Plan") is intended to
encourage ownership of the stock of Bruker Daltonics Inc. (the "Company") by
management, employees, directors, consultants and advisors ("Optionees") of the
Company and its subsidiaries, to induce qualified personnel to enter and remain
in the employ of the Company or its subsidiaries and otherwise to provide
additional incentive for Optionees to promote the success of its business.
2. STOCK SUBJECT TO THE 2000 STOCK OPTION PLAN.
(a) The total number of shares of the authorized but unissued or
Treasury shares of the common stock, $.01 par value, of the Company ("Common
Stock") for which options may be granted under the 2000 Stock Option Plan shall
not exceed two million two hundred twenty thousand (2,220,000) shares,
corresponding to four percent (4%) of the issued and outstanding shares of
Common Stock after the completion of the Company's initial public offering,
subject to adjustment as provided in Section 12 hereof.
(b) If an option granted hereunder shall expire or terminate for any
reason without having vested fully or having been exercised in full, the
unvested and/or unpurchased shares subject thereto shall again be available for
subsequent option grants under the 2000 Stock Option Plan.
(c) Stock issuable upon exercise of an option granted under the 2000
Stock Option Plan may be subject to such restrictions on transfer, repurchase
rights (but not to exceed 20% of the stock issuable upon exercise of options
granted under the 2000 Stock Option Plan) or other restrictions as shall be
determined by the Board of Directors of the Company (the "Board").
(d) Notwithstanding any other provision of this Plan to the contrary,
the Committee shall have the right, in its sole discretion, to allocate and
grant up to twenty percent (20%) of the Common Stock authorized to be granted as
options hereunder as restricted stock to employees of
<PAGE>
the Company on such terms and conditions and pursuant to such restricted stock
agreements as the Committee, in its discretion, shall deem appropriate.
3. ADMINISTRATION OF THE 2000 STOCK OPTION PLAN.
At the discretion of the Board, the 2000 Stock Option Plan shall be
administered either by (i) the Board, or (ii) the compensation committee (the
"Compensation Committee") consisting of two or more members of the Board. In the
event the Board is the administrator of the 2000 Stock Option Plan, references
herein to the Compensation Committee shall be deemed to include the full Board.
The Board may from time to time appoint a member or members of the Compensation
Committee in substitution for or in addition to the member or members then in
office and may fill vacancies on the Compensation Committee however caused. The
Compensation Committee shall choose one of its members as Chairman and shall
hold meetings at such times and places as it shall deem advisable. A majority of
the members of the Compensation Committee shall constitute a quorum and any
action may be taken by a majority of those present and voting at any meeting.
Any action may also be taken without the necessity of a meeting by a
written instrument signed by a majority of the Compensation Committee. The
decision of the Compensation Committee as to all questions of interpretation and
application of the 2000 Stock Option Plan shall be final, binding and conclusive
on all persons. The Compensation Committee shall have the authority to adopt,
amend and rescind such rules and regulations as, in its opinion, may be
advisable in the administration of the 2000 Stock Option Plan. The Compensation
Committee may correct any defect or supply any omission or reconcile any
inconsistency in the 2000 Stock Option Plan or in any option agreement granted
hereunder in the manner and to the extent it shall deem expedient to carry the
2000 Stock Option Plan into effect and shall be the sole and final judge of such
expediency. No Compensation Committee member shall be liable for any action or
determination made in good faith.
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4. TYPE OF OPTIONS.
Options granted pursuant to the 2000 Stock Option Plan shall be
authorized by action of the Compensation Committee and may be designated as
either incentive stock options meeting the requirements of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or non-qualified options
which are not intended to meet the requirements of such Section 422 of the Code,
the designation to be in the sole discretion of the Compensation Committee. The
2000 Stock Option Plan shall be administered by the Compensation Committee in
such manner as to permit options granted as incentive stock options to qualify
as incentive stock options under the Code.
5. ELIGIBILITY
(a) As required by U.S. law, incentive stock options shall
only be granted to Optionees who are employees. As a result, options designated
as incentive stock options shall, subject to the limitation on amounts of more
than 10% of the combined voting power of the Company as designated in Section
5(e), be granted only to employees (including officers and directors who are
also employees) of the Company or any of its subsidiaries, including
subsidiaries which become such after adoption of the 2000 Stock Option Plan.
(b) The law permits more flexibility for the grant of
non-qualified stock options. Accordingly, options designated as non-qualified
options may be granted to officers, employees, consultants, advisors and
directors of the Company or of any of its subsidiaries, including subsidiaries
which become such after adoption of the 2000 Stock Option Plan.
(c) As used herein, "subsidiary" or "subsidiaries" shall be as
defined in Section 424 of the Code and the Treasury Regulations promulgated
thereunder (the "Regulations").
(d) The Compensation Committee shall, from time to time, at
its sole discretion, select from such eligible persons those to whom options
shall be granted and shall determine the number of shares to be subject to each
option. In determining the eligibility of a person to be granted an option, as
well as in determining the number of shares to be granted to
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any person, the Compensation Committee in its sole discretion shall take into
account the position and responsibilities of the person being considered, the
nature and value to the Company or its subsidiaries of his or her service and
accomplishments, his or her present and potential contribution to the success of
the Company or its subsidiaries, and such other factors as the Compensation
Committee may deem relevant.
(e) As required by law, no option designated as an incentive
stock option shall be granted to any employee of the Company or any subsidiary
if such employee owns, immediately prior to the grant of an option, stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or of a parent or a subsidiary, unless the purchase price
for the stock under such option shall be at least 110% of its fair market value
at the time such option is granted and the option, by its terms, shall not be
exercisable more than five years from the date it is granted. In determining the
stock ownership under this paragraph, the provisions of Section 424(d) of the
Code shall be controlling.
(f) In determining the fair market value under this paragraph,
the provisions of Section 7 hereof shall apply.
6. OPTION AGREEMENT.
Each option shall be evidenced by an option agreement (the
"Agreement") duly executed on behalf of the Company and by the Optionee to whom
such option is granted, which Agreement shall comply with and be subject to the
terms and conditions of the 2000 Stock Option Plan. The Agreement may contain
such other terms, provisions and conditions which are not inconsistent with the
2000 Stock Option Plan as may be determined by the Compensation Committee;
provided that (a) options designated as incentive stock options shall meet all
of the conditions for incentive stock options as defined in Section 422 of the
Code; (b) the vesting schedule contained in the form of incentive stock option
agreement approved by the Board shall not be altered by the Compensation
Committee for any grant of an incentive stock option; and (c) the vesting
schedule contained in the form of non-qualified stock option agreement approved
by the Board shall be the recommended vesting schedule for the grant of
non-qualified stock options
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by the Compensation Committee but may be altered by the Compensation Committee.
The date of grant of an option shall be as determined by the Compensation
Committee. More than one option may be granted to an individual.
7. OPTION PRICE.
The option price or prices of shares of the Company's Common Stock for
options designated as non-qualified stock options shall be as determined by the
Compensation Committee, but in no event shall the option price of a
non-qualified stock option be less than 50% of the fair market value of such
Common Stock at the time the option is granted, as determined by the
Compensation Committee. The option price or prices of shares of the Company's
Common Stock for incentive stock options shall be not less than the fair market
value of such Common Stock at the time the option is granted as determined by
the Compensation Committee in accordance with the Regulations promulgated under
Section 422 of the Code. If such shares are then listed on any national
securities exchange, the fair market value shall be the mean between the high
and low sales prices, if any, on the largest such exchange on the date of the
grant of the option or, if none, shall be determined by taking a weighted
average of the means between the highest and lowest sales prices on the nearest
date before and the nearest date after the date of grant in accordance with
Treasury Regulations Section 25.2512-2. If the shares are not then listed on any
such exchange, the fair market value of such shares shall be the mean between
the high and low sales prices, if any, as reported in the National Association
of Securities Dealers Automated Quotation National Market ("NASDAQ/NM") for the
date of the grant of the option, or, if none, shall be determined by taking a
weighted average of the means between the highest and lowest sales on the
nearest date before and the nearest date after the date of grant in accordance
with Treasury Regulations Section 25.2512-2. If the shares are not then either
listed on any such exchange or quoted in NASDAQ/NM, the fair market value shall
be the mean between the average of the "Bid" and the average of the "Ask"
prices, if any, as reported in the National Daily Quotation Service for the date
of the grant of the option, or, if none, shall be determined by taking a
weighted average of the means between the highest and lowest sales
5
<PAGE>
prices on the nearest date before and the nearest date after the date of grant
in accordance with Treasury Regulations Section 25.2512-2. If the fair market
value cannot be determined under the preceding three sentences, it shall be
determined in good faith by the Compensation Committee.
8. MANNER OF PAYMENT; MANNER OF EXERCISE.
(a) Options granted under the 2000 Stock Option Plan may provide for
the payment of the exercise price, as determined by the Compensation Committee,
and as set forth in the Option Agreement, by delivery of cash or a check payable
to the order of the Company in an amount equal to the exercise price of such
options.
(b) To the extent that the right to purchase shares under an option has
accrued and is in effect, options may be exercised in full at one time or in
part from time to time, by giving written notice, signed by the Optionee
exercising the option, to the Company, stating the number of shares with respect
to which the option is being exercised, accompanied by payment in full for such
shares as provided in subparagraph (a) above. Upon such exercise, delivery of a
certificate for paid-up non-assessable shares shall be made at the principal
office of the Company to the Optionee exercising the option at such time, during
ordinary business hours, not more than thirty (30) days from the date of receipt
of the notice by the Company, as shall be designated in such notice, or at such
time, place and manner as may be agreed upon by the Company and the person or
persons exercising the option. Upon exercise of the option and payment as
provided above, the Optionee shall become a shareholder of the Company as to the
Shares acquired upon such exercise.
9. EXERCISE OF OPTIONS.
Each option granted under the 2000 Stock Option Plan shall, subject to
Section 6, Section 10(b) and Section 12 hereof, be exercisable at such time or
times and during such period as determined by the Compensation Committee which
shall be set forth in the Agreement; provided, however, that no option granted
under the 2000 Stock Option Plan shall have a term in excess of ten (10) years
from the date of grant.
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To the extent that an option to purchase shares is not exercised by an
Optionee when it becomes initially exercisable, it shall not expire but shall be
carried forward and shall be exercisable, on a cumulative basis, until the
expiration of the exercise period. No partial exercise may be made for less than
fifty (50) full shares of Common Stock.
Notwithstanding the foregoing, the Compensation Committee may in its
discretion accelerate the exerciseability of any option subject to such terms
and conditions as the Compensation Committee deems necessary and appropriate.
10. TERM OF OPTIONS; EXERCISEABILITY.
(a) TERM.
(1) Each option shall expire not more than ten (10) years from
the date of the granting thereof, but shall be subject to earlier termination as
herein provided.
(2) Except as otherwise provided in this Section 10, an option
granted to any employee who ceases to be an employee of the Company, or an
option granted to any other Optionee who ceases to have the same relationship
with the Company or one of its subsidiaries which was in effect on the date the
option was granted, shall terminate immediately on the date such Optionee ceases
to be an employee, or ceases to have such relationship with the Company or one
of its subsidiaries, or on the date on which the option expires by its terms,
whichever occurs first.
(3) If such termination of employment or relationship is
because the Optionee has become permanently disabled (within the meaning of
Section 22(e)(3) of the Code), such option shall terminate thirty (30) days
after the date such Optionee ceases to be an employee or to have such
relationship, or on the date on which the option expires by its terms, whichever
occurs first.
(4) In the event of the death of any Optionee, any option
granted to such Optionee shall terminate ninety (90) days after the date of
death, or on the date on which the option expires by its terms, whichever occurs
first.
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(5) Notwithstanding subparagraphs (2), (3) and (4) above, the
Compensation Committee shall have the authority to extend the expiration date of
any outstanding option in circumstances in which it deems such action to be
appropriate, provided that no such extension shall extend the term of an option
beyond the date on which the option would have expired if no termination of the
Optionee's employment or relationship with the Company or its subsidiary had
occurred.
(b) EXERCISEABILITY.
An option granted to an Optionee who ceases to be an employee,
or ceases to have the same relationship with the Company or one of its
subsidiaries which was in existence on the date the option was granted shall be
exercisable only to the extent that the right to purchase shares under such
option has accrued and is in effect on the date such Optionee ceases to be an
employee, or ceases to have such relationship with the Company or one of its
subsidiaries.
11. OPTIONS NOT TRANSFERABLE.
The right of any Optionee to exercise any option granted to him or her
shall not be assignable or transferable by such Optionee otherwise than by will
or the laws of descent and distribution, and any such option shall be
exercisable during the lifetime of such Optionee only by him or her. Any option
granted under the 2000 Stock Option Plan shall be null and void and without
effect upon the bankruptcy of the Optionee to whom the option is granted, or
upon any attempted assignment or transfer, except as herein provided, including
without limitation any purported assignment, whether voluntary or by operation
of law, pledge, hypothecation or other disposition, attachment, divorce, trustee
process or similar process, whether legal or equitable, upon such option.
12. RECAPITALIZATIONS, REORGANIZATIONS AND THE LIKE.
(a) In the event that the outstanding shares of the Common Stock of the
Company are changed into or exchanged for a different number or kind of shares
or other securities of the Company or of another corporation by reason of any
reorganization, merger, consolidation,
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<PAGE>
recapitalization, reclassification, stock split-up, combination of shares, or
dividends payable in capital stock, appropriate adjustment shall be made in the
number and kind of shares as to which options may be granted under the 2000
Stock Option Plan and as to which outstanding options or portions thereof then
unexercised shall be exercisable, to the end that the proportionate interest of
the Optionee shall be maintained as before the occurrence of such event; such
adjustment in outstanding options shall be made without change in the total
price applicable to the unexercised portion of such options and with a
corresponding adjustment in the option price per share.
(b) In addition, unless otherwise determined by the Board in its sole
discretion, in the case of any (i) sale or conveyance to another entity of all
or substantially all of the property and assets of the Company, including,
without limitation, by way of merger or consolidation, or (ii) Change in Control
(as hereinafter defined) of the Company, the purchaser(s) of the Company's
assets or stock may, in his, her or its discretion, deliver to the Optionee the
same kind of consideration that is delivered to the shareholders of the Company
as a result of such sale, conveyance or Change in Control, or the Board may
cancel all outstanding options in exchange for consideration in cash or in kind
which consideration in both cases shall be equal in value to the value of those
shares of stock or other securities the Optionee would have received had the
option been exercised (to the extent then exercisable) and no disposition of the
shares acquired upon such exercise been made prior to such sale, conveyance or
Change in Control, less the option price therefor. Upon receipt of such
consideration by the Optionee, his or her option shall immediately terminate and
be of no further force and effect. The value of the stock or other securities
the Optionee would have received if the option had been exercised shall be
determined in good faith by the Board, and in the case of shares of the Common
Stock of the Company, in accordance with the provisions of Section 7 hereof. The
Board shall also have the power and right to accelerate the exerciseability of
any options, notwithstanding any limitations in this 2000 Stock Option Plan or
in the Agreement upon such a sale, conveyance or Change in Control. Upon such
acceleration, any options or portion thereof originally designated as incentive
stock options that no longer qualify as incentive stock options under Section
422 of the Code as a
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<PAGE>
result of such acceleration shall be redesignated as non-qualified stock
options. A "Change in Control" shall be deemed to have occurred if any person,
or any two or more persons acting as a group, and all affiliates of such person
or persons, who prior to such time owned less than twenty percent (20%) of the
then outstanding Common Stock of the Company, shall acquire, whether by
purchase, exchange, tender offer, merger, consolidation or otherwise, such
additional shares of the Company's Common Stock in one or more transactions, or
series of transactions, such that following such transaction or transactions,
such person or group and affiliates beneficially own at least fifty percent
(50%) of the Company's Common Stock outstanding.
(c) Upon dissolution or liquidation of the Company, all options granted
under this 2000 Stock Option Plan shall terminate, but each Optionee (if at such
time in the employ of or otherwise associated with the Company or any of its
subsidiaries) shall have the right, immediately prior to such dissolution or
liquidation, to exercise his or her option to the extent then exercisable.
(d) No fraction of a share shall be purchasable or deliverable upon the
exercise of any option, but in the event any adjustment hereunder of the number
of shares covered by the option shall cause such number to include a fraction of
a share, such fraction shall be adjusted to the nearest smaller whole number of
shares.
13. NO SPECIAL EMPLOYMENT OR OTHER RIGHTS.
Nothing contained in the 2000 Stock Option Plan or in any option
granted under the Plan shall confer upon any Optionee right with respect to the
continuation of his or her employment or other relationship by the Company (or
any subsidiary) or interfere in any way with the right of the Company (or any
subsidiary), subject to the terms of any separate employment or other agreement,
at any time to terminate such employment or other relationship or to increase or
decrease the compensation of the option holder from the rate in existence at the
time of the grant of an option. Whether an authorized leave of absence, or
absence in military or government service, shall constitute termination of
employment or another relationship shall be determined by the Compensation
Committee at the time.
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14. WITHHOLDING.
The Company's obligation to deliver shares upon the exercise of any
option granted under the 2000 Stock Option Plan and any payments or transfers
under Section 12 hereof shall be subject to the Optionee's satisfaction of all
applicable Federal, state and local income, excise, employment and any other tax
withholding requirements. All non-U.S. Optionees must pay all applicable
employee and employers wage and other withholding taxes in advance of receiving
shares upon exercise of any vested option.
15. RESTRICTIONS ON ISSUE OF SHARES.
(a) Notwithstanding the provisions of Section 8, the Company may delay
the issuance of shares covered by the exercise of an option and the delivery of
a certificate for such shares until one of the following conditions shall be
satisfied:
(i) The shares with respect to which such option has
been exercised are at the time of the issue of such shares effectively
registered or qualified under applicable Federal and state securities acts now
in force or as hereafter amended; or
(ii) Counsel for the Company shall have given an
opinion, which opinion shall not be unreasonably conditioned or withheld, that
such shares are exempt from registration and qualification under applicable
Federal and state securities acts now in force or as hereafter amended.
(b) It is intended that all exercises of options shall be effective,
and the Company shall use its best efforts to bring about compliance with the
above conditions within a reasonable time, except that the Company shall be
under no obligation to qualify shares or to cause a registration statement or a
post-effective amendment to any registration statement to be prepared for the
purpose of covering the issue of shares in respect of which any option may be
exercised, except as otherwise agreed to by the Company in writing.
16. PURCHASE FOR INVESTMENT; RIGHTS OF HOLDER ON SUBSEQUENT
REGISTRATION.
Unless the shares to be issued upon exercise of an option granted under
the 2000 Stock Option Plan have been effectively registered under the Securities
Act of 1933, as now in force or
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<PAGE>
hereafter amended, the Company shall be under no obligation to issue any shares
covered by any option unless the Optionee, in whole or in part, shall give a
written representation and undertaking to the Company which is satisfactory in
form and scope to counsel for the Company and upon which, in the opinion of such
counsel, the Company may reasonably rely, that he or she is acquiring the shares
issued pursuant to such exercise of the option for his or her own account as an
investment and not with a view to, or for sale in connection with, the
distribution of any such shares, and that he or she will make no transfer of the
same except in compliance with any rules and regulations in force at the time of
such transfer under the Securities Act of 1933, or any other applicable law, and
that if shares are issued without such registration, a legend to this effect may
be endorsed upon the securities so issued. In the event that the Company shall,
nevertheless, deem it necessary or desirable to register under the Securities
Act of 1933 or other applicable statutes any shares with respect to which an
option shall have been exercised, or to qualify any such shares for exemption
from the Securities Act of 1933 or other applicable statutes, then the Company
may take such action and may require from each Optionee such information in
writing for use in any registration statement, supplementary registration
statement, prospectus, preliminary prospectus or offering circular as is
reasonably necessary for such purpose and may require reasonable indemnity to
the Company and its officers and directors and controlling persons from such
holder against all losses, claims, damages and liabilities arising from such use
of the information so furnished and caused by any untrue statement of any
material fact therein or caused by the omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made.
17. MODIFICATION OF OUTSTANDING OPTIONS.
The Board may authorize the amendment of any outstanding option with
the consent of the Optionee when and subject to such conditions as are deemed to
be in the best interests of the Company and in accordance with the purposes of
this 2000 Stock Option Plan.
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18. APPROVAL OF STOCKHOLDERS.
The 2000 Stock Option Plan shall be subject to approval by the vote of
stockholders holding at least a majority of the voting stock of the Company
present, or represented, and entitled to vote at a duly held stockholders'
meeting, or by written consent of the stockholders as provided for under
applicable state law, within twelve (12) months after the adoption of the 2000
Stock Option Plan by the Board of Directors and shall take effect as of the date
of adoption by the Board of Directors upon such approval. The Compensation
Committee may grant options under the 2000 Stock Option Plan prior to such
approval, but any such option shall become effective as of the date of grant
only upon such approval and, accordingly, no such option may be exercisable
prior to such approval.
19. TERMINATION AND AMENDMENT.
Unless sooner terminated as herein provided, the 2000 Stock Option Plan
shall terminate ten (10) years from the date upon which the 2000 Stock Option
Plan was duly adopted by the Board. The Board may at any time terminate the 2000
Stock Option Plan or make such modification or amendment thereof as it deems
advisable; provided, however, that except as provided in this Section 20, the
Board may not, without the approval of the stockholders of the Company obtained
in the manner stated in Section 19, increase the maximum number of shares for
which options may be granted or change the designation of the class of persons
eligible to receive options under the 2000 Stock Option Plan, or make any other
change in the 2000 Stock Option Plan which requires stockholder approval under
applicable law or regulations.
20. RESERVATION OF STOCK.
The Company shall at all times during the term of the 2000 Stock Option
Plan reserve and keep available such number of shares of stock as will be
sufficient to satisfy the requirements of the 2000 Stock Option Plan and shall
pay all fees and expenses necessarily incurred by the Company in connection
therewith.
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21. LIMITATION OF RIGHTS IN THE OPTION SHARES.
An Optionee shall not be deemed for any purpose to be a stockholder of
the Company with respect to any of the options except to the extent that the
option shall have been exercised with respect thereto and, in addition, a
certificate shall have been issued theretofore and delivered to the Optionee.
22. NOTICES.
Any communication or notice required or permitted to be given under
the 2000 Stock Option Plan shall be in writing, and mailed by registered or
certified mail or delivered by hand, if to the Company, to its principal place
of business, attention: Treasurer, and, if to an Optionee, to the address as
appearing on the records of the Company.
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Exhibit 10.2
SHARING AGREEMENT
This Agreement made and entered into as of the 28th day of February, 2000,
(the "Date of the Agreement"), and as amended on April 7, 2000, by and among
o Bruker Physik AG ("BPAG-DE"), a German corporation,
o Techneon AG ("TAG-CH"), a Swiss corporation,
o Bruker Analytik GmbH ("BA-DE"), a German corporation,
o Bruker Elektronik GmbH ("BE-DE"), a German corporation,
o SBI Holding AG ("SBI-CH"), a Swiss corporation,
o Bruker Instruments, Inc. ("BII-US"), a Massachusetts corporation,
o Rhena Invest AG ("RIAG-CH"), a Swiss corporation,
o Bruker AG ("B-CH"), a Swiss corporation,
o Bruker-Spectrospin SA ("BS-FR"), a French corporation,
o Bruker SA("B-FR"), a French corporation,
o Bruker Daltonics Inc. ("BDAL-US"), a Delaware corporation,
o Bruker Optics, Inc. ("BOPT-US"), a Massachusetts corporation,
o Bruker AXS Inc. ("BAXS-US"), a Delaware corporation, and
o Bruker Medical AG ("BMED-CH"), a Swiss corporation.
WITNESSETH:
WHEREAS, the parties hereto presently are all affiliates of each other;
WHEREAS, each party hereto uses certain names, trademarks and other
intellectual property owned by other of the parties hereto and may use certain
services, facilities, products and related items of other of the parties hereto;
and
<PAGE>
WHEREAS, the parties hereto desire to confirm by a written agreement the
arm's-length terms and conditions under which all such use has taken place and
shall take place in the future;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the parties hereto hereby agree as follows:
1.0 Definitions
1.1 "Affiliate" shall mean any person or entity which, directly or
indirectly, controls a party hereto, or is controlled by a party hereto, it
being understood that for such purposes "control" shall mean possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such person or entity, whether through the ownership
of voting securities or by contract or otherwise.
1.2 "Change of Control" shall mean, with respect to any party
hereto, a change in the possession to a third party who is presently not an
Affiliate, directly or indirectly, of the power to direct or cause the direction
of the management of policies of such party, whether through a change in the
ownership of voting securities or by contract or otherwise which occurs prior to
completion of a public offering of at least $25,000,000 (twenty five million
dollars) on a well-established public stock market (e.g. NASDAQ, Neuer Markt, or
others). An initial public offering and transfer of control of a party to public
ownership shall specifically not constitute a Change of Control.
1.3 "Intellectual Property" shall mean all patents, patent
applications, inventions, trademarks, trademark applications, copyrights,
copyright applications, trade secrets, common law rights and other intellectual
property rights of any nature whatsoever in existence as of the Date of the
Agreement, provided, however, that in the
<PAGE>
case of any patents and patent applications of Bruker Daltonics, only those
patents and patent applications listed on Attachment B shall be included in
Intellectual Property.
1.4 "Lien" shall mean, with respect to any item, any mortgage, deed
of trust, pledge, hypothecation, assignment, security interest, lien, charge,
restriction, adverse claim by a third party, title defect or encumbrance of any
kind.
1.5 The "Name" shall mean the name "Bruker", any logos associated
therewith, and all Intellectual Property rights related thereto together with
all goodwill associated therewith.
2.0 Name
2.1 The parties acknowledge that BA-DE owns the entire right, title
and interest in and to the Name in Germany, as well as various international
countries listed in Attachment A. The parties acknowledge that BPAG-DE owns the
entire right, title and interest in and to the Name in the U.S., Israel and the
rest of the world, except where the rights to the Name are specifically owned by
BA-DE.
2.2 BA-DE and BPAG-DE hereby confirm that the other parties have
properly used the Name prior to the date hereof.
2.3 BA-DE and BPAG-DE hereby grant the other parties hereto a
perpetual, irrevocable, non-exclusive, royalty-free, non-transferable right and
license to use the Name in connection with the conduct and operation of the
business, as the same may be conducted from time to time, of each such party,
subject to and in accordance with the following:
2.3.1 Each party shall use the Name in such a manner that it
does not interfere with any other party's use of the Name. Moreover, all parties
hereto have or will endeavour to adopt additional names in conjunction with the
Name Bruker to
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identify clearly the scope and purpose of each autonomous business (e.g. Bruker
Optics, Bruker Daltonics(R), Bruker AXS, Bruker Medical, etc.)
2.3.2 No party shall at any time, directly or indirectly, take
any material action which materially detracts from the goodwill associated with
the Name.
2.3.3 Notwithstanding the irrevocable, perpetual nature of the
license set forth in this Section 2.3, for ten (10) years after the signing of
this Agreement, a Party's license under this Section 2.3 may become null and
void at the option of BPAG-DE and BA-DE, which option must be exercised in
writing within ninety (90) days of the occurrence if a party (a) files a
voluntary petition for bankruptcy, (b) has an involuntary petition for
bankruptcy filed against it which remains undismissed for at least sixty (60)
consecutive days, (c) fails to comply with the provisions of this Section 2.3,
(d) suffers a major loss of its reputation in its industry or marketplace, such
as by the distribution of defective, harmful, illegal, or dangerous goods or
merchandise which materially detracts from the goodwill associated with the
Name, or (e) undergoes a Change of Control. Provided, however, that each party
hereto which may receive such written notice under this section, shall be given
a ninety (90) day period after receipt of written notice to cure the problem or
occurrence which led to the notice.
2.3.4 While the license set forth in this Section 2.3 is
non-transferable, a party shall have the right to have its Affiliates use the
Name subject to and in accordance with the following:
2.3.4.1 Use by an Affiliate shall be subject to all the
conditions of this Section 2.3.
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2.3.4.2 The party to this Agreement which permits its
Affiliate to use the Name shall be fully responsible under this Agreement for
the use of the Name by such Affiliate.
2.3.5 No party shall take any action which would cause a Lien
to be placed on the Name or on a party's license rights under this Section 2.3.
2.4 In the event a party at any time believes a person or entity not
a party to this Agreement is infringing the Name or in the event any party's use
of the Name at any time leads to a claim that it is infringing the rights of a
third party, the parties hereto will work together and cooperate in good faith
with respect to the handling of such matter. The financial burden of enforcing
the rights in the Name will be shared equitably between the parties hereto.
3.0 Technology
3.1 The parties acknowledge that each party hereto (a) owns various
technology and the Intellectual Property relating thereto, and (b) has used and
uses the technology and Intellectual Property of other parties hereto, provided,
however, that use of the patents and patent applications included in such
Intellectual Property by each party hereto (other than use pursuant to the
separate written agreements referred to in Section 3.3 below) is limited to use
of these patents and patent applications as it is in effect prior to the Date of
the Agreement, and (c) that the Bruker Daltonics patents and patent applications
described in Schedule B are used only by those parties specified as using such
patents and patent applications in such Schedule B.
3.2 Each party confirms that the other parties hereto have properly
used its technology and related Intellectual Property prior to the date hereof.
<PAGE>
3.3 Each party acknowledges that certain specific written agreements
are in place between certain parties hereto defining the use, royalties and
terms and conditions of use of technology and related intellectual property
between the specific parties to such separate previously existing written
agreements. This Agreement shall not supersede or replace any existing written
agreements pertaining to the subject matter hereof. For all technology and
related intellectual property which is not governed by a specific separate
written agreement between the parties or between any one or more parties and a
third party, each party hereby grants each of the other parties hereto a
perpetual, irrevocable, non-exclusive, royalty free, non-transferable right and
license to use the technology and related Intellectual Property of the granting
party in connection with the conduct and operation of the business, as the same
may be conducted from time to time, of each such other party, unless such other
party hereto undergoes a Change of Control, subject to and in accordance with
the following:
3.3.1 In the event a party (the "First Party") desires to make
a broader use of the technology or Intellectual Property of another party (the
"Second Party") hereto than the use of such Intellectual Property by the First
Party as of the Date of this Agreement, the two parties shall negotiate in good
faith regarding the possibility of entering into a written agreement permitting
the First Party to make such broader use, on arm's length terms and conditions
such as would be utilized in a typical transaction with a person or entity not a
party to this Agreement, provided, however, that neither the First Party nor the
Second Party shall have any obligation to enter into any such agreement.
3.3.2 No party (the "First Party") shall at any time take any
<PAGE>
action which would materially adversely affect the value of any technology or
Intellectual Property of any other party hereto, which has been made available
to the First Party hereunder.
3.3.3 Each party shall use the technology and Intellectual
Property of the other parties in such a manner that it does not materially
interfere with any other party's use thereof.
3.3.4 While the license set forth in this Section 3.3 is
non-transferable, a party shall have the right to have its Affiliates use the
technology or Intellectual Party of another party hereto subject to and in
accordance with the following:
3.3.4.1 Use by an Affiliate shall be subject to all of
the conditions of this Section 3.3.
3.3.4.2 The party to this Agreement which permits its
Affiliate to use the technology or Intellectual Property of another party shall
be fully responsible for the use thereof by such Affiliate.
3.3.5 No party shall take any action which shall cause a Lien
to be placed on the technology or Intellectual Property of another party hereto
or on such party's license rights under this Section 3.3.
3.4 In the event a party at any time believes a person or
entity not a party to this Agreement is infringing the technology or
Intellectual Property of any party to this Agreement or in the event any party's
use of the technology or Intellectual Property of a party to this Agreement at
any time leads to a claim that such using party is infringing the rights of a
third party, the party which owns such technology or Intellectual Property will
be responsible for the handling of such matter, provided that such owning
<PAGE>
party shall receive reasonable cooperation in connection therewith from the
other parties hereto which use such technology or Intellectual Property.
4.0 Distribution
4.1 The parties acknowledge that prior to the date hereof they have
used, and may continue to use after the date hereof, selected common
distribution channels for their respective products, including through the
Affiliates of the parties hereto.
4.2 Such common distribution channels shall continue, and no party
shall take any action which would interfere with the right of any other party
hereto to use such distribution channels.
4.3 The terms and conditions of sale and the transfer pricing for
such distribution will be on an arm's length basis as would be utilized in a
typical transaction with a person or entity not a party to this Agreement.
4.4 No common sales channel shall have any exclusivity in any
country or other geographic area and any party hereto shall have the right to
establish its own subsidiary sales channel or third-party sales channels in any
country or other geographic area at any time for any reason. However, in this
case sixty (60) days written notice shall be given.
4.5 In addition to the ability to establish a new sales channel as
described in Section 4.4 hereof, a party hereto shall have the right at any time
to establish additional exclusive or non-exclusive sales channels in any
country, geographic area or market segment with sixty (60) days written notice.
5.0 Shared Services
<PAGE>
Any subleases of facilities, sharing of employees, shared services
such as payroll services and any related matters may occur as two (2) or more of
the parties hereto may agree from time to time as evidenced by a written
agreement containing arm's length terms, conditions and pricing.
6.0 Components and Subunits
To the extent that prior to the date hereof a party has purchased
subunits or components from another party hereto, such purchases may occur after
the date hereof subject to and in accordance with the following:
6.1 Purchases may occur for seven (7) years after the date hereof,
and spare parts purchases may occur for twelve (12) years after the date hereof.
6.2 The prices shall be the prices in effect as of the date hereof,
provided that there may be a yearly price increase in an amount not to exceed
the yearly increase in the Consumer Price Index, or corresponding index, of the
country in which the manufacture occurs.
6.3 The terms and conditions shall be the previously established
terms and conditions, provided that all such terms and conditions shall be
reasonable arm's length terms and conditions. In any case, the prices shall be
competitive, and from time to time may have to be adjusted by mutual agreement
bases on cost and market conditions.
7.0 Miscellaneous Provisions
7.1 This Agreement shall be governed by and construed in accordance
with either the laws of the Federal Republic of Germany or the laws of the
Commonwealth of Massachusetts, USA. If a party (or parties) hereto has a
complaint against another party (or parties) hereto, then the defendant shall
have the choice of law and jurisdiction between Massachusetts and Germany.
<PAGE>
7.2 All notices given hereunder shall be in writing and sent by
certified mail, return receipt requested or by facsimile (receipt confirmed) to
the principal place of business of each party hereto, provided that a party may
change its address for notice in writing.
7.3 Subject to the prohibitions on transferability set forth herein,
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. To the extent set forth
herein, this Agreement shall bind the Affiliates of the parties hereto.
7.4. The headings of the provisions of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part of
this Agreement.
7.5 This Agreement may be executed in any number of counterparts and
by the different parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all of which together shall
constitute one and the same instrument, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart. Facsimile signatures may be treated as original signatures.
7.6 In the event that any one or more of the provisions contained
herein is held to be void or unenforceable for any reason, the validity or
enforceability of the remainder of this Agreement shall continue in full force
and effect, and such void or unenforceable provision shall be enforced to the
maximum extent permissible.
7.7 This Agreement does not supersede any prior or contemporaneous
written agreements in connection therewith. This Agreement may be amended or
waived only by a written instrument executed by all parties hereto.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal in a series of counterpart originals as of the date first written above.
BRUKER PHYSIK AG BRUKER ANALYTIK GMBH
By:_______________________________ By:_______________________________
Title:____________________________ Title:____________________________
TECHNEON AG BRUKER ELEKTRONIK GMBH
By:_______________________________ By:_______________________________
Title:____________________________ Title:____________________________
SBI Holding AG BRUKER INSTRUMENTS, INC.
By:_______________________________ By:_______________________________
Title:____________________________ Title:____________________________
RHENA INVEST AG BRUKER AG
By:_______________________________ By:_______________________________
Title:____________________________ Title:____________________________
BRUKER-SPECTROSPIN SA BRUKER SA
By:_______________________________ By:_______________________________
Title:____________________________ Title:____________________________
BRUKER DALTONICS INC. BRUKER OPTICS, INC.
By:_______________________________ By:_______________________________
Title:____________________________ Title:____________________________
BRUKER AXS INC. BRUKER MEDICAL AG
By:_______________________________ By:_______________________________
Title:____________________________ Title:____________________________
<PAGE>
Attachment A
<TABLE>
<CAPTION>
Country Date of Filing Present Owner Number Remarks
- ------- -------------- ------------- ------ -------
<S> <C> <C> <C> <C>
Germany 10.21.71 Bruker Analytik GmbH 893509
Int'l Reg. 25.5.72 Bruker Analytik GmbH 388454 CH BE NL LU FR IT ES
AT LI CS
Israel 31.5.72 Bruker Physik AG 35545
US 9.8.72 Bruker Physik AG 1133028 Includes Logo
</TABLE>
<PAGE>
Attachment B
Ward and Olivo Status Report For Bruker Daltonics, Inc.
As of 03/21/00
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Application Title or W&O Doc. Application Application Assignee Patent Number Current Status
Project Description No. Serial Number Filing Date Issue Date of Application
or Project
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Extended Bradbury 140-011 08/548,012 10/5/95 Bruker (see 140-023) Re-filed as a
Nielson Gate Analytical continuation
Instruments (see 140-023)
- ------------------------------------------------------------------------------------------------------------------------------
Multideflector 140-012 08/560,396 11/17/95 Bruker 5,696,375-12/9/97 Issued.
Analytical Application for
Instruments reissue pending
- ------------------------------------------------------------------------------------------------------------------------------
High Resolution Post 140-013 08/561,635 11/17/95 Bruker 5,753,909-5/19/98 Issued
Selector for Time of Analytical
Flight Mass Instruments
Spectrometry
- ------------------------------------------------------------------------------------------------------------------------------
Deflection Based 140-014 08/561,635 11/22/95 Bruker 5/,821,534-5/13/98 Issued
Daughter Ion Selector Analytical
Instruments
- ------------------------------------------------------------------------------------------------------------------------------
Split Field Interface 140-015 08/561,634 11/22/95 Bruker 5,744,791-4/28/98 Issued
Analytical
Instruments
- ------------------------------------------------------------------------------------------------------------------------------
Metal Ion Directed 140-016 08/652,708 5/30/96 Bruker N/A Pending.
Cleavage of Peptide Analytical Awaiting
Bonds Instruments Instructions
from the client
- ------------------------------------------------------------------------------------------------------------------------------
Nth Order Delayed 140-017 08/644,854 5/10/96 Bruker 5,861,623-1/19/99 Issued
Extraction Analytical
Instruments
- ------------------------------------------------------------------------------------------------------------------------------
Gas Flow Focusing 140-018 N/A N/A Bruker N/A Application
Based Ion Source Daltonics, draft provided
Application Inc. to client, but
no instructions
to proceed - NO
ACTION
- ------------------------------------------------------------------------------------------------------------------------------
Co-Axial Multiple 140-019A 08/866,134 5/30/97 Bruker N/A Pending.
Reflection Time of Daltonics, Awaiting PTO
Flight Mass Inc. response
Spectrometer
- ------------------------------------------------------------------------------------------------------------------------------
Shield Lens 140-021 08/926,541 9/10/97 Bruker 5,942,758-8/24/99 Issued
Daltonics,
Inc.
- ------------------------------------------------------------------------------------------------------------------------------
Extended Bradbury 140-023 08/911,639 8/15/97 Bruker 5,986,258-11/16/99 Issued
Nielson Gate Daltonics,
(Continuation of Inc.
140-011)
- ------------------------------------------------------------------------------------------------------------------------------
Kinetic Energy 140-026 09/032,510 2/27/98 Bruker N/A Pending.
Focusing for Pulsed Daltonics, Awaiting PTO
Ion Desorption Mass Inc. response
Spectroscopy
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Ward and Olivo Status Report For Bruker Daltonics, Inc.
As of 03/21/00
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Application Title or W&O Doc. Application Application Assignee Patent Current Status
Project Description No. Serial Filing Date Number of Application
Number Issue Date or Project
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increased MS/MS 140-028 N/A N/A Bruker N/A Invention
Sensitivity in Time of Daltonics, Disclosure - NO
Flight Mass Inc. ACTION
Spectroscopy
- ----------------------------------------------------------------------------------------------------------------------
Surface Induced 140-029 09/087,535 5/29/98 Bruker N/A Pending.
Dissociation with Daltonics, Awaiting PTO
Pulsed Ion Extraction Inc. response.
- ----------------------------------------------------------------------------------------------------------------------
RF-DC Ion Guide 140-030 N/A N/A Bruker N/A Application
Daltonics, Draft provided
Inc. to client. To
be finalized
and filed ASAP
- ----------------------------------------------------------------------------------------------------------------------
Co-Axial Multiple 140-031 09/282,076 3/30/99 Bruker N/A Pending.
Reflection Time of Daltonics, Awaiting PTO
Flight Mass Inc. response.
Spectrometer (CIP of
140-019A)
- ----------------------------------------------------------------------------------------------------------------------
Multiple Ion Trap 140-032 N/A N/A Bruker N/A Application
Orthogonal Time of Daltonics, Draft provided
Flight Mass Spectrometer Inc. to client. To
be finalized
and filed ASAP.
- ----------------------------------------------------------------------------------------------------------------------
"Multipart" Capillary 140-033 N/A 2/18/00 Bruker N/A Patent
for API Source Daltonics, Application
Inc. filed. Awaiting
PTO Response.
- ----------------------------------------------------------------------------------------------------------------------
Method and Apparatus 140-034 09/374,477 8/13/99 Bruker N/A Pending.
for Multiple Frequency Daltonics, Missing parts
Multipole Inc. filed.
Preliminary
Amendment
to be filed ASAP.
- ----------------------------------------------------------------------------------------------------------------------
Reissue Application re 140-035 09/324,098 6/1/99 Indiana N/A Pending.
Reilly et al. US Pat. Univ. Missing parts
No. 5,712,479 Foundation filed 11/15/99.
- ----------------------------------------------------------------------------------------------------------------------
Ionization Chamber for 140-036 09/263,659 3/5/99 Bruker N/A Pending.
Atmospheric Pressure Daltonics, Missing parts
Ionization Mass Inc. filed.
Spectroscopy Preliminary
Amendment to be
filed ASAP.
- ----------------------------------------------------------------------------------------------------------------------
Shielded Lens 140-038 09/324,232 6/2/99 Bruker N/A Pending.
(Continuation of Daltonics, Missing parts
140-021) Inc. filed.
Preliminary
Amendment
to be filed ASAP.
- ----------------------------------------------------------------------------------------------------------------------
Multiple Ion Trap for 140-039 N/A N/A N/A. N/A Invention
Othogonal TOFMS Disclosure - NO
ACTION
- ----------------------------------------------------------------------------------------------------------------------
Extended Bradbury 140-041 09/344,598 6/25/99 Bruker N/A Pending.
Nielson Gate Daltonics, Missing parts
(Continuation of Inc. filed.
140-023) Preliminary
Amendment to be
filed ASAP.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Ward and Olivo Status Report For
Bruker Daltonics, Inc.
As of 03/21/00
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Application Title or W&O Doc. Application Application Assignee Patent Current Status
Project Description No. Serial Number Filing Date Number of Application
Issue Date or Project
- ------------------------------------------------------------------------------------------------------------------------------
Ionization Source for 140-042 N/A N/A Bruker N/A Application
Mass Spectrometry Daltonics, Draft provided
Inc. to client. To be
finalized and
filed ASAP.
- ------------------------------------------------------------------------------------------------------------------------------
Means and Method for a 140-043 N/A N/A Bruker N/A Application
Quill Sprayer for Daltonics, Draft provided
Electrospray Inc. to client. To be
finalized and
filed ASAP.
- ------------------------------------------------------------------------------------------------------------------------------
Method and Apparatus for 140-044 N/A N/A Bruker N/A Draft being
a Multipole Ion Guide Daltonics, prepared.
for an Electrospray Inc.
Ionization Source
(HEXAPOLE)
- ------------------------------------------------------------------------------------------------------------------------------
Method and Apparatus for 140-045 N/A N/A Bruker N/A Patent
an Electrospray Daltonics, Application
Ionization Source Inc. Filed. Awaiting
(NANOSPRAY) PTO Response.
- ------------------------------------------------------------------------------------------------------------------------------
Zero Adjust System for 140-047 N/A N/A Bruker N/A Awaiting More
an E2 Microspray Device Daltonics, Detail From
Inc. Inventors.
- ------------------------------------------------------------------------------------------------------------------------------
Method and Apparatus for 140-048 N/A N/A Bruker N/A Draft being
an Automated Ionization Daltonics, prepared.
System for Mass Inc.
Spectrometry (MULTIPART
CAPILLARY - ROBOT)
- ------------------------------------------------------------------------------------------------------------------------------
Mass Spectrometer 140-049 N/A N/A Bruker N/A Draft being
Daltonics, prepared.
Inc.
- ------------------------------------------------------------------------------------------------------------------------------
Method for the Automatic 140-050 N/A N/A Bruker N/A Application
Acquisition, Analysis Daltonics, Draft provided
and Electronic Delivery Inc. to client. To be
of High Resolution Exact finalized and
Mass ESI Mass Spectral filed ASAP.
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Listing of licensed patents and patent applications as of 3/31/00.
No. Assignee Technology Covered Remarks
- -----------------------------------------------------------------
1 Indiana Spatial-Velocity USPNs: 5,504,326
University Correlation Focusing 5,510,613
in Time-of-Flight 5,712,479
Mass Spectrometry Bruker Daltonics
holds the exclusive
right to practice
these patents.
2 Battelle Capillary Electro- USPN 4,842,701
Memorial phoresis - Electro- RE34,757
Institute spray Interface and 5,423,964
Method one pending app.
Japan 2647941
Canada 1,340,133
Bruker Daltonics
has non-exclusive
rights to practice
these patents.
3 ISIS Pharma- "Methods and Apparatus Pending US patent
ceuticals, Inc. for External Accumulation application. Bruker
and Photodissociation of has exclusive rights
Ions Prior to Mass Spectro- to practice any
metric Analysis" patents issued.
4 Imperial Research Method for multiplexed WO 96/27681
Technology, Ltd. genotyping PCT /GB96/00476
Bruker Daltonics
has exclusive right
to practice this
patent in
conjunction with
mass spectrometry.
Patents acquired via Viking.
