Document:

Exhibit
      10.52

     

    [
      * ] =
      CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
      HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
      COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
      AMENDED.

    ASSEMBLY
      SYSTEM AGREEMENT

     

    This
      Assembly System Agreement
      (the
“Agreement”)
      is
      entered into on this 23 day of May, 2006, by and among Corgentech Inc.
      (“Corgentech,”
also
      referred to in Exhibit
      A
      attached
      hereto as “customer”
or
      “Purchaser”)
      and
      Mikron Corporation Denver (“Mikron,”
also
      referred to in Exhibit
      A
      attached
      hereto as “Mikron,”
      “Mikron
      Corporation,”
      “Mikron
      Corporation Denver”
or
      “Vendor”).

     

    Recitals

     

    Whereas,
      Corgentech and Mikron desire to enter into a legally binding contract for Mikron
      to sell, and Corgentech to purchase in exchange for the consideration set forth
      therein, the “Corgentech Assembly System” set forth on Quotation
      D05.05.012
      attached
      hereto as Exhibit
      A (the
      “Quotation”),
      on
      the terms and conditions set forth in the Quotation.

     

    Agreement

     

    Now,
      Therefore,
      in
      consideration of the foregoing recitals and for other good and valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged,
      Corgentech and Mikron hereby agree as follows:

     

    1. Binding
      Effective Agreement.
      Mikron
      hereby agrees to sell, and Corgentech agrees to purchase in exchange for the
      consideration set forth therein, the Corgentech Assembly System set forth in
      the
      Quotation on the terms and conditions set forth in the Quotation.
      Notwithstanding anything in the Quotation that may be construed to contradict
      the following, including but not limited to Section 12.9 therein, by signing
      below, Corgentech and Mikron agree this Agreement shall be legally binding
      as of
      the date first set forth above.

     

    2. Confidentiality.
      Notwithstanding anything in the Quotation that may be construed to contradict
      the following, Corgentech and Mikron hereby agree that the terms of the
      Confidential Disclosure Agreement among Corgentech, Mikron and The Tech Group
      dated March 2, 2006 shall govern the exchange of confidential information made
      pursuant to this Agreement.

     

    3. IP
      and Materials Ownership.
      Any
      trial materials provided to Mikron by Corgentech shall remain the property
      of
      Corgentech. Nothing in the Quotation, including but not limited to Section
      11.1.6 therein, shall be construed to provide Mikron with any right to use
      outside the specific scope of the Quotation, as modified by this Agreement,
      own,
      sell or reproduce any materials of Corgentech or any Proprietary Information
      or
      intellectual property of Corgentech provided under this Agreement or the
      Quotation.

     

    4. Assignment.
      Mikron
      shall not assign its contractual rights or obligations under this Agreement
      or
      the Quotation to any third party without the prior written consent of
      Corgentech.

     

    
      
        
          1.

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    5. Notices.
      All
      notices and other communications to Mikron from Corgentech shall be delivered
      to
      Mikron at the address set forth below:

     

    Attention:
      Tom Graves 

    Mikron
      Corporation Denver

    562
      Sable
      Boulevard

    Aurora,
      Colorado 80011

    Fax
      (303)
      364-5224

     

    All
      notices and other communications to Corgentech from Mikron shall be delivered
      to
      Corgentech at the address set forth below:

     

    Attention:
      Patrick Broderick

    Corgentech
      Inc.

    650
      Gateway Boulevard 

    South
      San
      Francisco, CA 94080

    Fax:
      650-624-9600

    

    6. Full
      Agreement; Modification; Waiver.
      This
      Agreement represents the full understanding between the parties of the subject
      matter contained herein. Neither this Agreement nor any term hereof may be
      changed, waived, discharged or terminated, but only by an instrument in writing
      signed by each of Corgentech and Mikron.

     

    [Remainder
      of Page Intentionally Left Blank]

     

     

    
      
        
          2.

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

      

      
        
        

        
          

        

      

      
        
        

      

    

    In
      Witness Whereof,
      each of
      the parties hereto has caused this Agreement to be executed by its duly
      authorized officer as of the date first above written.

     

     

    
      	
              Corgentech
                Inc.

            	 	 	 
	 	 	 	 
	/s/ John
              X. Regan	 	 	 
	
              
John
              X. Regan,	 	 	
            
	
              Vice
                President, Manufacturing

            	 	 	 

    

     

    
      	 	 	 
	 	

              Mikron
                Corporation Denver

               

            
	 
 	 
 	 
 
	 	By:  	/s/ Clark
              Neft
	 	
              
Clark
              Neft,
	 	
              President

            

    

     

    
      [SIGNATURE
        PAGE TO THE CORGENTECH ASSEMBLY SYSTEM AGREEMENT]

       

    

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        3
          of 62

        
          

        

      

      
        
        

      

       

    

    Exhibit
      A

     

    Quotation
      D05.05.012

    Corgentech
      Assembly System

     

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        4
          of 62

        
          

        

      

      
        
        

      

       

    

    

     

    January
      27, 2006

    

    The
      Tech
      Group

    Attn:
      Mark McElfresh

    14677
      North 74th
      St.

    Scottsdale,
      AZ 85260-2403

    

    
      	RE: 	 	Quotation D04.05.012
	 	 	Corgentech Assembly
              System

    

     

    Dear
      Mr.
      McElfresh:

    

    We
      offer
      the following assembly concept, based on our discussions and review of your
      project requirements.

    

    Mikron
      is
      an industry leader in high speed, precision assembly machines. Our equipment,
      in
      use throughout the world, produces over 40,000,000 parts each day for
      automotive, medical and consumer product manufacturers. We are committed to
      solving your production problems through design, production and timely delivery
      of reliable automation equipment at a competitive price.

    

    Our
      proposed concept utilizes our GO5TM cam-driven, linear indexing assembly system.
These
      systems allow for a high degree of scalability and flexibility allowing for
      a
      straightforward connection to downstream components.

    

    We
      hope
      the enclosed proposal meets your requirements and gives you the confidence
      to
      work as a partner with Mikron Corporation Denver. We thank you for the interest
      you have shown in our products and look forward to hearing from
      you.

    

    Sincerely,

    

    

    
      	Tom Graves	Jim Mueller
	Regional Sales Manager	Application
              Engineer

    

           

        

      
        
          
             

          

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

        
          5
            of 62

          
            

          

        

        
          
          

          
          

        

      

    

     

    
      
        	1.	
                Proposed
                  solution

              

      

    

     

    
      	
              1.1

            	
              Task
                definition

            

    

     

    Automatic
      assembly system for your Corgentech Assembly: 

     

    Please
      note that the machine is capable of producing more than 18,300,000 good parts
      per year with one machine operator and 1 part’s tender. Net output is calculated
      based on 3,600 parts per hour in 6,000 hours per year and approximately 78%
      line
      efficiency.

     

    G05TM
      Solution 

    Our
      solution is based on our G05TM assembly cells with the following advantages:

     

    
      	 	o	A parts transfer system with free pallets provides
              flexibility, speed and accuracy;

      	 	
              o

            	
              Various
                pallet sizes to accommodate your products;

            

    

    
      	 	
              o

            	
              Tested
                reliable and highly standardized basic cell;

            

    

    
      	 	
              o

            	
              Easily
                accessible compact linear configuration;

            

    

    
      	 	
              o

            	
              G05TM
                cam or numeric controlled (NC) movement in the same cell;
                

            

    

    
      	 	
              o

            	
              Systematic
                operation control check after every operation;

            

    

    
      	 	
              o

            	
              User
                friendly operator interface; 

            

    

    
      	 	
              o

            	
              Efficient
                use of working space; 

            

    

    
      	 	
              o

            	
              Option
                for integrating slow operations in a fast throughput system;
                

            

    

    
      	 	
              o

            	
              Progressive
                investment option; 

            

    

    
      	 	
              o

            	
              Option
                for connecting to other production
                systems.

            

    

     

    

      
        
           

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

        
          6
            of 62

          
            

          

        

        
          
          

        

      

    
      
        	2.	
                Key
                  points 

              

      

    

     

    
      	
              2.1

            	
              Production 

            

    

     

    Approximately
      47 “good” parts per minute

    Without
      considering stoppages due to production control 

     

    
      	
              2.2

            	
              Price

            

    

     

    
      	
              System

            	
              Approx.
                $ [*] 

            
	
              Bagging
                System (cost plus 10% integration margin)

            	
              Approx.
                $ [*] 

            
	
              Level
                3 FDA Validation Support

            	
              Approx.
                $ [*] 

            

    

     

    
      	
              2.3

            	
              Shipping
                time

            

    

     

    Approximately
      thirty four (34) weeks from receipt of signed purchase order, completion of
      the
      Kickoff Meeting and receipt of agreed-to specifications, drawings and component
      parts, and the resolution of all technical and commercial issues.

     

    
      	
              2.4

            	
              Warranty

            

    

     

    12
      months
      or 3500 hours whichever comes first.

    Parts
      and
      labor 

     

    
      	
              2.5

            	
              Confidentiality

            

    

     

    Customer
      confidentiality is an integral part of our corporate culture. Your competitive
      edge is also ours. All files are anonymously managed to guarantee optimum
      discretion.

     

    
      	
              2.6

            	
              Floor
                space requirements

            

    

     

    Approximately:
      49 x 21 feet. Our modular designed assembly systems can be configured to meet
      your space requirements.

     

    
      	
              2.7

            	
              Training

            

    

     

    Mikron
      Corporation provides comprehensive training for the operation and maintenance
      of
      the mechanical, electrical, pneumatic and software systems.

     

    
      	
              2.8

            	
              Production
                assistance: improved
                productivity

            

    

     

    Production
      assistance can be offered as an option.

     

    
      	
              2.9

            	
              Customer
                service

            

    

     

    After
      office hours, on Saturdays and Sundays, and during public holidays, a special
      phone number is reserved for our customers who need to reach us.

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        7
          of 62

        
          

        

      

      
        
        

      

       

    

    Machine
      remote connection by modem enables fast diagnosis of your control
      system.

     

    
      	
              2.10

            	
              Project
                management

            

    

     

    Our
      project teams maintain regular contact with you throughout the life of the
      project.

     

    The
      following diagram shows how a standard project develops. Very close cooperation
      throughout the project provides optimum time and cost control.

