UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) SEPTEMBER 30, 1998
QUAD SYSTEMS CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 0-21504 23-2180139
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2405 MARYLAND ROAD, WILLOW GROVE, PENNSYLVANIA 19090
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (215) 657-6202
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(Former name or former address, if changed since last report).
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 30, 1998, Quad Systems Corporation (the "Company") sold the
Company's SMTech printer business, which consisted of substantially all of the
assets and liabilities of SMTech Limited, to Speedline Technologies, Inc., a
subsidiary of Cookson Group PLC, for $14.8 million in cash paid at closing,
subject to a holdback of $750,000. In connection with the sale, the Company and
Speedline's MPM division have entered into an agreement whereby Speedline/MPM
will supply the Company on an OEM basis with the former SMTech stencil printer
product line with any and all technological improvements and advancements to be
made on the products by Speedline.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(b) Pro forma financial information.
It is impractical to provide the required pro forma financial
information required under Item 7(b) of Form 8-K at the time this
report on Form 8-K is required to be filed. In accordance with Item
7(b)(2) of Form 8-K, the Company will file the required pro forma
financial information under cover of an amended Form 8-K as soon as
practicable, but no later than December 14, 1998.
(c) Exhibits.
2.1 Agreement relating to the sale and purchase of the business and
assets of SMTech Limited, dated September 30, 1998, between the
Registrant, SMTech Limited and Speedline Technologies, Inc.
2.2 Agreement relating to the goodwill and intellectual property
assignment of SMTech Limited, dated September 30, 1998, between the
Registrant, SMTech Limited and Speedline Technologies, Inc.
2.3 Supply agreement dated September 30, 1998 between the Registrant
and Speedline Technologies, Inc. for the resale of SMTech stencil
printers (portions redacted pursuant to application to SEC for
confidential treatment of certain provisions).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
QUAD SYSTEMS CORPORATION
Dated: October 14, 1998 By: /s/ ANTHONY R. DRURY
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Anthony R. Drury
Senior Vice President, Finance
and Chief Financial Officer
(Principal Accounting Officer
and duly authorized officer)
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EXHIBIT INDEX
<TABLE>
<CAPTION>
<S> <C> <C>
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- ----------- --------
2.1 Agreement relating to the sale and purchase of the business and
assets of SMTech Limited, dated September 30, 1998, between the
Registrant, SMTech Limited and Speedline Technologies, Inc.
2.2 Agreement relating to the goodwill and intellectual property
assignment of SMTech Limited, dated September 30, 1998, between
the Registrant, SMTech Limited and Speedline Technologies, Inc.
2.3 Supply agreement dated September 30, 1998 between the Registrant
and Speedline Technologies, Inc. for the resale of SMTech
stencil printers (portions redacted pursuant to application to
SEC for confidential treatment of certain provisions).
</TABLE>
EXHIBIT 2.1
DATED SEPTEMBER 30, 1998
S M TECH LIMITED (1)
SPEEDLINE TECHNOLOGIES INC. (2)
QUAD SYSTEMS CORPORATION (3)
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AGREEMENT
FOR THE SALE AND PURCHASE OF THE BUSINESS
AND ASSETS OF SMTECH LIMITED
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Wragge & Co.
Birmingham
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CONTENTS
CLAUSE HEADING PAGE
1 Definitions and Interpretation.............................................4
2 Sale of the Assets.........................................................15
3 Consideration..............................................................16
4 Completion Accounts........................................................17
5 Adjustment to the Purchase Price...........................................20
6 Completion.................................................................20
7 Value Added Tax............................................................22
8 Debtors and Creditors......................................................24
9 Contracts and Finance Agreements...........................................29
10 Employees.................................................................29
11 Representations and Warranties............................................31
12 Names.....................................................................36
13 Restrictive Covenants.....................................................36
14 Apportionments............................................................39
15 Capital Allowances........................................................40
16 Guarantee.................................................................40
17 Continuing effect of this Agreement.......................................42
18 Announcements.............................................................42
19 Releases, waivers etc., by the Purchaser..................................42
20 Notices...................................................................43
21 Time......................................................................44
22 Entire Agreement..........................................................45
23 Alterations...............................................................45
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24 Severability..............................................................45
25 Counterparts..............................................................46
26 Payment of costs..........................................................46
27 Successors and Assigns....................................................46
28 Further Assurance.........................................................46
29 Applicable law and submission to jurisdiction.............................46
30 Address for service.......................................................47
Schedule 1...................................................................48
Schedule 2...................................................................49
Schedule 3...................................................................50
Schedule 4...................................................................51
Schedule 5...................................................................52
Schedule 6...................................................................53
Schedule 7...................................................................67
Schedule 8...................................................................68
Schedule 9...................................................................69
Schedule 10..................................................................73
Schedule 11..................................................................76
Schedule 12..................................................................77
Schedule 13..................................................................78
Schedule 14..................................................................76
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THIS AGREEMENT is made on September 30, 1998
BETWEEN:
(1) SMTECH LIMITED (No. 2597925) whose registered office is at Middle Farm,
Bridport Road, Dorchester, Dorset DT1 3WA ("THE VENDOR");
(2) SPEEDLINE TECHNOLOGIES INC. (a Delaware Corporation) whose registered
office is at 16 Forge Park, Franklin, MA 01748, USA ("THE Purchaser"); and
(3) QUAD SYSTEMS CORPORATION (a Delaware Corporation) whose registered office
is at 2405 Maryland Road, Willow Grove, Pennsylvania, 19090, USA ("THE
GUARANTOR")
NOW IT IS HEREBY AGREED as follows:
WHEREAS:
(A) The Vendor has agreed to sell and the Purchaser has agreed to purchase the
Assets with a view to maintaining the Business as a going concern upon the
terms and subject to the conditions contained in the following provisions
of this Agreement.
(B) The Guarantor has, at the request of the Purchaser agreed to guarantee the
due and punctual performance by the Vendor of all its obligations under
this Agreement and all other documents to be entered into by the Vendor
pursuant to this Agreement.
1 DEFINITIONS AND INTERPRETATION
In this Agreement and in the Schedules (which are part of this Agreement)
unless the context otherwise requires
1.1 the following expressions shall have the following meanings:
"THE ACCOUNTS" means the audited trading and profit and loss account of the
Vendor for the financial or accounting period ended on the Accounting Date
and the audited balance sheet of the Vendor as at the Accounting Date
together with the reports of the directors and auditors and all other notes
and memoranda attached thereto or any of them;
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"THE ACCOUNTING DATE" means 30th September 1997;
"THE ASSETS" means the Cash Balance, the Debtors, the Fixed Equipment, the
Moveable Equipment, the Stock, the Intangible Assets, the Patents, the
Trade-Marks, the Registered Designs, the benefit of the Contracts and all
other assets and rights of the Vendor in relation to the Business but
excluding the Excluded Assets;
"THE ASSUMED LIABILITIES" means the Creditors, accrued outgoings and
expenses, including accrued holiday pay, the Warranty Claims and the burden
of the Contracts but excluding the Excluded Liabilities;
"THE BAD DEBT RESERVE" means the reserve for bad debts shown in the
Completion Accounts;
"BUSINESS DAY" means a day (excluding Saturdays and Sundays) on which
clearing banks are ordinarily open for the transaction of normal banking
business in London and New York;
"THE BUSINESS" means the business of the Vendor carried on at the
Completion Date including the manufacturing, distributing and after sales
service and support of the Products;
"THE BUSINESS NAMES" means the business names "SIGMAPRINT" and "SMTECH" and
each and every name, title and logo used in connection with the Business;
"THE CASH BALANCE" means any cash in hand or at bank of the Vendor at the
Completion Date held for the purposes of the Business;
"COMPLETION" means completion of the sale and purchase of the Assets by the
performance by the parties of their respective obligations under clause 6;
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"COMPLETION ACCOUNTS" means the balance sheet and profit and loss account
of the Vendor as at the Completion Date and the notes thereto to be
prepared in accordance with clause 5;
"THE COMPLETION ACCOUNTS DATE" means the date on which the Completion
Accounts are agreed or determined pursuant to clause 4;
"THE COMPLETION DATE" means the date hereof;
"THE COMPLETION PAYMENT" means the cash sum of $2,150,000 to be paid by the
Purchaser on Completion on account of the Purchase Price;
"THE CONFIDENTIAL INFORMATION" means trade secrets and information
equivalent to them (including but not limited to formulae, processes,
methods, knowledge and know-how) in connection with the Products and
details of the customers and suppliers of the Business being customers and
suppliers exclusive to the Vendor and not customers and suppliers of other
members of the Guarantor's Group and any information concerning new
products which are being developed or proposed to be developed by the
Business and which are as at the Completion Date confidential to the Vendor
in connection with the Business;
"THE CONTRACTS" means the Customer Contracts, the Supply Contracts and the
Finance Agreements;
"CREDITORS" means the aggregate amount due to trade and other creditors of
the Vendor in relation to the Business including but not limited to accrued
charges, customers' prepayments and trade and other bills payable (whether
or not yet due and payable) at the Completion Date but excluding the
Excluded Liabilities;
"THE CUSTOMER CONTRACTS" means all of the contracts, agreements, orders,
engagements and arrangements (whether written or oral) between the Vendor
and customers of the Business for the supply of Products goods or services
by the Vendor including the Distributorship Agreements, which are
subsisting at the Completion Date;
"CUSTOMS" means HM Customs & Excise;
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"DEBTORS" means the aggregate amount due from trade and other debtors of
the Vendor in relation to the Business including but not limited to
payments in advance to suppliers of the Vendor and trade and other bills
receivable at the Completion Date;
"THE DEBTS" means the aggregate amount due or owing at the Completion
Accounts Date from trade debtors where such amounts have been invoiced by
the Vendor as shown in the Completion Accounts less the Bad Debt Reserve;
"DEVELOPED SOFTWARE" means any software developed by, or on behalf of the
Vendor and used by the Business;
"THE DISCLOSURE LETTER" means the letter of the same date as this Agreement
from the Vendor to the Purchaser disclosing certain matters in relation to
the Warranties which has been delivered to the Purchaser prior to the
execution of this Agreement;
"DISTRIBUTORSHIP AGREEMENTS" means those agreements definitively listed in
Schedule 12;
"THE EMPLOYEES" means the persons employed by the Vendor in the Business
particulars of whom are set out in Schedule 5;
"THE EXCLUDED ASSETS" means those items details of which are set out in
Part A of Schedule 4;
"THE EXCLUDED LIABILITIES" means those items details of which are set out
in Part B of Schedule 4;
"THE FIXED EQUIPMENT" means all of the plant, machinery and equipment used
in the Business which are affixed to the Property details of the principal
items of which are set out in part I of Schedule 3;
"THE FINANCE AGREEMENTS" means the leasing, hire purchase, credit sale and
other similar agreements details of which are set out in Schedule 7;
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"THE FINANCIAL INDEBTEDNESS" means all short term and long term financial
indebtedness including bank debt and any debts (other than trading debts)
owing to the Guarantor or any of the subsidiaries of the Vendor in relation
to the Business but excluding amounts arising under or pursuant to the
Finance Agreements and the list of inter-company charges set out in
Schedule 14;
"GUARANTEE" means any guarantee, indemnity, suretyship, letter of comfort
or other assurance, security or right of set-off given or undertaken by a
person to secure or support the obligations (actual or contingent) of any
third party and whether given directly or by way of counter-indemnity to
any third party who has provided a Guarantee;
"ICTA 1988" means Income and Corporation Taxes Act 1988;
"INTANGIBLE ASSETS" means all customer and supplier lists maintained by or
on behalf of the Vendor for the purpose of the Business (and/or copies of
the same) and those items listed in sub-clauses 6.1(b)(i),(ii) and (iii);
"THE INTELLECTUAL PROPERTY" means all the Intellectual Property Rights used
or owned by the Vendor in connection with the Business as at the date of
this Agreement;
"INTELLECTUAL PROPERTY RIGHTS" means patents, registered designs, trade
marks and service marks (whether registered or not) applications for the
foregoing and the right to apply therefore in any part of the world,
copyrights, design rights, and all similar property rights, including those
subsisting (in any part of the world) in inventions, designs, drawings,
performances, computer programs, semiconductor topographies, plant
varieties, confidential information, business or brand names, goodwill or
the style of presentation of goods or services and in applications for
protection thereof;
"THE MOVEABLE EQUIPMENT" means all of the moveable plant, machinery and
equipment (including but not limited to tools, furniture and fittings,
motor vehicles and spare parts) used in the Business details of the
principal items of which are set out in part II of Schedule 3;
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"THE NET ASSET VALUE" means a sum equal to the aggregate of the values of
the Assets (other than Intangible Assets and Intellectual Property) as
shown in the Completion Accounts minus a sum equal to the aggregate of the
value of the Creditors as agreed or determined pursuant to clause 4;
"THE NOMINATED ACCOUNT" means the Vendor's account numbered 1422647298 at
Corestates Bank (ABA no. 031000011) or such other account or accounts as
the Vendor shall specify;
"THE OEM SUPPLY AGREEMENT" means an agreement of even date with this
Agreement between the Vendor and the Guarantor for the supply of Products
and related services following Completion;
"THE OPINION" means the opinion in the agreed form given by Messrs Ballard,
Spahr, Andrews and Ingersoll in relation to the Guarantor;
"THE PATENTS" means the patents (if any) listed in Part A of Schedule 13;
"PAYE AND NIC RECORDS" means the workings sheets records and other
documents relating to the Business required to be preserved for the
purposes of the Pay As You Earn and National Insurance systems;
"THE PERMITTED ACTIVITY" means the resale to customers of the Guarantor of
products which have been supplied to the Guarantor by the Purchaser
pursuant to the OEM Supply Agreement and the ongoing product support of
such products;
"THE PRODUCTS" means those stencil printers produced or being developed by
the Business including but not limited to those products of the Business
sold under or referred to by the names, SigmaPrint 500, SigmaPrint 400,
Sigma Print 90, SigmaPrint 100 and SigmaPrint 200 and similar or like names
used when such products are sold through the Guarantor;
"PROHIBITED AREA" means the World;
"THE PROPERTY" means the leasehold property details of which are set out in
Schedule 1;
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"THE PROPERTY LICENCE" means the licence agreement in the agreed form
relating to the Property to be entered into between the Purchaser and the
Vendor on Completion;
"THE PURCHASE PRICE" means the sum of US $ (dollars) 2,900,000, subject to
adjustment pursuant to clause 5;
"THE PURCHASER'S SOLICITORS" means Messrs. Wragge & Co, of 55 Colmore Row,
Birmingham B3 2AS;
"THE REGISTERED DESIGNS" means the registered designs (if any) listed in
Part C of Schedule 13;
"THE REGULATIONS" means the Transfer of Undertakings (Protection of
Employment) Regulations 1981 as amended from time to time;
"RELEVANT BREACH" means any event, matter or circumstance which is
inconsistent with, contrary to or otherwise a breach of any of the
Warranties;
"THE RESTRICTED PRODUCTS" means:
(i) all products which are manufactured, produced, distributed or sold by
the Vendor in connection with the Business at the Completion Date
(including, without prejudice to the generality of the foregoing, the
Products); and
(ii) any other products which are of a type similar to and competing with
any of the products referred to in (i) above;
but excluding products supplied as part of the Permitted Activity;
"THE RESTRICTED SERVICES" means:
(i) all services which are supplied by the Vendor in connection with the
Business at the Completion Date (including without prejudice to the
generality of the foregoing, research and development, product design,
software design, manufacturing, field service, technical support and
supply of spare parts); and
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(ii) any other services which are of a type similar to and competing with
any of the services referred to in (i) above;
but excluding the supply of field service, technical support and
supply of spare parts in connection with the Permitted Activity;
"THE RETENTION SUM" means such part of the cash sum of $750,000 (being part
of the Purchase Price) as the Purchaser is entitled to retain and which is
payable in accordance with clause 3;
"SCHEDULE" means a schedule to this agreement;
"SECURITY INTEREST" means a mortgage, lien, pledge, charge, hypothecation
or other security interest (or an agreement or commitment to create any of
them), but excluding:
(a) any lien arising in the ordinary course of business to secure
amounts which are not material;
(b) any unpaid vendor's or supplier's lien arising in the ordinary
course of the Business to secure amounts due in respect of goods
or services sold or supplied; and
(c) liens arising by operation of law, including a banker's lien;
"SET OFF AMOUNT" means the amount of any Set Off Claim which is the subject
of a Set Off Notice being a bona fide estimate of the amount of a relevant
claim (as defined in Schedule 9);
"SET OFF CLAIM" means a claim by the Purchaser to make a deduction or
withholding from the Retention Sum pursuant to clause 11 being a relevant
claim for the purposes of Schedule 9 and for the avoidance of doubt there
may be any number of Set Off Claims in respect of the Retention Sum
provided that such claims do not in aggregate exceed $375,000;
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"SET OFF NOTICE" means a notice substantially in the form set out at
Schedule 11 in relation to any Set Off Claim and specifying a Set Off
Amount;
"SYSTEMS" means any computer hardware, software (including all Third Party
Software and Developed Software), networking equipment and infrastructure
or other equipment owned and used by the Business which are reliant upon
microchip technology;
"THE STOCK" means all raw materials, stocks, work-in-progress, finished and
partly finished goods, spare parts, fuel and other consumables relating to
the Business at the Completion Date;
"THE SUPPLY CONTRACTS" means all of the contracts, agreements, orders,
engagements and arrangements (whether written or oral) between the Vendor
and suppliers for the supply of goods or services to the Vendor in relation
to the Business or any of the Assets subsisting at the Completion Date;
"TAX" means all forms of taxes duties imposts levies and all deductions and
withholdings in relation to tax whenever created or imposed, whether in the
United Kingdom or elsewhere, including (without limitation) VAT deductions
under the PAYE system and National Insurance contributions, together with
all penalties, fines, charges, surcharges and interest in relation to tax
or to any return or information required to be provided for the purposes of
any tax;
"THIRD PARTY SOFTWARE" means any software used by the Business the
Intellectual Property in which is owned by a third party;
"THE TRADE MARKS" means the trade marks (if any) listed in Part B of
Schedule 13;
"VAT" means Value Added Tax;
"VAT RECORDS" means all records invoices and other documents relating to
the Business which are required to be preserved for the purposes of VATA
1994 and/or regulations made thereunder;
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"VATA 1994" means the Value Added Tax Act 1994;
"THE VENDOR'S SOLICITORS" means Messrs. Gouldens of 22 Tudor Street,
London, EC4Y 0JJ;
"THE WARRANTIES" the warranties, representations and undertakings contained
in clause 11 and Schedule 6;
"THE WARRANTY CLAIMS" means any claim or liability of the Vendor arising as
a result of any product warranty provisions of the Contracts relating
solely to Products manufactured in whole or in part prior to Completion,
including, for the avoidance of doubt, any claims in respect of such
provisions where the relevant Product has been sold via the Guarantor
(acting as the Vendor's agent or distributor);
"THE WARRANTY CLAIMS RESERVE" means the specific provision made in the
Completion Accounts in respect of the Warranty Claims;
"YEAR 2000 COMPLIANT" means that the Products conform to the year 2000
conformity definition in the British Standards Institution Document
reference DISC PD 2000-1.
1.2 a document expressed to be "IN THE AGREED FORM" means a document in a form
which has been agreed by the parties contemporaneously with or before the
execution of this Agreement and which has, for the purposes of
identification, been initialled by them or on their behalf;
1.3 references to a clause or schedule are to a clause of, or a schedule to,
this Agreement, references to this Agreement include its schedules and
references in a schedule or part of a schedule to a paragraph are to a
paragraph of that schedule or that part of that schedule;
1.4 references to this Agreement or any other document or to any specified
provision of this Agreement or any other document are to this Agreement,
that document or that provision as in force for the time being and as
amended from time to time in accordance with the terms of this Agreement or
that document or, as the case may be, with the agreement of the relevant
parties;
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1.5 words importing the singular include the plural and vice versa, words
importing a gender include every gender and references to persons include
corporations, partnerships and other unincorporated associations or bodies
of persons;
1.6 the contents table and the descriptive headings to clauses, schedules and
paragraphs (and summaries in parentheses of the scope of any statutory
provisions in the Tax Warranties) are inserted for convenience only, have
no legal effect and shall be ignored in the interpretation of this
Agreement;
1.7 the words and phrases "other", "including" and "in particular" shall not
limit the generality of any preceding words or be construed as being
limited to the same class as the preceding words where a wider construction
is possible;
1.8 a person is connected with another person if he is so connected within the
meaning of section 839 ICTA 1988;
1.9
(i) "enactment" means any statute or statutory provision (whether of the
United Kingdom or elsewhere), subordinate legislation (as defined by
section 21(1) Interpretation Act 1978) and any other subordinate
legislation made under any such statute or statutory provision;
(ii) a reference to any enactment shall be construed as including a
reference to:
(A) any enactment which that enactment has directly or indirectly
replaced (whether with or without modification), and
(B) that enactment as re-enacted, replaced or modified from time to
time, whether before, on or after the date hereof, provided that
this sub-clause 1.9(ii) shall not increase the liability of any
party above that which appertains at the date hereof;
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1.10
(a) "Group" means, in relation to a body corporate such body corporate and
all of its subsidiaries and holding companies for the time being;
(b) "Group Company" means a member of a Group;
(c) "subsidiary" and "holding company" have meaning given to them by
section 736 and 736A Companies Act 1985.
1.11 Where any amount is required to be converted to US Dollars for the purposes
of this Agreement such conversion shall be calculated at the rate of
exchange (sterling to dollars) quoted in the Wall Street Journal on the day
following the Completion Date.
2 SALE OF THE ASSETS
2.1 The Vendor shall sell and the Purchaser shall (relying as the Vendor hereby
acknowledges, on the representations, warranties, undertakings and
indemnities of the Vendor referred to or contained in this Agreement)
purchase from the Vendor the Assets and assume the Assumed Liabilities from
the Completion Date.
2.2 The Excluded Assets and Excluded Liabilities shall be excluded from the
sale and purchase referred to in clause 2.1.
2.3 The Vendor shall sell and transfer the Assets free from all Security
Interests and with full title guarantee.
2.4 Title to, beneficial ownership of, and any risk attaching to, the Assets
shall pass on Completion.
2.5 The Purchaser shall not be obliged to complete the purchase of any of the
Assets unless the Purchase of all the Assets is completed simultaneously.
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2.6 Save as otherwise expressly provided in this Agreement, the Purchaser shall
have no responsibility for creditors or any other liabilities of the Vendor
in connection with the Business existing at Completion or arising by reason
of anything done or omitted to be done prior to Completion and the Vendor
will indemnify and keep the Purchaser fully and effectively indemnified (on
an after tax basis) from and against all costs, claims, losses or expenses
which the Purchaser may suffer or incur in respect thereof.
2.7 Save as otherwise expressly provided in this Agreement (save in relation to
any such matter which gives rise to a Relevant Breach) the Purchaser shall
indemnify the Vendor and keep the Vendor fully and effectively indemnified
from and against all losses, costs, claims or expenses arising out of or in
connection with the carrying on of the Business and the possession of the
Assets after Completion by the Purchaser.
3 CONSIDERATION
3.1 Subject to adjustment pursuant to clause 5, the aggregate consideration
payable for the Business and the Assets hereby agreed to be sold shall be
(and be satisfied by) the payment by the Purchaser to the Vendor of the
Purchase Price and the assumption by the Purchaser of the Assumed
Liabilities.
3.2 The Purchase Price shall be apportioned between and allocated to the Assets
and the Assumed Liabilities in the manner set out in Schedule 2.
3.3 On Completion, the Purchaser shall pay to the Vendor, on account of the
Purchase Price the Completion Payment.
3.4 Subject to clause 5 on the Completion Accounts Date the sum of $375,000
shall be released from the Retention Sum and paid by the Purchaser to the
Vendor forthwith and the Retention Sum shall be permanently reduced on a $
for $ basis.
3.5 Subject to clause 11 the remainder of the Retention Sum together with the
interest accrued thereon (following any reduction made pursuant to clauses
3.4, 11 or 14) shall on the first anniversary of Completion be released to
the Vendor
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3.6 Pending payment the Retention Sum shall be held on the terms of this
Agreement by the Purchaser and such Retention Sum shall accrue interest for
the benefit of the Vendor at an annual rate of 6% compounded monthly.
3.7 All payments and releases of the Retention Sum shall be made in the manner
set out in clause 6.1(c).
4 COMPLETION ACCOUNTS
4.1 The Vendor and the Purchaser shall procure that on the Completion Date
there shall be a stocktaking of the Stock (which shall be attended by
representatives of the Vendor and the Purchaser) and the Purchaser shall
procure that, as soon as practicable following the Completion Date and in
any event not later than 60 days after the Completion Date, a draft of the
Completion Accounts ("DRAFT COMPLETION ACCOUNTS") shall be prepared by the
Purchaser in accordance with clause 4.2 and delivered to the Vendor.
4.2 The draft Completion Accounts shall be prepared:
(a) in a format which complies with the requirements of schedule 4 of the
Companies Act 1985; and
(b) on a historical cost basis and on a going concern basis in accordance
with the accounting principles and practices generally accepted in the
United Kingdom (UK GAAP) which are in force at the date hereof,
including all applicable statements of standard accounting practice
and financial reporting standards; and
(c) subject to sub-clauses 4.2(a) and 4.2(b), using the same accounting
principles, policies, bases and practices as were used in the
preparation of the Accounts; and
(d) notwithstanding the provisions of clauses 4.2(a), (b) and (c) in
accordance with the principles and policies set out in schedule 10;
and
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(e) so as to indicate the Net Asset Value, the Assumed Liabilities, the
Warranty Claims Reserve, the Bad Debts Reserve and the apportionments
pursuant to clause 14.1.
4.3 Unless the Vendor notifies the Purchaser in writing within 30 days after
receipt of such draft Completion Accounts that it does not accept that such
draft Completion Accounts comply with this clause 4, the Vendor shall be
deemed to have accepted such draft as complying with this clause 4.