No. Assignee Technology Covered Remarks
- -----------------------------------------------------------------
1 Bruker Daltonics Miniaturized Mass USPN 5,313,061
Spectrometer System Euro. PN 0476062
German PN
690283041.0
UKPN 2249662
Canadian PN
2,058,763
Japanese PN
Hei-2-509224
<PAGE>
Granted Patents: Bruker Daltonik GmbH, Bremen as of 12. Apr. 00
(in Sequence of Priority)
P5047 Family: MM Owner: BFA Priority: 10.03.80
German Title: Eingangskopf eines Mess/Nachweissystems fur chemische Agenzien
English Title: Input head of a measuring or identification system for chemical
agents
Inventors: Dr. B. Odernheimer Johannes Kremer K. Kranich
DE 3 009 069 21.10.82
EP 0 047 286 16.01.85
US 4 433 982 28.02.84
P5048 Family: MM Owner: BFA Priority: 23.09.81
German Title: Verfahren und Vorrichtung zur probenahme von Spurenkomponenten
in Gasen, Flussigkeiten, an Festkorpern oder in Oberflachenschichten
English Title: Method and device for the sampling of trace elements in gases,
liquids, solids or in surface layers
Inventors: Dr. B. Odernheimer
DE 3 137 765 27.04.89
EP 0 089 356 27.08.86
US 4 541 268 17.09.85
P4643 Family: TOF Owner: BAM Priority: 10.07.85
German Title: Flugzeitmassenspektrometer mit einem Ionenreflektor
English Title: Time-of-flight mass spectrometer using an ion reflector
Inventors: Dr. Rudiger Frey Prof. E. W. Schlag
EP 0 208 894 23.10.91
US ???
P5234 Family: CB Owner: BFA Priority: 23.12.87
German Title: Verfahren zur massenspektroskopischen Untersuchung eines
Gasgemisches und Massenspektrometer zur Durchfuhrung dieses Verfahrens
English Title: Method for mass-spectroscopic examination of a gas mixyture and
mass spectrometer intended for carrying out this method
Inventors: Dr. Jochen Franzen Dr. R.-H. Gabling Gerhard Heinen
Gerhard WeiB
US 5 028 777 02.07.91
P5242 Family: TOF Owner: BFA Priority: 22.03.88
German Title: Verfahren zum Verdampfen einer Probensubstanz
English Title: Method of vaporizing a sample substance
Inventors: Prof. E. W. Schlag J. Lindner Prof. R. C. Beavis
Prof. J. Grotemeyer
DE 3 809 504 21.09.89
EP 0 333 912 28.06.95
US 5 062 935 05.11.91
BDAL.DE Page 1
<PAGE>
DAR08 Family: CB Owner: USA Priority: 13.04.88
German Title: Verfahren zur massenspektrometrischen Untersuchung eines
Gasgemisches und Massenspektrometer zur Durchfuhrung dieses Verfahrens
English Title: Method of mass analyzing a sample by use of a quistor and a
quistor designed for performing this method
Inventors: Dr. Jochen Franzen Dr. R.-H. Gabling Gerhard Heinen
Gerhard WeiB
US 4 882 484 21.11.89
P5197 Family: CB Owner: BFA Priority: 13.04.88
German Title: Verfahren zur massenspektrometrischen Untersuchung eines
Gasgemisches und Massenspektrometer zur Durchfuhrung dieses Verfahrens
English Title: Method of mass analyzing a sample by use of a quistor and a
quistor designed for performing this method
Inventors: Dr. Jochen Franzen Dr. R.-H. Gabling Gerhard Heinen
Gerhard WeiB
EP 0 336 990 13.04.88
P5464 Family: MM Owner: BFA Priority: 28.05.88
German Title: Verfahren zur nicht intrusiven kontinuierlichen und
automatischen Analysenprobennahme, Abspeicherung und Bereitstellung der Proben
und Daten fur eine eventuelle Auswertung
English Title: Method for non-intrusive continuous and automatic taking of
samples, storing and supplying of samples and data for a possible evaluation
Inventors: Dr. B. Odernheimer
CA 1 335 866 13.06.95
DE 3 818 210 23.11.89
EP 0 407 469 07.04.93
Hei7-11475 07.07.95
PCT/DE89/00330
SU 4 831 972
US 5 216 925 08.06.93
P5464A Family: MM Owner: BFA Priority: 28.05.88
German Title:
English Title: Apparatus for non-intrusive continuous and automatic taking of
samples, storing and supplying of samples and data for a possible evaluation
Inventors: Dr. B. Odernheimer
US 5 205 178 27.04.93
P5368 Family: MM Owner: BFA Priority: 15.10.88
German Title: Vorrichtung zur Probenahme fur Uberwachungsfahrzeuge
English Title: Sampling device for inspection vehicles
Inventors: Dr. Dieter Koch Hans J. Baum
DE 3 835 207 03.08.89
EP 0 364 687 26.05.93
US 4 982 616 08.01.91
BDAL.DE Page 2
<PAGE>
P5357 Family: LC Owner: BFA Priority: 03.11.88
German Title: Flussigkeits-Kolbenpumpe fur chromatographische Analysegerate
English Title: Liquid plunger pump for chromatographic analyzer
Inventors: Dr. W. Risler
DE 3 837 325 03.09.90
P5511 Family: CB Owner: BFA Priority: 18.02.89
German Title:
English Title: Method and instrument for mass analyzing samples with a quistor
Inventors: Dr. Jochen Franzen Dr. R.-H. Gabling Gerhard Heinen
Gerhard WeiB
DE689 13 290 26.05.94
EP 0 383 961 23.02.94
P5467 Family: TOF Owner: BFA Priority: 23.06.89
German Title: MS-MS-Flugzeitmassenspektrometer
English Title: MS-MS time-of-flight mass spectrometer
Inventors: Priv.Doz. U. Boesl Prof. E. W. Schlag R. Weinkauf K. Walter
DE 3 920 566 01.04.93
EP 0 403 965 15.09.94
US 5 032 722 16.07.91
DAR15 Family: CB Owner: USA Priority: 18.12.89
German Title:
English Title: Method and instrument for mass analyzing samples with a quistor
Inventors: Dr. Jochen Franzen Dr. R.-H. Gabling Gerhard Heinen
Gerhard WeiB
US 4 975 577 04.12.90
P5505 Family: XQ Owner: BFA Priority: 08.01.90
German Title:
English Title: Generation of an exact three-dimensional quadrupole electric
field
Inventors: Dr. Yang Wang
CA 2 033 753 21.11.95
EP 0 509 986 31.05.95
US 5 283 436 01.02.94
B2321 Family: XQ Owner: BFA Priority: 29.05.90
German Title: Masenspektrometrischer Hochfrequenz-Quadrupolkafig mit
uberlagerten Multipolfeldern
English Title: Mass spectrometric high-frequency quadrupole cage with overlaid
multipole fields
Inventors: Dr. Jochen Franzen
DE 4 017 264 22.06.92
US 5 170 054 08.12.92
BDAL.DE Page 3
<PAGE>
B2326 Family: EM Owner: BFA Priority: 02.07.90
German Title: Verfahren und Vorrichtung zum Extrahieren geloster fluchtiger
Substanzen aus Flussigkeiten in die Gasphase
English Title: Method and apparatus for extracting dissolved, volatile
substances from liquids into the vapor phase
Inventors: Dr. Gokhan Baykut
DE 4 021 239 17.05.94
US 5 258 057 02.11.93
B2442 Family: TOF Owner: BFA Priority: 13.03.91
German Title: Verfahren und Vorrichtung zum Erzeugen von Ionen aus thermisch
instabilen, nichtfluchtigen gro(beta)en Molekulen
English Title: Method and Apparatus for generating ions from thermally
unstable, non-volatile, large molecules, particularly for
a mass spectrometer such as a time-of-flight mass spectrometer
Inventors: Dr. Rudiger Frey Dr. Armin Holle Gerhard WeiB
DE 4 108 462 28.04.94
EP 0 503 748 11.12.96
US 5 294 797 28.04.94
B2524 Family: TOF Owner: BFA Priority: 05.09.91
German Title: Verfahren und Detektor zum Nachweis schwerer Molekulionen in
einem Flugzeitmassenspektrometer
English Title: Method and detector for detecting heavy molecule ions in a
time-of-flight mass
Inventors: Dr. Armin Holle
DE 4 129 791 17.06.93
B2534 Family: XQ Owner: BFA Priority: 27.11.91
German Title: Verfahren zum Isolieren von Ionen einer auswahlbaren Masse
English Title: Method of clean removal of ions
Inventors: Dr. Jochen Franzen
DE 4 139 037 13.03.95
GB 2 261 988 10.05.95
US 5 331 157 19.07.94
01/91 Family: XQ Owner: BFA Priority: 23.12.91
German Title: Verfahren und Vorrichtung fur phasenrichtige Anregung des
Ionenauswurfs aus Ionenfallen-Massenspektrometern
English Title: Method and device for in-phase excitation of ion ejection from
ion trap mass spectrometers
Inventors: Dr. Jochen Franzen
DE 41 42 871 19.05.93
GB 9 226 835 03.05.95
US 5 347 127 13.09.94
BDAL.DE Page 4
<PAGE>
02/91 Family: XQ Owner: BFA Priority: 23.12.91
German Title: Verfahren fur phasenrichtiges Messen der Ionen aus
Ionenfallen-Massenspektrometern
English Title: Method and device for in-phase measuring of ions from ion trap
mass spectrometers
Inventors: Dr. Jochen Franzen
DE 41 42 870 17.10.94
GB 2 263 192 10.05.95
US 5 386 113 31.01.95
03/91 Family: XQ Owner: BFA Priority: 23.12.91
German Title: Verfahren und Vorrichtung fur die Steuerung der
Anregungsspannung fur den Ionenauswurf aus
Ionenfallen-Massenspektrometern
English Title: Method and device for control of the excitation voltage for ion
ejection from ion trap mass spectrometers
Inventors: Dr. Jochen Franzen
DE 41 42 869 19.05.93
GB 2 263 191 30.08.95
US 5 298 746 29.03.94
01/92 Family: EM Owner: BFA Priority: 20.01.92
German Title: Einla(beta)ventil fur ein Hochvakuum-Analysengerat mit
Bypass-Bepumpung
English Title: Inlet valve for a high vacuum analyzer with a bypass evacuation
Inventors: Dr. Jochen Franzen Gerhard WeiB Alfred Kraffert
GB 2 263 534 17.05.95
US 5 404 765 11.04.95
03/92 Family: XQ Owner: BFA Priority: 27.01.92
German Title: Vorrichtung fur die massenspektrometrische Untersuchung
schneller organischer Ionen
English Title: Method and device for the mass spectrometric examination of
fast organic ions
Inventors: Dr. Jochen Franzen
DE 42 02 123 02.11.94
US 5 373 156 13.12.94
04/92 Family: EM Owner: BFA Priority: 27.02.92
German Title: Verfahren und Vorrichtung zur Aufbereitung fester Proben mit
Hilfe pyrolytischer Verdampfung fur eine Analyse mittels eines
Massenspektrometers oder eines Gaschromatographen
English Title:
Inventors: Dr. Gokhan Baykut Anatoly Schiller
DE 42 06 109 24.01.94
BDAL.DE Page 5
<PAGE>
P5997 Family: MM Owner: BFA Priority: 13.11.92
German Title: Mobiles Massenspektrometer mit einer Probenahmevorrichtung mit
drehbarem Spurrad mit Metallfelge
English Title: Sampling device comprising a revolvable sampling wheel with a
metal wheel rim
Inventors: Dr. Dieter Koch G. Menne Alfred Kraffert R. Spudich
Gerhard WeiB
DE 4 238 399 27.08.93
FR 9 312 064 22.12.95
GB 2 272 518 10.07.96
US 5 437 203 01.08.95
10/93 Family: TOF Owner: BFA Priority: 26.02.93
German Title: Verfahren und Vorrichtung zur quantitativen Analyse von
Gasgemischen mittels resonanter Laser-Massenspektrometrie bei stark
fluktuierenden Me(beta)signalen
English Title:
Inventors: Christian Weikhardt Priv.Doz. U. Boesl Prof. E. W. Schlag
DE 43 05 981
01/93 Family: XQ Owner: BFA Priority: 19.05.93
German Title: Verfahren zur digitalen Erzeugung einer zusatzlichen
Wechselspannung fur die resonante Anregung von Ionen in Ionenfallen
English Title: Method and device for the digital generation of an additional
alternating voltage for the resonant excitation of ions in an ion trap
Inventors: Dr. Jochen Franzen Gerhard Heinen Dr. R.-H. Gabling
DE 43 16 737 01.09.94
GB 2 278 233 23.04.97
US 5 438 195 01.08.95
02/93 Family: XQ Owner: BFA Priority: 19.05.93
German Title: Auswurf von Ionen aus Ionenfallen durch kombinierte elektrische
Dipol- und Quadrupolfelder
English Title: Ejection of ions from ion traps by combined electrical dipole
and quadrupole fields
Inventors: Dr. Jochen Franzen
DE 43 16 738 17.10.96
GB 2 278 232 28.05.97
US 5 468 957 21.11.95
03/93 Family: TOF Owner: BFA Priority: 20.05.93
German Title: Nachweis schwerer Ionen in einem Flugzeitmassenspektrometer
English Title: Detection of very large molecular ions in a time-of-flight mass
spectrometer
Inventors: Dr. Armin Holle
DE 43 16 805 06.03.97
GB 2 278 494 25.09.96
US 5 463 218 31.10.95
BDAL.DE Page 6
<PAGE>
04/93 Family: XQ Owner: BFA Priority: 20.07.93
German Title: Quadrupol-Ionenfallen mit schaltbaren Multipolanteilen
English Title: Quadrupole ion trap with switchable multipole fractions
Inventors: Dr. Jochen Franzen Dr. Yang Wang
DE 43 24 224 06.10.94
GB 2 280 305 02.04.97
US 5 468 958 21.11.95
05/93 Family: XQ Owner: BFA Priority: 20.07.93
German Title: Verfahren zur Auswahl der Reaktionspfade in Ionenfallen
English Title: Method of selecting reaction paths in ion traps
Inventors: Dr. Jochen Franzen Dr. R.-H. Gabling
DE 43 24 233 31.08.94
GB 2 280 304 06.08.97
US 5 521 379 28.05.96
06/93 Family: XQ Owner: BFA Priority: 07.08.93
German Title: Verfahren fur eine Regelung der Raumladung in Ionenfallen
English Title: Method of automatically controlling the space charge in ion
traps
Inventors: Dr. Jochen Franzen
DE 43 26 549 08.04.94
GB 2 280 781 05.03.97
US 5 559 325 24.09.96
02/94 Family: XQ Owner: BFA Priority: 10.03.94
German Title: Verfahren zur Ionisierung von gelosten Atomen oder Molekulen aus
Flussigkeiten durch elektrisches Verspruhen
English Title: Method of ionizing atoms or molecules by electrospraying
Inventors: Dr. Matthias Mann Matthias Wilm
US 5 504 329 02.04.96
03/94 Family: TOF Owner: BFA Priority: 10.03.94
German Title: Verfahren zur massenspektrometrischen Analyse von Proben aus
2-D-Gel-Elektrophoreseplatten mit matrixunterstutzter, ionisierender
Laserdesorption
English Title: Method for mass spectrometric analysis of samples from
electrophoresis plates
Inventors: Dr. Jochen Franzen
DE 44 08 034 01.03.95
GB 2 280 304 06.08.97
US 5 595 636 21.01.97
04/94 Family: CB Owner: BFA Priority: 29.04.94
German Title: Virtueller Impaktor mit schlitzformigen Dusen
English Title: Virtual impactor
Inventors: Dr. Ulrich Geise
DE 44 15 014 29.07.96
GB 2 280 305 02.04.97
US 5 533 406 09.07.96
BDAL.DE Page 7
<PAGE>
06/94 Family: XQ Owner: BFA Priority: 03.05.94
German Title: Vorrichtung und Verfahren zur massenspektrometrischen
Untersuchung von Substanzgemischen durch Kopplung kapillarelektrophoretischer
Separation (CE) mit Elektrospray-Ionisation (ESI)
English Title: Device and method for mass spectrometric analysis of substance
mixtures by coupling capillary electrophoretic separation (CE) with electrospray
ionization (ESI)
Inventors: Dr. Jochen Franzen Dr. Frank Laukien
DE 44 15 480 02.09.99
GB 2 289 161 08.04.98
US 5 505 832 09.04.96
07/94 Family: XQ Owner: BFA Priority: 19.07.94
German Title: Verfahren zur Sto(beta)induzierten Fragmentierung von Ionen in
Ionenfallen
English Title: Collisionally induced decomposition of ions in nonlinear ion
traps
Inventors: Dr. Jochen Franzen
DE 44 25 384 16.06.95
GB 2 291 534 18.02.98
US 5 528 031 18.06.96
08/94 Family: XQ Owner: BFA Priority: 25.11.94
German Title: Verfahren und Vorrichtung zur Elektrospruh-Ionisierung fur
speichernde Massenspektrometer
English Title: Electrospraying Method for mass spectrometric analysis
Inventors: Dr. Jochen Franzen Dr. Matthias Mann Matthias Wilm
DE 44 44 229 25.07.96
GB 2 288 061 15.10.97
US 5,608,217
P6403 Family: TOF Owner: BFA Priority: 29.11.94
German Title: Verfahren und Vorrichtung zur verbesserten Massenauflosung eines
Flugzeitmassenspektrometers mit Ionenreflektor
English Title: Device and method for the improved mass resolution of
time-of-flight mass spectrometer with ion reflector
Inventors: Dr. Frank Laukien Prof. J. Grotemeyer Dr. Claus Koster
Johann Grundwurmer
DE 44 42 348
GB 9 524 247 29.07.98
US 5,739,529 14.04.98
11/95 Family: XQ Owner: BFA Priority: 21.01.95
German Title: Verfahren zur Anregung der Schwingungen von Ionen in Ionenfallen
mit Frequenzgemischen
English Title: Method for exciting the oscillations of ions in ion traps with
frequency mixtures
Inventors: Dr. Jochen Franzen Dr. Michael Schubert
DE 195 01 835 08.01.98
GB 2 297 192 28.10.98
US 5 654 542
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<PAGE>
12/95 Family: XQ Owner: BFA Priority: 21.01.95
German Title: Verfahren zur Regelung der Erzeugungsrate fur massenselektives
Einspeichern von Ionen in Ionenfallen
English Title: Method for controlling the ion generation rate for mass
selective loading of ions in ion traps
Inventors: Dr. Jochen Franzen Dr. Michael Schubert
GB 2 297 191 04.11.98
US 5,710,427 20.01.98
13/95 Family: CB Owner: BFA Priority: 09.02.95
German Title: Virtuelle Impaktoren mit schlitzformigen Dusen ohne Schlitzende
English Title: Virtual impactors with slit shaped nozzles without slit ends
Inventors: Dr. Ulrich Geise
DE 195 04 275 10.02.00
GB 2 297 706 28.07.99
US 5,858,043 12.01.99
16/95 Family: XQ Owner: BFA Priority: 28.03.95
German Title:
English Title: Method for ionization of heavy molecules at atmospheric
pressure
Inventors: Dr. Jochen Franzen Dr. Claus Koster
GB 2 299 445 09.12.98
US 5 663 561 02.09.97
17/95 Family: TOF Owner: BFA Priority: 28.03.95
German Title: Verfahren und Vorrichtung fur orthogonalen Einschu(beta)von
Ionen in ein Flugzeit-Massenspektrometer
English Title: Method and device for orthogonal ion injection into a
time-of-flight mass spectrometer
Inventors: Dr. Jochen Franzen
DE 195 11 333 26.03.96
GB 2 299 446 25.11.98
US 5,763,878 09.06.98
18/95 Family: IMS Owner: BSA Priority: 26.04.95
German Title: Verfahren zur Messung von Ionenmobilitatsspektren
English Title: Method of measuring ion mobility spectra
Inventors: Dr. Jochen Franzen
GB 2 300 296 09.06.99
US 5 719 392 17.02.98
19/95 Family: XQ Owner: BFA Priority: 26.04.95
German Title: Vorrichtung fur den gasgefuhrten Transport von Ionen durch
Kapillarrohr
English Title: Method and device for transport of ions in gas through a
capillary
Inventors: Dr. Jochen Franzen
DE 195 15 271 02.09.99
GB 2 300 295 14.10.98
US 5,736,740 07.04.98
BDAL.DE Page 9
<PAGE>
20/95 Family: XQ Owner: BFA Priority: 12.05.95
German Title: Hochfrequenz-Ionenleitsystem
English Title: Method and device for the transport of ions in vacuum
Inventors: Dr. Jochen Franzen
DE 19 517 507 21.03.96
GB 2 300 751 23.12.98
US 5 708 268 13.01.98
22/95 Family: XQ Owner: BFA Priority: 02.06.95
German Title: Vorrichtung fur die Einfuhrung von Ionen in ein
Massenspektrometer
English Title: Method and device for the introduction of ions into the gas
stream of an aperture to a mass
spectrometer
Inventors: Dr. Jochen Franzen
DE 195 20 276 26.08.99
GB 2 301 703 22.10.99
US 5,747,799 05.05.98
23/95 Family: XQ Owner: BFA Priority: 02.06.95
German Title:
English Title: Method and device for the introduction of ions into quadrupole
ion traps
Inventors: Dr. Jochen Franzen
GB 2 301 705 10.01.00
US 5,739,530 14.04.98
24/95 Family: XQ Owner: BFA Priority: 29.06.95
German Title: Ionenfallen-Massenspektrometer mit vakuum-externer
Ionenerzeugung
English Title: Ion trap mass spectrometer with vacuum-external ion generation
Inventors: Dr. Jochen Franzen
GB 2 302 984 10.11.99
US 5,859,433 12.01.99
25/95 Family: XQ Owner: BFA Priority: 30.06.95
German Title: Verfahren und Vorrichtung fur die Reflektion von geladenen
Teilchen
English Title: Method and device for the reflection of charged particles on
surfaces
Inventors: Dr. Jochen Franzen
DE 195 23 859
GB 2 302 985 12.01.00
US 5 572 035 05.11.96
26/95 Family: XQ Owner: BFA Priority: 14.09.95
German Title: Zwischenspeichern von Ionen fur massenspektrometrische
Untersuchungen
English Title: Temporary storage of ions for mass spectrometric analyses
Inventors: Dr. Jochen Franzen Dr. Michael Schubert
EP 0 738 000 A 16.02.00
US 5,811,800 22.09.98
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<PAGE>
28/95 Family: TOF Owner: BFA Priority: 19.09.95
German Title: Verbesserte Massenauflosung in Flugzeitmassenspektrometern mit
Reflektoren
English Title: Mass Resolution in time-of-flight mass spectrometers with
reflectors
Inventors: Dr. Armin Holle Dr. Claus Koster Dr. Jochen Franzen
US 5 654 545 05.08.97
30/95 Family: TOF Owner: BFA Priority: 27.11.95
German Title: Verfahren und Vorrichtungen zur Massenspektrometrie von
Tochterionen
English Title: Method for time-of-flight mass spectrometry of daughter ions
Inventors: Dr. Claus Koster
DE 195 44 808
US 5,734,161 31.03.98
31/95 Family: TOF Owner: BFA Priority: 14.12.95
German Title: Flugzeitmassenspektrometrie verbesserter Massenauflosung durch
Schalten einer Zwischenblende
English Title: Method for improved mass resolution with a TOF-LD source
Inventors: Dr. Armin Holle Dr. Claus Koster Dr. Jochen Franzen
US 5 641 959 24.06.97
32/95 Family: TOF Owner: BFA Priority: 15.12.95
German Title: Flugzeitmassenspektrometrie mit verbesserter Massenauflosung
English Title: Methjod of improving mass resolution in time-of-flight mass
spectrometry
Inventors: Dr. Armin Holle Dr. Claus Koster Dr. Jochen Franzen
US 195 47 949
US 5,742,049 21.04.98
34/96 Family: TOF Owner: BFA Priority: 24.04.96
German Title: Verfahren zur matrix-unterstutzten ionisierenden Laserdesorption
English Title: Method for matrix-assisted laser desorption and ionization
Inventors: Dr. Claus Koster Dr. Jochen Franzen
US 5,828,063 27.11.98
36/96 Family: TOF Owner: BFA Priority: 03.05.96
German Title: Lagerfahig vorpraparierte MALDI-Probentrager
English Title: Prefabricated MALDI layers suitable for storage
Inventors: Dr. Claus Koster Dr. Jochen Franzen Dr. Detlef Suckau
DE 196 18 032
37/96 Family: XQ Owner: BFA Priority: 20.06.96
German Title: Vorrichtung und Verfahren zum Einschuss von Ionen in eine
Ionenfalle
English Title: Method and device for injection of ions into an ion trap
Inventors: Dr. Jochen Franzen
DE 196 28 179 24.11.97
US 5,818,055 06.10.98
BDAL.DE Page 11
<PAGE>
38/96 Family: TOF Owner: BFA Priority: 01.07.96
German Title: Vorrichtung zum Einschleusen von Probentragern in ein
Massenspektrometer
English Title: Device and method for introduction of sample supports into a
mass spectrometer
Inventors: Dr. Armin Holle Dr. Claus Koster Rebettge
US 5,841,136 24.11.98
39/96 Family: TOF Owner: BFA Priority: 02.07.96
German Title: Verfahren zum Beladen von Probentragern fur Massenspektrometer
English Title: Method for loading sample supports for mass spectrometers
Inventors: Dr. Jochen Franzen
DE 196 28 178 18.09.97
US 5,770,860 23.06.98
41/96 Family: TOF Owner: BFA Priority: 15.08.96
German Title: Verfahren und Vorrichtung fur die genaue Massenbestimmung in
einem Flugzeitmassenspektrometer
English Title: Adjustment of sample support in time-of-flight mass
spectrometers
Inventors: Dr. Claus Koster Dr. Armin Holle Dr. Jochen Franzen
DE 196 33 441 26.02.98
US 5,910,656 08.06.99
42/96 Family: ICR Owner: BFA Priority: 19.08.96
German Title: Vorrichtung zur Uberfuhrung von Ionen und mit dieser
durchgefuhrtes Messverfahren
English Title: Introduction of ions from ion sources into mass spectrometers
Inventors: Dr. Gokhan Baykut
DE 196 29 134
US 5,825,026 20.10.98
43/96 Family: TOF Owner: BFA Priority: 20.08.96
German Title: Genaue Massensbestimmung mit MALDI-Flugzeitmassenspektrometern
English Title: Exact mass determination with MALDI time-of-flight mass
spectrometers
Inventors: Dr. Jochen Franzen Dr. Claus Koster
DE 196 33 507 21.12.97
US 5,869,830 09.02.99
44/96 Family: TOF Owner: BFA Priority: 30.08.96
German Title: Korrektur der Massenbestimmung mit
MALDI-Flugzeitmassenspektrometern
English Title: Accurate mass determination with MALDI time-of-flight mass
spectrometers using internal
reference substances
Inventors: Dr. Claus Koster Dr. Jochen Franzen Dr. Armin Holle
DE 196 35 646 29.01.98
US 5,886,345 23.03.99
BDAL.DE Page 12
<PAGE>
45/96 Family: TOF Owner: BFA Priority: 30.08.96
German Title: Hochstauflosendes lineares Flugzeitmassenspektrometer
English Title: Linear time-of-flight mass spectrometer with high mass
resolution
Inventors: Dr. Jochen Franzen
US 5,905,259 18.05.99
46/96 Family: TOF Owner: BFA Priority: 31.08.96
German Title: Hochauflosende Ionendetektion fur lineare
Flugzeitmassenspektrometer
English Title: High resolution ion detection for linear time-of-flight mass
spectrometers
Inventors: Dr. Jochen Franzen
US 5,898,173 27.04.99
47/96 Family: TOF Owner: BFA Priority: 09.09.96
German Title: Hochstauflosende Geometrie fur lineares
Flugzeitmassenspektrometer
English Title: Geometry for a linear time-of-flight mass spectrometer with
very high resolution
Inventors: Dr. Jochen Franzen
US 5,898,174 27.04.99
48/96 Family: TOF Owner: BFA Priority: 13.09.96
German Title: Simultane Fokussierung aller Massen in
Flugzeitmassenspektrometern
English Title: Wide mass range focusing in time-of-flight mass spectrometers
Inventors: Dr. Jochen Franzen
DE 196 38 577 15.01.98
US 5,969,348 19.10.99
50/97 Family: TOF Owner: BFA Priority: 24.02.97
German Title: Zwei-Schritt-Verfahren der DNA-Amplifikation fur
MALDI-TOF-Messungen
English Title: Two-step method of DNA amplification for MALDI-TOF measurement
Inventors: Dr. Ivo Gut Dr. Jochen Franzen
DE 197 10 166 10.12.98
51/97 Family: XQ Owner: B+H Priority: 04.03.97
German Title: Verfahren der vergleichenden Analyse mit
Ionenfallen-Massenspektrometern
English Title: Methods of comparative analyses using ion trap mass
spectrometers
Inventors: Dr. Michael Schubert Dr. John Fjeldsted Dr. Jochen Franzen
US 5,903,003 11.05.99
52/97 Family: XQ Owner: B+H Priority: 04.03.97
German Title: Verfahren der Raumladungsregelung von Tochterionen in
Ionenfallen
English Title: Method for space-charge control of daughter ions in ion traps
Inventors: Dr. Jochen Franzen Dr. Michael Schubert
US 5,936,241 10.08.99
BDAL.DE Page 13
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53/97 Family: TOF Owner: BFA Priority: 14.04.97
German Title: Verfahren und Gerate fur extrem schnelle DNA-Vervielfachung
durch Polymerase-Kettenreaktionen (PCR)
English Title: Methods for extremely fast DNA replication by polymerase chain
reactions (PCR)
Inventors: Dr. Jochen Franzen
DE 197 17 085 17.06.99
54/97 Family: XQ Owner: B+H Priority: 04.08.97
German Title: Axialsymmetrische Ionenfalle fur massenspektrometrische
Messungen
English Title: Ion trap mass spectrometer of high mass-constancy
Inventors: Gerhard WeiB Alfred Kraffert Dr. Michael Schubert
Dr. Jochen Franzen
DE 197 33 834 04.03.99
55/97 Family: TOF Owner: BFA Priority: 30.08.97
German Title: Flugzeitmassenspektrometer mit thermokompensierter Fluglange
English Title: Time-of-flight mass spectrometer with constant flight path
length
Inventors: Dr. Jochen Franzen
US 6,049,077 11.04.00
59/97 Family: TOF Owner: BFA Priority: 08.12.97
German Title: Probentrager fur die MALDI-Massenspektrometrie nebst Verfahren
zur Herstellung der Platten und zum Aufbringen der Proben
English Title: Sample support plates for MALDI mass spectrometry including
methods for manufacture of plates and application of samples
Inventors: Dr. Martin Dr. Jochen Franzen
DE 197 54 978
61/98 Family: TOF Owner: BFA Priority: 26.01.98
German Title: Massenspektrometrisches Verfahren zur genauen Massenbestimmung
unbekannter Ionen
English Title: Mass spectrometry method for accurate mass determination of
unknown ions
Inventors: Dr. Claus Koster
DE 198 03 309 07.10.99
62/98 Family: TOF Owner: BFA Priority: 23.02.98
German Title: Verfahren zur qualitativen Schnellauswertung analytischer
Massenspektren
English Title: Method of fast evaluation of analytical mass spectra
Inventors: Dr. Jochen Franzen
DE 198 08 584 26.08.99
66/98 Family: TOF Owner: BFA Priority: 10.06.98
German Title: Thermostabile Flugzeiten in Flugzeitmassenspektrometern
English Title: Method and apparatus for thermally stabilizing flight times in
time-of-flight mass spectrometers
Inventors: Horst Rache
DE 198 27 841 10.02.00
BDAL.DE Page 14
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71/98 Family: DA Owner: BFA Priority: 28.09.98
German Title: Verfahren fur die interaktive Steuerung von Me(beta)- oder
Auswerteverfahren in Chromatographie, Spektroskopie oder Elektrophorese
English Title: Method of using the mouse for interactive control in
chromatography or spectroscopy
Inventors: Dr. Carsten Bassmann
DE 198 45 699 02.12.99
BDAL.DE Page 15
<PAGE>
Bruker Daltonik GmbH, Bremen: Patent Applications as of 12. Apr. 00
(in sequence of priority dates)
P5511 Family: CB Owner: BFA Priority: 18.02.89
German Titel:
English Titel: Method and instrument for mass analyzing samples with a quistor
Inventors: Dr. Jochen Franzen Dr. R.-H. Gabling Gerhard Heinen
Gerhard WeiB
P5997 Family: MM Owner: BFA Priority: 13.11.92
German Title: Mobiles Massenspektrometer mit einer Probenahmevorrichtung mit
drehbarem Spurrad mit Metallfelge
English Titel: Sampling device comprising a revolvable sampling wheel with a
metal wheel rim
Inventors: Dr. Dieter Koch G. Menne Alfred Kraffert R. Spudich
Gerhard WeiB
18/95 Family: IMS Owner: BSA Priority: 26.04.95
German Title: Verfahren zur Messung von Ionenmobilitatsspektren
English Titel: Method of measuring ion mobility spectra
Inventors: Dr. Jochen Franzen
28/95 Family: TOF Owner: BFA Priority: 19.09.95
German Title: Verbesserte Massenauflosung in Flugzeitmassenspektrometern mit
Reflektoren
English Titel: Mass Resolution in time-of-flight mass spectrometers with
reflectors
Inventors: Dr. Armin Holle Dr. Claus Koster Dr. Jochen Franzen
30/95 Family: TOF Owner: BFA Priority: 27.11.95
German Title: Verfahren und Vorrichtungen zur Massenspektrometrie von
Tochterionen
English Titel: Method for time-of-flight mass spectrometry of daughter ions
Inventors: Dr. Claus Koster
32/95 Family: TOF Owner: BFA Priority: 15.12.95
German Title: Flugzeitmassenspektrometrie mit verbesserter Massenauflosung
English Titel: Methjod of improving mass resolution in time-of-flight mass
spectrometry
Inventors: Dr. Armin Holle Dr. Claus Koster Dr. Jochen Franzen
33/96 Family: TOF Owner: BFA Priority: 08.03.96
German Title: Ionisierung schwerer Molekule bei Atmospharendruck
English Titel: Method for the ionization of heavy molecules at atmospheric
pressure
Inventors: Dr. Jochen Franzen Dr. Claus Koster
BDAL.DE Patent Page 1
<PAGE>
34/96 Family: TOF Owner: BFA Priority: 24.04.96
German Title: Verfahren zur matrix-unterstutzten ionisierenden Laserdesorption
English Titel: Method for matrix-assisted laser desorption and ionization
Inventors: Dr. Claus Koster Dr. Jochen Franzen
GB 2 299 445 A
36/96 Family: TOF Owner: BFA Priority: 03.05.96
German Title: Lagerfahig vorpraparierte MALDI-Probentrager
English Titel: Prefabricated MALDI layers suitable for storage
Inventors: Dr. Claus Koster Dr. Jochen Franzen Dr. Detlef Suckau
37/96 Family: XQ Owner: BFA Priority: 20.06.96
German Title: Vorrichtung und Verfahren zum Einschuss von Ionen in eine
Ionenfalle
English Titel: Method and device for injection of ions into an ion trap
Inventors: Dr. Jochen Franzen
38/96 Family: TOF Owner: BFA Priority: 01.07.96
German Title: Vorrichtung zum Einschleusen von Probentragern in ein
Massenspektrometer
English Titel: Device and method for introduction of sample supports into a
mass spectrometer
Inventors: Dr. Armin Holle Dr. Claus Koster Jens Rebettge
39/96 Family: TOF Owner: BFA Priority: 02.07.96
German Title: Verfahren zum Beladen von Probentragern fur Massenspektrometer
English Titel: Method for loading sample supports for mass spectrometers
Inventors: Dr. Jochen Franzen
41/96 Family: TOF Owner: BFA Priority: 15.08.96
German Title: Verfahren und Vorrichtung fur die genaue Massenbestimmung in
einem Flugzeitmassenspektrometer
English Titel: Adjustment of sample support in time-of-flight mass
spectrometers
Inventors: Dr. Claus Koster Dr. Armin Holle Dr. Jochen Franzen
42/96 Family: ICR Owner: BFA Priority: 19.08.96
German Title: Vorrichtung zur Uberfuhrung von Ionen und mit dieser
durchgefuhrtes Messverfahren
English Titel: Introduction of ions from ion sources into mass spectrometers
Inventors: Dr. Gokhan Baykut
BDAL.DE Patent Page 2
<PAGE>
43/96 Family: TOF Owner: BFA Priority: 20.08.96
German Title: Genaue Massensbestimmung mit MALDI-Flugzeitmassenspektrometern
English Titel: Exact mass determination with MALDI time-of-flight mass
spectrometers
Inventors: Dr. Jochen Franzen Dr. Claus Koster
44/96 Family: TOF Owner: BFA Priority: 30.08.96
German Title: Korrektur der Massenbestimmung mit
MALDI-Flugzeitmassenspektrometern
English Titel: Accurate mass determination with MALDI time-of-flight mass
spectrometers using internal reference substances
Inventors: Dr. Claus Koster Dr. Jochen Franzen Dr. Armin Holle
45/96 Family: TOF Owner: BFA Priority: 30.08.96
German Title: Hochstauflosendes lineares Flugzeitmassenspektrometer
English Titel: Linear time-of-flight mass spectrometer with high mass
resolution
Inventors: Dr. Jochen Franzen
46/96 Family: TOF Owner: BFA Priority: 31.08.96
German Title: Hochauflosende Ionendetektion fur lineare
Flugzeitmassenspektrometer
English Titel: High resolution ion detection for linear time-of-flight mass
spectrometers
Inventors: Dr. Jochen Franzen
47/96 Family: TOF Owner: BFA Priority: 09.09.96
German Title: Hochstauflosende Geometrie fur lineares
Flugzeitmassenspektrometer
English Titel: Geometry for a linear time-of-flight mass spectrometer with
very high resolution
Inventors: Dr. Jochen Franzen
48/96 Family: TOF Owner: BFA Priority: 13.09.96
German Title: Simultane Fokussierung aller Massen in
Flugzeitmassenspektrometern
English Titel: Wide mass range focusing in time-of-flight mass spectrometers
Inventors: Dr. Jochen Franzen
49/96 Family: TOF Owner: BFA Priority: 25.10.96
German Title: Hochauflosender Hochmassendetektor fur
Flugzeitmassenspektrometer
English Titel: Ion detector
Inventors: Dr. Claus Koster
BDAL.DE Patent Page 3
<PAGE>
50/97 Family: TOF Owner: BFA Priority: 24.02.97
German Title: Zwei-Schritt-Verfahren der DNA-Amplifikation fur
MALDI-TOF-Messungen
English Titel: Two-step method of DNA amplification for MALDI-TOF measurement
Inventors: Dr. Ivo Gut Dr. Jochen Franzen
51/97 Family: XQ Owner: B+H Priority: 04.03.97
German Title: Verfahren der vergleichenden Analyse mit
Ionenfallen-Massenspektrometern
English Titel: Methods of comparative analyses using ion trap mass
spectrometers
Inventors: Dr. Michael Schubert Dr. John Fjeldsted Dr. Jochen Franzen
52/97 Family: XQ Owner: B+H Priority: 04.03.97
German Title: Verfahren der Raumladungsregelung von Tochterionen in
Ionenfallen
English Titel: Method for space-charge control of daughter ions in ion traps
Inventors: Dr. Jochen Franzen Dr. Michael Schubert
GB 2 322 961
53/97 Family: TOF Owner: BFA Priority: 14.04.97
German Title: Verfahren und Gerate fur extrem schnelle DNA-Vervielfachung
durch Polymerase-Kettenreaktionen (PCR)
English Titel: Methods for extremely fast DNA replication by polymerase chain
reactions (PCR)
Inventors: Dr. Jochen Franzen
54/97 Family: XQ Owner: B+H Priority: 04.08.97
German Title: Axialsymmetrische Ionenfalle fur massenspektrometrische
Messungen
English Titel: Ion trap mass spectrometer of high mass-constancy
Inventors: Gerhard WeiB Alfred Kraffert Dr. Michael Schubert
Dr. Jochen Franzen
55/97 Family: TOF Owner: BFA Priority: 30.08.97
German Title: Flugzeitmassenspektrometer mit thermokompensierter Fluglange
English Titel: Time-of-flight mass spectrometer with constant flight path
length
Inventors: Dr. Jochen Franzen
GB 2 329 066
BDAL.DE Patent Page 4
<PAGE>
56/97 Family: XQ Owner: B+H Priority: 17.11.97
German Title: Quadrupol-Hochfrequenz-Ionenfallen fur Massenspektrometer
English Titel: Quadrupole RF ion traps for mass spectrometers
Inventors: Dr. Jochen Franzen Prof.Dr. Arne Kasten
57/97 Family: XQ Owner: B+H Priority: 25.11.97
German Title: Vorselektion extern erzeugter Ionen fur Quadrupol-Ionenfallen
English Titel: Preselection of externally generated ions for quadrupole ion
traps
Inventors: Dr. Michael Schubert Dr. Jochen Franzen
59/97 Family: TOF Owner: BFA Priority: 08.12.97
German Title: Probentrager fur die MALDI-Massenspektrometrie nebst Verfahren
zur Herstellung der Platten und zum Aufbringen der Proben
English Titel: Sample support plates for MALDI mass spectrometry including
methods for manufacture of plates and application of samples
Inventors: Dr. Martin Schurenberg Dr. Jochen Franzen
60/98 Family: TOF Owner: BFA Priority: 19.01.98
German Title: Verfahren zur bevorzugten Herstellung nur eines Stranges
selektierten Genmaterials fur massenspektrometrische Messungen
English Titel: Method for preferred production of only one strand of selected
genetic material for mass spectrometric measurements
Inventors: Dr. Jorn Mosner Dr. Jochen Franzen
61/98 Family: TOF Owner: BFA Priority: 26.01.98
German Title: Massenspektrometrisches Verfahren zur genauen Massenbestimmung
unbekannter Ionen
English Titel: Mass spectrometry method for accurate mass determination of
unknown ions
Inventors: Dr. Claus Koster
BDAL.DE Patent Page 5
<PAGE>
62/98 Family: TOF Owner: BFA Priority: 23.02.98
German Title: Verfahren zur qualitativen Schnellauswertung analytischer
Massenspektren
English Titel: Method of fast evaluation of analytical mass spectra
Inventors: Dr. Jochen Franzen
65/98 Family: TOF Owner: BFA Priority: 30.04.98
German Title: Mutationsanalyse mitteld Massenspektrometrie
English Titel: Mutation analysis using mass spectrometry
Inventors: Dr. Ivo Gut
66/98 Family: TOF Owner: BFA Priority: 10.06.98
German Title: Thermostabile Flugzeiten in Flugzeitmassenspektrometern
English Titel: Method and apparatus for thermally stabilizing flight times in
time-of-flight mass spectrometers
Inventors: Horst Rache
GB 2 338 824
67/98 Family: TOF Owner: BFA Priority: 15.06.98
German Title: Ionisierung hochmolekularer Substanzen durch Laserdesorption aus
flussigen Matrices
English Titel: Ionization of high-molecular substances by laser desorption
from liquid matrices
Inventors: Dr. Claus Koster Dr. Jochen Franzen
GB 2 340 298
68/98 Family: TOF Owner: BFA Priority: 20.06.98
German Title: Me(beta)verfahren fur Polymorphismen und Mutationen in
Nukleinsauren
English Titel: Methods of screening nucleic acids using mass spectrometry
Inventors: Thomas Bonk Dr. Andreas Humeny Prof. Cord-Michael
Prof. M. von Knebel Dr. Jochen Franzen
70/98 Family: XQ Owner: BFA Priority: 28.09.98
German Title: Verfahren zur Darstellung von Tochterionespektren der
Ionenfallen-Massenspektrometrie
English Titel: Methods for library searches and extraction of structural
information from daughter ion spectra in ion trap mass spectrometry
Inventors: Dr. Jochen Franzen
BDAL.DE Patent Page 6
<PAGE>
71/98 Family: DA Owner: BFA Priority: 28.09.98
German Title: Verfahren fur die interaktive Steuerung von Me(beta)- oder
Auswerteverfahren in Chromatographie, Spektroskopie oder Elektrophorese
English Titel: Method of using the mouse for interactive control in
chromatography or spectroscopy
Inventors: Dr. Carsten Bassmann
*72/98 Family: XQ Owner: BFA Priority: 28.09.98
German Title: Verfahren zur Verwaltung von Tochterionen uber mehrere
Generationen
English Titel: Method for management of daughter ion spectra over several
generations
Inventors: Dr. Andreas Germanus
07/98 Family: TOF Owner: BSA Priority: 10.11.98
German Title: Einfache SNP-Analyse mittels Massenspektrometrie
English Titel: Simple SNP analysis using mass spectrometry
Inventors: Dr. Markus Kostrzewa Dr. Thomas Frohlich Dr. Thomas Wenzel
74/98 Family: TOF Owner: BDAL Priority: 30.11.98
German Title: Tochterionenspektren mit Flugzeitmassenspektrometern
English Titel: Daughter ion spectra with time-of-flight mass spectrometers
Inventors: Dr. Claus Koster Dr. Armin Holle Dr. Jochen Franzen
75/99 Family: TOF Owner: BDAL Priority: 27.01.99
German Title: Validierbare Punktmutationsanalyse mittels Massenspektrometrie
English Titel:
Inventors: Dr. Ivo Gut Dr. Jochen Franzen
76/99 Family: ICR Owner: BDAL Priority: 12.03.99
German Title: Verfahren und Vorrichtung zur matrixunterstutzten
Laserdesorptions-Ionisierung von Substanzen
English Titel: A method and device for matrix assisted laser desorption
ionization of substances
Inventors: Dr. Gokhan Baykut
77/99 Family: ICR Owner: BDAL Priority: 15.05.99
German Title: Verfahren und Vorrichtung zur Regelung der Ionenzahl in
Ionenfallen-Massenspektrometern
English Titel:
Inventors: Dr. Gokhan Baykut Dr. Jochen Franzen
- --------------------------------------------------------------------------------
* This patent is used from time to time by parties to this agreement other than
BDAL in connection with the use by such parties of BDAL's HyStar software.