     

    [*]

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        8
          of 62

        
          

        

      

      
        
        

      

    

    
      	3.	
              Rights
                to proposal 

            

    

     

    As
      part
      of this proposal, Mikron Corporation Denver has divulged and delivered to the
      Customer certain proprietary information which includes, but is not limited
      to,
      technical requirements, specifications, print, data and other information
      relating to the description and operation of the system which is the subject
      of
      this proposal, its components, equipment, options and related services, designs,
      processes, techniques, documentation, pricing, installation and safety. The
      Customer acknowledges that certain information is secret and the sole and
      exclusive property developed or owned by Mikron Corporation Denver. The Customer
      further agrees that during the term of the consideration of this proposal and
      at
      all times subsequent (subject to contract provisions which may modify this
      agreement), Customer shall not disclose or deliver such proprietary information
      to any person or entity, other than an employee of Customer, nor shall Customer
      reverse engineer such information; it being acknowledged that it is private,
      confidential and a trade secret under the sole ownership and development of
      Mikron Corporation Denver. In the event of the breach of these covenants by
      the
      Customer, Mikron Corporation Denver shall have all rights in law or in equity
      to
      enforce this covenant including, without limitation, the right to an award
      for
      damages and reasonable costs and attorneys’ fees incurred by Mikron Corporation
      Denver in the enforcement of these covenants. The providing of such information
      by Mikron Corporation Denver to the Customer shall not be construed by either
      party to be a publication of such proprietary information.

     

    
 

    
      
        
           

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

        
          9
            of 62

          
            

          

        

        
          
          

        

      

    

     

    
      
        	4.	
                Parts
                  to be assembled

              

      

    

     

    
      	
              4.1

            	
              Description
                of parts to be assembled

            

    

     

    
      	
              No.

            	
              Description

            	
              Sample

            	
              Drawing
                No.

            	
              Rev.

            	
              Date
                

            
	
              01

            	
              Corgentech
                Assembly

            	
              YES

            	
              Not
                Provided 

            	 	 

    

     

    
      	
              4.2

            	
              Description
                and drawings of components (products) to be
                assembled

            

    

     

    [*]

     

    
      	
              4.3

            	
              Definition
                of variants 

            

    

     

    This
      proposal considers no variants.

     

    
      	
              4.4

            	
              Overall
                Assumptions

            

    

     

    Certain
      points require clarification and may have an influence on the technical and
      commercial aspects of the quotation. This proposal is based on the following
      assumptions.

     

    NOTE:
      If
      the assumptions stated within this proposal prove not to be true, project
      schedule and/or costs to The Tech Group could change.

     

    4.4.1  
[*]

     

    4.4.2  
[*]

     

    4.4.3   [*]

     

    4.4.4   [*]

     

    4.4.5   [*]

     

    4.4.6   [*]

     

    4.4.7  
[*]

     

    4.4.8   [*]

     

    4.4.9  
[*]

     

    4.4.10     
      [*]

     

    4.4.11     
      [*]

     

    
 

    
      
        
           

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

        
          10
            of 62

          
            

          

        

        
          
          

        

      

    

     

    
      
        	5.	
                Description
                  of the assembly system 

              

      

    

     

    The
      proposed concept is based on the use of free pallets to transport the parts
      to
      be assembled. The parts are supported, during successive operations, on specific
      fixtures known as “nests”, which form an integral part of the
      pallets.

     

    The
      proposed G05TM concept is based on linear assembly cells with indexed pallets. It
      may consist of one or more G05TM units, depending on the number of
      operations.

     

    Pallets
      entering the G05TM are mechanically indexed and placed in front of each
      workstation. Pallets are transported from cell to cell then recycled with a
      belt
      conveyor.

     

    
      	
              Pallet
                dimensions:

            	
              120
                x 120 mm 

            
	
              Number
                of pallets:

            	
              125
                pallets 

            
	
              Number
                of nests:

            	
              3
                nests (2-Up) 

            
	
              Pallet
                coding system: 

            	
              Balluff
                

               

            

    

    Please
      refer to the “Description of standard basic machines” section in this proposal
      for more information on standard assembly cells.

     

    
      	
              5.1

            	
              Sequence
                of operations and
                description

            

    

     

    The
      sequence of operations described below is based on a review of the submitted
      parts and your Request For Quote. This concept combines our extensive assembly
      experience with the product knowledge that you provided. Any requested changes
      to this proposal will be thoroughly reviewed by our engineers.

     

    Cell
      1:
2-Module
      G05TM 120

      

    [*]

    

    Cell
      2:
      2-Module G05TM 120 

    

    [*]

    

    CELL
      3:
      1-Module G05TM 120 

    

    [*]

    

    CELL
      4:
      1-Module G05TM 120 

    

    [*]

    

    
      	
              5.2

            	
              Machine
                speed

            

    

     

    [*]

     

    
      	
              5.3

            	
              Effective
                output

            

    

     

    [*]

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        11
          of 62

        
          

        

      

      
        
        

      

    

     

    
      	
              5.4

            	
              Feeding
                systems

            

    

     

    Specific
      feed systems are provided to feed each part assembled. The
      type
      of feeding system depends on each part’s physical characteristics: 

     

    [*]

     

    Important:
      If changes are made on the basis of non-conforming prototype parts, Mikron
      Corporation Denver shall not be liable for changes or modifications necessary
      to
      ensure feeding systems operate correctly.

     

    
      	
              5.5

            	
              Noise
                level

            

    

     

    Maximum
      of 80dBA, measured three feet from the loudest source, four feet from the floor
      in the Mikron Corporation Denver Facility.

     

    
      	
              5.6

            	
              Floor
                space required

            

    

     

    See
      Section 2.6, herein.

     

    
      	
              5.7

            	
              Calibration

            

    

     

    Neither
      calibration devices nor calibration programs are included as part of the basic
      machine.

     

    
      	
              5.8

            	
              Machine
                capability index

            

    

     

    If
      required, an optional statistical analysis of machine performance can be
      conducted. The Customer shall submit the acceptance requirements to Mikron
      Corporation Denver for assessment. Then, Mikron Corporation Denver and the
      Customer shall determine the tolerances and Cm and CmK values.

     

    The
      machine capability analysis shall be conducted by the Customer with the
      measuring tools supplied by Mikron Corporation Denver (except for specific
      tools
      to be specified after the order) and in Mikron Corporation Denver’s facility.
      This study shall be carried out after preliminary acceptance and shall be part
      of this acceptance.

     

    Mikron
      Corporation Denver is not involved in the process capability
      analysis.

     

    

      
        
           

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

        
          12
            of 62

          
            

          

        

        
          
          

        

      

    
      
        	6.	
                Installation
                  Conditions &
Terms

              

      

    

     

    
      	
              6.1

            	
              Packing

            

    

     

    The
      cost
      of packing is included in the price. The equipment is FOB Aurora,
      Colorado.

     

    
      	
              6.2

            	
              Installation
                supervision and final
                acceptance

            

    

     

    Installation
      supervision with 2 Mikron Corporation Denver personnel for twenty-one (21)
      days
      and the final acceptance are included in the price.

     

    
      	
              6.3

            	
              Unspecified
                work outside Mikron Corporation Denver
                Facility

            

    

     

    Certain
      work relating to the machine can be invoiced in accordance with the following
      conditions: 

     

    6.3.1   Connection
      to services 

     

    The
      work
      and cost of electrical, compressed air and possible water connections are not
      included in the price and shall be invoiced at the hourly rates shown
      herein.

     

    6.3.2   Production
      assistance 

     

    Production
      assistance is not included in the price and shall be invoiced at the hourly
      rates shown herein.

     

    6.3.3   Other
      work executed outside Mikron Corporation Denver’s Facility 

     

    Other
      work executed outside Mikron Corporation Denver’s facility shall be invoiced at
      the hourly rates shown herein.

     

    6.3.4  
Labor
      rates 

     

    
      	
            	
              Mechanical
                Technicians: traveling and working time

              Electronic and Software Engineers: traveling
                and working
                time     

            	
              $[*]/hour 
                

              $[*]/hour
                

            

    

                            

    Invoices
      are prepared in accordance with the time sheets and expense reports prepared
      by
      Mikron Corporation Denver staff.

     

    Please
      refer to the General Terms and Conditions Of Sale section of this proposal
      for
      more information.

     

    6.3.5       
      Remote
      maintenance 

     

    Setting
      up the system 

    Price
      per
      hour on line (Including telephone costs)            
$[*]/hour
      

     

    
      	
              6.4

            	
              Validity
                of proposal

            

    

     

    90
      days.

    After
      finalization of all technical and commercial issues 

     

    Please
      refer to the Terms and Conditions Of Sale section of this proposal.

    

      
        
           

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

        
          13
            of 62

          
            

          

        

        
          
          

        

      

    

    
       

    

    
      	
              6.5

            	
              Payment
                terms

            

    

     

    Initial
      payment is due upon receipt of invoice. All other payments are due net 10 days
      from receipt of invoice.

     

    [*]%
      of
      Total Contract Price with Purchase Order 

    [*]%
      of
      Total Contract Price at Preliminary Design Review 

    [*]%
      of
      Total Contract Price at Final Design Review 

    [*]%
      of
      Total Contract Price at Acceptance Test at Mikron 

    [*]%
      of
      Total Contract Price at Acceptance Test at The Tech Group 

     

    Subject
      to Credit Department approval, terms are net 10 days from receipt of invoice.
      Accounts past due are assessed a service charge of 1.5% per month. If accounts
      or service charges thereon are not paid when due, or suit is brought, additional
      reasonable costs of collecting, including attorneys’ fees, will be
      charged.

     

    
      	
              6.6

            	
              Acceptance
                terms

            

    

     

    Pre-acceptance
      shall take place in our facility in the presence of one or more representatives
      of your company. Costs of customer’s travel and accommodations are not included
      in the bid price.

     

    Final
      acceptance shall take place in your facility after installation and
      startup.

     

    The
      terms
      of pre-acceptance and final acceptance shall be specified and mutually agreed
      upon before the contract is concluded. Six (6) hours of production time is
      provided in our proposal.

     

    Utilities
      must be ready and stable prior to the start of the final acceptance run.
      Components to specification and in required quantities must be available prior
      to the start of pre and final acceptance runs.

     

    Acceptance
      takes place in the presence of both parties and is considered successful if
      the
      machine assembles the number of good parts shown herein.

     

    A
      certificate of acceptance shall be drawn up for each acceptance. These
      certificates shall be signed by both parties.

     

    Note:
      The
      customer shall not, without the prior written approval of Mikron Corporation
      Denver, use the equipment for production purposes before the final acceptance
      has taken place and the final acceptance report has been signed by the
      customer.

     

     

    
      
         

        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        14
          of
          62

        
          

        

      

      
        
        

      

    

    
      
        	7.	
                Risk
                  Management

              

      

    

     

    
      	
              7.1

            	
              Efficiency

            

    

     

    [*]

     

    
      	
              7.2

            	
              Machine
                downtime

            

    

     

    Machine
      downtime is directly linked to execution of the assembly machine cycle and
      is
      the responsibility of Mikron Corporation Denver. This downtime is classified
      in
      three categories: 

     

    Feed
      systems blockage: Most of these stoppages are generated by feed systems that
      have relatively low inherent efficiency because of the feeder design and part
      characteristics.