4.4 If within the period of 30 days referred to in clause 4.3 the Vendor shall
notify the Purchaser in writing that it does not accept that the said draft
Completion Accounts comply with this clause 4 then the Vendor and the
Purchaser shall use their respective reasonable endeavours to reach
agreement upon appropriate adjustments to the said draft Completion
Accounts.
4.5 When the Vendor accepts or is deemed to accept that the said draft
Completion Accounts comply with this clause 4, then such draft Completion
Accounts shall be the Completion Accounts for the purposes of this
Agreement and shall be final and binding on the parties.
4.6 If the Vendor and the Purchaser have not resolved any such matter in
dispute within 30 days following the expiry of the period of 30 days
referred to in clause 4.4 or any other matter in dispute pursuant to
clauses 8.8 and 8.1 then either party shall be entitled to refer any matter
in dispute to such firm of independent chartered accountants as the Vendor
and the Purchaser may agree within 14 days of a request by either of them
to the other or, failing such agreement within such time, as the President
for the time being of the Institute of Chartered Accountants in England and
Wales may nominate on the application of the Vendor or the Purchaser
("INDEPENDENT ACCOUNTANTS") for determination on the following basis:
(a) the Independent Accountants shall be instructed to notify the Vendor
and the Purchaser of their determination of any such matter as soon as
possible;
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(b) the Vendor and the Purchaser shall be entitled to make written
submissions to the Independent Accountants and to have sight of and to
comment on any submissions made by the other but subject thereto the
Independent Accountants shall have power to determine the procedure to
be followed in relation to their determination;
(c) in making such submissions the Vendor and the Purchaser shall, where
appropriate, state their respective best estimates of monetary amounts
of the matters referred for determination;
(d) in making their determination the Independent Accountants shall act as
experts and not as arbitrators, their decision as to any matter
referred to them for determination shall in the absence of manifest
error be final and binding in all respects on the Vendors and the
Purchaser (but shall be without prejudice to the Purchaser's right to
claim under the Warranties or otherwise in respect of any matter);
(e) in making their determination the Independent Accountants shall state
what adjustments (if any) are to be made to the said draft Completion
Accounts in order that they shall comply with this clause 4; and
(f) the fees and expenses of the Independent Accountants shall be borne
equally between the parties.
4.7 Following Completion and until the Completion Accounts shall have been
agreed or determined, the Vendor and the Purchaser shall respectively:
(a) give or procure that the Independent Accountants are given access at
all reasonable times to all books and records of the Business which
are in the possession or under the control of the Vendor or the
Purchaser (as the case may be); and
(b) generally provide the Independent Accountants with such other
information and assistance as they may reasonably require (including
access to and assistance at reasonable times from personnel employed
by the Vendor or the Purchaser, as the case may be) in relation to the
review, agreement or determination of the Completion Accounts.
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5 ADJUSTMENT TO THE PURCHASE PRICE
5.1 If the Net Asset Value is less than US$ 2,900,000, the Purchase Price shall
be reduced by an amount equal to the shortfall such shortfall being applied
first against and shall reduce on a $1 for $1 basis the Retention Sum (the
Purchaser being entitled to payment of the same) and, to the extent that
the Retention Sum is insufficient, such amount shall be repaid to the
Purchaser forthwith on the Completion Accounts being agreed or determined.
5.2 Any reduction in the Purchase Price required to be made pursuant to this
clause 5 shall be allocated to those Assets and the Assumed Liabilities to
which such shortfall is attributed in the Completion Accounts.
6 COMPLETION
6.1 Completion shall take place at the offices of Adler Pollock and Sheehan
P.C. 2300 BankBoston Plaza, Providence, Rhode Island USA on the Completion
Date when all (but not part only unless the parties shall so agree) of the
following business shall be transacted:
(a) the Vendor shall deliver to the Purchaser or make available for
collection by the Purchaser or its authorised representatives at the
Property all of the Assets title to which is capable of passing by
delivery when title to such assets shall pass to the Purchaser;
(b) the Vendor shall deliver into the possession of the Purchaser (or as
it shall direct) the following:
(i) such documents as may be required to give good title to the
Assets and vest title to the Assets in the Purchaser;
(ii) all books of account and other financial records, payroll
records, stock and other records, information relating to
customers and suppliers (including but not limited to a list of
all of the customers of the Business during the last two years,
and a list of unfulfilled orders as at the Completion Date),
relevant computer programs and other books and documents which
relate to the Business;
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(iii) all designs and drawings, plans, instructional and promotional
material, sales publications, advertising materials, other
technical material and sales matter which relate to the Business;
(iv) a list of sales distributors, identifying sales by units and the
territory served during the last twelve months, and copies of all
the current agreements with such distributors;
(v) the PAYE and NIC Records relating to each of the Employees duly
completed and up-to-date;
(vi) the VAT Records;
(vii) all mortgages or charges over the Assets (or any of them) duly
vacated or (if the mortgages or charges also relate to other
property) duly executed release of the Assets from such mortgages
or charges together with letters of non-crystallisation in
relation to such charges;
(viii) a certified copy of the special resolution resolving to change
the name of the Vendor pursuant to clause 12;
(ix) duly executed assignments of the Intellectual Property Rights;
(x) the Opinion;
(c) the cash sums payable under this Agreement by the Purchaser, or as the
case may be the Vendor shall be paid by electronic transfer as
follows:
(i) in the case of any sums payable to the Vendor to the Nominated
Account and payment of the Completion Payment into such account
shall constitute a good discharge to the Purchaser in respect of
it;
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(ii) in respect of any sums payable to the Purchaser, to an account to
be nominated in writing by notice from the Purchaser to the
Vendor (a copy to be provided to Fleet Bank if applicable);
(iii) in respect of the Retention Sum in accordance with clause 3;
(d) the Purchaser and the Vendor shall enter into the Property Licence.
6.2 If the Vendor shall fail to perform any obligation under this clause 6, the
Purchaser may without prejudice to its rights or remedies under this
Agreement or under the general law:
(a) defer Completion with respect to some or all of the Assets to a date
not more than twenty eight days after the Completion Date (in which
case this sub-clause 6.2(a) shall apply to Completion as so deferred);
or
(b) proceed to Completion so far as practicable (including, at the
Purchaser's option, completion of the purchase of some only of the
Assets); or
(c) determine this Agreement.
6.3 Upon determination pursuant to clause 6.2(c) this Agreement shall (save for
the provisions of clauses 16, 20, 26.1, 29 and 30) be null and void and of
no further effect;
7 VALUE ADDED TAX
7.1 All amounts expressed in this Agreement as being payable by any party
hereto are expressed exclusive of any VAT which may be chargeable thereon
and the amount of any VAT shall be payable in addition thereto.
7.2 The parties each consider that article 5 of the Value Added Tax (Special
Provisions) Order 1995 ("ARTICLE 5") applies to the purchase of the
Business and the Assets by the Purchaser so that the purchase is treated as
a transfer of a business (or part of a business) as a going concern and is
treated neither as a supply of goods nor a supply of services.
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7.3 The parties shall each use all reasonable endeavours to persuade Customs
that Article 5 applies to the sale and purchase of the Business and the
Assets and (without limitation) the Vendor shall:
(a) promptly after execution of this Agreement, submit a written request
to Customs for a ruling that the sale and purchase hereunder
constitutes the sale of a business (or part of a business) as a going
concern within Article 5 and shall provide a copy of such application
to the Purchaser; and
(b) upon receipt of any response from Customs, inform the Purchaser of the
same (and shall provide copies of all relevant correspondence).
7.4 The Vendor shall not charge any VAT to the Purchaser in respect of the sale
and purchase of the Business and the Assets unless Customs shall first have
provided a written ruling to the effect that the Vendor is obliged to
charge VAT to the Purchaser in respect of the sale and purchase hereunder.
If Customs issue such a ruling, then:
(a) the Vendor shall promptly provide a copy of such ruling to the
Purchaser;
(b) (in accordance with the ruling received) the Vendor shall charge VAT
on the whole or (as the case may be) part of the purchase price and
issue to the Purchaser a VAT invoice for such VAT addressed to the
Purchaser; and
(c) (subject to prior receipt of such ruling and such VAT invoice) the
Purchaser shall promptly pay to the Vendor the VAT shown in the VAT
invoice.
7.5 For the avoidance of doubt, any penalty or interest incurred by the Vendor
for late payment of VAT by reason of it having been assumed that sale and
purchase of the Business and the Assets to the Purchaser fell within
Article 5 shall be borne by the Vendor.
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7.6 If the Purchaser shall have paid to the Vendor any amount in respect of a
supposed liability to VAT and Customs shall subsequently determine that the
whole or part of such supposed liability to VAT was not properly chargeable
("OVERPAID VAT"), then the Vendor shall:
(a) promptly notify the Purchaser of Customs' determination; and
(b) repay the Overpaid VAT (together with all interest relating thereto)
to the Purchaser and (if the Purchaser so requires) issue a VAT credit
note to the Purchaser in respect of the Overpaid VAT.
7.7 On Completion, the Vendor shall deliver to the Purchaser the VAT Records
and no application will be made pursuant to section 49(1)(b) VATA 1994 for
the Vendor to retain the VAT Records.
7.8 The Vendor shall (and will procure that each of its relevant associates
(within the meaning of paragraph 3(7) schedule 10 VATA) shall) not on or
after the date of this Agreement make any election pursuant to paragraph 2
schedule 10 VATA in respect of any of the Assets or the Property.
7.9 No application shall be made to transfer the Vendor's VAT registration to
the Purchaser.
8 DEBTORS AND CREDITORS
8.1 The Purchaser will be responsible for and will discharge the Creditors in
full in accordance with their credit terms and will indemnify the Vendor in
full and keep it fully indemnified against any liability if may suffer or
incur as a result of its failure to discharge the same.
8.2 If the Collection Amount is less than the amount of the Debts the Purchaser
shall forthwith notify the Vendor of the amount of the shortfall and the
Vendor shall pay to the Purchaser the difference between the Collection
Amount and the amount of the Debts. Any such payment shall be made on the
day falling after the Final Date. Provided always that if on that date the
Collection Amount or if the amount of the Debts has not been agreed or
deemed to be agreed between the Vendor and the Purchaser or determined by
the Independent Accountants then the Vendor on such day shall:
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(a) pay to the Purchaser on account of such payment an amount equal to the
portion thereof which is not in dispute;
(b) pay to the Purchaser's Solicitors for crediting to a deposit account,
in the names of the Vendor's Solicitors and the Purchaser's Solicitors
("the Joint Account") the amount notified by the Purchaser to the
Vendor as the amount of the said shortfall less the amount paid by the
Vendor to the Purchaser pursuant to sub-paragraph (a) above.
On agreement and/or determination of the aggregate amount realised by the
Debts during the Collection Period pursuant to the provisions of this
clause 8.2 there shall be released to the Purchaser out of the principal
sum standing to the credit of the Joint Account an amount equal to the
amount by which the aggregate amount realised by the Debts during the
Collection Period falls short of the Debts less the amount of any payment
pursuant to sub-paragraph (a) above together with the interest accrued on
such proportion of the principal sum and the balance of the principal sum
standing to the credit of the Joint Account shall be released to the Vendor
together with the interest accrued thereon.
8.3 If the Collection Amount is more than the amount of the Debts the Purchaser
shall pay to the Vendor the difference between the amount calculated as
aforesaid and the amount of the Debts.
8.4 In this clause 8:
(a) "Collection Amount" means the aggregate of the amounts received by the
Purchaser in respect of the Debts during the Collection Period less
the proper and reasonable legal costs incurred by the Purchaser in
connection with any legal proceedings to collect any such Debt and for
seeking advice on whether legal proceedings will have a reasonable
chance of success provided that all cheques and other bills received
but uncleared at the close of business on the Final Date shall be
included at their full face value unless they are dishonoured on first
presentation and all cheques and other bills received before the close
of business on the Final Date but dated after that date shall not be
included;
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(b) "Collection Period" means the period beginning on the Completion Date
and ending on the Final Date;
(c) "Final Date" means the date falling 100 days after the Completion
Date.
8.5 The Purchaser undertakes that during the Collection Period:-
(a) it will use all reasonable endeavours to collect the Debts (but so
that it will not be obliged to take any legal proceedings with a view
to such collection unless it has received legal advice that such
proceedings have a reasonable chance of success); and
(b) it will not assign dispose of or otherwise charge or hypothecate any
of the Debts otherwise than by way of floating charge.
8.6 In the event that the Collection Amount is less than the amount of the
Debts the Purchaser shall forthwith upon the making of the payments
required to be made in accordance with the provisions of clause 8.2:
(a) assign free of all liens charges and encumbrances (save those existing
at Completion) the Debts outstanding at the close of business on the
Final Date to the Vendor upon the terms that the Vendor shall have no
claim against the Purchaser (other than in respect of the obligations
of the Purchaser under this clause 8.6) in the event that any of the
Debts so assigned shall be bad in whole or in part or otherwise
uncollectable;
(b) promptly execute and deliver to the Vendor individual assignments
(prepared by the Vendor) of such Debts in such form and at such times
as the Vendor may from time to time request and at the Vendor's
expense; (c) receive as trustee for and account at monthly intervals
to the Vendor in full in respect of any of the Debts assigned to the
Vendor pursuant to sub-paragraph (a) of this clause 8.6.
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8.7 If the Vendor shall not request the Purchaser pursuant to sub-paragraph (b)
of clause 8.6 to deliver an assignment of any of the Debts the Vendor shall
be entitled (subject to indemnifying the Purchaser to the Purchaser's
reasonable satisfaction against all costs and expenses which the Purchaser
may thereby incur) to continue or to bring legal proceedings in the
Purchaser's name to recover such Debt.
8.8 Any dispute or difference which may arise between the parties in relation
to the provisions of this clause 8 shall be determined mutatis mutandis by
the Independent Accountants in accordance with clauses 4.6 and 4.7.
8.9 Subject to clause 8.10 below the Purchaser will be responsible for and will
discharge the Warranty Claims in accordance with the terms of the Contracts
and will indemnify the Vendor in full and keep it fully indemnified against
any liability it may suffer or incur as a result of its failure to
discharge the same.
8.10 The Vendor will indemnify the Purchaser in full and keep it fully
indemnified to the extent that the Purchaser's liability in respect of the
Warranty Claims exceeds the Warranty Claims Reserve and will pay to the
Purchaser on demand an amount equal to such excess. The liability of the
Vendor in respect of claims under this clause shall not exceed US$ 500,000
minus the Warranty Claims Reserve and the Purchaser shall in the event of
any claim made under this clause provide full details thereof to the Vendor
and in the event that the amount of the claim is not agreed then the matter
shall be referred to the Independent Accountant for determination mutatis
mutandis in accordance with clause 4.6 and 4.7.
8.11 The Vendor will, indemnify the Purchaser in full and keep it fully
indemnified against all costs, losses, expenses, damages, charges,
liabilities, penalties, licence fees whatsoever (including, without
limitation any legal and other professional expenses) which the Purchaser
may incur arising out of:
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(i) any claim made in the period up to and including 1st October 1999 by
DEK or any person claiming rights under them that the Vendor or the
Purchaser in the manufacture or modification of the Products has
infringed any Intellectual Property Rights of DEK or such person
comprised in DEK's patents numbered UK#EP0606928 and US#5,157,438;
(ii) any claim made in the period up to and including 1st October 1999 by
the owner or any person claiming rights under such owner of any Third
Party Software used in the computer systems of the Business that the
Vendor or the Purchaser has infringed any Intellectual Property
comprised in such Third Party Software,
the provisions of Schedule 9 paragraph 9 shall apply to this clause 8.11 as
if set out herein.
8.12 The Purchaser will use its reasonable endeavours, for the period referred
to in clause 8.11(i) above, to modify the design of the Products so that
they do not infringe the patents referred to in clause 8.11(i) above,
provided however, that this clause 8.11 shall in no way limit or affect the
liability of the Vendor to indemnify the Purchaser pursuant to clause 8.11
above.
8.13 The Vendor agrees to indemnify and keep indemnified the Purchaser against
all liabilities, actions, proceedings, costs, claims, damages and expenses
which the Purchaser may suffer or incur by reason of the operation of the
SM Tech Executive Pension Scheme (the "SM SCHEME") operated by Scottish
Equitable for Richard Wilshire but this indemnity will not extend to:
(a) employer contributions to the SM Scheme of up to 10% per annum of the
annual basic salary of Richard Wilshire for any period after
Completion; or
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(b) any liability, action, proceedings, costs, claims, damages, or
expenses resulting from any act or omission of the Purchaser or the
Trustees of the SM Scheme after Completion.
9 CONTRACTS AND FINANCE AGREEMENTS
9.1 The Contracts shall be dealt with as follows:
(a) all Contracts which can be assigned by the Vendor without the consent
of any third party shall be assigned to the Purchaser with effect from
the Completion Date;
(b) as from the Completion Date the Vendor shall hold the benefit of such
of the Contracts which cannot be assigned without the consent of a
third party upon trust for the Purchaser and all profit and losses
arising from them shall belong to and be borne by the Purchaser and
the Vendor will at the Purchaser's request and cost give to the
Purchaser all reasonable assistance to enable the Purchaser to enforce
the Contracts;
(c) the Vendor and the Purchaser shall each use their reasonable
endeavours to obtain all necessary consents for the assignment or
novation of each of the Contracts; and
(d) with effect from the Completion Date and subject to the Vendor
performing its obligations under this clause 9 the Purchaser shall
assume the obligations and carry out, complete and discharge all of
the obligations of the Vendor under the Contracts and shall indemnify
the Vendor from all costs, proceedings, actions, losses, charges,
interest, claims and demands arising by reason of the Purchaser's
failure to observe or perform the terms of any of the Contracts after
the Completion Date.
10 EMPLOYEES
10.1 The parties hereby acknowledge that the transaction effected by this
Agreement is a transfer of an undertaking to which the Regulations apply.
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10.2 The contract of employment of each of the Employees shall be transferred to
the Purchaser in accordance with the Regulations with effect from the
Completion Date.
10.3 The Vendor shall be liable for and shall indemnify the Purchaser in respect
of all or any redundancy payments unfair dismissal or other compensation
(whether statutory or contractual) salaries wages commissions remuneration
Tax national insurance contributions damages costs claims deductions or
expenses which may be incurred by the Purchaser as a result of:
(a) anything done before the Completion Date by or in relation to the
Vendor in respect of the Employees or any of their contracts of
employment or being deemed to have been done by or in relation to the
Purchaser by virtue of the Regulations;
(b) any persons other than the Employees being employees of the Vendor
engaged in the Business in such a way that their employment transfers
to the Purchaser pursuant to or by virtue of the Regulations;
(c) the particulars of employment of the Employees set out in Schedule 5
being in any respect inaccurate or incorrect.
10.4 In the event that wages salaries or commissions are due to any of the
Employees after the Completion Date in respect of the period to and
including the Completion Date the same shall be paid by the Purchaser which
shall forthwith on demand be indemnified in respect thereof by the Vendor
except to the extent that such sums are provided for in the Completion
Accounts.
10.5 The Purchaser shall indemnify the Vendor against all claims, compensation,
awards, damages, fines, judgments, expenses and liability whatsoever
incurred by the Vendor in connection with the termination of employment of
any of the Employees after the Completion Date which is incurred by the
Vendor by virtue of such termination save to the extent that any such
claims, compensation, awards, damages, fines, judgments, expenses and
liability arise directly from any failure by the Vendor to comply with its
obligations under regulation 10 of the Regulations.
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10.6 For the period of 3 months following Completion the parties agree to allow
reasonable access to such of their respective employees as the parties
shall agree (acting reasonably) in order to facilitate the preparation of
the Vendor's accounts and the consolidation accounts of the Guarantor's
Group and any accounts of the Business (as the case may be) for the period
ending 31st December 1998. Each party shall pay a fair and reasonable
proportion of all expenses (including payroll, national insurance and PAYE)
incurred by the others in complying with this clause 10.6.
11 REPRESENTATIONS AND WARRANTIES
11.1 In consideration of the Purchaser entering into this Agreement the Vendor
hereby warrants to the Purchaser:
(a) (subject to clause 11.2) in the terms set out in Schedule 6; and
(b) that any statement in Schedule 6 which is qualified as being made "so
far as the Vendor is aware" or "to the best of the knowledge,
information and belief of the Vendor" or any similar expression has
been so qualified after due diligent and careful enquiries by the
Vendor (including enquiry of the executive directors of the Vendor (to
the extent that such persons are employed or engaged in connection
with the Business)).
11.2
(a) The Warranties are qualified to the extent, but only to the extent, of
those matters fully and fairly disclosed in this Agreement or the
Disclosure Letter and for this purpose "fully and fairly disclosed"
means disclosed in such detail as to enable a reasonable purchaser to
make an informed assessment of the size and nature of the matter
concerned;
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(b) Each of the paragraphs in Schedule 6:
(i) shall be construed as a separate and independent representation
and/or warranty; and
(ii) save as expressly otherwise provided in this Agreement, shall not
be limited by reference to any other paragraph in Schedule 6 or
by any other provision of this Agreement;
and the Purchaser shall have a separate claim and right of action in
respect of every Relevant Breach of each such representation or warranty.
11.3 The rights and remedies conferred on the Purchaser under this Agreement are
cumulative and are additional to, and not exclusive of, any rights or
remedies provided by law or otherwise available at any time to the
Purchaser in respect of any Relevant Breach (including but not limited to
the right to damages for any loss or additional loss suffered by the
Purchaser). All claims by the Purchaser for damages or compensation in
respect of any Relevant Breach shall be subject to the provisions for the
protection of the Vendor in Schedule 9.
11.4
(a) The Purchaser's right or ability to claim damages, compensation or
other relief in respect of any Relevant Breach shall not be affected
or limited, and the amount recoverable shall not be reduced, on the
grounds that the Purchaser may before Completion have had constructive
or implied knowledge of the matter giving rise to the claim; and
(b) Without prejudice to the generality of sub-clause 11.4(a) the rights
and remedies of the Purchaser shall not be affected or limited in any
way by any investigation made by or on behalf of the Purchaser into
the Business or any report on the Business prepared at the instance of
or made available to the Purchaser prior to Completion.
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11.5 The Vendor undertakes to indemnify the Purchaser against any costs
(including legal costs on an indemnity basis), expenses and other
liabilities (together with any VAT thereon which is not recoverable by the
Purchaser) which the Purchaser may reasonably incur, either before or after
the commencement of any action, in connection with:
(a) the settlement of any claim by the Purchaser that there has been a
Relevant Breach; or
(b) any legal proceedings in which the Purchaser claims that there has
been a Relevant Breach and in which judgement is given for the
Purchaser; or
(c) the enforcement of any such settlement or judgement.
11.6 The Warranties shall not in any respect be extinguished or affected by
Completion.
11.7 In respect of any relevant claim (as defined in Schedule 9) made by the
Purchaser, the Purchaser shall be entitled to make a Set Off Claim in
respect of any Set Off Amount by serving a Set Off Notice on the Vendor,
the Guarantor, the Vendor's Solicitors and the Purchaser's Solicitors
specifying the Set Off Amount at the same time as it gives notice of the
relevant claim pursuant to Schedule 9 on or before 12 months from
Completion.
11.8 If the Purchaser serves a Set Off Notice in accordance with clause 11.7 the
Set Off Amount specified in the Set Off Notice shall be retained by the
Purchaser out of the Retention Sum until the relevant claim to which that
Set Off Notice relates has been settled, agreed or adjudicated and the
amount of the Retention Sum then payable to the Vendor in accordance with
clause 3.5 shall be reduced pending the settlement agreement or
adjudication of the relevant claim accordingly on a $1 for $1 basis.
11.9 The Vendor may, within 60 days following receipt of a Set Off Notice
require by notice in writing to the Purchaser, that the Purchaser shall
procure that the Purchaser's Solicitors instruct a counsel of not less than
ten years' call to determine by way of a written opinion as at the date of
service of the Set Off Notice:
(a) whether a relevant claim has been made in accordance with this
Agreement;
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(b) whether the relevant claim giving rise to or comprised in the Set Off
Claim is one in respect of which a prima facie case can be
established; and
(c) what part of the Set Off Amount properly equals the value of the
relevant claim,
within 15 business days after receipt by him of instructions from the
Purchaser's Solicitors. The costs of such counsel's determination shall be
borne as to half by the Purchaser and half by the Vendor.
11.10 The Purchaser shall be entitled to retain from the Retention Sum (and
forthwith upon such agreement or adjudication) any Set Off Amount (and the
Retention Sum shall be permanently reduced accordingly) to the extent
that:
(a) the relevant claim to which such Set Off Amount relates is agreed in
writing between the parties to be due to the Purchaser; or
(b) final judgement (which for the purposes of this clause 11.10 shall
mean a judgement which is not subject to appeal or has not been
appealed within the time permitted) is given in favour of the
Purchaser in respect of the relevant claim to which such Set Off
Amount relates.
11.11 If it is determined in accordance with clause 11.9 that either a relevant
claim has not been made in accordance with this Agreement or is not one in
respect of which a prima facie case can be established or that the Set Off
Amount exceeds the value of the relevant claim, then:
(a) if such determination occurs before the first anniversary of
Completion, the Purchaser shall no longer be entitled to retain in
the Retention Sum the Set Off Amount in respect of that Set Off
Claim (but without prejudice to its right to have such sum retained
in respect of any other Set Off Claim) or
(b) if such determination occurs on or after the first anniversary of
Completion, the Set Off Amount which relates to that Set Off Claim,
shall be paid forthwith to the Vendor together with interest accrued
on such sum since the first anniversary of Completion;
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and the Vendor and Purchaser shall forthwith give instructions to this
effect to their respective Solicitors and in so doing shall deliver to them
a copy of counsel's opinion.