BDAL.DE Patent Page 7
<PAGE>
78/99 Family: TOF Owner: BDAL Priority: 16.05.99
German Title: Aufreinigende Probentrager fur die MALDI-Massenspektrometrie
English Titel:
Inventors: Dr. Jochen Franzen
79/99 Family: TOF Owner: BDAL Priority: 30.06.99
German Title: Kopplung Dunnschicht-Chromatographie und Massenspektrometrie
(TLC/MS)
English Titel:
Inventors: Dr. F.-J. Mayer-Posner Dr. Jochen Franzen
*80/99 Family: XQ Owner: BDAL Priority: 01.07.99
German Title: Steuerung von Mess- und Auswerteverfahren mit der Computermaus
English Titel:
Inventors: Rudiger Dreier Dr: Gerd Eden Dr. Jochen Franzen
81/99 Family: XQ Owner: BDAL Priority: 12.07.99
German Title: Fragmentierung in Quadrupol-Ionenfallenmassenspektrometern
English Titel:
Inventors: Dr. Andeas Brekenfeld Dr. Michael Schubert Dr. Jochen Franzen
82/99 Family: ICR Owner: BDAL Priority: 03.08.99
German Title: Vorrichtung und Verfahren zum abwechselnden Betrieb mehrerer
Ionenquellen
English Titel:
Inventors: Dr. Gokhan Baykut
83/99 Family: TOF Owner: BDAL Priority: 01.10.99
German Title: Kompaktes Reflektor-Flugzeitmassenspektrometer hochster
Massenauflosung
English Titel:
Inventors: Dr. Armin Holle
84/99 Family: TOF Owner: BDAL Priority: 04.10.99
German Title: Prozessieren von Proben in Losung mit definiert kleiner
Wandkontaktflache
English Titel:
Inventors: Dr. Martin Schurenberg Dr. Jochen Franzen
Dr. Eckehard Nordhof Dr. Holger Eickhoff
- --------------------------------------------------------------------------------
* This patent is used from time to time by parties to this agreement other than
BDAL in connection with the use by such parties of BDAL's HyStar software.
BDAL.DE Patent Page 8
<PAGE>
85/99 Family: TOF Owner: BDAL Priority: 04.11.99
German Title: Kontaminationsfreie Ubertragung von Bioproben
English Titel:
Inventors: Dr. Jochen Franzen
86/99 Family: TOF Owner: BDAL Priority: 10.12.99
German Title: Ionenselektor fur Tochterionenspektren in
Flugzeitmassenspektrometern
English Titel:
Inventors: Platzhalter
87/99 Family: Owner: B+E Priority: 19.12.99
German Title: Massenspektrometrische Genotypisiserung des Gens MDR-1
English Titel:
Inventors: Platzhalter
88/00 Family: TOF Owner: BDAL Priority: 08.02.00
German Title: Gitterloses Reflektor-Flugzeitmassenspektrometer fur
orthogonalen Ioneneinschuss
English Titel:
Inventors: Dr. Jochen Franzen
89/00 Family: TOF Owner: BDAL Priority: 27.02.00
German Title: Konditionierung eines Ionenstrahls fur den Einschuss in ein
Flugzeitmassenspektrometer
English Titel:
Inventors: Dr. Jochen Franzen
90/00 Family: Owner: BDAL Priority: 06.03.00
German Title: Tandem-Massenspektrometer aus zwei Quadrupolfiltern
English Titel:
Inventors: Dr. Jochen Franzen
BDAL.DE Patent Page 9
<PAGE>
Exhibit 10.3
MALDI-TOF Mass Spectrometry
Collaboration and OEM Agreement
between
PerkinElmer Instruments LLC and its Affiliates ("PKI")
and
Bruker Daltonics Inc. and its Affiliates ("BDAL")
1. BACKGROUND
o PKI wishes to offer and distribute a MALDI-TOF system to its North
American pharmaceutical, biotech, food and chemical industry customers, as
well as to certain international markets by Q2-2000.
o PKI requires a high-quality MALDI-TOF for a diverse range of customer
applications from a supplier with a strong reputation.
o PKI has particularly strong distribution channels into pharmaceutical and
food QA/QC, pharma/biotech and chemical manufacturing, pharma/biotech drug
development, pre-clinical and clinical trials.
o PKI also has international distribution strength in certain markets where
BDAL is not well established, e.g. Latin America, Italy, Eastern Europe,
Israel, India;
o If PKI rolls out a MALDI-TOF, it intends to sell such a product in
significant numbers. Eventually, PKI wishes to sell such a product
globally.
o Based on the performance, automation and quality of its systems, BDAL has
recently become the leading MALDI-TOF company for high-end research
applications in proteomics, PKIs, and drug discovery.
1
<PAGE>
o BDAL has significant MALDI-TOF sales into universities, medical schools,
government research labs, and pharma/biotech research and drug discovery
labs.
o BDAL presently does not have strong distribution into industrial QA/QC,
manufacturing, clinical trials, and drug development, and BDAL does not
have complete international distribution coverage
o At Pittcon 2000, BDAL will introduce a high-performance, bench-top,
PC/NT-driven MALDI-TOF system called OmniFLEXT(TM). This new product has
very good performance/price ratio compared to otherbench-top MALDI-TOFs on
the market. It is arguably "the first bench-top MALDI-TOF worth buying".
The OmniFLEX also features an attractive industrial design, and a well
thought-out intuitive GUI.
2. OBJECTIVE
PKI and BDAL wish to enter into a strategic alliance in MALDI-TOF mass
spectrometry. In particular, PKI and BDAL wish to collaborate on the
distribution of BDAL's linear bench-top OMNIFLEXTm MALDI-TOF system via PKI's
international distribution system.
3. TERM AND NON-COMIPETE CLAUSE
Once signed by both parties this Agreement shall initially be valid until
Dec. 31, 2001 ("Phase I"). If both PKI and BDAL are satisfied with Phase I of
this Agreement, and if and when the numerical targets agreed to herein for Phase
I have been reached, then this Agreement shall be automatically extended to Dec.
31st , 2003 ("Phase 2"). Thereafter, this Agreement is renewable for additional
two-year periods by mutual written consent.
2
<PAGE>
During the Term of this Agreement, and, except as described below, for one
(1) year following the expiration or termination of this Agreement, PKI will not
develop, manufacture, offer to sell, sell or deliver any other benchtop
MALDI-TOF system comparable to the OmniFLEX, i.e. in the selling price range
between $80,000 to $140,000, and not built by BDAL, unless BDAL cannot deliver
systems without sustained, substantial and non-solvable delivery or quality
problems which negatively impact PKI's ability to sell the OmniFLEX.
Any MALDI-TOF system manufactured and/or sold by Genomic Solutions Inc. as
part of a complete proteomics solution (presently called Investigator(TM)
proteomics solution) via PKI or other sales channels shall be specifically
excluded from this non-compete clause. Also, this non-compete clause shall not
apply if PKI acquires an instrument company with a MALDI-TOF product line if
that line represents less than 30% of the acquired company's business. Finally,
this non-compete clause shall not apply if BDAL is not willing to sell and
deliver OmniFLEX systems to PKI, for example by refusing to extend this
Collaboration into a Phase 2 (see below), even though PKI may have achieved the
minimum quantities of Phase I (see below).
4. PRODUCT DEFINITION & CO-LABELLING
The mass spectrometer that may be resold by PKI as an authorized
OEM-dealer for BDAL is a linear OMNIFLEX(TM) MALDI-TOF, as described in
Attachment A, which will meet the specifications contained in Attachment B. PKI
may also resell additional BDAL MALDI-TOF accessories, such as MAP(TM) MALDI
AutoPrep robots, AnchorChip(TM) high-sensitivity targets, various
post-processing software packages, and MALDI-TOF consumables (collectively the
"Accessories"), which are described on
3
<PAGE>
BDAL's standard U.S. MALDI-TOF price list from time to time. The linear OmniFLEX
system to be sold by PKI will be co-labeled with both, equally-sized PKI and
BDAL decals on the system.
If, during the term of this Agreement BDAL introduces a system that
replaces or supersedes the OmniFLEX or introduces new Accessories, BDAL will
sell such products to PKI under the terms of this Agreement.
PKI is specifically not authorized to sell the reflector version of the
OmniFLEX. If a research customer absolutely needs a reflector OmniFLEX system
from the beginning, then PKI will pass this customer lead on to BDAL. The only
exception to this policy is that PKI upon specific request by its linear
OmniFLEX customer, may sell the reflector upgrade to PKI linear OmniFLEX
customers who have accepted their PKI-purchased linear OnmiFLEX more than twelve
(12) months before those customers request an upgrade. The transfer price to PKI
will be the BDAL U.S. list price minus a 10% finders' fee for PKI. BDAL will
install the reflector upgrade, and provide a limited 90-day warranty on the
reflector upgrade. Moreover, PKI agrees not to incentivize its sales force or
product manager for reflectron upgrades sold via PKI to its customer base of
linear OmniFLEX customers.
For customer leads passed from PKI to BDAL which result in an accepted
purchase order for a reflectron OmniFLEX, or a reflectron upgrade, to BDAL, BDAL
will pay PKI a 5% finder's fee of the purchase order net amount, provided that
PKI played a significant and substantial role in assisting BDAL with the systems
sale (i.e. this would apply if a joint sales call took place, but it would not
apply for passing on lists of potential customers, unqualified general leads,
etc.).
4
<PAGE>
It is understood that BDAL itself will also continue to sell the OmniFLEX,
including a version with an optional reflector, and nothing contained in this
Agreement shall prevent BDAL from selling or distributing its OmniFLEX system
also via additional third-party distribution channels in the future.
PKI and BDAL agree that on-time deliveries and high quality are important
for the success of this Collaboration. If repeated substantially late deliveries
and major quality problems arise, PKI and BDAL will try to resolve these issues
mutually. If BDAL cannot deliver OmniFLEX systems to PKI without sustained,
substantial and non-solvable delivery or quality problems which negatively
impact PKI's ability to sell the OmniFLEX, then PKI can terminate this Agreement
with one hundred twenty (120) days written notice, including a ninety (90) day
period during which BDAL is afforded an opportunity to fix the delivery or
quality problems.
5. INTRODUCTION AND PHASE 1
PKI and BDAL intend to announce their strategic alliance and
simultaneously introduce the OmniFLEX at Pittcon 2000 on March 13th, 2000. BDAL
will loan an OmniFLEX shell or system to PKI for Pittcon 2000. If PKI can
provide paint color requests and decals to BDAL very soon, then BDAL will make a
best effort to have a co-labeled OmniFLEX shell or system in the PKI selected
colors at the PKI booth at Pittcon.
This strategic alliance will be announced in a joint mutually agreeable
press release, which will initially be drafted by PKI.
5
<PAGE>
For Phase 1 of this Agreement until Dec. 31st, 2001, PKI with the signing
of this Agreement places a firm, fixed minimum order with BDAL for [*](1)
systems to be delivered to PKI at a minimum rate of [*] per month for
July-October 2000, and going up to [*] per month for the thirteen month period
between November 2000 and November 2001, for a minimum total of [*] systems.
This order shall be accompanied by a non-refundable down-payment of forty
percent (40%) of the total order value, i.e. [*], which will be credited against
actual deliveries of OmniFLEX systems to PKI. Alternatively, PKI may opt to pay
a cash down-payment of forty percent (40%) for the first [*] units in the amount
of [*], plus an irrevocable letter of credit acceptable to BDAL for the
down-payment of forty percent (40%) on the remaining [*] units in the amount of
[*], with both amounts to be credited against actual deliveries of OmniFLEX
systems to PKI. The letter of credit will provide that, if PKI fails to meet its
commitment to purchase and take delivery of systems in accordance with the
agreed upon monthly delivery rate, BDAL shall have the right, after giving
thirty (30) days written notice to PKI, to call the letter of credit. The letter
of credit will be reduced quarterly on the last business day of the quarter in
an amount equal to the value of the units delivered to PKI during such quarter.
Should PKI determine that it needs more systems during Phase 1, then PKI
will advise BDAL as soon as practical on forecasting for additional systems
deliveries. Should PKI take delivery and pay for all [*] systems (or optionally
[*] systems, see below) ordered in Phase 1 well before Dec. 31st, 2001, then
Phase 2 will begin earlier, i.e.
- ----------
(1) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
6
<PAGE>
whenever PKI has taken delivery and paid for the first [*](2) systems (or
optionally [*] systems, see below).
During Phase 1, PKI may re-sell the co-labeled OmniFLEX MALDI-TOF
o in the US, Canada and Mexico into
(i) the for-profit food and agriculture industries for any application,
including but not limited to research, production, product safety and or
distribution;
(ii) the for-profit chemical, petroleum and polymer industries for
applications involving
(a) the characterization of raw materials, intermediates and
products used in the production and distribution of synthetic
polymers, bulk chemicals, specialty chemicals, and petrochemicals,
and
(b) the development of analytical methods used to support the
characterizations describe in (ii)(a) above; and
(c) research laboratories only as far as these research labs are
involved in methods development for (ii)(a) and (ii)(b) above;
(iii) QA/QC, manufacturing, drug development and clinical trials in the
for-profit pharmaceutical and biotech industry for applications
specifically involving
(a) the characterization of any molecular components integral to the
manufacture and distribution of commercial products, and
(b) the characterization of any molecular component integral to the
development and evaluation of pharmacologically active compounds for
any
- ----------
(2) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
7
<PAGE>
development phase after the identification of lead candidate
compounds, including characterization of polypeptides,
oligonucleotides, and carbohydrates synthesized within core
laboratories when these compounds are used as enabling tools for any
development phase after the drug discovery phase and the
identification of lead compounds.
In Phase 1, if PKI increases the minimum order from [*](3) to [*] systems
over eighteen (18) months, PKI shall have the option of adding the following
countries and fields-of-use to its authorized reselling territory:
o Central and South America to all potential customers
o Italy, Greece, Turkey, Eastern Europe, Israel, and India to all potential
customers.
In Phase 1, PKI is not permitted to re-sell the OmniFLEX into any other
country, and PKI is not permitted to re-sell the OmniFLEX in the U.S. and Canada
into pharmaceutical/biotech laboratories performing drug discovery, including
target research and discovery of new lead compounds; into chemical/polymer
research labs, except as described in (ii)(c) above; or into academic,
non-profit or governmental customer accounts.
During Phase 1, BDAL will be responsible for installation and warranty
service of the co-labeled OmniFLEX in the U.S., Canada and Mexico. If PKI elects
to add Central and South America, Italy, Greece, Turkey, Eastern Europe, Israel,
and India, then BDAL will initially be responsible for the installation, but PKI
will participate in the installation in
- ----------
(3) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
8
<PAGE>
order to train its local technicians, and PKI will be responsible for the
post-installation warranty service. BDAL will provide 1-2 weeks of installation
and service training to PKI at mutually agreeable times at BDAL's Massachusetts
factory.
At the beginning of Phase 1, BDAL will generally assist PKI with
transferring marketing materials (e.g. Powerpoint presentations, brochures,
flyers, manual, advertisements) to PKI at no charge, except for direct printing
cost. BDAL retains all rights, including its copyright on these materials, but
PKI is authorized to use these materials as co-labeled materials for its own
marketing purposes, provided that any material changes in content must be
approved in writing by BDAL. However, PKI is responsible for its own
advertising, trade show and similar costs. If PKI develops additional marketing
materials (e.g. application notes, product notes, photos, etc.), PKI will
provide these materials to BDAL at no charge, except for direct printing cost.
PKI retains all rights, including its copyright, and BDAL will obtain prior
written permission from PKI if BDAL makes material changes in content. BDAL has
the right to use the PKI materials as co-labeled materials for marketing
purposes.
6. CONTINUATION AND PHASE 2
If PKI reaches or exceeds the minimum sales goal of [*](4) systems (or
optionally [*] systems) in Phase 1, then this OEM distribution model is expanded
globally for Phase 2, starting Jan. 1st, 2002, and until this Agreement is
terminated. If at the end of Phase 1 the minimum sales goal of [*] systems (or
optionally [*] systems) has not been reached
- ----------
(4) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
9
<PAGE>
by PKI, then this Agreement can either be terminated by either party hereto, or
PKI and BDAL may mutually agree to extend Phase 1 by another 2 years.
At least 4 months prior to the beginning of the two-year Phase 2, as well
as at least 4 months prior to the beginning of any subsequent 2-year Phase 2
agreement period, PKI will order a two-year minimum order to be mutually agreed
upon, but in any case greater than [*](5) systems per month, to be delivered to
PKI over 2 years at a minimum rate of greater than [*] systems per month. Unless
the parties otherwise mutually agree, this two-year order shall be accompanied
with a non-refundable down-payment of forty percent (40%) of the total order
value, which will be credited against actual deliveries of OmniFLEX systems to
PKI.
Alternatively, PKI may opt to pay a cash down-payment of forty percent
(40%) for the first third (one 3rd), plus an irrevocable letter of credit
acceptable to BDAL for the down-payment of forty percent (40%) on the remaining
two thirds (two 3rds), with both amounts to be credited against actual
deliveries of OmniFLEX systems to PKI. The letter of credit will provide that,
if PKI fails to meet its commitment to purchase and take delivery of systems in
accordance with the agreed upon monthly delivery rate, BDAL shall have the
right, after giving thirty (30) days written notice to PKI, to call the letter
of credit The letter of credit will be reduced quarterly on the last business
day of the quarter in an amount equal to the value of the units delivered to PKI
during such quarter.
- ----------
(5) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
10
<PAGE>
Should PKI determine that it needs more systems during Phase 2, then PKI
will advise BDAL as soon as practical on forecasting for additional systems
deliveries.
During Phase 2 and subsequently, PKI may re-sell the OmniFLEX MALDI-TOF
o in the U.S., Canada and Mexico into
(i) the for-profit food and agriculture industries for any application,
including but not limited to research, production, product safety and or
distribution;
(ii) the for-profit chemical, petroleum and polymer industries for
applications involving
(a) the characterization of raw materials, intermediates and
products used in the production and distribution of synthetic
polymers, bulk chemicals, specialty chemicals, and petrochemicals,
and
(b) the development of analytical methods used to support the
characterizations describe in (ii)(a) above; and
(c) research laboratories only as far as these research labs are
involved in methods development for (ii)(a) and (ii)(b) above;
(iii) QA/QC, manufacturing, drug development and clinical trials in the
for profit pharmaceutical and biotech industry for applications
specifically involving
(a) the characterization of any molecular components integral to the
manufacture and distribution of commercial products, and
(b) the characterization of any molecular component integral to the
development and evaluation of pharmacologically active compounds for
any development phase after the identification of lead candidate
compounds, including characterization of polypeptides,
oligonucleotides, and
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carbohydrates synthesized within core laboratories when these
compounds are used as enabling tools for any development phase after
the drug discovery phase and the identification of lead compounds.
in such other countries and geography, which may be broader than
during Phase 1, and into country-specific fields of use as will be
mutually agreed between the parties prior to the beginning of Phase
2, provided that the monthly minimum quantity of units will exceed
the two (2) units per month of Phase 1 by a mutually agreeable
amount.
In Phase 2 and subsequently, PKI is not permitted to re-sell the OmniFLEX
globally into pharmaceutical/biotech laboratories performing drug discovery,
including target research and discovery of new lead compounds; into
chemical/polymer research labs, except as described in (ii)(c) above, or into
academic, non-profit or governmental customer accounts. During Phase 2, PKI will
be responsible for installation and warranty service of the co-labeled OmniFLEX
globally.
For post-warranty service, PKI and BDAL will adopt a two-layer service
strategy with front-line service support by PKI for straight-forward service
issues (e.g. subunit exchange, calibration, vacuum service, laser alignment,
software loading), and back-up BDAL service by factory-engineers for difficult
problems.
7. OEM PRICING AND VOLUME DISCOUNTS
Assuming that PKI herewith places a minimum order with BDAL for [*](6)
systems at the beginning of Phase 1, as discussed in section 5 above, and a
minimum order of [*]
- ----------
(6) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
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systems at the beginning of the Phase 2 two-year period (or subsequent two-year
Phase 2 type periods), an OEM Discount of [*](7) shall apply, as long as BDAL is
responsible for installation and warranty service. "OEM Discount" is the
percentage discount off the U.S. list price given in Attachment A, which shall
be fixed for Phase 1, but which may increase or decrease in Phase 2 and
subsequently.
Specifically, for the minimum order of [*] systems under Phase 1, the OEM
transfer price per system to PKI shall be [*], as long as BDAL is responsible
for installation and warranty service.
During Phase 1, and as long as PKI takes delivery of [*] OmniFLEX systems
from BDAL per month, PKI's OEM Discount for other MALDI-TOF accessories,
consumables and software will be [*] off BDAL's applicable U.S. list price, as
it may be in effect from time to time.
All pricing is understood as F.O.B. BDAL's factory in Billerica, USA, and
does not include import duty, or any country or local sales tax, VAT,
Mehrwertsteuer, or similar.
As part of this Agreement, PKI grants BDAL a [*] OEM discount on
digitizers purchased by BDAL from PKI Ortec division on minimum orders of [*]
units per order. BDAL forecasts that it will wish to purchase [*] Ortec
digitizers in 2000, and [*] Ortec digitizers in the year 2001, but this forecast
shall not be contractually binding.
- ----------
(7) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
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<PAGE>
For each OnmiFLEX system for which PKI provides the warranty service, the
OEM Discount is increased to [*](8). For each OmniFLEX system for which PKI
performs installation, acceptance and warranty service, the OEM Discount is
increased to [*].
The transfer prices above includes Windows-NT workstation (present
configuration: 500 MHz Pentium PC, 19" color monitor, 256MB RAM, >8 GB hard
disk, 1.44 MB floppy, CDR drive for data archival, Ethernet connection) and a HP
1100xi laser printer. Should PKI decide to supply the Windows-NT workstation and
the laser printer, then the transfer price for each OmniFLEX system is reduced
by $2,856.00. However, PKI needs to send each Windows-NT workstation to BDAL for
complete software loading and systems final test 4-6 weeks prior to the expected
factory shipment date.
8. DEVELOPMENT, DEMONSTRATION, TESTING (DDT) DISCOUNT
For OMNIFLEX systems purchased by PKI for internal applications
development, or internal customer demonstration purposes, the DDT discount shall
be [*] off BDAL's applicable U.S. price list. For Phase 1, the DDT transfer
price to PKI is [*]. PKI may not resell any systems purchased under this DDT
discount until the earlier of two years after delivery to PKI or the termination
or expiration of this Agreement, unless there is an imminent major model change,
which would make the DDT systems in PKI's demo inventory obsolete.
9. PAYMENT TERMS
For each ONPULEX system, the payment terms for each OEM system are as follows:
- ----------
(8) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
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<PAGE>
40% deposit N30 after order placement
30% N30 after delivery
30% N30 upon installation and acceptance
For the first [*](9) units in Phase 1, the 40% cash down payment will be
deemed to satisfy the requirement for a 40% deposit and 30% will be due N30
after delivery and 30% will be due N30 upon installation and acceptance. For the
remaining [*] units in Phase 1 subject to the letter of credit referred to in
Section 5, 70% will be due N30 after delivery and 30% N30 upon installation and
acceptance.
10. WARRANTY AND SERVICE
In Phase 1, the cost of customer site preparation according to BDAL's site
planning guide, or rigging and transportation of the system into the PKI or
customer lab, and consumables required for the installation, are not included in
the BDAL OEM price. If PKI or its customers require additional installations (in
addition to the one installation included in the normal transfer price of [*]),
then these additional installations will be billed by BDAL to PKJ, or its
customer, at normal posted BDAL service rates.
In Phase 1, each system price includes a one-year limited warranty under BDAL's
standard warranty terms, a copy of which is attached hereto as Attachment C. The
period of warranty is one year following demonstration of specifications, but in
any event not more than 13 months after delivery, if the beginning of
installation is delayed for no fault of BDAL. If, however, the installation and
acceptance of the system by BDAL takes longer than 2 weeks because the OmniFLEX
system does not meet its performance
- ----------
(9) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
15
<PAGE>
specifications for reasons other than siting problems, then the one year
warranty shall run from acceptance of the instrument.
Warranty covers both parts and labor.
In Phase 2, or whenever PKI is responsible for the warranty service, PKI
will supply warranty service labor, be responsible for travel and related costs
of its service technicians, etc. However, BDAL provides to PKI a limited 13
months hardware back-up warranty, beginning upon shipment by BDAL to PKI or its
customer, for all submits which are not wear-and-tear items or consumables. This
BDAL hardware warranty is for parts-exchange or BDAL depot level parts repair
service only, and does not cover field service.
After the expiration of the one-year limited warranty (or at any time when
PKI needs expert assistance with installations or warranty service for which PKI
is responsible per this Agreement) PKI, or the final customer, may purchase
additional annual Maintenance Service Agreements (MSA) or per-call service from
the BDAL service organization in each country at normal MSA or per-call service
rates, posted in each country from time to time. If a customer requires
additional response time guarantees, or 24/7 coverage, then surcharges to the
normal BDAL MSA rates will apply.
BDAL will sell to PKI any spare parts needed by PKI to service the
OmniFLEX system as long as such system is manufactured and for an additional
seven (7) years after manufacture of such system is discontinued, or for an
additional seven (7) years after the
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<PAGE>
termination of this Agreement, whichever is earlier, at a discount level of
[*](10) off of BDAL's U.S. list price.
11. LICENSING OF BDAL'S MALDI-TOF IP FOR OEM SYSTEMS
With the purchase of each OMNIFLEX system, PKI and its final system's
customer receives a paid-up non-exclusive license for each particular OMNIFLEX
system to use this particular system under BDAL's intellectual property,
including all patents owned by or exclusively licensed by BDAL, for MALDI-TOF
mass spectrometry. Specifically, this license includes the Indiana University
patent portfolio on SVCF (Space-Velocity Correlation Focussing, by J. Reilly et.
al.), and for BDAL OEM MALDI-TOF systems purchased by PKI, the royalty cost to
Indiana University will be paid by BDAL. The sublicense agreement in Attachment
D, which will be executed simultaneously as a separate agreement, is required
for this Agreement to become valid.
Each software package sold from BDAL to PKI comes with a single CPU
license which PKI may transfer to the final customer. Details of the software
licensing and sublicensing will be subject to BDAL's standard software licensing
policy, as it may be in effect from time to time.
12. OVERSIGHT BOARD
BDAL and PKI will each appoint two members to serve on an oversight board
("Oversight Board") with respect to this Agreement. Initially, the
representative of BDAL will be Frank H. Laukien and Victor Fursey, and the
representatives of PKI will be Dr. Robert Rosenthal and Michael Elliott. The
oversight board will meet on a quarterly basis or as otherwise agreed upon by
BDAL and PKI to review the progress under the
- ----------
(10) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
17
<PAGE>
Agreement, to review and approve modifications to this Agreement, and attempt in
good faith to resolve any disputes that may arise before the arbitration
provisions of Section 13.9 are invoked to resolve any dispute. The Oversight
Board will also meet, in person or by telephone, to address any issues relating
to the interpretation of the field of use language in Section 5 in order to
minimize customer confusion and resolve disputes as quickly as possible.
13. GENERAL TERMS AND CONDITIONS
13.1 The terms and conditions of this Agreement are confidential, and any press
releases will be done by mutual agreement.
13.2 Neither party acquires any intellectual property rights under this
Agreement except the limited rights necessary to carry out the purposes
set forth in paragraph 11.
13.3 Both parties shall adhere to all applicable laws, regulations and rules
relating to the export of technical data and equipment. PKI shall not
export or re-export any BDAL product or technical data to any proscribed
country listed in such applicable laws, regulations and rules unless
properly authorized.
13.4 This Agreement does not create any agency or partnership relationship.
13.5 All additions or modifications to this Agreement must be made in writing
and must be signed by both parties.
13.6 This Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof and it supersedes all prior
agreements, understandings and negotiations, written or oral, between the
parties with respect to the subject matter hereof, except for a previously
signed Confidentiality Agreement. Drafts to
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<PAGE>
this Agreement were exchanged and drafted by both parties hereto, and
accordingly this Agreement shall be considered jointly drafted.
13.7 This Agreement is made under, and shall be construed according to, the
laws of the Commonwealth of Massachusetts.
13.8 Neither party shall be liable to the other party for any special,
consequential or punitive damages, including, but not limited to, loss of
profits. The provisions of this section shall survive any termination of
this Agreement.
13.9 Neither party shall institute a proceeding in any court or administrative
agency to resolve a dispute between the parties before that party has
sought to resolve the dispute through direct negotiation with the other
party using the Oversight Board established in accordance with Section 12.
If the dispute is not resolved within thirty (30) days after a demand for
direct negotiation, the aggrieved party may then seek relief through
arbitration in Boston Massachusetts administered by the American
Arbitration Association under its commercial arbitration rules before a
single arbitrator; provided that persons eligible to be selected as the
arbitrator shall be limited to attorneys-at-law who have practiced law for
at least 15 years specializing in either general commercial litigation or
general corporate and commercial matters. The arbitrator shall base his or
her award on applicable laws and judicial precedent and include in such
award a statement of the reasons upon which the award is based. Judgement
on the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof. Both parties will share the cost of the arbitration
equally. The arbitrator may not award special, consequential or punitive
damages.
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<PAGE>
14. NOTICE
All notices and other communications required by this Agreement shall be
deemed duly given when deposited in the mail, postage prepaid, registered or
certified First Class mail and addressed to the address given below (unless a
different address shall have been duly given previously) or sent by telephone
facsimile (with receipt confirmed by telephone):
If to BDAL, to:
Bruker Daltonics Inc.
44 Manning Road
Billerica, MA 0 1821
Attention: President
Facsimile No.: (978) 667-0985
If to PKI, to:
PerkinElmer Instruments LLC
761 Main Avenue
Norwalk, Connecticut 06859
Attention: President
Facsimile No.: (203) 761-2800
15. EXCUSABLE DELAYS
Neither party shall be liable in damages for failure to perform under this
Agreement due to any causes beyond its control and without its fault or
negligence, including, but not restricted to, acts of God, acts of war,
governmental acts, fires, floods, epidemics, quarantine restrictions, freight
embargoes, strikes, unusually severe weather, or delay of a subcontractor due to
such causes (unless the materials, supplies, or services to be furnished under a
subcontract are procurable from other sources). In the event that a party
discovers any facts which may, or could with the passage of time, result in a
delay in performance due to an event beyond its control, that party shall
immediately provide written notice to the other party of such facts (including a
description of the cause of the delay, an estimate of the duration of the delay
and a statement regarding the
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<PAGE>
remedial steps that are being undertaken to resume performance) and shall take
all measures and precautions to reduce the effects of the delay on contract
performance. The time for performance under this Agreement shall be extended by
an amount of time equal to the period of delay; provided, however, that, if the
delay lasts more than ninety (90) days, the party whose performance is not
delayed shall have the right, but not the obligation, to terminate this
Agreement without liability.
16. NAME AND TRADEMARK
16.1. BDAL hereby grants to PKI a royalty-free, non-exclusive license under the
BDAL Trademarks, that pertain to the OmniFLEX and its Accessories, to
distribute these BDAL products to which any of the BDAL Trademarks have
been applied by BDAL; and use any documentation provided by BDAL
hereunder. No license is granted to PKI to use the name Bruker
Daltonics(R) as, or as part of, a corporate name and/or a trading name.
16.2. PKI hereby grants to BDAL a royalty-free, non-exclusive license under the
PKI Trademarks, to apply the PKI Trademarks to the co-labeled OmniFLEX
before supplying them to PKI.
16.3 The BDAL Trademarks and PKI Trademarks shall be applied to the products in
accordance with such principles as may be agreed between the parties
regarding the form, location and prominence of such trademark, each such
trademark to be of equal prominence to each other.
16.4 All rights in the BDAL Trademarks are owned by BDAL, and all rights in the
PKI Trademarks are owned by PKI. All rights granted pursuant to this
Section 16 shall
21
<PAGE>
terminate upon the expiration or termination of this Agreement. This
applies to registered or unregistered trademarks.
17. PATENT INDEMNITY
BDAL shall defend, indemnify and hold PKI harmless from and against all claims,
damages, costs (including reasonable attorneys fees), or judgments against PKI
in which it is determined or alleged that the sale or the use of any of BDAL
product infringes any patent, copyright, trademark or any other intellectual
property right of any third party. PKI agrees that BDAL, at its sole option,
shall be relieved of the foregoing obligations unless PKI or its customers (i)
notifies BDAL promptly in writing of such claim, suit or proceeding, (ii) gives
BDAL available information and assistance to settle and/or defend any such
claim, suit or proceeding, (iii) gives BDAL authority over the defense or
settlement of such claim as contemplated above, and (iv) refrains from settling
such claim without BDAL's written consent. If a product (or any part thereof)
is, or in the opinion of BDAL, may become, the subject of any claim, suit or
proceeding for infringement of any patent, copyright or trademark, or if it is
determined that a product (or any part thereof) is infringing and, as a result,
its use is enjoined, then BDAL may, at its option and expense: (i) procure for
PKI the right under such patent, copyright or trademark to distribute such
product (or such part thereof) without prejudice to BDAL's obligations above; or
(ii) replace such product (or part thereof) with other suitable parts; or (iii)
suitably modify such product (or part thereof) to make them non-infringing
without modifying their capability; or (iv) if the use of a product (or part
thereof) is prevented by injunction, remove such product (or part thereof) and
refund the aggregate payment paid therefor by
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<PAGE>
PKI less an amount to account for actual use by PKI's customer, as measured over
a sixty month (60) month life span.
18. TERMINATION
If either party shall, at any time, commit any material breach of any of
the terms or conditions of this Agreement, the non-breaching party shall give
notice of the breach to the breaching party. If the breaching party fails to
cure the breach within forty-five (45) days of said notice (or such longer
period not to exceed ninety (90) days if such breach is incapable of cure within
forty-five days, provided that the breaching party continues diligently to cure
said breach during such period), the non-breaching party may terminate this
Agreement, effective immediately.
In the event that at any time during the term of this Agreement, either
party is adjudged insolvent or bankrupt or shall make an assignment for the
benefit of its creditors, the other party hereto shall have the right, at its
election, to terminate this Agreement effective upon the giving of written
notice. In no event shall this Agreement be construed as an asset of the
bankrupt party.
Upon termination of this Agreement, PKI shall immediately cease to
describe itself as a distributor of products. BDAL shall honor its obligations
under this Agreement with respect to orders for products placed prior to the
effective date of termination or expiration, and shall fill such orders that are
accepted by it prior to the effective date of such termination or expiration.
SIGNATURES:
For PKK: /s/ Robert Rosenthal For BDAL: /s/ Frank H. Laukien
-------------------- -----------------------
Name: Robert Rosenthal Name: Frank H. Laukien
----------------
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<PAGE>
Title: President & CEO Title: President & CEO
---------------
Date: March 06, 2000 Date: March 02, 2000
Attachment D:
OEM SUB-LICENSE AGREEMENT
THIS AGREEMENT (the "Agreement") is made and/or entered into by and
between Bruker Daltonics Inc. ("Licensor"), a Delaware corporation with its
principal place of business at Fortune Drive, Manning Park, Billerica,
Massachusetts 0 182 1, and PerkinElmer Instruments LLC ("Licensee") a
______________________ corporation with its principal place of business at 761
Main Avenue, Norwalk, CT 06859.
WHEREAS, Licensor is the exclusive licensee of, having the full right to
grant sublicenses to, the Patent Rights, as these are defined with particularity
herein; and
WHEREAS, Licensee desires to obtain a license under certain patent rights
held by Licensor, as defined with particularity in this Agreement;
NOW, THEREFORE in view of the promises set forth below, the parties hereto
agree as follows:
1. Definitions
Solely for the purposes of this Agreement the following terms, as used
herein, will have the meanings specified below:
1.1 "Effective Date" means the date last written below.
1.2 "Patent Rights" means those patents and/or patent applications
listed on Schedule A and any patents issuing from such patent
applications, or any related U.S. or foreign applications or patents
based upon any of such patent applications or patents, as well as
any continuations, divisions, reexaminations, reissues, substitutes,
renewals or extensions of any of the foregoing patent applications
or patents.
1.3 "Affiliate" of a specified entity means an entity that directly
or indirectly controls, is controlled by, or is under common control
with, the specified entity. For purposes of this Agreement, the
direct or indirect ownership of more than 50% of the outstanding
voting shares of an entity, the right to receive 50% or more of the
profits or earnings of an entity, or the right to control policy
decisions of an entity, will be deemed to constitute control.
1.4 "Licensed Product" or "Licensed Products" means and includes any
apparatus, device, system, product, article of manufacture,
appliance, method or process, the practice, manufacture, use or sale
of which would
24
<PAGE>
be, but for this Agreement, covered in whole or in part by a pending
claim in a pending application within the Patent Rights or an
unexpired claim in a patent within the Patent Rights.
1.5 "Net Sales" means the gross sales amount of all sales or leases
of Licensed Products by Licensee, Affiliates or sublicensees to any
distributors and/or customers minus any customary quantity, trade or
cash discounts actually given, allowed returns or allowances given
in lieu of allowed returns, freight and insurance, if separately
itemized on the invoice and paid by the customer, and any value
added, sales, use or excise taxes actually included in the invoice
amount, provided, however, that no deductions will be taken for any
other costs incurred in the manufacture, offering for sale, sale,
distribution, shipment, promotion, advertisement, exploitation or
commercialization of the Licensed Products, for any costs of
collections or any uncollectible accounts, or for any other costs,
expenditures, fees or expenses. For all Licensed Products used by
Licensee as premiums to promote, market, sell and/or lease products
or processes other than Licensed Products such premiums will be
deemed to have been sold at Licensee's customary sales price.
Licensed Products will be considered "sold" when delivered, billed
out, or invoiced, whichever comes first. In the cases of
transactions not at "arm's length" and of transactions in which the
Licensed Product is exchanged for other than a separate,
entirely-money consideration, "Net Wholesale Price" shall mean Fair
Market Value.
1.6 "Fair Market Value" as applied to Licensed Products means the
Net Sales which the Licensee (or its Affiliate) would realize from
an unaffiliated buyer typical of Licensee's (or its Affiliate's)
buyers in an arm's length sale of identical apparatus in the same
quantity and at the same time and place as such transaction;
provided, however, that Fair Market Value shall not be lower than
complete cost less the items specified in paragraph 1.5 above to be
deducted from Net Sales, to the extent these items are included in
such complete cost) plus a normal profit factor.
2. Grant of Special OEM Sub-License
2.1. Licensor hereby grants an individual systems' license to
Licensee, with the right to grant sublicenses to its
Affiliates, to use and/or to re-sell each MALDI-TOF mass
spectrometer purchased by Licensee from Licensor under a
separate "MALDI-TOF Mass Spectrometry Collaboration and OEM
Agreement" of even date.
2.2. Pursuant to the separate "MALDI-TOF Mass Spectrometry
Collaboration and OEM Agreement" Licensor shall be responsible
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<PAGE>
for the payment of all royalties to IU-ARTI on Licensor's
MALDI-TOF systems sold as OEM systems to Licensee.
2.3. Any license granted under this Agreement shall not constitute
or be interpreted as a license to the Licensee for
manufacture, use or sale of any other MALDI-TOF or other mass
spectrometer, other than the OEM MALDI-TOF systems
specifically purchased from Licensor under the terms of the
"MALDI-TOF Mass Spectrometry Collaboration and OEM Agreement".
In particular, this Agreement does not waive for the Licensee
future access payments, retroactive or future royalty payments
on any other MALDI-TOF or other mass spectrometer not
specifically covered by this Agreement.
3. Payments/License Fees and Royalties
This section is not applicable, as Licensor pays all royalties to IU-ARTI
for OEM MALDI-TOF systems sold to Licensee under the separate "MALDI-TOF
Mass Spectrometry Collaboration and OEM Agreement".
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<PAGE>
4. Representation and Warranties
Licensor warrants that, to the best of its knowledge and belief, it is the
sole exclusive licensee of all rights, title, and interest in the Patent
Rights, free of any liens, encumbrances, restrictions and other legal or
equitable claims, subject, however, to any rights of governmental
authorities, including full right and authority to sublicense the Patent
Rights.
5. Records, Reports, and Payments
5.1 not applicable
5.2 not applicable
5.3 not applicable
5.4 not applicable
6. Term of the Agreement
6.1 Unless sooner canceled or terminated as herein provided, the
individual system's license granted under this Agreement will
continue for ten (10) years or for the full term of the last
expiring patent or patent application within the Patent Rights,
whichever is longer.
6.2 If Licensee becomes bankrupt or insolvent, or files a petition
in bankruptcy, or if the business of Licensee is placed in the hands
of a receiver, assignee or trustee for the benefit of creditors,
whether by the voluntary act of Licensee or otherwise, this
Agreement will automatically terminate without any notice whatsoever
to Licensee.
6.3 not applicable
6.4 Licensee will have the right to terminate this Agreement with or
without cause at any time upon six (6) months written notice to
Licensor.
6.5 not applicable
6.6 If, at any time during this Agreement, Licensee directly or
indirectly opposes or assists any third party to oppose the grant of
any Letters Patent on any patent application within the Patent
Rights or disputes or directly or indirectly assists any third party
to dispute the validity of any patent within the Patent Rights, or
any of the claims thereof, Licensor will be entitled thereafter to
terminate immediately all or any portion of the license granted
under this Agreement by notice thereof to Licensee.
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<PAGE>
6.7 In the event that any claim of any application within the Patent
Rights is canceled, abandoned, or otherwise disallowed by a final
non-appealable or non-appealed action of a Patent Office having
jurisdiction, or in the event that any claim of any patent within
the Patent Rights is held invalid or unenforceable by a
non-appealable or non-appealed decision by any court of competent
jurisdiction, such claim will be deemed to have expired, as of the
date of final disallowance or final decision of invalidity or
non-enforceability.
6.8 Provisions of this Agreement which by their nature contemplate
rights and obligations of the parties to be enjoyed or performed
after the expiration or termination of this Agreement will survive
until their purposes are fulfilled. Termination of this Agreement
for any reason will not relieve either party of its obligations
under this Agreement previous to the effective date of such
termination.
7. Non-Transferability of Licenses
7.1 The license granted by this Agreement can be transferred by the
Licensee, but only as part of a transaction by which the Licensee
divests itself of all or substantially all of the business of
manufacturing and/or selling Licensed Products. In the event of such
a transfer, Licensee and its Affiliates shall thereupon cease to be
Licensees hereunder, but such termination of licenses shall not
affect any obligations to pay royalties which may have accrued prior
thereto.
7.2 Should any entity or person cease to be an Affiliate of a party,
as that term is defined in paragraph 1.3 above, this Agreement shall
be terminated as to that entity or person, who shall have no further
rights or obligations under this Agreement; provided, that such
termination of Affiliate status shall not affect any obligations to
pay royalties which may have accrued prior thereto.
7.3 The license granted in this Agreement shall be binding upon any
successor of Licensor in ownership or control of the Patent Rights,
and the obligations of Licensee, including, but not limited to, the
obligation to make reports and pay royalties, shall run in favor of
any such successor of Licensor's benefits under this Agreement.
8. Payments, Notices and Other Communications
Any payment, notice, or other communication pursuant to this Agreement
will be sufficiently made or given on the date of mailing if sent to such
party by express mail or certified first class mail, postage prepaid, made
out to Bruker Daltonics,
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<PAGE>
Inc. and addressed to it at its address below or made out to Licensee and
addressed to it at its address below as either party will designate by
written notice given to the other party:
Licensor: Frank H. Laukien, President
Bruker Daltonics Inc.
Fortune Drive, Manning Park
Billerica, MA 0 1821
Licensee: Robert Rosenthal, President
PerkinElmer Instruments LLC.
____________________________
____________________________
9. Miscellaneous Provisions
9.1 Each party hereto agrees that it will not release any
information to any third party with respect to the terms of this
Agreement without the prior written consent of the other party. This
prohibition includes, but is not limited to, press releases,
educational and scientific conferences, promotional materials,
governmental filings, and discussions with lenders, investment
bankers, public officials, and the media. Should any third party
seek to obtain any information by legal process with respect to the
existence or terms of this Agreement from either Party hereto, such
Party shall promptly notify the other Party hereto, and shall take
all appropriate measures to avoid and minimize the release of such
information.
9.2 This Agreement will be construed, governed, interpreted, and
applied in accordance with the laws of the Commonwealth of
Massachusetts, U.S.A., except that questions affecting the
construction and effect of any patent will be determined by the law
of the country in which the patent was granted.
9.3 In the event of an adjudication to resolve a dispute over the
scope to or appropriate royalty payment (if any) under, any of the
Patent Rights licensed under this Agreement, the Licensee may place
any disputed royalty payments in an interest-bearing escrow account
mutually satisfactory to the Licensee and Licensor, rather than
paying them to the Licensor, during the pendency of the
adjudication. If the determination of the adjudication is that no
royalty payment is owed to the Licensor, the escrowed funds,
together with any accrued interest, shall be returned to the
Licensee. If the determination of the adjudication is that a royalty
payment is owed to the Licensor, the escrowed funds, together with
any accrued interest, shall be paid to the Licensor.
29
<PAGE>
9.4 This Agreement constitutes the entire understanding between the
Parties hereto with respect to the subject matter hereof. This
Agreement supersedes any prior agreements between the Parties hereto
as to the subject matter of this Agreement except as specifically
provided herein. No modification, extension or waiver of any
provision hereof or any release of any right hereunder shall be
valid, unless the same is in writing and is consented to by both
Parties hereto.
9.5 The provisions of this Agreement are severable, and if any
provision of this Agreement is held to be ineffective, unenforceable
or illegal for any reason, such ineffectiveness, unenforceability
and/or illegality shall not affect the validity or enforceability of
any or all of the remaining portions hereof.
9.6 This Agreement shall be construed in accordance with its fair
meaning and not strictly for or against any Party.
9.7 This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but both of
which together constitute one and the same Agreement.
9.8 Paragraph titles or captions contained herein are inserted only
as a matter of convenience and for reference, and in no way define,
limit, extend, or describe the scope of this Agreement, nor the
intent of any provision thereof.
9.9 Each Party acknowledges that it has or has, had the opportunity
to consult with counsel of its choice and that in executing this
Agreement it has not relied upon any statements, representations or
agreements of any other person other than those contained herein.
9.10 Notwithstanding Paragraph 1.5 above, at anytime prior to the
expiration of the patents licensed pursuant to this Agreement,
Licensee may challenge in a legal proceeding the validity or
enforceability the Patent Rights. Licensor may not use in said legal
proceeding this Agreement, the language contained herein or the
royalty payments previously made or required to be made by this
Agreement as an admission by Licensee that any Patent Rights are
valid, enforceable or infringed.
9.11 Licensee agrees to mark the Licensed Products made, used or
sold in the United States with all applicable United States patent
numbers. All Licensed Products used, shipped to or sold in other
countries will be marked in such a manner as to conform with the
patent laws and practice of the country of use, shipment, and/or
sale.
30
<PAGE>
9.12 No failure or delay on the part of either Party hereto in the
exercise of any power, right or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other right, power or privilege.