     

    Gray
      area
      - non conforming parts, assembled and then detected as non-conforming: It is
      not
      always possible to determine whether the part was already non-conforming during
      feed system filling or if the part had been damaged by the machine and thus
      detected as non-conforming. This gray area is accepted as Mikron Corporation
      Denver’s responsibility.

     

    Reject
      parts caused by the system: This concerns parts damaged by the assembly
      system.

     

    7.2.1       
      Unplanned
      production stoppage 

     

    These
      stoppages are random interruptions due to the two factors shown below and are
      the Customer’s responsibility.

     

    Non
      conforming parts: These are parts damaged during manufacture or shipment, for
      example, bent parts, molding defects, parts not de-burred, etc.

     

    Staff,
      operators: These are short unplanned absences, interruptions due to insufficient
      staff or operator ability.

     

    7.2.2       
      Planned
      production stoppage 

     

    These
      stoppages are interruptions with a fixed frequency as described below and are
      the responsibility of the Customer.

     

    Pauses:
      Meals and intermediate break periods.

     

    Shift
      Changeover: Often synchronized with break periods.

     

    Clean
      room procedures: Mainly cleaning equipment and safety procedures during batch
      changeover.

     

    Re-certification:
      Recalibration or re-certification procedures according to a fixed schedule,
      determined by the Customer, can significantly affect output.

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        15
          of
          62

        
          

        

      

      
        
        

      

       

    

    Series
      or
      batch changeover: This procedure can result in a 1 to 20% variation in output,
      depending on the frequency of changeover and the method of
      changeover.

     

    Periodic
      preventive maintenance: Preventive maintenance work executed in accordance
      with
      predetermined schedules.

     

    7.2.3       
      Definition
      of effective output - machine efficiency 

     

    Good
      parts are counted after a batch of parts has been produced in a given amount
      of
      time.

     

    Bad
      or
      incomplete parts attributable to the Customer are added and the result becomes
      the corrected number of good parts.

     

    Production
      stoppage times attributable to the Customer are deducted from the production
      time and the result becomes the corrected production time.

     

    The
      actual system output will be defined by dividing the corrected number of good
      parts by the corrected production time. The result shall, as a minimum, be
      equivalent to the actual output shown herein.

     

    Nbc = Corrected
      number of good parts 

    Nb = Number
      of
      good parts 

    Nic = Number
      of
      incomplete parts attributable to the Customer 

     

    

     

    Tbc = corrected
      production time 

    Tb = total
      production time 

    Tic = stoppage
      time attributable to the Customer 

    Tc = cycle
      time 

    The
      efficiency of the Mikron system is calculated as follows: 

     

    

     

    7.2.4       
      Quality
      and cleanliness of parts 

     

    Actual
      output will depend on the quality of the components to be assembled. They shall
      be clean, de-burred, degreased, undamaged, non magnetic and manufactured within
      the tolerances shown on the drawings.

     

    Components
      submitted in bulk shall not contain foreign debris.

     

    The
      output shown is based on present information. It will only be possible to
      confirm the actual output after testing samples.

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        16
          of
          62

        
          

        

      

      
        
        

      

    

     

    
      	
              7.3

            	
              Information
                on production costs

            

    

     

    The
      following data is based on the mean values. It may vary, depending on the
      equipment provided with the standard cells.

     

    7.3.1       
      Energy
      costs 

     

    Cell
      energy consumption: 

    The
      values given in the following table are indicative only. Actual values depend
      on
      specific units and equipment integrated on the units.

     

    
      	
              Cell

            	
              Electric
                energy (3x480V ±10%)

            	
              Compressed
                air (80 psi)

            	
              Connection
                value (electrical protection) 

            
	
              G05TM
                120

            	
              Approx.
                4 kVA

            	
              Approx.
                131 cu. ft./hr

            	
              25
                A 

            

    

     

    7.3.2      
      Maintenance
      costs 

     

    The
      Mikron machine design minimizes mechanical stresses, reducing parts wear and
      downtime due to maintenance.

     

    Machine
      maintenance costs depend on how well the Customer adheres to the recommended
      preventive maintenance schedule. The frequency of maintenance work will depend
      on actual production rates.

     

    Periodic
      maintenance tables, listed in the technical documents, provide information
      on
      the type, frequency and duration of preventive maintenance work.

     

    7.3.3       
      Spare
      parts costs 

     

    Average
      spare parts costs are divided into 2 different categories: 

    
      	 	
              •

            	
              Parts
                recommended for making up the basic stock when the machine is purchased.
                This stock is made up jointly with our services, according to your
                needs.

            

    

    
      	 	
              •

            	
              Parts
                used for routine machine operation (per
                year).

            

    

     

    [*]

     

    
      	
              7.4

            	
              Customer
                responsibilities

            

    

     

    7.4.1      
      Machine
      operation 

     

    Operating
      and maintaining the machine requires certain skills on the part of the
      customer’s staff to which these tasks will be entrusted. Operating the machine
      correctly depends partially on the operator’s capabilities.

     

    The
      proposed machines are designed for ease of operation.

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        17
          of
          62

        
          

        

      

      
        
        

      

    

    Operation
      of the machine should not require any special operator skill levels other than
      understanding the relationships between machine functions and commands (Human
      Machine Interface).

     

    Maintenance
      should be provided by technically trained staff that understand basic
      mechanical, information technology and electrical concepts.

     

    The
      additional information required for production, upkeep and maintenance of the
      machine is provided during training (refer to the “Customer Service” section of
      this proposal for more information on training details).

     

    7.4.2 Information
      to be provided to Mikron Corporation Denver 

     

    At
      the
      time the order is placed, Mikron Corporation Denver requires the following
      information and documents: 

     

    
      	 	
              •

            	
              Final
                drawings of all parts to be assembled, including variants, and the
                CAD
                files, in DWG or DXF format

            

    

    
      	 	
              •

            	
              Component
                matrices per variant 

            

    

    
      	 	
              •

            	
              Final
                specifications for the assembly process

            

    

     

    7.4.3 Equipment
      supplied by the Customer 

     

    When
      required, special equipment supplied by the Customer may be integrated into
      the
      machine. The following responsibilities then are incumbent on the Customer:
      

     

    
      	 	
              •

            	
              Delivery
                of the equipment to Mikron Corporation Denver on the agreed schedule;
                

            

    

    
      	 	
              •

            	
              Provide
                separate assessment and acceptance of the supplied equipment;
                

            

    

    
      	 	
              •

            	
              Ensure
                the equipment output does not affect the overall system output;
                

            

    

    
      	 	
              •

            	
              Manage
                and assume responsibility of the interface between the supplied equipment
                and the Mikron machine; 

            

    

    
      	 	
              •

            	
              Provide
                startup and set process parameters according to product
                requirements.

            

    

     

    Delivery
      and shipment of this equipment to Mikron Corporation Denver is the
      responsibility of the Customer.

     

    
      	
              7.5

            	
              Project
                schedule

            

    

     

    The
      project schedule must be followed to ensure on time delivery. The final project
      schedule is fixed at the point the purchase order is signed.

     

    
      	8.	
              Changes
                and deviations from Mikron Corporation Denver
                standards

            

    

    

    
      	
              8.1

            	
              Changes
                during the project

            

    

     

    Changes
      requested by the customer during the project shall be examined for their
      feasibility. Mikron Corporation Denver shall be notified in writing of any
      change involving parts to be assembled, accompanied by an amended drawing
      clearly showing the extent of the changes made.

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        18
          of
          62

        
          

        

      

      
        
        

      

    

    Mikron
      Corporation Denver engineers will evaluate the impact on the machine. As a
      result, Mikron Corporation Denver reserves the right to change its price and
      schedule.

     

    
      	
              8.2

            	
              Deviation
                from Mikron Corporation Denver
                standards

            

    

     

    This
      proposal was prepared on the basis of our standard machines. Any departure
      from
      these standards requires an investigation to determine the feasibility and
      cost.

     

    
      	9.	
              Parts
                for testing and preliminary acceptance 

            

    

    

    Parts
      for
      testing feed systems, machine setting and preliminary acceptance will be
      delivered and reshipped, without cost to Mikron Corporation Denver, in
      accordance with the schedule below.

    

    Each
      delivery shall be accompanied by a packing list and parts quality
      protocol.

     

    Non-compliance
      with delivery times or part quality could have an effect on the shipping date
      and machine costs.

     

    
      	
              Delivery
                schedule of parts for testing 

               

            
	
              Project
                Schedule [wks] 

               

            	
              Parts*
                time [wks] 

               

            	
              Project
                stages

               

            	
              Quantities
                of parts (for each part type) 

               

            
	
               34
                

               

            	
              2
                

               

            	
              Customer
                order

               

            	
              2
                -
                3 parts 

               

            
	
               34
                

               

            	
              6
                

               

            	
              Construction
                start

               

            	
              3000
                parts 

               

            
	
               34
                

               

            	
              17
                

               

            	
              Acceptance
                of systems

               

            	
              For
                1 hour of production or a minimum of one times feed system capacity
                

               

            
	
               34
                

               

            	
               22
                

               

            	
              Machine
                start up

               

            	
              G05TM:
                For 50 hours of production, or according to Mikron Corporation Denver
                specifications

               

            
	
               34
                

               

            	
              27
                

               

            	
              Internal
                acceptance

               

            	
              For
                6 hours of production or according to Mikron Corporation Denver
                specifications 

               

            
	
               34
                

            	
              30
                

            	
              Preliminary
                acceptance of machine

            	
              For
                12 hours of production or according to Mikron Corporation Denver
                specifications 

            
	
              *Parts
                delivery times, in numbers of weeks after the order
                

            

    

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        19
          of
          62

        
          

        

      

      
        
        

      

    

    A
      final
      schedule for receipt of parts will be prepared and submitted in a timely manner
      after the order.

     

    The
      minimum quality of delivered parts (capability index) shall be the same or
      superior as is required for assembled parts, for projects with statistical
      analysis protocols.

     

    

      
        
           

           

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

        
          20
            of
            62

          
            

          

        

        
          
          

        

      

    
      
        	10.	
                Warranty 

              

      

    

     

    Our
      warranty is in accordance with our Terms and Conditions of Sale and forms an
      integral part of this proposal.

     

    Should
      you need any further information, please do not hesitate to contact
      us.

     

    We
      recommend a meeting to discuss your project thoroughly at your facility in
      the
      near future. We will present this proposal formally to you and your people
      to
      fully describe how each step of this process is designed to meet and exceed
      your
      requirements.