11.12 In the event that:
(a) a relevant claim being the subject of a Set Off Claim or any part of
that Claim is agreed in writing between the parties not to be due to
the Purchaser; or
(b) legal proceedings in respect of any relevant claim being the subject
of a Set Off Claim (which is not agreed in writing between the
parties) are not issued and served on the Vendor before 1st April 2001
or, if earlier, within six months of notice thereof first being given
to the Vendor; or
(c) final judgement (which for the purposes of this clause 11.12 shall
mean a judgement which is not subject to appeal or has not been
appealed within the time permitted) is given in favour of the Vendor
in respect of that claim
then:
(A) if such event occurs before the first anniversary of Completion,
the Purchaser shall no longer be entitled to retain in the
Retention Sum that part of the Set Off Amount which relates to
that Set Off Claim which is referable to such event (but without
prejudice to its right to have such sum retained in respect of
any other Set Off Claim); and
(B) if such event occurs on or after the first anniversary of
Completion, that part of the Set-Off Amount which relates to that
Set Off Claim which is referable to such event, shall be paid
forthwith to the Vendor from the Retention Sum together with
interest accrued on such sum since the first anniversary of
Completion;
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and the Vendor and the Purchaser shall forthwith give instructions to
this effect to their respective solicitors.
11.13 The parties acknowledge that the purpose of this clause 11 is to determine
the basis on which funds are to be held in and/or released from the
Retention Sum and for the avoidance of doubt any retention or payment made
or determination given in accordance with this clause 11 (other than
clauses 11.10(a), 11.10(b) 11.12(a) or 11.12(c)) shall be without
prejudice to the rights and remedies of the parties in respect of the
claim or claims in relation to which any retention or payment is made or
determination given.
12 NAMES
12.1 The Vendor shall at Completion procure:
(a) that a resolution be passed changing its name to a name which does
not include the Business Names or any other name likely to cause
confusion therewith or which is phonetically similar and that such
resolution shall forthwith be submitted to the Registrar of
Companies together with the appropriate fee; and
(b) that the Business Names or any similar phrase shall no longer be
used by the Vendor as a corporate, business or trading name.
13 RESTRICTIVE COVENANTS
13.1 Subject to the provisions of this Agreement and the OEM Supply Agreement
the Guarantor hereby undertakes with the Purchaser on behalf of itself and
each member of its Group that without the prior consent in writing of the
Purchaser (such consent not to be unreasonably withheld) it will not and
will procure that each member of its Group does not directly or
indirectly, whether by itself or their respective employees or agents and
whether on its own behalf or on behalf of any other person, firm or
company or otherwise howsoever, for the period specified in clause 13.2:
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(a) carry on, be employed or otherwise engaged, concerned or interested
in any capacity (whether for reward or otherwise) in, provide any
technical, commercial or professional advice to, or in any way
assist any business which is or is about to be engaged in the
manufacture or production of the Restricted Products or any of them
or the supply of the Restricted Services or any of them except for
field service, technical support and supply of spare parts in the
Prohibited Area in competition with the Business;
(b) solicit or entice away or endeavour to solicit or entice away from
the Business any person employed or otherwise engaged in connection
with the Business on the Completion Date, whether or not that person
would commit any breach of his contract of employment by reason of
his leaving the service of the Purchaser following Completion.
13.2 The restrictive covenants contained in clause 13.1 shall apply to the
Vendor the Guarantor and any member of the Guarantor's Group until the
earliest of:
(a) the second anniversary of the Completion Date;
(b) such date as the Purchaser may deliver notice to the Guarantor
terminating the OEM Supply Agreement or shall fail to materially
comply with its material obligations thereunder; and
(c) (in respect of a particular Restricted Product) the Purchaser
ceasing to manufacture the relevant Restricted Product which shall
thereon cease to be a Restricted Product for the purposes of this
clause 13.
13.3 The Vendor hereby undertakes with the Purchaser that it will not at any
time after Completion directly or indirectly, whether by itself, its
employees or agents or otherwise howsoever:
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(a) engage in any trade or business or be associated with any person
firm or company engaged in any trade or business using the Business
Names or any trade name used in the Business prior to Completion or
any name incorporating the Business Names or such trade name or any
similar name or names or any colourable imitation thereof;
(b) in the course of carrying on any trade or business, claim, represent
or otherwise indicate any present association with the Business or,
for the purpose of obtaining or retaining any business or custom,
claim, represent or otherwise indicate any past association with the
Business;
(c) without the consent of the Purchaser use, whether on its own behalf
or on behalf of any third party, or divulge to any third party, any
of the Confidential Information.
13.4 Subject to clause 13.5 the Vendor and Guarantor undertake with the
Purchaser that, if the Vendor, the Guarantor or any other Group Company
shall have obtained any of the Confidential Information from any third
party under an agreement including any restriction on disclosure known to
it, neither the Vendor, the Guarantor or any other Group Company will at
any time without the consent of the Purchaser infringe that restriction.
13.5 The restrictions in sub-clause 13.3(c) shall not apply:
(a) in respect of any of the Confidential Information which is in or
becomes part of the public domain, other than through a breach of
the obligations of confidentiality set out in this Agreement; or
(b) to the extent that the Vendor, the Guarantor or any member of the
Guarantor's Group is required to disclose Confidential Information
by any applicable law, governmental order, decree, regulation,
licence or rule or pursuant to the regulations of any securities
exchange or regulatory or governmental body to which it is subject.
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13.6 The Vendor and the Guarantor (on behalf of itself and each member of the
Guarantor's Group) agree with the Purchaser that the restrictive covenants
in clauses 13.1 to 13.4 inclusive are reasonable and necessary for the
protection of the value of the Business and the Assets and that, having
regard to that fact, those covenants do not work harshly on them.
13.7 The Vendor and the Guarantor (on behalf of itself and each member of the
Guarantor's Group) hereby undertake to the Purchaser that they will at the
request and cost of the Purchaser enter into a direct agreement or
undertaking with any member of the Purchaser's Group carrying on the
Business from time to time whereby they will accept restrictions and
provisions corresponding to the restrictions and provisions contained in
clauses 13.1 to 13.6 inclusive (or such of them as may be appropriate in
the circumstances) in relation to such products and services and such area
and for such period as such company may reasonably require for the
protection of its legitimate interests.
13.8 The Vendor and Guarantor acknowledge and agree that in addition to all
other remedies the Purchaser shall be entitled to seek injunctive or other
interim or equitable relief, including damages (or their equivalent in any
jurisdiction), which may be appropriate in the event of any breach or
anticipatory breach of this clause
14 APPORTIONMENTS
14.1 All outgoings relating to or payable in respect of the Business, the
Property or any of the other Assets up to and including the Completion
Date shall be borne by the Vendor and as from the Completion Date shall be
borne by the Purchaser and all payments receivable in respect of the
Business, the Property or any of the other Assets up to and including the
Completion Date shall belong to and be payable to the Vendor and as from
the Completion Date shall belong to and be payable to the Purchaser. Such
outgoings and payments receivable shall if necessary be apportioned
accordingly and shall be evidenced in the Completion Accounts.
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14.2 Payment of any amount apportioned pursuant to clause 14.1 shall be made
within fourteen days after its agreement or determination in accordance
with the provisions of clause 4 and shall form part of the calculation of
Net Asset Value for the purposes of clause 5.
15 CAPITAL ALLOWANCES
15.1 The Vendor will on demand by the Purchaser sign and submit to the Inland
Revenue any claims or elections which the Purchaser reasonably requires in
order to enable the Purchaser to claim capital allowances in respect of
the Purchaser's acquisition of the Assets including (without limitation):
(a) any elections in respect of Assets which are fixtures for the
purposes of Capital Allowances Act 1990; and/or
(b) any elections in respect of the apportionment of the purchase price
payable under this Agreement.
16 GUARANTEE
16.1 In consideration of the Purchaser entering into this Agreement and the sum
of (Pound Sign) 1 (receipt of which is hereby acknowledged) the Guarantor
unconditionally guarantees to the Purchaser as principal obligor full,
prompt and complete performance by the Vendor of all its obligations and
covenants under this Agreement (as varied, extended or renewed from time
to time), including without limitation the due and punctual payment of all
sums payable now or in the future to the Purchaser by the Vendor and the
performance of all covenants under this Agreement when and as the same
shall become due for payment or performance (as the case may be).
Accordingly, the Guarantor undertakes with the Purchaser that if and each
time that the Vendor shall be in default in the payment of any sum
whatsoever or the performance of any obligations under this Agreement or
in breach of any of the Warranties the Guarantor will on demand make good
the default and pay all sums which may be payable and do all things
required as if the Guarantor instead of the Vendor were expressed to be
the primary obligor warrantor or covenantor, together with interest
thereon at the rate of 1% per annum above the base rate of Barclays Bank
Plc for the time being in force from the date on which such sums become
payable by the Vendor hereunder until payment of such sums in full.
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16.2 This guarantee is a continuing guarantee and shall remain in force until
all obligations and covenants of the Vendor under this Agreement have been
discharged and performed in full.
16.3 The obligations of the Guarantor hereunder shall not be affected by any
act, omission, matter or thing which, but for this clause 16.3, might
operate to release or otherwise exonerate the Guarantor from its
obligations warranties or covenants hereunder or affect such obligations
or covenants including but not limited to:
(a) any time or indulgence granted to or composition with the Vendor;
(b) the taking, variation, compromise, renewal or release of or refusal
or neglect to perfect or enforce any right or remedies against the
Vendor;
(c) any legal limitation, disability, incapacity or other circumstances
relating to the Vendor or any other person or any amendment to or
variation of the terms of this Agreement or any other document or
security; or
(d) any irregularity, unenforceability or invalidity of any obligations
of the Vendor under this Agreement with the intent that the
Guarantor's obligations under this guarantee shall remain in full
force and this guarantee shall be construed accordingly as if there
were no such irregularity, unenforceability or invalidity.
16.4 The Guarantor waives any right it may have of first requiring the
Purchaser to proceed against or enforce any guarantee or security of or
claim payment from the Vendor.
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17 CONTINUING EFFECT OF THIS AGREEMENT
17.1 No restriction in this Agreement or in any other agreement or arrangement
of which it forms part which is registrable under the Restrictive Trade
Practices Act 1976 or 1977 ("the Acts") shall come into effect until the
day after particulars of this Agreement and any of the other agreement or
arrangement of which it forms part have been furnished to the Director
General of Fair Trading in accordance with the Acts, unless this Agreement
and any other agreement or arrangement of which it forms part falls within
any of the classes of non-notifiable agreements established by statutory
instrument under the Acts.
17.2 Subject to clause 17.1 all of the provisions of this Agreement shall so
far as they are capable of being performed or observed continue in full
force and effect notwithstanding Completion except in respect of those
matters then already performed and Completion shall not constitute a
waiver of any of the Purchaser's rights in relation to this Agreement.
18 ANNOUNCEMENTS
18.1 No announcements shall be made by or on behalf of any of the parties
hereto and relating to the sale and purchase hereunder without the prior
written approval of the other parties whose consent shall not unreasonably
be withheld. For the avoidance of doubt it shall be unreasonable for any
party to withhold its consent to any announcement where such announcement
is required by law or the rules of a stock exchange.
19 RELEASES, WAIVERS ETC., BY THE PURCHASER
19.1 The Purchaser may, in its discretion, in whole or in part release,
compound or compromise, or waive its rights or grant time or indulgence in
respect of, any liability to it under this Agreement.
19.2 Subject to clause 19.1, neither the single or partial exercise or
temporary or partial waiver by the Purchaser of any right, nor the failure
by the Purchaser to exercise in whole or in part any right or to insist on
the strict performance of any provision of this Agreement, nor the
discontinuance, abandonment or adverse determination of any proceedings
taken by the Purchaser to enforce any right or any such provision shall
(except for the period or to the extent covered by any such temporary or
partial waiver) operate as a waiver of, or preclude any exercise or
enforcement or (as the case may be) further or other exercise or
enforcement by the Purchaser of, that or any other right or provision.
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19.3 All references in clause 19.2 to:
(a) any right shall include any power, right or remedy conferred by this
Agreement on, or provided by law or otherwise available to, the
Purchaser; and
(b) any failure to do something shall include any delay in doing it.
19.4 The giving by the Purchaser of any consent to any act which by the terms
of this Agreement requires such consent shall not prejudice the right of
the Purchaser to withhold or give consent to the doing of any similar act.
20 NOTICES
20.1 Except as otherwise provided in this Agreement, every notice under this
Agreement shall be in writing and shall be deemed to be duly given if it
(or the envelope containing it) identifies the party to whom it is
intended to be given as the addressee and:
(a) it is delivered by being handed personally to the addressee (or,
where the addressee is a corporation, any one of its directors or
its secretary); or
(b) it is delivered by being left in a letter box or other appropriate
place for the receipt of letters at the addressee's authorised
address; or
(c) the envelope containing the notice is properly addressed to the
addressee at his authorised address and duly posted by the recorded
delivery service (or by airmail registered post if overseas) or the
notice is duly transmitted to that address by facsimile
transmission;
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and, in proving the giving or service of such notice, it shall be
conclusive evidence to prove that the notice was duly given within
the meaning of this clause 20.1.
20.2 A notice sent by post (or the envelope containing it) shall not be deemed
to be duly posted for the purposes of sub-clause 20.1(c) unless it is put
into the post properly stamped or with all postal or other charges in
respect of it otherwise prepaid.
20.3 For the purposes of this clause 20 the authorised address of the Vendor
shall be its registered office for the time being or (in the case of
notices transmitted by facsimile transmission) its facsimile number at
that address and the authorised address of the Purchaser shall be the
address of its registered office for the time being or (in the case of
notices transmitted by facsimile transmission) its facsimile number at
that address.
20.4 Any notice duly given within the meaning of clause 20.1 shall be deemed to
have been both given and received:
(a) if it is delivered in accordance with sub-clause 20.1(a) or 20.1(b),
on such delivery;
(b) if it is duly posted or transmitted in accordance with sub-clause
20.1(c) by any of the methods therein specified, on the second (or,
when sent airmail, fifth) business day after the day of posting or
(in the case of a notice transmitted by facsimile transmission) upon
receipt by the sender of the correct transmission report.
20.5 For the purposes of this clause 20 "notice" shall include any request,
demand, instruction, communication or other document.
21 TIME
21.1 Time shall be of the essence of this Agreement as regards any time, date
or period whether as originally fixed or as altered in any manner provided
herein.
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22 ENTIRE AGREEMENT
22.1 This Agreement (together with all documents which are required by its
terms to be entered into by the parties or any of them and any terms of
any other documents which this Agreement expressly preserves and all other
documents which are in the agreed form and are entered into by the parties
or any of them in connection with this Agreement) sets out the entire
agreement and understanding between the parties in connection with the
sale and purchase of the Assets and other matters described in it.
23 ALTERATIONS
23.1 No purported alteration of this Agreement shall be effective unless it is
in writing, refers specifically to this Agreement and is duly executed by
each party hereto.
24 SEVERABILITY
24.1 Each provision of this Agreement is severable and distinct from the
others. The parties intend that every such provision shall be and remain
valid and enforceable to the fullest extent permitted by law. If any such
provision is or at any time becomes to any extent invalid, illegal or
unenforceable under any enactment or rule of law, it shall to that extent
be deemed not to form part of this Agreement but (except to that extent in
the case of that provision) it and all other provisions of this Agreement
shall continue in full force and effect and their validity, legality and
enforceability shall not be thereby affected or impaired, provided that
the operation of this clause would not negate the commercial intent and
purpose of the parties under this Agreement.
24.2 If any provision of this Agreement is illegal or unenforceable as a result
of any time period specified herein being in excess of that permitted by a
regulatory authority, that provision shall take effect with the
substitution of a period acceptable to the relevant regulatory authorities
subject to it not negating the commercial intent of the parties under this
Agreement.
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25 COUNTERPARTS
25.1 This Agreement may be entered into in the form of two or more counterparts
each executed by one or more of the parties but, taken together, executed
by all and, provided that all the parties so enter into the Agreement,
each of the executed counterparts, when duly exchanged or delivered, shall
be deemed to be an original, but, taken together, they shall constitute
one instrument.
26 PAYMENT OF COSTS
26.1 Each of the parties shall be responsible for his or its respective legal
and other costs incurred in relation to the negotiation, preparation and
completion of this Agreement and all ancillary documents.
27 SUCCESSORS AND ASSIGNS
27.1 This Agreement shall be binding on and shall ensure for the benefit of the
successors in title of each party.
27.2 The Agreement may be assigned by the Vendor or the Purchaser with the
prior written consent of the other party (such consent not to be
unreasonably withheld)
28 FURTHER ASSURANCE
28.1 The Vendor shall execute or, so far as it is able, procure that any
necessary third party shall execute all such documents and/or do or, so
far as it is able, procure the doing of such acts and things as the
Purchaser shall after Completion require in order to give effect to this
Agreement and any documents entered into pursuant to it and to give to the
Purchaser the full benefit of all the provisions of this Agreement.
29 APPLICABLE LAW AND SUBMISSION TO JURISDICTION
29.1 This Agreement shall be governed by and construed in accordance with
English law and the parties hereby submit to the non-exclusive
jurisdiction of the High Court of Justice in England for the purpose of
hearing and determining any suit, action or proceedings which may arise
out of or in connection with this Agreement.
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30 ADDRESS FOR SERVICE
30.1 The Vendor and Guarantor hereby irrevocably authorise and appoint the
Vendor's Solicitors (or such other person or persons, being a firm of
solicitors resident in England, as the Vendor and Guarantor may hereafter
as regards itself by notice in writing to all the other parties hereto
from time to time substitute) to accept on their behalf service of all
legal process arising out of or connected with this Agreement.
30.2 The Purchaser hereby irrevocably authorises and appoints the Company
Secretary of Cookson Group plc, The Adelphi, 1-11 John Adam Street, London
WC2N 6HJ (or such other person or persons, being resident in England, as
the Purchaser may hereafter as regards itself by notice in writing to all
the other parties hereto from time to time substitute) to accept on its
behalf service of all legal process arising out of or connected with this
Agreement.
30.3 Service of such process on the person for the time being authorised under
clause 30.1 or 30.2 to accept it on behalf of the relevant appointor shall
be deemed to be service of that process on that appointor.
IN WITNESS whereof this Agreement has been entered into as a Deed the day and
year first above written.
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SCHEDULE 1
THE PROPERTY
Part I
DESCRIPTION
ADDRESS PRESENT USE
- ------- -----------
Middle Farm Barns Light/general industrial
Bridport Road
Fordington
Dorchester
Dorset
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SCHEDULE 2
CONSIDERATION
CONSIDERATION
ASSET ATTRIBUTABLE (POUND SIGN)
- ----- -------------------------
Moveable Equipment* [ ]
Fixed Equipment* [ ]
The benefit of the Contracts 1
The Patents
The Trade Marks
The Registered Designs 1
Intangible Assets 1
The Stock* [ ]
The Debtors* [ ]
Pre-paid expenses (Clause 14.2)* [ ]
----------------
Cash* [ ]
TOTAL ASSETS* [ ]
LESS
ASSUMED LIABILITIES* [ ]
----------------
Purchase Price* [ ]
*each as determined by the Completion Accounts
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SCHEDULE 3
THE EQUIPMENT
PART I
THE FIXED EQUIPMENT
Those items marked with a X on the attached fixed asset register.
PART II
THE MOVEABLE EQUIPMENT
Those other items on the attached fixed asset register.
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SCHEDULE 4
PART A - EXCLUDED ASSETS
1 The Property and any leasehold improvements.
2 Any Tax assets of the Vendor including deferred Tax assets and any claims
for repayment of Tax.
3 The benefit of the agreement between the Vendor (and others) and Mr
Dominique Henry dated 27th January 1995.
4 Goodwill
5 Intellectual Property (other than the Patents, Trade Marks and Registered
Designs)
PART B - EXCLUDED LIABILITIES
1 All liabilities of the Vendor pursuant to an agreement between the Vendor
(and others) and Mr. Dominique Henry dated 27th January 1995.
2 Tax and all Tax creditors.
3 The Financial Indebtedness.
4 Any liability (which liability will include, without limitations, all
losses, costs, claims, expenses and charges including legal and other
professional expenses) in respect of the Property.
5 Any liability of the Vendor pursuant to any oral distribution agreements
entered into by the Vendor.
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SCHEDULE 5
EMPLOYEES
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SCHEDULE 6
THE WARRANTIES
ASSETS
1 The Assets are the absolute legal and beneficial property of the Vendor
free from any lease, hire or hire purchase agreement, agreement for
payment on deferred terms, bill of sale or retention of title claim,
mortgage, charge, lien or other encumbrance whatsoever and are in the
possession or under the control of the Vendor and situate at the Property
and there are no agreements or arrangements restricting the freedom of the
Vendor to transfer the Assets to the Purchaser or otherwise to use or
dispose of the same as it thinks fit.
2 No Asset has been acquired on terms that property therein does not pass
until full payment is made.
3 The Assets comprise all the rights, assets and benefits whatsoever owned
or used for the purposes of operating the Business.
CONDITION
4 The Assets are in a state of good repair and in good condition (taking
into account their age and fair wear and tear excepted) and are regularly
maintained and in particular (but without limitation) all vehicles are
roadworthy and duly licensed for the purposes for which they are used.
ACCOUNTS
5 The Accounts comply with the accounting requirements of the Companies Act
1985 and all other relevant legislation and have been prepared in
accordance with UK generally accepted accounting principles and practices
consistently applied.
6 The Accounts give a true and fair view of the assets liabilities
(including contingent unquantified and disputed liabilities) capital
commitments and state of affairs of the Vendor as at the Accounting Date
and of the profits and losses of the Vendor for the financial period to
which the Accounts relate and in particular (but without limitation) the
Vendor had no liabilities at the Accounting Date which were not included
in the Accounts by way of proper provision or reserve therefor.
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7 The method of valuing stock and work-in-progress in the Accounts was the
same as that adopted in the balance sheets for the two financial periods
of the Vendor immediately preceding the financial period to which the
Accounts relate and no changes in the basis or policies of accounting have
been made by the Vendor in its audited accounts for the two financial
periods up to the Accounting Date.
8 Any slow moving stock has been appropriately and damaged redundant
obsolete or unsaleable stock has been wholly written off.
9 The profits (or losses) of the Vendor for the two accounting periods ended
on the Accounting Date as shown by the audited accounts relating to such
periods and the trend of profits (or losses) thereby shown have not
(except as therein disclosed) to a material extent been affected by any
unusual or non-recurring income or expenditure or by any other factor
known to the Vendor rendering such profits (or losses) for all or any such
period(s) exceptionally high or low.
STOCK
10 No item comprised in the Stock is damaged, redundant, obsolete or in poor
condition and all items comprised in the Stock are capable of being sold
in the ordinary course of business in accordance with the Vendor's current
price list without rebate or allowance to a Purchaser.
CONTRACTS
11 There are annexed to the Disclosure Letter true complete and up-to-date
copies of the Finance Agreements and there has been no written amendment
or addition thereto whether express or implied not contained in such
documentation.
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12 None of the Contracts:
12.1 other than the Finance Agreements is unlikely to have been fully performed
in accordance with its terms more than six months after the date on which
it was entered into or undertaken; or
12.2 is incapable of termination by the Vendor in accordance with its terms
without payment of compensation or damages by three months' notice or
less; or
12.3 is likely to result in a loss to the Vendor upon completion of performance
or fulfilment of the Vendor's obligations thereunder; or
12.4 is incapable of being performed or fulfilled by the Vendor in accordance
with its terms without undue or unusual expenditure of money effort or
personnel; or
12.5 involves the supply to or by the Vendor of goods at fixed prices more than
three months from the date of order; or
12.6 involves payment by the Vendor by reference to fluctuations in the index
of retail prices or any other index; or
12.7 involves an aggregate expenditure by the Vendor of more than (Pound Sign)
10,000; or
12.8 is dependant upon the guarantee or security of any person; or
12.9 is incapable of assignment by the Vendor without the consent of any other
party; or
12.10 is with any person connected with (within the meaning of section 839 of
the Income and Corporation Taxes Act 1988) the Vendor or any member of the
Vendor's Group or any director or shareholder of the Vendor; or
12.11 involves any commitment to obtain or supply goods or services exclusively
from or to any person or otherwise restricts the manner or geographical
area in which the Business may be operated; or
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12.12 involves or is likely to involve the purchase or supply of goods or
services the aggregate cost or sales value of which will represent in
excess of 15% of the turnover for the preceding financial year of the
Business ending on the Accounting Date; or
12.13 is outside the ordinary course of the Business or entered into otherwise
than at arm's length or involves the supply by or to the Vendor of goods
or services other than at full market value.
13 Neither the Vendor nor so far as the Vendor is aware is any third party in
breach of any of its obligations under the Contracts and so far as the
Vendor is aware there are no circumstances likely to give rise to any such
breach;
14 In so far as the Vendor is aware no event or omission has occurred which
would entitle the Vendor or any third party to terminate prematurely any
of the Contracts.
CONDUCT OF BUSINESS
15 The Vendor has carried on the Business exclusively for a period of at
least two years preceding the Completion Date and the Business has at all
times been carried on in the ordinary and normal course.
16 Since the Accounting Date:
16.1 there has been no material adverse change in the financial or trading
position or prospects of the Business;
16.2 the Vendor has not disposed of any assets used in connection with the
Business other than in the normal course of trading;
16.3 the Vendor has not received notice that any customer or supplier of the
Business representing more than 5% of the turnover of the Business has
ceased to trade or materially reduced the level of its trading with the
Business;
16.4 As at the Completion Date there are no amounts owing by the Vendor which
have been due for more than ten weeks;
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17 The Vendor has obtained all licences permissions and consents required for
the carrying on of the Business and such licences permissions and consents
are in so far as the Vendor is aware in full force and effect and the
Vendor is not in so far as the Vendor is aware in breach of any of their
terms or conditions. There are disclosed in the Disclosure Letter details
of all such licences permissions and consents and in so far as the Vendor
is aware there is no reason why any of the same may be revoked or not
renewed in the ordinary course or should not be capable of being
transferred to or obtained by the Purchaser without the necessity for any
special arrangements.