9.13 Nothing in this Agreement shall be construed as:
(a) a warranty or representation as to the validity,
enforceability or scope of any patent by the Licensor;
(b) a warranty or representation that any manufacture,
sale, lease, use or importation will be free fi7om
infringement of patents other than those under which and to
the extent to which licenses or covenants are in force
hereunder, including patents of third parties;
(c) an agreement to bring or prosecute actions or suits
against third parties for infringement;
(d) conferring any right to use, in advertising,
publicity or otherwise, any name, trade name, trademark,
service mark, symbol or any other identification or any
contraction, abbreviation or simulation thereof,
(e) conferring by implication, estoppel or otherwise any
license or other right under any patent, except as expressly
granted herein;
(f) a representation or warranty of any kind or the
assumption of any responsibility whatsoever by any Party with
respect to the manufacture, sale, lease, use or other
disposition of any product or method licensed hereunder
(including without limitation, claims of third parties
asserting that a product is defective or unsafe for its
intended purpose); and
(g) a representation deemed to place Licensee and
Licensor in a partnership, joint venture or agency
relationship and neither party will have the right or
authority to obligate or bind the other party in any manner.
9.14 All notices and communications provided for hereunder shall be
in writing and shall be mailed or delivered to the business address
of the respective Parties as aforementioned, or to such other
address as any Party may designate from time to time in writing to
the other.
31
<PAGE>
9.15 Each of the Parties agrees to perform reasonably requested
actions of the other Party which are required to effectuate the
covenants and purposes of this Agreement.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals and duly executed this Agreement as of the day and year set forth below.
Licensee Licensor
BY: /s/ Robert Rosenthal BY: /s/ Frank H. Laukien
--------------------- ---------------------
Robert Rosenthal Frank H. Laukien
President & CEO President & CEO
PerkinElmer Instruments LLC Bruker Daltonics Inc.
DATE: March 06, 2000 DATE: March 02, 2000
32
<PAGE>
SCHEDULE A
- --------------------------------------------------------------------------------
US Pat. No. Inventor Title
----------- -------- -----
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5,504,326 James P. Reilly Spatial-Velocity Correlation Focusing
Steven M. Colby in Time-of-Flight Mass Spectrometry
Timothy B. King
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5,510,613 James P. Reilly Spatial-Velocity Correlation Focusing
Steven M. Colby in Time-of-Flight Mass Spectrometry
Timothy B. King
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5,712,479 James P. Reilly Spatial-Velocity Correlation Focusing
Steven M. Colby in Time-of-Flight Mass Spectrometry
Timothy B. King
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
33
<PAGE>
Exhibit 10.4
/logo/
MWGAG
BIOTECH
Today for Tomorrow
Agreement concerning the Cooperation of
Bruker Daltonik GmbH
and
MWG-Biotech AG
Objective
MWG-Biotech AG (MWG) and Bruker Daltonik GmbH and their Bruker branches (Bruker)
are contemplating entering into commercial and technical cooperation in the
field of DNA research through SNP analysis, as well as other potential molecular
biology areas of application by means of MALDI-TOF mass spectrometry.
Validity
As soon as this agreement is signed by both sides, it shall be valid at least
until December 31, 2002. It shall be extended by two years upon submission of
the signed agreement of both sides.
Product definition, development objective, and periods of time
The following products are to be developed or further developed in combination,
and thereafter jointly marketed, as a solution for the field of low and medium
daily sample throughput:
o Bruker: The Bruker MALDI-TOF mass spectrometer BIFLEX III in a linear
configuration having the specifications listed in Appendix I.
Development objective: [*](1) Timeframe: [*]
/letterhead information/
- ----------
(1) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
<PAGE>
MWG AG Biotech
Today for Tomorrow
o MWG: provision of equipment for the primer extension reaction and sample
preparation robotics having the following tasks:
o Sample preparation robot having a throughput of up to 1,000 samples
per day. Time frame: [*](2)
o Sample preparation robot having a throughput of up to 10,000 samples
per day. Time frame: [*]
Both products shall serve, among other things, for the following
applications:
o For use with the "Bruker Magnetic Bead DNA Purification Kit"
o For use with the "Ivo Gut Alkylation Method".
Marketing
Products affected by this agreement shall be deemed OEM products. MWG and Bruker
are free to offer solutions derived from these products competitively or
jointly.
OEM price structure
The following OEM price structure with calendar-year OEM discount rates relative
to the list price (Appendix 1) will be used as the basis for future product
orders:
Bruker Biflex III MALDI-TOF MS:
Number per year OEM discount
#10 [*]
11-20 [*]
21+ [*]
The OEM discount rate will be applied retroactively.
- ----------
(2) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
<PAGE>
MWG AG Biotech
Today for Tomorrow
For equipment used for its own research or for demonstration purposes, the
discount rate shall increase to [*](3).
MWG:
OEM price structure
Bruker Daltonik GmbH shall receive a [*] OEM discount for the MWG sample
preparation robots. The price for the high throughput robot for up to 10,000
samples per day will be determined as of March 2000. The price for a
demonstration device shall be [*] of our list price.
If sales are made through joint appearances and efforts, prices will be
negotiated on a case-by-case basis.
All prices are ex works, exclusive of customs duty, value-added tax, sales tax
on imports, and similar taxes.
Protection of patronage
In a competitive situation, as soon as one of the parties to the agreement is
able to confirm in writing (letter, fax, e-mail, etc.) the buying intention of a
customer or the impending purchase by a customer, the sale shall be protected
for that party for a period of 12 months.
This protection shall not apply if the other party to the agreement can provide
suitable documentation, within one week of disclosure of the case, proving that
the sale came about through its own efforts.
Installation, maintenance, and service
Bruker is responsible for installation, guarantees, and additional services for
the Bruker Biflex III.
The purchase of a Bruker Biflex III includes equipment installation and a
demonstration of specifications. These services are included in the purchase
price.
- ----------
(3) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
<PAGE>
MWG AG Biotech
Today for Tomorrow
The customer must prepare the installation area in
accordance with Appendix 2. Expenses relating thereto, as well as other
expendable materials required for the installation, are not included in the
purchase price.
Additional installations and services resulting therefrom, if required, shall be
settled with MWG at the usual Bruker computation rates. The guarantee period
shall be one year from the demonstration of the specifications, but not more
than 15 months after delivery.
MWG:
Installation, maintenance, and service
Services shall remain the same for the MWG sample preparation robots.
Purchasing lead-times and sales projections
The purchasing lead-time for a Bruker Biflex III is three months.
To shorten this purchasing lead-time, MWG shall issue semi-annual sales
projections at least three months prior to the end of the previous half. These
projections shall be reviewed and corrected, if necessary, 30 days prior to the
end of the previous half. Additionally, Bruker will deliver the equipment in a
timely manner. If this planning aid proves not to be useful, with MWG taking
delivery of less than 75% of the projected Bruker Biflex III devices, it will be
suspended and replaced with the usual purchasing lead-time of three months.
MWG:
Purchasing lead-times and sales projections
The purchasing lead-times shall be a maximum of 30 days after receipt of a new
order.
<PAGE>
MWG AG Biotech
Today for Tomorrow
Terms of payment
The following terms of payment shall apply for each Bruker Biflex III ordered:
40% 30 days net after receipt of the customer order
40% 30 days net after delivery
20% 30 days net after installation and acceptance of the specifications.
MWG:
Terms of payment
30 days net after delivery.
Protection and utilization of intellectual property in joint developments
For future developments, whether performed jointly, financed jointly, or merely
arising through the exchange of confidential information, MWG and Bruker each
undertake to maintain silence with respect to third parties and to protect the
intellectual property and business information of the other party to the
agreement.
A decision will be made on a case-by-case basis with regard to utilization and
financial recognition of joint developments.
Contact individuals
MWG and Bruker shall each appoint two contact individuals who shall serve as the
interface between the two companies for commercial and technical matters,
respectively, and who shall monitor compliance with this agreement:
For MWG:
Commercial matters: Helmut Pende, MWG-Biotech AG, Ebersberg
Technical matters: Dr. Jutta Huber, MWG-Biotech AG, Ebersberg
<PAGE>
MWG AG Biotech
Today for Tomorrow
For Bruker:
Commercial matters:
Dr. Roland Schnurpfeil, Bruker Daltonik GmbH, Bremen,
Technical matters:
Dr. Markus Kostrzewa, Bruker Saxonia Analytik GmbH, Leipzig
This agreement enters into force when it is signed:
Bremen, November 15, 1998 Ebersberg, November 2, 1999
Bruker Daltonik GmbH MWG-Biotech AG
/corporate address stamp/ /corporate address stamp/
Name: Dr. Franzen Dr. Koch Name: Michael Weichselgartner
Title: General Managers Title: CEO
/signatures/ /signature/
<PAGE>
MWG AG Biotech
Today for Tomorrow
Price List
RoboAmp(R)
<TABLE>
<CAPTION>
RoboAmp(R)4200 basic platforms DM
<S> <C> <C>
RY-4200 M Robot for the automation of Non Cross Contamination (NCC) PCR 147.500,00
and loading of MALDI samples
including: 1 washable tip assembly for sample distribution, handler
for positioning of microplates
96 well HTR thermocycler with motorized lid
Disposable tip assembly for sample distribution
Air waste chassis and electronic chassis
Automated tube/well sealing device
Power Supply
RoboSeq sample management and application software
MWG analysis and control unit
Reagent rack, cooled
Sample position for 2 plates, non cooled
Pipetting positions, cooled for 2 microplates (1 cooled/1 non cooled)
Stacker for 8 microtitre plates
Disposable tip rack for 8 x 96 tips
Module for loading of MALDI carriers in 96 and 384 well format
Accessories
Reagent Rack
RY-RC Reagent rack, cooled 8.150,00
RY-RN Reagent rack, non cooled 3.050,00
RY-RS Reagent rack, small non cooled 1.150,00
Sample Position
RY-SPT Tube rack, 96 positions, 1.5 ml, non cooled 1.450,00
RY-SPTC Tube rack, 96 positions 1.5 ml, cooled 6.920,00
RY-SPC Sample position for 2 plates/1 cooled/1 non cooled 6.450,00
RY-SPN Sample position for 2 plates, non cooled 1.560,00
RY-SPS Sample position for 2 microtitre plates 820,00
Pipetting Position
RY-PPC Pipetting positions for 2 plates, 1 cooled/1 non cooled 6.450,00
RY-PPC384 Pipetting positions for 2 plates, 384 well, 1 cooled/1 non cooled 7.950,00
RY-PPN Pipetting positions for 2 plates, non cooled 1.560,00
RY-PPN384 Pipetting positions for 2 plates, 384 well, non cooled 1.950,00
PRY-PPS Pipetting positions for 2 microtitre plates, non cooled 820,00
RY-ST4 Stacker for 4 microtitre plates 1.850,00
RY-ST8 Stacker for 8 microtitre plates 2,450,00
RY-ST12 Stacker for 12 microtitre plates 2.950,00
RY-STC10 Stacker for 10 microtitre plates, cooled effective 01.12.99 9.950,00
Shaker
RY-3-1410 Shaker, 1 microtitre plate 3.200,00
Disposable Tip Rack
RY-TR2 Disposable tip rack for 2 x 96 tips 1.150,00
RY-TR4 Disposable tip rack for 4 x 96 tips 2.050,00
RY-TR6 Disposable tip rack for 6 x 96 tips 2.950,00
RY-TR8 Disposable tip rack for 8 x 96 tips 3.850,00
</TABLE>
<PAGE>
MWG AG Biotech
Today for Tomorrow
<TABLE>
<S> <C> <C>
Automated Agarose Gel Loading (requires RY-WTA)
RY-GLS Holding & Loading Devices for agarose gels 960,00
HB-0708 Gel tray 96 Complete, 12 x 8 + 1 tooth combs 1.250,00
Bar Code Option
RY-BCR Bar code reader 780,00
RY-BCP Bar code printer 3.060,00
RY-MPS Multiport seriell, PC Interface card 840,00
Tip assembly
RY-WTA Washable tip assembly for sample distribution 375,00
RY-DTA Disposable tip assembly for sample distribution 375,00
Liquid Container
RY-SLC System liquid container, 5l 210,00
RY-WC Waste container, 20l 245,00
Training
RY-EKR Training course, en Ebersberg, 2 days 1.500,00
Service kits & contracts
RY-1-2001 Service kit on request
RY-1-2002 Liquid handling kit on request
S-10040 Service contract RoboAmp(R)4200 19.900,00
</TABLE>
Prices are net prices ex VAT and shipping costs. Prices become valid on
01.11.99. Prices are subject to change without notice.
<PAGE>
MWG AG Biotech
Today for Tomorrow
Appendix 1
BIFLEX(TM) III RESEARCH-GRADE MALDI-TOF MS SYSTEM
BIFLEX(TM) III Matrix-Assisted LASER Desorption Mass Spectrometer
Time-of-flight mass analyzer
o 125 cm linear TOF analyzer for both positive and negative ions
o High sensitivity fast MCP detector system with detector housing
o Ion flight path housing o Integrated vacuum system, electronics and
computer desk
o Ultra-Stable power supplies for TOF analyzer, detector and ion source
Gridless MALDI source with Pulsed Ion Extraction (PIE(TM))
o Ion source and ion lens system
o Automatic vacuum lock for sample introduction with inlet vacuum pump
o N2-LASER including variable power attenuator and UV optics
o SCOUT(TM)384 Microtitre Plate Source/Target with Observation Optics
o Large area target (12cm x 8cm) with exact dimensions of microtitre plate
o Precise X-Y positions (4 micron step increments)
o 2 exchangeable targets (384-position standard)
o 1 adaptor target for up to 12 inserts provided with 25 assorted inserts
(10 position)
o High resolution magnifying observation optics with display on 14" color
monitor
o Intuitive GUI for simple mouse controlled X-Y positioning
Pumping system including vacuum measurement and control unit
o 260 l/sec turbomolecular pump including forepump
o Vacuum measurement system and control unit
Data System and Software
o 2 GHz Digitizer
o Sun SPARCUltra 5, 19" color monitor, 128MB RAM, 4.3 Gbyte IDE disk, 1.44
MB floppy drive, CD-ROM drive, EtherNet connection for external networks
o Mass spectrometry software for acquisition (XACQ(TM)), processing
(XMASS(TM)), plotting, and analysis in a networked multi-user environment
o AutoXecute with fuzzy-logic optimization for automated acquisition
o Postscript printer
o DAT tape drive for backup
BASIC SYSTEM PRICE DEM 337.000,-
<PAGE>
MWG AG Biotech
Today for Tomorrow
Appendix 2
BIFLEX(TM) Facilities Information
Warning: Read SAFETY PRECAUTIONS on page 2
Preface
BIFLEX(TM) is a high performance, bench-integrated MALD-TOF mass spectrometer
system. All components of hardware and associated control electronics are
mounted in a laboratory "desk-style" bench which is approximately 1.9m long and
0.905 m deep. Two backing pumps are mounted in a small box situated underneath
the bench. Even the control computer can be mounted on top of the system, thus
not adding to the footprint. This document details the required system
facilities.
Instrument Preparation
On system arrival the crate should be opened to check for shipping damages or
shortages, and the crate should be moved to a position adjacent to the final
site of installation. A mechanical means of transportation should be made
available for the installation engineer to manoevre the system out of the crate
and to its final installation position.
Site Consideration
1. Physical Requirements:
Please refer to the attached instrument floor plan for details of the required
floor and height space recommended. It is possible to fit the system into a
smaller space with only around 0.2m clearance around three sides of the bench,
but should access be required for service, preventative maintenance etc. then
the "recommended" clearances come into play. Note that for door access the
system's narrowest dimension is 0.905 m. If the door is smaller, call Bruker.
2. Power Requirements:
The system is supplied requiring 230V AC power (50/60 Hz) single phase with a
single 16A outlet (German: Schukostecker). The computer system can be operated
with 110-240V AC at 50/60 Hz either on separate outlets or can be connected
through the main internal BIFLEX power distribution system. The system's average
power consumption is 1.5kW. There may be an initial surge slightly greater than
this on powering up the vacuum system. A stable voltage supply is required and
use of appropriate line conditioners, (or uninterruptable power supply, if
required) is recommended to ensure its integrity.
Note: Even short occasional power failures will require a lengthy vacuum pump
down and the customer is responsible for providing stable, uninterrupted power.
3. Pressurized Air:
<PAGE>
MWG AG Biotech
Today for Tomorrow
No pressurized air is required for this system.
4. Cooling Water:
No cooling water or closed cycle cooling unit is required for this system.
5. Rough Pump Outlet:
For the outlet of the rough pumps you either need an oil mist filter, or you
have to lead it to the outside or into your exhaust air system. Tubing: 9mm
inner diameter, 12 mm outer diameter, 5m delivered with the instrument.
6. System Weight:
The entire system with pumps and computer data system included is approximately
250Kg.
7. Environment:
The system should be located in a clean, reasonably vibration free and
temperature controlled environment for maintaining optimum performance. No
special humidity control is required but the temperature limits are 15(degree)C
to 27(degree)C (optimum of 20(degree)C) and in a range of 20 - 80% relative
humidity.
8. Electrical Safety Codes:
The instrument will meet all applicable safety codes before shipment.
9. Safety Precautions:
The Nitrogen laser emits high intensity radiation at 337nm, 200uJ. The class
IIIB laser radiation emitted is invisible to the eye but can cause damage to it.
To safeguard the user the BIFLEX(TM) is equipped with safety features which
prevent operation of the laser when the instrument covers are open. Thus during
standard operation (all covers closed), no laser radiation can be transmitted
outside the spectrometer (i.e. then the system is Class 1). Bruker does not
recommend disabling any of the safety features, by anyone than a trained Bruker
service engineer, or running the system with covers removed.
The spectrometer operation involves uses of high voltages. All access to wiring
and feedthroughs is restricted behind safety panels. Bruker does not assume
responsibility for any injury incurred as a result of disabling the safety
interlocks. We do not guarantee optimum performance of the instrument when
operating under non-standard conditions. Bruker does not recommend disabling the
safety features and any user that does so proceeds at their own risk.
<PAGE>
MWG AG Biotech
Today for Tomorrow
BIFLEX(TM) III dimensions and floor plan:
[diagram]
<PAGE>
ACKNOWLEDGMENT OF TRANSLATION
April 13, 2000
The undersigned officer of the Registrant hereby acknowledges on behalf
of the Registrant that the foregoing translation of the Cooperation Agreement
dated November 15, 1999 between Bruker Daltonik GmbH and MWG-Biotech AG is a
fair and accurate English translation from German of the original executed
agreement.
BRUKER DALTONICS INC.
By: /s/ David E. Plunkett
--------------------------------
Name: David E. Plunkett
Title: Treasurer
<PAGE>
Exhibit 10.5
AGREEMENT
THIS AGREEMENT (the "Agreement") is made and/or entered into by and between
Indiana University's Advanced Research & Technology Institute ("IU-ARTI"), a
nonprofit corporation organized under the laws of the state of Indiana, having
offices at 501 North Morton Street, Suite 111, Bloomington, Indiana 47404, and
Bruker Daltonics, Inc. ("Bruker"), a Massachusetts corporation with its
principal place of business at Fortune Drive, Manning Park, Billerica,
Massachusetts 01821.
NOW THEREFORE in view of the promises set forth below, the parties hereto agree
as follows:
1. Definitions.
For all purposes of this Agreement the following terms, as used herein,
will have the meanings specified below:
1.1 "Effective Date" means the date last written below.
1.2 The "Invention" means all inventions, proprietary developments, data
and/or information owned as of the Effective Date by IU-ARTI relating to
Method and Apparatus Providing Improved Time-of-Flight Mass Spectrometer
Resolution, Invention Number 9404, created by James P. Reilly, Steven M.
Colby, and Timothy B. King (hereinafter the "Inventors"), as described in
the patent application(s) and/or patent(s) listed in Schedule A, as well
as any continuations, divisions, reexaminations, reissues, substitutes,
renewals or extensions of any of the foregoing patent applications or
patents.
1.3 "Affiliate" of a specified entity means an entity that directly or
indirectly controls, is controlled by, or is under common control with,
the specified entity. For purposes of this Agreement, the direct or
indirect ownership of more than 50% of the outstanding voting shares of an
entity, the right to receive 50% or more of the profits or earnings of an
entity, or the right to control policy decisions of an entity, will be
deemed to constitute control.
1.4 "Patent Rights" means those patents and/or patent applications listed
on Schedule A and any patents issuing from such patent applications, or
any related U.S. or foreign applications or patents based upon any of such
patent applications or patents, as well as any continuations, divisions,
reexaminations, reissues, substitutes, renewals or extensions of any of
the foregoing patent applications or patents.
1.5 "Licensed Products" means any apparatus, device, system, product,
article, appliance, method or process covered in whole or in part by a
pending claim in a pending application within the Patient Rights or an
unexpired claim in a patent within the Patent Rights.
1
<PAGE>
1.6 "Net Sales" means the gross sales amount of all sales or leases of
Licensed Products by Bruker, Affiliates or sublicensees to any customer
minus any customary quantity, trade or cash discounts actually given,
allowed returns or allowances given in lieu of allowed returns, freight
and insurance, if separately itemized on the invoice and paid by the
customer, and any value added, sales, use or excise taxes actually
included in the invoice amount, provided, however, that no deductions will
be taken for any other costs incurred in the manufacture, offering for
sale, sale, distribution, shipment, promotion, advertisement, exploitation
or commercialization of the Licensed Products, for any costs of
collections or any uncollectible accounts, or for any other costs,
expenditures, fees or expenses. For all Licensed Products used by Bruker
as premiums to promote, market, sell and/or lease products or processes
other than Licensed Products, such premiums will be deemed to have been
sold at Bruker's customary sales price. Such premiums do not include
systems used solely for demonstration or for in-house research and
development purposes by Bruker. Licensed Products will be considered
"sold" when delivered, billed out, or invoiced, whichever comes first.
1.7 "Due Diligence" means the process whereby Bruker has the opportunity
to inspect and review all IU-ARTI and Inventors' files pertaining to the
Invention and Patent Rights.
2. Grant of License
2.1 IU-ARTI grants to Bruker a royalty-bearing exclusive license to make,
have made, use, lease, and sell the Licensed Products, and practice,
sublicense or otherwise enforce the Patent Rights, subject only, however,
to a reservation of rights by IU-ARTI for itself and Indiana University to
make, have made and use the Licensed Products or otherwise exploit the
Patent Rights for research and educational purposes.
2.2 Bruker acknowledges that the United States Government retains certain
rights in the inventions funded in whole or in part under any contract,
grant or similar agreement with a Federal agency. The License granted
under this Section 2 is expressly subject to any such rights.
2.3 Bruker grants to IU-ARTI and Indiana University a non-exclusive,
non-transferable royalty-free license, for research and educational
purposes only, to any improvements to the Invention developed by Bruker.
2.4 The scope of this Agreement will cover the Invention, Patent Rights
and Licensed Products and any patent that will issue claiming the benefit
of priority from the Patent Rights, or a priority date before the
effective date of the Agreement, in so far as the priority date pertains
to technology related to the subject matter of the Patent Rights, and any
invention in the field of laser time-of-flight mass spectrometry relating
to both instrumentation development and application development that may
have been conceived by the Inventors before the Effective Date of this
Agreement. This Agreement specifically excludes the work embodied in
IU-ARTI Invention Number 9737, "Hybrid
2
<PAGE>
Ion Mobility and Mass Spectrometer," and other such investigations outside
James P. Reilly's research group ("Reilly Group").
3. Payments/License Fees and Royalties.
3.1 Bruker agrees to provide IU-ARTI with a state of the art linear and
reflectron REFLEX II Matrix Assisted Laser Desorption Ionization
Time-of-Flight ("MALDI-TOF) Mass Spectrometer (valued at $280,000) in
support of the research support/collaboration effort as set forth in
Section 10.
3.2 Bruker agrees to pay to IU-ARTI a one-time payment of [*](1) as a
non-refundable license fee that will be deemed to forgive any past
royalties that may be due, if there are any, to be paid in the following
installments:
3.2.1 a one-time payment of [*] due upon execution of this
Agreement, and
3.2.2 a one-time payment of [*], due upon the expiration of ninety
(90) days after the Effective Date of this Agreement, whichever is
shorter;
[*] of the non-refundable license fee will be considered an advance
creditable toward future royalties due under 3.3.1, provided, that the
credit may be applied to only fifty percent (50%) of the total due in any
one period; and that no other credits or reductions may be applied.
3.3 Bruker agrees to pay to IU-ARTI within sixty (60) days after the end
of each semi-annual calendar year of this Agreement (i.e., period ending
June 30 and December 31) the following:
3.3.1 for Licensed Products made, and or sold within the United
States, an earned royalty of [*] of Bruker's or its Affiliates' Net Sales
(Bruker's royalty rate is discounted in consideration for its many
obligations under this Agreement); and
3.3.2 for Licensed Products manufactured here in the United States
and sold abroad for use in a foreign country, an earned royalty of [*]
less than the amount specified in Section 3.3.1 above, as an incentive to
make products in the United States.
3.4 After Bruker has secured the first two (2) sublicensees for IU-ARTI in
accordance with the terms of Section 4 below, the earned royalty of [*] in
Section 3.3.1 will be adjusted, either up or down, [*] the average ongoing
royalty rate of the sublicensees. The adjustment of this section will be
recalculated once every calendar year, at the beginning of the calendar
year, incorporating all sublicensees then in effect.
- ----------
(1) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
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4. Sublicenses.
4.1 Bruker will use reasonably diligent efforts, in accordance with
Section 5, to sublicense the Patent Rights, and if they are unable to
sublicense the Patent Rights, to otherwise enforce the Patent Rights, in
accordance with Section 9. As long as Bruker continues to sublicense or
otherwise enforce the Patent Rights in such reasonably diligent manner,
then the exclusive license of this Agreement will remain exclusive. If,
however, at any time, Bruker provides IU-ARTI with written notice of its
decision to discontinue sublicensing, and or otherwise enforcing the
Patent Rights in accordance with this Agreement, then the exclusive
license of this Agreement will revert to a non-exclusive license ninety
(90) days after receipt of such notice by IU-ARTI.
4.2 Bruker will have the exclusive right to grant sublicenses to others
for the Patent Rights. Bruker will provide IU-ARTI with a complete copy of
each sublicense granted hereunder within sixty (60) days of execution of
each sublicense.
4.3 For any sublicenses granted by Bruker hereunder, Bruker will attempt
to collect up-front licensing fees from all sublicensees and will pay to
IU-ARTI, for any third-party up-front licensing fee ("third-party fees")
received without governmental intervention, [*] of such third-party fees
received, but after an aggregate of [*] in third-party fees has been
received, IU-ARTI and Bruker will split all additional third-party fees in
[*] shares each to IU-ARTI and Bruker. Third-party fees include up-front
payments, payments for past damages and license access fees, milestones,
and other financial consideration but not advances of future royalties.
4.4 For any sublicenses granted by Bruker hereunder, Bruker will pay to
IU-ARTI, with respect to third-party earned royalties based on sublicensee
Net Sales, or royalties paid in advance that are received without
governmental intervention, [*] of such third-party earned royalties
received, but whereupon an aggregate of [*] in third-party earned
royalties has been received from third-party royalties, IU-ARTI and Bruker
will split all additional third-party earned royalties in [*] shares each
to IU-ARTI and Bruker.
4.5 Bruker will not conclude a sublicense under which the earned royalties
payable by a sublicensee are less than [*](2) of such sublicensee's Net
Sales without the written consent of IU-ARTI. Bruker will not conclude a
sublicense under which the Patent Rights are cross-licensed to a
sublicensee or otherwise sublicensed or exchanged for non-financial
consideration without the written consent of IU-ARTI.
4.6 Termination of the license granted to Bruker by IU-ARTI under this
Agreement will terminate all sublicenses that may have been granted by
Bruker. Any sublicense granted by Bruker must contain corresponding
provisions relative to termination and the conditions of continuance of
any sublicenses.
- ----------
(2) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
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5. Best Efforts and Due Diligence.
5.1 Bruker will use reasonably diligent efforts to bring the Licensed
Products to market through a program of developing, marketing,
sublicensing, commercializing, or otherwise enforcing the Patent Rights.
5.2 Bruker will prepare and submit to IU-ARTI within sixty (60) days of
the completion of Due Diligence or upon the expiration of one hundred
fifty (150) days after the Effective Date of this Agreement, whichever is
shorter, a commercially reasonable development plan for the development,
marketing, sublicensing, and enforcement of the Patent Rights
("sublicensing and commercialization plan"), which will become a part of
this Agreement.
5.3 Bruker will provide IU-ARTI with semi-annual reports of its activities
under the sublicensing and commercialization plan occurring during each
semi-annual period, due in accordance with Section 7.1, and its projected
activities under the sublicensing and commercialization plan for the next
semi-annual period. If the activities reported are substantially
inadequate compared to plans submitted earlier under Section 5.2, given
reasonable industry and commercialization standards, IU-ARTI will so
notify Bruker. If, within six (6) months of said notification, Bruker has
not rectified the deficiencies so identified, such deficiencies will
constitute a material breach of this Agreement.
6. Warranty.
6.1 IU-ARTI warrants that, to the best of its knowledge and belief, it is
the owner of all rights, title, and interest in the Patent Rights, free of
any liens, encumbrances, restrictions and other legal or equitable claims,
subject, however, to any rights of governmental authorities.
6.2 All property, whether tangible or intangible, which may be delivered
hereunder, will be delivered on an "as is, where is" basis without any
express or implied warranty. Other than the obligations of IU-ARTI set
forth in this Agreement, IU-ARTI MAKES NO OTHER WARRANTIES WHATSOEVER.
IU-ARTI HEREBY DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE, OR ANY IMPLIED WARRANTIES ARISING
FROM ANY COURSE OF DEALING, USAGE, OR TRADE PRACTICE. IU-ARTI ASSUMES NO
RESPONSIBILITY WITH RESPECT TO THE EXPLOITATION OR COMMERCIALIZATION OF
THE LICENSED PRODUCTS, INVENTION, OR PATENT RIGHTS OR THE MANUFACTURE,
USE, SALE, LEASE OR DISTRIBUTION OF ANY METHODS, PROCESSES, APPARATUS,
DEVICES, SYSTEMS, PRODUCTS, ARTICLES, AND/OR APPLIANCES DERIVED FROM OR
USING THE LICENSED PRODUCTS, INVENTION, OR PATENT RIGHTS BY BRUKER, ITS
AFFILIATES, OR SUBLICENSEES. IU-ARTI WILL
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NOT BE LIABLE FOR LOSS OF PROFITS, LOSS OF USE, OR ANY OTHER DIRECT,
INCIDENTAL, CONSEQUENTIAL, OR EXEMPLARY DAMAGES.
7. Records, Reports, and Payments.
7.1 Bruker will render to IU-ARTI semi-annual written reports for each
semi-annual calendar year period, due within sixty (60) days following
each semi-annual period, during the term of the license under this
Agreement, setting forth an accounting for all Licensed Products sold,
distributed, or leased, and a calculation of total Net Sales for such
semi-annual period including a reporting of any applicable deductions,
allowances, and charges as provided in Section 1.6 of this Agreement.
Concurrent with the making of the report under this Section 7.1, Bruker
will include payment due and will submit the sublicensing and
commercialization plan report require in accordance with Section 5.3.
Bruker will require its sublicensees to render these same written reports
to Bruker and will provide IU-ARTI with such reports within 15 days of
receipt by Bruker and such reports will be accompanied by applicable
payment to IU-ARTI by Bruker for each sublicensee.
7.2 Bruker will keep and maintain and will require any of its sublicensees
to keep and maintain, complete, accurate, and correct records and books
relating to the sale or lease of the Licensed Products for three (3) years
following the end of the calendar year to which such records and books
pertain.
7.3 The books and records of account kept by Bruker and any of its
sublicensees, must be made available upon reasonable notice during normal
business hours for examination by one or more auditors of IU-ARTI's
choosing and at IU-ARTI's expense, who will be permitted to enter upon the
premises of Bruker or its sublicensees and make and retain copies of any
and all parts of said books and records of account, including invoices
that are relevant to any report required to be rendered under this
Agreement. Any amount found to have been owed but not paid, will be paid
promptly to IU-ARTI with interest at the maximum rate allowable by Indiana
Usury Law. If, in the event any such audit shows that Bruker has underpaid
its royalty obligation hereunder by fifteen percent (15%) or more during
any calendar year, Bruker will pay IU-ARTI the amount of such underpayment
and Bruker will reimburse IU-ARTI for the out-of-pocket expense for such
audit. If, in the event any such audit shows that any sublicensee has
underpaid its royalty obligation hereunder by fifteen percent (15%) or
more during any calendar year, Bruker will require its sublicensee to pay
IU-ARTI the amount of such underpayment and will reimburse IU-ARTI for the
out-of-pocket expense for such audit.
7.4 Royalty or other payments to be paid in cash will be paid in United
States dollars in accordance with Section 16, or at such other place as
IU-ARTI may reasonably designate and will be made within sixty (60) days
following each semi-annual reporting period listed in Section 7.1. Any
withholding taxes which Bruker is required by law to withhold on
remittance of the royalty payments will be deducted from the royalty paid
and Bruker will furnish IU-ARTI with copies of all official receipts for
such taxes. If any royalties hereunder are based on Net Sales converted
from foreign currency, such
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conversion will be made by using the exchange rate prevailing at a
first-class foreign exchange bank on the last business day of the
semi-annual reporting period listed in Section 7.1 to which such royalty
payments relate. Late payment will bear interest at the maximum rate
allowable by Indiana Usury Law.
8. Patent Prosecution
8.1 The filing, prosecution, and maintenance of all patents within the
Patent Rights will be the primary responsibility of IU-ARTI provided,
however, that Bruker will have reasonable opportunities to advise and
cooperate with IU-ARTI in such filing, prosecution and/or maintenance.
8.2 Within ninety (90) days of presentation of itemized statements to
Bruker, Bruker will reimburse IU-ARTI for all reasonable fees and costs
incurred by IU-ARTI during the term of this Agreement relating to the
preparation, filing, prosecution, and maintenance of the Patent Rights.
8.3 In the event Bruker determines that the continued filing, prosecution
or maintenance of any particular patent application or patent within the
Patent Rights is not justified, it will advise IU-ARTI in writing and
IU-ARTI will then have the option to file, prosecute or maintain any such
Patent Rights at its own expense, and IU-ARTI will have the option to
delete the particular patent application or patent within the Patent
Rights from the license granted under this Agreement. In that event,
Bruker will have no rights under this license for any such deleted patent
application or patent and IU-ARTI will be free to exploit and to assign or
license any such deleted patent applications or patents to third parties
without effect on the amount of royalties due to IU-ARTI under Section
3.1.
8.4 In the event that any claim of any application within the Patent
Rights is canceled, abandoned, or otherwise disallowed by a final
non-appealable or non-appealed action of a Patent Office having
jurisdiction, or in the event that any claim of any patent within the
Patent Rights is held invalid or unenforceable by a non-appealable or
non-appealed decision by any court of competent jurisdiction, such claim
will be deemed to have expired, as of the date of final disallowance or
final decision of invalidity or non-enforceability.
9. Infringement
9.1 Each party will promptly inform the other in writing of any alleged
infringement of any of the patents within the Patent Rights, and provide
the other party with any available evidence of infringement.
9.2 During the term of this Agreement, Bruker will have the first option
to prosecute, at its own expense, any such infringements of the Patent
Rights and, in furtherance of such prosecution, Bruker may, for such
purposes, join IU-ARTI as a party plaintiff or use the name of IU-ARTI as
a party plaintiff, without expense to IU-ARTI. In the event that
litigation or other governmental proceedings are required in the conduct
of the patent
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enforcement or defense, Bruker shall be entitled to recover its reasonable
enforcement or defense costs, including reasonable attorneys' fees, on a
matter-by-matter basis, from any judgment, settlement, or the like, the
payment of which is dispositive of the governmental proceeding. Such costs
incurred by Bruker shall be recovered from the first one-half (1/2) of the
total recoveries from the litigation or other governmental proceeding,
with the remainder of this first one-half of recoveries being divided in
fifty percent (50%) shares between IU-ARTI and Bruker. The second one-half
(1/2) of the total recoveries from the litigation or other governmental
proceeding will be divided in fifty percent (50%) shares between IU-ARTI
and Bruker.
9.3 If, within six (6) months after having been notified of any alleged
infringement, Bruker will have been unsuccessful in persuading the alleged
infringer to desist, and will not have brought or be diligently
prosecuting an infringement action, or if Bruker will notify IU-ARTI at
any time prior thereto of its intention not to bring suit against any
alleged infringer, then, and in those events only, IU-ARTI will have the
right to prosecute at its own expense any infringement of the Patent
Rights, and IU-ARTI may, for such purposes, join Bruker as a party
plaintiff or use the name of Bruker as a party plaintiff, without expense
to Bruker. The total cost of any such infringement action commenced or
defended solely by IU-ARTI will be borne by IU-ARTI, and IU-ARTI will keep
any recovery or damages for past infringement derived therefrom.
9.4 In the event that a declaratory judgment action alleging invalidity or
non-infringement of any of the Patent Rights will be brought, Bruker will
defend such action, but IU-ARTI, at its option, will have the right to
intervene and take over the sole defense of the action at its own expense
and whereupon IU-ARTI will keep any recovery or damages derived therefrom
or from any counterclaims asserted therein. Unless and until IU-ARTI
elects to intervene and take over the sole defense of the action, Bruker
will be responsible, at its sole expense, for the defense of the action
and whereupon Bruker will keep any recovery or damages derived therefrom,
or from any counterclaims asserted therein. If IU-ARTI and Bruker share in
the responsibility of the expense for the defense of the action, Bruker
and IU-ARTI will share in any recovery or damages derived therefrom or
from any counterclaims asserted therein in proportion to the total costs
contributed by each party.
9.5 In the event an infringement action is brought against Bruker arising
from the use of the Patent Rights, Bruker will defend such action and will
be solely responsible for all attorneys fees, costs of defense, and
liability arising out of that action.
9.6 In any infringement suit brought or declaratory judgment action
defended by either Bruker or IU-ARTI to protect any of the Patent Rights
pursuant to this Agreement, the other party will, at the request and
expense of the party initiating such suit, cooperate in all respects and,
to the extent possible, have its employees testify when requested and make
available relevant records, papers, information, samples, specimens, and
the like.
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9.7 Bruker will not settle or compromise any claim or action in a manner
that imposes any restrictions or obligations on IU-ARTI without IU-ARTI's
written consent, which consent will not be unreasonably withheld.
10. Research Support
10.1. Scope of Work. IU-ARTI will use reasonable efforts to perform
experiments and studies of mutual interest to Bruker and Dr. James Reilly,
Professor of Chemistry, Indiana University, related to Time-of-Flight mass
spectrometry fundamentals, instrumentation and applications (hereinafter,
"Collaboration").
10.2. Key Personnel. The Collaboration will be performed under the
direction of Dr. James Reilly. In the event he is unable or unwilling to
continue with the Collaboration, the parties will attempt to find a
mutually acceptable substitute. In the event a mutually acceptable
substitute is not found, the Collaboration may be terminated.
10.3 Term. The Collaboration will commence on the date of completion of
the Due Diligence or will commence on the expiration of ninety (90) days
after the Effective Date of this Agreement, whichever is shorter; and
continue for a period of four (4) years.
10.4 Meetings. Dr. Reilly will from time-to-time and at mutually agreeable
times give presentations at Bruker sponsored symposia or mass spectrometer
conferences and contribute application notes for Bruker's marketing
efforts. Bruker will be responsible for Dr. Reilly's travel expenses
related to the giving of presentations and marketing assistance but no
additional consulting fee will be paid for such presentations provided
that they do not exceed three (3) presentations per year.
10.5 Bruker Facilities. During the Collaboration, Bruker will make its
Massachusetts MALDI-TOF research and development and applications
laboratories accessible to Dr. Reilly and his research group from
time-to-time for special experiments and collaborative projects that
cannot readily be performed in Dr. Reilly's laboratory.
10.6 Payments. Bruker will provide funding for the Collaboration as
follows:
10.6.1 [*](3) per year;
10.6.2 [*] of the Net Sales per year during the period of
Collaboration.
Payment will be made quarterly in advance with the first such
payment due 90 days after the Effective Date of this Agreement.
Checks will be payable to IU-ARTI and sent in accordance with
Section 16.
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(3) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
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10.7 Equipment. Bruker will deliver and install a demo REFLEX II system with
the following configuration and/or capabilities:
10.7.1 Manual target introduction and computer-controlled sample
selection;
10.7.2 "Scout" ion source;
10.7.3 Ability to record positive and negative ion spectra;
10.7.4 One hundred megabyte (100Mb) storage capability for large
time-of-flight data files;
10.7.5 Bruker's latest data manipulation software, and most recent
applicable data acquisition software;
10.7.6 The Multichannel Plate (MCP) detectors provided will be
sufficiently speed-optimized to meet Bruker's resolution
specification in mode of 12,000;
10.7.7 Ion gate with a preselection resolution on the order of 100;
10.7.8 Digital scope capable of sampling at 1 GHz; and
10.7.9 Heating mantle to facilitate flight tube pump-out.
Bruker will provide for the replacement of Bruker-built parts (excluding
OEM-built parts) and documentation as needed to effect repairs on the
system, but will not be responsible for providing any other service or
repair of the system during the period of Collaboration. If either the
Agreement or the Collaboration is terminated prior to the fourth
anniversary of commencement of the Collaboration, the REFLEX II system
will be returned to Bruker. Subsequent to the fourth anniversary of
commencement of the Collaboration, title to the REFLEX 11 system will
remain with IU-ARTI and will be free of all claims, liens, or encumbrances
of Bruker.
10.8. Reports and Publications. It is intended that there be full
cooperation and a free flow of information between IU-ARTI and Bruker with
respect to the conduct of the Collaboration. Bruker will have unrestricted
timely access to the results of the Collaboration and the data generated
will be communicated fully and openly to Bruker. Subject to patent rights
of IU-ARTI, Bruker may use these data in any manner it deems appropriate.
IU-ARTI is free to publish, present, or use any results arising out of the
Collaboration for its own instructional, research, or publication
objectives provided that the publication, presentation or use does not
disclose any Information furnished by Bruker under Section 10.9. IU-ARTI
agrees that any proposed publication or presentation relating to the
Collaboration will be submitted to Bruker for review 30 days prior to
submission for publication or presentation. In the event that the proposed
publication or presentation contains patentable subject matter which
requires protection, IU-ARTI will, upon written request from Bruker within
the 30-day review period, delay the publication or presentation for a
maximum of an additional 60 days to allow filing of a patent application.
10.9. Intellectual Property.
10.9.1 IU-ARTI will promptly disclose to Bruker, and Bruker will
hold with the same level of confidentiality that it obligates IU-ARTI to
use under Section 10.9, all creative ideas, developments and inventions,
whether or not patentable, conceived or first
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reduced to practice as a result of the Collaboration (hereinafter
"Collaboration Inventions"). Collaboration Inventions developed solely by
IU-ARTI will remain the property of IU-ARTI. Collaboration Inventions
developed solely by Bruker will remain the property of Bruker.
Collaboration Inventions developed jointly by the parties will be jointly
owned by IU-ARTI and Bruker.
10.9.2 IU-ARTI hereby grants to Bruker and its Affiliates the
unrestricted, irrevocable, royalty-free, worldwide, perpetual,
non-exclusive right and license to make and/or use solely for Bruker's own
internal research and educational purposes the Collaboration Inventions,
and the unrestricted, irrevocable, royalty-free, worldwide, perpetual,
non-exclusive right and license to make, have made, use, and sell the
jointly-owned Collaboration Inventions.
10.9.3 IU-ARTI hereby grants to Bruker the first option for a
worldwide, exclusive, royalty-bearing license, subject to the rights of
the U.S. government, to make, have made, use, sell, with a right to
sublicense or other-wise enforce, Collaboration Inventions owned solely by
IU-ARTI, or IU-ARTI's interest in any jointly-owned Collaboration
Inventions. The terms of such license will be reasonable in the
circumstances and will be negotiated in good faith between Bruker and
IU-ARTI. The option will extend for a time period of six (6) months from
the date of first disclosure to Bruker. If Bruker exercises its option,
but Bruker and IU-ARTI are unable to reach agreement on the terms of the
license, Bruker will at its own option, have either "right of first
refusal" with respect to any agreement granting rights in Collaboration
Inventions to any third party, or a perpetual, worldwide, non-exclusive,
royalty-bearing license, subject to the rights of the U.S. government, to
make, have made, use, or sell Collaboration Inventions solely owned by
IU-ARTI. IU-ARTI will not enter into any agreement granting any third
party rights in Collaboration Inventions without first offering Bruker the
same terms and conditions offered to the third party. Bruker will have
thirty (30) days from IU-ARTI's first offering to Bruker in which to
notify IU-ARTI that it desires to exercise its right of first refusal. If
Bruker does not notify IU-ARTI that it desires to exercise its right of
first refusal, then IU-ARTI may conclude the agreement with a third party
on the terms and conditions proposed to Bruker. If IU-ARTI desires to
enter into an agreement on terms and conditions other than those proposed
to Bruker, it must again propose such agreement to Bruker as described in
this Section 10.9.3.
10.10. Confidentiality.
10.10.1 IU-ARTI agrees to hold in confidence, in accordance with
this paragraph, any information disclosed to IU-ARTI by Bruker in
connection with the Collaboration and identified in writing as
confidential (hereinafter "Information"). For the purpose of this
Agreement, "hold in confidence" means that IU-ARTI will protect the
Information in the same manner in which it protects its own confidential
information. The Information will remain the property of Bruker, and will
be disclosed only to those persons necessary for the performance of the
Collaboration or is required by law.
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10.10.2 No indirect or consequential damages or damages based on
loss of profits or market share are contemplated or recoverable for breach
of confidentiality.
10.10.3 The obligations of IU-ARTI to maintain confidentiality will
survive the expiration or termination of this Agreement and will endure
for 5 years from the date of disclosure.
10.10.4. The obligation of non-disclosure will not apply to the
following:
10.10.4.1. Information that is publicly available
through no fault of IU-ARTI;
10.10.4.2. Information that is disclosed to IU-ARTI by
a third party entitled to disclose the
Information;
10.10.4.3. Information that is already known to
IU-ARTI; or
10.10.4.4. Information that is required to be disclosed
by law, provided IU-ARTI promptly notifies
Bruker in writing of such lawful disclosure.
10.11 IU-ARTI agrees that it will not enter into any other agreements that
will conflict with its obligations hereunder.
11. Termination
11.1 Unless sooner canceled or terminated as herein provided, the license
granted under this Agreement will continue for ten (10) years or for the
full term of the last expiring patent or patent application within the
Patent Rights, whichever is longer.
11.2 If Bruker becomes bankrupt or insolvent, or files a petition in
bankruptcy, or if the business of Bruker is placed in the hands of a
receiver, assignee or trustee for the benefit of creditors, whether by the
voluntary act of Bruker or otherwise, this Agreement may be terminated by
IU-ARTI by giving written notice to Bruker.