     

    

      
        
           

           

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

        
          21
            of
            62

          
            

          

        

        
          
          

        

      

    
      
        	11.	
                Terms
                  and Conditions of Sale 

              

      

    

    

    
      	
              11.1

            	
              General
                Terms and Conditions of
                Sale

            

    

     

    
      	
              11.1.1

            	
              The
                following terms and conditions of supply and payment shall be deemed
                to
                have been accepted by the customer when he places the order. General
                conditions of business of the customer and departures from the present
                conditions shall be valid only if they are expressly acknowledged
                in
                writing by Mikron Corporation.

            

    

     

    
      	
              11.1.2

            	
              Save
                where otherwise agreed, the “Conditions for the machinery acceptance
                procedure” of Mikron Corporation and the “Installation Conditions”
                applicable to assembly work, including Mikron Corporation’s current
                assembly charge rates, shall be deemed to have been
                agreed.

            

    

     

    
      	
              11.1.3

            	
              All
                agreements and declarations of the contracting parties having legal
                effect
                shall be valid only if they are made in
                writing.

            

    

     

    
      	
              11.1.4

            	
              The
                customer shall not transfer his contractual rights to third parties
                without the express consent of Mikron
                Corporation.

            

    

     

    
      	
              11.1.5

            	
              Delivery
                periods recited herein shall commence upon finalization of all technical
                and commercial details (as hereinafter explained) or the receipt
                of the
                required down payment, whichever occurs later. “Finalization of all
                technical and commercial details” shall include Vendor’s receipt of
                complete specifications, samples and trial materials from Purchaser.
                Delivery periods are dependent upon the availability of raw materials
                and
                components from Vendor’s suppliers as prevailing on the date of quotation,
                and Vendor therefore reserves the right to modify the delivery periods
                due
                to changes in such conditions. Shipment will be made in the name
                of the
                Purchaser and will be at the risk of the Purchaser from the time
                that the
                merchandise leaves the Vendor’s manufacturing facility. Purchaser shall
                promptly inspect all shipments and shall notify Vendor of all defects,
                shortages or deficiencies within forty-eight (48) hours of Purchaser’s
                receipt of the shipment. Vendor shall not be liable for any losses
                or
                damages to any merchandise damaged in transit from and after the
                time such
                merchandise has left Vendor’s manufacturing facility. Purchaser agrees to
                look solely to the carrier and Insurer with respect to any and all
                losses
                or damages to shipments, and agrees not to make any claim against
                the
                Vendor for same.

            

    

     

    
      	
              11.1.6

            	
              Purchaser
                shall supply to Vendor at Purchaser’s expense such quantities of trial
                materials as are specified in this quotation or are reasonably required
                by
                Vendor together with such written specifications as may be necessary
                to
                finalize all technical and commercial details. Such trial materials
                shall
                be delivered at Purchaser’s expense including shipping costs, to the
                Vendor’s manufacturing facility in the United States, as specified in this
                quotation, on or before the date(s) specified in this quotation or
                otherwise reasonably required by Vendor. Unless otherwise specified
                in
                this quotation, such trial materials shall become the property of
                Vendor
                and shall not be returned to
                Purchaser.

            

    

     

    
      	
              11.1.7

            	
              Prices
                set forth in this quotation for parts, tools and machines built at
                Vendor’s facilities in the United States of America are fixed in United
                States Dollars and shall not be adjusted. The purchase price shall
                be paid
                in compliance with the agreed payment terms. The payment dates shall
                be
                respected, even if minor parts of the deliveries and performance
                are
                lacking, or if subsequent work has proved necessary but does not
                prevent
                the delivered goods from being used. All payments for delivered
                merchandise which are not received within thirty (30) days after
                their
                respective due dates shall bear interest from their respective due
                dates
                until paid in full, at the rate of one and one-half percent (1.5%)
                per
                month, or the maximum interest rate permitted by applicable law,
                whichever
                shall be less.

            

    

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        22
          of
          62

        
          

        

      

      
        
        

      

    

    
      	
              11.2

            	
              Verification,
                Preliminary and Final Acceptance and Clearance of the Delivered Goods
                for
                Production Purposes

            

    

     

    
      	
              11.2.1

            	
              Save
                where otherwise agreed, preliminary acceptance shall take place on
                the
                premises of Mikron Corporation Denver, by agreement with the customer,
                within ten (10) days of notification of readiness for dispatch being
                given
                by Mikron Corporation Denver. Final acceptance shall take place on the
                customer’s premises. Preliminary and final acceptance shall be effected in
                accordance with “conditions for the machinery acceptance procedure” and
                shall end with the compilation of a preliminary or final acceptance
                report.

            

    

     

    
      	
              11.2.2

            	
              The
                customer shall not withhold acceptance and signing of the preliminary
                or
                final acceptance report by reason of minor defects, in particular
                those
                which do not significantly impair the functional quality of the delivered
                goods and services. Mikron Corporation Denver shall make such shortcomings
                good within a reasonable period. Defects which could not be recognized
                at
                the time of preliminary or final acceptance shall be notified by
                the
                customer to Mikron Corporation Denver in writing as soon as they
                are
                detected, failing which the items concerned shall be deemed to have
                been
                accepted. Mikron Corporation Denver shall not be liable for defects
                that
                are notified after expiration of the warranty
                period.

            

    

     

    
      	
              11.2.3

            	
              If
                final acceptance does not take place at the latest within three (3)
                months
                of delivery of the machinery for reasons which are not attributable
                to
                Mikron Corporation Denver, said machinery shall be deemed to have
                been
                definitively accepted by the
                customer.

            

    

     

    
      	
              11.2.4

            	
              Should
                defects occur, the customer shall in all cases allow Mikron Corporation
                Denver to verify the goods supplied and the repairs made thereto
                pursuant
                to Section 11.3 of these
                conditions.

            

    

     

    
      	
              11.2.5

            	
              The
                customer undertakes not to use the machinery for production purposes
                without the written approval of Mikron Corporation Denver before
                the final
                acceptance report has been signed or before definitive final acceptance
                has taken place.

            

    

     

    
      	
              11.3

            	
              Warranty
                and Liability for Defects

            

    

     

    
      	
              11.3.1

            	
              Notwithstanding
                the provisions herein, the warranty period shall be twelve (12) months
                or
                3,500 operating hours. It shall begin to run on the date of final
                acceptance, or at the latest, three (3) months after delivery by
                Mikron
                Corporation Denver. For deliveries of goods and services which are
                not
                brought into service on the operating site by Mikron Corporation
                Denver,
                or by technicians specifically authorized by Mikron Corporation Denver,
                or
                which have been used for productive purposes before definitive final
                acceptance without the consent of Mikron Corporation Denver, the
                latter
                shall give no warranty. The warranty period on repaired or replaced
                components begins to run for a further period of six (6) months from
                the
                date of replacement, completion of repairs and acceptance or at the
                latest
                until the end of the warranty period for deliveries and
                services.

            

    

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        23
          of
          62

        
          

        

      

      
        
        

      

    

    
      	
              11.3.2

            	
              The
                warranty shall expire immediately if the customer or third parties
                operate
                the delivered goods inexpertly, undertake inexpert modifications
                or
                repairs, fail to use original Mikron Corporation Denver replacement
                parts
                during the warranty period or do not give Mikron Corporation Denver
                an
                opportunity to remedy the defect itself. In addition, the customer
                shall
                make sure that the damage is not allowed to become more
                extensive.

            

    

     

    
      	
              11.3.3

            	
              Mikron
                Corporation Denver undertakes, at the written request of the customer,
                to
                repair or replace as quickly as possible, at its own discretion,
                and in
                its own works, all parts of the Mikron Corporation Denver deliveries
                which
                demonstrably become defective or unusable due to poor material or
                inadequate workmanship before the expiration of the warranty period.
                Replaced components shall become the property of Mikron Corporation
                Denver.

            

    

     

    
      	
              11.3.4

            	
              Special
                suitability for an intended use or the assurance of a particular
                performance capability exists only where such an assurance has been
                given
                contractually in express and direct terms. Such an assurance presupposes
                use of the delivered goods and services for their intended purpose
                and in
                compliance with all the contractually agreed functional parameters.
                On the
                completion of final acceptance of the delivered goods and services,
                evidence of suitability for the intended purpose, or assurance of
                a
                particular performance capability of the goods and services, shall
                be
                deemed to have been definitively provided or given. If the assured
                properties are not satisfied, or only satisfied in part, on final
                acceptance of the goods and services, the customer shall solely be
                entitled to repairs by Mikron Corporation Denver within a reasonable
                period. For this purpose, the customer shall grant Mikron Corporation
                Denver the necessary time and opportunity. Should this repair prove
                impossible in full or in part, the customer shall only be entitled
                to a
                suitable price reduction.

            

    

     

    
      	
              11.3.5

            	
              The
                warranty and liability do not extend to damage which has demonstrably
                been
                caused by poor materials, defective design or inadequate workmanship,
                e.g.
                as a result of natural wear and tear, defective maintenance, failure
                to
                comply with operating or safety instructions, excessive strain, unsuitable
                working materials, chemical or electrolytic influences, building
                or
                assembly work which was not performed by Mikron Corporation Denver
                or its
                subcontractors and for any other reasons not attributable to Mikron
                Corporation Denver itself.

            

    

     

    
      	
              11.3.6

            	
              In
                the case of goods and services provided by sub-contractors who were
                prescribed by the customer, Mikron Corporation Denver shall only
                give a
                warranty within the framework of the warranty obligations of such
                subcontractors.

            

    

     

    
      	
              11.3.7

            	
              In
                respect of material defects, poor design or workmanship and failure
                to
                comply with assured characteristics, the customer shall have no rights
                in
                claims apart from those expressly stated herein and in no case amounting
                to more than the value of the defective parts of the
                delivery.

            

    

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        24
          of
          62

        
          

        

      

      
        
        

      

    

    
      	
              11.3.8

            	
              Liability
                for consequential damages resulting from defects and damages to property
                of all kinds, e.g., loss of production, loss of use, loss of orders,
                loss
                of profit, failure to perform or effective breach of contract, or
                claims
                for compensation made by way of redress - together with all other
                direct
                and indirect damage -is hereby expressly excluded. This exclusion
                of
                liability shall not apply to willful intent or gross negligence on
                the
                part of Mikron Corporation Denver, but it shall apply to willful
                intent or
                gross negligence on the part of
                servants.

            

    

     

    
      	
              11.3.9

            	
              Mikron
                Corporation Denver shall only be liable for claims by the customer
                in
                cases of willful intent or gross
                negligence.

            

    

     

    
      	
              11.4

            	
              Title

            

    

     

    
      	
              11.4.1

            	
              Title
                to all machines shall vest in Purchaser upon (a) completion of
                installation at Purchaser facility and (b) the payment in full of
                the
                purchase price. Title to all parts, tools and other items shall vest
                in
                Purchaser upon delivery and payment therefore.