LITIGATION, OFFENCES AND PROCESSES
18 Apart from normal debt collection by the Vendor there is no litigation,
arbitration, prosecution or other legal proceedings relating to the
Business or the Assets outstanding, or so far as the Vendor is aware,
pending or threatened and the Vendor is not aware of any facts or
circumstances likely to give rise to any such proceedings.
19 No injunction has been granted against the Vendor in connection with the
Business and the Vendor has given no undertaking to any court or to any
third party arising out of any legal proceedings relating to the Business
or the Assets.
20 No order has been made or petition served or resolution passed for the
winding up of the Vendor nor has any person threatened to present such a
petition or convened or threatened to convene a meeting of the Vendor to
consider a resolution to wind up the Vendor or any other resolution; no
distress execution or other process has been levied on any of the Assets
nor has any person except in the course of debt collection threatened any
such distress execution or other process; no person has appointed or
threatened to appoint a receiver of the Vendor the Business or the Assets
or any part thereof; there is no unfulfilled or unsatisfied judgement or
court order outstanding against the Vendor.
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21 In so far as the Vendor is aware, no investigations or enquiries by or on
behalf of any governmental or other body in respect of the Vendor the
Business or any of the Assets are pending or in existence.
DEFECTIVE PRODUCTS OR SERVICES
22 The Vendor has not manufactured or sold any products or supplied any
services work or materials in connection with the Business which were or
are or will become faulty or defective in a manner not covered by the
product warranty provisions of the Contracts and there are so far as the
Vendor is aware no circumstances existing which may lead to a claim for
defective goods services work or materials or for delays in delivery or
completion of contracts or for deficiencies of design or performance which
are not Warranty Claims for the purposes of the Agreement.
EMPLOYEES
23 All of the Employees are employed by the Vendor in connection with the
Business and no other person other than the Employees is now or has been
within the six months preceding the Completion Date employed or engaged as
an independent contractor in connection with the Business.
24 The details of the Employees contained in Schedule 5 are true complete and
accurate and there are disclosed in the Disclosure Letter full and
accurate particulars of all material terms and conditions of employment of
and all remuneration payable and other benefits provided to the Employees
or their dependants or to which they are entitled (whether now or in the
future and whether legally enforceable or not) including (without
limitation) details of all profit sharing, incentive, bonus, commission or
other similar arrangements which relate to the Employees.
25 There is no outstanding commitment (whether legally binding or not) to
increase the remuneration payable or other benefits provided to any of the
Employees and no negotiations for any such increase are current.
58
<PAGE>
26 The employment or engagement of all of the Employees may be terminated by
not more than one month's notice given at any time without liability for
payment of compensation or damages (other than compensation payable by
statute) and none of the Employees has given or received notice
terminating his employment.
27 None of the Employees so far as the Vendor is aware are members of a trade
union or any similar organisation and there is no recognised trade union,
closed shop or collective agreement of any kind relating to the Employees.
28 No dispute is subsisting between the Vendor and any Employee or former
employee of the Vendor and there are no present circumstances of which the
Vendor is aware which are likely to give rise to such a dispute. There
have been no strikes, work-to-rules, go-slows or other industrial action
by any of the Employees or former employees of the Vendor during the
period of two years immediately preceding the Completion Date.
29 The Vendor has in relation to each of the Employees complied with:
29.1 all obligations imposed on it by all statutes regulations and codes of
conduct and practice relevant to the relations between it and the
Employees or any trade union and has maintained current adequate and
suitable records regarding the service and terms and conditions of
employment of each of the Employees;
29.2 all collective agreements recognition agreements and customs and practices
for the time being dealing with such relations or the conditions of
service of the Employees; and
29.3 All relevant orders and awards made under any relevant statute regulation
or code of conduct and practice affecting the conditions of service of the
Employees;
29.4 All recommendations made by the Advisory Conciliation and Arbitration
Service and all awards and declarations made by the Central Arbitration
Committee relating to the Business.
59
<PAGE>
BUSINESS NAME
30 The Business is not carried on and has not in the past three years been
carried on under any name other than the Business Name.
31 No person other than the Vendor has any rights in relation to the Business
Name or has required the Vendor to refrain from using such name or
attempted to prevent such use by the Vendor.
INTELLECTUAL PROPERTY
32 The Vendor has disclosed in writing to the Purchaser full details of all
the Intellectual Property and in so far as the Vendor is aware no
Intellectual Property Rights other than the Intellectual Property are
required in order to use all processes employed in the Business and to
manufacture, use and sell the Products or otherwise to carry on the
Business.
33 All the Intellectual Property Rights comprising the Intellectual Property
are legally and beneficially owned by the Vendor and all renewal or other
fees required to be paid to maintain any of the Intellectual Property
Rights that are registered are in full force and effect have been paid.
34 There are not outstanding any contracts under which the Business is
granted by or grants to any third party any Intellectual Property Rights
or licences to manufacture use or sell any product or process and except
in the ordinary course of business there has not been disclosed to any
person other than the Purchaser and the Guarantor any details of the
Intellectual Property or the Intangible Assets.
35 The conduct of the Business does not and is not in so far as the Vendor is
aware likely to infringe the Intellectual Property Rights of any other
person firm or company, nor has the Vendor become liable to make any
payment of any royalty or of any sum in the nature of any royalty to any
such person firm or company in relation to the Business.
36 In so far as the Vendor is aware, there is no unauthorised use or
infringement by any person of any Intellectual Property.
60
<PAGE>
37 Save in the ordinary course of business or with its employees the Vendor
has not entered into any confidentiality agreement nor is subject to any
duty which restricts the free use or disclosure of any Confidential
Information.
INSURANCE
38 Copies of all the insurances maintained in respect of the Business are
attached to the Disclosure Letter.
39 Such insurances are in full force and effect and the Vendor has paid all
premiums falling due in respect thereof.
40 In so far as the Vendor is aware there are no circumstances which would or
might lead to any liability under such insurances being avoided by the
insurers or the premiums thereunder being increased.
41 There is no claim outstanding under any policy of insurance of or in
connection with the Business and in so far as the Vendor is aware there
are no circumstances likely to give rise to such a claim.
42 No insurer has refused to insure any of the Assets or has imposed
conditions for such insurance whether by the imposition of increased
premiums or otherwise.
IT SYSTEMS
43 Accurate copies of all the agreements held by the Business to use,
support, maintain and/or develop all components of the Systems (including
all licences, development agreements, software maintenance and support
agreements, hardware maintenance agreements, source code escrow agreements
and disaster recovery agreements) are attached to the Disclosure Letter.
44 The Vendor has not breached any of its obligations under any of the
agreements referred to in paragraph 48, those agreements all remain in
full force and effect as at completion and no notice has been served by
any party to terminate any of those agreements.
61
<PAGE>
45 In so far as the Vendor is aware, the use of the Systems by the Business
does not, and the continued use of the Systems by the Business after
Completion will not, infringe the Intellectual Property Rights of any
third party.
46 The Vendor has exclusive control of the operation of the Systems and of
the storage, processing and retrieval of all data stored on the Systems
and any Intellectual Property Rights in such data are owned solely by the
Vendor.
47 All Intellectual Property Rights in the Developed Software are owned by
the Vendor and the Vendor has in its possession an up-to-date, useable and
complete copy of the source code for all Developed Software together with
copies of all programmer's commentaries and technical documentation
relating thereto.
48 The Systems have been properly maintained in accordance with the
maintenance agreements attached to the Disclosure Letter.
49 If any person providing maintenance or support services for the Third
Party Software ceases or is unable to do so by reason of breach or
insolvency on the part of such provider the Vendor has all necessary
rights to obtain the source code to the relevant software and all related
technical and other information free of charge that in so far as the
Vendor is aware are required to maintain and support that software
together with the right to use, or to allow a third party to use, the same
for the purpose of carrying out such maintenance and support.
50 The Vendor has copies of all user manuals, technical documentation and any
other documentation required to operate, maintain and support the Systems
and is fully licensed to use the same for those purposes.
51 There are in place prudent procedures to ensure internal and external
security of the Systems, including procedures for taking and storing
on-site back-up copies of computer programs and data, for preventing
introduction of viruses into the Systems and for the protection of
security of data stored on the Systems.
52 All the Products are, Year 2000 Compliant.
62
<PAGE>
53 The Systems have not been used to hold or process data in any manner that
contravenes the Data Protection Act 1984.
BOOKS AND RECORDS
54 All the books of account, ledgers and financial and other records of
whatsoever kind which are to be delivered to the Purchaser in accordance
with this Agreement:
54.1 are held or stored under the exclusive ownership and control of the
Vendor; and
54.2 are fully properly and accurately made up kept and completed in all
respects; and
54.3 record all matters required to be entered therein; and
54.4 do not contain or reflect any material inaccuracies or discrepancies; and
CAPACITY AND OTHER ACTIVITIES
55 Each of the Vendor and the Guarantor has all requisite corporate power to
enter into and perform this Agreement and the transaction and matters
contemplated hereby and has taken all necessary action to authorise the
entry into and performance of this Agreement and the transactions and
matters contemplated hereby.
56 Each of the obligations expressed to be assumed by the Vendor and the
Guarantor under this Agreement and any agreement hereby contemplated
constitutes a valid and binding obligation on each of the Vendor and the
Guarantor respectively.
57 Neither the Vendor nor any member of the Vendor's Group nor any person
connected with the Vendor nor any member of the Vendor's Group (within the
meaning of Section 839 of the Income and Corporation Taxes Act 1988) has
any interest directly or indirectly in any business other than the
Business which is or is likely to be or become competitive with the
Business (except as the holder for investment only of securities dealt in
on a recognised stock exchange and not exceeding 5% in nominal value of
the securities of that class).
63
<PAGE>
SPECIAL ARRANGEMENTS
58 In so far as the Vendor is aware the Vendor is not nor has it ever been a
party to or in any way connected with any agreement arrangement or
practice in connection with the Business which in any way infringes or
requires notification or registration under the Restrictive Trade
Practices Acts 1956 to 1977 the Fair Trading Act 1973 the Consumer Credit
Act 1974 the Resale Prices Act 1976 the Competition Act 1980 or Articles
85 and 86 of the Treaty of Rome.
59 None of the Assets has been acquired by the Vendor other than by way of an
arm's length transaction for full market value.
60 The Vendor has not given in relation to the Business any guarantee
indemnity warranty or bond or incurred any other similar obligation or
created any security for or in respect of liabilities actual or contingent
of any other person otherwise than in the ordinary course of trading.
61 The Vendor is not nor has it ever been in connection with the Business
party to any joint venture consortium or partnership arrangement or
agreement or a member of any unincorporated association.
TAX
62 The Vendor is a taxable person for VAT purposes and is registered under
schedule 1 VATA 1994 with number586106333.
63 The VAT Records are complete accurate and up-to-date and will be delivered
to the Purchaser on Completion.
64 None of the Assets or the Property is a capital item, the input tax on
which could be subject to adjustment on accordance with the provisions of
Part XV of the Value Added Tax Regulations 1995.
65 None of the Vendor, its relevant associates (within the meaning of
paragraph 3(7) schedule 10 VATA) nor any other person has made or will
make an election under paragraph 2 schedule 10 VATA in respect of any of
the Assets or the Property.
64
<PAGE>
66 The PAYE and NIC Records are complete accurate and up-to-date and will be
delivered to the purchaser on Completion.
67 There is no branch agent office or permanent establishment (within the
meaning of the OECD Model Double Taxation Agreement) of the Business
outside the United Kingdom.
PENSIONS
68 Other than the Group Personal Pension Plan of the Vendor operated by Sun
Life ("the GPPP") and the SM Tech Executive Pension Scheme operated by
Scottish Equitable for Richard Wilshire ("the SM Scheme") there are no
agreements or arrangements, in operation at the date hereof for the
payment of or contribution towards any pensions, allowances, lump sums
or other like benefits on retirement or on death for the benefit of any
of the Employees or for the benefit of dependants of any of the
Employees nor has any proposal to establish any such agreement or
arrangement been announced.
69 Full details of the GPPP have been given to the Purchaser in the form of:
69.1 copies of the current explanatory booklets issued to the Employees who are
members of the GPPP;
69.2 details of the Employees who are members of the GPPP.
70 In relation to the GPPP there are not at the date hereof any contributions
thereto from or in respect of Employees which have fallen due but are
unpaid
71 Each policy issued under the GPPP is approved for the purposes of Chapter
IV of Part XIV of the Taxes Act or is capable of receiving such approval
and the Vendor is not aware of any circumstances which might give the
Inland Revenue reason to withdraw or withhold such approval.
65
<PAGE>
72 The Vendor's annual contribution to the SM Scheme for Richard Wilshire
does not exceed ten percent of his total annual salary and all emoluments.
PROPERTY
73 The Property is not subject to any covenant, agreement, restriction,
reservation or right which would adversely affect the use and occupation
of the Property by the Purchaser pursuant to the Property Licence;
EFFECT OF SALE OF THE BUSINESS AND THE ASSETS
74 The sale of the Business or the Assets under this Agreement will not
conflict with result in a breach of or constitute a default under the
terms of any of the Contracts and to the best of the Vendor's knowledge
information and belief after Completion (whether by reason of an existing
agreement or arrangement or otherwise) and as a result of the proposed
acquisition of the Business and Assets by the Purchaser:
74.1 the Business will not lose the benefit of any right or privilege which it
presently enjoys;
74.2 none of the Employees will terminate or be entitled to terminate his
employment.
ACCURACY OF INFORMATION
75 All information which has been supplied by the Vendor or any of the
Vendor's advisers to the Purchaser or any of the Purchaser's advisers
concerning the Business or the Assets (including without limitation all
information contained or referred to in this Agreement or the Disclosure
Letter) was when supplied true and accurate in all material respects.
66
<PAGE>
SCHEDULE 7
FINANCE AGREEMENTS
VEHICLES
<TABLE>
<CAPTION>
MTHLY START TERMINATION
MAKE REG. CHG DATE TERMS DATE SUPPLIER
/MODEL
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BMW328i N983 SPC 519.00 22/09/95 3 Yrs 21/09/98 Lombard Contract
Hire
Laguna R567 JMA 336.24 31/03/98 3 Yrs 31/03/01 Axus UK
1.8RT
Laguna P527 DJM 415.58 24/10/96 3 Yrs 23/10/99 Axus UK
2.2RT
Mtv Est
Golf P139 DUX 314.20 04/10/96 3 Yrs 04/10/01 Axus
1.8TDI
Megane R569 JMA 327.93 31/03/98 3 Yrs 31/03/01 Axus UK
1.6 Sport
Coupe
TELEPHONE SYSTEM
Norstar Modular 32 + 717.61 17/02/97 7 yrs 17/02/04 British
Various Tele-communications
Plc
FRANKING MACHINE
Postage by phone meter 201.00 15/08/98 5 Yrs 15/08/98 Pitney Bowes
mailing base Finance plc
5kg scale
</TABLE>
67
<PAGE>
SCHEDULE 8
[Not used]
68
<PAGE>
SCHEDULE 9
PROVISIONS FOR THE PROTECTION OF THE VENDOR
1 No claim under or in respect of the Warranties and/or clause 11 hereof (a
"RELEVANT CLAIM") may be made unless written notice detailing a ground for
liability thereunder and providing details of the claim (so far as
possible having regard to the information available to the Purchaser)
shall have been given by the Purchaser to the Vendor before 1st October
2000.
2 Any relevant claim which is validly made within the required period
aforesaid shall (unless previously settled or withdrawn) be deemed to have
been waived or withdrawn in the event that legal proceedings in respect
thereof are not issued and served on the Vendor before 1st April 2001 or,
if earlier, within six months of notice thereof first being given to the
Vendor under paragraph 1 above.
3 Time shall be of the essence for the purposes of the provisions of
paragraphs 1 and 2 of this Schedule.
4 No relevant claim may be made and the Vendor shall not be liable in
respect thereof unless the actual amount payable under any individual
claim exceeds $15,000 and in any event unless and until the aggregate
cumulative liability of the Vendor to make actual payments in respect of
all relevant claims exceeds $225,000 in which case the Vendor shall be
liable for the whole amount of such claim or claims and not just the
excess.
5 The aggregate liability of the Vendor under or in respect of all relevant
claims shall not exceed an amount equal to $14,800,000 less such sums as
the Purchase Price may be reduced pursuant to Clause 5.1.
6 No relevant claim may be made:
6.1 if it would not have arisen but for some voluntary act or omission carried
out after Completion by or on behalf of the Purchaser or any of its
successors in title to the Business or Assets or any of them where such
act or omission is carried out otherwise than in the ordinary course of
the conduct of the Business as carried on at Completion or is required to
be carried out by law or a legally binding commitment created or entered
into before Completion;
69
<PAGE>
6.2 to the extent that the claim arises or is materially increased as a result
of any legislation not in force at Completion;
6.3 if the facts events or circumstances giving rise to the claim or otherwise
relevant thereto are fully and fairly disclosed in this Agreement
(including the Schedules hereto) or in the Disclosure Letter;
6.4 to the extent the Purchaser actually recovers an amount in respect of the
loss or damage the subject of the claim under any manufacturers' or
suppliers' warranty or guarantee or like obligation;
6.5 to the extent that the Purchaser actually recovers an amount in respect of
the loss or damage suffered under the terms of any insurance policy for
the time being in force;
6.6 to the extent that any taxation for which the Purchaser is or may be
liable is actually reduced or extinguished as a result of any such claim
or the liability to which it relates;
6.7 if full provision allowance or reserve is made in the Completion Accounts
specifically in respect of the matter to which the liability relates or if
payment or discharge thereof has been fully taken into account therein;
6.8 in respect of any liability which is contingent, unless and until such
liability becomes actual provided this paragraph shall not prevent claims
being notified in accordance with paragraph 1;
6.9 to the extent that the liability to which the claim relates is or has been
taken into account in calculating the Net Asset Value.
7 No person shall be entitled to recover any sum in respect of any relevant
claim or otherwise retain reimbursement or restitution more than once in
respect of the same loss or damage under this Agreement or otherwise.
70
<PAGE>
8 Nothing contained in this Agreement or in any agreement entered into
pursuant hereto shall be deemed to relieve the Purchaser from any common
law duty to mitigate any loss or damage incurred by it.
9 Without prejudice to the foregoing, the Purchaser undertakes as soon as
reasonably practicable to notify the Vendor in writing of any matter which
will or may give rise to any claim hereunder against the Vendor and that
it shall at all times thereafter disclose in writing to the Vendor all
information and documents in its possession or under its control and
relating to such claim and the matters giving rise thereto. Further it
shall (i) not take any action to avoid dispute resist appeal settle
compromise or defend or otherwise deal with any such claim without the
prior written consent of the Vendor; and (ii) (subject first to being
indemnified and held harmless by the Vendor to its reasonable satisfaction
against all liability which may thereby be incurred) take such action as
the Vendor may reasonably require from time to time to assist it in
dealing with such claim or to enforce any rights it may have to recover
from any third party any sum or benefit the matter of the subject of the
claim or otherwise referable thereto provided that it shall be deemed
reasonable for the Purchaser to refuse to take such action.
10 In the event that payment is made by the Vendor in respect of a claim
hereunder or under any agreement entered into pursuant hereto the Vendor
may require the Purchaser to assign to the Vendor for no consideration all
the rights of the Purchaser (or such relevant member) to recover from any
third party any sums or other benefits in respect of the subject matter of
the claim and in any event if the Purchaser subsequently recovers or
receives from any third party a sum which is referable to the subject
matter of such claim, the Purchaser shall forthwith after the receipt of
such sum reimburse to the Vendor the net amount received after deducting
tax thereon and any costs or expenses reasonably incurred by the Purchaser
in recovering such sum or benefit from the third party concerned.
71
<PAGE>
11 Neither the Purchaser nor the Vendor shall be liable in respect of any
representation warranties covenants agreements undertakings or other
obligations (whether express implied statutory or otherwise) which are not
contained and expressly given or assumed by it in this Agreement or any
agreement entered into pursuant hereto and the Purchaser and the Vendor
hereby confirm that they have not entered into this Agreement or any other
agreement in reliance on any such representation warranty covenant
agreement undertaking or other obligation.
12 Any payment by the Vendor under this Agreement shall, so far as possible,
be deemed to be a reduction of the Purchase Price but nothing in this
paragraph shall limit or exclude liability under this Agreement.
13 Nothing contained in this Agreement or otherwise shall entitle the
Purchaser to rescind or terminate this Agreement (i) after Completion or
(ii) at any time by reason of anything done or omitted to be done or
occurring after the date hereof.
72
<PAGE>
SCHEDULE 10
COMPLETION ACCOUNTS POLICIES
ACCOUNTS INCLUDED IN NET ASSETS CALCULATION PURSUANT TO CLAUSE 4.2
Research and Development
Expenditures for research and development are to be expensed as incurred, except
that prototype machines capable of normal resale should be treated as trading
stock and valued at current costs or have been capitalised and depreciated over
a period of less than 2 years.
Cash and Cash Equivalents
Accounts Receivable
Accounts Receivable consist of trade receivables and intercompany receivables,
net of a provision for bad debts.
Inventories
Inventories consist of materials for use in production, labour and overhead
capitalised to the stage of completion, and stock acquired for re-sale and are
valued at the lower of cost or net realisable value. Inventories are valued net
of an allowance for slow moving and obsolete stock and net of a rotation
provision for finished machines.
Prepaid Expenses
Prepaid expenses consist of amounts disbursed or accrued which are to be
expensed in future periods.
Fixed Assets and Depreciation
All fixed assets are included except for those exceptions noted below.
Depreciation is to be provided based on depreciation policies consistent with
prior SMTech accounting practice.
73
<PAGE>
Other Assets
Accounts Payable
Accounts Payable consist of obligations due to trade suppliers or the Guarantor
only. Any other Intercompany payables are specifically excluded save for those
services set out in Schedule 14.
The Completion Accounts will show Debts and Debtors separately.
Accrued Expenses
Accrued expenses consist of expenses incurred as of the closing date for which
no invoice has been received.
These include but are not limited to:
Warranty provision - an allowance for the warranty obligation outstanding, on
machines shipped prior to the closing date.
Payroll and holiday pay - an accrual for all obligations due to employees as of
the closing date.
Commissions - an accrual for all commissions due to distributors,
representatives and employees as of the closing date.
Other accrued expenses - all other expenses incurred as of the closing date.
Other Liabilities.
Full provision shall be made in the Completion Accounts for all liabilities for
Tax assumed by the Purchaser as part of the Assumed Liabilities, including
(without limitation) income tax under PAYE and National Insurance contributions
(including class 1A contributions) accrued as at the Completion Date.
74
<PAGE>
ACCOUNTS EXCLUDED FROM THE NET WORTH CALCULATION
Debt
All short term and long term debt, both internal and external, is excluded,
including interest on that debt.
Fixed Assets
Excluded fixed assets include:
Leasehold Improvements
Capitalised project expenses
Immovable assets
Taxes
All tax accounts, prepaid taxes or accrued taxes are excluded.
Intangible Assets
All intangible assets are excluded. This definition includes, but is not limited
to Goodwill, Capitalised Patents or Trade Marks, and Investments in
Subsidiaries.
Leases
All leased property is excluded from this calculation. This includes, but is not
limited to leased autos, office equipment, and manufacturing equipment.
Contracts
All contracts, whether they can be considered an asset or a liability, are
excluded from this calculation.
No tax assets including (without limitation) rights to repayment of tax or
deferred tax assets shall be shown or taken into account in the Completion
Accounts.
75
<PAGE>
SCHEDULE 11
Set Off Notice
From: The Purchaser
To: (1) The Vendor
(2) The Guarantor
(3) Wragge & Co
(4) Gouldens
This Notice is issued pursuant to the agreement for the sale of the businesses
and assets of the Vendor between the Purchaser, the Vendor, and the Guarantor,
dated September 30, 1998 ("AGREEMENT").
Terms defined in the Agreement shall, unless the context otherwise requires,
have the same meaning in this letter.
We hereby notify you that the Purchaser now claims an amount of (Pound Sign) [ ]
("A SET OFF AMOUNT") brief details of which are set out in the schedule attached
hereto and that accordingly such Set Off Amount should, in accordance with the
Agreement, be retained by the Purchaser as part of the Retention Sum until
settlement, agreement or adjudication in accordance with the terms of clause 11
of the Agreement.
Yours faithfully,
......................................................
[for and on behalf of the Purchaser]
76
<PAGE>
SCHEDULE 12
DISTRIBUTORSHIP AGREEMENTS
PARTIES DATE
------- ----
1 SMTech Limited and WKK 1st October 1997
Distribution Limited
2 SMTech Limited and Inimar of 1st July 1998
Denmark
3 SMTech Limited and IPT of Ireland 1st July 1998
4 SMTech Limited and PB Technik 25th June 1998
AG
77
<PAGE>
SCHEDULE 13
Part A
Patents
Part B
Trade Marks
Part C
Registered Designs
78
<PAGE>
SCHEDULE 14
INTERCOMPANY SERVICES
79
<PAGE>
SIGNED )
AS A DEED by S M TECH LIMITED )
acting by: ) /s/ THEODORE J. SHONECK
-----------------------
Director
/s/ ANTHONY R. DRURY
-----------------------
Director/Secretary
SIGNED )
AS A DEED by SPEEDLINE )
TECHNOLOGIES INC. )
acting by: ) /s/ SCOTT PEARSON
-----------------------
Authorised signatory
................................