11.3 If Bruker at any time defaults in the payment of any license fee,
royalty or other payment, or in providing any report due under this
Agreement or make any false report. or commits a material breach of any
covenant or undertaking set forth herein, IU-ARTI will have the right, in
addition to all other remedies available, to terminate this Agreement and
revoke any and all licenses herein granted, by giving Bruker ninety (90)
days prior written notice of such termination, provided, however, that if
Bruker will have rectified such default or breach within such ninety (90)
day period, then this Agreement will remain in effect and the rights and
licenses herein granted will be in force as if no default or breach had
occurred on the part of Bruker. In the event of termination under this
Section, Bruker will continue to be obligated to pay to IU-ARTI all
license fees, royalties, or other payments payable at the time of
termination pursuant to this Section or otherwise accruing under this
Agreement.
11.4 Bruker will have the right to terminate this Agreement with or
without cause at any time upon six (6) months written notice to IU-ARTI.
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11.5 Any termination of the license granted under this Agreement will not
relieve Bruker of any obligations to make payments for any license fees,
royalties or other payments that may have accrued prior to the date of
such termination. Bruker may, for and only for a twelve (12) month period
following termination of this Agreement, sell all Licensed Products in the
inventory of Bruker at the usual sales price of Bruker for such Licensed
Products, provided that Bruker will pay to IU-ARTI the royalties thereon
as required by Section 3 of this Agreement and will submit the reports
required by Section 7 of this Agreement. Any Licensed Products remaining
in inventory of Bruker following such twelve (12) month period will be
either destroyed or, at Bruker's discretion, transferred, without charge
or cost, to IU-ARTI.
11.6 Upon termination of this Agreement for any reason the rights granted
herein will immediately revert to IU-ARTI.
11.7 If, at any time during this Agreement, Bruker directly or indirectly
opposes or assists any third party to oppose the grant of any Letters
Patent on any patent application within the Patent Rights or disputes or
directly or indirectly assists any third party to dispute the validity of
any patent within the Patent Rights, or any of the claims thereof, IU-ARTI
will be entitled thereafter to terminate immediately all or any portion of
the license granted under this Agreement by notice thereof to Bruker.
11.8 Provisions of this Agreement which by their nature contemplate rights
and obligations of the parties to be enjoyed or performed after the
expiration or termination of this Agreement will survive until their
purposes are fulfilled. Termination of this Agreement for any reason will
not relieve either party of its obligations under this Agreement previous
to the effective date of such termination.
12. Indemnification and Insurance
12.1 Bruker will, and require all of its sublicensees to, at all times
during the term of this Agreement and thereafter, indemnify, hold
harmless, and defend IU-ARTI, Indiana University, their trustees,
officers, directors, employees, agents, and affiliates from and against
all claims, losses, damages, and/or liability of whatsoever kind or
nature, as well as all costs and expenses, including legal expenses and
reasonable attorneys fees, which arise or may arise at any time out of or
in connection with any activity of Bruker involving the Licensed Products,
Invention, or the Patent Rights, including without limitation, the
manufacture, use, sale, lease, commercialization, licensing or
distribution of any system, method, process, apparatus, device, product,
article or appliance derived from or using the Licensed Products,
Invention, or the Patent Rights.
12.2 Bruker and each of its sublicensees will carry liability insurance at
its expense, adequate to assure its obligations to the IU-ARTI under
Section 11. 1 of this Agreement. Bruker will include satisfactory evidence
of adequate insurance coverage upon request.
13. Assignment
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Bruker may assign or otherwise transfer this Agreement and the license
granted hereby and the rights acquired by it to and only to the assignee
or transferee of Bruker's entire business or of that part of Bruker's
business to which the License granted under this Agreement relates,
provided, however, that such assignee or transferee agrees in writing to
be bound by the terms and conditions of this Agreement within thirty (30)
days of such sale or transfer.
14. Non-Use of Names
Bruker will not use the names or trademarks of Indiana University, IU-ART1
or of the Inventors, nor any adaptation thereof in any advertising,
promotional or sales activities without prior written consent obtained
from IU-ARTI in each separate case, except that Bruker may state that it
is licensed under one or more of the patents and/or applications within
the Patent Rights.
15. Export Controls
It is understood that IU-ARTI is subject to United States laws and
regulations controlling the export of technical data, computer software,
laboratory prototypes, and other commodities that may require a license
from the applicable agency of the United States Government and/or may
require written assurances by Bruker that Bruker will not export data or
commodities to certain foreign countries without prior approval of such
agency. IU-ARTI neither represents that a license will not be required nor
that, if required, it will be issued.
16. Payments, Notices and Other Communications
Any payment, notice, or other communication pursuant to this Agreement
Nvill be sufficiently made or given on the date of mailing, if sent to
such party by express mail or certified first class mail, postage prepaid,
made out to IU-ARTI and addressed to it at its address below or made out
to Bruker and addressed to it at its address below or a replacement
address as either party will designate by written notice given to the
other party:
IU-ARTI: Julie M. Watson, Vice President
Advanced Research and Technology Institute
Office of Technology Transfer
Indiana University Research Park
501 N. Morton Street, Suite 111
Bloomington, IN 47404-3730
Tax ID Number: 35-1990726
Bruker: Dr. Frank Laukien, President
Bruker Daltonics, Inc.
14
<PAGE>
15 Fortune Drive, Manning Park
Billerica, MA 01821
17. Miscellaneous Provisions
17.1 This Agreement will be construed, governed, interpreted, and applied
in accordance with the laws of the State of Indiana, U.S.A., except that
questions affecting the construction and effect of any patent will be
determined by the law of the country in which the patent was granted.
17.2 This Agreement sets forth the entire agreement and understanding of
the parties related to the subject matter and may not be modified, except
that this Agreement may be modified by a duly executed amendment signed by
an authorized representative of both parties.
17.3 The provisions of this Agreement are severable, and in the event that
any provision of this Agreement will be determined to be invalid or
unenforceable under any controlling body of law, such invalidity or
non-enforceability will not in any way affect the validity or
enforceability of the remaining provisions hereof.
17.4 Bruker agrees to mark the Licensed Products made, used or sold in the
United States with all applicable United States patent numbers. All
Licensed Products used, shipped to or sold in other countries will be
marked in such a manner as to conform with the patent laws and practice of
the country of use, shipment, and/or sale.
17.5 The failure of either party to assert a right hereunder or to insist
upon compliance with any term or condition of this Agreement will not
constitute a waiver of that right or excuse a similar subsequent failure
to perform any such term or condition by the other party.
17.6 Nothing contained in this Agreement will be deemed to place the
parties in a partnership, joint venture or agency relationship, and
neither party will have the right or authority to obligate or bind the
other party in any manner.
17.7 This Agreement will be executed in duplicate counterparts, each of
which will be deemed an original, but all of which taken together will
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals and duly executed this Agreement as of the day and year last set
forth below.
Indiana University Advanced Research Bruker Daltonics, Inc.
and Technology Institute
15
<PAGE>
By: /s/ Douglas M. Wilson By: /s/ Frank Laukien
--------------------------------- ----------------------------
Douglas Wilson Dr. Frank Laukien
President President
DATE: 8/10/98 DATE: 8/10/98
------------------------- --------------------------
16
<PAGE>
SCHEDULE A
Patent No. Inventors Title
- ---------- --------- -----
5,504,326 James P. Reilly Spatial-Velocity Correlation Focusing in
Steven M. Colby Time-of-Flight Mass Spectrometry
Timothy B. King
5,510,613 James P. Reilly Spatial-Velocity Correlation Focusing in
Steven M. Colby Time-of-Flight Mass Spectrometry
Timothy B. King
5,712,479 James P. Reilly Spatial-Velocity Correlation Focusing in
Steven M. Colby Time-of-Flight Mass Spectrometry
Timothy B. King
17
<PAGE>
Exhibit 10.6
THIRD AMENDMENT
TO
LEASE BETWEEN BRUKER INSTRUMENTS, INC., LESSOR
AND
BRUKER DALTRONICS, INC., LESSEE
FOR THE PREMISES AT
15 FORTUNE DRIVE, BILLERICA, MASSACHUSETTS
Amendment to Amended Lease Agreement dated as of June 27, 1996 (the "Lease")
between Bruker Instruments, Inc., Lessor and Bruker Daltronics, Inc., Lessee,
for the property known as and numbered 15 Fortune Drive, Billerica,
Massachusetts.
1. WHEREAS, the Lease defines the term as through October 31, 1999; and
WHEREAS, the Lessor and Lessee wish to extend the term to renew annually
automatically;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
1. Article II, Paragraph 1 of the Lease is hereby modified to:
TO HAVE AND TO HOLD the Demised Premises under the Tenant for the term
of one year, automatically renewing annually unless terminated in
writing with 90 days written notice by either party.
2. Article II, Paragraph 2 of the Lease is hereby DELETED.
3. All other provisions of the Lease remain unchanged and the parties
hereto ratify the Lease as amended hereby.
Executed as an instrument under seal as of the 25th day of January, 1999.
Lessor:
BRUKER INSTRUMENTS, INC.
/signature/
Duly Authorized
Lessee:
BRUKER DALTRONICS, INC.
/signature/
Duly Authorized
<PAGE>
SECOND AMENDMENT
TO
LEASE BETWEEN BRUKER INSTRUMENTS, INC., LESSOR
AND
BRUKER DALTRONICS, INC., LESSEE
FOR THE PREMISES AT
15 FORTUNE DRIVE, BILLERICA, MASSACHUSETTS
Amendment to Amended Lease Agreement dated as of January 15, 1998 (the "Lease")
between Bruker Instruments, Inc., Lessor and Bruker Daltronics, Inc., Lessee,
for the property known as and numbered 15 Fortune Drive, Billerica,
Massachusetts.
1. WHEREAS, the Lease defines the rentable space as Seventeen Thousand
Five Hundred Ninety-five (17,595); and
WHEREAS, the Lessor and Lessee wish to increase the rentable space;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
2. Article I, Paragraph 1 of the Lease is hereby modified by changing
"Seventeen Thousand Five Hundred Ninety-five (17,595)" to "Twenty-Nine
Thousand Five Hundred Thirty-five (29,535)".
3. Article III, Paragraph (a) of the Lease is hereby modified by changing
"One Hundred Thirty One Thousand Nine Hundred Sixty-two and 44/100
($131,962.44)" to "Two Hundred Twenty One Thousand Two Hundred Twenty
and 00/100 ($221,220.00)".
4. All other provisions of the Lease remain unchanged and the parties
hereto ratify the Lease as amended hereby.
Executed as an instrument under seal as of the 25th day of January, 1999.
Lessor:
BRUKER INSTRUMENTS, INC.
/signature/
Duly Authorized
Lessee:
BRUKER DALTRONICS, INC.
/signature/
Duly Authorized
2
<PAGE>
FIRST AMENDMENT
TO
LEASE BETWEEN BRUKER INSTRUMENTS, INC., LESSOR
AND
BRUKER DALTRONICS, INC., LESSEE
FOR THE PREMISES AT
15 FORTUNE DRIVE, BILLERICA, MASSACHUSETTS
Amendment to Lease Agreement dated as of June 27, 1996 (the "Lease") between
Bruker Instruments, Inc., Lessor and Bruker Daltronics, Inc., Lessee, for the
property known as and numbered 15 Fortune Drive, Billerica, Massachusetts.
WHEREAS, the Lease defines the rentable space as Sixteen Thousand Six Hundred
Eighty-three (16,683); and
WHEREAS, the Lessor and Lessee wish to increase the rentable space;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
1. Article I, Paragraph 1 of the Lease is hereby modified by changing
"Sixteen Thousand Six Hundred Eighty-three (16,683)" to "Seventeen
Thousand Five Hundred Ninety-five (17,595)".
2. Article III, Paragraph (a) of the Lease is hereby modified by changing
"One Hundred Twenty Five Thousand One Hundred Twenty-two and 50/100
($125,122.50)" to "One Hundred Thirty One Thousand Nine Hundred
Sixty-two and 44/100 ($131,962.44)".
3. All other provisions of the Lease remain unchanged and the parties
hereto ratify the Lease as amended hereby.
Executed as an instrument under seal as of the 15th day of January, 1998.
Lessor:
BRUKER INSTRUMENTS, INC.
/signature/
Duly Authorized
Lessee:
BRUKER DALTRONICS, INC.
/signature/
Duly Authorized
3
<PAGE>
INDENTURE OF LEASE
THIS INDENTURE made this 27th day of June, 1996 by and between BRUKER
INSTRUMENTS, INC., a Massachusetts corporation with principal offices located at
19 Fortune Drive, Billerica, MA 01821, as sub-landlord (hereinafter referred to
as the "Landlord"), and BRUKER ANALYTICAL SYSTEMS, INC., a Massachusetts
corporation, having a usual place of business at 15 Fortune Drive, Billerica, MA
01821 as sub-tenant (hereinafter referred to as the "Tenant").
RECITAL
Dirk D. Laukien and Frank H. Laukien, Trustees of Umbrina Realty Trust
(the "Trust") entered into a Lease Agreement dated as of April 1, 1993 with the
Landlord (the "Lease Agreement"), whereby Landlord leased the premises known as
and numbered 15 Fortune Drive, Billerica, Massachusetts (the "Property").
W I T N E S S E T H:
ARTICLE I - PREMISES. The Landlord does by these presents demise and
lease unto the Tenant and the Tenant does hereby hire from the Landlord, upon
and subject to the terms and provisions of this Lease for the term hereinafter
set forth, the following premises (hereinafter sometimes called the "Demised
Premises"): approximately Sixteen Thousand Six Hundred Eighty-three (16,683)
rentable square feet of space in the Property, all as more particularly shown on
the plan attached hereto as EXHIBIT A, as well as the right to use in common
with other tenants Thirty-three and 2/10 percent (33.2%) of the parking spaces
provided for the Building (as hereinafter defined). The Demised Premises are
demised and leased subject to:
(a) The rights of parties in possession and the existing state of
title thereof as of the commencement of the term of this Lease;
(b) All zoning regulations, restrictions, rules and ordinances,
building restrictions and other laws and regulations now in effect or hereafter
adopted by any governmental authority having jurisdiction; and
(c) Taxes, assessments, easements, claims of easements and
encumbrances, as of the date of commencement of the term of this Lease.
The Demised Premises are leased herewith together with the right to
use, in common with others entitled thereto, the hallways, stairways, loading
areas and elevators, if any, necessary for access to, egress from and use of the
Demised Premises.
The Property in which the Demised Premises are situated may be
sometimes referred to herein as the "Building". The Building, together with all
other improvements situated upon the land known and numbered as 15 Fortune
Drive, Billerica, described in
4
<PAGE>
EXHIBIT B attached hereto and made a part hereof, shall be sometimes
collectively referred to herein as "Landlord's Property."
ARTICLE II - TERM. TO HAVE AND TO HOLD the Demised Premises unto the
Tenant for the term of Three (3) years and four (4) months commencing on July 1,
1996 and terminating on October 31, 1999, both dates inclusive.
Provided that Landlord has extended the Lease Agreement, and provided,
further that at the times of exercise, and at the end of the then present term,
(i) there exists no Default, as hereinafter defined, beyond applicable notice
and cure periods, and (ii) this Lease is still in force and effect, Tenant shall
have the right to extend the Term hereof upon all of the same terms, conditions,
covenants and agreements herein contained (except for Rent, which shall be
adjusted as set forth in Article III, below) for two (2) successive terms of
three (3) years each. The said two (2) extension terms are hereinafter referred
to as the "First Extension Term" and the "Second Extension Term", respectively.
Tenant may extend this Lease by providing the Landlord written notice of its
election to extend not less than four (4) months prior to the expiration of the
then current term.
ARTICLE III - RENT.
(a) Fixed Annual Rent: Tenant agrees to pay to Landlord fixed
annual rent, One Hundred Twenty Five Thousand One Hundred Twenty-two and 50/100
($125,122.50) dollars, payable in equal monthly installments commencing on July
1, 1996 and on the first day of each calendar month of the term of this Lease in
advance, without deduction, counterclaim or set-off.
(b) FIRST EXTENDED TERM: The fixed annual rent for the First
Extended Term shall be adjusted in accordance with changes in the Consumer Price
Index (hereinafter called the "Price Index"). The Price Index shall mean the
average for "All Items" Series A, for "Urban Wage Earners and Clerical Workers,
Boston, Massachusetts", as promulgated by the Bureau of Labor Statistics of the
U.S. Department of Labor. The fixed annual rent for the First Extended Term
shall be adjusted in accordance with the following provisions:
(i) The Price Index as of July, 1996 shall be
designated the Base Price Index.
(ii) Promptly after the commencement of the First
Extended Term, the fixed annual rent shall be adjusted so that the ratio of the
Price Index for the first month following the commencement of the First Extended
Term to the adjusted rent shall be the same as the ratio of the Base Price Index
to the fixed annual rent for the original Term; and
(iii) No such adjustment shall reduce the fixed annual
rent below the highest fixed annual rent during the original Term.
5
<PAGE>
(c) SECOND EXTENDED TERM: The fixed annual rent for the Second
Extended Term shall be adjusted in accordance with changes in the Price Index.
The fixed annual rent for the Second Extended Term shall be adjusted in
accordance with the following provisions:
(i) The Price Index as of November, 1999 shall be
designated the Base Price Index.
(ii) Promptly after the commencement of the Second
Extended Term, the fixed annual rent shall be adjusted so that the ratio of the
Price Index for the first month following the commencement of the Second
Extended Term to the adjusted rent shall be the same as the ratio of the Base
Price Index to the fixed annual rent for the First Extended Term; and
(iii) No such adjustment shall reduce the fixed annual
rent below the highest fixed annual rent during the First Extended Term.
In the event that a substantial change is made in the method of
establishing such Price Index, then the Price Index shall be adjusted to the
figure that would have resulted had no change occurred in the manner of
computing such Price Index. In the event that such Price Index (or a successor
substitute index) is not available, a reliable governmental or other nonpartisan
publication evaluating the information theretofore used in determining the Price
Index shall be used in lieu of such Price Index.
Tenant may exercise its option to extend the Term of this Lease for the
First Extended Term, and, thereafter, extend the First Extended Term of this
Lease for the Second Extended Term, by providing Landlord with written notice
thereof not less than four (4) months prior to the expiration of the then
current term.
Tenant also agrees to pay as Additional Rent (as hereinafter defined),
any and all sums which may become due by reason of an omission or failure of the
Tenant to comply with any of the terms, covenants, provisions, obligations and
conditions of this Lease, together with all damages, costs and expenses which
the Landlord may suffer or incur by reason of any omission or failure, including
without limitation, attorneys fees, plus interest calculated at the highest rate
allowable by law.
Rent and other sums of money provided to be paid by the Tenant to the
Landlord shall be paid to the Landlord at the place to which notices to the
Landlord are required to be sent as provided in ARTICLE XXIV, below, or to such
other person or address as the Landlord shall from time to time designate by
written notice to the Tenant.
Tenant also agrees to pay, as additional rent, any and all sums which
may become due by reason or an omission or failure of the Tenant to comply with
any of the terms, covenants, provisions, obligations and conditions of this
Lease, together with all damages, costs and expenses which the Landlord may
suffer or incur by reason of any omission or failure, including without
limitation, attorneys fees and expenses.
6
<PAGE>
ARTICLE IV - NET - NET - NET LEASE. All costs, taxes, and all other
expenses based upon or arising out of the possession, and/or use of the Demised
Premises shall be borne solely by the Tenant without any exception, limitation,
or reservation whatsoever except as otherwise specifically provided in this
Lease. It is the intention of the parties that all rent, additional rent and
other payments provided for in this Lease shall be 100% net to the Landlord and
shall not be diminished in any manner whatsoever except as otherwise
specifically provided herein.
ARTICLE V - TENANT'S COVENANTS. The Tenant agrees with the Landlord
that during the term of this Lease and for such further time as the tenant or
any person claiming through or under it shall hold the Demised Premises or any
part thereof that:
(1) the Tenant shall pay punctually to the Landlord the rent and
additional rent reserved herein, and all other sums that may
become due and payable by the tenant hereunder, at the times
and in the manner set forth in this Lease;
(2) the Tenant shall pay all charges for heat, water, sewer, gas,
electricity, telephone and other utilities or services used
or consumed upon the Demised Premises, whether called a
charge, tax, assessment, fee or otherwise, including, without
limitation, water and sewer charges and taxes, if any, all
such charges to be paid as the same from time to time become
due and, in any event, before the same shall become
delinquent. In the event any of the utilities servicing the
Demised Premises are not separately metered, the Tenant shall
pay its Proportionate Share (as hereinafter defined) of such
utility costs as provided in ARTICLE VI of this Lease. In no
event shall the Landlord be liable to the Tenant in damages
or otherwise for any interruption, curtailment or suspension
of any utility services, nor shall Tenant be entitled to any
abatement of rent by reason of the same.
(3) the Tenant shall keep the Demised Premises and the fixtures
therein, and also all of the doors and windows thereof in the
same condition they now are or may be put in hereafter,
reasonable wear and tear, damage by fire and other
unavoidable casualty only excepted, and the Landlord shall be
under no obligation to make any repairs, renovations,
alterations or improvements to the Demised Premises, the
Building or the Landlord's Property (except as herein
specifically provided otherwise);
(4) the Tenant shall not permit any hole to be drilled which may
weaken the structure of the Building. Upon the removal of any
fixtures, equipment or signs so installed by the Tenant, the
Tenant shall restore the stone, brickwork, and walls,
ceilings and floors to
7
<PAGE>
the condition they were in prior to the installation, except
as otherwise specifically provided in herein;
(5) if the Tenant, or its employees, agents, invitees, licensees,
or anyone claiming under the Tenant or the whole or any part
of any property of every kind, nature and description
belonging to the Tenant or anyone claiming by, through or
under the Tenant shall be injured, lost or damaged by theft,
fire, explosion, falling plaster, gas, electricity,
electrical disturbance, water, rain, snow, stream, all leaks
(including, but not limited to, leaks from any part of the
Building, the pipes, appliances, plumbing works, the roof,
street, subsurface or any other place), or from any cause
whatsoever, whether similar or dissimilar to the foregoing,
no part of said injury, loss or damage is to be borne by the
Landlord;
(6) other than those arising due to Landlord's own negligence or
willful deeds, the Tenant agrees to and does hereby indemnify
and save the Landlord harmless from and against any and all
claims, losses, damages, liability, suits, costs, fees and
expenses, including, without limitation, reasonable
attorneys' fees and expenses, arising out of or in connection
with the Tenant's use or occupancy of the Demised Premises,
the Building or the Landlord's Property and any act or
omission of the Tenant, its agents, contractors, invitees,
licensees, servants, or employees; or resulting from the
failure of the Tenant to perform and discharge its covenants
and obligations under this Lease. If the Landlord is, except
due to its own negligence, made a party to any litigation or
legal claim (without regard to whether any litigation is
commenced) asserted by or against the Tenant, or by or
against any parties in possession of the Demised Premises, or
any party thereof claiming under the Tenant, the Tenant shall
pay all costs, including without limitation, reasonable
counsel fees, incurred by the Landlord in connection with
such litigation and in connection with enforcing this
indemnification;
(7) the Tenant covenants that all furnishings, trade fixtures,
effects and personal property of every kind, nature and
description belonging to the Tenant and all parties claiming
by, through or under the Tenant which, during the term of
this Lease or any occupancy of the Demised Premises by the
Tenant or anyone claiming by, through or under the Tenant,
may be upon or within the Demised Premises, shall be at the
sole risk and hazard of theft; and if the whole or any part
thereof shall be destroyed or damaged by fire, explosion,
falling plaster, steam gas, electricity, electrical
disturbance, water, rain, snow, all leaks (including, but not
limited to, leaks from any part of the Building, the pipes,
appliances,
8
<PAGE>
plumbing works, the roof, street, subsurface, or any other
place), theft, or from any other cause whatsoever, no part of
said loss or damage is to be charged to or to be borne by the
Landlord, except as may be caused by the negligence or
intentional acts of the Landlord;
(8) no trade or occupation shall be carried on upon or within the
Demised Premises, nor will any use be made thereof which
shall be unlawful, improper, offensive or contrary to any law
of the Commonwealth of Massachusetts, or any law or ordinance
from time to time in force of the Town of Billerica, or rules
or regulations of the Board of Fire Underwriters, or which
shall be injurious to any person or property;
(9) the Tenant shall not: permit any practice which will create
any nuisance; overload, deface or injure the Demised
Premises, the Building or the Landlord's Property; commit or
suffer any waste; dump, flush, or in any way introduce any
hazardous or toxic substances into the sewage or other waste
disposal system serving the Demised Premises, the Building or
the Landlord's Property; generate, store, use or dispose of
inflammable, hazardous or toxic substances in or about the
Demised Premises, the Building or the Landlord's Property; or
make such use of the Demised Premises, the Building or the
Landlord's Property as to disturb, by obnoxious odors, noises
or otherwise, the Landlord, or any of the Landlord's other
tenants in the Building.
(10) nothing shall be done upon or within the Demised Premises,
the Building or the Landlord's Property which increases, in
any way, the rate of fire insurance or creates any extra
premiums for any such insurance, or increases the rate of
other casualty or liability insurance or prevents the
obtaining of any such insurance on the building or on the
property kept therein, or which renders void or voidable any
such policy of insurance; provided that if the rate of any
such insurance is increased or extra premiums are made
payable by reason of anything done or permitted to be done by
the Tenant on the Demised Premises, the Tenant shall pay such
increase or extra premiums on demand;
(11) unless covered by casualty insurance, the Tenant shall keep
in good condition, at its own expense, with glass for the
same kind and quality as that which may be damaged or broken,
all the glass now or hereafter in the demised Premises,
whether broken by accident, the elements or any other cause;
9
<PAGE>
(12) the Tenant shall comply promptly with all laws, rules,
regulations, requirements and orders of public authorities,
local boards of fire underwriters and similar organizations
having jurisdiction which are applicable to the Demised
Premises, Tenant's use and occupancy thereof and/or the
Tenant's business operation;
(13) the Tenant shall maintain in full force and effect as of the
date it takes possession of the Demised Premises and during
the term, of this Lease, at its sole cost and expense, the
following insurance policies: (i) comprehensive public
liability and property damage insurance indemnifying and
insuring the Landlord, the Landlord's Mortgagee, if required
by the Landlord, and the Tenant against all claims and
demands for personal injury liability (including, without
limitation, bodily injury, sickness, disease and death) or
damage to property which may be claimed to have occurred
upon, within or about the Demised Premises, the Building and
the Landlord's Property, with combined single limits of not
less than One Million Dollars ($1,000,000,000), with such
insurance to include products and completed operations and
(ii) fire and casualty insurance, covering loss of or damage
to all furnishings, trade fixtures, effects and other
personal property located within the Demised Premises, on an
all risk of loss basis, in amounts equal to the full
replacement cost thereof.
The Landlord and the Landlord's Mortgagee, if required by the
Landlord, shall be named as an additional named insured on
all insurance policies required hereunder, with full privity
of contract including the right to participate in any loss
adjustment. The Tenant may maintain such insurance under a
blanket policy affecting the Demised Premises and other
premises of the Tenant or any business organization
affiliated with the Tenant. The Tenant shall furnish the
Landlord with copies of said insurance policies and
satisfactory evidence of the payment of the premiums thereon.
The Tenant shall furnish the Landlord with Certificates of
Renewal at least thirty (30) days prior to the expiration of
each such insurance policy. The Tenant shall pay promptly
when due the premiums on said insurance policies. All
insurance policies required hereunder shall contain
provisions providing that the policies. All insurance
policies required hereunder shall contain provisions
providing that the policies may not be canceled or modified
without at least thirty (30) days prior written notice to the
Landlord and that the Landlord shall be notified of any
non-payment of premium.
The Landlord may from time to time increase the minimum
limits of insurance required pursuant to the provisions of
this paragraph
10
<PAGE>
(13). Tenant also agrees to keep all of its employees covered
by workmen's compensation insurance in the required statutory
amounts and such other insurance in such amounts and upon
such terms as the Landlord may, from time to time, reasonably
require.
(14) the Tenant shall not permit any non-structural repairs,
installations, alterations, additions, improvements or
removals (collectively, the "Alterations") to be made to the
Demised Premises without the prior written consent of the
Landlord, which consent shall not be unreasonably withheld or
delayed. All permitted Alterations made by the tenant to the
Demised Premises shall be made at Tenant's sole cost and
expense and shall belong to the Tenant during the term hereof
and, unless otherwise specifically provided by the Landlord,
shall become the property of the Landlord and shall remain
upon and be surrendered with the Demised Premises as a part
thereof at the termination of this Lease. The tenant agrees
that it shall procure all necessary permits before making any
such permitted non-structural Alternations. The Landlord
agrees that it shall co-operate with the Tenant in obtaining
such permits, provided, however, all costs and expenses
incident to Landlord's cooperation (including without
limitation, reasonable attorneys fees and costs) shall be
paid by Tenant upon demand.
Tenant shall not make any structural Alternations to the
Demised Premises or the Building without the prior written
consent of the Landlord, which, at Landlord's sole option may
be withheld or denied for any reason, or for not reason.
With regard to all structural and non-structural Alterations
that have been consented to by the Landlord, the Tenant
shall: (i) submit to Landlord compete plans and
specifications for the work; (ii) deliver to the Landlord a
statement of the names of all contractors and subcontractors
and the estimated cost of all labor and material to be
furnished by them; (iii) require each contractor and
subcontractor to carry workmen's compensation insurance, in
statutory amounts, covering all of the contractor's and
subcontractor's employees and comprehensive public liability
and property damage insurance with combined single limits of
not less than One Million Dollars ($1,000,000,000) with such
insurance policies to include contractual liability, products
and completed operations, naming the Landlord and Tenant as
additional named insureds; and (iv) require the contractors
and subcontractors to deliver to the Landlord certificates of
insurance for all such required insurance. The Tenant agrees
that all Alterations done by it or anyone claiming under it
will be done in a good and workmanlike manner, that the same
will be done in conformity
11
<PAGE>
with the plans and specifications approved by the Landlord.
The Tenant shall repair any and all damage, caused by or
resulting from, any such Alterations, including, without
limitation, the filling of holes. The Tenant agrees to save
the Landlord harmless from, and indemnify the Landlord
against any and all claims for injury, loss or damage to
persons or property caused by or resulting from the doing of
any such work which indemnification shall include the payment
of Landlord's reasonable attorneys' fees and expenses
incurred in connection with such claims and in enforcing this
indemnification. The Tenant agrees to pay promptly when due
all charges for labor and materials in connection with any
work done by the Tenant or anyone claiming under the Tenant
upon the Demised Premises so the Demised Premises shall, at
all times, be free of liens for such work;
(15) the Tenant shall not permit any sign to be place upon the
outside of the building except such sign, and in such place
and manner as shall have been first approved by the Landlord
in writing. Whatever signs shall be placed upon the Building
shall be attached in a good and workmanlike manner and in
conformity with all laws, ordinances, regulations and orders
for ht time being in force of all public authorities having
jurisdiction. The Tenant shall indemnify and same harmless
the Landlord from an and all claims for injury or damage to
person or property caused by the installation, maintenance or
removal of any signs attached by the Tenant;
(16) the Tenant shall not assign, mortgage, pledge or transfer by
operation of law or otherwise convey this Lease or any
interest therein, or sublet the Demised Premises or any part
thereof without first obtaining on each occasion the written
consent of the Landlord, which consent, at Landlord's sole
option, may be withheld or denied for any reason or for no
reason.
If the Tenant shall be a corporation, a transfer of more than
forty-nine (49%) of the voting stock of said corporation,
either at one time, or in the aggregate shall be deemed to be
an assignment of this Lease unless such stock is listed for
sale to the public on a recognized stock exchange or such
transfer is made in connection with a bona fide public
offering. Such a transfer shall be permitted in connection
with a merger or consolidation of Tenant with or into another
corporation, if immediately subsequent to such merger or
consolidation, the net worth of the surviving corporation
shall be at least one hundred twenty-five percent (125%) of
the net worth of Tenant immediately prior thereto. Net worth
in all instances to be determined by a Certified Public
Accountant using generally
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accepted accounting principals, consistently applied.
Notwithstanding the foregoing , the Tenant may assign the
Lease to a parent, subsidiary or affiliate corporation,
subject to the continued liability of the Tenant, as set
forth below.
The Tenant may not, in any event, assign, sublet or otherwise
transfer this Lease if it is in default of any of the terms,
covenants or conditions of this Lease. No assignment,
sublease or other transfer by the Tenant, even though
consented to by the Landlord, shall, in any manner, diminish
or limit the liability of the Tenant to the Landlord under
the terms, covenants and conditions of this Lease, and such
liability shall remain and continue in full force and effect
as if the Tenant had never entered into any assignment,
sublease or transfer. The Tenant shall remain and continue to
be unconditionally and primarily liable for the performance
of all obligations of this Lease including without
limitation, the obligation to pay all rent. The acceptance by
the Landlord of rent or the performance of any of the other
obligations of this Lease from an assignee, subtenant or
transferee shall not be deemed a release of the Tenant from
any of its obligations or an acknowledgment of any assignment
or sublease.
Any attempted assignment, transfer, mortgage, grant of
security interest, sublease, or other conveyance of this
Lease or any interest therein, except as permitted by the
provisions of this Paragraph 16, shall be void. If, for any
assignment or sublease of this Lease, the Tenant receives
rent or other consideration, either initially or over the
term of the assignment or sublease, in excess of the rent
called for hereunder, or in case of sublease of part, in
excess of such rent fairly allocable to the part, after
appropriate adjustments to assure that all other payments
called for hereunder are appropriately taken into account,
the Tenant shall pay to Landlord as additional rent, the full
excess of each such payment of rent or other consideration
received by Tenant promptly after its receipt.
(17) the Tenant shall not do or cause anything to be done whereby
the Demised Premises, the Building or the Landlord's Property
shall be encumbered by any lien, attachment or other
encumbrance, and shall, whenever and as often as any lien,
attachment, or encumbrance is filed against the Demised
Premises, the Building or the Landlord's Property as a result
of any acts by the Tenant or anyone claiming under the
Tenant, or any work performed or claimed to have been
performed by or for the benefit of the Tenant, cause the same
to be canceled and discharged of record, by payment, bond or
otherwise, within ten (10) days after the date of the filing
thereof. If any such lien is not discharged and released
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within said ten (10) days, then the Landlord shall have the
right, but not the obligation, to take such action as it
deems desirable to remove such lien, and the Tenant shall
indemnify and reimburse the Landlord for any costs incurred
in connection therewith;
(18) if the Tenant or anyone claiming under the Tenant shall
remain in possession of the Demised Premises or any part
thereof after the expiration or sooner termination of this
Lease without any agreement in writing between the Landlord
and the Tenant with respect thereto, prior to acceptance of
rent by the Landlord, the person remaining in possession
shall be deemed a tenant at sufferance and after acceptance
of rent by the Landlord, the person remaining in possession
shall be deemed a monthly tenant at will, subject to the
provisions of this Lease insofar as the same may be made
applicable to a tenancy at will; provided, however, that if
annual rent shall be payable during the term of this Lease at
different rates at different times, annual rent during such
period as such person shall continue to hold the Demised
Premises or any part thereof shall be payable at twice the
highest rate payable during the term hereof. In no event
shall any tenancy for years or from year to year be created
unless by an agreement by and between the Landlord and Tenant
in writing;
(19) the Tenant shall at all times during the term of this Lease
and at its own expense, keep and maintain the Demised
Premises in good order, repair and condition, including,
without limiting the foregoing, keeping the Demised Premises
in good, safe, reasonably neat and attractive condition, both
interior and exterior;
(20) the Tenant agrees that it and its employees and others
connected with Tenant's operations at the Demised Premises
will abide by all reasonable rules and regulations with
respect to the building from time to time established by
Landlord by written notice to Tenant.
ARTICLE VI - TENANTS PROPORTIONATE SHARE. Tenant shall, during the term
of this Lease, pay to Landlord, as additional rent, Tenant's proportionate share
of all real estate impositions, public assessments, insurance costs and
Operational Expenses, all as hereinafter defined, with respect to Landlord's
Property as provided in this ARTICLE VI. It is agreed that Thirty-three and 2/10
percent (33.2%) will be Tenant's proportionate share of all additional rent and
items provided for in this ARTICLE VI ("Tenant's Proportionate Share").
(A) Tenant shall pay to Landlord Tenant's Proportionate Share of (i)
the real estate impositions for all tax periods wholly included in the term of
this Lease and (ii) for any fraction of a tax period included in the term of
this Lease at the beginning or end, the corresponding fraction of the real
estate impositions assessed for the period. All such
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payments shall be made within ten (10) days after Landlord shall have notified
Tenant of the amount of such impositions (such notice to include a copy of the
tax bills involved), except that payment for the period in which the term of
this Lease shall end shall be made not later than the termination date of this
Lease, and if the amount is not then determinable shall be made on the basis of
the last prior imposition, with readjustment as soon as the correct amount is
determinable. the term "real estate impositions" as used herein shall be deemed
to constitute the real estate taxes on Landlord's Property (including, without
implied limitation, the Building and the Demised Premises), expenses of any
proceedings for abatement or reduction of taxes and assessments (less any
abatements or refunds received and attributable to a tax period or fraction
thereof included during the term of this Lease), and any use or occupancy or
similar tax with respect to the Landlord's Property. The foregoing provisions of
this ARTICLE VI are predicated upon the present system of taxation in the
Commonwealth of Massachusetts. If taxes upon rentals shall be substituted, in
whole or in part, for the present and valorem real estate taxes, then Tenant's
Proportionate Share of taxes (as set forth above) shall be based upon such taxes
on rentals to the extent to which the same shall be a substitute for present and
valorem real estate taxes. Further, if there is any other change in the system
of taxation (other than as set out immediately above) which is in substitution
of the present system, Tenant shall be responsible for its fair and equitable
share thereof, taking into account the prorations provided for in this ARTICLE
VI.
(B) In the event of any public special or betterment assessments for
improvements hereafter installed, Tenant shall pay to Landlord Tenant's
Proportionate Share thereof, as follows:
If Landlord is permitted by law to pay the assessments in
installments, Tenant shall pay to Landlord Tenant's Proportionate Share
of the first installment within thirty (30) days after Landlord shall
have notified Tenant of such assessment and the amount of the first
installment. Thereafter, at least fifteen (15) days before subsequent
installments become due, Tenant shall pay to Landlord Tenant's
Proportionate Share of each installment, including interest, coming due
during the term of this Lease, and shall pay to Landlord not later than
the end of the term of this Lease for any fraction of an installment
period at the end of the term, the corresponding fraction of Tenant's
Proportionate Share of the installment, including interest, for the
period.
If Landlord is not permitted to pay any such assessments in
installments, Tenant shall pay to Landlord Tenant's Proportionate Share
of the full amount thereof within sixty (60) days after Landlord shall
have notified Tenant of the amount of the assessment.
Tenant shall have no liability for any installment due or deemed
to be due after the expiration of the term hereof except as such
installment relates to any period of time falling within the term of
this Lease.
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(C) Tenant shall pay to Landlord Tenant's Proportionate Share of all
costs and expenses of every kind and nature paid or incurred by the Landlord
(including appropriate reserves) in operating, maintaining, insuring, managing,
equipping, policing and securing (if and to the extend provided by the Landlord)
the common areas of the Building and Landlord's Property and the Demised
Premises. Such costs and expenses (the "Operational Expenses") shall include,
but shall not be limited to, the cost of scheduled trash and refuse compacting
and removal; water and sewer and other utility charges servicing the common
areas of the Building and Landlord's Property and the Demised Premises (unless
the utilities servicing the Demised Premises are separately metered, in which
event, the Tenant shall pay all such utility costs directly to the utility
companies providing such services as indicated pursuant to the provisions of
ARTICLE V hereunder) and the cost of maintenance, repair and replacement of
utility systems serving the common areas of the Building and/or the Landlord's
Property (including, without limitation, water, sewer and storm water and other
utility lines, pipes and conduits); the cost of pumping, cleaning, repairing,
replacing and rebuilding all septic systems and leaching fields serving the
Landlord's Property; the cost of maintenance, repair and replacement of the
Landlord's signage; wages, salaries, fees and other compensation, payroll taxes,
contributions to any social security, unemployment insurance, pension or similar
fund and payments for other fringe benefits made to or on behalf of any and all
agents, employees, or contractors of the Landlord performing services rendered
in connection with the common areas of the Building and/or Landlord's Property;
fees for licenses and permits; costs of independent contractors performing
services with respect to the common areas of the Building and/or Landlord's
Property; supplies; depreciation of equipment used in the operation, repair and
maintenance of the Landlord's Property; premiums incurred by the Landlord with
respect to all insurance relating to the Building and/or Landlord's Property,
including, without limitation, fire and casualty insurance, public liability
insurance, workmen's compensation insurance, boiler and machinery insurance,
sprinkler leakage insurance, rent insurance and such other insurance as Landlord
shall elect to carry; cleaning costs for the common areas of the Building and/or
Landlord's Property, including without implied limitation, the facade, windows
and sidewalks and all Building common areas; costs incurred for the operation,
service, maintenance, inspection, repairs and alterations of and to the
Building, and the heating, air-conditioning (if any), ventilating, plumbing,
electrical and elevator systems (if any) of the Building, and the cost of labor,
materials, supplies and equipment used in connection with all of the aforesaid
items; management fees of the managing agent (if any) for the Building and the
Landlord's Property; all costs incurred by Landlord to comply with governmental
requirements whether Federal, State, or Municipal; capital expenditures
necessitated by casualties to the extent the same are not covered by insurance;
and reasonable legal and accounting fees and expenses incurred in connection
with the management and operation of the Building and Landlord's Property; but
there shall be excluded from such Operational Expenses the initial costs of
equipment properly chargeable to the capital account and depreciation of the
original cost of constructing the buildings upon the Landlord's Property and the
common area appurtenant thereto.
Tenant's Proportionate Share of the Operational Expenses shall be paid
in monthly installments, in the amount estimated by the Landlord from time to
time, in
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advance of the first day of each and every calendar month during the term of
this Lease. Within one hundred twenty (120) days after the end of each calendar
year during the term hereof, Landlord shall furnish to Tenant a statement in
reasonable detail setting forth the computation of such total costs and
expenses; thereupon there shall be a prompt adjustment between Landlord and
Tenant, with payment to, or repayment by, Landlord, as the case may require, to
the end that Landlord shall receive the entire amount of Tenant's Proportionate
Share of said costs and expenses, and no more. Notwithstanding the foregoing, in
the event that Tenant shall have paid to Landlord an amount in excess of
Tenant's Proportionate Share of Operational Expenses, Landlord may, but shall
not be obligated to, credit any such excess payments against monthly
installments of Operational Expenses next coming due during the term hereof.
ARTICLE VII - MAINTENANCE AND REPAIRS. The Landlord agrees at its own
expense, expeditiously after receipt of notice from Tenant, to make all repairs
to the structure, exterior walls, walls between the Demised Premises and the
adjoining premises, foundation, common areas (including the glass entrance to
the Building) and roof of the Building, unless such repairs or alterations shall
be made necessary (i) by reason of any alterations, additions or improvements
made by the Tenant, (ii) by reason of any special use to which the Demised
Premises are put by the Tenant, (iii) by reason of the negligent or willful
misconduct of the Tenant or anyone claiming under Tenant or (iv) by the failure
of the Tenant to perform or observe some agreement or condition contained in
this Lease on the part of the Tenant to be performed or observed, in which event
the Tenant shall promptly make such repairs or alterations at its own expense.
As used in this Section, the expression "structure" means supporting columns and
beams and the expression "exterior walls" does not include windows, doors,
glass, or the frames of windows. All repairs which are required to be made to
the Demised Premises and which the Landlord is not obligated to make pursuant to
this Section shall be made by the Tenant, unless herein otherwise specifically
provided.
ARTICLE VIII - LANDLORD'S RIGHT OF ENTRY. The Landlord and its agents
shall have the right to enter into and upon the Demised Premises or any part
thereof during regular business hours, and in case of emergency, at any time:
(a) to examine the same;
(b) to order the removal of any signs not affixed in accordance
with the terms of this Lease (or to remove the same if said order shall not be
complied with within ten (10) days),
(c) to make any repairs or alterations to the Demised Premises as
the Landlord shall be expressly required to make or shall otherwise elect to
make, but nothing herein contained shall obligate the Landlord to make any
repairs or alterations to the Demised Premises except as in this Lease otherwise
provided; and
(d) to make any repairs, alterations or improvements or additions
to the Building and the Landlord's Property and to put through the Demised
Premises such
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pipes, wires, conduits and appurtenances as may be necessary for effecting such
repairs, alterations, improvements or additions, provided that the same shall
not interfere unreasonably with the business of the Tenant and shall not
unreasonably restrict the space usable by the Tenant; and the Tenant shall not
be entitled to any abatement or reduction of rent by reason thereof. The Tenant
shall permit inspection of the Demised Premises at reasonable hours to
prospective purchasers and mortgagees, and, during the last twelve (12) months
of the term of this Lease, the Tenant shall permit inspection of the Demised
Premises at reasonable hours to prospective tenants and shall permit the usual
"To Let" or "For Sale" signs to be placed on the property; provided, however,
that such inspection or inspections shall not interfere unreasonably with the
business being conducted on the Demised Premises.
ARTICLE IX - DEFAULT. In the event that:
(1) the Tenant should default in the payment of the annual rent,
or additional rent or any part thereof, and such default
continues for five (5) days after the due date thereof; or
(2) the Tenant should default in the performance of any of the
other terms, covenants and conditions in this Lease contained
and on its part to be kept and performed and fail to correct
such default within twenty (20) days after the receipt of
written notice from the Landlord designating the nature of
such default, or if by reason of the nature of such default
it cannot be corrected within said twenty (20) days, Tenant
fails to commence to correct such default within said twenty
(20) days and thereafter diligently prosecute the correction
of the same to completion; or
(3) if any assignment shall be made by the Tenant of its property
for the benefit of creditors; or
(4) if the Tenant's leasehold interest shall be taken on
execution; or
(5) if proceedings shall be commenced by the Tenant in court of
bankruptcy or insolvency; or
(6) if the Tenant shall be declared bankrupt or insolvent
according to law; or
(7) if any proceedings shall be commenced against the Tenant in a
court of bankruptcy or insolvency and such proceedings shall
not have been dismissed within sixty (60) days;
then in any of said cases, Landlord shall have the right, at its sole election
either (i) without necessity or requirement for making an entry, to terminate
this Lease by notice in writing to Tenant, which shall take effect on the date,
prior to the expiration of
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the term of this Lease, specified in Landlord's notice or (ii) enter into and
take possession of the Demised Premises (or any part thereof in the name of the
whole) without demand or notice and repossess the same as of the Landlord's
former estate, expelling Tenant and those claiming under it, forcibly, if
necessary, without being deemed guilty of any manner of trespass, provided that
such repossession shall not be construed to effect a termination of this Lease,
unless Landlord so declares as part of such entry, or sends Tenant a written
notice of termination as provided above. Any such termination or entry shall be
without prejudice to any remedy for arrears of rent or preceding breach of
contract.