            

    

     

    
       

      
        	
                11.4.2

              	
                Grant
                  of Security Interest 

              

      

       

    

    1. Customer
      and Mikron agree that title to the Equipment provided herein does not pass
      until
      Customer has paid for the Equipment in full. Notwithstanding the foregoing,
      and
      not in limitation of the foregoing, Customer hereby grants to Mikron a security
      interest in and to the Equipment, and any and all additions, accessions and
      substitutions thereto or therefore (hereinafter called the “Collateral”) to
      secure Customer’s payment for the Equipment, and any and all other existing or
      future obligations of Customer to Mikron (the “Obligations”). Customer agrees to
      execute such documentation as may be required by Mikron to further evidence
      and
      perfect such security interest, including without limitation financing
      statements.

    

    2. Except
      for the security interest granted herein, Customer is, or to the extent that
      this Agreement states that the Collateral is to be acquired after the date
      hereof, will be, the owner of the Collateral free from any adverse lien,
      security interest or encumbrances, and that Customer will defend the Collateral
      against all claims and demands of all persons at anytime claiming the same
      or
      any interest therein. The Collateral will be kept at Customer’s address stated
      in this Agreement.

    

    3. Until
      default Customer may have possession of the Collateral and use it in any lawful
      matter, and upon default Mikron shall have the immediate right to the possession
      of the Collateral. Upon such default and at any time thereafter, or if it deems
      itself insecure, Mikron may declare all Obligations secured hereby immediately
      due and payable and shall have the remedies of a secured party under Article
      9
      of the Colorado Uniform Commercial Code. Mikron may require Customer to assemble
      the Collateral and deliver or make it available to Mikron at a place to be
      designated by Mikron which is reasonably convenient to both parties. Expenses
      of
      retaking, holding, preparing for sale, selling or the like shall include
      Mikron’s reasonable attorney’s fees and legal expenses.

    

    11.4.3 Intellectual
      Property 

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        25
          of
          62

        
          

        

      

      
        
        

      

    

    The
      Equipment provided herein contains and requires intellectual property (including
      the intellectual property of third parties) in order to operate, such as
      software, formulas, processes and know how (the “Intellectual Property”). By
      selling Customer the Equipment, Mikron is not transferring legal or equitable
      title to the Intellectual Property. However, Mikron hereby grants to Customer
      a
      non-exclusive, perpetual worldwide, royalty-free license to use the Intellectual
      Property so long as and only in connection with Customer’s use of the Equipment
      and only if Customer is not in default in its Obligations to Mikron (the “Mikron
      License”). The Mikron License is strictly limited to use with the Equipment and
      may not be utilized independently of the Equipment. The Mikron License may
      not
      be transferred, assigned or pledged without the written consent of Mikron.
      Any
      transfers in violation of the foregoing shall be voided and without
      effect.

     

    
      	
              11.5

            	
              Protected
                Rights

            

    

     

    
      	
              11.5.1

            	
              In
                the case of standard Mikron Corporation chassis and components forming
                part of Mikron Corporation’s scope of supply, Mikron Corporation shall be
                responsible for assuring that the acquisition or use of the delivered
                object, or parts thereof, does not infringe the patent rights of
                third
                parties in the customer’s own country. Mikron Corporation Denver shall be
                entitled to contest or otherwise settle purported claims of third
                parties
                in or out of court in any appropriate manner. The customer shall
                grant due
                authority to Mikron Corporation Denver for that purpose. In the case
                of
                equipment components specific to the customer and for the deliveries
                and
                services as a whole, Mikron Corporation Denver declines all liability, as
                it is impossible for Mikron Corporation Denver to make sure that
                the
                patent rights of third parties are not affected or
                infringed.

            

    

     

    
      	
              11.5.2

            	
              The
                customer gives a full guarantee that the manufacturer of objects
                according
                to his specifications does not infringe the protected property rights
                of
                third parties; he undertakes to release Mikron Corporation Denver
                from any
                resulting claims on grounds of infringement and claims for
                compensation.

            

    

     

    
      	
              11.5.3

            	
              Each
                contracting party reserves all rights in calculations, drawings and
                technical documents made available by him to the other party. The
                receiving contracting party acknowledges these rights and will treat
                the
                relevant documents as his own business secrets and refrain from using
                them
                otherwise than for their intended purpose for which they were made
                available.

            

    

     

    The
      customer shall be entitled to use the software, drawings, know-how and
      documentation himself to the stipulated extent, but shall not make them
      available to third parties or make copies. Any extension or modification of
      the
      software or its use otherwise than for the intended purpose by the customer
      shall require the prior written consent of Mikron Corporation
      Denver.

     

    
      	
              11.6

            	
              Environmental
                and operational safety

            

    

     

    
      	
              11.6.1

            	
              The
                customer undertakes to comply with the operating instructions and
                safety
                rules handed over with the delivered goods, and to instruct his own
                personnel accordingly, so as to permanently guarantee the safe and
                environmentally compatible operation of the delivered
                goods.

            

    

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        26
          of
          62

        
          

        

      

      
        
        

      

    

    
      	
              11.6.2

            	
              Existing
                safety instructions and danger notices on the machinery must not
                be
                removed. Instructions that are poorly secured or have been damaged
                must be
                repaired or replaced immediately. Mikron Corporation Denver undertakes
                to
                replace unusable safety instructions for the customer at any time
                and to
                make the requisite number of copies available. Improvements to the
                safety
                instructions shall be accepted and respected by the customer at all
                times
                at the request of Mikron Corporation
                Denver.

            

    

     

    
      	
              11.6.3

            	
              Technical
                modifications to machinery, in particular if they are liable to endanger
                safety of operating personnel or of the environment, shall only be
                made
                with the written consent of Mikron Corporation. If that consent is
                withheld, they shall be removed
                immediately.

            

    

     

    
      	
              11.6.4

            	
              The
                customer shall inform Mikron Corporation Denver without delay if
                an
                accident involving the delivered goods has occurred, or if it transpires
                that operation of the delivered goods presents a
                risk.

            

    

     

    If
      the
      customer fails to comply with any of these requirements for the preservation
      of
      environmental and operational safety, he shall release Mikron Corporation Denver
      from all the resulting obligations to provide compensation to third
      parties.

     

    
      	
              11.7

            	
              Prior
                Agreements

            

    

     

    Purchaser
      expressly acknowledges that these terms and conditions shall supersede all
      prior
      agreements, discussions or correspondence between Purchaser and Vendor
      (including the respective employees, agents or representatives of either),
      written or oral, and that Purchaser is not relying upon any oral or written
      representation of Vendor other than those expressly contained
      herein.

     

    
      	
              11.8

            	
              Force
                Majeure

            

    

     

    In
      the
      event of any Act of God, war, fire, explosion, accident, flood or riot,
      sabotage, lack of adequate fuel, power, raw materials, labor, containers or
      transportation facilities, or compliance with governmental requests, laws,
      regulations, orders or actions of unforeseen technical difficulties, breakage
      or
      failure of machinery or apparatus; or national defense requirements, or any
      other event, whether or not of the class or kind enumerated herein, beyond
      the
      reasonable control of Vendor, or labor trouble, strike, lockout or injunction
      (provided that Vendor shall not be required to settle a labor dispute against
      its own business judgment), which makes impossible or impractical the
      manufacture or transportation of subject goods or acquisition of a material
      upon
      which the manufacture of the subject goods is dependent, i.e., any “Force
      Majeure,” Vendor at its option may either terminate the contract or extend the
      delivery period, without liability to Purchaser, except that in the event of
      cancellation, Vendor shall return any portion of the purchase price which
      remains unexpended as of the date of Vendor’s election to
      terminate.

     

    
      	
              11.9

            	
              Applicable
                Law

            

    

     

    The
      parties agree that any contract between the parties which may arise from this
      quotation shall be deemed entered into at Aurora, Colorado, USA, and shall
      be
      interpreted and construed in accordance with the laws of Colorado. Both parties
      hereby consent to the jurisdiction of the courts of the State of Colorado and
      more specifically the judicial district within which Vendor maintains an office
      or manufacturing facility, but their consent shall not limit jurisdiction with
      regard to this matter to that district within the State.

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        27
          of
          62

        
          

        

      

      
        
        

      

    

    
      	
              11.10

            	
              Taxes

            

    

     

    Purchaser
      shall be responsible for all taxes (other than income taxes) due and payable
      in
      connection with the delivery of, and transfer of title to, the merchandise
      that
      is the subject of this agreement.

     

    
      	
              11.11

            	
              Modification 

            

    

     

    This
      agreement shall not be changed or modified except by written instrument signed
      by both parties.

     

    
      	
              11.12

            	
              Rights
                or Remedies 

            

    

     

    Any
      forbearance by Vendor in the exercise of Vendor’s rights or remedies in response
      to any breach by Purchaser shall not be construed to be a waiver of, nor shall
      it preclude, the exercise of any right or remedy.

     

    
      	
              11.13

            	
              Cancellation 

            

    

     

    Except
      as
      expressly stated to the contrary herein, the Purchaser may not cancel this
      agreement.

     

    

      
        
           

           

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

        
          28
            of
            62

          
            

          

        

        
          
          

        

      

    
      
        	12.	
                Mikron
                  Assistance Beyond Installation 

              

      

    

     

    
      	
              12.1

            	
              Assistance
                rates 

            

    

     

    Based
      on
      your request, we can provide support personnel at your facility for the purpose
      of start-up, demonstration, overhaul and repairs.

     

    Our
      conditions for this work are: 

     

    
      	
              Travel
                time 

            	
              $[*]/hr.

            
	
              Standard
                working time 

            	
              $[*]/hr.

            
	
              Overtime
                

            	
              50%
                extra 

            
	
              Travel
                expenses 

            	
              (See
                paragraph 12.6 below) 

            
	
              Charges
                for lodging and meals 

            	
              To
                be determined 

            
	
              Compensation
                for extras 

               

            	
              To
                be determined 

               

            

    

    The
      above
      charges are valid for normal conditions. Should any unforeseen extra charges
      be
      incurred or, if the support personnel are able to prove that they are unable
      to
      meet expenditure with the allowances granted, a proportionate adjustment shall
      be effected subsequently.

     

    Cost
      increase adjustment reserved.

     

    
      	
              12.2

            	
              Travel
                time 

            

    

     

    Travel
      time includes all project-related travel, including travel to and from the
      project site and daily travel.

     

    
      	
              12.3

            	
              Working
                time 

            

    

     

    
      	
              12.3.1

            	
              The
                standard workweek is 40 hours. If standard working hours are decreased
                for
                reasons beyond our control, then standard working hours must be paid
                in
                accordance with the terms of our
                agreement.