Authorised signatory
SIGNED )
AS A DEED by QUAD SYSTEMS )
CORPORATION acting by: ) /s/ THEODORE J. SHONECK
-----------------------
Authorised signatory
/s/ ANTHONY R. DRURY
-----------------------
Authorised signatory
EXHIBIT 2.2
DATED SEPTEMBER 30, 1998
SMTECH LIMITED (1)
SPEEDLINE TECHNOLOGIES INC. (2)
AND
QUAD SYSTEMS CORPORATION (3)
-----------------------------------------------
GOODWILL AND INTELLECTUAL
PROPERTY ASSIGNMENT
-----------------------------------------------
<PAGE>
CONTENTS
CLAUSE HEADING PAGE
- ------ ------- ----
1 Definitions.......................................................3
2 Assignment........................................................4
3 Further Assurance.................................................5
4 Warranties........................................................5
5 Guarantee.........................................................5
6 Miscellaneous.....................................................5
7 Applicable Law and Jurisdiction...................................5
<PAGE>
THIS ASSIGNMENT is made on September 30, 1998 BETWEEN
(1) SM TECH LIMITED (Registered in England No.2597925) whose registered office
is at Middle Farm, Bridport Road, Dorchester, DT1 3WA (the "ASSIGNOR");
(2) SPEEDLINE TECHNOLOGIES INC (a Delaware Corporation) whose registered
office is at 1 Forge Park, Franklin MA, D1748 USA (the "ASSIGNEE"); and
(3) QUAD SYSTEMS CORPORATION (a Delaware Corporation) whose registered office
is at 2405 Maryland Road, Willow Grove, Pennsylvania, 19090, USA (the
"GUARANTOR").
WHEREAS:
(A) The Assignor has, by an agreement of even date herewith made between the
Assignor, the Assignee and the Guarantor (the "Agreement"), agreed to
sell to the Assignee the Business and the Assets (each as defined in
that Agreement) as a going concern.
(B) The Assignor is the proprietor and beneficial owner of certain
Intellectual Property Rights used in the Business and of the Goodwill
(each as defined below).
(C) The Assignor has agreed to assign such Intellectual Property Rights and
Goodwill to the Assignee on the terms set out below.
The Parties AGREE as follows:-
1 DEFINITIONS
1.1 In this Assignment and unless the context otherwise requires:-
"CONFIDENTIAL INFORMATION" means secret or confidential commercial,
financial, marketing, technical or other information know-how, trade
secrets and other information in any form or medium whether disclosed
orally or in writing before or after the date of this Agreement, together
with any reproductions of such information in any form or medium or any
part(s) of this information (and "CONFIDENTIAL" means that the
information, either in its entirety or in the precise configuration or
assembly of its components, is not publicly available);
3
<PAGE>
"COPYRIGHT WORKS" means all sketches, designs, drawings, plans, printed
form and formats, specifications, documents, electronic representations
(whether produced by computer or otherwise) and documents, materials and
things of all kinds whatsoever in which copyright and/or design right
subsists or is capable of subsisting and used in the Business and
including the right to do and to authorise others to do any and all acts
restricted by the Copyright, Designs and Patents Act 1988;
"DESIGN WORKS" means all design rights, whether registered or
unregistered, subsisting in any work by virtue of the Copyright Designs
and Patents Act 1988 or otherwise;
"GOODWILL" means the goodwill of the Business including but not limited to
the exclusive right as between the Assignor and the Assignee to use and
trade under the Business Names and to carry on the Business;
"INTELLECTUAL PROPERTY RIGHTS" means any patents, trade marks and service
marks (whether registered or not), Design Works, Copyright Works, the
right to use any trade names, Know-how, trade secrets and Confidential
Information, goodwill, utility models, brand names or logos, application
for any of the foregoing, and all industrial or commercial rights similar
to the foregoing anywhere in the world other than the Patents, Trade Marks
and Registered Designs;
"KNOW-HOW" means Confidential Information and experience which is secret
and substantial and is devised by Assignor or acquired by it in
circumstances permitting it to disclose the same to Assignee concerning
the manufacture, assembly and use of Products or any part or parts of it;
1.2 Terms defined in the Agreement shall each have the meaning set out in that
Agreement when used in this Assignment unless the context otherwise
demands.
2 ASSIGNMENT
2.1 In consideration of the sum of US$11,900,000 (eleven million nine hundred
thousand United States dollars) now paid by the Assignee to the Assignor
(receipt of which the Assignor hereby acknowledges) and the execution of
this Assignment as a deed the Assignor hereby assigns with full title
guarantee free from all and any liens, charges or third party rights to
the Assignee all its right, title and interest in the Intellectual
Property Rights together with the Goodwill and together with all rights of
action, remedies, powers and benefits relating to any of the Intellectual
Property Rights belonging or accrued to the Assignor as at the date of
this Assignment including the right to sue for damages for infringement of
the Intellectual Property Rights occurring before this Agreement TO HOLD
unto the Assignee absolutely.
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3 FURTHER ASSURANCE
3.1 The Assignor undertakes that, at the request of the Assignee, it will in
so far as it is able do all acts and things (including, without
limitation, making declarations and oaths) and execute all deeds,
documents, papers, forms and authorisations or do any other thing that may
be reasonably necessary under the law of any country for securing,
completing, further assuring or absolutely vesting in the Assignee full
right, title and interest to any of the rights assigned by Clause 2 above.
3.2 At the request of the Assignee, the Assignor shall (at the Assignee's
expense) provide all assistance to the Assignee which may be necessary in
connection with bringing or defending any proceedings relating to any of
the rights assigned by Clause 2 above.
4 WARRANTIES
4.1 The Assignor hereby repeats, with respect to the Intellectual Property
Rights and the Goodwill, the Warranties as though they were set out in
full in this Assignment with the intention that all such Warranties shall
be warranted in respect of the Intellectual Property Rights and Goodwill
subject to the limitations set out in the Agreement applying to such
Warranties.
4.2 If the Assignee is entitled to make a claim in respect of any act, event
or default both under this Assignment and under the Agreement, such claim
may be only made once.
5 GUARANTEE
5.1 In consideration of the execution of this Assignment as a deed Clause 16
of the Agreement shall have effect in this Assignment (so far as the
context allows) as if set out in full herein.
6 MISCELLANEOUS
6.1 In consideration of the execution of this Assignment as a deed Clauses
18-27 shall have effect in this Agreement (so far as the context allows)
as if set out in full herein.
7 APPLICABLE LAW AND JURISDICTION
7.1 This Assignment shall be governed by and construed in accordance with the
laws of England and the parties hereby submit to the non-exclusive
jurisdiction of the English Courts.
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IN WITNESS whereof the Assignor and Assignee have executed this Assignment as a
deed the day and year first before written intending the sum to be delivered.
SIGNED AS A DEED by ) /s/ THEODORE J. SHONECK
-----------------------
for and on behalf of the ASSIGNOR ) Director
and thereby executed as its deed ) /s/ ANTHONY R. DRURY
--------------------
Director/Secretary
SIGNED AS A DEED by /s/ SCOTT PEARSON .
for and on behalf of the ASSIGNEE -----------------------
Authorised Signatory
and
............................
Authorised Signatory
SIGNED AS A DEED by
for and on behalf of QUAD SYSTEMS
CORPORATION /s/ THEODORE J. SHONECK
-----------------------
Authorised Signatory
/s/ ANTHONY R. DRURY
-----------------------
Authorised Signatory
6
EXHIBIT 2.3
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS STARRED AND HAS BEEN FILED SEPERATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT is entered into on this 30th day of September, 1998
("Agreement), by and between Quad Systems Corporation, a Delaware corporation
("Buyer"), and Speedline Technologies, Inc., a Delaware corporation ("Seller").
W I T N E S S E T H :
WHEREAS, Seller and Buyer wish to enter into a supply agreement pursuant to
which Seller will sell to Buyer for worldwide resale (i) stencil printers of the
type manufactured by SMTech Limited, a company organized under the laws of
England ("SMTech"), immediately prior to the date of this Agreement and as set
forth on EXHIBIT A attached hereto (the "SMTech Products"), (ii) any modified
versions of the SMTech Products hereafter developed and manufactured by Seller
(the "Modified SMTech Products") (the SMTech Products and the Modified SMTech
Products are hereinafter collectively referred to as the "Products"), and (iii)
spare parts for each of the Products (collectively, the "Spare Parts"); and
Buyer will buy the Products and Spare Parts from Seller, upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein set forth,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Seller and Buyer do hereby agree as follows:
1. TERM OF THIS AGREEMENT. The term of this Agreement shall commence on the
date hereof and shall expire on the date which is two (2) years after the date
hereof; PROVIDED, HOWEVER, on the date which is two (2) years after the date
hereof, and on each anniversary of that date, the term of this Agreement shall
automatically be extended for an additional one (1) year period commencing on
the day immediately following such date and expiring one year later (each such
one year extension period is hereinafter referred to as a "One Year Extension");
and, PROVIDED, FURTHER, either party may terminate this Agreement as of the
commencement of any One Year Extension by giving notice of termination to the
other party at least one hundred eighty (180) days prior to the start of such
One Year Extension; and, PROVIDED, STILL FURTHER, this Agreement may otherwise
be terminated as provided in Sections 13, 14 and 23 hereof. The period of time
during which this Agreement is in effect is hereinafter referred to as the "Term
of this Agreement".
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2. SALE OF PRODUCTS AND SPARE PARTS; MINIMUM QUANTITIES.
(a) During the Term of this Agreement, Seller will exercise its
reasonable efforts to manufacture or cause to be manufactured for sale to
Buyer, and Buyer will purchase from Seller, in accordance with and subject
to the terms, provisions and conditions of this Agreement, such quantities
of the Products and Spare Parts as shall be ordered by Buyer from time to
time. Notwithstanding anything herein to the contrary, Seller shall have
the right at any time during the Term of this Agreement to discontinue the
manufacture and sale of any of the Products or Spare Parts and Seller shall
have no obligation to supply such Products or Spare Parts discontinued,
provided, however, Buyer receives at least three (3) months prior written
notice of any such discontinuance of any Product or Spare Parts. With
respect to any Product which has been discontinued by Seller and for which
no replacement or similar model is available for purchase hereunder, Buyer
and Seller shall negotiate in good faith to reach an agreement pursuant to
which the Buyer may manufacture, or have manufactured for Buyer, such
Product.
(b) Buyer shall place orders for the Products and Spare Parts with
Seller on Buyer's standard purchase order form setting forth the quantity
of the Products ordered and the desired delivery date. Seller, after its
acknowledgment and acceptance of the order, shall sell the Products and
Spare Parts to Buyer for resale throughout the world. No order shall be
binding unless acknowledged and accepted in writing by Seller. Seller shall
confirm its acceptance of an order within seven (7) days after its actual
receipt of such order.
(c) Buyer will purchase from Seller at least *********** units of the
AVX500 stencil printers during the period from the date hereof to the end
of the calendar year 1999; provided, however, if Seller sells more than
**** units of such printer to its other customers in the calendar year
1999, then the minimum purchase commitment of Buyer for calendar year 1999
shall be reduced by the number of such printers in excess of ***********
that Seller has sold to its other customers in 1999. Buyer will purchase
from Seller at least ******* units of the AVX500 stencil printers in the
calendar year 2000; provided, however, if Seller sells more than
******************* units of such printers to its other customers in the
calendar year 2000, then the minimum purchase commitment of Buyer for
calendar year 2000 shall be reduced by the number of such printers in
excess of ****************** units that Seller has sold to its other
customers in 2000.
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3. FORECASTING AND ORDERING.
(a) On the date hereof, Buyer shall deliver to Seller its good faith
non-binding forecast of Buyer's requirements for each of the Products (the
"Forecast") for the first six (6) months of this Agreement. On a monthly
basis thereafter, Buyer shall deliver to Seller the Forecast updated for a
six (6) month period commencing on the date of such updated Forecast.
(b) On the date hereof and on Tuesday of each week hereafter during
the Term of this Agreement, Buyer shall deliver to Seller its firm and
binding commitment ("Order Commitment) of the exact quantity of each of the
Products to be shipped to Buyer during the week which is twelve (12) weeks
after the date of receipt by Seller of such commitment. No later than six
(6) weeks prior to the week in which any of the Products are to be ordered
and shipped to Buyer as set forth in the Order Commitment corresponding to
such week, Buyer shall submit firm purchase orders therefor as provided
above which shall set forth all options to be included in connection with
the Product or Products ordered.
4. PRICING FOR PRODUCTS AND SPARE PARTS.
(a) The initial prices for the Products shall be equal to the prices
set forth on EXHIBIT B attached hereto and made a part hereof and shall
remain the same until at least the day which is two (2) years after the
date hereof.
(b) Notwithstanding anything herein to the contrary, either Buyer or
Seller may request an upward or downward adjustment to the pricing for any
of the Products at any time after the day which is two (2) years after the
date hereof if, in its reasonable judgment, business conditions, product
volumes or product cost structures change significantly for Buyer and/or
Seller to warrant a price adjustment. After any such request, the Buyer and
Seller shall negotiate in good faith to determine a mutually satisfactory
adjustment in the price for such Product or Products. If the Buyer and
Seller are unable to agree in good faith on any adjustment, then the price
for such Product or Products shall remain at the price in existence prior
to such request.
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(c) The prices for any Spare Parts purchased by Buyer from Seller
under this Agreement shall be equal to ************************************
***************************************************************************
**************************************************************** Buyer
shall be notified of the price for a Spare Part upon request prior to the
submission of a firm purchase order for such Spare Part.
(d) Notwithstanding anything herein to the contrary, Seller shall not
sell to any other OEM customer at prices that are lower than the prices
being charged to Buyer for products similar to the Products and in similar
volumes as purchased by Buyer and under similar circumstances and upon
similar terms as provided to Buyer. To the extent such lower prices are
being made available to other OEM customers of Seller, Seller shall provide
the same prices to Buyer for similar Products. Once during each twelve (12)
month period during the Term of this Agreement, Buyer may verify Seller's
compliance with the terms of this Section 4(d) by having an independent
third party reasonably satisfactory to Seller ("Buyer's Representative")
review any or all agreements similar to the Agreement which Seller has
entered into with other OEM customers for the purchase of Products or
products similar to the Products. Any such review by the Buyer's
Representative shall be conducted at Buyer's sole expense at Seller's
facility during normal business hours and upon reasonable notice. Prior to
any such review, the Buyer's Representative shall be required to execute
and deliver to Seller a confidentiality agreement reasonably satisfactory
to Seller that will prohibit any disclosure to Buyer or any other party or
the use of any information or terms regarding the OEM agreements to be
reviewed or any other proprietary information or data of Seller; provided,
however, the Buyer's Representative shall be allowed to disclose to Buyer
information to the extent necessary to evidence any failure of Seller to
comply with its obligations under this Section 4(d).
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(e) All prices are or shall be expressed in, and payable in, United
Stated dollars and exclude all charges for costs of transportation and
transit insurance, duties and tariffs imposed before the passage of title,
any and all taxes imposed upon the sale or transfer of Products or Spare
Parts and any installation or training costs (all of which shall be borne
solely by Buyer).
5. DEMONSTRATION UNITS. Seller shall sell to Buyer each year during the
term hereof demonstration units of each model of the Products as Buyer may order
from time to time, except the number of such demonstration units for each model
of the Products shall not exceed five (5) units during the first year of this
Agreement and shall not exceed for each year thereafter the greater of five (5)
units or ten (10%) percent of the number of units of such model which Buyer sold
to its customers in the prior contract year. All such demonstration units shall
be sold to Buyer by Seller at the prices for such Products as determined under
Section 4 hereof ********************************** *******************. For a
period of at least ninety (90) days after Buyer's receipt of a demonstration
unit, Buyer shall not sell such unit or use such unit other than for
demonstration purposes to prospective customers or for training of Buyer's
personnel or customers.
6. DELIVERY AND SHIPMENT TERMS.
(a) All Products and Spare Parts shall be delivered F.O.B. Seller's
plant(s) after receipt and acceptance by Seller of firm purchase orders for
the same. As long as Buyer has complied with its obligations under Section
3, Seller will exercise its reasonable efforts to meet Buyer's requested
delivery dates set forth in any purchase order but shall not be obligated
to deliver any Products or Spare Parts earlier than six (6) weeks after
receipt of a firm purchase order by Seller for such Products or Spare
Parts; PROVIDED, HOWEVER, Seller shall give equal priority for delivery of
Products to Buyer as provided to Seller's internal sales force or
customers.
(b) Title, possession and risk of loss shall pass to Buyer upon
delivery of Products or Spare Parts to Buyer's carrier at the point of
shipment.
(c) Buyer hereby grants to Seller a non-exclusive and royalty-free
license to affix the brandname, trademark or logo of Buyer to be supplied
by Buyer to Seller (the "Buyer's Tradename") on all Products and all
literature for such Products purchased by Buyer hereunder during the Term
of this Agreement. This license may not be sublicensed other than to any
subconstractor of Seller and shall expire immediately upon the expiration
of the Term of this Agreement. Seller shall not make use of any of the
Buyer's Trademarks, except as contemplated hereby, and shall not sell to
any third party other than Buyer any products that have affixed thereto
Buyer's Trademark.
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<PAGE>
(d) In the event of any conflict between the terms of this Agreement
and the terms of any purchase order, sales order or other communication
between Seller and Buyer with respect to the terms of delivery or any other
terms of sale, this Agreement shall be controlling.
7. PAYMENT. Payment for any Products ordered shall be made in United States
dollars ************************************************************.
8. INSPECTION AND ACCEPTANCE. Buyer, prior to acceptance thereof, may
inspect Products and Spare Parts at destination. Buyer shall accept deliveries
of Products and Spare Parts without delay and shall be deemed to have accepted
any Products and Spare Parts delivered to Buyer hereunder unless Buyer gives
Seller notice within ten (10) days after Buyer's receipt of such Products or
Spare Parts at destination that any of such Products or Spare Parts is
defective, damaged or non-conforming, provided that Buyer's acceptance shall not
limit Seller's warranty under Section 10 hereof. If the Buyer rejects any or all
of the shipment of Products or Spare Parts, then Buyer shall promptly notify
Seller in writing thereof. Seller shall, if commercially reasonably, promptly
replace or repair the Product or Spare Part, or otherwise refund to Buyer the
price paid, if any, by Buyer for the Product or Spare Part, provided, such
Product or Spare Part is returned to the Seller in accordance with shipping
instructions received from the Seller. If Seller determines, in its sole
discretion, that the Product or Spare Part is defective, damaged or
non-conforming, Seller will pay all costs of repairing and returning the Product
or Spare Part. Risk of loss for all Products or Spare Parts returned to Seller
shall at all times be upon Buyer until received by Seller. If Seller elects to
make repairs at the place of business of Buyer or its customer, Seller will bear
all costs incurred by it in making such repairs unless Seller determines that
the Product or Spare Part is not defective, damaged or non-conforming and there
is no basis for such rejection by Buyer.
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9. TECHNICAL TRAINING AND SUPPORT.
(a) For each year during the Term of this Agreement, Seller shall
provide at its facility in Elgin, Illinois, without any consultation fees
charged to Buyer, Seller's standard technical training sessions, which
sessions may be attended by up to eight (8) personnel of Buyer, provided
that Buyer shall be responsible for all expenses for its personnel
attending such training session. During the first year of this Agreement,
if Buyer requests additional technical training for its personnel, Seller
shall use its reasonable efforts to accommodate Buyer if space is available
in Seller's standard technical training sessions.
(b) Buyer shall be responsible for all telephone support services for
its customers who purchase any of the Products from Buyer; PROVIDED,
HOWEVER, Seller shall provide access to and the assistance of Seller's
phone support system if Buyer is unable to resolve any problems relating to
any of the Products purchased by Buyer hereunder.
(c) If any service calls are required to be performed relating to any
of the Products purchased by Buyer from Seller and sold by Buyer to a
customer, the Buyer shall be responsible for the first two service calls
for the Product unit needing servicing and Seller shall be responsible for
all service calls thereafter for the Product unit needing servicing.
10. LIMITED WARRANTY.
(a) EXCEPT AS EXPRESSLY STATED BELOW, SELLER MAKES NO WARRANTIES TO
BUYER OR ANY OTHER PERSON, EXPRESS OR IMPLIED BY OPERATION OF LAW OR
OTHERWISE, RESPECTING THIS AGREEMENT OR THE PRODUCTS OR SPARE PARTS
PURCHASED HEREUNDER; AND ALL EXPRESS OR IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, FREEDOM FROM DEFECTS
IN MATERIAL OR WORKMANSHIP, OR OTHERWISE, ARE HEREBY DISCLAIMED BY SELLER
AND EXCLUDED. With respect to any Products sold by Seller to Buyer
hereunder, Seller warrants to Buyer that such Products shall be free from
defect in material and workmanship and shall conform to the standard
specifications attached hereto as EXHIBIT A (the "Specifications"), normal
wear and tear excepted, for a period (the "Warranty Period") of twelve (12)
months after the earlier of (i) the day of shipment of such Product by
Buyer to its customer or (ii) the day which is ninety (90) days after the
date of shipment of such Product to Buyer.
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(b) If it is determined during the warranty period that the Product
delivered to Buyer does not conform to the Specifications for such Product,
then Buyer shall promptly notify Seller in writing thereof. Seller shall,
if commercially reasonable, promptly replace or repair the Product, or
otherwise refund to Buyer the price paid by Buyer for the Product,
provided, such Product is returned to Seller. Seller's sole liability and
obligation under this warranty shall be to replace or repair, or refund the
price paid for, any Products which do not conform to this warranty. IT IS
UNDERSTOOD AND AGREED THAT, SELLER'S LIABILITY FOR DAMAGES, WHETHER IN
CONTRACT, IN TORT, UNDER ANY WARRANTY, EXPRESS OR IMPLIED, OR IN NEGLIGENCE
OR OTHERWISE, SHALL NOT EXCEED THE REPLACEMENT OR REPAIR OF, OR REFUND OF
THE PRICE PAID BY BUYER FOR, ANY PRODUCTS AND UNDER NO CIRCUMSTANCES SHALL
SELLER BE LIABLE FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES.
THE PRICES STATED FOR PRODUCTS OR SPARE PARTS IN THIS AGREEMENT ARE A
CONSIDERATION IN LIMITING SELLER'S LIABILITY.
(c) Seller will honor the warranty on a return-to-factory basis but
prior thereto Seller shall send, if practical, one of its personnel to the
place of business of Buyer or its customer to perform repairs. In the case
of repairs made on a return-to-factory basis, Buyer must obtain shipping
instructions from Seller prior to returning any Products under the
warranty. Buyer will pay all costs of returning the Products to Seller and
will arrange for, and pay for, transit insurance. If Seller determines, in
its sole discretion, that the Products do not conform to the warranty as
claimed by Buyer, Seller will pay all costs of repairing or replacing and
returning the Products to Buyer or its customer and will reimburse Buyer
for the costs incurred by it in shipping the Products to Seller. If Seller
determines that the Products are not defective within the terms of the
warranty, Buyer shall not be entitled to reimbursement for costs incurred
by it in shipping the Products to Seller and shall bear the cost of
returning the Products to Buyer or its customers and transit insurance in
connection therewith. Risk of loss for all Products returned to Seller
shall at all times be upon Buyer until received by Seller. If Seller elects
to make repairs at the place of business of Buyer or its customer, Seller
will bear all costs incurred by it in making such repairs unless Seller
determines that the Products are not defective within the terms of the
warranty, in which case Buyer will reimburse Seller for any such costs
incurred. If Seller elects to make repairs, then Seller shall loan to
Buyer's customer a replacement unit if repairs cannot be completed within a
reasonable period of time. Notwithstanding the foregoing, Seller may elect,
in lieu of repair or replacement, to discharge its obligation under the
foregoing warranty by refunding to Buyer, or issuing a credit to Buyer, in
the amount of the price of the defective Products upon the return thereof
to Seller.
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11. DEFENSE OF INFRINGEMENT CLAIMS ON MODIFIED SMTECH PRODUCTS. If notified
promptly in writing of any action (and all prior claims relating to such action)
brought against the Buyer based on a claim that Buyer's use and sale of any of
the Modified SMTech Products to the extent of any modification made thereto by
Seller after the date hereof infringes a United States or United Kingdom patent,
and if given access by Buyer to any information Buyer has regarding such alleged
infringement, Seller agrees to defend Buyer in such action at its expense and
will pay any costs or damages finally awarded against Buyer in any such action
up to an aggregate amount not to exceed **********************
****************** Dollars for all such claims, provided the Seller shall have
had sole control of the defense of any such action and all negotiations for its
settlement or compromise. In the event that a final injunction shall be obtained
against the Buyer's use of the Modified SMTech Product as modifed by reason of
infringement of a United States patent or other intellectual property right or
if in Seller's opinion the goods are likely to become the subject of a claim of
infringement of a United States patent or other intellectual property right,
Seller will, at its option and at its expense, either procure for the Buyer the
right to continue using the Modified SMTech Product, replace or modify the same
so it becomes non-infringing or grant the Buyer a credit for such Modified
SMTech Product as depreciated and accept their return. The depreciation shall be
an equal amount per year over the lifetime of the Product as established by
Seller. Seller shall not have any liability to the Buyer under any provision of
this clause if any infringement, or claim thereof, is based upon: (i) any aspect
of the Modified SMTech Product which is in same form such Product was
manufacture and sold to Buyer by SmTech prior to the date hereof, (ii) the use
of the Modified SMTech Products in combination with other goods or devices;
(iii) the use of the Modified SMTech Products in practicing any process other
than as intended by Seller, or (iv) the use of the Modified SMTech Products with
modifications made by the Buyer. The Buyer shall hold Seller harmless against
any expense, judgment or loss for infringement of any patent or other
intellectual property right which results from Seller's compliance with the
Buyer's designs, specifications or instructions. No costs or expenses shall be
incurred for the account of Seller without the written consent of Seller. The
obligations of Seller under this Section 11 shall survive until the termination
of this Agreement. THE FOREGOING STATES THE ENTIRE LIABILITY OF SELLER WITH
RESPECT TO INFRINGEMENT OF PATENTS OR OTHER INTELLECTUAL PROPERTY RIGHT BY THE
PRODUCTS OR ANY PART THEREOF, OR BY THEIR OPERATION.
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12. INDEMNIFICATION.
(a) Seller agrees to indemnify and hold Buyer harmless from and defend
against any and all damages, claims, liabilities, losses, judgments,
awards, fines, penalties, costs and expenses (including reasonable fees and
expenses of counsel) incurred by Buyer during the Term of this Agreement as
a result of the failure of Seller to perform any covenant made by Seller in
this Agreement.