If the Landlord shall terminate this Lease, or take possession of the
Demised Premises, as aforesaid, Tenant shall indemnify Landlord each month
against all loss of rent and all damages which Landlord may incur by reason of
any such termination between the time of termination and the expiration of the
term of the Lease, or at the election of Landlord, exercised at the time of the
termination or at any time thereafter, Tenant shall indemnify Landlord each
month until the exercise of the election against all loss of rent and other
obligations which Landlord may incur by reason of such termination during the
period between the time of the termination and the exercise of the election, and
upon the exercise of the election, Tenant shall pay to Landlord as damages such
amount as at the time of the exercise of the election represents the amount by
which the rental value of the Demised Premises for the period from the exercise
of the election until the expiration of the term shall be less than the amount
of rent and other payments provided herein to be paid by Tenant to Landlord
during said period. It is understood and agreed that at the time of the
termination or at any time thereafter Landlord may rent the Demised Premises,
and for a term which may expire after the expiration of the term of this Lease,
without releasing Tenant from any liability whatsoever, that Tenant shall be
liable for any reasonable expenses incurred by Landlord in connection with
obtaining possession of the Demised Premises, with removing from the Demised
Premises property of Tenant and persons claiming under it (including warehouse
charges), with putting the Demised Premises into good condition for reletting
and with any reletting, including, but without limitation, reasonable attorneys'
fees and brokers' fees, and that any monies collected from any reletting shall
be applied first to the foregoing expenses and then to the payment of rent and
all other payments due from Tenant to Landlord.
In lieu of the foregoing, the Landlord may elect to receive from the
Tenant and the Tenant agrees to pay to the Landlord, on demand, as liquidated
damages, a sum equal to the amount by which the sum of the rent, additional rent
and other payments called for under this lease for remainder of the term exceeds
the fair rental value of Demised Premises for the remainder of the term.
The word "Tenant" as used in clauses (3), (4)Less than (5), (6) and (7)
of this ARTICLE IX shall be deemed to mean either (a) the Tenant or (b) the
guarantor, if any, of the Tenant's obligations under this Lease.
ARTICLE X - CONDEMNATION, EMINENT DOMAIN. If, after the execution of
this Lease and before the expiration of the term hereof, any portion of the
Demised Premises shall be taken by right of eminent domain that reduces the
Demised
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Premises to less than 15,000 rentable square feet of space, then this Lease and
the term hereof shall terminate as of the time when the Landlord shall be
divested of its interest in the Demised Premises, and annual fixed rent and all
additional rent and other charges payable hereunder shall be apportioned and
adjusted as of the date of termination.
If the term of this Lease shall not be terminated as aforesaid, then
the term of this Lease shall continue in full force and effect, and the Landlord
shall, within a reasonable time after possession is required for public use
(subject to delays due to difficulty in obtaining labor, materials, equipment,
government restrictions, labor difficulties, fires or to any other cause beyond
the Landlord's control and subject to the provisions of the applicable building
and zoning laws) repair and rebuild what may remain of the Demised Premises so
as to put the same into condition for use and occupancy by the Tenant. A just
proportion of the annual rent reserved herein, according to the nature and
extent of the injury to the Demised Premises, shall be suspended or abated until
what may remain of the Demised Premises shall be put in such condition by the
Landlord, and thereafter a just proportion of the annual rent reserved herein,
according to the nature and extent of the part so taken, shall be abated for the
balance of the term of this Lease; provided, however, that in connection with
the above obligation to repair and rebuild Landlord shall have no obligation to
expend more than the amount actually recovered as an award for such taking and
made available by any mortgage of the building and/or the Landlord's Property.
The Landlord reserves to itself, and the Tenant assigns to the
Landlord, all rights to damages accruing on account of any taking under the
power of eminent domain or by reason of any act of any public or quasi-public
authority for which damages are payable. The Tenant agrees to execute such
instruments of assignment as may be reasonably required by the Landlord in any
proceeding for the recovery of such damages if requested by the Landlord, and to
turn over to the Landlord any damages that may be recovered in such proceeding.
It is agreed and understood, however, that the Landlord does not reserve to
itself, and the Tenant does not assign to the Landlord, any damages payable for
reimbursement of the cost of moving Tenant's stock, fixtures and appliances to
the extent that such claim may be made independently by Tenant directly against
any taking authority without regard to and without diminishing Landlord's claim.
ARTICLE XI - DAMAGE AND/OR DESTRUCTION. In the event that the Demised
Premises shall be damaged or destroyed by fire, the elements, or other casualty,
then Tenant shall give immediate notice thereof to Landlord, and, except as
hereinafter otherwise provided, the Demised Premises shall be repaired or
restored by the Landlord as speedily as possible (but due allowance shall be
made for any reasonable or unavoidable delay arising in connection with the
adjustment of the fire loss or inability to procure labor or materials or any
other cause beyond the Landlord's control); provided, however, that in no event
shall Landlord be obligated (i) to expend for such repairs or restoration more
than the amount of proceeds of insurance actually recovered and made available
by any mortgagee of the Building or the Landlord's Property, nor shall Landlord
be obligated to repair or restore if not allowed by applicable zoning, building
or other such laws or (ii) to repair, reconstruct or replace Tenant's leasehold
improvements, furniture, fixtures, equipment or other personal property or goods
located upon or within the
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Demised Premises. In the event that the damage to the Demised Premises should be
so extensive as to render the whole or any part thereof untenantable and
unsuitable for use and occupation by the Tenant, a just proportion of the annual
fixed rent hereinafter reserved, according to the nature and extent of the
injury to the Demised Premises, shall be suspended or abated until the Demised
Premises, shall be suspended or abated until the Demised Premises shall have
been repaired or restored by the Landlord (to the extent of the insurance
proceeds recovered and made available by Landlord's mortgagee(s) as aforesaid)
to substantially the same condition they were in immediately prior to such
casualty.
Notwithstanding anything contained in the foregoing paragraph to the
contrary, it is expressly agreed that if the Demised Premises are damaged or
destroyed to the extent of fifty percent (50%) or more of the insurable value of
the same, then the Landlord may terminate this Lease and the term hereof. In the
event the Building is damaged to the extent of thirty-three and one-third
percent (33 1/3%) or more of the insurable value of the same (regardless of
whether or not the Demised Premises shall be damaged or destroyed), then the
Landlord may terminate this Lease and the term hereof. In either case, the
election to terminate shall be by a notice given to the Tenant within sixty (60)
days after such damage or destruction and in the event of such notice this Lease
shall terminate on the thirtieth day after the giving of such notice of
termination.
Notwithstanding anything in this Article contained in the contrary, it
is expressly agreed and understood that if during the last Lease Year of the
term of this Lease the Demised Premises are damaged or destroyed to the extent
of fifteen percent (15%) or more of the insurable value of the same, then the
Landlord may terminate this Lease and the term hereof by notice given to the
Tenant within sixty (60) days after such damage or destruction and in the event
of such notice this Lease shall terminate on the thirtieth day after the giving
of the notice of such termination.
ARTICLE XII - QUIET ENJOYMENT. It is agreed that upon the Tenant,
paying the rent reserved and performing and observing the terms, agreements,
obligations, conditions, and provisions herein on its part to be performed and
observed, shall and may peaceably and quietly have, hold and enjoy the Demised
Premises during the term hereof without any manner of hindrance or molestation
from the Landlord, subject to the terms and conditions of any mortgages of
record now or at any time hereafter a lien or liens on the Building and/or the
Landlord's Property as to which mortgages this Lease is subordinate, subject to
the powers or condemnation and eminent domain of public and quasi-public
authorities, and subject further to any rights of the Landlord with respect to
any provision of this Lease.
ARTICLE XIII - RIGHT TO DEFAULT. If Tenant shall default in the
performance or observance of any agreement or condition in this Lease contained
on its part to be performed or observed other than an obligation to pay money,
and shall not cure such default within twenty (20) days after written notice
from Landlord, specifying the default (or if such default is not capable of
being cured within twenty (20) days, if Tenant shall not within said period
commence to cure such default and thereafter prosecute the curing of such
default to completion with due diligence), Landlord may, at
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its option and without the obligation to do so, without waiving any claim for
damages for breach of agreement, at any time thereafter cure such default for
the account of Tenant, and any amount paid or any contractual liability incurred
by Landlord in so doing shall be deemed paid or incurred for the account of
Tenant, and Tenant hereby agrees to reimburse Landlord therefore or save
Landlord harmless therefrom; provided that Landlord may cure any such default as
aforesaid prior to the expiration of said grace period but after notice to
Tenant, if the curing of such default prior to the expiration of said grace
period is reasonably necessary to protect the real estate or Landlord's interest
therein, or to prevent injury or damage to persons or property. If Tenant shall
fail to reimburse Landlord upon demand for any amount paid for the account of
Tenant hereunder, said amount shall be added to and become due together with the
next payment of rent due hereunder.
ARTICLE XIV - APPLICABLE LAW AND CONSTRUCTION. This Lease shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts. If any term, covenant, condition or provision of this Lease or
the application thereof to any person or circumstances shall be declared
invalid, or unenforceable by the final ruling of a court of competent
jurisdiction having final review, the remaining terms, covenants, conditions and
provisions of this Lease and their application to persons or circumstances shall
not be affected thereby and shall continue to be enforced and recognized as
valid agreements of the parties, and in the place of such invalid or
unenforceable provision, there shall be substituted a like, but valid and
enforceable provision which comports to the findings of the aforesaid court and
must nearly accomplishes the original intention of the parties. It is the
intention of the parties hereto that if any provision of this Lease is capable
of two constructions, one of which would render the provision void and the other
of which would render the provision valid, then the provision shall be construed
in accordance with the construction which renders the provision valid.
There are no oral or written agreements between Landlord and Tenant
affecting this Lease. This Lease represents the entire Agreement between the
parties and it is agreed that no representations, warranties or understandings
other than those expressly set forth herein, have been made, and if so made,
were neither material nor relied upon.
This Lease may be modified only by instruments in writing executed by
Landlord and Tenant, and no act or omission of any employee or agent of the
Landlord shall alter, charge or modify any of the provisions hereof. It shall be
an absolute condition precedent in each instance that such written modification
be produced before either party may legally assert, rely upon or establish any
modification of this Lease.
The titles of the several Articles contained herein are included for
convenience and reference only and the words contained therein shall in no way
be held or deemed to define, limit, describe, explain, modify, amplify and/or
add to the interpretation, construction, or meaning of any provision of, or the
scope or intent of, this Lease.
The words "Landlord" and "Tenant" and the pronouns referring thereto,
as used in this Lease, shall mean, where the context requires or admits, the
persons named herein
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as the Landlord and as the Tenant, respectively, and their respective heirs,
legal representatives, subsidiaries, successors and assigns, irrespective of
whether singular or plural, masculine, feminine or neuter.
ARTICLE XV - REMEDIES CUMULATIVE. No mention of this Lease of any
specific right or remedy shall preclude the Landlord from exercising any other
right or from maintaining any action, either at law or in equity. The remedies
available to the Landlord under this Lease, and at law or in equity, shall be
cumulative and, except as otherwise specifically provided in this Lease, the
exercise of one remedy shall not constitute an election or waiver of any other
remedy. In addition to other remedies provided in this Lease, the Landlord shall
be entitled to the restraint by injunction of the violation or attempted or
threatened violation of any covenants, conditions or provisions of this Lease or
to a decree compelling specific performance of any such covenants, conditions or
provisions.
ARTICLE XVI - WAIVER. No assent, express or implied, by the Landlord to
any breach of any agreements or conditions herein contained on the part of the
other to be performed or observed, and no waiver, express or implied, of any
such agreement or condition shall be deemed to be a waiver of or assent to any
succeeding breach of the same or any other agreement or condition; the
acceptance by the Landlord as to any breach shall not be construed as waiving
any of the Landlord's rights hereunder unless such waiver is in writing. No
payment by the Tenant or acceptance by the Landlord of a lesser amount than will
be due the Landlord from the Tenant shall be deemed to be anything but payment
on account, and the acceptance by the Landlord of a check for a lesser amount
with an endorsement or statement thereon or upon a letter accompanying said
check that said lesser amount is payment in full shall not be deemed an accord
and satisfaction, and the Landlord may accept said check without prejudice to
recover the balance due or pursue any other remedy.
ARTICLE XVII - SUBORDINATION. This Lease is and shall be subject and
subordinate to any mortgage, deed of trust or any instrument in the nature of a
mortgage now existing or hereafter placed upon the Demised Premises, the
Building and/or the Landlord's Property by the Landlord. Tenant agrees to
execute such documents as may be reasonably required to effectuate this
subordination. Tenant agrees to make such changes in this Lease as may be
reasonably required by the holders of any mortgage upon the Demised Premises,
the Building, and/or the Landlord's Property or any transferee which may
purchase all or a substantial part of Landlord's interest in the Demised
Premises, the Building, and/or the Landlord's Property; provided that such
changes may not increase the rent, additional rent or other payments due
hereunder or otherwise materially affect the obligations of Tenant hereunder.
After receiving written notice from any person, firm, or other entity,
that it holds a mortgage (which term shall include a deed of trust) which
includes as part of the mortgaged premises the Demised Premises, Tenant shall,
so long as such mortgage is outstanding, be required to give to such holder the
same notice as is required to be given to Landlord under the terms of this
Lease, but such notice may be given by Tenant to Landlord and such holder
concurrently. It is further agreed that such holder shall have
23
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the same opportunity to cure any default, and the same time within which to
effect such curing, as is available to Landlord; and if necessary to cure such a
default, such holder shall have such access to the Demised Premises as shall be
required in connection therewith.
ARTICLE XVIII - ASSIGNMENTS BY LANDLORD. With respect to any assignment
by the Landlord of Landlord's interest in this Lease or the rent, additional
rent and other payments payable hereunder, conditional in nature or otherwise,
which assignment is made to the holder of any security interest in the Building
or the Landlord's Property, the Tenant hereby agrees:
(i) that the execution thereof of any such assignment by the
Landlord and the acceptance thereof by the holder shall never be deemed an
assumption by such holder of the obligations of the Landlord hereunder, unless
such holder shall, by written notice sent to the Tenant, expressly otherwise
elect; and
(ii) that except as aforesaid, such holder shall be treated as
having assumed the Landlord's obligations hereunder only upon the foreclosure of
such holder's mortgage or security interest, if any, the taking of possession of
the Demised Premises, the Building, or the Landlord's Property and upon written
notice to the Tenant.
ARTICLE XIX - LIMITATION OF LANDLORD'S LIABILITY. If at any time during
the term of this Lease, the landlord's interest hereunder shall be held by
anyone acting in a fiduciary capacity, then notwithstanding any other provision
of this Lease, Landlord's obligations hereunder shall not be binding upon such
fiduciary acts, but only upon such fiduciary in that capacity and upon the trust
estate.
The covenants of Landlord contained in this Lease shall be binding upon
each party holding the landlord's interest herein only with respect to breaches
occurring during the time of that party's ownership of the landlord's interest
hereunder. Nothing included in the terms of this Lease shall preclude the
Landlord from transferring in any manner all or any portion of the landlord's
interest under this Lease. In addition, Tenant specifically agrees to look
solely to Landlord's interest in the Landlord's Property for the satisfaction of
any claim or judgment against Landlord, it being specifically agreed that
neither Landlord, nor any person, partner, entity, firm or other beneficial
owner of Landlord, nor anyone claiming under Landlord shall ever be otherwise
liable for any such judgment. It is further understood and agreed that with
respect to any services to be furnished by Landlord to Tenant, Landlord shall in
no event be liable for failure to furnish the same when prevented from so doing
by strike, lockout, breakdown, accident, order or regulation of or by any
governmental authority, or failure of supply, or inability by the exercise of
reasonable diligence to obtain supplies, parts, or employees necessary to
furnish such services, or because of war or other emergency, or for any cause
beyond the Landlord's reasonable control, or for any cause to do any act or
neglect of the Tenant or its servants, agents, employees, licensees, or any
person, claiming by, through or under the Tenant, or any termination for any
reason of Landlord's occupancy of the premises from which the service is being
supplied by Landlord, and in no event shall the Landlord ever by liable to
Tenant for any indirect or consequential damages.
24
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ARTICLE XX - PROVISIONS BIDING, ETC. Except as hereinafter provided
otherwise, the agreements and conditions in this Lease contained on the part of
the Landlord to be performed and observed shall be binding upon the Landlord and
its successors and assigns and those claiming through or under the Landlord and
shall inure to the benefit of the Tenant and its heirs, legal representatives,
successors and assigns (and those claiming through or under the Tenant); and the
agreements and conditions on the part of the Tenant to be performed and observed
shall be binding upon the Tenant and its heirs, legal representatives,
successors and assigns (and those claiming through or under the Tenant) and
shall inure to the benefit of the Landlord and its heirs, legal representatives,
successors and assigns (and those claiming through or under the Landlord).
Each term and each provision of this Lease to be performed by Tenant
shall be construed to be both a covenant and a condition. The reference
contained to successors and assigns of Tenant is not intended to constitute a
consent to assignment by Tenant, but as reference only to those instances in
which Landlord may later give written consent to a particular assignment as
required by the provisions of ARTICLE V hereof.
ARTICLE XXI - PERMITTED USES. The Tenant covenants and agrees to use
the Demised Premises only for light manufacturing, research and development and
sales and service of electronic equipment (but not to the general public) and
general office use, in any event subject to the Rules and Regulations (herein
the "Permitted Uses" and for no other purposes.
ARTICLE XXII - CONDITION OF THE DEMISED PREMISES WHEN SURRENDERED. Upon
the termination or expiration of this Lease, the Tenant shall peaceably and
quietly surrender possession of the Demised Premises to the Landlord in
broom-clean condition and in the same good order and repair in which the Tenant
is obligated to keep and maintain the Demised Premises by the provisions of this
Lease, normal wear and tear excepted. Any and all alterations, additions and
improvements which may have been made to or installed by the Tenant upon or
within the Demised Premises and which are in any manner attached to the floors,
walls and ceilings of the Demised Premises, shall remain upon or within the
Demised Premises and at the termination of this Lease shall be surrendered with
the Demised Premises as a part thereof and shall become the property of the
Landlord, unless the Landlord shall specifically direct the Tenant to remove any
such alternations, additions or improvements. Upon such direction, Tenant shall,
at its sole cost and expense, remove such property and promptly repair any and
all damages which may be caused by or result from either the original
installation or from the removal of such property from the Demised Premises.
All fixtures, signs, furniture, equipment and personal property which
may be located upon or within the Demised Premises (and are not subject to the
provisions of the foregoing paragraph), may, and at the Landlord's request must,
be removed by the Tenant from the Demised Premises upon the expiration or sooner
termination of this Lease. Furthermore, the Tenant hereby agrees to promptly
repair any and all damage which may be caused by or result from the installation
or placement of such property upon or within
25
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the Demised Premises or by the removal of such property from the Demised
Premises. Any property not so removed shall be deemed abandoned and may be
removed and disposed of by Landlord in such manner as Landlord shall determine
and Tenant shall pay Landlord the entire cost and expense incurred by the
Landlord in effecting such removal and disposition and in making any incidental
repairs and replacements to the Demised Premises and for use and occupancy
during the period after the expiration of the term of this Lease and prior to
Tenant's performance of its obligations under this Article. Tenant shall and
does hereby indemnify Landlord against all loss, cost and damage resulting from
Tenant's failure and delay in surrendering the Demised Premises as herein above
provided.
The delivery of keys to or acceptance thereof by any employee of the
Landlord shall not operate as a termination of this Lease or a surrender of the
Demised Premises.
ARTICLE XXIII-SUBROGATION. The Landlord hereby releases the Tenant from
any and all liability for any loss or damage caused by fire or any of the
extended coverage casualties covered by Landlord's insurance, even if such fire
or other casualty shall be brought about by the fault or negligence of the
Tenant or its agents, provided; however, the this release shall be in force and
effect only with respect to loss or damage occurring during such time as the
Landlord's policies of fire and extended coverage insurance shall contain a
clause to the effect that his release shall not affect said policies or the
right of the Landlord to recover thereunder. The intent of this Article is to
preclude any action by Landlord's insurance carrier against Tenant under any
right of subrogation, but it is expressly understood that nothing contained in
this Article shall be deemed a release or waiver of any other rights which
Landlord may have against Tenant under this Lease including without limitation,
the right to seek damages in excess of insurance proceeds where legally
entitled. The Landlord agrees that its fire and extended coverage insurance
policies will include such a clause so long as the same is includable without
extra cost. If extra cost is chargeable therefor, the Landlord will advise the
Tenant thereof and of the amount thereof. The Tenant, at its election, may pay
the same, or waive the benefit of such a clause.
The Tenant hereby releases the Landlord from any and all liability for
any loss or damage caused by fire or any of the extended coverage casualties
covered by Tenant's insurance, even if such fire or other casualty shall be
brought by the fault or negligence of the Landlord or its agents; provided,
however, this release shall be in force and effect only with respect to loss or
damage occurring during such time as the Tenant's policies of fire and extended
coverage insurance shall contain a clause to the effect that this release shall
not affect said policies or the right of the Tenant to recover thereunder. The
intent of this Article is to preclude any action by Tenant's insurance carrier
against Landlord under any right of subrogation, but it is expressly understood
that nothing contained in this Article shall be deemed a release or waiver of
any other rights which Tenant may have against Landlord under this Lease
including without limitation, the right, subject to the limitation set forth in
ARTICLE XIX hereof, to seek damages in excess of insurance proceeds where
legally entitled. The Tenant agrees that its fire and extended coverage
insurance policies will include such a clause so long as the same is includable
without extra cost, or if extra cost is chargeable therefor, the Tenant will
advise the Landlord
26
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thereof and of the amount thereof. The Landlord, at its election, may pay the
same, or waive the benefit of such a clause.
ARTICLE XXIV - NOTICES. All notices required or permitted to be given
hereunder shall be in writing and delivered by hand, telecopier, overnight
delivery carrier (with proof of delivery, such as Federal Express) or mailed
postage prepaid, by registered or certified mail, return receipt requested, if
sent to the Tenant, the same shall be addressed if to the Tenant:
Bruker Analytical Systems, Inc.
15 Fortune Drive
Billerica, MA 01821
or to such other address as the Tenant may hereafter designate in writing, and
if sent to the Landlord:
Bruker Instruments, Inc.
44 Manning Road
Billerica, MA 01821
Attn: Treasurer
FAX: (978) 667-9580
with a copy to:
George Woron, Esq.
75 State Street - Suite 1520
Boston, MA 02109
FAX: (617) 439-0134
or in the case of either party to such other address as shall be designated by
written notice given to the other party. Any such notice shall be deemed given
when so delivered by hand or if so mailed, when deposited with the U.S. Post
Service.
ARTICLE XXV - ESTOPPEL CERTIFICATE. The Tenant agrees from time to
time, within ten (10) days after a request by Landlord, to execute, acknowledge
and deliver to Landlord, any prospective purchaser or mortgagee or other party
designated by the Landlord, a written statement certifying (which statement may
be relied upon by any party receiving such statement) that this Lease is then in
full force and effect as modified and stating the modifications) and that the
Landlord is not in default hereunder (or if such shall not be the case, to
specify any default then existing).
ARTICLE XXVI - BROKERAGE. The Tenant warrants and represents that it
has not dealt with any broker or agent in connection with this Lease and agrees
to hold harmless and indemnify the Landlord of and from any and all claims for
any brokerage or finder's fee or compensation attributable to dealings with the
Tenant, together with any and all expenses incurred by Landlord in disputing
such claims and in enforcing this indemnification, including without limitation,
reasonable attorneys' fees and expenses.
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ARTICLE XXVII - LEASE NOT TO BE RECORDED. Tenant agrees that it shall
not record this Lease.
ARTICLE XXVIII - AUTHORITY TO EXECUTE LEASE. The person signing this
Agreement on behalf of the Tenant materially represents that the Tenant is a
duly organized and existing corporation and has taken all steps necessary or
desirable to authorize the execution of this Lease and that upon the execution
hereof by him on behalf of the Tenant, this Lease shall be binding and
enforceable upon the Tenant.
WITNESS the execution of this instrument as a sealed instrument as of
the day and year first above written.
Witness: LANDLORD:
BRUKER INSTRUMENTS, INC.
By: /s/ Dirk D. Laukien
--------------------------------
Dirk D. Laukien, Vice President,
Duly authorized
Witness: TENANT:
BRUKER ANALYTICAL
SYSTEMS, INC.
By: /s/ David E. Plunkett
- ---------------------------- ---------------------------------
David Plunkett, its Treasurer,
hereunto duly authorized
28
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Attachment A
[Diagram]
29
<PAGE>
Exhibit 10.7
ITMS COLLABORATION AGREEMENT
BY AND BETWEEN
HEWLETT-PACKARD COMPANY
AND
BRUKER DALTONIK GMBH
<PAGE>
CONFIDENTIAL HEWLETT-PACKARD - BRUKER
TABLE OF CONTENTS
RECITALS 1
ARTICLE 1 - DEFINITIONS 2
ARTICLE 2 - MANAGEMENT OF THE RELATIONSHIP AND COMMUNICATIONS
BETWEEN THE PARTIES 4
ARTICLE 3 - OVERVIEW OF THE GEMINI PROGRAM 6
ARTICLE 4 - SPECIFICATIONS FOR THE GEMINI / GEMINI R&D MS 7
ARTICLE 5 - DESIGN AND DEVELOPMENT OF THE GEMINI / GEMINI R&D MS 8
ARTICLE 6 - MARKETING OF THE GEMINI / GEMINI R&D MS 10
ARTICLE 7 - MANUFACTURING AND PROCURING COMPONENTS FOR THE
GEMINI / GEMINI R&D MS 11
ARTICLE 8 - SALES OF COMPONENTS AND OF THE GEMINI MS AND GEMINI
R&D MS 15
ARTICLE 9 - HP'S MINIMUM PURCHASE COMMITMENT, INITIAL PURCHASE
ORDER AND DISPOSITION OF HP'S SECURITY DEPOSIT/DOWN PAYMENT 19
ARTICLE 10 - WARRANTIES AND SUPPORT 20
ARTICLE 11 - NEW DEVELOPMENT PROJECTS 21
ARTICLE 12 - EMPLOYEE RELATIONS 22
ARTICLE 13 - CONFIDENTIAL INFORMATION 23
ARTICLE 14 - DEVELOPMENT INVENTIONS AND OTHER INTELLECTUAL
PROPERTY CREATED DURING DEVELOPMENT PROGRAMS 24
ARTICLE 15 - REPRESENTATIONS, WARRANTIES AND DISCLAIMERS 29
ARTICLE 16 - CONFLICTS WITH THIRD PARTY INTELLECTUAL PROPERTY
RIGHTS 29
ARTICLE 17 - RESPONSIBILITIES FOR SALES OF ESQUIRE-LC SYSTEMS 30
ARTICLE 18 - DISPOSITION OF RESEARCH FUNDS 32
ARTICLE 19 - PUBLICITY 33
ARTICLE 20 - TERM, TERMINATION AND EXCLUSIVITY 33
ARTICLE 21 - DISPUTES BETWEEN THE PARTIES 38
ARTICLE 22 - MISCELLANEOUS 39
EXECUTION 41
41BRUKER-HP Collaboration Agreement ii
<PAGE>
ITMS COLLABORATION AGREEMENT
This Agreement is made with an Effective Date of April 28, 1999 by
Hewlett-Packard Company, a Delaware corporation with offices at 1601 California
Avenue, Palo Alto, CA 94304-1126 ("HP"); and Bruker Daltonik GmbH, a corporation
organized and existing under the laws of Germany with offices at
Fahrenheitstrasse 4, D-28359 Bremen, Germany ("Bruker"), formerly called
Bruker-Franzen Analytik GmbH ("BFA").
RECITALS
A. HP is in the business of designing, manufacturing, and marketing
analytical chemistry instruments such as liquid chromatographs, gas
chromatographs, and mass spectrometers; analytical chemistry systems that
combine a liquid or gas chromatograph with a mass spectrometer; and
software tools for collecting and processing data in such systems. HP is a
leader in developing low-cost mass spectrometers and technology for the
ionization/interface stage of LC/MS systems. HP has considerable expertise
in the design and manufacture of API ion sources.
B. Bruker is in the business of designing, manufacturing and marketing
analytical chemistry instruments such as mass spectrometers and associated
software. Bruker is a recognized leader in developing ion trap mass
spectrometers. Bruker has considerable expertise in the design and
manufacture of ion trap mass spectrometers and conventional
nanoelectrospray ion sources.
C. HP and Bruker have complementary expertise. HP and BRUKER wish to develop
a long-term collaboration in API-ITMS technology. HP and Bruker desire to
serve their respective customers more effectively by collaborating on
developing LC/MS() mass spectrometers, especially certain critical core
components thereof, thereby enabling both parties to take advantage of the
particular strengths, experience and superior competencies of each. HP and
Bruker also recognize that by allocating responsibility for manufacturing
components of mass spectrometers, the parties can take advantage of higher
volume production, reducing the cost of the components to each party and
enabling the parties to participate in a highly competitive market.
D. Bruker and HP entered into a certain BRUKER-HP ITMS Agreement dated
January 19, 1996, which established a plan for developing (1) a product
series (Esquire-LC ITMS) for market introduction in Fall 1996 and (2) a
lower cost, higher volume product series (Gemini) for market introduction
in January 1998. The BRUKER-HP ITMS Agreement has been amended twice: on
March 14, 1997, (Amendments I and 2) and on September 1, 1997 (Amendment
3). Phase I of the program provided for in the ITMS Agreement, as amended,
has been completed. The hardware development work under Phase 2 of the
program is substantially complete. The software development work is
progressing. The Esquire ITMS product series has been developed and the
second generation product, called Esquire-LC, is currently being marketed
by both parties. The Gemini mass spectrometer, which was to be developed
in Phase 3, is still under development.
E. The Parties desire to continue the development of software for, and the
manufacture and marketing of, the Esquire-LC ITMS system.
F. The parties now wish to recommit themselves and undertake to develop a
re-defined Gemini / Gemini R&D MS and to allocate the necessary resources
to complete this development.
<PAGE>
CONFIDENTIAL HEWLETT-PACKARD - BRUKER
G. The parties wish to complete the set of specifications for the Gemini /
Gemini R&D MS, and to adopt a plan for finalizing these specifications.
The Parties also wish to allocate responsibility for designing,
integrating, and manufacturing the various components of the Gemini/Gemini
R&D MS. The Parties will sell these components and other parts to each
other, allocate responsibility for integrating the various components and
testing the integrated Gemini / Gemini R&D MS, establish the terms and
conditions of sale of the Gemini / Gemini R&D MS and certain components
thereof, and provide for long term support of the Gemini / Gemini R&D MS.
H. Because circumstances have changed substantially from what was
contemplated when the ITMS Agreement was signed, the Parties wish to
replace the ITMS Agreement, as amended, with this agreement.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the mutual covenants expressed in this
Agreement, HP and Bruker agree as follows:
ARTICLE I - DEFINITIONS
1.1 Affiliate means a business entity which controls, is controlled by, or is
under common control with a Party. "Control" means ownership or control of more
than 50% of the stock entitled to vote for the election of directors, or in the
case of a non-corporate entity an equivalent majority control. Such entity will
be considered an Affiliate only so long as such control exists.
1.2 Agreement means this ITMS Collaboration Agreement, comprising this document
and the appendices identified in Section 22 .
1.3 APCI means atmospheric pressure chemical ionization.
1.4 API means atmospheric pressure ionization, the process of producing ions at
atmospheric pressure and then sampling the ions through atmospheric interfaces.
1.5 Bruker Core Areas means the following areas: RF ITMS technology design or
parts of an RF ITMS, RF ion trap, and methods of operating an RF ion trap;
electronics, firmware and software for RF ion trap control and detection and
acquisition of MS, MS/MS and MS(n) data.
1.6 Engineering Collaboration Period means the period of time during which the
Parties collaborate on the joint development of ITMSs, including Esquire,
Esquire-LC, Gemini/Gemini R&D, [*](1), and any other future ITMS jointly
developed hereunder. The Engineering Collaboration Period is specified and
determined in Article 20. 1.
1.7 Esquire-LC means the API-ITMS co-developed by the Parties under the Old
Agreement.
- ----------
(1) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
41BRUKER-HP Collaboration Agreement 2
<PAGE>
CONFIDENTIAL HEWLETT-PACKARD - BRUKER
1.8 ESI means electrospray ionization.
1.9 Gemini is the code name given to (1) the project to develop
high-performance, rugged, easy-to-use, relatively low cost, bench-top, ITMSs for
high performance liquid chromatography with MS('~ capability; (2) the ITMSs that
are expected to result from such project; and(3) the overall program that
includes manufacturing and marketing, as well as the development, of such ITMSs.
1.10 Gemini NIS is the internal code name for the API-ITMS that the Parties will
develop and manufacture for HP in accordance with this Agreement.
1.11 Gemini R&D NIS is the internal code name for an alternative configuration
of the Gemini MS that the Parties will develop and manufacture for Bruker in
accordance with this Agreement.
1.12 HP Core Areas means the following areas: conventional on-line electrospray
and APCI generation of ions but excluding nano-electrospray; as reduced to
practice in an ITMS product.
1.13 Intellectual Property Rights means the rights under patents, patent
applications, and copyrights, and the rights in any industrial designs or trade
secrets recognized by law.
1.14 ITMS means radio frequency ion trap mass spectrometer.
1.15 LCIMS means a mass spectrometer designed to work with a liquid
chromatograph.
1.16 MS(n) means multiple stages of mass spectrometry (where n = the number of
stages) in which there is a collision or reaction between each stage of mass
analysis.
1.17 Old Agreement means the "BRUKER-HP ITMS AGREEMENT between Bruker-Franzen
Analytik GmbH and Hewlett-Packard Company" dated January 19, 1996, together with
Amendments I and 2 thereto, dated March 14, 1997, and Amendment 3, dated
September 1, 1997.
1.18 Party and Parties refer to HP and Bruker as the context requires.
1.19 Qualified New Lead means the identification of a prospective new customer
who is presented as interested in buying a product and who either has the
authority to buy the product or can authorize the purchase of the product. A
lead will be considered new if the selling Party who receives the lead has not
had any contact with the individual (or his / her predecessor) during the 12
months prior to receiving the lead.
ARTICLE 2 - MANAGEMENT OF THE RELATIONSHIP AND COMMUNICATIONS
BETWEEN THE PARTIES
2.1 Designation of Key Personnel. Bruker will designate appropriate persons to
serve as its Program Manager, Product Manager, Project Manager, and Business
Manager. HP will designate appropriate persons to serve as its Program Manager,
Product Manager, Project Manager, and Business Manager. Each Party also may
designate one or more Project Leaders.
41BRUKER-HP Collaboration Agreement 3
<PAGE>
CONFIDENTIAL HEWLETT-PACKARD - BRUKER
2.2 Program Managers. The Program Managers will represent their respective
Parties on all business and management issues. They will confer as needed to
ensure that schedule delays and administrative issues are resolved; that
inventions are being identified and reported; that intellectual property and
confidentiality issues are properly addressed ; and that other activities are
proceeding in accordance with this the Agreement. The Program Managers will
ensure that all issues relating to the manufacture and delivery of parts,
components and finished instruments are addressed properly.
2.3 Product Managers. The Product Managers will be responsible for product
strategy, product definition, marketing programs, product introduction plans,
promotions, business plans, and pricing proposals.
2.4 Project Managers. The Project Managers will be responsible for answering
technical questions, clarifying technical issues, and resolving schedule delays.
They will confer regularly to ensure that all technical issues are resolved
quickly; that all inventions are being identified and reported promptly; and
that all intellectual property issues are addressed thoroughly. The Project
Managers will confer whenever important issues arise in the development of the
specifications or the prototypes of the Gemini MS / Gemini R&D MS.
2.5 Project Leaders. The Project Leaders will be responsible for receiving and
answering technical questions and resolving technical issues in the areas for
which they have been designated.
2.6 Business Managers. The Business Managers have the authority to resolve any
issues that arise under this Agreement. The Business Managers will not be
involved on a day-to-day basis, but they will confer as needed to ensure
harmonious relationships between the Parties and their respective Program
Managers, Product Managers, and Project Managers.
2.7 Changing Designations. Each Party may change its Project Leader, Program
Manager, Product Manager, Project Manager, or Business Manager. Each Party will
notify the other Party of such change in a timely manner.
2.8 Lifecycle Planning. In developing the Gemini / Gemini R&D MS and any other
product under this Agreement the Parties will use "Lifecycle Planning," HP's
product development methodology. As part of Lifecycle Planning, the Parties will
prepare a set of Lifecycle Documents substantially like those that HP prepares
for the development of a new product. To minimize redundant effort, the Parties
will collaborate in developing those portions of their respective Lifecycle
Documents that are common to the product development. The Parties will exclude
from their jointly prepared Lifecycle Documents, and will not collaborate on or
exchange, information about pricing, customer profiles, and markets. Lifecycle
Planning prescribes well-defined phases in developing a new product, with
checkpoints and formal reviews at the end of each phase. The Parties will
conduct joint formal reviews at each check point to discuss all common issues on
the development of the product. The Parties will conduct separately their
independent formal reviews of the marketing and financial aspects of the
development project. The Parties will develop consensual quality plans for
hardware, software, and analytical performance. The Parties must sign off upon
the completion of each phase before proceeding to the next phase. The Parties
will revise their Project Plan and other Lifecycle Documents, as required to
track the progress of the Project.
41BRUKER-HP Collaboration Agreement 4
<PAGE>
CONFIDENTIAL HEWLETT-PACKARD - BRUKER
2.9 Meetings and Reviews. The Parties will conduct regular telephone conferences
to discuss any corrective actions that may be required to keep the project on
track. The Parties will conduct formal project reviews at checkpoint dates.
These meetings will be face-to-face, by video conference, or by teleconference.
2.10 Notices. Any required notices will be given in writing. Notices may be
delivered by any reasonable means and will be deemed to have been given on the
date of actual receipt. Notices will be given to the Parties at the following
addresses, or at such other addresses as the Parties may designate:
Hewlett-Packard Company Bruker Daltonik GmbH
Attn.: Dick Begley Attn.: Dieter Koch
1601 California Avenue Fahrenheitstrasse 4, D-28359
Palo Alto, CA 94304 USA Bremen, Germany
Fax: 650 857-7029 Fax: 49-421-2205-100
with a copy to: with a copy to
Hewlett-Packard Company Bruker Daltonics, Inc.
Attn.: Managing Counsel(IP) Attn.: Frank H. Laukien, Ph.D.
1501 Page Mill Road 19 Fortune Drive, Manning Park
Palo Alto, CA 94304 Billerica, MA 0 1821
Fax: 650 852-8063 Fax: 987 667-0985
ARTICLE 3 - OVERVIEW OF THE GEMINI PROGRAM
3.1 Goals of the Gemini Project. As the first project under this Agreement, HP
and Bruker undertake to develop the Gemini MS for HP and the Gemini R&D MS for
Bruker. The Gemini MS will be a high-performance, rugged, easy-to-use,
relatively low cost, bench-top ITMS for high performance liquid chromatography
with MS(n) capability. The Gemini R&D MS will be a high-performance, flexible,
research-oriented ITMS for high performance liquid chromatography with MS(')
capability. The Gemini MS / Gemini R&D MS is described in more detail and the
required functionality, features, and performance characteristics are set out in
the Gemini Product Data sheet, which is incorporated herein as Appendix 1. The
Gemini MS and the Gemini R&D MS will be based upon essentially the same
components, but will have different configurations, as well as differences in
names and appearances as provided in Section 5.7. HP and Bruker will complete
the development so that HP and Bruker can begin shipping the Gemini MS and the
Gemini R&D MS respectively to their demo centers and to their first customers
between January 1, 2000 and March 1, 2000. The Gemini Project if successful may
lead to the [*](2) as further described in Article 11. Improvements to or
further developments of the Gemini MS / Gemini R&D MS after the product is
introduced and first marketed, particularly any software developed during any
continuing development program, may be made available as an upgrade to the
Gemini MS / Gemini R&D MS or as part of the next generation platform, [*].
3.2 General Plan. The Parties will collaborate to complete a set of
specifications for the Gemini MS and the Gemini R&D MS. The Parties will divide
the responsibilities for designing, developing, manufacturing, assembling,
integrating and testing the Gemini / Gemini R&D MS. The
- ----------
(2) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
41BRUKER-HP Collaboration Agreement 5
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Parties will apply jointly for certifications of the product(s) in the names of
both Parties. The specific responsibilities of each Party are described in the
Gemini Project Plan, incorporated herein as Appendix 2. The Parties will carry
out the development work, including the manufacture of prototype units and pilot
run units, during the different phases of the development in accordance with the
Gemini Project Plan.
ARTICLE 4 - SPECIFICATIONS FOR THE GEMINI / GEMINI R&D MS
4.1 Documents Comprising Set of Specifications. The Gemini MS will be defined,
described and specified in accordance with the following set of specifications:
4.1.1 Gemini Product Data Sheet
4.1.2 Gemini Hardware External Reference Specification
4.1.3 Gemini Software External Reference Specification
4.1.4 Gemini Compatibility Matrix
4.1.5 Gemini Analytical Performance Quality Plan
4.1.6 Gemini Hardware Quality and Regulatory Plan
4.1.7 Gemini Software Quality Plan
4.2 Requirements and Desired Targets. In some instances the specifications will
set out not only the requirements that the Gemini MS / Gemini R&D MS must meet,
but also the desired targets that the Parties recognize as technically
challenging. The Parties will meet all requirements and will use reasonable
efforts to meet all desired targets. A Party will not be in default for failing
to design and/or manufacture a component so that the Gemini MS meets a desired
target.
4.3 Status and Further Efforts to Complete Set of Specifications. The set of
specifications, while substantially complete, still have areas requiring further
work. Items designated "TBD" (to be determined) will be the subject of further
discussions. The Parties will endeavor to complete and formally adopt the
specifications in April 1999. To that end, the Project Managers and the other
affected technical personnel will confer at least bi-weekly by teleconference to
discuss any open issues until the entire set of specifications is complete and
the Parties have adopted them.
4.4 Formal Adoption of Specifications. When the Parties agree that a
specification is complete, Bruker's and HP's Product Managers and the Project
Managers will sign the specification to signify that the specification has been
formally adopted.
4.5 Changes to Specifications After Adoptions. After a specification has been
formally adopted, the Parties may change the specification only by mutual
written agreement, signed by Bruker's and HP's Product Manners and Project
Managers.
ARTICLE 5 - DESIGN AND DEVELOPMENT OF THE GEMINI / GEMINI R&D MS
5.1 Project Plan. The Gemini Project Plan (Appendix 2) sets out the plan for
designing and developing the Gemini MS and the principal portions of the Gemini
R&D MS, which are in common with the Gemini MS. The Gemini Project Plan
allocates the various tasks between the Parties. Each Party will perform its
tasks on the development of the Gemini MS / Gemini R&D MS in each of the phases
of the Project in accordance with the Gemini Project Plan.
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5.2 Individual and Collaborative Approach. Each Party has -well-defined tasks
called out in the Gemini Project Plan. The Parties will work closely together on
system design, integration and testing, particularly of software. The Parties
also will work together as necessary to solve a problem or correct for a missed
milestone or a delay in an element on the critical path. Because the various
components of the Gemini MS will need to work together, a Party may offer
suggestions respecting a component even if that Party is not responsible for
developing that component. The Party responsible for developing the component
will consider each suggestion and will adopt the suggestion unless in its
judgment the suggestion is not feasible or reasonable.
5.3 HP's Core Responsibilities. HP will design and develop the APCI and ESI
ionization sources of the Gemini MS / Gemini R&D MS, the high voltage supplies
that drive the ion source, the ion optics that guide the ions to the mass
analyzer section, the vacuum system, the mechanical packaging and exoskeleton,
and the ChemStation software. HP also will design (or procure) the APCI hardware
accessory and application software options for protein database searching,
peptide tools analysis and deconvolution analysis. HP also will provide
assistance to Bruker in the integration and testing of the hardware components
that HP develops and the software that HP develops with the hardware components
and software that Bruker develops, as and when it becomes necessary. The Gemini
Project Plan contains a more detailed and complete itemization of the components
for which HP is responsible.
5.4 Bruker's Core Responsibilities. Bruker will design and develop the ion trap
mass analyzer portion of the Gemini MS, including the electronics, the
algorithms, and the software for controlling the ion trap mass analyzer. Bruker
will do the mechanical design of the internal tub supports. Bruker will develop
the acquisition and control software and software for performing data analysis.
Bruker also is responsible for overall integration of the Gemini MS, with HP
assisting when and as necessary. Bruker also will design (or procure) the
nanoelectrospray accessory and application software options for MS library
searching, standalone data analysis, and identification- of-unknown-peaks ("LUMS
Dissect") analysis. The Gemini Project Plan contains a more detailed and
complete itemization of the components for which Bruker is responsible.
5.5 Joint Responsibilities. Bruker and HP are jointly responsible for ensuring
that their respective components and contributions to Gemini MS/Gemini R&D MS
are fully compatible so that when the kit components are integrated, the
products will meet their set of specifications. Bruker and HP are jointly
responsible for conducting and passing tests for the prototype and pilot run
instruments and software.
5.6 Alternate Versions and Models of the Gemini MS. The Gemini MS will be
designed, developed, and manufactured to include all essential features and
functions so that HP may sell it as a stand-alone product and as part of a
high-throughput, routine analysis system. The Gemini MS will bear the product
identification and appearance or trade dress of an HP instrument. The Gemini MS
is also intended to serve as a core platform from which each Party may develop
specialized Gemini instruments and systems. A Party may include additional
software as a standard or optional feature. All Gemini instruments and systems
and Gemini R&D systems will be based on the core Gemini MS so that economies of
scale may be realized in manufacturing common parts and components and in
assembling and testing the finished product. The Parties expect to differentiate
their respective products.
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
5.7 Gemini R&D MS. Bruker will modify the Gemini MS to make the Gemini R&D MS.
The Gemini R&D MS will differ in appearance from the Gemini MS and will be
consistent with the appearance of the Bruker product line. Bruker will design
and manufacture different external covers for the Gemini R&D MS. The Gemini R&D
MS will bear the product identification and appearance or trade dress, of a
Bruker instrument. Bruker will distribute the Gemini R&D MS to its customers.