            

    

     

    
      
        	
                12.3.1

              	
                Hours
                  worked over and above the normal work shift will apply as
                  overtime.

              

      

            

    

    
      	
              12.4

            	
              Waiting
                time

            

    

     

    If,
      for
      reasons beyond our control, the support personnel are prevented from working
      or
      from leaving when the work is completed, the time lost shall count as waiting
      time and be charged as standard working time. The same applies to hours lost
      on
      account of local public holidays.

     

    
      	
              12.5

            	
              Holidays 

            

    

     

    Holidays
      and the corresponding wage and traveling rates shall be subject to a separate
      agreement.

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        29
          of
          62

        
          

        

      

      
        
        

      

    

    
      	
              12.6

            	
              Traveling
                expenses 

            

    

     

    
      
        	
                 

              	
                Traveling
                  expenses shall include return fare and transportation cost at the
                  place of
                  installation, as well as insurance, freight and duty for baggage
                  and
                  tools, the cost for procuring the identity papers, vaccination
                  and other
                  measures required in the country of
                  installation.

              

      

       

    

    
      	
              12.7

            	
              Incidental
                expenses 

            

    

     

    Incidental
      expenses shall include charges for meals, tips, laundry and miscellaneous
      expenses.

     

    
      
        
          	
                  12.7.1   

                	
                  Illness
                    and accidents 

                

        

        
          
             

            
              
                	
                        12.7.1.1   

                      	
                        Our
                          support personnel are insured against illness and
                          accidents.

                      

              

                
                
                
                  
                    
                      	
                              12.7.1.2  

                            	
                              In
                                case of illness or accident (also non-factory accidents)
                                Mikron
                                Corporation Denver
                                will be responsible for wages as well as for expenses
                                in connection
                                with
                                medical treatment.

                            

                    

                       
                      
                      
                        
                          
                            	
                                    12.7.1.3  

                                  	
                                    Customers
                                      are expected to undertake the requisite precautionary measures
                                      against
                                      accidents in their facility.

                                  

                          

                             

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      	
              12.8

            	
              Taxes 

            

    

     

    Any
      taxation which may arise in connection with the dispatch of our support
      personnel will be chargeable to the customer.

     

    
      	
              12.9

            	
              Formation
                of contract 

            

    

     

    The
      contract shall be deemed to have been concluded when the customer accepts the
      completed order.

     

    
      	
              12.10

            	
              Regulations
                in force at destination 

            

    

     

    The
      customer must inform Mikron Corporation Denver of any regulations and all laws,
      governmental or others, in force, which affect the execution of the
      installation, operation of the machinery/equipment as well as to the well-being
      of Mikron Corporation Denver personnel.

     

    
      	
              12.11

            	
              Preliminary
                work 

            

    

     

    Mikron
      Corporation Denver supplies dimensional drawings as part of the project. The
      customer must prepare the workspace with all necessary utility connections
      prior
      to the arrival of support personnel. This should include parts, equipment,
      and
      any necessary materials. The customer shall make arrangements in good time
      and
      at his own expense for the issue of any residence or work permits which may
      be
      required for our personnel and shall also pay any fees or premiums for
      additional insurance coverage required by regulations in force.

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        30
          of
          62

        
          

        

      

      
        
        

      

    

    
      	
              12.12

            	
              Tools,
                auxiliary equipment and materials 

            

    

     

    Mikron
      Corporation Denver shall provide our support personnel with the hand tools
      necessary for the job. They should be maintained in a secured location.
      Insurance against theft, fire and water damage is left to the customer. On
      completion of the job, the tools and other items that we have supplied must
      be
      returned to Mikron Corporation Denver.

     

    Upon
      request, the customer shall supply any additional labor, material, and tools
      necessary.

     

    The
      customer assumes full responsibility for accidents, their consequences and
      any
      material damage that can be traced to the auxiliary equipment. If any special
      factory Installation Conditions Quotation D04.05.012 47 of 90 considerations
      have to be taken into account, then the customer shall expressly bring those
      to
      the attention of our support personnel.

     

    
      	
              12.13

            	
              Duration
                of support 

            

    

     

    
      	12.13.1	 	
               A
                target date for completion of work shall only be binding when accepted
                in
                writing by Mikron Corporation Denver. Work begins when Mikron Corporation
                Denver receives instructions from the customer to send our support
                personnel to their facility.

            

    

     

    
      	12.13.2	 	
              The
                completion date shall be extended if 1) the customer fails to supply
                instructions required for the work, 2) the customer makes changes
                which
                delay the work, 3) any other conditions beyond our control make it
                impossible to meet the original date, or 4) the purchaser is behind
                schedule with the work required to fulfill contractual obligations
                or
                fails to provide the required skilled
                labor.

            

    

     

    12.13.3    The
      imposition of a penalty for delay in the completion of work requires written
      agreement.

     

    12.13.4   
      The
      purchaser is not entitled to claim indemnity or cancel the contract if the
      work
      is delayed.

     

    
      	
              12.14

            	
              Testing
                and acceptance of
                machinery/equipment

            

    

     

    
      	12.14.1	
            	
              The
                machinery/equipment is ready for acceptance when it is placed into
                production. Acceptance can occur even if nonessential parts are missing
                or
                readjustments are necessary or if the machinery/equipment cannot
                be taken
                into service for reasons beyond our
                control.

            

    

     

    
      	12.14.2	
            	
              As
                soon as the purchaser is notified that the machinery/equipment is
                ready
                for acceptance, it shall be inspected in the presence of the person
                in
                charge of the work. Any deficiencies must be reported immediately
                to
                Mikron Corporation in writing. If the customer fails to comply, the
                machinery/equipment shall be deemed
                accepted.

            

    

     

    
      	12.14.3	 	
              If
                the tests prove that the machinery/equipment does not fulfill the
                terms of
                the contract, the customer shall give Mikron Corporation Denver an
                immediate opportunity to correct any
                deficiencies.

            

    

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        31
          of
          62

        
          

        

      

      
        
        

      

    

    12.14.4 The
      purchaser shall not be entitled to claim indemnity or cancel the contract on
      account of unsatisfactory work.

     

    
      	
              12.15

            	
              Work
                not covered by the contract 

            

    

     

    The
      customer shall not request support personnel to perform any work that is not
      covered by the contract without express agreement from Mikron
      Corporation.

     

    
      	
              12.16

            	
              Guarantee 

            

    

     

    12.16.1   
      Mikron
      Corporation Denver guarantees any material we supply and install.

     

    12.16.2   
      The
      customer shall not be entitled to claim indemnity or cancel the contract on
      account of poor workmanship.

     

    
      	
              12.17

            	
              Liability 

            

    

     

    Mikron
      Corporation Denver shall carry out the work in accordance with the terms of
      the
      contract and shall fulfill our guarantee.

     

    
      	
              12.18

            	
              Validity

            

    

     

    
      	12.18.1	 	
              These
                general conditions apply to all work and services carried out by
                us or on
                our behalf in regards to support, commissioning or repair of
                machinery/equipment. The conditions shall be binding if applicable
                at the
                conclusion of the contract unless Mikron Corporation Denver agrees
                in
                writing to other conditions.

            

    

     

    
      	12.18.2	
            	
              Any
                responsibility accepted by the support personnel on behalf of the
                customer
                or a third party shall only be binding if they are covered by the
                scope of
                the contract or are acknowledged by Mikron Corporation Denver in
                writing.

            

    

     

    
      	
              12.19

            	
              Additional
                conditions 

            

    

     

    
      	12.19.1	
            	
              If
                the customer requests support at a fixed price, those terms must
                be agreed
                to in writing. The Terms and Conditions of Sale shall also apply
                in such
                cases, unless other conditions are agreed
                to.

            

    

     

    
      	12.19.2	 	
              The
                fixed price shall only cover work and services specified in the contract.
                It is based on the following provisions: 1) all preliminary work
                to be
                carried out by the customer shall be completed in a timely manner,
                2) the
                support work can proceed without hindrance due to matters beyond
                our
                control.

            

    

     

    
      	12.19.3	 	
              If
                a fixed price is agreed upon for the support work, then this shall
                be
                based on the standard working time specified herein. If our support
                personnel have to observe shorter working hours, then the resultant
                longer
                working period costs, including daily expenses, will be charged to
                the
                customer. The customer shall be responsible if support personnel
                are
                prevented from executing their work thorough causes for which Mikron
                Corporation Denver is not
                responsible.

            

    

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        32
          of
          62

        
          

        

      

      
        
        

      

    

    
    

     

    
      	
              12.20

            	
              Terms
                of payment 

            

    

     

    
      	12.20.1	
            	
              Payments
                to the agreed terms shall be sent to Mikron Corporation Denver at
                our
                billing address without any deductions for cash discount, expenses,
                taxes
                or dues of any kind.

            

    

     

    
      	12.20.2	 	
              Payment
                shall be deemed effected when the particular sum is available to
                us. The
                purchaser shall not withhold or reduce payment on account of complaints
                or
                claims or of counterclaims we did not agree to. Payment shall also
                be made
                if the support work is delayed or prevented by reasons beyond our
                control.

            

    

     

    
      	12.20.3	 	
              If
                the purchaser defaults on payment, he shall be liable for interest
                from
                the date on which the payment was due, without further warning, at
                a rate
                depending on the terms prevailing at the purchaser’s registered address,
                but not less than 6 percent per year. Payment of default interest
                shall
                not release the purchaser from paying the sum due under the terms
                of the
                contract.

            

    

     

    
      	
              12.21

            	
              Place
                of jurisdiction and law applicable 

            

    

     

    These
      conditions are to be governed by, and interpreted in accordance with, the laws
      of the United States. Denver, Colorado is hereby designated as the seat of
      jurisdiction for both parties.

     

    

      
        
           

           

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

        
          33
            of
            62

          
            

          

        

        
          
          

        

      

    
      
        	13.	
                Project
                  development description  

              

      

    

     

    Mikron
      Corporation Denver is organized on a project team basis. Key personnel, such
      as
      the Project Manager, are assigned for the duration of the project and others
      are
      assigned as specialized resources are required throughout the various stages
      of
      the project. The Project Manager has complete responsibility for the management
      and direction of all phases of the project, including design, fabrication,
      assembly, test and supervision of both installation and start-up. The Project
      Manager’s authority provides you with a single point of contact for all
      communications with Mikron Corporation for the resolution of project
      issues.

     

    The
      Mikron Corporation Denver project team consists of the Project Manager,
      production engineers, quality engineers, automation technicians and mechanics
      who participate in the project when their special skills are required. At each
      important milestone throughout the project, a progress report is provided by
      our
      project team.