(b) Buyer agrees to indemnify and hold Seller harmless from and defend
against any and all damages, claims, liabilities, losses, judgments,
awards, fines, penalties, costs and expenses (including reasonable
attorneys' fees and expenses) incurred by Seller as a result of: (i) the
failure of Buyer to perform any covenant made by Buyer in this Agreement,
(ii) the use of the Buyer's Trademark as contemplated by Section 6(c)
hereof, or (iii) the sale or use of any of the Products hereunder by Buyer
which conform to the Specifications, except to the extent of any indemnity
for infringement provided by Seller to Buyer under Section 11 hereof.
(c) Notwithstanding Sections 12(a) and 12(b) hereof, the parties shall
have no right to any consequential, indirect, special or punitive damages.
(d) The indemnified party shall notify the indemnifying party in
writing of any fact or circumstance which gives rise to liability for which
the indemnified party is indemnified hereunder with reasonable promptness
after such fact or circumstance first comes to the attention of the
indemnified party, provided, however, the failure to give such notice shall
not relieve the indemnifying party of its indemnification obligations
unless, and only to the extent that, the failure to give such notice
actually prejudices the rights of the indemnifying party.
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(e) If a claim is based upon a demand, claim or action brought by a
third party, the indemnifying party shall defend such demand, claim or
action at its expense with counsel of its choice. The indemnifying party
shall not have the right to compromise or settle such claim without the
consent of the indemnified party, which consent will not be unreasonably
withheld or delayed, unless such compromise or settlement includes a full
release of the indemnified party from liability for the claim. The
indemnified party may participate in any such matter at its expense and
with counsel of its choice. The indemnified party will cooperate with the
indemnifying party in all reasonable ways in the defense of any such action
and shall give the indemnifying party access to such relevant files and
records for inspection and copying, and make its employees available to the
indemnifying party at the expense of the indemnifying party in the defense
of any action for which the indemnified party is being indemnified
hereunder.
(f) The obligations under this Section 12 shall survive until the
termination of this Agreement.
(g) The sole recourse and exclusive remedy of Seller and Buyer against
each other for damages arising out of this Agreement, whether based on
tort, contract or otherwise shall be to assert a claim for indemnification
under the indemnification provisions of this Section 12.
13. TERMINATION.
(a) Except as otherwise contemplated in Sections 4(b), 14 and 23
hereof, this Agreement shall be subject to summary termination by any party
(the "Terminating Party") in the event that the other party (the "Other
Party"): (1) materially breaches any of its obligations under this
Agreement and such breach continues uncured for a period of thirty (30)
days after written notice thereof to the Other Party or (2) the Other Party
applies for or consents to the appointment of a receiver, trustee or
liquidator for all or a substantial part of its assets; admits in writing
its inability to pay its debts generally as they mature; makes a general
assignment for the benefit of creditors; is adjudicated a bankrupt, submits
a petition or an answer seeking an arrangement with creditors; takes
advantage of any insolvency law except as a creditor; submits an answer
admitting the material allegations of a petition in bankruptcy or
insolvency proceeding; has an order, judgment or decree entered by any
court of competent jurisdiction approving a petition seeking reorganization
of the Other Party or appointing a receiver, trustee or liquidator for the
Other Party, or for all or a substantial part of its assets and such order,
judgment or decree shall continue unstayed and in effect for a period of
ninety (90) consecutive days; or files a voluntary petition in bankruptcy
or fails to remove an involuntary petition in bankruptcy filed against it
within ninety (90) consecutive days of the filing thereof.
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(b) Any party entitled to terminate this Agreement in accordance with
the provisions of this Section 13 or Sections 4(b), 14 and 23 hereof shall
do so by giving written notice of such termination to the Other Party, and
except as otherwise expressly provided herein, any such termination shall
be effective upon receipt by the other party of such notice.
(c) Notwithstanding any such termination hereunder, Buyer will
purchase from Seller all Products, and Seller shall deliver such Products,
covered by orders placed by Buyer prior to the effective date of such
termination at the prices and upon other terms and conditions provided for
in this Agreement.
14. FORCE MAJEURE. Neither party shall be liable for failure to perform any
of its obligations under this Agreement (other than Buyer's payment obligations
hereunder) during any period in which, and to the extent which, such performance
is delayed by fire, flood or other casualty or natural disaster, embargo, riot,
delays of carriers, transportation shortages, breakdown of plant or equipment,
strikes or other labor trouble, lack of or inability to obtain labor, raw
materials, power or supplies, any law, order, proclamation, regulation,
ordinance, demand, requisition, requirement or intervention of any governmental
authority or court, whether foreign or domestic, national, state or local, or
any other cause, whether similar or dissimilar to those above enumerated, beyond
the reasonable control of such party, provided that the party so delayed
promptly under the circumstances notifies the other party of such delay. If
either party's performance is delayed for these reasons for a cumulative period
of ninety (90) days or more from the date of such notice, either party may
summarily terminate this Agreement.
15. CONFIDENTIALITY.
(a) Each party (in this Section 15, the "receiving party") covenants
and agrees that: (1) except as may be necessary to the performance of its
obligations hereunder, it will never use any Confidential Information (as
hereinafter defined) of the other party (in this Section 15, the
"disclosing party") for any purpose and (2) except as required by
governmental or judicial mandate, it will never disclose to third persons
any Confidential Information of the disclosing party. In the event a
receiving party is required by governmental or judicial mandate to disclose
Confidential Information of the disclosing party, then the receiving party
agrees that it will not disclose such Confidential Information without
first disclosing to the disclosing party its intention to do so and
cooperating with the disclosing party to secure any appropriate protective
order deemed desirable by the disclosing party. The obligations under this
Section 15 shall survive any termination of this Agreement.
12
<PAGE>
(b) DEFINITION OF CONFIDENTIAL INFORMATION. As used herein, the term
"Confidential Information" of a disclosing party means oral or written
information relating to the business of such disclosing party including
without limitation: know-how, technology, inventions, designs,
methodologies, trade secrets, patents, secret processes and formulae,
specifications, information and data relating to the development, research,
testing, manufacturing and uses of products, sources of supplies, budgets
and strategic plans, the identity and special needs of customers, plants
and other properties, and any other information which may give such
disclosing party an opportunity to obtain an advantage over its competitors
who do not know or use such information, PROVIDED THAT the term
"Confidential Information" shall not include (i) any such information that,
prior to its use or disclosure by the receiving party, can be shown to have
been in the public domain through no breach of the provisions of this
Section 15 or other non-disclosure covenants; (ii) any such information
that, prior to the disclosure of same by the disclosing party to the
receiving party, was rightfully in the receiving party's possession,
without violation of the provisions of this Section 15 or other
non-disclosure covenants; and (iii) any such information that, prior to the
disclosure of same by the disclosing party to the receiving party, was
independently developed by the receiving party without violation of the
provisions of this Section 15 or other non-disclosure covenants.
16. RELATIONSHIP OF PARTIES. At all times hereunder the relationship of
each party to the other shall be that of an independent contractor, and neither
party shall be deemed to be a partner, joint venturer, employee, agent or legal
representative of the other party. Neither party shall have authority to bind
the other party in any manner.
13
<PAGE>
17. NOTICES. Except as otherwise expressly provided herein, any notice or
other communication required or permitted to be given to any party hereunder
shall be in writing and shall be given to such party at the address for such
party set forth below or at such other address as such party may hereafter
specify by notice in writing to the other party:
If to Seller: Speedline Technologies, Inc.
16 Forge Park
Franklin, Massachusetts 02038-3731
Attn: Robert Ballog, General Manger
Fax: (508) 520-2280
With a copy to: Cookson America, Inc.
One Cookson Place
Providence, Rhode Island 02903
Attn: Mark A. Dingley, General Counsel
Fax: (401) 731-5273-00
and
Adler Pollock & Sheehan P.C.
2300 BankBoston Plaza
Providence, Rhode Island 02903
Attn: John F. Corrigan, Esq.
Fax: (401) 751-0604
If to Buyer: Quad Systems Corporation
2405 Maryland Road
Willow Grove, Pennsylvania 19090
Attn: Anthony R. Drury, CFO
Fax: (215) 657-4107
With a copy to: Ballard, Spahr, Andrews & Ingersoll
1735 Market Square
51st Floor
Philadelphia, Pennsylvania 19103
Attn: Ray Agran, Esq.
Fax: (215) 864-8999
Any such notice or other communication shall be addressed as aforesaid and given
by (1) certified mail, return receipt requested, with first class postage
prepaid, (2) hand delivery, (3) reputable overnight courier or (4) facsimile
transmission. Any notice or other communication will be deemed to have been duly
given (1) on the date of receipt of delivery, if mailed to the party to whom
notice is to be given, by certified mail, return receipt requested, with first
class postage prepaid, (2) on the date of service if served personally on the
party to whom notice is given, (3) on the day of delivery by overnight courier
service, provided receipt of delivery has been confirmed or (4) on the date of
transmission if sent via facsimile transmission provided confirmation of receipt
is obtained promptly after completion of transmission.
14
<PAGE>
18. MERGER. This Agreement sets forth the entire agreement and
understanding between the parties with respect to the subject matter hereof and
merges any and all discussions, negotiations, letters of intent or agreements in
principle between them. Neither of the parties shall be bound by any conditions,
warranties, understandings or representations with respect to such subject
matter other than as expressly provided herein, or as duly set forth on or
subsequent to the date hereof in writing and signed by a duly authorized officer
of the party to be bound thereby.
19. WAIVER OR FORBEARANCE. A failure of either party at any time to require
performance by the other party of any provision of this Agreement shall not
affect the right of the party to later insist upon performance of that provision
by the other party. Any waiver by either party of any breach of any provision of
this Agreement shall not be construed as a waiver of any continuing or
succeeding breach of that provision, the provision itself, the breach of any
other provision, or any right under this Agreement.
20. INVALIDITY. If any of the provisions of this Agreement shall be
construed by a court or other judicial or arbitral body of competent
jurisdiction to be illegal, invalid or unenforceable, then this Agreement in all
other respects shall remain valid and enforceable unless it can be established
that the provisions affected are of such importance to either or both of the
parties that without such provisions the Agreement would not have been
concluded.
21. AMENDMENTS. This Agreement shall not be amended, altered or modified
except by an instrument in writing expressly referring to this Agreement and
signed by the parties hereto.
22. ARBITRATION. Without limiting either party's right to seek injunctive
or other equitable relief in any court of competent jurisdiction, any dispute
between the parties arising under or in connection with this Agreement shall be
settled by binding arbitration in accordance with the commercial rules then in
force of the American Arbitration Association ("AAA"), except that a written
opinion of the arbitrator or arbitrators must be delivered to the parties,
notwithstanding any rules to the contrary. The location of any arbitration
hereunder shall be in Boston, Massachusetts, and the arbitration proceedings and
the substantive law of this Agreement will be governed by the laws of the
Commonwealth of Massachusetts, without reference to conflict of laws principles.
The arbitrators shall be individuals generally skilled in the legal and business
aspects of the subject matter at issue. A single arbitrator is to be selected
jointly by the parties to settle the dispute. If the parties cannot agree on the
selection of an arbitrator within fifteen (15) days after notice by one party
that it desires to refer a matter to arbitration hereunder, each party shall
then select one arbitrator giving notice of its nominee to the other party; and
the two arbitrators so selected shall select a third arbitrator within fifteen
(15) days after their selection. If a party fails to select an arbitrator within
fifteen (15) days after the other party's notice of selection of its nominee,
the other party may apply to AAA for selection of a second arbitrator, and the
AAA shall do so within fifteen (15) days of such application. If the two
arbitrators selected as aforesaid cannot agree upon the selection of the third
arbitrator within fifteen (15) days after selection of the second arbitrator,
the third arbitrator shall be appointed by the AAA within fifteen (15) days
after application by either party. The decision of the arbitrator or any two of
the three arbitrators, as the case may be, shall be final, binding and
conclusive upon the parties. The prevailing party in any arbitration proceeding
hereunder shall be awarded, and shall be entitled to recover, all of its costs
and reasonable attorney fees incurred in connection with such proceeding.
Judgment upon the award rendered may be entered in any court having jurisdiction
or application may be made to such court for a judicial acceptance of the award
and an order of enforcement, as the case may be.
15
<PAGE>
23. ASSIGNMENT. This Agreement shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Neither party to
this Agreement shall assign any of its rights or obligations under this
Agreement without the prior written consent of the other party and, for this
purpose, and without limitation, any transfer of voting stock of such party
which results in a change of voting control of such party shall be deemed to be
an assignment of this Agreement. Notwithstanding the foregoing, all of the
rights and obligations of either party under this Agreement may be assigned,
without the consent of the other party, to any affiliate of the assigning party
or to any person who acquires all or substantially all of the assets and
business of the assigning party which relate to the subject matter or
performance of this Agreement or voting control of the assigning party and who
delivers to the other party a written undertaking to perform and discharge all
of the assigning party's obligations hereunder, provided that if the
acquiror-assignee is a competitor of the other party, the other party may
summarily terminate this Agreement. No assignment shall relieve the assignor of
its obligations hereunder.
16
<PAGE>
24. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, exclusive of its
conflict of laws principles.
25. COUNTERPARTS. This Agreement may be executed in counterparts and by
each party hereto on a separate counterpart, both of which when so executed
shall be deemed to be an original and both of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Agreement by telecopier or facsimile transmission shall
be effective as delivery of a manually executed counterpart of this Agreement.
17
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly signed on the date first set forth above.
SPEEDLINE TECHNOLOGIES, INC.
By: /s/ SCOTT PEARSON
----------------------------
Name: SCOTT PEARSON
Title: VICE PRESIDENT
QUAD SYSTEMS CORPORATION
By: /s/ THEODORE J. SHONECK
----------------------------
Name: THEODORE J. SHONECK
Title: PRESIDENT AND COO
18
<PAGE>
EXHIBIT A
SUPPLY AGREEMENT
BETWEEN
QUAD SYSTEMS CORPORATION
AND
SPEEDLINE TECHNOLOGIES INC.
FOR THE SUPPLY OF SMTECH STENCIL PRINTERS
19
<PAGE>
SIGMAPRINT 500
The Sigmaprint 500 is an automatic in-line solder paste printer based on a 29 x
29 inch screen frame with the following standard features:
Single roving camera with dual plane optics
20X20 inch print area
Underscreen cleaner
3-stage programmable conveyor
Windows interface
PC based vision system
SMEMA protocol plus others
The following features are optionally available on the printer:
Automatic tooling
Paste dispenser
2d inspection
Temperature control facility
Environmental control facility
Adaptive control
Modem link option
RS 232 host link
SPC management
Dual Lane facility
Direct imaging using the DEK(C) ProFlo(C) printing head
Closed loop squeegee control
CAD/Gerber interface (currently in development)
20
<PAGE>
FUNCTIONAL SPECIFICATION
PCB SIZE
The machine shall have the ability to print PCBs which are the following
minimum, maximum and thickness size.
Minimum 75x50 mm
Maximum 500x500 mm
Thickness 0.8 -- 5.0 mm
The machine shall have capability of handling pallets. The weight of which shall
not exceed 1.0Kg including the PCB. Pallets in excess of 1Kg can be accommodated
subject to deatiled specification. The machine shall have capability of handling
PCBs which have a maximum warpage including board thickness of 5mm. The machine
shall have the capability to handle 15 mm under side components.
PRINT PRESSURE
The print pressure system shall apply pressure between 0Kg and 20Kg to a
resolution of 0.1Kg Pressure accuracy = 0.05Kg
The standard system will be open-loop control. Closed-loop control is optionally
available.
PRINT SPEED
The machine shall be capable of printing between 5mm per sec and 200mm per sec
Speed resolution =1mm per sec Speed Accuracy = 1% of full range. +/-1% of value
PROGRAMMABLE SQUEEGEE HEAD
The squeegee head shall be capable of having 2 independently controlled
squeegees with the following programmable features:
* Independent front and rear squeegee pressure control
* Precise automatic calibration control
* Print/print, flood/print and print/flood modes of operation.
* The head shall be capable of fitting the full range of standard
squeegee holders.
* The Squeegee lift shall be sufficient in order to load the screen
without the need to remove the squeegees.
SQUEEGEES
The standard range of Metal and polyurethane squeegee blades shall fit the new
machine
SCREEN FRAME
The machine shall be capable of accepting the following stencil / screen frames:
* 29" x 29"x 1.5"hollow section
* Universal screen frame adapter. (The underscreen cleaning operation
will be affected when using this frame).
* 20"x20"x 1" hollow and cast type with adapter.
The stencil frame shall be either manually slide into the machine or power
assisted as per the AVX 400. The later only applies to the standard 29" frame.
SCREEN LOCATION
The stencil shall manually slide into the machine's stencil location system and
be pneumatically clamped The final position of the screen shall be controlled by
a fixed stop and spring loading system in order to achieve a repeatability of
0.5 mm. Alternatively the final position of the screen shall be positioned using
the machine adaptive control feature. The screen location shall not restrict the
print image position within the screen.
21
<PAGE>
PRINTABLE PITCH
The machine shall be capable of printing solder paste, epoxy glues and
conductive inks generally used in the electronics production environment.
TABLE SEPARATION
The table vertical lift motion, gap and separation speed requirements shall also
be as follows:
* Gap 0 to 10mm resolution 0.005 mm
* Separation speed 0.1to 20mm per second
* Separation speed Resolution 0.1 to 5 = 0.1 mm per second
* Separation speed Resolution 5 to 20 = 1.0 mm per second
PASTE KNEAD CYCLE
A user selectable paste knead cycle shall be available in order to prepare the
solder paste in the following situations:
* At the start of a new printing operation
* When the machine has been left for a period of time with solder paste
on the screen.
MACHINE PERFORMANCE
The machine shall be capable of the following.
* Have the ability to print 12 thou pitch subject to the process limits.
* Achieve a print accuracy of 25 micron at 3 sigma
* Achieve an alignment repeatability of 25 micron at 6 sigma.
* Return a Cpk value of 1.33
MACHINE THROUGHPUT
A machine throughput of 20 seconds per board shall be achieved based on the
following parameters:
* PCB size 150 mm length x 110mm width.
* Squeegee pressure 4Kg
* Squeegee speed 170mm per second
* Print mode Print Print
* Snap off speed maximum
* Table down delay zero
PRODUCT RELIABILITY
All parts should be designed and selected to give a minimum of 5 years service
based on the machine working 18 hours per day for 320 days per year, subject to
the routine maintenance schedule being carried out. The machine up time
requirement shall be greater than 96% MTTR = 1 hr
PRODUCT SETUP
The machine shall be capable of configuring a new product in 15minutes or less.
The process includes the following steps.
* Screen load /unload.
* Squeegee removal / replacement
* Create board file
* Completion of board file parameter pages.
* Vision setup based on learning two site fiducial locations.
* Configure board tooling.
22
<PAGE>
It shall be possible to set up a pre-programmed product in 10 minutes or less.
The process includes the following steps:
* Select board file
* Screen load /unload
* Squeegee removal / replacement Configure board tooling.
PCB ALIGNMENT
The system for stencil to PCB alignment is a single motorised camera
module with a look up / down optical arrangement. The module shall be
driven in x and y to cover the maximum and minimum board sizes. A
programmable multipoint Alignment location strategy locates and aligns
the PCB to stencil. Fiducials of size 0.5-3.5 mm shall be
accommodated. Fiducial training shall be carried out manually or
automatically on any board fiducial or synthetic shape.
PCB SUPPORT
* The PCB to be printed will be held using edge clamps, the edge clamps
will not encroach more than 3mm over two sides of the PCB.
* The machine shall be supplied with either manual or automatic tooling
support. Both systems shall operate with the same pin design and be
capable of handling 48 pins.
THREE STAGE CONVEYOR
The machine shall have the capability to be installed in-line with similar
production equipment.
* The following feed configurations are available: left to right, right
to left, right to right, left to left.
* The protocol between the three sections shall be to the SMEMA standard
* The conveyor shall be of single track design split in to three
sections
* Speed control shall be provided for the individual conveyor sections
in order that the system can be matched to up and down line equipment.
MACHINE DIAGNOSTICS
The machine shall have the capability to report the following
* A comprehensive list of error conditions giving the machine operator a
description of the condition and possible recovery messages.
* Sensor Input and output status and check for correct operation
* Motor status and check for correct operation
* Maintenance interval details
SPC
The machine should have a SPC programme indicating the following:
* Machine uptime / downtime / waiting time
* Total PCB count
* Batch count
* Operator log on and access permission level
* Temperature and humidity logging (when option is fitted)
* If 2D inspection is supplied then the SPC programme will report on
paste coverage and alignment accuracy.
23
<PAGE>
OPTIONS
LANGUAGE
The machine interface shall be configurable in the following languages :
* English
* German
* French
* Danish
* Swedish
* Italian
* Spanish
* Finnish
AUTOMATIC TOOLING
The system shall be capable of placing a maximum of forty-eight tooling pins to
be configured anywhere within the available board area within a 6 minute period.
* A twin magnetic pickup attached to the single roving camera picks and
places two pins at a time.
* Twin lift cylinders raise and lower the tooling pins from the
carousel.
* The tooling is situated at the front of the machine allowing an
operator to easily load and unload the tooling posts
The placement strategy may be driven either by
* The tooling page available on the SigmaPro interface
* Through CAD / GERBER data with third party supplied software.
TEMPERATURE CONTROL
The Environmental Control Unit provides:
* Low print-head air velocity to prevent skin forming on solder pad
surfaces
* Integrated design uses air ducts in printer hood and allowing the
printer hood to be lifted with the Temperature control module in place
* Refrigeration plant sized to cope with ambient of +15(degree)C and
+32(degree)C
* Minimal service connections requiring only electricity Constant
temperature gives users a closely controlled environment
FULL ENVIRONMENTAL CONTROL
The Environmental Control Unit provides:
* HUMIDITY CONTROL: 40 degrees rh plus/minus 5%
* LOW PRINT-HEAD AIR VELOCITY to prevent skin forming on solder pad
surfaces
* INTEGRATED DESIGN uses air ducts in printer hood and allows printer
hood to be lifted with the Perfect Climate control module in place
* REFRIGERATION PLANT sized to cope with ambient between +15(degree)C
and +32(degree)C
* MINIMAL SERVICE CONNECTIONS requiring only electricity, demineralized
water, and drain
* No intermediate coolant, so installation and use are both easy and
free from mess
* Humidity control combined with constant temperature gives users a much
more closely controlled environment than is possible with conventional
temperature-only systems.
PASTE DISPENSER
* Solder paste is dispensed from a 12oz paste cartridge
* The dispensing system is attached to the rear of the squeegee pressure
mechanism
* The operation of the dispenser does not require the screen to move in
order to apply the solder paste.
* As the paste cartridge is attached to the squeegee carriage the paste
can be deposited anywhere within the screen frame area.
* In general the paste is dispensed either 10mm in front or behind the
print zone. Certain combinations will not be possible depending on the
size of the print zone and whether the machine conveyor is front or
rear dedicated
24
<PAGE>
UNDERSCREEN CLEANER
* An sensor indicates when the paper roll is empty.
* An sensor indicates when the solvent bottle is empty
* The cleaner shall be capable of cleaning a 500 mm screen image - unit
is only compatible with the standard 29" screen frame.
* An optional vacuum system is available to further enhance the stencil
cleaner which filters the air before exhausting it back into the
environment
2D INSPECTION
The system will:
* Identify paste coverage
* Inspect the under side of the stencil and initiate an underscreen
clean cycle when required.
PROFLO
All ProFlo products supplied by DEK Printing Systems Limited will be
supported on the SigmaPrint 500.
ProFlo incorporates a pressure head instead of conventional squeegees to
apply pressure during the print stroke to a replaceable solder paste
cartridge. Solder paste is forced out of the cartridge and directly into
the apertures of the stencil underneath.
Downward force on the pressure head is independent of the downward force on
the solder paste cartridge. This reduces stencil wear and improves the
gasket effect between the stencil and the board being printed.
The cartridge is designed to form a good seal between itself and the
stencil material, and also to prevent excess solder being left on the
stencil after printing.
Increased throughput and print quality.
You can print boards at higher print speeds.
The need for under-stencil cleaning operations is reduced.
The interval between solder paste dispensing operations is reduced.
Time-consuming knead cycles are reduced.
Reduce wastage of solder paste.
No excess solder paste is left on the surface of the stencil.
* Operator safety is improved as direct contact with solder paste is
eliminated.
Reduced wear of the stencil.
You can use either ProFlo or conventional squeegee technology.
(Change-over time typically (less than) 5 minutes)
300mm paste cartridges available from all major manufacturers. (For
availability of other sizes, contact SMTech Ltd.)
Simple on-site upgrade.
25
<PAGE>
STATISTICAL PROCESS CONTROL (SPC)
Real-time statistical process control is achieved through a wide range
of industry standard control charts with user-definable warning and
action limits. When installed, 2D inspection is automatically
integrated with SPC.
SPC charts are displayed during production, with warnings producing
operator alerts. Violation of action limits halts production. Data can
be replayed as required to review process events, and hard copies of
charts and summary data can be obtained.
A full SPC log is stored in a networkable system database, from which
selective export can generate data for use in Microsoft(R) Excel or
other formats.
Statistical Process Control provides:
* Detection of faulty input product
* Control of process variability within user-definable limits
* Review of process history
* Management access to raw and summary print process data
DUAL LANE (UNDER DEVELOPMENT)
A dual lane system accepts two PCBs from separate asynchronous input
conveyors and clamps them. It then aligns and prints each board in
turn, with optional early ejection of the first board printed.
The Sigmaprint 500 dual lane option conforms to the SMEMA Dual Lane
standard.
The operator interface for dual lane is a seamless extension of the
standard SigmaPro system, so there is no training overhead when
upgrading.
The Dual Lane upgrade provides:
* Increased printer and overall line throughput
* Ability to print dissimilar PCBs simultaneously
* Locally adjustable print and vision parameters
* Global setup for squeegees and stencil cleaner
* Product file compatible with single lane
* Full rail setup flexibility
CAD/GERBER INTERFACE (UNDER DEVELOPMENT)
A software interface is currently under development which will provide
an off-line facility to produce PCB files which can be used by
SigmaPro from CAD or Gerber file information.