Bruker intends to market the Gemini R&D MS as a flexible research-oriented
instrument and as part of a high-end LC/MS(') system. Bruker may include other
ion sources and/or other software as standard features. HP will provide a fast
switching power supply as a standard component of the Gemini R&D MS.
5.8 Continuing Responsibilities. If a purchased part that a Party has designed
into a component becomes obsolete, that Party will develop an alternative design
using parts that will be available in the future. That Party also will develop
an appropriate migration plan (acceptable to HP and Bruker) that includes the
purchase of sufficient parts to (a) continue manufacture and timely delivery of
the Gemini MS and Gemini R&D MS during the period of transition to the new
design and (b) make field replacements of obsoleted parts or components as may
be required.
5.9 Formal Testing and Certifications. Bruker and HP are jointly responsible for
obtaining the required certifications as set out in the Gemini Hardware Quality
and Regulatory Plan and for meeting all requirements for CSA and CE
certification. Whenever testing occurs at the other party's site, the visiting
party will provide engineering support personnel for the tests at their own
expense, including travel costs.
5.10 Product Documentation. HP and Bruker Will collaborate on the development of
- -the (a) product engineering documentation for use in manufacturing and testing,
(b) training materials for training product support engineers, and (c) user
information for generation of user manuals. Bruker will take the lead in
preparing the first draft and the final draft of the product engineering
documentation. Each Party will prepare and exchange its drafts of training
materials and user information pertaining to the parts and functions of the
Gemini/Gemini R&D for which it is responsible for designing and developing. Both
Bruker and HP will own the copyright in the product documentation. Each Party
may adapt and prepare derivative works of the product documentation in
developing manuals or other documentation for its employees and its customers.
5.11 Sustaining Engineering. Each Party will provide sustaining engineering for
the Gemini / Gemini R&D MS product line comparable to the level that it provides
for other similar products. The Parties will continue to collaborate on
refinements, engineering changes, cost reduction, and software updates,
upgrades, and new releases.
ARTICLE 6 - MARKETING OF THE GEMINI / GEMINI R&D MS
6.1 Market Introduction. Neither Party may announce the Gemini/Gemini R&D MS or
show such instruments to prospective customers until both Parties have accepted
the production prototypes at the end of the Production Prototype Phase, unless
both Parties agree to the early announcement or showing. Neither Party may issue
quotations on, accept purchase orders for, or ship its Gemini/Gemini R&D MS
instrument unless the other Party consents or both Parties have accepted the
pilot run units at the end of the Pilot Run Phase. At any time the Parties may
by mutual agreement disclose information about the
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
Gemini/Gemini R&D MS and invite industry experts to observe demonstrations of
prototype units, under terms of appropriate confidentiality agreements, to
obtain critical feedback.
6.2 No Restrictions on Sales by the Parties. Bruker may sell the Gemini R&D MS
without restriction on customers, geographic territory or sales channels. HP may
sell the Gemini.MS without restriction on customers, geographic territory or
sales channels.
6.3 HP Collaboration on Sales of the Gemini R&D MS. Whenever appropriate, HP
will provide to Bruker or its Affiliates. Qualified New Leads to prospective
customers who express an interest in the Gemini R&D MS. Bruker or its Affiliates
will pay HP a commission or finder's fee on the sale of a Gemini R&D MS that
results from a Qualified New Lead, as provided in the Finder's Fee Agreement.
6.4 Bruker Collaboration on Sales of the Gemini MS. Whenever appropriate, Bruker
or its Affiliates will provide to HP Qualified New Leads to prospective
customers who express an interest in the Gemini MS. HP will pay Bruker or its
Affiliates a commission or finder's fee on the sale of a Gemini MS that results
from a Qualified New Lead, as provided in the Finder's Fee Agreement.
ARTICLE 7 - MANUFACTURING AND PROCURING COMPONENTS FOR THE
GEMINI / GEMINI R&D MS
7.1 HP's Core Responsibilities.
7.1.1 HP Gemini Kits and HP Gemini R&D Kits. HP will manufacture (or procure)
and test all components comprising the HP Gemini Kit and the HP Gemini R&D Kit.
These components are identified in "Appendix 2 - Gemini Component Breakdown" in
the Gemini Project Plan. HP will assemble and test each HP Gemini Kit and each
HP Gemini R&D Kit. HP will manufacture HP Gemini Kits based on (a) HP's forecast
of demand and actual purchase orders from HP customers for the Gemini MS and (b)
Bruker's forecast of demand and actual purchase orders received from Bruker for
kits with standard positive/negative power switching. HP will manufacture HP
Gemini R&D Kits based on (a) actual purchase orders and sales forecasts from
Bruker and (b) HP's forecast of demand and actual purchase orders received from
HP customers who specify fast positive/negative power switching. HP will design
the shipping container and packaging for the HP Gemini Kits and HP Gemini R&D
Kits so that Bruker can reuse the shipping container and packaging for the
Gemini MS and the packaging for the Gemini R&D MS. HP will provide the container
and packaging as part of the Gemini MS Kit and Gemini R&D Kit. HP will pack the
High Voltage Power Supply within the shipping container, but separate from and
outside the mechanical packaging or body of the HP Gemini Kit and the HP Gemini
R&D Kit, so that Bruker may easily remove the power supply and store it
separately. HP will ship HP Gemini Kits and HP Gemini R&D Kits to Bruker FOB San
Francisco using reasonable efforts to ship in accordance with schedules in
Bruker purchase orders.
7.1.2 HP Software. HP will manufacture CD ROMs containing the standard
ChemStation software. Separate copies of the ChemStation software will be
provided for each customer shipment. HP will provide a master copy of all
integration software components that HP develops for the Gemini MS/Gemini R&D
MS. (Bruker will incorporate these components on its CD-ROM for distribution to
customers.) HP also will manufacture CD ROMs or discs containing the software
for the following
41BRUKER-HP Collaboration Agreement 9
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
optional products, which Bruker may purchase from HP: HP Peptide Tools, HP
Deconvolution, and Peptide Search.
7.1.3 HP Ship Kits. HP will manufacture or procure all accessories and
consumables comprising the HP Ship Kit. The specific items included in the HP
Ship Kit are listed under the heading "HP Ship Kit" in "Appendix 2 - Gemini
Component Breakdown" in the Gemini Project Plan.
7.1.4 Consumables. HP will manufacture or procure the consumables that are
regularly used by customers in using the Gemini MS or Gemini R&D MS. HP
customers and Bruker customers may order these consumables from HP through HP's
consumables distribution channel.
7.2 Bruker's Core Responsibilities.
7.2.1 Bruker Hardware. Bruker will manufacture (or procure) and test all
hardware components for which Bruker has production responsibility. These
components are identified in the section under the heading "Bruker-Daltonik
Components" in "Appendix 2 - Gemini Im Component Breakdown" in the Gemini
Project Plan.
7.2.2 Bruker Software. Bruker will manufacture CD ROMs containing all software
required to provide control of the Gemini MS and Gemini R&D MS and CD ROMs
containing the data analysis software. Bruker also will manufacture CD ROMs or
discs containing the software for the following optional products, which HP may
purchase from Bruker: LC/MS Dissect, Library Search, and stand-alone data
analysis.
7.2.3 Integration and Final Testing. Bruker will provide final assembly and
integration of the HP Gemini Kit / HP Gemini R&D Kit with the corresponding
Bruker hardware components referred to in Section 7.2.1 and the Bruker Software
referred to in Section 7.2.2 to produce the final Gemini MS units and Gemini R&D
MS units and will conduct the final testing of each of the final units. All work
will be performed in an ISO 9000 certified environment. Bruker will conduct the
final test of each Gemini MS and Gemini R&D MS in accordance with the final test
procedures that Bruker, with 11P's assistance, will develop before the end of
the pilot run phase.
7.3 Separately Procured Items. The following components, although required for
the operation of the Gemini MS and Gemini R&D MS, are not provided by HP to
Bruker as part of the HP Gemini Kit or HP Gemini R&D Kit, and are not provided
by Bruker to HP as part of the Gemini MS that it sells to HP: (1) an Edwards
EIM18 rough pump; (2) a PC with two LAN boards, monitor, and printer; and (3) a
syringe pump. Each Party will procure these components separately and furnish
them as part of the Gemini MS or Gemini R&D MS that such Party sells to its
customers.
7.4 ISO Compliance. Each Party will prepare its manufacturing facilities and
environment in which Gemini / Gemini R&D components, kits, and products will be
manufactured and the processes and systems that it will use to manufacture
Gemini / Gemini R&D components, kits, and products to meet the relevant ISO 9000
standards by October 1, 1999. Each Party will maintain ISO 9000 certification
for the duration of its activities in manufacturing Gemini / Gemini R&D
components, kits, and products. If a Party decides to use a separate entity for
manufacturing any component for which
41BRUKER-HP Collaboration Agreement 10
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
it is responsible, the Party will use its best efforts to select an entity that
will meet the relevant ISO 9000 standards before engaging such entity to perform
any work required under this Agreement. If a Party uses a separate entity for
manufacturing any component for which it is responsible, and such entity does
not meet the relevant ISO 9000 standards, the Party will carefully inspect all
incoming parts and provide the other Party assurance that such parts meet such
Party's quality standards.
7.5 Year 2000 Compliance Warranties. The phrase "Year 2000 Compliant" means able
to perform without error, loss of data or loss of functionality arising from any
failure to process, calculate, compare or sequence date data accurately. Each
Party warrants to the other Party that the processes and systems that it uses to
manufacture Gemini and Gemini R&D components, kits, and products hereunder will
be Year 2000 Compliant by June 1, 1999, and that such processes and systems will
not have an adverse impact on the provision of components, kits and products to
either Party or their respective customers. Each Party also warrants to the
other Party that all software and firmware that it develops for the other Party
or furnishes to the other Party or to the other Party's customers will be Year
2000 Compliant and will not cause any product with which the software or
firmware is intended to be used and is used to become non-Year 2000 Compliant.
Each Party will demonstrate Year 2000 Compliance by furnishing the other Party
successful results of a formal software inspection and review and by
successfully executing the year 2000 compliance tests.
7.6 Quality Program. Each Party will maintain an objective quality program for
all products it delivers to the other Party. Each Party's quality program will
be in accordance with the current revision of HP's Supplier Quality System
Requirements. Each Party will provide to the other Party a copy of its quality
program and supporting test documentation.
7.7 Delegating Manufacturing Responsibilities. Whenever in this Agreement a
Party is assigned the responsibility for manufacturing an item, such Party may
procure the item from a third party or may have a third party manufacture the
item. However, such Party must use its best efforts to select a third party
supplier or third party manufacturer who will meet all relevant requirements of
ISO 9000. Such Party also will use its best efforts to require the third party
supplier or third party manufacturer to provide Year 2000 Compliance warranties,
substantially like the warranties in Section. 7.5, covering everything,
particularly software and firmware, procured from such third party, and to
permit inspection by both Parties.
7.8 Contingency Manufacturing Plan. The Parties will develop a
mutually-acceptable contingency manufacturing plan for use in case either Party
cannot produce sufficient products to meet the other Party's requirements.
7.8.1 If during any quarter either party is unable or unwilling to ship at least
90% of the quantity of HP Gemini MS and HP Gemini R&D MS kits and instruments,
the Parties' Program Managers will discuss corrective actions. If during any
quarter either party is unable or unwilling to ship at least 80% of the quantity
of HP Gemini MS and HP Gemini R&D MS kits and instruments, the Par-ties' Program
Managers and Business Managers will decide what corrective actions to take. Such
actions may include, but are not limited to the following: (a) hire
appropriately skilled personnel to add capacity or shift personnel from other
programs to meet the shipment goals, or (b) provide additional technical
assistance to the other party in which situation the party receiving assistance
will compensate the other party at a rate of 1.5 times salaries plus
transportation and living expenses.
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
7.9 Engineering Design or Process Changes.
7.9.1 Proposed Changes. Neither Party will, without the prior written consent of
the other Party, make or incorporate in the Gemini kit, Gemini R&D kit or Gemini
MS any change in any process or any change in any design that affects the
electrical performance; the mechanical form fit, or function; the environmental
compatibility; the chemical characteristics; the software compatibility; or the
life, reliability, or quality of such Gemini Product (collectively, "Engineering
Changes"). Each Party will give to the other Party notice of any proposed
Engineering Change, and will provide evaluation samples and other appropriate
information at least 90 days prior to the first proposed shipment of the Gemini
kit, Gemini R&D kit or Gemini MS involving an Engineering Change. Each Party
also will give to the other Party notice of any proposed geographical relocation
of any manufacturing process together with assurances that such relocation will
not affect product availability, the electrical performance, the mechanical
form, fit, or function, the environmental compatibility, the chemical
characteristics, the software compatibility, or the life, reliability, or
quality of such Gemini Product, at least 60 days before such relocation.
7.9.2 Safety Standard Changes. Each Party will immediately give notice to the
other Party if any upgrade, substitution or other change to an instrument is
required to make that instrument meet applicable safety standards or other
governmental statutes, rules, orders or regulations, even those that are not
defined as Engineering Changes in Section 7.9. 1. The Parties will determine
which Party is responsible for meeting the requirement, and such Party shall
take all appropriate steps to effect the upgrade, substitution, or other change
that may be required. If the instrument met all applicable safety standards and
other governmental requirements at the time of manufacture, the Parties will
allocate the costs of any subsequent upgrade, substitution or other change
required, in an equitable manner, based on good faith discussions between the
Parties.
7.9.3 Excessive Failure Rate. If the failure rate for the Gemini MS and/or
Gemini R&D MS exceeds an average of two service calls per instrument per year,
averaged over the total number of instruments under warranty, the Parties
jointly will analyze the failure reports, determine the root causes, and develop
corrective action plans. If the Parties determine that the failures are
primarily attributable to one Party, such Party will provide additional
engineering and technical support needed to bring the failure rate within an
acceptable limit. If the Parties determine that the failures are not primarily
attributable to one Party, both Parties will provide additional engineering and
technical support needed to bring the failure rate within an acceptable limit.
ARTICLE 8 - SALES OF COMPONENTS AND OF THE GEMINI MS AND GEMINI
R&D MS
8.1 HP Gemini Products. Bruker may purchase from HP and HP will sell to Bruker
the following products ("HP Gemini Products") so long as either HP is actively
selling the Gemini MS or Bruker is actively selling the Gemini R&D MS:
HP Gemini Kits, as specified in Sub-Section 7.1.1
HP Gemini R&D Kits, as specified in Sub-Section 7.1.1
41BRUKER-HP Collaboration Agreement 12
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
HP Ship Kits, comprising accessories and consumables, as specified in
Sub-Section 7.1.3
HP APCI accessory HP CDs or disks containing optional software identified
on the document entitled "Pricing of HP and Bruker Kits, Instruments,
Accessories, and Software" which is incorporated herein as an Appendix 3
in Section 22.9.
HP Gemini R&D kit without source parts, etc. as specified in Gemini
Project Plan.
8.2 Bruker Gemini Products. HP may purchase from Bruker and Bruker will sell to
HP the following products ("Bruker Gemini Products") so long as either Bruker is
actively selling the Gemini R&D MS or HP is actively selling the Gemini MS:
Gemini MS as assembled and tested in accordance with Section 7.2.3 Bruker
Nanoelectro spray accessory
Bruker CDs or disks containing optional software identified on the
document entitled "Pricing of HP and Bruker Kits, Instruments,
Accessories, and Software"
8.3 Prices. Sales between HP and Bruker will be conducted in US dollars. The
prices are set out in the document entitled "Pricing of HP and Bruker Kits,
Instruments, Accessories, and Software," which is incorporated herein as
Appendix 3. The Parties have a goal of reducing their respective manufacturing
costs so that they can reduce their prices to each other after the year [*](3)
from the prices specified for the year [*]. The parties will confer regarding
their prices for HP Gemini Kits, HP Gemini R&D Kits and the Gemini MS sold after
the year [*]. HP will reduce the prices that HP charges Bruker for the HP Gemini
Kit and the HP Gemini R&D Kit by the same percentage that Bruker reduces the
price that it charges HP for the Bruker value add portion of the Gemini MS.
Bruker and HP have mutual interest in product differentiation, including
different ionization methods (e.g. MALDI, FAB, SIMS, MCI, MAB). Bruker has an
initial interest in developing an in-source MALDI-ITMS system based upon
ionization in vacuum. Bruker has the option of purchasing a Gemini R&D kit
without ESI/API source parts, power supplies, etc. to be used with different
ionization sources mentioned above. This option is described in the Gemini
project plan and the price set forth in Appendix 3. This provision is applicable
for a volume of more than 5 kits per year. If less than 5 kits per year are
required, Bruker can purchase Gemini R&D kits, and the excess parts not used for
this instrument configuration can be used by Bruker for spare parts.
8.4. Exchange Rate Variances. The prices in Appendix 3 are based upon an
exchange rate of 1.65DM per US dollar. HP and Bruker agree to share the exchange
rate risk associated with the Bruker value add portion of the Gemini MS. If the
actual exchange rate varies more than 5%DM/US$ Bruker and HP will equally share
the impact of the variance. The actual exchange rate will be the noon Fed Funds
fixing rate on the date that Bruker accepts a purchase order placed by HP.
Within thirty days after the end of each HP fiscal quarter HP and Bruker will
settle the impact of the differences and the appropriate party will make a
payment to the other party. If the exchange rate between US dollars and the
DM(or Euro) differs from the assumed exchange rate by more than 15% at the
beginning of any HP fiscal quarter, HP and Bruker will reset the assumed
exchange rate and adjust the prices in Appendix 3. To complete the reset of the
assumed exchange rate, the Parties will (1) replace Appendix 3, "Pricing of HP
and Bruker Kits,
- ----------
(3) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
41BRUKER-HP Collaboration Agreement 13
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
Instruments, Accessories, and Software" with a document containing revised
prices in US dollars, (2) agree that any reference to prices refers to the
updated Appendix, and (3) agree that any reference to the assumed exchange rate,
in the body of the contract or any Appendices, refers to the new assumed
exchange rate.
8.5 AOB-HP License Agreement Analytical of Branford, Inc. ("AOB") is the
exclusive licensee of U.S. patents No. 5,130,5338, No. 5,581,080, and No.
5,686,726. AOB has granted to HP sublicenses under AOB's exclusive licenses to
the AOB licensed patents. AOB and HP have agreed that the Esquire-LC, Gemini MS
& Gemini R&D MS and successor ITMS systems will be considered as licensed
products sold by HP and Bruker to their customers so long as HP pays AOB the
royalty due upon such sales. The AOB license fee is included in the price of the
HP Esquire-LC kit and HP Gemini MS and Gemini R&D MS kits and bioanalysis and
deconvolution software. However, Bruker cannot use the HP API source parts or
deconvolution software for products other than ITMS products since Bruker has no
license to AOB patents.
8.6 Taxes, Duties, Shipping Charges, Insurance. Title to the HP Gemini MS Kits,
HP Gemini R&D MS Kits, HP Ship Kits, APCI accessories, and the media on which HP
has stored its optional software will pass to Bruker, FOB San Francisco. Bruker
will pay all taxes, duties, freight and insurance for shipments from San
Francisco. Title to the finished HP Gemini MS, nanoelectrospray accessory and
the media on which Bruker has stored its optional software will pass to HP, FOB
Bremen, Germany. HP will pay all taxes, duties, freight and insurance for
shipments from Bremen, Germany.
8.7 Order Forecasts.
8.7.1 During the Development Project. At the beginning of the Production
Prototype Phase, Bruker will give HP an initial forecast of Bruker's
requirements for HP Gemini Products (as defined or listed in Section 8.1 ) for
the first year after shipment release. Likewise, at the beginning of the
Production Prototype Phase, HP will give Bruker an initial forecast of HP's
requirements for Bruker Gemini Products (as defined or listed in Section 8.2)
for the first year after shipment release . At the beginning of the Pilot Run
Phase, each Party will provide to the other Party an updated forecast.
8.7.2 On-Going Forecasts. After the successful conclusion of the Pilot Run
Phase, HP will provide to Bruker before the end of each month a forecast of the
quantity of the Gemini MS, the Bruker Nanoelectrospray Accessory, and Bruker
Software that HP has ordered or scheduled for delivery or expects to order or
schedule for deliveries, during the following 12 months. Similarly, before the
end of each month Bruker will provide to HP a forecast of the quantity of the HP
Gemini Kit, the HP Gemini R&D Kit, the HP Ship Kit, the HP APCI Accessory, and
HP Software that Bruker has ordered or scheduled for deliveries, or expects to
order or schedule for deliveries, during the following 12 months. Each Party
will update its forecast each month to provide the other Party its best
estimates of the number of units that it will want delivered in each of the 12
succeeding months.
8.7.3 Implications of Forecasts on Orders for Products. Both parties may accept,
but will not be obligated to accept, a purchase order for quantities of Gemini
Products that differ from the quantities indicated in its forecasts by more than
the percentages indicated in the table below. A conforming purchase order must
conform with each parameter set out below; the variances permitted are to be
considered separately and not cumulatively.
41BRUKER-HP Collaboration Agreement 14
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
- --------------------------------------------------------------------------------
Time Between Relevant Minimum Quantity of Maximum Quantity of
Forecast and Required Product on Purchase Order Product on Purchase Order
Shipments on Purchase Order
- --------------------------------------------------------------------------------
Forecast Provided 1 Month 100% 100%
Before Shipments Scheduled
on Purchase Order
- --------------------------------------------------------------------------------
Forecast Provided 2 Months 100% 110%
Before Shipments Scheduled
on Purchase Order
- --------------------------------------------------------------------------------
Forecast Provided 3 Months 80% 120%
Before Shipments Scheduled
on Purchase Order
- --------------------------------------------------------------------------------
Forecast Provided 6 Months 50% 150%
Before Shipments Scheduled
on Purchase Order
- --------------------------------------------------------------------------------
8.8 Purchase Orders
8.8.1 Function of Purchase Orders. Each Party will formally order kits,
instruments, components, accessories, software, and replacement parts,
("Products") from the other Party and schedule shipments ("Delivery Dates") by
issuing its regular purchase order ("Order") to the other Party. Each Order will
include: (i) unit quantity; (ii) unit price; (iii) shipping destination; (iv)
Delivery Date; and (v) other instructions or requirements pertinent to the
Order. Both parties may schedule regular intervals for deliveries by an
appropriate Order setting forth the intervals. This Agreement will control and
take precedence over the terms of an Order if there is any inconsistency between
this Agreement and an Order.
8.8.2 Order Acknowledgment. An Order will be deemed to have been placed as of
the date of receipt of the Order. The receiving Party will promptly confirm the
receipt of an Order electronically or through facsimile to the ordering Party
within two working days. Orders that are within the allowed variances from the
forecasts, as set out in Section 8.7, will be deemed accepted upon receipt. All
Orders will be deemed accepted if the receiving Party does not reject the Order
or non-conforming item on the Order, in whole or in part, within ten business
days of receipt of the Order. If an Order exceeds the Forecast or shortens the
Lead Time, the receiving Party will use reasonable efforts to fill such excess
or accommodate such shorter Lead Time.
8.8.3 Submission of Regular Monthly Purchase Orders. Each Party will submit to
the other Party its Purchase Order for Products to be purchased and delivered
during any month at least 60 days before the beginning of such month.
8. 9 Standard Payment Terms. Each Party will pay for Products, in US dollars,
net 37 days, after the latest of. (a) receipt by the receiving Party of an
appropriate invoice from the shipping Party; or (b) receipt by the Party of the
corresponding Products or Parts. Except as other-wise provided in this
41BRUKER-HP Collaboration Agreement 15
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
Agreement, associated freight expenses and duties will be paid directly by the
receiving Party. Neither Party will be liable for any costs related to or
payments for unordered or Nonconforming Products.
8.10 Prototypes and Products Delivered During Development Project. During the
Lab Prototype Phase, the Parties will provide the parts, hardware components,
software, and labor to make and allocate lab prototypes,, in accordance with the
Gemini Project Plan. This will be done without charge to or receiving
reimbursement from the other Party, irrespective of where the lab prototypes
will be sent, who will get the lab prototypes, or how the lab prototypes will be
used. During the Production Prototype Phase, the Parties may provide the parts,
hardware components, software and labor to upgrade some of the lab prototypes to
become production prototypes. The Parties will also provide the parts, hardware
components, software, and labor to make new production prototypes. The Parties
will allocate the production prototypes between the Parties, in accordance with
the Gemini Project Plan, without charge to or receiving reimbursement from the
other Party, irrespective of where the production prototypes will be sent, who
will get the production prototypes, or how the production prototypes will be
used. During the Pilot Run Phase, the Parties may upgrade some of the production
prototypes to become pilot run instruments, and the Parties will make additional
pilot run instruments. The Parties will distribute the pilot run instruments in
accordance with the Gemini Project Plan, The pilot run instruments will be
treated as customer units for purposes of determining and allocating costs and
payments between the Parties. Bruker will pay HP for all HP Gemini Kits, HP
Gemini R&D Kits, and HP Ship Kits (or their equivalents in components and parts)
incorporated into the pilot run instruments, as though Bruker had ordered the
components for its regular manufacturing. HP will pay Bruker for all the pilot
run units that are delivered to HP, as though the units were ordered for
customer shipments. If one Party has purchased and famished the separately
procured items for a unit that is distributed to the other Party, the other
Party will reimburse the procuring Party for such separately procured items.
ARTICLE 9 - HP'S MINIMUM PURCHASE COMMITMENT, INITIAL PURCHASE
ORDER AND DISPOSITION OF HP'S SECURITY DEPOSIT/DONVN PAYMENT
9.1 Minimum Purchase Commitment by HP. HP will purchase a minimum of [*](4)
units of the Gemini NIS during the two years following shipment release.
9.2 HP's Initial Purchase Order. As assurance for HP's minimum purchase
commitment recited above, HP will issue a new purchase order for this minimum
quantity after completion of the Production Prototype phase. This new purchase
order will replace and automatically cancel existing HP Purchase Order
#23732322. Notwithstanding anything to the contrary in Sub-Section 8.7.3,
Section 8.8, and Section 8.9, (a) HP will not submit regular purchase orders
until the [*] units ordered on its initial purchase order have been allocated
for deliveries; instead HP will issue call offs or use another mutually
acceptable procedure to advise Bruker of shipping destinations, Delivery Dates,
and other instructions for each of the [*] units; (b) HP will pay for the first
[*] units, including the pilot run units, as provided in Section 9.5 below.
9.3 Security Deposit/Down Payment Previously Paid by HP to Bruker. Under the
terms of the Old Agreement, HP submitted Purchase Order 923732322 to Bruker for
[*] Gemini units. HP paid Bruker
- ----------
(4) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
41BRUKER-HP Collaboration Agreement 16
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
[*] as a security deposit and down payment, with an expectation that Bruker
would begin shipping Gemini systems to HP in [*](5).
9.4 Partial Refund of Security Deposit/Down Payment. Within five days of
execution of this Agreement, Bruker will refund to HP, by wire transfer, the
balance of the security deposit / down payment, including accrued interest,
except Bruker will retain [*] as the security deposit/down payment for the first
[*] units of the Gemini MS . Thereafter, Bruker will pay HP interest within 30
days after the end of each HP Fiscal Quarter on any amounts that Bruker retains
as a security deposit/down payment during such quarter. The interest rate for
computing interest for such quarter will be the average of the LIBOR one-year
index for such quarter divided by four.
9.5 Disposition of Security Deposit/Down Payment. Each time Bruker sells and
delivers a Gemini MS to HP, Bruker will deduct [*] of transfer price from the
security deposit/down payment and invoice HP for the remainder. When the balance
of the security deposit/down payment is less than [*], Bruker will apply the
balance to HP's purchase of the next Gemini MS and invoice HP for the
difference. If Bruker fails to develop the Gemini/Gemini R&D MS in a timely
manner in accordance with the Gemini Project Plan, or if Bruker terminates this
Agreement before the security deposit/down payment has been used up in the
normal course of selling products to HP, Bruker shall immediately refund to HP
the remaining balance of the security deposit/down payment. If HP does not order
sufficient products to deplete the security deposit/down payment through no
fault of Bruker, HP will forfeit any remaining security deposit/down payment.
9.6 Delay in Initial Shipment. If the initial shipment of the Gemini MS is
delayed beyond the scheduled shipment date of [*], Bruker will refund to HP [*]
of the Security Deposit for each Gemini MS that HP forecasts, on its forecast
immediately preceding the delay, for delivery during the period of the delay,
until the initial shipment occurs.
ARTICLE 10 - WARRANTIES AND SUPPORT
10.1 HP Warranty. HP warrants that all HP Gemini Products, including the media
on which HP software is fixed, will be free from defects in materials and
workmanship for a period of 15 months from the date of shipment by HP to Bruker.
If any HP part in any Gemini MS or Gemini R&D MS fails during manufacture or
test at Bruker's factory as a result of such defect, Bruker may draw from its
stock of HP parts to replace any such failed HP part and return such failed part
to HP for replacement at no charge: or for credit. If any HP part in any Gemini
R&D MS fails as a result of such defect after Bruker has shipped the Gemini R&D
MS, but within 15 months of HP's shipment to Bruker, HP will provide a
replacement part in exchange for such failed part at no charge. However, HP will
not be responsible for paying for any labor or other expenses incurred in
connection with replacing such part in the Gemini R&D MS.
10.2 Bruker Warranty. Bruker warrants that all Bruker Gemini Products, including
the media on which Bruker software is fixed, will be free from defects in
materials and workmanship for a period of
- ----------
(5) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
41BRUKER-HP Collaboration Agreement 17
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
15 months from the date of shipment by Bruker to HP. If any Bruker part in any
Gemini MS fails as a result of such defect within 15 months of Bruker's shipment
to HP, Bruker will provide a replacement part in exchange for such failed part
at no charge. However, Bruker will not be responsible for paying for any labor
or other expenses incurred in connection with replacing such part in the Gemini
MS.
10.3 Replacement Parts. Each Party will prepare a list of parts (by part number
and description) that it will make available as replacement parts under its
warranty and that it will sell for customer support. In preparing these lists,
each Party will determine whether to furnish individual parts or assemblies of
parts as replacement parts. Each Party also will determine and specify the
lead-time for ordering and the lot quantity for each listed replacement part.
Each Party also will determine the distribution channel(s) that it will use in
selling the replacement parts or making them available to the other Party. The
prices that each Party will charge the other Party for replacement parts or the
formula that will be used to determine such prices is set out in the "Pricing of
HP Kits, Accessories, and Software and Bruker Instruments, Accessories, and
Software".
10.4 Return of Failed Parts and Failure Reports. HP will send to Bruker all
failed electronic boards that HP replaces for its customers, at Bruker's
expense. If Bruker requests HP to send other failed parts to Bruker, HP will use
reasonable efforts to send such other failed parts to Bruker , at Bruker's
expense. If HP requests Bruker to send any failed parts to HP, Bruker will use
reasonable efforts to send such failed parts to HP, at HP's expense. Whether or
not any failed part is returned, the par-ties will provide each other with
failure information to facilitate corrective action by the Party that made the
part.
ARTICLE 11 - NEW DEVELOPMENT PROJECTS
11.1 Upgrades to Gemini/Gemini R&D MS and New ITMS. The Parties will begin
considering upgrades to the Gemini/Gemini R&D MS and/or the design of the next
generation platform (under the code name [*](6)), at the end of the Gemini
Production Prototype Phase. If the Parties decide to jointly develop a major
upgrade to the Gemini/Gemini R&D MS or to jointly develop the [*] or any other
ITMS, the Parties will use Lifecycle Planning, including the preparation of
Lifecycle Documents for the project. Neither Party will be obligated to commence
or to finish any joint development of an upgrade or new product unless both
Parties formally adopt the Lifecycle Documents for the upgrade or new product,
and both Parties agree to a set of prices at which the Parties will sell
components and products to one another.
11.2 RP Developments of Technologies in HP Core Areas. HP anticipates that it
will continue making improvements in the HP Core Areas. HP will inform Bruker
product, project and program management of any improvements that HP develops and
incorporates into any of its ITMS instruments during the Engineering
Collaboration Period. Both Parties will share technology improvements in their
core areas to assure that both Parties' products are competitive in basic areas
of MS and MS/MS performance such as sensitivity, mass range, resolution, etc.
Upon meeting the required competitive levels, the parties will discuss and
mutually agree how to differentiate their products.
11.3 Bruker Developments of Technologies in Bruker Core Area. Bruker anticipates
that it will continue making improvements in the Bruker Core Areas. Bruker will
inform HP products, project and
- ----------
(6) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
41BRUKER-HP Collaboration Agreement 18
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
program management of any improvements that Bruker develops and incorporates
into any of its ITMS instruments during the Engineering Collaboration Period.
Both Parties will share technology improvements in their core areas to assure
that both Parties' products are competitive in basic areas of MS and MS/MS
performance such as sensitivity, mass range, resolution, etc. Upon meeting the
required competitive levels, the parties will discuss and mutually agree how to
differentiate their products.
ARTICLE 12 - EMPLOYEE RELATIONS
12.1 Visiting Employees. Each Party will perform most of its tasks on its own
premises. However, employees of each Party will visit the other Party's premises
on a regular basis during the Engineering Collaboration Period. Regardless of
the duration of any such visit, the visiting employee will not be deemed an
employee of the Host Party. The visiting employee's regular employer will
continue to be responsible for the employee's wages, benefits and payroll taxes,
and (unless otherwise agreed by the Parties) reimbursable expenses. Each
visiting employee will abide by the safety and security rules of the Host Party.
12.2 Sensitive Information. A visiting employee may inadvertently observe or
overhear information that a reasonably prudent person would recognize as
confidential or proprietary. If this happens, the employee will treat such
information as belonging to the Host Party and will not disclose it to anyone or
use it for any purpose without first inquiring of the Host Party.
12.3 Recruiting. No Party may recruit any employee assigned by another Party to
work on the Project while such employee works on the Project or within one year
thereafter. However, such employee may take the initiative to apply for
employment with the other Party and such other Party may offer employment to
such employee.
ARTICLE 13 - CONFIDENTIAL INFORMATION
13.1 Confidential Information. "Confidential Information" means (a) written
information that is marked as confidential at the time of disclosure and (b)
unwritten information that is treated as confidential at the time of disclosure
and designated as confidential in a written memorandum sent to the recipient
within thirty days of disclosure, summarizing the information sufficiently for
identification.
13.2 Duty of Care. Each Party receiving Confidential Information under this
Agreement will protect it by using the same degree of care, but no less than a
reasonable degree of care, to prevent the unauthorized use, dissemination, or
publication of the Confidential Information as the recipient uses to protect its
own confidential information of a like nature.
13.3 Persons Who May Receive Information. A recipient may disclose Confidential
Information only to its employees and consultants who have a need to know such
information to carry out their duties. All such employees and consultants must
be obligated by written agreement to give substantially the same protection to
the Confidential Information as is provided herein.
13.4 Use of Confidential Information. HP may use Bruker's Confidential
Information only for the purpose of understanding technologies associated with
such disclosures, for developing ITMS products under this agreement, and for
such purposes as may be permitted under Article 14. Bruker may use HP's
41BRUKER-HP Collaboration Agreement 19
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
Confidential Information only for the purpose of understanding technologies
associated with such disclosures, for developing ITMS products under this
agreement, and for such purposes as may be permitted under Article 14.
13.5 Disclosures Under Prior Agreements. As of the Effective Date, this
Agreement will govern any disclosure of Confidential Information pertinent to
the Project under any prior agreement.
13.6 Exclusions. The provisions of this Article shall not apply to any
information:
(a) that was already in recipient's possession before disclosure by the
disclosing Party,
(b) that is, or after it becomes, a matter of public knowledge through no
fault of recipient,
(c) that is rightfully received by recipient from a third party without a
duty of confidentiality,
(d) that is disclosed by the disclosing Party to a third party without
imposing a duty of confidentiality on the third party, or
(e) that is developed independently by employees of the recipient with no
access to the Confidential Information.
A recipient may disclose Confidential Information when required by law, but only
to the extent so required, provided that the recipient gives the disclosing
Part), reasonable advance notice so that the disclosing Party can protect its
interests.
13.7 Term. The recipient's obligations of confidentiality expires three years
after the expiration or termination of the Engineering Collaboration Period.
ARTICLE 14 - DEVELOPMENT INVENTIONS AND OTHER INTELLECTUAL
PROPERTY CREATED DURING DEVELOPMENT PROGRAMS
14.1 Invention. "Invention" means anything that comprises patentable subject
matter under the U.S. Patent Law (Title 35, U.S. Code Section 101)
14.2 Development Invention. "Development Invention" means an invention
comprising, or embodied in, an ITMS or a component thereof, or a process
practiced or implemented in or by an ITMS made or developed, by one or more
employees of either Bruker or HP, during the Engineering Collaboration Period.
14.3 Ownership of Development Inventions. A Development Invention made or
developed solely by Bruker employees ("a Bruker Development Invention") is
deemed to be solely owned by Bruker. A Development Invention made or developed
solely by HP employees ("an HP Development Invention") is deemed to be solely
owned by HP. A Development Invention made or developed jointly by employees of
both Parties ("a Joint Development Invention") is deemed to be owned by both
Parties. For purposes of Section 14.5 and Section 14.6 below, a Bruker
Development Invention will be considered solely owned by Bruker, and an HP
Development Invention will be considered solely owned by HP, notwithstanding any
assignment or partial assignment of any ownership by a Party to any other party.
14.4 Disclosure of Development Inventions. Each Party will disclose to the other
Party all Development Inventions, including Joint Development Inventions, made
or developed by its employees.
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14.5 Obtaining and Maintaining Patents Covering Development Inventions. Each
Party will determine, in its sole discretion, whether and where to file patent
applications covering Development Inventions of which it is the sole owner. Each
Party will be solely responsible for the prosecution of patent applications and
the maintenance of patents covering Development Inventions of which it is the
sole owner. With respect to Joint Development Inventions, the Parties will be
governed by the provisions of Section 143 in determining whether and where to
file patent applications and in allocating responsibility for the prosecution of
patent applications and the maintenance of patents.
14.6 Licenses Regarding Solely Owned Development Inventions. The provisions of
this Section 14.6 and the Sub-sections hereunder relate and extend only to
solely owned Development Inventions and grant no rights to exploit any other
inventions or under any patents covering any other inventions.
14.6.1 Licenses to Each Other Regarding Development Invention Within Owner's
Core Area. With respect to each solely owned Development Invention in the
owner's Core Areas, the owning Party hereby grants and will grant to the other
Party, for the duration of the Engineering Collaboration Period and for 2 years
there after a world-wide, non-exclusive, royalty-free, paid -up license to use,
offer to sell, sell and import ITMSs that constitute, embody, or incorporate
such Development Invention and to practice any process(es) constituting or
embodying such Development Invention in using ITMSs with the right to grant
sublicenses to the other Party's Affiliates, but without the right to grant
sublicenses to non-Affiliates. Such license extends and will extend to all
patents covering the Development Invention and to trade secrets embodied in the
Development Invention, but not to copyrights in computer programs. Such license
specifically excludes the right to make, or have made, i.e. the license is not a
manufacturing license.
14.6.2 Licenses to Each Other Regarding Development Invention In Other Party's
Core Area. With respect to each solely owned Development Invention in the other
Party's Core Areas, the owning Party hereby grants and will grant to the other
Party a world-wide, non-exclusive, royalty-free, paid-up, perpetual. license to
make, have made, use, offer to sell, sell, and import products that constitute,
embody, or incorporate such Development Invention and to practice any
process(es) constituting or embodying such Development Invention in
manufacturing or using products, in all fields, with the right to grant
sublicenses to the other Party's Affiliates, but without the right to grant
sublicenses to non-Affiliates. Such license extends and will extend to all
patents covering the Development Invention and to trade secrets embodied in the
Development Invention, but not to copyrights in computer programs.
14.6.3. Licenses to Each Other Regarding Development Invention In Neither
Party's Core Area. With respect to each solely owned Development Invention that
is in neither Party's Core Areas, the owning Party hereby grants and will grant
to the other Party, for the duration of the Engineering Collaboration Period and
for two years thereafter, a world-wide, non-exclusive, royalty-free, paid-up
license to use, offer to sell, and import ITMSs that have been developed jointly
by the Parties hereunder that constitute, embody, or incorporate such
Development Invention and to practice any process(es) constituting or embodying
such Development Invention in using ITMSs that have been developed jointly by
the Parties hereunder, with the right to grant sublicenses to the other Party's
Affiliates, but without the right to grant sublicenses to non-Affiliates. Such
license extends and will extend to all patents covering the Development
Invention and to trade secrets embodied in the Development
41BRUKER-HP Collaboration Agreement 21
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Invention, but not to copyrights in computer programs. Such license specifically
excludes the right to make or have made, i.e., the license in not a
manufacturing license.
14.6.4 Licenses to Third Parties. Each Party will determine, in its sole
discretion, whether, and to whom else, it will grant additional licenses and the
terms of such licenses with respect to its solely owned Development Inventions.
14.7 Joint Development Inventions
14.7.1 Joint Development Inventions In Bruker Core Areas. If the subject matter
of a Joint Development Invention is exclusively in Bruker Core Areas: (1) Bruker
shall have the first right to determine whether to seek patents on such
invention; (2) if Bruker decides to file one or more patent applications on such
invention, upon request by Bruker, HP will assign its rights to any patent
application and any patent issuing from such patent application covering such
invention, and Bruker may file and prosecute such patent applications solely in
its name; and (3) HP shall retain, and Bruker shall grant to HP under the
patents issuing from such patent applications, a royalty-free, nonexclusive,
perpetual license to make, have made, import, offer to sell, sell, and use
products that incorporate the invention, with the right to grant sublicenses to
its Affiliates, but without the right to grant sublicenses to non-Affiliates. If
Bruker decides not to file a patent application on a Joint Development Invention
in Bruker Core Areas, or if Bruker does not timely request HP to assign HP's
rights to file a patent application on such Joint Development Invention, the
Joint Development Invention will be treated as a Joint Development Invention in
neither Core Areas under the provisions of Section 14.7.3.
14.7.2 Joint Development Inventions In HP Core Areas. If the subject matter of a
Joint Development Invention is exclusively in HP Core Areas: (1) HP shall have
the first right to determine whether to seek patents on such invention; (2) if
HP decides to file one or more patent applications on such invention, upon
request by HP, Bruker will assign its rights to any patent application and any
patent issuing from such patent application covering such invention, and HP may
file and prosecute such patent applications solely in its name; and (3) Bruker
shall retain, and HP shall grant to Bruker under the patents issuing from such
patent applications, a royalty-free, nonexclusive, perpetual license to make,
have made, import, offer to sell, sell, and use products that incorporate the
invention, with the right to grant sublicenses to its Affiliates, but without
the right to grant sublicenses to non-Affiliates. If HP decides not to file a
patent application on a Joint Development Invention in HP Core Areas, or if HP
does not timely request Bruker to assign Bruker's rights to file a patent
application on such Joint Development Invention, the Joint Development Invention
will be treated as a Joint Development Invention in neither core areas under the
provisions of Section 14.7.3.
14.7.3 Joint Development Inventions In Neither Core Areas or in Both Core Areas.
Joint inventions that are in neither Party's Core Areas, or simultaneously in
both Party's Core Areas, will be owned jointly, and both parties will try to
resolve by mutual agreement who takes the lead in filing patents on such
inventions.
14.8 Inventions Prior to Effective Date. The Provisions of this Article 14 will
apply to all Development Inventions-made during the Engineering Collaboration
Period, whether made during the validity of the Old Agreement or after the
Effective Date of this Agreement, except that with respect to any invention
covered by the Old Agreement for which a patent has issued or for which a patent
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
application has been filed in any country in the names of both Parties, all
patents issued in all countries covering such invention will be assigned to both
Bruker and HP in accordance with the Old Agreement.
14.9 Licenses to Each Other on Pre-existing Intellectual Property. With respect
to any HP or Bruker inventions, patents, know-how or trade secrets that existed
before the Old Agreement was signed ("Pre-existing Intellectual Property"), the
owning Party hereby grants and will grant to the other Party, for the duration
of the Engineering Collaboration Period and for two years thereafter, a
world-wide, non-exclusive, royalty-free, paid-up license to use, offer to sell,
sell and import ITMSs that have been developed jointly by the Parties hereunder
that constitute, embody, or incorporate such Pre-existing Intellectual Property
and to practice any process(es) constituting or embodying such Pre-existing
Intellectual Property in using ITMSs that have been developed jointly by the
Parties hereunder, with the right to grant sublicenses to the other Party's
Affiliates, but without the right to grant sublicenses to non-Affiliates. Such
license does not extend to copyrights in computer programs. Such license
specifically excludes the right to make or have made, i.e., the license in not a
manufacturing license. The license also extends to the Esquire-LC.
14.10 Implied Licenses. The Parties acknowledge that with respect to any
invention of a Party that such Party embodies in or incorporates into the Gemini
MS / Gemini R&D MS or a component thereof, any purchaser of the Gemini MS /
Gemini R&D MS will have an implied license under any patent that may cover such
invention permitting such purchaser to use, to offer for sale, and to sell such
patented invention when using or selling such Gemini MS / Gemini R&D MS.
14.11 Ownership of Copyrights in Works of Authorship. The copyright in a
document and in any software or firmware code, written solely by employees of
one Party, shall be owned solely by that Party. The copyright in a document and
in any software or firmware code, written by employees of both Parties shall be
owned by both Parties.
14.12 Trade Secrets in and Legends to be Applied to Documents. If a document or
software or firmware code includes or incorporates a trade secret of either
Party, the Party that creates such document or software or firmware must include
a legend on the document or embedded in the code designating such document or
code as "Confidential" or "Proprietary" with the name of the Party whose trade
secret is incorporated (or names of both Parties if trade secrets of both
Par-ties are incorporated). Notwithstanding the ownership of the copyright in a
work by one or both Parties, if the work incorporates or is based upon
Confidential Information disclosed by one or both Parties or developed as
Confidential Information in the Gemini Program or in connection with any other
matters covered by this Agreement, the work may be used and distributed only in
accordance with the provisions governing the use and distribution of
Confidential Information herein.
14.13 License to Use HP Software. HP will make available for purchase by Bruker,
as set out in Section 8.1, CDs containing certain optional computer application
programs covered by HP copyrights. HP hereby grants to Bruker a license, under
HP's copyright in each computer application program for which Bruker has paid
the license fee, to install and to execute the program on one computer. Bruker
will transfer to Bruker's customer the license when Bruker transfers the CDs
containing such computer application program or when Bruker transfers the
computer on which such computer application program is installed. Bruker will
pay HP the license fee (or purchase the CE, containing the optional
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computer application program) for each computer on which an HP optional computer
application program is installed or executed.