     

    [*]

     

    

      
        
           

           

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

        
          34
            of
            62

          
            

          

        

         

      

    
      
        
          	13.1	
                  Kick-off
                    Meeting 

                

        

      

    

     

    Mikron
      project team introduction 

     

    Following
      award of the contract, Mikron Corporation personnel will attend a Kick-off
      Meeting at Customer’s facility. The purpose of this meeting is to introduce the
      key individuals of the Mikron Corporation team to the key individuals of the
      Customer’s team. In addition, the proposal is reviewed to discuss all pertinent
      aspects and to obtain common direction for project requirements. Following
      completion of this meeting, a detailed schedule of activities is finalized
      and
      issued.

     

    
      	
              13.2

            	
              Project
                reviews 

            

    

     

    Monitoring
      important project stages 

     

    The
      Mikron Corporation project team provides a progress report at each important
      stage of the project.

     

    
      	
              13.3

            	
              Preliminary
                Design Review 

            

    

     

    After
      the
      Project Kick-off Meeting, the members of the Mikron Corporation design team
      are
      assembled and the concepts of the proposed system are reviewed. These concepts
      are defined in the form of preliminary design drawings so that each member
      is
      aware of his or her individual responsibilities for overall project
      completion.

     

    The
      preliminary designs are reviewed with Customer, at Mikron Corporation’s facility
      to assure a complete understanding of the course of action to be taken with
      the
      project.

     

    
      	
              13.4

            	
              Final
                Design Review

            

    

     

    The
      Final
      Design Review is conducted at the Mikron Corporation facility in Aurora,
      Colorado. A complete mechanical assembly drawing package is reviewed for
      approval of the overall design. The electrical and controls engineers also
      review the drawings of panels, schematics and the overall structure of the
      software. Following this review, the details of the system are released for
      fabrication and assembly.

     

    Mikron
      Corporation Denver openly invites Customer to participate in all aspects of
      the
      engineering phase. Frequent visits and meetings to review concepts and progress
      enhance the overall design effort.

     

    
      	
              13.5

            	
              Certification
                tests 

            

    

     

    Testing
      and operating approval 

     

    When
      the
      final stage for tuning a machine is reached, a series of internal tests are
      carried out to verify compliance with specification requirements. These tests
      are based on documents jointly prepared with the customer: 

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        35
          of
          62

        
          

        

      

      
        
        

      

    

    
      	 	
              •

            	
              Mechanical
                and software function tests; 

            

    

     

    
      	 	
              •

            	
              Production
                throughput checks; 

            

    

     

    
      	 	
              •

            	
              Checks
                on assembly performance.

            

    

     

    These
      tests help prepare for the pre-acceptance stage.

     

    
      	
              13.6

            	
              Pre-acceptance

            

    

     

    Operating
      and production test before shipping 

     

    The
      performance of the Assembly Line is demonstrated thoroughly at Mikron
      Corporation Denver prior to shipment. The line is run for a 6-hour period (or
      other period agreed between Customer and Mikron Corporation) to demonstrate
      that
      it can produce the required output. Parts that do not meet the drawing
      requirements for tolerances are not counted against the actual number of
      acceptable assemblies during the acceptance testing. Any slow-down due to lack
      of operator performance is not counted when determining the line
      rate.

     

    It
      is the
      responsibility of the Customer to supply a sufficient quantity of parts and
      inert material for the testing and acceptance tests of the Assembly Line. A
      quantity of components will be agreed to following defined criteria of testing
      the machine at the Kick-off Meeting.

     

    Component
      parts not received in the quantities or by the schedule specified may result
      in
      additional test and debug by Mikron Corporation Denver at the Customer’s
      facility prior to Final Acceptance Test. This additional cost is not included
      in
      the system price and will be invoiced at the time and material rates specified
      herein.

     

    
      	
              13.7

            	
              Final
                acceptance 

            

    

     

    Operating
      and production test after installation 

     

    The
      performance of the Assembly System is demonstrated thoroughly at the Customer’s
      facilities prior to final acceptance. The line is run for a 6-hour period (or
      other period agreed between Customer and Mikron Corporation) to demonstrate
      that
      it can produce the required number of assemblies at the required output. Parts
      that do not meet the drawing requirements for tolerances are not counted against
      the actual number of acceptable assemblies during the acceptance testing. Any
      slowdown due to operator performance is not counted when determining the line
      rate.

     

    Note:
      After final acceptance, production assistance can be provided by a Mikron
      Corporation team to assist with your production start-up (please refer to the
      “Customer Service” section in this proposal for more information on this
      service).

     

    
      	
              13.8

            	
              Debriefing

            

    

     

    Project
      review after production start-up 

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        36
          of
          62

        
          

        

      

      
        
        

      

    

    Approximately
      three (3) months after the Final Acceptance of the system, the Mikron
      Corporation project team conducts a final project review to verify the system
      performance. The project is then handed over to our After-Sales Services, which
      provides support thereafter.

     

    
      
        	14.	
                Customer
                  parts control

              

      

    

     

    At
      various stages of the project, the Customer is required to provide production
      parts and inert material for testing, station set-up and system run-off. The
      parts should be delivered to Mikron Corporation in accordance with the “Parts
      Delivery Schedule” of this proposal.

     

    
      	
              14.1

            	
              Parts
                tracking

            

    

     

    Mikron
      Corporation will receive, classify, inventory and store all Customer parts.
      In
      every step of the process, we comply with all confidentiality
      agreements.

     

    
      	
              14.2

            	
              Parts
                use and stock control 

            

    

     

    Stored
      parts are used for testing and checks on the production line. The next batches
      are delivered in accordance with the plan provided and they follow the same
      process, according to project requirements.

     

    
      	
              14.3

            	
              Parts
                disposal 

            

    

     

    When
      the
      project is completed, Mikron Corporation returns or directly disposes of any
      leftover parts. Disposal will comply with environmental standards and
      regulations. Costs for either option are charged to the Customer and are not
      included in the proposal.

     

    
      	
              14.4

            	
              Confidentiality

            

    

     

    Industry
      products and technologies often require a high degree of
      confidentiality.

    The
      following policies are in place to ensure the confidentiality of all
      projects.

     

    14.4.1    
      General
      policy 

     

    We
      define, with our Customer, the degree of confidentiality consistent with the
      project. The confidentiality guidelines must be clearly delineated so that
      no
      breaches of confidentiality negatively impact the Customer.

     

    Mikron
      Corporation ensures that the confidentiality requirements regarding protecting
      Customer parts and restricting access of unauthorized people to the Customer’s
      project are met.

     

    Each
      project is internally coded to eliminate any direct reference to the product
      and
      the Customer’s name.

     

    Strict
      adherence to this policy ensures the Customer’s confidentiality and our
      reputation in the industry.

    

      
        
           

           

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

        
          37
            of
            62

          
            

          

        

         

      

    
      
        	15.	
                Training 

              

      

    

     

    
      	
              15.1

            	
              Basic
                training

            

    

     

    Training
      in the use and maintenance of the machine is provided in our facility in
      accordance with our standard program.

     

    
      	
              15.2

            	
              Target
                audience

            

    

     

    Appropriate
      training for the Customer’s staff will be provided as follows: 

     

    
      	 	
              •

            	
              Staff
                without special qualification levels, who have a basic understanding
                of
                the machine’s operator interface, can take operator
                training.

            

    

     

    
      	 	
              •
                

            	
              Staff
                with technical training should take upkeep and maintenance training
                in
                order to understand the required mechanical, information technology
                and
                electric fundamentals.

            

    

     

    
      	
              15.3

            	
              Development
                and contents

            

    

     

    Planned
      duration: Approximately 3 days 

     

    First
      day

    
      	 	
              •
                

            	
              Introduction
                to the Mikron group and company
                visit.

            

    

    
      	 	
              •
                

            	
              Main
                mechanical elements.

            

    

     

    Second
      day 

     

    
      	 	
              •

            	
              Controls
                and electrical elements.

            

    

    
      	 	
              •
                

            	
              Level
                1 automation includes all necessary automation training to effectively
                run
                and maintain the machine.

            

    

    
      	 	
              •
                

            	
              Specific
                elements and feeding systems.

            

    

     

    Third
      day

     

    
      	 	
              •

            	
              Specific
                elements and feeding systems.

            

    

    
      	 	
              •
                

            	
              After-sales
                service, spare parts list and preventive
                maintenance.

            

    

     

    
      	
              15.4

            	
              Additional
                training

            

    

     

    Mikron
      Corporation Denver provides additional training at an optional price. This
      optional training consists of 2 modules, “Level 2 automation” and “Level 3
      automation” of 1 1⁄2 days each.

     

    Target
      audience 

    The
      following training modules are intended for people trained in software
      programming.

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        38
          of
          62

        
          

        

      

      
        
        

      

    

    Level
      2
      automation 

     

    
      	 	
              •

            	
              Controls
                configuration (hardware and software);

            

    

    
      	 	
              •

            	
              Introduction
                to PLC programming language; 

            

    

    
      	 	
              •

            	
              Use
                and parameter definition of commands (stations, alarms, options);
                

            

    

    
      	 	
              •

            	
              Elementary
                and advanced programming procedures;

            

    

    
      	 	
              •

            	
              PLC
                program study and analysis of machine-specific
                implementations.

            

    

     

    Level
      3
      automation 

     

    
      	 	
              •

            	
              Declaration
                of PLC variables, features and procedures;

            

    

    
      	 	
              •

            	
              Implementation
                of an HMI interface and example
                study.

            

    

     

    
      	
              15.5

            	
              Costs
                and organization

            

    

     

    Travel,
      accommodation and food costs are the responsibility of the Customer. Our staff
      is available to assist you with hotel reservations.

     

    

      
        
           

           

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

        
          39
            of
            62

          
            

          

        

         

      

    
      
        	16.	
                Production
                  assistance 

              

      

    

     

    
      	
              16.1

            	
              Description

            

    

     

    Mikron
      Corporation provides optional assistance services to facilitate the
      implementation of the new assembly systems into production. Mikron Corporation
      personnel accompany your operators and maintenance staff at your facility during
      the “ramp-up” production stage. Mikron corporation’s personnel operate the
      system and further train your operators and maintenance staff to avoid downtime
      due to the unfamiliarity with the system. This service is provided on request
      and is quoted as an option.

     

    “Made
      to
      measure” planning 

    During
      the production assistance stage, Mikron Corporation’s mechanics and automation
      specialists help your operators run the new system at your facility. Because
      our
      technicians have identified potential production problems during the tuning
      and
      testing stages, they are able to provide your staff with the additional insight
      to optimize the production of the system. The assignments are generally spread
      over the first 3 months of products in periods of one to several weeks,
      according to your needs.

     

    Productivity
      gains 

    Mikron
      Corporation’s experience providing the production assistance services shows that
      productivity gains are important in the first months.