The interface will allow the user to import and view Gerber files and
to specify fiducial, tooling and inspection sites on the viewed image.
This data is then used to modify a template product file which may be
used by the SigmaPro software.
Initially the program will operate as a stand-alone program, but the
intention is to later incorporate this functionality into SigmaPro.
SAFETY COMPLIANCE
* The machine complies with the Heath and Safety requirements
currently in force in the UK
* The machine is CE approved
* The machine is designed to conform to UL standards
26
<PAGE>
TECHNICAL SPECIFICATION
- --------------------------------------------------------------------------------
Maximum board size 500 x 500mm
- --------------------------------------------------------------------------------
Minimum board size 75 x 50mm
- --------------------------------------------------------------------------------
Maximum board thickness 5.0mm (including warpage tolerance
and without tooling)
- --------------------------------------------------------------------------------
Maximum underside clearance 20mm
- --------------------------------------------------------------------------------
Maximum board weight 1Kg
- --------------------------------------------------------------------------------
Machine repeatability +/-25 microns at 6 sigma
- --------------------------------------------------------------------------------
Print area 490 x 500 mm
- --------------------------------------------------------------------------------
Maximum print stroke 520mm
- --------------------------------------------------------------------------------
Operation modes print/print, print/flood, flood/print,
on contact, 1 or 2 deposits
- --------------------------------------------------------------------------------
Standard stencil frame size 29"x29"
- --------------------------------------------------------------------------------
Stencil frame adapters Available within maximum stencil
frame dimensions
- --------------------------------------------------------------------------------
X/Y stencil alignment range +/-10mm
- --------------------------------------------------------------------------------
Squeegees Metal or Polyurethane
- --------------------------------------------------------------------------------
Radial stencil alignment range +/-3(degree)
- --------------------------------------------------------------------------------
Squeegee pressure 0-20 kg
- --------------------------------------------------------------------------------
Print speed 5-200mm sec-1
- --------------------------------------------------------------------------------
Snap off speed 1-20mm sec-1
- --------------------------------------------------------------------------------
Table height 860mm-960mm
- --------------------------------------------------------------------------------
PCB Support Magnetic pin + vacuum support
- --------------------------------------------------------------------------------
Throughput time 20 seconds
- --------------------------------------------------------------------------------
Min board edge clearance 5.0 mm
- --------------------------------------------------------------------------------
Power supply 110-240V, 60/50Hz +/- 10%
- --------------------------------------------------------------------------------
Internal power supply 24V
- --------------------------------------------------------------------------------
Power consumption 1KW
- --------------------------------------------------------------------------------
Air supply 5cfm at 5 Bar clean air supply
- --------------------------------------------------------------------------------
Weight 550kg
- --------------------------------------------------------------------------------
Height 1534mm
- --------------------------------------------------------------------------------
Depth 1400mm
- --------------------------------------------------------------------------------
Width 1160mm excluding rail
extensions 1314mm with
- --------------------------------------------------------------------------------
User interface 15" VGA Monitor with light pen
- --------------------------------------------------------------------------------
Board File storage 500 Board File locations
- --------------------------------------------------------------------------------
VISION SYSTEM
- --------------------------------------------------------------------------------
Camera field of view 10 x 10mm
- --------------------------------------------------------------------------------
Teach window Full vision windows
- --------------------------------------------------------------------------------
Viewing capability 500 x 500mm
- --------------------------------------------------------------------------------
Camera system Single roving design with
look up \ down optics
- --------------------------------------------------------------------------------
Fiducials Standard shape fiducials see
SMEMA standards
- --------------------------------------------------------------------------------
Processing speed (typical) Less than 500 milliseconds per
fiducial (for a 1.0mm fiducial within
+/-2.5mm of trained location
- --------------------------------------------------------------------------------
Vision processing methods Normalised grey scale correlation
and binary boundary tracking
- --------------------------------------------------------------------------------
Grey scale resolution 255 shades of grey per pixel
- --------------------------------------------------------------------------------
Image storage capacity 512 x 512 pixels
- --------------------------------------------------------------------------------
Framestore Matrox
- --------------------------------------------------------------------------------
The following specification applies to a 10mm horizontal field
of view:
- --------------------------------------------------------------------------------
Pixel to mm ratio ~0.019mm/pixel
- --------------------------------------------------------------------------------
Vision accuracy +/-0.5 pixel
- --------------------------------------------------------------------------------
Vision repeatability +/-.0.5 pixel
- --------------------------------------------------------------------------------
27
<PAGE>
2 D INSPECTION
- --------------------------------------------------------------------------------
Inspection area Inspection can be programmed anywhere
within the maximum board area.
- --------------------------------------------------------------------------------
Field of view 10mm x 10mm (3/8" x 3/8")
- --------------------------------------------------------------------------------
Inspect area 9mm x 9mm
- --------------------------------------------------------------------------------
Maximum number 100 per board
of inspection sites
- --------------------------------------------------------------------------------
Inspections / cycle Full, sequential or randomized
- --------------------------------------------------------------------------------
Inspection speed Typically 5 sites in 1.5 seconds
- --------------------------------------------------------------------------------
Paste coverage 10%
repeatability
- --------------------------------------------------------------------------------
DUAL LANE OPTION
- --------------------------------------------------------------------------------
Number of rails 4
- --------------------------------------------------------------------------------
Fixed rails 1 and 3
- --------------------------------------------------------------------------------
Minimum PCB size 50 x 75mm
- --------------------------------------------------------------------------------
Maximum PCB size 216 x 300mm
- --------------------------------------------------------------------------------
PCB thickness 0.8 - 5.0mm
- --------------------------------------------------------------------------------
Underside clearance 12mm
- --------------------------------------------------------------------------------
Maximum PCB weight 0.5 Kg
- --------------------------------------------------------------------------------
Maximum print stroke 520mm
- --------------------------------------------------------------------------------
ENVIRONMENTAL CONTROL UNIT
- --------------------------------------------------------------------------------
Cooling Provided by a refrigeration compressor fitted
with bypass circuitry to keep the compressor
running when setpoint is reached, so cooling is
available on demand to provide close control of
temperature.
The compressor is switched off if no cooling
has been used for 6 minutes, so minimizing
power consumption.
Refrigerant is HFA R134a, free from CFC and HCFC
compounds.
No intermediate cooling fluid is used.
Instead, temperature and humidity conditioning is
carried out directly on the circulating airflow.
- --------------------------------------------------------------------------------
Heating Provided by an electrical heater element.
- --------------------------------------------------------------------------------
Humidity By evaporation directly into the recirculated
airflow.
- --------------------------------------------------------------------------------
Dehumidity By an unfinned refrigerated coil which causes
moisture to condense out into the unit's drain.
- --------------------------------------------------------------------------------
Performance The Temperature Control unit is designed to:
* Condition a volume of 0.09 cu metres
* Produce a stream of air at a constant
+24(degree)C (stabilised to+/-2(degree)C),
50% r.h. (stabilized to+/-5(degree)%)
* Operate in combined ambient conditions of
+15(degree)C to +32(degree)C, 20% r.h. to 95%
r.h. (non-condensing)
- --------------------------------------------------------------------------------
Airflow Air enters through the rear of the printer hood,
suitably conditioned, and is then blown out through
openings built into the printer hood.
Recirculating airflow minimizes contamination by
dirt and dust.
The rate of airflow to the print head area is
critical. Too high an airflow rate causes a skin to
form on the solder paste, making it difficult to
solder. The unit integrates with baffling in the
printer hood to provide a controlled airflow of 0.5
metres/sec maximum in the print head area.
- --------------------------------------------------------------------------------
28
<PAGE>
Controls The unit is designed for simple operation with minimum
operator intervention. Where possible, functions have
been automated or pre-set. The controls comprise
the following:
* On / off isolator switch
* Start button with illuminated warning indicator
* Emergency Stop button
* Digital temperature controller
* Digital humidity controller
- --------------------------------------------------------------------------------
Distilled / * Required to give a maximum flow of 3 litres
Demineralized water per hour
supply * Only opaque tube to be used (preferably
plastic)
* 3/8" OD compression fitting. See drawing for
pipework.
- --------------------------------------------------------------------------------
Power requirement * 415 volt 50 Hz 3 phase
* 210 volt 60 Hz 3 phase
- --------------------------------------------------------------------------------
TEMPERATURE CONTROL UNIT
- --------------------------------------------------------------------------------
Cooling Cooling is achieved using a refrigeration
compressor. Water circulates through a heat
exchanger in the print head hood. A fan draws air
through recirculating tubes within the print head
environment. When the required temperature is
reached the fan runs in slow mode to reduce the air
flow. This ensures that cooling is available on
demand to provide close control of temperature with
a minimum of air flow.
The refrigerant used is HFA R134a which is totally
free from both CFC and HCFC compounds.
- --------------------------------------------------------------------------------
Heating Provided by an electrical heater element. If
ambient temperature falls below the set point then
the unit switches to heating. The recirculating
water passes through the print head heat exchanger
raising the temperature in the print head.
- --------------------------------------------------------------------------------
Performance The Temperature Control unit is designed to:
* Condition a volume of 0.5 cu metres
* Produce a stream of air at a constant
+24(degree)C (stabilised to +/-2(degree)C)
* Operate in combined ambient conditions of
+15(degree)C to +32(degree)C
- --------------------------------------------------------------------------------
Airflow Air enters through the rear of the printer hood,
suitably conditioned, and then blown out through a
number of graduated openings built into the printer
hood.
The recirculating nature of the airflow
minimizes contamination by outside dirt and
dust particles.
The rate of airflow to the print head area is
critical. While it may seem desirable to have a
high rate in order to transfer the temperature
conditions to the print head area more
efficiently, too high an airflow rate causes a
skin to form on the solder paste making it
difficult to solder. The unit is designed to
integrate with baffling in the printer hood to
provide the required conditions with an airflow
of 0.35 metres/second maximum in the print
head area.
- --------------------------------------------------------------------------------
Controls The unit has been designed for simple operation
requiring the minimum of operator intervention.
Where possible, functions have been automated or
pre-set so that operator controls can be kept to a
minimum. The controls comprise the following:
* On / off isolator switch
* Digital space temperature probe and controller
* Ambient temperature monitor
* Recirculating water temperature controller
- --------------------------------------------------------------------------------
29
<PAGE>
Power requirement Can be specified with either one of the
following supplies:
* 220 volt 50 Hz
* 110 volt 60 Hz
- --------------------------------------------------------------------------------
PASTE DISPENSER
- --------------------------------------------------------------------------------
Dispenser cartridge 6oz or 12oz cartridge
- --------------------------------------------------------------------------------
Dispensing medium Solder paste or adhesives
- --------------------------------------------------------------------------------
Dispenser nozzles 3mm and 5mm
- --------------------------------------------------------------------------------
Dispensing pressure Adjustable up to 6 Bar at
2 litres/min FAD
- --------------------------------------------------------------------------------
Dispensing range Anywhere within the internal screen
frame, subject to design limits
- --------------------------------------------------------------------------------
Dispensing speed 10 - 100 mm /second
- --------------------------------------------------------------------------------
Dispensing frequency 0 - 500 prints
- --------------------------------------------------------------------------------
Start delay 0 - 10 seconds in 0.1 second increments
- --------------------------------------------------------------------------------
Suck-back delay 0 - 10 seconds in 0.1 second increments
- --------------------------------------------------------------------------------
No. of passes 1 - 10 per dispense cycle
- --------------------------------------------------------------------------------
Air supply Uses printer air supply
- --------------------------------------------------------------------------------
STATISTICAL PROCESS CONTROL
- --------------------------------------------------------------------------------
Chart types * PCB Stretch
* Fiducial confidence
* Defects
* 2D PCB Average cover
* 2D PCB Minimum cover
* 2D Stencil Average cover
* 2D Stencil maximum cover
- --------------------------------------------------------------------------------
Chart properties Enable, Display, Sample size, Chart size, Chart
limits, Action limit, Warning limit
- --------------------------------------------------------------------------------
Database type Microsoft(R) Access for Windows(R)
- --------------------------------------------------------------------------------
Database fields Includes date/time, user, product, batch,
print direction, confidence, stretch, print time,
number of:
* Prints
* Alignment retries
* Paste cycles
* Dry stencil cleans
* Wet stencil cleans
* 2D PCB / stencil pass / fail
* 2D PCB / stencil measurements
* 2D average cover
* 2D minimum / maximum cover
* Error codes
- --------------------------------------------------------------------------------
Database management tools Compact, Backup, Delete, Repair, Export,
Database statistics
- --------------------------------------------------------------------------------
Data export types Microsoft Access, Microsoft Excel, dBase IV,
ASCII CSV
- --------------------------------------------------------------------------------
Data replay facilities * Select by User, Product, Batch, Date, Time
* Recreate control charts
* Show individual print data for PCB coverage,
Stencil coverage, Paste dispensing,
Stencil cleaning
- --------------------------------------------------------------------------------
Network support User-specified SPC database directory
- --------------------------------------------------------------------------------
Report features * Print chart / charts
* User-definable report interval
* Report group by user, product, batch, day,
month, year or none
* Print summary data
* 2D inspection summary data
* Time utilization for printing, waiting, and
idle
* Error analysis
- --------------------------------------------------------------------------------
30
<PAGE>
AUTO-TOOLING
- --------------------------------------------------------------------------------
Programmable 48
tooling pins
- --------------------------------------------------------------------------------
Placement area Full board area (within design limits)
- --------------------------------------------------------------------------------
Changeover cycle 4 minutes for 48 pins distributed
time evenly across 490 x 470mm
- --------------------------------------------------------------------------------
Pin diameter 21mm base reduced to 4mm at board support
- --------------------------------------------------------------------------------
VACUUM STENCIL CLEANER
- --------------------------------------------------------------------------------
Cleaning paper 508mm width paper roll incremented by a
DC motor and tensioned by an adjustable
clutch
- --------------------------------------------------------------------------------
Solvent dispensing Even dispensing up to 2cc over the full
system width of the cleaning paper
- --------------------------------------------------------------------------------
Vacuum cleaning Provides standard dry and wet cleaning
head functions and a suction facility through
3mm x 505mm slots across the width of
the unit
- --------------------------------------------------------------------------------
Manifold Includes ports each side of the unit
providing even air flow across the
cleaning head. The combined c.s.a. of
the ports is 1200 mm2 minimum.
Flexible ducting takes the air to the filtration unit.
- --------------------------------------------------------------------------------
Y movement Achieved by connecting the unit to the camera
carriage using electromagnets.
- --------------------------------------------------------------------------------
Safety regulations Fully compliant with OSHA and
COSHH regulations
- --------------------------------------------------------------------------------
Filter Carbon granulated chemical filter with 78% efficiency at
1 micron.
- --------------------------------------------------------------------------------
Filter life Minimum 180 days given typical
solvent use of 160 cc/day
- --------------------------------------------------------------------------------
Filter access The filter is easily accessed and replaced from
the rear of the printer.
- --------------------------------------------------------------------------------
Vacuum pump Provides pressure drop of 2-3 psi across the
cleaning head with a mass air flow rate of 75 -
100 litres/min.
115/240V, 50/60Hz, 500 W
Noise level 60dB (max)
- --------------------------------------------------------------------------------
31
<PAGE>
SIGMAPRINT 400
The Sigmaprint 400 is an automatic in-line solder paste printer based on a 20 x
20 inch screen frame with the following standard features:
Single roving camera with dual plane optics
13X16.5 inch print area
Underscreen cleaner
Windows interface
PC based vision system
SMEMA protocol plus others
The following features are optionally available on the printer:
Automatic tooling
Paste dispenser
2d inspection
Temperature control facility
Environmental control facility
Adaptive control
SPC management
CAD/Gerber interface (currently in development)
32
<PAGE>
FUNCTIONAL SPECIFICATION
PCB SIZE
The machine shall have the ability to print PCBs which are the following
minimum, maximum and thickness size.
Minimum 50x25 mm
Maximum 420x340 mm
Thickness 0.8 -- 5.0 mm
The machine shall have capability of handling pallets. The weight of which shall
not exceed 1.0Kg including the PCB. The machine shall have capability of
handling PCBs which have a maximum thickness including board warpage of 5mm. The
machine shall have the capability to handle 15 mm under side components.
PRINT PRESSURE
The print pressure system shall apply pressure between 0Kg and 15Kg to a
resolution of 0.1Kg
Pressure accuracy = 0.05Kg
PRINT SPEED
The machine shall be capable of printing between 5mm per sec and 170mm per sec
Speed resolution =1mm per sec
Speed Accuracy = 1% of full range. +/-1% of value
SQUEEGEES
The standard range of metal and polyurethane squeegee blades shall fit the new
machine
SCREEN FRAME
The machine shall be capable of accepting the following stencil / screen frames:
* 20" x 20"x 1"hollow section
* Universal screen frame adapter.
SCREEN LOCATION
The stencil shall manually slide into the machine's stencil location system and
be pneumatically clamped. The final position of the screen shall be controlled
by a fixed stop and spring loading system in order to achieve a repeatability of
0.5 mm. Alternatively the final position of the screen shall be positioned using
the machine adaptive control feature. The screen location shall not restrict the
print image position within the screen.
PRINTABLE PITCH
The machine shall be capable of printing solder paste, epoxy glues and
conductive inks generally used in the electronics production environment.
PASTE KNEAD CYCLE
A user selectable paste knead cycle shall be available in order to prepare the
solder paste in the following situations:
* At the start of a new printing operation
* When the machine has been left for a period of time with
solder paste on the screen.
33
<PAGE>
MACHINE PERFORMANCE
The machine shall be capable of the following.
* Have the ability to print 12 thou pitch subject to the process limits.
* Achieve a print accuracy of 25 micron at 3 sigma
* Achieve an alignment repeatability of 25 micron at 6 sigma.
* Return a Cpk value of 1.33 ( see test spec)
MACHINE THROUGHPUT
A machine throughput of 30 seconds per board shall be achieved based on the
following parameters:
* PCB size 150 mm length x 110mm width.
* Squeegee pressure 4Kg
* Squeegee speed 170mm per second
* Print mode Print Print
* Snap off speed Maximum
* Table down delay Zero
PRODUCT RELIABILITY
All parts should be designed and selected to give a minimum of 5 years service
based on the machine working 18 hours per day for 320 days per year, subject to
the routine maintenance schedule being carried out. The machine up time
requirement shall be greater than 96% MTTR = 1 hr
PRODUCT SETUP
The machine shall be capable of configuring a new product in 15minutes or less.
The process includes the following steps.
* Screen load /unload.
* Squeegee removal / replacement
* Create board file
* Completion of board file parameter pages.
* Vision setup based on learning two site fiducial locations.
* Configure board tooling.
It shall be possible to set up a pre-programmed product in 10 minutes or
less. The process includes the following steps:
* Select board file
* Screen load /unload
* Squeegee removal / replacement
* Configure board tooling.
PCB ALIGNMENT
The system for stencil to PCB alignment is a single motorised camera
module with a look up / down optical arrangement. The module shall be
driven in x and y to cover the maximum and minimum board sizes. A
programmable multipoint alignment location strategy locates and aligns
the PCB to stencil. Fiducials of size 0.5-3.5 mm shall be
accommodated. Fiducial training shall be carried out manually or
automatically on any board fiducial or synthetic shape.
PCB SUPPORT
* The PCB to be printed will be held using edge clamps, the edge clamps
will not encroach more than 3mm over two sides of the PCB.
* The machine shall be supplied with either manual or automatic tooling
support. Both systems shall operate with the same pin design and be
capable of handling 24 pins.
34
<PAGE>
MACHINE DIAGNOSTICS
The machine shall have the capability to report the following
* A comprehensive list of error conditions giving the machine operator a
description of the condition and possible recovery messages.
* Sensor Input and output status and check for correct operation
* Motor status and check for correct operation
* Maintenance interval details
SPC
The machine should have a SPC programme indicating the following:
* Machine uptime / downtime / waiting time
* Total PCB count
* Batch count
* Operator log on and access permission level
* Temperature and humidity logging (when option is fitted)
* If 2D inspection is supplied then the SPC programme will report on
paste coverage and alignment accuracy.
OPTIONS
LANGUAGE
The machine interface shall be configurable in the following languages :
* English
* German
* French
* Danish
* Swedish
* Italian
* Spanish
* Finnish
* Japanese
AUTOMATIC TOOLING
The system shall be capable of placing a maximum of 24 tooling pins to be
configured anywhere within the available board area within a 5 minute period.
* A magnetic pickup attached to the single roving camera picks and
places support posts
* The lift cylinder raises and lowers the tooling supports from the
carousel.
The placement strategy may be driven either by
* The tooling page available on the SigmaPro interface
* Through CAD / GERBER data with third party supplied software.
TEMPERATURE CONTROL
The Environmental Control Unit provides:
* Low print-head air velocity to prevent skin forming on solder pad
surfaces
* Integrated design uses air ducts in printer hood and allowing the
printer hood to be lifted with the Temperature control module in place
* Refrigeration plant sized to cope with ambient of +15(degree)C and
+32(degree)
* Minimal service connections requiring only electricity
Constant temperature gives users a closely controlled environment
35
<PAGE>
FULL ENVIRONMENTAL CONTROL
The Environmental Control Unit provides:
* HUMIDITY CONTROL: 40 degrees rh plus/minus 5%
* LOW PRINT-HEAD AIR VELOCITY to prevent skin forming on solder pad
surfaces
* INTEGRATED DESIGN uses air ducts in printer hood and allows printer
hood to be lifted with the Perfect Climate control module in place
* REFRIGERATION PLANT sized to cope with ambient of +15(degree)C and
+32(degree)
* MINIMAL SERVICE CONNECTIONS requiring only electricity, demineralized
water, and drain
* No intermediate coolant, so installation and use are both easy and
free from mess
Humidity control combined with constant temperature gives users a much
more closely controlled environment than is possible with conventional
temperature-only systems.
PASTE DISPENSER
* Solder paste is dispensed from a 6oz paste cartridge
* The operation of the dispenser does not require the screen to move in
order to apply the solder paste.
UNDERSCREEN CLEANER
* An sensor indicates when the paper roll is empty.
* An sensor indicates when the solvent bottle is empty
* An optional vacuum system is available to further enhance the stencil
cleaner which filters the air before exhausting it back into the
environment
2D INSPECTION
The system will:
* Identify paste coverage
* Report on alignment accuracy
* Inspect the under side of the stencil and initiate an underscreen
clean cycle when required.
STATISTICAL PROCESS CONTROL (SPC)
Real-time statistical process control is achieved through a wide range
of industry standard control charts with user-definable warning and
action limits. When installed, 2D inspection is automatically
integrated with SPC.
SPC charts are displayed during production, with warnings producing
operator alerts. Violation of action limits halts production. Data can
be replayed as required to review process events, and hard copies of
charts and summary data can be obtained.
A full SPC log is stored in a networkable system database, from which
selective export can generate data for use in Microsoft(R) Excel or
other formats.
Statistical Process Control provides:
* Detection of faulty input product
* Control of process variability within user-definable limits
* Review of process history
* Management access to raw and summary print process data
36
<PAGE>
CAD/GERBER INTERFACE
A software interface is currently under development which will provide
an off-line facility to produce PCB files which can be used by
SigmaPro from CAD or Gerber file information.
The interface will allow the user to import and view Gerber files and
to specify fiducial, tooling and inspection sites on the viewed image.
This data is then used to modify a template product file which may be
used by the SigmaPro software.
Initially the program will operate as a stand-alone program, but the
intention is to later incorporate this functionality into SigmaPro.
SAFETY COMPLIANCE
* The machine complies with the Heath and Safety requirements currently
in force in the UK
* The machine is CE approved
* The machine is designed to conform to UL standards
37
<PAGE>
TECHNICAL SPECIFICATION
- --------------------------------------------------------------------------------
Maximum board size 420 x 340 mm
- --------------------------------------------------------------------------------
Minimum board size 50 x 25 mm
- --------------------------------------------------------------------------------
Maximum board 5.0 mm (including warpage tolerance)
thickness
- --------------------------------------------------------------------------------
Maximum underside 15 mm
clearance
- --------------------------------------------------------------------------------
Maximum board 0.5 Kg
weight
- --------------------------------------------------------------------------------
Machine +/- 25 microns at 6 sigma
repeatability
- --------------------------------------------------------------------------------
Print area 420 x 340 mm
- --------------------------------------------------------------------------------
Maximum print 360 mm
stroke
- --------------------------------------------------------------------------------
Operational modes print/print, print/flood, flood/print,
on contact, 1 or 2 deposits
- --------------------------------------------------------------------------------
Standard stencil 508 x 508 x 25 mm
frame size
- --------------------------------------------------------------------------------
Stencil frame Available within maximum stencil
adaptors frame dimensions
- --------------------------------------------------------------------------------
X/Y stencil +/- 10 mm
alignment range
- --------------------------------------------------------------------------------
Radial stencil +/- 3(0)
alignment range
- --------------------------------------------------------------------------------
Squeegee pressure 0-15 Kg
- --------------------------------------------------------------------------------
Print speed 5-170 mm sec-1
- --------------------------------------------------------------------------------
Snap off speed 1-20 mm sec-1
- --------------------------------------------------------------------------------
Transfer height 915-965 mm
- --------------------------------------------------------------------------------
Conveyor belts 3.0 mm 'O'-section polyurethane
- --------------------------------------------------------------------------------
Throughput time 30 seconds excluding print time
- --------------------------------------------------------------------------------
Up and down line SMEMA, TDK (Alternative interfaces
protocol can be specified)
- --------------------------------------------------------------------------------
Conveyor orientation Front rail dedication
(Rear rail dedication optional)
- --------------------------------------------------------------------------------
Power supply 110-240V, 60/50 Hz
- --------------------------------------------------------------------------------
Internal power 24V
supply
- --------------------------------------------------------------------------------
Power consumption 400W
- --------------------------------------------------------------------------------
Air supply 5 cfm at 5 Bar clean air supply
- --------------------------------------------------------------------------------
Weight 250Kg
- --------------------------------------------------------------------------------
Height 1188 mm
- --------------------------------------------------------------------------------
Depth 1070 mm
- --------------------------------------------------------------------------------
Width 797 mm
- --------------------------------------------------------------------------------
User Interface Microsoft Windows(TM) with SigmaPro
machine control software
- --------------------------------------------------------------------------------
Interface control Monitor with light pen
- --------------------------------------------------------------------------------
VISION SYSTEM
- --------------------------------------------------------------------------------
Teach window Full vision windows
- --------------------------------------------------------------------------------
Viewing capability 330 x 410 mm
- --------------------------------------------------------------------------------
Camera Single roving module
(look up/look down capability)
- --------------------------------------------------------------------------------
Fiducials Any standard shape printed pad or
dedicated fiducials half-etched in
stencil depending on mode of operation
- --------------------------------------------------------------------------------
Processing speed Less than 500 milliseconds per fiducial
(typical) (for a 1.0 mm fiducial within
+/-2.5 mm of trained location
- --------------------------------------------------------------------------------
Vision processing Selectable: normalised gray scale
methods correlation or binary boundary tracking
- --------------------------------------------------------------------------------
Gray scale resolution 255 shades of gray per pixel
- --------------------------------------------------------------------------------
Image storage 512 x 512 pixels
capacity
- --------------------------------------------------------------------------------
Framestore card Matrox
- --------------------------------------------------------------------------------
38
<PAGE>
The following specification applies to a 10mm horizontal field
of view:
- --------------------------------------------------------------------------------
Field of view/pixel ~0.019mm/pixel
- --------------------------------------------------------------------------------
Vision accuracy +/-0.0152mm
- --------------------------------------------------------------------------------
Vision repeatability +/-0.0076mm
- --------------------------------------------------------------------------------
2 D INSPECTION
- --------------------------------------------------------------------------------
Inspection area Inspection can be programmed anywhere
within the maximum board area.