14.14 License to Use Bruker Software. Bruker will make available for purchase by
HP, as set out in Section 8.2, CDs containing certain optional computer
application programs covered by Bruker copyrights. Bruker hereby grants to HP a
license, under Bruker's copyright in each computer application program -for
which HP has paid the license fee, to install and to execute the program on one
computer. HP will transfer to HP's customer the license when HP transfers the
CDs containing such computer application program or when HP transfers the
computer on which such computer application program is installed. HP will pay
Bruker the license fee (or purchase the CD containing the optional computer
application program) for each computer on which a Bruker optional computer
application program is installed or executed.
14.15 License to Copy and Distribute Documents. Each Party grants to the other
Party a non-exclusive, royalty-free, worldwide license under its copyrights in
any technical paper or brochure describing or applicable to the Gemini MS /
Gemini R&D MS to make and distribute copies thereof and to make derivative works
thereof and to make and distribute copies of such derivative works
ARTICLE 15 - REPRESENTATIONS, WARRANTIES AND DISCLAIMERS
15.1 Third Party Confidential Information. Each Party represents and warrants to
the other Party that it will not furnish to the other Party, incorporate in any
works furnished to the other Party or use in any deliverable in the Gemini
Project any confidential information of any third party without permission of
such third party.
15.2 Third Party Works of Authorship. Each Party represents and warrants to the
other Party that it will not furnish to the other Party, incorporate in any
works furnished to the other Party, or use in any deliverable in the Gemini
Project any copyrighted works of any third party without permission of such
third party.
15.3 Third Party Patents. Each Party represents and warrants to the other Party
that it will not furnish to the other Party, incorporate in any works furnished
to the other Party, or use in any deliverable in the Gemini Project any product,
data, information, know-how, or process that such Party reasonably believes may
infringe or conflict with any patent rights of a third party, unless such Party
also furnishes to such other Party a warning of such possible infringement or
conflict and information known by such Party about such possible infringement or
conflict. Neither Party has a duty under this Agreement to conduct a patent
search or infringement study. Except as expressly set forth elsewhere in this
Agreement, neither Party warrants against infringement of third-party patent
rights.
15.4 Disclaimers of Express and Implied Warranties. Except as expressly set
forth elsewhere in this Agreement, each Party expressly disclaims any express or
implied warranties, including without limitation the warranties of
merchantability and fitness for a particular purpose.
ARTICLE 16 - CONFLICTS WITH THIRD PARTY INTELLECTUAL PROPERTY
RIGHTS
41BRUKER-HP Collaboration Agreement 24
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
16.1 Claims Directed to Bruker Core Areas.
16.1.1 Bruker's Duty To Defend. Bruker will, at its expense, defend or settle
any third party claim asserted against HP based on an allegation of infringement
of a third party's intellectual property rights in the Bruker Core Areas. Bruker
will pay all costs, damages and expenses awarded by a court or agreed to in
settlement, arising from such third party claim against HP.
16.1.2 HP's Duty To Notify and Cooperate. HP will give Bruker prompt notice of
any third party claim, tender the defense, permit Bruker to control the defense,
and provide information and reasonable assistance to Bruker at HP's expense.
16.2 Claims Directed to HP Core Areas.
16.2.1 Duty To Defend. HP will, at its expense, defend or settle any third party
claim asserted against Bruker based on an allegation of infringement of a third
party's intellectual property rights in the HP Core Areas. HP will pay all
costs, damages and expenses awarded by a court or agreed to in settlement,
arising from such third party claim against Bruker.
16.2.2 Bruker's Duty To Notify and Cooperate. Bruker will give HP prompt notice
of any third party claim, tender the defense, permit HP to control the defense,
and provide information and reasonable assistance to HP at Bruker's expense.
16.3 Either Party's Right to Defend. The party providing any indemnification
under this Section 16 shall have complete control of the defense and settlement
of the matter subject to indemnification. If an indemnified party under Section
16 decides to retain its own counsel in connection with the matter where it is
receiving indemnification, such indemnified party shall do so at its sole cost
and expense, and such counsel shall have no role other than a monitoring role.
16.4 Other Third Party Claims. Each party will be responsible for its own
defense against third party claims not covered by the provisions above. The
parties will co-operate with one another in defending against such third party
claims.
16.5 Pending Litigation. Bruker will assume the complete defense of the existing
ITMS law suit and any new law suits brought by Finnigan Corporation against the
Parties in Bruker's Core Areas as of the Effective Date and will be solely
responsible for the selection of counsel and prosecution or settlement of the
suit. HP will provide reasonable assistance to Bruker upon request, at HP's
expense. Bruker will pay all costs of the defense incurred after the Effective
Date. Bruker will pay any settlement and any final adverse judgment. Bruker is
not liable for any of HP's defense costs incurred prior to the Effective Date.
ARTICLE 17 - RESPONSIBILITIES FOR SALES OF ESQUIRE-LC SYSTEMS
17.1 Co-Branding. Bruker will continue to affix the trademarks and logotypes of
both Bruker and HP to the Esquire-LC systems that Bruker makes.
41BRUKER-HP Collaboration Agreement 25
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
17.2 Sales of Esquire Kits. HP will continue to sell to Bruker the HP Esquire-LC
Kit, the HP APCI accessory and certain HP software related to Esquire-LC to
Bruker as is described in Appendix 4. Bruker may purchase the HP software and HP
hardware related to Esquire-LC through Bruker's OEM and DTD agreement with HP at
the prices set out in such agreements. The prices for the Esquire-LC kits and
APCI accessory are set out in an exhibit entitled "Pricing of HP Esquire-LC kits
and APCI accessory" which is attached as Appendix 4. Bruker is responsible for
determining the final amount of Esquire-LC kits to be ordered from HP.
17.3 Marketing Esquire-LC Systems in the United States and Canada
17.3.1 Division of Responsibilities. In the United States and Canada , HP's
primary area of responsibility for promotion and sale of Esquire-LC Systems will
be the commercial (for-profit) market plus HP's established customer base in the
non-profit market. In the United States and Canada , Bruker's primary area of
responsibility for promotion and sale of Esquire-LC Systems will be the
non-profit market plus Bruker's established customer base in the commercial
market. "Non-profit" means institutions such as governments, universities,
hospitals, and research institutions that do not market products with an
expectation of ultimately earning a profit. Representatives of HP and Bruker
may, from time to time, meet to discuss whether each Party is effectively
serving its primary area of responsibility, but nothing stated in this Section
17.3.1 or in any such meeting or discussion will prevent either Party from
accepting, orders for Esquire-LC Systems outside its primary area of
responsibility.
17.3.2 Purchases of Esquire-LC Systems and Accessories. HP may purchase
Esquire-LC Systems and related accessories,, such as the Bruker nanoelectrospray
ionization source, from Bruker for resale to commercial customers in the United
States and Canada. Such purchases will be at transfer prices equal to Bruker's
list prices in effect when HP submits its order, less a [*](7) discount. HP also
may purchase the Bruker nanoelectrospray ionization source, for resale with the
HP 1100 Series LC/MSD at a transfer price equal to Bruker's list price for the
nanoelectrospray accessory in effect when HP submits its order, less an [*]
discount.
17.3.3 Service and Support of Esquire-LC Systems.
17.3.3.1 HP will, at HP's expense, provide demos, first-line phone service and
field support for simple problems, administration of warranties and service,
hardware warranty of HP products and parts, and support for applications
software arising from HP sales of Esquire-LC Systems.
17.3.3.2 Bruker will, at Bruker's expense, provide installation services for
Esquire-LC systems (but not the HP 1100),, phone support and field service for
serious problems, hardware warranty for products and parts not supplied by HP,
software phone support, and support for applications (at the factory only). If
Bruker's sales and service affiliate does not provide such services in a timely
manner, HP may contact Bruker and Bruker either will dispatch an engineer from
the factory to provide the service or authorize HP to provide the service, in
which case HP may invoice Bruker and Bruker will reimburse HP for HP's actual
cost of providing such service for HP customers.
- ----------
(7) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
17.4 Marketing Esquire-LC Systems in Other Countries.
17.4.1 Responsibilities. In Europe and other countries outside the United States
and Canada, Bruker shall have primary responsibility for promotion and sales of
Esquire-LC systems. In Europe and other countries outside the United States and
Canada, HP shall promote and co-market the Esquire-LC with Bruker. From time to
time HP can sell to HP's established customer base in Europe and other countries
outside the United States and Canada. Nothing contained in this section 17.4.1
will prevent either party from accepting orders outside of its primary area of
responsibility.
17.4.2 Commission for Sales of Esquire-LC Systems in Other Countries after
Effective Date. Bruker will pay HP for promoting, marketing, and assisting.,
Bruker in selling Esquire-LC Systems in countries other than the United States
and Canada by paying HP a commission upon each sale of an Esquire-LC System
where substantive sales support is provided for a particular sale. The company
receiving the sales lead and substantive sales support has the sole
responsibility to determine whether or not the consummated sale was a direct
result of the sales lead and sales support passed on by the other company. The
commission on all such sales after the effective date will be [*](8) of -the net
value of the order exclusive of all commissions, freight charges, duties or
taxes.
17.4.3 Reports of Sales and Payments of Commissions. Bruker will report its
sales and shipments of Esquire-LC Systems in all countries on a monthly basis
within three business days after the end of each month. Bruker will pay all
commissions due HP within 15 days after the end of each HP Fiscal Quarter.
17.4.4 Commission for Sales of Esquire-LC Systems in Other Countries Prior to
Effective Date. Bruker has paid HP a sales commission of [*] rate of the German
list price on sales of six Esquire-LC systems. This payment was in addition to
the commission already paid by Bruker on three Esquire-LC systems sold under
Amendment 3 of the Old Contract. HP agrees that Bruker does not owe HP any
additional commissions for sales of ESQUIRE-LC systems prior to the Effective
Date.
17.5 Marketing of other Products Not Using Shared Technology
Nothing contained in this Article 17 will be construed in any way to restrict or
limit either Party with regard to promotion, distribution or sale of either
Party's non-ITMS products that do not incorporate shared technology.
ARTICLE 18 - DISPOSITION OF RESEARCH FUNDS
HP heretofore paid Bruker [*] to help fund development of the Esquire/Gemini
product line under the Old Agreement. If the Gemini MS and Gemini R&D MS are
developed and introduced in accordance with the Gemini Project Plan, or mutually
agreed upon changes to the Gemini Project Plan, Bruker will permanently retain
the [*]. Otherwise, Bruker will forwith refund all of the [*] to HP.
ARTICLE 19 - PUBLICITY
- ----------
(8) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
19.1 Endorsements. Bruker and HP will consider each other's reasonable requests
for endorsements of technical capabilities or the technology in each Party's
respective core area. However, neither Party is obligated to endorse or give
public testimonials respecting the other.
19.2 Publicity. The Parties will collaborate respecting publicity. Neither Party
will issue any notice to third parties or generate any publicity concerning this
Agreement or the relationship of the Parties without the prior written consent
of the other, except as may be required by law.
ARTICLE 20 - TERM, TERMINATION AND EXCLUSIVITY
20.1 Engineering Collaboration on the Gemini/Gemini R&D and Other ITMS. The
initial term of engineering collaboration on ITMS products, including the
Gemini/Gemini R&D MS, commenced on January 19, 1996, under the Old Agreement,
and will continue under this Agreement through [*](9). The Parties will continue
their engineering collaboration after [*], for successive terms of one year
through [*], unless one Party gives notice to the other Party, on or before [*]
or September 1 of any subsequent year, that such Party does not want to extend
the collaboration beyond the end of that year. The period of time from January
19, 1996, through the termination of engineering collaboration on [*], or on
such date in such later year, up to [*], if the Parties extend the engineering
collaboration, will be called the Engineering Collaboration Period. Certain
provisions of this Agreement related to the engineering collaboration,
specifically Section 2.9 - Meetings and Reviews, Article 3 - Over-view of the
Gemini Program, Article 4 - Specifications for the Gemini/Gemini R&D MS, Article
5 - Design and Development of the Gemini/Gemini R&D MS, Article 11 - New
Development Projects, Article 19 - Publicity, and Section 20.2.1 - Exclusivity
will be in effect from the Effective Date until [*], and will be the extended
automatically each year for an additional period of one year through [*], unless
one Party gives notice to the other Party, on or before [*], or September 1 of
any subsequent year, that such Party does not want to extend the collaboration
beyond the end of that year, in which case these provisions will expire or
terminate upon the expiration or termination of the engineering collaboration (
i.e. the end of the Engineering Collaboration Period). After the Engineering
Collaboration Period neither Party will have any obligations; under such
provisions. The obligations of the Parties to disclose inventions, as provided
in Section 14.4, extends beyond the Engineering Collaboration Period, but
applies only to inventions made during the Engineering Collaboration Period. The
obligations to grant licenses under patents covering Development Inventions, as
provided in Article 14, extends beyond the Engineering Collaboration Period, but
applies only to Development Inventions made during the Engineering Collaboration
Period.
20.2 Exclusivity.
20.2.1 Exclusivity during the Collaboration Period. During the Engineering
Collaboration Period, HP will not design, develop or manufacture an RIF ITMS,
except as provided herein, or enter into any agreement with a third party for
the design, development, manufacture or distribution of an RIF ITMS, other than
an RF ITMS jointly developed by the Parties hereunder. However, HP's
unrestricted right to distribute the Gemini and its successor products developed
under this Agreement shall not be limited by this Section 20.2. 1.
- ----------
(9) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
41BRUKER-HP Collaboration Agreement 28
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
During the Engineering Collaboration Period, Bruker will not design, develop or
manufacture a commercial LC/MS/MS API-ITMS, except the Gemini R&D and its
successor products, as provided in this Agreement, or enter into any agreement
with a third party analytical instruments company for the design, development,
manufacture or distribution of a commercial LC/MS/MS API-ITMS, other than an RF
UMS jointly developed by the Parties hereunder. However, Bruker's unrestricted
right to distribute the Gemini R&D and its successor products developed under
this Agreement shall not be limited by this Section 20.2. 1.
A specific exception to this exclusivity section 20.2.1, is that Bruker always
has the unencumbered right to design and develop any ITMS technology and systems
for final customers in the Department of Defense, other government agencies, or
their prime contractors or subcontractors for use in the course of their work on
a government contract.
Moreover, during the Engineering Collaboration Period and thereafter, Bruker has
the unencumbered right to give non-exclusive licenses for its ITMS technology to
any other party at any time at Bruker's sole discretion. Similarly, HP has the
right to give non-exclusive licenses for its technology to any party at any
time.
20.2.2 Exclusivity if HP gives notice. If HP gives notice to Bruker, pursuant to
section 20.1, that it does not want to extend the Engineering Collaboration
Period, then (1) HP shall not directly market or distribute any ITMS-based
products, other than ITMS systems procured from Bruker, and Bruker shall
continue to make such systems available to HP at competitive pricing and
performance, for a period of four years from the date that HP gives such written
notice, and (2) HP shall continue to make the components which it is selling to
Bruker at the time of the notice available to Bruker at competitive pricing and
performance, for a minimum of two years from the date that HP gives such written
notice. Both Parties will develop a mutually agreed upon plan to maintain a
competitive advantage for instrument pricing and performance compared with other
state of art ITMS systems during the post-Collaboration period. Both parties
will continue to supply parts to each other beyond the minimum two year period
pursuant to Section 20.3.
20.2.3 Exclusivity if Bruker gives notice. If Bruker gives notice to HP,
pursuant to Section 20.1, that it does not want to extend the Engineering
Collaboration Period, then neither Party is under any continuing obligation
under this Section 20.2. If Bruker gives written notice that it does not want to
extend the Engineering Collaboration Period, then for a period of two years from
the date that Bruker gives written notice (1) Bruker shall continue to make ITMS
systems jointly developed under this agreement available to HP at competitive
pricing and performance, as provided in Section 20.3, and (2) HP shall continue
to make the components which it is selling to Bruker at the time of the notice
available to Bruker at competitive pricing and performance. Both Parties will
develop a mutually agreed upon plan to maintain a competitive advantage for
instrument pricing and performance compared with other state of art ITMS systems
during the post-collaboration period. Both Parties will continue to supply parts
to each other beyond the minimum two year period pursuant to Section 20.3.
20.3 Manufacturing and Selling Gemini Products and Other ITMS Products.
Notwithstanding the expiration or termination of the Engineering Collaboration
Period, the Parties will continue to manufacture and sell to each other Gemini
Products, and any comparable or successor products for any other ITMS jointly
developed by the Parties under this Agreement, in accordance with Article 7 and
41BRUKER-HP Collaboration Agreement 29
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
Article 8 for at least two years after the expiration of the Engineering
Collaboration Period. If Bruker obsoletes the Gemini R&D MS and removes the
product from its price list, or if the number of HP Gemini R&D Kits that Bruker
orders from HP declines below 5 per calendar quarter for two successive
quarters, HP may notify Bruker that HP will discontinue manufacturing HP Gemini
Products, in which event, HP will allow Bruker to make one last-time buy of HP
Gemini Products, within three months of such notice, after which HP will no
longer be obligated to accept purchase orders for or sell HP Gemini Products to
Bruker. If HP obsoletes the Gemini MS and removes the product from its price
list, or if the number of Gemini MS that HP orders from Bruker declines below 5
per calendar quarter for two successive quarters, Bruker may notify HP that
Bruker will discontinue manufacturing Bruker Gemini Products, in which event,
Bruker will allow HP to make one last-time buy of Bruker Gemini Products, within
three months of such notice, after which Bruker will no longer be obligated to
accept purchase orders for or sell Bruker Gemini Products to HP. Notwithstanding
the preceding two sentences, each Party will sell replacement parts to the
other, in accordance with Section 10.3, for at least five years after the later
of the last sale of a Gemini MS by Bruker to HP or the last sale of an HP Gemini
R&D Kit by HP to Bruker. This section 20.3 shall also apply to any HP and Bruker
successor products developed under this Agreement.
20.4 Service and Support. Bruker will continue to provide service and support,
both in- warranty and out-of-warranty, in accordance with Article 10, for at
least five years after its last sale of a Gemini NIS to HP. HP will continue to
provide service and support, both in-warranty and out-of-warranty, in accordance
with Article 10, for at least five years after its last sale of an HP Gemini R&D
Kit to Bruker. Bruker will not be required to provide a Failure Report under
Section 10.4 after HP's last sale of an HP Gemini R&D Kit to Bruker. HP will not
be required to provide a Failure Report under Section 10.4 after Bruker's last
sale of a Gemini MS to HP. This section 20.4 shall also apply to any HP and
Bruker successor products developed under this Agreement.
20.5 Termination of Engineering Collaboration Period for Default.
20.5.1 Right to Terminate. If, during the Engineering Collaboration Period,
either Party (a) commits a material breach of its obligations hereunder or (b)
files for bankruptcy or receivership or does not dismiss a petition for
involuntary bankruptcy filed against it within 60 days of such filing, either of
which will be deemed a default hereunder, the other Party may terminate the
Engineering Collaboration Period on a date earlier than that prescribed in
Section 20.1.
20.5.2 Material Breach. A material breach would include, by way of example and
not a limitation: (1) failing to meet and. collaborate on critical tasks for
which collaboration is required for the successful development of Gemini/Gemini
/R&D MS or subsequent product, without good cause; (2) stopping work on the
project to develop Gemini/Gemini /R&D MS or subsequent product, without good
cause; (3) refusing to furnish parts, components, or instruments for which a
Party is responsible to the other Party in accordance with the Gemini Project
Plan (or the corresponding Project Plan for a new product), without good cause,
(4) disclosing or misusing Confidential Information of a Party, in violation of
Article 13, to the material detriment of such Party; or (5) failing to make
available improvements in a Party's Core Areas as required by Section 11.2 and
Section 11.3; (6) willfully failing to disclose Development Inventions (7)
violating the exclusivity in Section 20.2, (8) failing to ship or being
materially late in shipping Gemini Products or other products jointly developed
hereunder; and (9) attempting to assign this Agreement in violation of Section
22.5.
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
20.5.3 Not Material Breach. The following, by way of example and not of
limitation, would not be considered a material breach giving rise to the right
to terminate engineering collaboration: (1) delays in the development of a
product caused by Force Majeure or substantial unanticipated technical problems;
(2) failing to attain a desired target in the specifications; (3) inadvertent or
minor delays in the development project that are promptly corrected; and (4)
minor delays in manufacturing and delivering Gemini Products or other products
jointly developed hereunder where such delays do not cause a significant
disruption of the other Party's ability to sell and deliver products to its
customers.
20.5.4 Notice and Opportunity to Cure Default and Resolve Dispute. Before
terminating the Engineering Collaboration Period under this Section 20.5, a
Party who has the right to terminate under Sub-Section 20.5.1, must send the
other Party a written notice of default setting out the grounds for such early
termination. The Party receiving such a notice of default must cure the default
within 90 days of receipt of such notice. If it is not technically feasible to
cure the default within such 90 days, then within such 90 days the Party
receiving the notice of default must submit to the Party who has the right to
terminate a mutually acceptable plan to cure the default and proceed to cure the
default under such plan. If the Party in Default has not cured the default or
presented a mutually acceptable plan to cure the default within such 90 days,
the Party with the right to terminate may thereafter terminate the Engineering
Collaboration Period by sending the Party in default a written notice formally
terminating the Engineering Collaboration Period on the date specified in such
notice. If the Party receiving a notice of default disputes in good faith the
right of the other Party to terminate the Engineering Collaboration Period, it
may, in addition to, or in lieu of, curing the default or presenting a mutually
acceptable plan to cure the default, initiate actions to resolve the dispute in
accordance with Article 21. If the Party receiving a notice of default initiates
the dispute resolution process under Article 21 and proceeds in good faith to
resolve the dispute, the Party sending the notice of default will postpone
sending any notice formally terminating the Engineering Collaboration Period for
an additional 90 days while the Parties are engaged in resolving the dispute.
The Parties may continue trying to resolve any dispute under Article 21 even
after a Party terminates the Engineering Collaboration Period under this Section
20.5. If the Parties resolve a dispute after the Engineering Collaboration
Period has been terminated under this Section 20.5, the Parties may, by mutual
agreement, rescind the early termination, in which event the Engineering
Collaboration Period will be determined in accordance with Section 20. 1.
20.5.5 Consequences of Early Termination of Engineering Collaboration Period.
20.5.5.1 Termination By Either Party. If either Party terminates the Engineering
Collaboration Period under this Section 20.5, neither Party will be obligated to
collaborate on development projects thereafter. The obligations of the Parties
under Section 2.9- Meetings and Reviews, Article 3 - Overview of the Gemini
Program, Article 4 - Specifications for the Gemini/Gemini R&D MS, Article 5 -
Design and Development of the Gemini/Gemini R&D MS, Article 11 - New Development
Projects, Article 19 - Publicity, and Section 20.2.1 - Exclusivity will
terminate. Notwithstanding the Early Termination of engineering collaboration,
if the Parties have commenced manufacturing and selling Gemini/Gemini R&D
Products, the Parties will continue their relationship in accordance with
Section 20.3.
20.5.5.2 Termination by Bruker. If Bruker terminates the Engineering
Collaboration Period under this Section 20.5 for default by HP, Bruker may
retain the Research Funds, but if Bruker has not shipped the minimum quantity of
Gemini MS specified in Section 9.1, then Bruker will forthwith refund any
41BRUKER-HP Collaboration Agreement 31
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
remaining Security Deposit. If Bruker terminates the Engineering Collaboration
Period under this Section 20.5 for default by HP, then HP shall not market or
distribute directly or indirectly any ITMS-based products, other than ITMS
systems procured from Bruker, and Bruker shall continue to make such systems
available to HP at competitive pricing and performance, for a period of four
years after such early termination by Bruker; however, if Bruker is in default
or subsequently commits a material breach of this Agreement or becomes in
default, then this restriction upon HP will not apply.
20.5.5.3 Termination by HP. If HP terminates the Engineering Collaboration
Period under this Section 20.5 for default by Bruker, prior to the market
introduction of the Gemini MS, then Bruker will forthwith refund to HP the
Research Funds according to Article 18. If HP terminates the Engineering
Collaboration Period under this Section 20.5 for default by Bruker and if Bruker
has not shipped the minimum quantity of Gemini MS specified in Section 9.1, then
Bruker will forthwith refund to HP any remaining Security Deposit.
ARTICLE 21 - DISPUTES BETWEEN THE PARTIES
21.1 Initial Dispute Resolution. The Program Managers will meet and confer as
needed to resolve any disputes between the Parties. If the Program Managers are
unable to resolve a dispute, they will refer it to the Business Managers.
21.2 Escalation of Dispute. Any dispute that the Business Managers are unable to
resolve will be referred to senior executives of the Parties. The senior
executives will meet and confer in good faith to resolve the dispute.
21.3 Mediation. If the Parties have not resolved the dispute within thirty days
of the first meeting of the senior executives, any Party may initiate formal
mediation. Mediation will take place in Boston, Massachusetts unless the Parties
agree otherwise. The Parties will select a mediator. If the Parties are unable
to agree on a mediator, any Party may ask the American Arbitration Association
to appoint a mediator with experience in the analytical chemistry industry. The
mediator will agree in writing to hold in confidence any information that a
Party designates as confidential. All communications made by the Parties in
connection with mediation will be treated as settlement negotiations and will
not be admissible in any other proceeding.
21.4 Litigation; Injunctions. If the Parties have not resolved the dispute
through mediation within ninety days of the initiation of mediation, any Party
may initiate litigation to resolve the dispute. No Party may initiate litigation
until the above procedure has been followed. However, any Party may at any time
seek injunctive relief to prevent imminent, irreparable harm.
21.5 Choice of Law. The substantive laws of the State of New York, which are
well developed and provide a preferable structure for commercial transactions,
will govern this Agreement, without regard to the principles of conflict of
laws.
21.6 Forum. Any lawsuit may be brought in the U.S. District Court for the
District of Massachusetts if the requirements for federal jurisdiction are met,
or in the Middlesex Superior Court in Massachusetts if the requirements for
federal jurisdiction are not met. All Parties consent to the exercise of
personal. jurisdiction by these courts.
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CONFIDENTIAL HEWLETT-PACKARD - BRUKER
ARTICLE 22 - MISCELLANEOUS
22.1 Legal Status of the Parties. Each Party is an independent contractor. This
Agreement does not create a joint venture, partnership, or other legal entity.
22.2 No Third Party Beneficiaries. This Agreement is intended for the sole
benefit of the Parties hereto, and unless expressly provided herein, no rights
or powers shall arise hereunder in favor of any third party.
22.3 Force Majeure. The failure of any Party to perform hereunder as a result of
governmental action, laws, orders, or regulations, or as a result of disasters,
such as war, acts of public enemies, fires, floods, earthquakes, acts of God or
any causes of like kind beyond the reasonable control of such Party is excused
for so long as such cause exists.
22.4 Exports. Each Party will comply with applicable laws and regulations of the
United States, the European Community, and Germany relating to export of goods
and technical data. The Parties will not export or re-export any technical data,
the direct product of such technical data, or any products received from any
other Party to any proscribed country unless properly authorized.
22.5 No Assignment. No Party may assign any of its rights or obligations
hereunder (except the right to receive money) without the prior written consent
of the other Party. However, consent is not required for an assignment in
connection with a change of the state of incorporation of a Party, a merger of a
Party into its parent corporation, or a transfer of the business with which this
Agreement is associated to an Affiliate of a Party. No assignment will relieve
any Party of responsibility for its obligations hereunder, but consent to a
request for a transfer of such responsibility to a successor in interest or to a
transferee of the business will not be unreasonably withheld. Any purported
assignment by a Party in violation of this Section will be voidable by the other
Party.
22.6 Rules of Construction and Interpretation. This Agreement was prepared by
the Parties in negotiation. No Party will be considered the drafter and this
Agreement will be construed without strict construction in favor of or against
any Party.
22.7 No Waiver. Waiver of any provision of this Agreement will not be deemed a
continuing waiver of that provision or a waiver of any other provision.
22.8 Severability. If any provision of this Agreement is held to be ineffective,
unenforceable or illegal for any reason, such decision will not affect the
validity or enforcement of any or all of the remaining portions thereof.
22.9 Integration; Supersession; and Amendments. This Agreement, including the
Recitals, together with the Appendices identified below, contains the entire
understanding of the Parties as to its subject matter. This Agreement supersedes
and replaces the Old Agreement and any other prior agreements or understandings
between the Parties as to this subject matter. If there are any conflicts
between any provision in this Agreement and a provision in an Appendix the
provision in this Agreement will prevail. Any waiver, modification or exception
to this Agreement must be in writing and signed by a
41BRUKER-HP Collaboration Agreement 33
<PAGE>
CONFIDENTIAL HEWLETT-PACKARD - BRUKER
duly authorized company representative. Any such waiver, modification or
exception in a given instance will not be deemed a waiver, modification or
exception as to other or future actions or circumstances. The following
Appendices are part of this Agreement:
22.9.1 Appendix I - Gemini Product Data Sheet
22.9.2 Appendix 2 - Gemini Project Plan
22.9.3 Appendix 3 - Pricing of IIP and Bruker Kits, Instruments Accessories, and
Software
22.9.4 Appendix 4 - Pricing of HP Esquire-LC Kit and Instrument and APCI Prices
22.10 Bruker has been and intends to continue purchasing HP Analytical Chemistry
Products from HP under a DTD Agreement and/or an Original Equipment
Manufacturer's Agreement and reselling such products to Bruker's customers.
Bruker and HP have been collaborating on sales activities, providing leads to
one another under the terms of a Finder's Fee Agreement. The transaction under
such agreements and the relationships governed by such agreements will continue
to be governed by the terms of such respective agreements and are not abrogated
or modified by this Agreement.
22.11 Counterparts. This Agreement may be signed in any number of counterparts,
each of which will be deemed an original, but all of which will constitute one
and the same instrument.
41BRUKER-HP Collaboration Agreement 34
<PAGE>
CONFIDENTIAL HEWLETT-PACKARD - BRUKER
EXECUTION
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their duly authorized representatives on the date written below.
BRUKER DALTONIK GmbH HEWLETT-PACKARD COMPANY
By /s/ Frank H. Laukien By /s/ Richard F. Begley
------------------------ --------------------------------
Printed Name Frank H. Laukien Printed Name Richard F. Begley
-------------------- ----------------------
Title Managing Director Title General Manager - CAD
--------------------- -----------------------------
By /s/ Dieter Koch By /s/ Richard D. Kniss
------------------- --------------------------------
Printed Name Dieter Koch Printed Name Richard D. Kniss
--------------- ----------------------
Title Managing Director Title V.P. & General Manager CAG
--------------------- -----------------------------
Date May 3, 1999 Date April 28, 1999
--------------- ------------------------------
41BRUKER-HP Collaboration Agreement 35
<PAGE>
CONFIDENTIAL HEWLETT-PACKARD - BRUKER
Gemini Product Data Sheet
Appendix 1 to Bruker-HP Collaboration Agreement
Document Information:
- --------------------------------------------------------------------------------
Filename Gemini.pds.doc
- --------------------------------------------------------------------------------
Current Owner Michael Schubert, John Fieldsted, Ken
Imatani, Sebastian Meyer-Plath
- --------------------------------------------------------------------------------
Product Identifier G2440A LC/MS Detector
- --------------------------------------------------------------------------------
Project Identifier Gemini
- --------------------------------------------------------------------------------
Current Lifecycle Phase Entwurf/Investigation
- --------------------------------------------------------------------------------
Revision Log:
Revision Date Reason for Update
- --------------------------------------------------------------------------------
A.00 971114 Initial revision
- --------------------------------------------------------------------------------
A.01 971117 Revisions to FURPS, decision priority list, and
critical success factors following review session by John
Fjeldsted, Steve Madden, Jim Bertsch, and Frank Cesarz
- --------------------------------------------------------------------------------
A.02 971121 Revisions to related projects, boundary
conditions, project management team, and what project is
not following review session with Gemini project team
- --------------------------------------------------------------------------------
A.03 971219 Revisions to FURPS following review by HP and BFA
Gemini project management team and LCQ
benchmarking phase 1
- --------------------------------------------------------------------------------
A.04 980626 Update for Appendix to new HP-BFA Gemini contract,
by Ken Imatani, John Fjeldsted, Frank Kuhlmann,
Paul Goodley, Bryan Miller and Jim Bertsch; Change
of ownership from Bryan Miller to Ken Imatani
- --------------------------------------------------------------------------------
A.05 14.7.98 Update by MS after discussions with SMP
- --------------------------------------------------------------------------------
A.06 23.7.98 Update by MS after Review with BS and GH.
Clarifications regarding ESI HV supply for use
with nanospray, mass axis stability, trigger
outputs
- --------------------------------------------------------------------------------
A.07 12.8.98 Update after discussions with John Fjeldsted
- --------------------------------------------------------------------------------
A.08 24.8.98 Update after more discussions with John Fjeldsted
- --------------------------------------------------------------------------------
A.09 29.9.98 Update after discussion on mass range issues
- --------------------------------------------------------------------------------
A.10 9.10.98 Update
- --------------------------------------------------------------------------------
A.11 18.1.99 Update
- --------------------------------------------------------------------------------
A.12 31.3.99 Update
- --------------------------------------------------------------------------------
A.13 Apr. 8, 99 Reformated Header, deleted "Draft, for discussion
only" (JF)
- --------------------------------------------------------------------------------
A.14 Apr. 15, 99 Added "Appendix 1 to Bruker-HP Collabor..." (JF)
- --------------------------------------------------------------------------------
A.15 Apr. 21, 99 Changed language: stretch goals-> desired targets
(MS)
- --------------------------------------------------------------------------------
Instructions: Manually enter the document revisions here
and update the corresponding footer revision each time
revision log changed. Revision text should include
location, time, participants, (R&D, marketing, product
support) and a summary of the changes. Also state the
revision control system used to recover revisions.
- --------------------------------------------------------------------------------
[*] Remaining two pages of Appendix 1 have been marked confidential.(10)
- ----------
(10) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
41BRUKER-HP Collaboration Agreement 36
<PAGE>
CONFIDENTIAL HEWLETT-PACKARD - BRUKER
Gemini Product Data Sheet
Appendix 2 to Bruker-HP Collaboration Agreement
[*] Twenty-four pages of Appendix 2 have been marked confidential.(11)
- ----------
(11) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
41BRUKER-HP Collaboration Agreement 37
<PAGE>
CONFIDENTIAL HEWLETT-PACKARD - BRUKER
Appendix 3
Pricing of HP & Bruker Kits, Accessories,
Software & Instruments
<TABLE>
<CAPTION>
Ship Release Jan 1, 2001 Jan 1, 2002
HP Esquire-LC Kit sold to Bruker US$, G1961A (230V version) through through and
HP Esquire-LC Kit sold to Bruker US$, G1963A (208V version) through through and
<S> <C> <C> <C>
HP Gemini R&D Kit sold to Bruker US$ (fast pos/neg switching) [*](12) [*] [*]
HP Gemini Kit sold to Bruker US$
(standard positive/negative switching) [*] [*] [*]
Bruker Value Add Price to HP US$ [*] [*] [*]
Bruker Value Add Price to HP US$ (fast pos/neg switching) [*] [*] [*]
HP Price Paid to Bruker for Gemini Instrument US$ [*] [*] [*]
HP Price Paid to Bruker for Gemini Instrument US$ [*] [*] [*]
(with positive/negative switching)
HP Gemini Ship Kit sold to Bruker US$ [*] [*] [*]
HP Gemini Kit without source parts as given in Project Plan, sold
to Bruker US$ for up to 10 Kits of such ind per year [*] [*] [*]
HP APCI sold to Bruker US$ [*] [*] [*]
HP Peptide Tools sold to Bruker sales outside US only, US$* [*] [*] [*]
HP Deconvolution plus Peptide Tools sold to Bruker,
sales inside US only, US$ [*] [*] [*]
Bruker Nanoelectrospray sold to HP, DM [*] [*] [*]
Sales of Bruker Software to HP and Sales of HP Software
to Bruker, discount off list [*] [*] [*]
</TABLE>
* This price may increase if/when HP increases the list price. The same formula
that was used initially would apply (HPList - [*]) Bruker can sell the jointly
developed deconvolution software outside of the United States, where no AOB
license fee is due. In Europe and Asia-Pacific countries, Bruker may purchase
from HP Peptide Tools bioanalysis software at the price specified in this
appendix. In the United States by purchasing deconvolution and Peptide Tools
from HP at the price specified in this appendix, Bruker obtains a licensed
product for re-sale to its customers which includes the fee due to AOB.
Spare Parts Pricing: The formula for pricing spare parts will be cost of
material multiplied by [*].
- ----------
(12) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
41BRUKER-HP Collaboration Agreement 38
<PAGE>
CONFIDENTIAL HEWLETT-PACKARD - BRUKER
Appendix 4
Pricing of Esquire LC Kit, Instrument & APCI
Prices effective until Introduction of Gemini
HP Esquire LC Kit sold to Bruker US$*, G1961A (230V version) [*](13)
HP Esquire LC Kit sold to Bruker US$*, G1963A (208V version) [*]
HP APCI sold to BFA US$**, G1962A [*]
Price for purchases of the Esquire LC instrument by HP from Bruker will be the
US list price less a discount of [*].
*The Price of the HP Esquire Kit sold to Bruker will decrease whenever Bruker
decreases the US List price of the Esquire Instrument. The reduction of the
Esquire Kit price will be the same percentage as the Esquire US List price is
reduced. The current US List for the Esquire instrument is $179,000.
**APCI pricing will be replaced with the APCI pricing for Gemini once Gemini
starts shipping.
Components of the Esquire-LC Kit:
1. API Source Inlet and electrospray source as developed for HP 1100 Series
LC/MSD (spray chamber, nebulizer, integrated drying gas heater, sampling
capillary, dual skimmer differential pumping stages, split octopole ion guide,
and lens focusing optics, modified LC/MSD cast manifold - per current Bruker
drawing, baffle, vacuum hoses and interconnection between pumps, and source
covers). The ESI source is compatible for flow rates from 1 to 1000 uL/min. The
system can also accept an APCI source (from HP, optional) or nanoelectrospray
(from Bruker, optional). This product does not have an autocalibration system.
2. Pumping system as developed for LC/MSD (Edwards E1M18 rough pump, 250l/s
split-flow drag-stage turbo pump, 70l/s drag-stage turbo pump; two turbo
controllers.
3. Gas Flow Control Assembly as developed for LC/MSD (valves and manifold for
the control of the nebulizer and drying gas flows, no electronics included.
4. Customized Octopole RF drive printed circuit assembly for split octopole ion
guide.
5. License for production of multiply charged ions by electrospray on the
ESQUIRE-LC (this does not include deconvolution software).
6. HP LC ChemStation software (G2170AA, (version A.06); HP spectral Evaluation
module (G2180AA, version A.06).
7. Jet Direct Card 4100A.
- ----------
(13) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
41BRUKER-HP Collaboration Agreement 39
<PAGE>
Exhibit 10.8
Collaboration Agreement
by and between
Bruker-Franzen Analytik GmbH
Fahrenheitstr.4
28359 Bremen
hereinafter referred to as 'Bruker'
and
Sequenom Instruments GmbH
Mendelssohnstr. 15 D
22761 Hamburg
hereinafter referred to as 'Sequenom'
November 24, 1997
Preamble
(1) Bruker-Franzen Analytik develops and manufactures mass spectrometers and
supplies such instruments on a worldwide scale.
Bruker-Franzen Analytik has exclusive intellectual property rights and
know-how, covering
o MALDI-TOF mass spectrometer technology
o Pulsed Ion Extraction
o Multi-Target Acquisition
o Postprocessing XMASS(TM) software
Bruker-Franzen Analytik maintains an organisation appropriate for the
manufacture, marketing and customer service with regard to such mass
spectrometers.
(2) Sequenom has exclusive intellectual property rights and know-how, covering
Sequenom's DNA MassArray(TM) technology basis and comprising
o Sample preparation and sample conditioning of nucleic acids,
optimized for MS separation and detection
o DNA analysis application formats specifically designed for MS
analysis (BiomassSIZE(TM), BiomassSCAN(TM), BiomassPROBE(TM),
BiomassSEQUENCE(TM), BiomassINDEX(TM))
<PAGE>
o Parallel processing features, applying DNA chips (SpectroChip(TM))
and multiplexing
o Separation and detection of nucleic acids by MS, incl. analytical
and diagnostic applications.
(3) The parties intend to establish a broad relationship focusing on nucleic
acid analysis by mass spectrometry subject to the experience within this
Collaboration.
Collaboration
(1) Bruker-Franzen and Sequenom intend to collaborate in the manufacture and
marketing of and in the provision of customer service for 2D-array
MADI-TOF mass spectrometers designed to process Sequenom's
SpectroChips(TM) (the 'Mass Spectrometer') under a joint Bruker-Franzen -
Sequenom logo.
The Mass Spectrometer will be made available as stand-alone instrument and
will be integrated by Sequenom in collaboration with highly qualified
instrument manufacturers in the area of microliter and nanoliter liquid
handling, mass spectrometry and system integration in modular analytical
lines (the 'Modular System'), comprising automatic liquid handling
modules, DNA amplification and sequencing modules, sample-to-chip transfer
modules and controlling and data management units. The Modular System will
be designed to run applications of Sequenom's DNA MassArray(TM) software.
(2) Bruker-Franzen will design and manufacture the Mass Spectrometer, meeting
the specifications required for use in the DNA MassArray(TM) process and
dedicated and appropriate to process Sequenom's SpectroChips(TM),
including the XY-stage component and signal acquisition software. The
parties will mutually agree on specifications for the Mass Spectrometer
and the SpectroChip(TM). Bruker will make available to Sequenom the
complete details of the interface, including software protocols and time
behavior, enabling Sequenom to develop the specific application DNA
MassArray(TM) software.
(3) The Mass Spectrometer will be available by June 30, 1998.
(4) Bruker-Franzen and Sequenom will promote the Mass Spectrometer under a
joint label. The procedure will be defined on a case-by-case basis.
(5) Bruker-Franzen will market and provide service for the Mass Spectrometer
on a world-wide scale and under the name of Bruker-Franzen and Sequenom.
(6) Sequenom will provide nucleic acid analysis services to customers and to
corporate partners using DNA MassArray(TM)'
Sequenom will provide DNA MassArray(TM) application development, including
necessary software, to Mass Spectrometry users.
<PAGE>
Sequenom will develop, manufacture and market SpectroChips(TM) for
whatever applications.
Business Terms
(1) Bruker-Franzen will supply the Mass Spectrometer to the market at a
competitive market price (the 'Market Price').
(2) Sequenom maintains the option to purchase from Bruker-Franzen the Mass
Spectrometer at a reduced price (the 'Supply Price').
The Supply Price will be calculated by deducting [*](1) from the Market
Price, referring to the basic instrument, in the respective country of
instrument delivery.
(3) Bruker-Franzen Analytik will provide one Mass Spectrometer to Sequenom,
Hamburg as (beta) test site by June 30, 1998 without payment.
Initially, a prototype instrument equipped for handling of a single
SpectroChip(TM) will be supplied by March 30, 1998. The Modular System in
Hamburg will be used as demonstration and test site by both parties.
A second Mass Spectrometer will be supplied to Sequenom, San Diego, the
price being the Supply Price, by June 30, 1998.
(4) The Mass Spectrometer will be locked by appropriate hardware and software
features for the exclusive processing of Sequenom's SpectroChip(TM).
Timelines
(1) The Collaboration Agreement will come into force with the date of
signature.
(2) The Collaboration Agreement may be terminated by either party at 12 months
notice; such first notice of termination may, however, not be given
earlier than 30 Dec. 1999.
Date: December 4, 1997 Date: December 4, 1997
--------------------------- -------------------------
Bruker-Franzen Sequenom
- --------
(1) [*] Indicates information has been omitted and separately filed with the
Securities and Exchange Commission pursuant to an application for an order
declaring confidential treatment thereof.
<PAGE>
/s/ Dr. Franzen /s/ Hubert Koster
/s/ H.J. Baum
<PAGE>
Exhibit 21.1
List of Subsidiaries of the Registrant
<TABLE>
<CAPTION>
Name Jurisdiction
---- ------------
<S> <C> <C>
1. Bruker Daltonics Ltd. England
2. Bruker Daltonique S.A. France
3. Nihon Bruker Daltonics K.K. Japan
4. Bruker Daltonics AG Switzerland
5. Bruker Daltonics Scandinavia AB Sweden
6. ProteiGene, Inc. Massachusetts, USA
7. Bruker Daltonik GmbH Germany
8. Bruker Saxonia Analytik GmbH* Germany
</TABLE>
* Bruker Saxonia Analytik GmbH ("Saxonia") is an indirect subsidiary of the
Registrant. Saxonia is 98% owned by Bruker Daltonik GmbH ("Daltonik");
Daltonik, in turn, is a wholly owned subisdiary of the Registrant.
<PAGE>
Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference of our firm under the captions "Selected Financial
Data" and "Experts" and to the use of our reports dated March 11, 2000 and
February 3, 2000, in the Registration Statement (Form S-1) and related
Prospectus of Bruker Daltonics, Inc. for the registration of its shares of
common stock.
/s/ ERNST & YOUNG LLP
Boston, Massachusetts
April 10, 2000
<PAGE>
Exhibit 23.2
Bremen, April 13, 2000
CONSENT OF BDO, INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Selected Financial
Data" and "Experts" and to the use of our report dated April 6, 2000, in the
Registration Statement (Form S-1) and related Prospectus of Bruker
Daltonics Inc. for the registration of shares of its common stock.
BDO von Riegen, Lienau, Sucker & Partner GmbH
Wirtschaftsprufungsgesellschaft
<TABLE>
<S> <C>
/s/ signature /s/ signature
(Sucker) (Dr. Lienau)
Wirtschaftsprufer Wirtschaftsprufer
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED 1999 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 2,443,142
<SECURITIES> 0
<RECEIVABLES> 12,203,888
<ALLOWANCES> 113,861
<INVENTORY> 25,441,844
<CURRENT-ASSETS> 41,520,320
<PP&E> 43,984,242
<DEPRECIATION> 18,633,699
<TOTAL-ASSETS> 67,309,060
<CURRENT-LIABILITIES> 29,440,312
<BONDS> 12,843,582
0
0
<COMMON> 455,000
<OTHER-SE> 9,602,649
<TOTAL-LIABILITY-AND-EQUITY> 67,309,060
<SALES> 60,620,349
<TOTAL-REVENUES> 64,690,450
<CGS> 31,617,724
<TOTAL-COSTS> 62,050,058
<OTHER-EXPENSES> (130,219)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 907,682
<INCOME-PRETAX> 1,862,929
<INCOME-TAX> 986,887
<INCOME-CONTINUING> 876,042
<DISCONTINUED> 373,477
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,249,519
<EPS-BASIC> 0.03
<EPS-DILUTED> 0.03
</TABLE>