- --------------------------------------------------------------------------------
Field of view 10mm x 10mm (3/8" x 3/8")
- --------------------------------------------------------------------------------
Inspect area 9mm x 9mm
- --------------------------------------------------------------------------------
Maximum number 100 per board
of inspection sites
- --------------------------------------------------------------------------------
Inspections / cycle Full, sequential or randomized
- --------------------------------------------------------------------------------
Inspection speed Typically 5 sites in 1.5 seconds
- --------------------------------------------------------------------------------
Paste coverage 10%
repeatability
- --------------------------------------------------------------------------------
ENVIRONMENTAL
CONTROL UNIT
- --------------------------------------------------------------------------------
Cooling Provided by a refrigeration compressor fitted
with bypass circuitry to keep the compressor
running when setpoint is reached, so cooling is
available on demand to provide close control of
temperature.
The compressor is switched off if no cooling has
been used for 6 minutes, so minimizing power
consumption.
Refrigerant is HFA R134a, free from CFC and HCFC
compounds.
No intermediate cooling fluid is used.
Instead, temperature and humidity conditioning is
carried out directly on the circulating airflow.
- --------------------------------------------------------------------------------
Heating Provided by an electrical heater element.
- --------------------------------------------------------------------------------
Humidity By evaporation directly into the recirculated
airflow.
- --------------------------------------------------------------------------------
Dehumidity By an unfinned refrigerated coil which causes
moisture to condense out into the unit's drain.
- --------------------------------------------------------------------------------
Performance The Temperature Control unit is designed to:
* Condition a volume of 0.09 cu metres
* Produce a stream of air at a constant
+24(degree)C (stabilised to +/-2(degree)C),
50% r.h. (stabilized to +/-5(degree)%)
* Operate in combined ambient conditions of
+15(degree)C to +32(degree)C, 20% r.h. to
95% r.h. (non-condensing)
- --------------------------------------------------------------------------------
Airflow Air enters through the rear of the printer hood,
suitably conditioned, and is then blown out through
openings built into the printer hood.
Recirculating airflow minimizes contamination by
dirt and dust.
The rate of airflow to the print head area is
critical. Too high an airflow rate causes a skin to
form on the solder paste, making it difficult to
solder. The unit integrates with baffling in the
printer hood to provide a controlled airflow of 0.5
metres/sec maximum in the print head area.
- --------------------------------------------------------------------------------
39
<PAGE>
Controls The unit is designed for simple operation with
minimum operator intervention. Where possible,
functions have been automated or pre-set. The
controls comprise the following:
* On / off isolator switch
* Start button with illuminated warning indicator
* Emergency Stop button
* Digital temperature controller
* Digital humidity controller
- --------------------------------------------------------------------------------
Distilled / * Required to give a maximum flow of 3 litres per
Demineralized water hour
supply * Only opaque tube to be used (preferably plastic)
* 3/8" OD compression fitting. See drawing for
pipework.
- --------------------------------------------------------------------------------
Power requirement * 240 volt 50 Hz single phase
* 115 volt 60 Hz single phase
- --------------------------------------------------------------------------------
TEMPERATURE CONTROL UNIT
- --------------------------------------------------------------------------------
Cooling Cooling is achieved using a refrigeration
compressor. Water circulates through a heat
exchanger in the print head hood. A fan draws air
through recirculating tubes within the print head
environment. When the required temperature is
reached the fan runs in slow mode to reduce the
air flow. This ensures that cooling is available
on demand to provide close control of temperature
with a minimum of air flow.
The refrigerant used is HFA R134a which is
totally free from both CFC and HCFC compounds.
- --------------------------------------------------------------------------------
Heating Provided by an electrical heater
element. If ambient temperature falls
below the set point then the unit
switches to heating. The recirculating
water passes through the print head
heat exchanger raising the temperature
in the print head.
- --------------------------------------------------------------------------------
Performance The Temperature Control unit is designed to:
* Condition a volume of 0.5 cu metres
* Produce a stream of air at a constant
+24(degree)C (stabilised to+/-2(degree)C)
* Operate in combined ambient conditions of
+15(degree)C to +32(degree)C
- --------------------------------------------------------------------------------
Airflow Air enters through the rear of the
printer hood, suitably conditioned, and
then blown out through a number of
graduated openings built into the
printer hood.
The recirculating nature of the airflow minimizes
contamination by outside dirt and dust particles.
The rate of airflow to the print head area is
critical. While it may seem desirable to have a
high rate in order to transfer the temperature
conditions to the print head area more efficiently,
too high an airflow rate causes a skin to form on
the solder paste making it difficult to solder. The
unit is designed to integrate with baffling in the
printer hood to provide the required conditions with
an airflow of 0.35 metres/second maximum in the
print head area.
- --------------------------------------------------------------------------------
Controls The unit has been designed for simple
operation requiring the minimum of
operator intervention. Where possible,
functions have been automated or
pre-set so that operator controls can
be kept to a minimum. The controls
comprise the following:
* On / off isolator switch
* Digital space temperature probe and controller
* Ambient temperature monitor
* Recirculating water temperature controller
- --------------------------------------------------------------------------------
Power requirement Can be specified with either one of the
following supplies:
* 220 volt 50 Hz
* 110 volt 60 Hz
- --------------------------------------------------------------------------------
40
<PAGE>
PASTE DISPENSER
- --------------------------------------------------------------------------------
Dispenser cartridge 6oz cartridge
- --------------------------------------------------------------------------------
Dispensing medium Solder paste or adhesives
- --------------------------------------------------------------------------------
Dispenser nozzles 3mm and 5mm
- --------------------------------------------------------------------------------
Dispensing pressure Adjustable up to 6 Bar at 2 litres/min FAD
- --------------------------------------------------------------------------------
Dispensing speed 10 - 100 mm /second
- --------------------------------------------------------------------------------
Dispensing frequency 0 - 500 prints
- --------------------------------------------------------------------------------
Start delay 0 - 10 seconds in 0.1 second increments
- --------------------------------------------------------------------------------
Suck-back delay 0 - 10 seconds in 0.1 second increments
- --------------------------------------------------------------------------------
No. of passes 1 - 10 per dispense cycle
- --------------------------------------------------------------------------------
Air supply Uses printer air supply
- --------------------------------------------------------------------------------
STATISTICAL PROCESS CONTROL
- --------------------------------------------------------------------------------
Chart types * PCB Stretch
* Fiducial confidence
* Defects
* 2D PCB Average cover
* 2D PCB Minimum cover
* 2D Stencil Average cover
* 2D Stencil maximum cover
- --------------------------------------------------------------------------------
Chart properties Enable, Display, Sample size, Chart size, Chart
limits, Action limit, Warning limit
- --------------------------------------------------------------------------------
Database type Microsoft(R) Access for Windows(R)
- --------------------------------------------------------------------------------
Database fields Includes date/time, user, product, batch,
print direction, confidence, stretch, print time,
number of:
* Prints
* Alignment retries
* Paste cycles
* Dry stencil cleans
* Wet stencil cleans
* 2D PCB / stencil pass / fail
* 2D PCB / stencil measurements
* 2D average cover
* 2D minimum / maximum cover
* Error codes
- --------------------------------------------------------------------------------
Database management tools Compact, Backup, Delete, Repair, Export,
Database statistics
- --------------------------------------------------------------------------------
Data export types Microsoft Access, Microsoft Excel, dBase IV,
ASCII CSV
- --------------------------------------------------------------------------------
Data replay facilities * Select by User, Product, Batch, Date, Time
* Recreate control charts
* Show individual print data for PCB coverage,
Stencil coverage, Paste dispensing,
Stencil cleaning
- --------------------------------------------------------------------------------
Network support User-specifed SPC database directory
- --------------------------------------------------------------------------------
Report features * Print chart / charts
* User-definable report interval
* Report group by user, product, batch, day,
month, year or none
* Print summary data
* 2D inspection summary data
* Time utilization for printing, waiting, and idle
* Error analysis
- --------------------------------------------------------------------------------
41
<PAGE>
AUTO-TOOLING
- --------------------------------------------------------------------------------
Programmable 24
tooling pins
- --------------------------------------------------------------------------------
Placement area Full board area (within design limits)
- --------------------------------------------------------------------------------
Pin diameter 21mm base reduced to 4mm at board support
- --------------------------------------------------------------------------------
VACUUM STENCIL CLEANER
- --------------------------------------------------------------------------------
Cleaning paper 420mm width paper roll incremented by a DC motor and
tensioned by an adjustable clutch
- --------------------------------------------------------------------------------
Solvent dispensing Even dispensing up to 2cc over the full width of the
system cleaning paper
- --------------------------------------------------------------------------------
Vacuum cleaning head Provides standard dry and wet cleaning
functions and a suction facility through 3mm slots
across the width of the unit
- --------------------------------------------------------------------------------
Manifold Includes ports each side of the unit
providing even air flow across the
cleaning head. The combined c.s.a. of the
ports is 1200 mm2 minimum.
Flexible ducting takes the air to the filtration unit.
- --------------------------------------------------------------------------------
Y movement Achieved by connecting the unit to the camera
carriage using electromagnets.
- --------------------------------------------------------------------------------
Safety regulations Fully compliant with OSHA and COSHH
regulations
- --------------------------------------------------------------------------------
Filter Carbon granulated chemical filter with 78% efficiency
at 1 micron.
- --------------------------------------------------------------------------------
Filter life Minimum 180 days given typical solvent
use of 160 cc/day
- --------------------------------------------------------------------------------
Filter access The filter is easily accessed and replaced from
the rear of the printer.
- --------------------------------------------------------------------------------
Vacuum pump Provides pressure drop of 2-3 psi across the
cleaning head with a mass air flow rate of 75 - 100
litres/min.
115/240V, 50/60Hz, 500 W
Noise level 60dB (max)
- --------------------------------------------------------------------------------
42
<PAGE>
SMTECH 100 SERIES PRINTERS
The SMTech 100 Series printer range comprises the following four models:
100S
100MV
100AV
100iS
The 100S is a semi-automatic solder paste printer based on a 20 x 20 inch screen
frame with the following standard features:
19X17 inch print area
Dual squeegee printhead
Ultra-fine pitch capability
Programmable setup parameters
Snap-off speed control
Vertical motion stencil/PCB separation
Built-in diagnostics
Setup security management
The following options are available:
Tooling
Stencil frame adaptors
Stencil cleaner
Host management system
Stand/cabinet
The 100MV is a semi-automatic solder paste printer based on a 20 x 20 inch
screen frame with all the features of the 100S printer, and with a twin camera
vision system to aid the operator in the alignment of PCBs. The vision system
incorporates two video cameras which view each PCB in position on the worktable
and check its alignment against a previously stored reference. Incorrectly
aligned boards will not be printed until the registration has been corrected by
the operator.
The 100AV is similar to the 100AV printer except that errors in registration are
automatically corrected by the printer before printing takes place.
The 100iS is an automatic in-line solder paste printer which, like all the 100
series printers is based on a 20 x 20 inch screen frame. It features all the
standard features of the other 100 series printers plus the following:
Adjustable conveyor system
Adjustable system tooling
Reciprocating registration pin carriage
'Torque-beam' mounted registration pins
Easily interfaced with other up-line or down-line equipment using the
industry standard SMEMA interface.
43
<PAGE>
FUNCTIONAL SPECIFICATION
PCB SIZE
The machine shall have the ability to print PCBs which have the following
minimum and maximum sizes,.and thicknesses.
Minimum 50x25 mm
Maximum 500x450 mm
Thickness 0.8 -- 5.0 mm including warpage
PRINT PRESSURE
The print pressure system shall apply pressure between 0Kg and 15Kg
PRINT SPEED
The machine shall be capable of printing between 10mm per sec and 70mm per sec
Speed resolution =1mm per sec
Speed Accuracy = 1% of full range. +/-1% of value
SQUEEGEES
The standard range of metal and polyurethane squeegee blades shall fit the
machine
SCREEN FRAME
The machine shall be capable of accepting the following stencil / screen frames:
* 20" x 20"x 1"hollow section
* Universal screen frame adapter.
PRINTABLE PITCH
The machine shall be capable of printing solder paste, epoxy glues and
conductive inks generally used in the electronics production environment.
PRODUCT RELIABILITY
All parts should be designed and selected to give a minimum of 5 years service
based on the machine working 18 hours per day for 320 days per year, subject to
the routine maintenance schedule being carried out. The machine up time
requirement shall be greater than 96% MTTR = 1 hr
PRODUCT SETUP
The machine shall be capable of configuring a new product in 15minutes or less.
The process includes the following steps.
* Screen load /unload.
* Squeegee removal / replacement
* Create board file
* Completion of board file parameter pages.
* Configure board tooling.
44
<PAGE>
It shall be possible to set up a pre-programmed product in 10 minutes or less.
The process includes the following steps:
* Select board file
* Screen load /unload
* Squeegee removal / replacement
* Configure board tooling.
MACHINE DIAGNOSTICS
The machine shall have the capability to report the following
* A comprehensive list of error conditions giving the machine operator a
description of the condition and possible recovery messages.
* Sensor Input and output status and check for correct operation
* Motor status and check for correct operation
SIGMALINK
SigmaLink is an off-line facility is optionally available and enables the
creation and storage of PCB files. These can be up- or down-loaded to the
stencil printer as required.
45
<PAGE>
TECHNICAL SPECIFICATION
- --------------------------------------------------------------------------------
Maximum board size 400 x 450 mm
- --------------------------------------------------------------------------------
Minimum board size 50 x 25 mm
- --------------------------------------------------------------------------------
Maximum board thickness 5.0 mm (including warpage tolerance)
- --------------------------------------------------------------------------------
Maximum underside clearance 15 mm
- --------------------------------------------------------------------------------
Maximum board weight 0.5 Kg
- --------------------------------------------------------------------------------
Minimum board Zero
edge clearance
- --------------------------------------------------------------------------------
Registration +/- 10 microns
repeatability
- --------------------------------------------------------------------------------
Print area 400 x 500 mm
- --------------------------------------------------------------------------------
Print stroke +/-5mm
repeatability
- --------------------------------------------------------------------------------
Operational modes print/print, print/flood, flood/print,
on contact, 1 or 2 deposits
- --------------------------------------------------------------------------------
Standard stencil 508 x 508 x 25 mm (internal)
frame size
- --------------------------------------------------------------------------------
Stencil frame Available within maximum stencil
adaptors frame dimensions
- --------------------------------------------------------------------------------
X/Y stencil +/-10mm
alignment range
- --------------------------------------------------------------------------------
Radial stencil +/-4(degree)
alignment range
- --------------------------------------------------------------------------------
Squeegee type Metal or polyurethane
- --------------------------------------------------------------------------------
Squeegee width 75-470mm
- --------------------------------------------------------------------------------
Squeegee pressure 0-15Kg (increments of 0.1Kg)
- --------------------------------------------------------------------------------
Print speed 10 - 70mm/sec (increments of 1.0mm/sec)
- --------------------------------------------------------------------------------
Snap-off (print gap) 25mm max - depending on tooling
(increments of 0.05mm)
- --------------------------------------------------------------------------------
Snap-off speed 1-20mm/sec (increments of 1%)
- --------------------------------------------------------------------------------
Tooling posts 2-16mm diameter
- --------------------------------------------------------------------------------
Throughput time 15 seconds - operator dependent,
excluding print time
- --------------------------------------------------------------------------------
Power supply 80 - 240V 50Hz
- --------------------------------------------------------------------------------
Internal power supply 24V
- --------------------------------------------------------------------------------
Power consumption 1KW (max)
- --------------------------------------------------------------------------------
Air supply 5 Bar clean air supply
- --------------------------------------------------------------------------------
Footprint (S/MV/AV) 694mm x 837mm
- --------------------------------------------------------------------------------
Height 1000mm
- --------------------------------------------------------------------------------
Weight (S/MV/AV) 225Kg
- --------------------------------------------------------------------------------
Board data storage Up to 30 sets of print parameters
- --------------------------------------------------------------------------------
Control system Menu driven via super high twist
illuminated LCD and positive
action membrane key pads
- --------------------------------------------------------------------------------
100IS SPECIFIC PARAMETERS:
- --------------------------------------------------------------------------------
Footprint 966mm x 860mm
- --------------------------------------------------------------------------------
Weight 180Kg
- --------------------------------------------------------------------------------
Conveyor belts 2mm 'O'-section polyethylene
- --------------------------------------------------------------------------------
Up- and down-line SMEMA
protocol
- --------------------------------------------------------------------------------
Conveyor speed 100 mm/sec
- --------------------------------------------------------------------------------
PCB transfer time 30 seconds plus printing time
- --------------------------------------------------------------------------------
Feed options Left to right, right to left,
left to left
- --------------------------------------------------------------------------------
46
<PAGE>
Machine To SMEMA standard, front edge
configuration dedicated, (rear edge optional)
- --------------------------------------------------------------------------------
Power supply 200/240V 50Hz or 100V50/60Hz
- --------------------------------------------------------------------------------
47
<PAGE>
SIGMAPRINT BENCHMARK
The Sigmaprint Benchmark is an entry-level semi-automatic solder paste printer
based on a 20 x 20 inch screen frame with the following standard features:
19X17 inch print area
Dual squeegee printhead
Vertical motion stencil/PCB separation
Built-in diagnostics
Setup security management
The following options are available:
Pneumatic head lift
Tooling
Stencil frame adaptors
Flat-pack machine stand
FUNCTIONAL SPECIFICATION
PCB SIZE
The machine shall have the ability to print PCBs which are the following
minimum, maximum and thickness size.
Minimum 50x25 mm
Maximum 500x450 mm
Thickness 0.8 -- 5.0 mm including warpage
PRINT PRESSURE
The print pressure system shall apply pressure between 0Kg and 15Kg to a
resolution of 0.1Kg
Pressure accuracy = 0.05Kg
PRINT SPEED
The machine shall be capable of printing between 10mm per sec and 70mm per sec
Speed resolution =1mm per sec
Speed Accuracy = 1% of full range. +/-1% of value
SQUEEGEES
The standard range of metal and polyurethane squeegee blades shall fit the new
machine
SCREEN FRAME
The machine shall be capable of accepting the following stencil / screen frames:
* 20" x 20"x 1"hollow section
* Universal screen frame adapter.
48
<PAGE>
PRINTABLE PITCH
The machine shall be capable of printing solder paste, epoxy glues and
conductive inks generally used in the electronics production environment.
PRODUCT RELIABILITY
All parts should be designed and selected to give a minimum of 5 years service
based on the machine working 18 hours per day for 320 days per year, subject to
the routine maintenance schedule being carried out. The machine up time
requirement shall be greater than 96% MTTR = 1 hr
PRODUCT SETUP
The machine shall be capable of configuring a new product in 15minutes or less.
The process includes the following steps.
* Screen load /unload.
* Squeegee removal / replacement
* Create board file
* Completion of board file parameter pages.
* Configure board tooling.
It shall be possible to set up a pre-programmed product in 10 minutes or less.
The process includes the following steps:
* Select board file
* Screen load /unload
* Squeegee removal / replacement
* Configure board tooling.
PCB SUPPORT
* The PCB to be printed will be held using edge clamps, the edge clamps
will not encroach more than 3mm over two sides of the PCB.
* The machine shall be supplied with manual tooling support. Both
systems shall operate with the same pin design and be capable of
handling 10 pins and 4 vacuum tooling supports.
MACHINE DIAGNOSTICS
The machine shall have the capability to report the following
* A comprehensive list of error conditions giving the machine operator a
description of the condition and possible recovery messages.
* Sensor Input and output status and check for correct operation
* Motor status and check for correct operation
49
<PAGE>
TECHNICAL SPECIFICATION
- --------------------------------------------------------------------------------
Maximum board size 500 x 450 mm
- --------------------------------------------------------------------------------
Minimum board size 50 x 25 mm
- --------------------------------------------------------------------------------
Maximum board 5.0 mm (including warpage tolerance)
thickness
- --------------------------------------------------------------------------------
Maximum underside 15 mm
clearance
- --------------------------------------------------------------------------------
Maximum board 0.5 Kg
weight
- --------------------------------------------------------------------------------
Minimum board Zero
edge clearance
- --------------------------------------------------------------------------------
Registration +/- 10 microns
repeatability
- --------------------------------------------------------------------------------
Print area 400 x 450 mm
420 x 450 mm
- --------------------------------------------------------------------------------
Print stroke +/-5mm
repeatability
- --------------------------------------------------------------------------------
Operational modes print/print, print/flood, flood/print,
on contact, 1 or 2 deposits
- --------------------------------------------------------------------------------
Standard stencil 508 x 508 x 25 mm (internal)
frame size
- --------------------------------------------------------------------------------
Stencil frame Available within maximum stencil
adaptors frame dimensions
- --------------------------------------------------------------------------------
X/Y stencil +/-10mm
alignment range
- --------------------------------------------------------------------------------
Radial stencil +/-4(degree)
alignment range
- --------------------------------------------------------------------------------
Squeegee type Metal or polyurethane
- --------------------------------------------------------------------------------
Squeegee width 75-470mm
- --------------------------------------------------------------------------------
Squeegee pressure 0-15Kg (increments of 0.1Kg)
- --------------------------------------------------------------------------------
Print speed 10 - 70mm/sec (increments of 1.0mm/sec)
- --------------------------------------------------------------------------------
Snap-off (print gap) 25mm max - depending on tooling
(increments of 0.05mm)
- --------------------------------------------------------------------------------
Snap-off speed 1-20mm/sec (increments of 1%)
- --------------------------------------------------------------------------------
Tooling posts 2-16mm diameter
- --------------------------------------------------------------------------------
Throughput time 20 seconds - operator dependent,
excluding print time
- --------------------------------------------------------------------------------
Power supply 200/240V 50Hz or 100V 50/60Hz
- --------------------------------------------------------------------------------
Internal power supply 24V
- --------------------------------------------------------------------------------
Power consumption 400W
- --------------------------------------------------------------------------------
Air supply 5 Bar clean air supply
- --------------------------------------------------------------------------------
Weight 133Kg
- --------------------------------------------------------------------------------
Height 415mm (excluding stand)
- --------------------------------------------------------------------------------
Depth 837mm
- --------------------------------------------------------------------------------
Width 694mm
- --------------------------------------------------------------------------------
Board data storage Up to 30 sets of print parameters
- --------------------------------------------------------------------------------
Control system Menu driven via super high twist
illuminated LCD and positive
action membrane key pads
- --------------------------------------------------------------------------------
Language options English/French; English/German;
English/Swedish; English/Italian
- other languages available
- --------------------------------------------------------------------------------
50
<PAGE>
EXHIBIT B
MACHINE QUAD PRICE
------- ----------
90S *****
Adjustable Tooling *****
Mylar *****
Power Assist Open/Close *****
Support Stand *****
100S *****
BASE 100S *****
Vision System *****
100MV *****
1001S *****
100 SERIES ACCESSORIES
- ----------------------
Underscreen Cleaner *****
Sigmalink Setup Software *****
Registration Pins & *****
Carriers
Magnetic Tooling Posts *****
(each)
Vacuum Tooling Cups (each) *****
Squeegee Assemblies (per *****
pair)
Metal Squeegee Blades (per *****
pair)
Polyurethane Squeegee *****
Blades (per pair)
Standard Frames 20"x20" *****
Quantity 1-4
Standard Frames 20"x20" *****
Quantity 5-10
Standard Frames 20"x20" *****
Quantity 11-24
Standard Frames 20"x20" *****
Quantity 25+
AVX400 *****
Auto Stencil Cleaner *****
Vacuum Auto Stencil Cleaner *****
Automatic Tooling *****
Auto Paste Dispense *****
TCU *****
ECU *****
51
<PAGE>
Vacuum Tooling System
2d Inspection *****
AVX500 *****
Vacuum Auto Stencil Cleaner *****
Automatic Tooling *****
Auto Paste Dispense *****
TCU *****
ECU *****
2d Inspection PCB *****
2d Inspection Stencil *****
SPC Reporter *****
Screen Frame Adapter *****
All Prices in US Dollars
52