     

    The
      following graph illustrates the average productivity gained with our production
      assistance services.

     

    
      
    

     

    

      
        
           

           

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

        
          40
            of
            62

          
            

          

        

         

      

    
      
        	17.	
                Communications 

              

      

    

     

    
      	
              17.1

            	
              Hot-line

            

    

     

    Our
      After-Sales Service has a telephone line available to meet your needs quickly.
      A
      special telephone number is reserved for your urgent calls 24-hours, 7-days
      a
      week throughout the year, including holidays.

     

    Our
      U.S.
      service line number is 720-858-2100.

     

    
      	
              17.2

            	
              Remote
                maintenance

            

    

     

    Our
      Software Department is set up to provide remote maintenance work. Machines
      delivered can be fitted with the required equipment to allow such
      work.

     

    17.2.1     System
      implementation 

    To
      enable
      this remote access, Mikron Corporation installs a communications kit on each
      cell (modem card, specific program and RJ45 connector).

     

    The
      Customer specifies the following: 

     

    
      	 	
              •

            	
              Type
                of connection available; digital or analog with RJ45 or RJ11 socket;
                

            

    

    
      	 	
              •

            	
              Telephone
                number reserved for remote
                maintenance;

            

    

    
      	 	
              •
                

            	
              Contact
                name for providing local support
                (training).

            

    

     

    17.2.2     Possible
      types of intervention 

    Remote
      maintenance has two kinds of intervention; namely: 

     

    
      	 	
              •

            	
              Remote
                fault tracking; 

            

    

    
      	 	
              •

            	
              Program
                modification 

            

    

     

    A
      site
      visit may be required depending on the type of fault or modification. There
      is
      no guarantee that all problems can be solved by remote maintenance.

     

    

      
        
           

           

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

        
          41
            of
            62

          
            

          

        

         

      

    
      
        	18.	
                Documents

              

      

    

     

    
      	
              18.1

            	
              File
                No. 0 Transportation and installation
                instructions

            

    

     

    One
      binder containing detailed instructions for transportation, unpacking and
      installation, sent separately at the time of delivery.

     

    
      	
              18.2

            	
              File
                No. 1 standard information (2
                copies)

            

    

     

    One
      binder containing standard information about the machine: 

     

    
      	 	
              •

            	
              [*]
                

            

    

    
      	 	
              •

            	
              [*]

            

    

    
      	 	
              •

            	
              [*]

            

    

    
      	 	
              •

            	
              [*]

            

    

    
      	 	
              •

            	
              [*]

            

    

    
      	 	
              •

            	
              [*]

            

    

    
      	 	
              •

            	
              [*]

            

    

    
      	 	
              •

            	
              [*]

            

    

    
      	 	
              •

            	
              [*]

            

    

    
      	 	
              •

            	
              [*]

            

    

    
      	 	
              •

            	
              [*]

            

    

    
      	 	
              •

            	
              [*]

            

    

    
      	 	
              •
                

            	
              [*]

            

    

    
      	 	
              •

            	
              [*]

            

    

    
      	 	
              •

            	
              [*]

            

    

    
      	 	
              •

            	
              [*]

            

    

    
      	 	
              •

            	
              [*]

            

    

    
      	 	
              •

            	
              [*]

            

    

    
      	 	
              •

            	
              [*]

            

    

     

    
      	
              18.3

            	
              File
                No. 2, specific information (3
                copies)

            

    

     

    
      	 	
              •

            	
              [*]
                

            

    

    
      	 	
              •

            	
              [*]
                

            

    

    
      	 	
              •

            	
              [*]

            

    

    
      	 	
              •

            	
              [*]
                

            

    

    
      	 	
              •

            	
              [*]
                

            

    

    
      	 	
              •

            	
              [*]
                

            

    

    
      	 	
              •

            	
              [*]
                

            

    

     

    
      	
              18.4

            	
              File
                No. 3, supplier documentation (2
                copies)

            

    

     

    One
      binder containing special device suppliers’ documents.

     

    
      	
              18.5

            	
              File
                No. 4, automation documentation (1
                copy)

            

    

     

    One
      binder containing information relating to the machine command: 

    
      	 	
              •

            	
              [*]
                

            

    

    
      	 	
              •
                

            	
              [*]
                

            

    

    
      	 	
              •

            	
              [*]
                

            

    

    
      	 	
              •

            	
              [*]

            

    

     

     

    
      
         

         

        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        42
          of
          62

        
          

        

      

       

    

    
      
        	19.	
                Spare
                  parts 

              

      

    

     

    Mikron
      Corporation works with your team to develop a recommended spare parts list
      of
      the basic stock during the final project review. This stock is sent directly
      to
      the Customer after system delivery.

     

    
      	
              19.1

            	
              Delivery

            

    

     

    To
      reorder basic stock or other parts, the following shipping schedule applies:
      

     

    [*]

     

    
      	
              19.2

            	
              List

            

    

    The
      spare
      parts list simplifies the ordering process.

     

    
      	 	
              •

            	
              [*]
                

            

    

    
      	 	
              •

            	
              [*]
                

            

    

    
      	 	
              •

            	
              [*]
                

            

    

    
      	 	
              •

            	
              [*]
                

            

    

    
      	 	
              •

            	
              [*]
                

            

    

    
      	 	
              •

            	
              [*]
                

            

    

     

    
      
         

        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        43
          of
          62

        
          

        

      

      
        
        

      

    

    
      
        	20.	
                Production
                  simulation (optional) 

              

      

    

     

    Simulation
      enables machine development to be optimized by calculating the important
      parameters relating to its operation and preparation of production. This
      simulation is all the more advantageous as the machine is complex.

     

    
      	
              20.1

            	
              Customized
                simulation

            

    

     

    Simulation
      may be achieved during the design stage or preferably before the order.
Definition
      of parameters is then discussed with customers and data are inserted in the
      simulation program.

     

    Our
      software, based on the latest research as regards statistics, has very many
      functions for programming elements comprising an assembly line and integrating
      all parameters representing current production events in them (batch changes,
      maintenance work, parts defects, breakdowns, etc.)

     

    [*]

     

    
      	
              20.2

            	
              Simulation
                Goals

            

    

    Simulation
      has multiple goals: 

     

    
      	 	
              •

            	
              [*];
                

            

    

    
      	 	
              •

            	
              [*];
                

            

    

    
      	 	
              •

            	
              [*].

            

    

     

    
      	
              20.3

            	
              Data
                processing

            

    

    Simulation
      data is extracted and a report is sent to the Customer. This data is then
      analyzed jointly to calculate possible changes.

     

    [*]

     

    

    

      
        
           

           

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

        
          44
            of
            62

          
            

          

        

         

      

    
      
        	21.	
                Mikron
                  Corporation Denver quality policy 

              

      

    

     

     

    
      	
              21.1

            	
              Mikron
                Corporation Denver ISO 9001 Certification--December 8,
                2001.

            

    

     

    
      	
              21.2

            	
              General
                principles

            

    

    Quality
      is an integral part of our company policy. It is based on three general
      principles: 

     

    
      	 	
              •

            	
              Our
                quality shall achieve or exceed the standards specified by our customers
                and the market; 

            

    

    
      	 	
              •

            	
              Quality
                is a means for lowering our costs; 

            

    

    
      	 	
              •

            	
              Quality
                requirements apply both to ourselves and to our
                products.

            

    

     

    Quality
      plan: 

    Our
      work
      is based on an internal quality plan comprising the following terms:

     

    
      	 	
              •

            	
              Quality
                assurance is the permanent concern of each worker in each department;
                

            

    

    
      	 	
              •

            	
              Each
                worker is personally responsible for quality in his or her department.
                The
                worker spots and proposes each possibility for improvement;
                

            

    

    
      	 	
              •

            	
              Each
                worker is aware of the need to prevent any error at each production
                stage;
                

            

    

    
      	 	
              •

            	
              Our
                efforts are aimed at optimizing the quality of our product and service;
                

            

    

    
      	 	
              •

            	
              Special
                attention is paid to monitoring measures for reducing costs;
                

            

    

    
      	 	
              •

            	
              Quality
                assurance procedures are regularly updated and brought to the attention
                of
                all.

            

    

     

    
      	22.	
              Construction
                standards and rules 

            

    

     

    Our
      standards and validation department ensures that our plant and production
      procedures conform to the standards and directives for the lines of business
      in
      which we operate.

     

    
      	
              22.1

            	
              OSHA
                Standard

            

    

     

    The
      Williams-Steiger Occupational Safety and Health Act of 1970 places
      responsibility for compliance with the Act in the use of the equipment with
      the
      Customer. Mikron Corporation Denver endeavors to design all systems in
      accordance with all OSHA requirements. Should you feel that additional
      modifications are necessary to make the system comply with state, local or
      corporate requirements, we will discuss them and quote such modifications as
      may
      be necessary.

     

    
      	
              22.2

            	
              Specific
                standards and rules

            

    

     

    For
      developing and manufacturing its machines, Mikron Corporation Denver complies
      with appropriate JIC and NEC standards and codes and good engineering
      practices.

     

    

      
        
           

           

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

        
          45
            of
            62

          
            

          

        

         

      

    
      
        	23.	
                Description
                  of standard
                  cells

              

      

    

     

    
      	
              23.1

            	
              G05
                Overview 

            

    

     

    The
      G05
      system is a high performance assembly solution, which offers not only high
      speed
      of operation but also modularity, flexibility and adaptability, which make
      it
      unique in its field. The vision of the G05 was to offer our customers an
      assembly system which could have a shorter lead time, faster time to volume;
      increased modularity, increased output, increased re-usability and a solution
      which would future proof their investment. In all of these areas the G05 has
      excelled. It also has the added benefits of being constructed from stainless
      steel, has clean room compatibility and having an electronic pallet tagging
      system as standard, thus product traceability is guaranteed. Its PLC based
      control system is also designed to minimize the level of specialist programming
      to make it highly functional and easy to use.

     

    
      
    

     

    The
      linear concept of G05 consists of a re-circulating conveyor system, which feeds
      into and exits the main assembly cell. Within the assembly cell are sited the
      process modules and these are used to accurately index the pallets in front
      of
      the assembly, process and feeding stations. The pallets themselves are uniquely
      identified by the use of electronic pallet tags, thus traceability of product
      and assembly can be guaranteed. The G05 system is freely configurable to suit
      the three different standard versions. The 60, 120 and 240 versions correspond
      to the different pallet sizes, however the only machine difference is the
      indexing distance, once again this to suit the pallet size.

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        46
          of
          62

        
          

        

      

      
        
        

      

    

    The
      G05
      is constructed using modular building blocks, which can be easily configured
      to
      provide a solution for all assembly requirements. The two main functional units
      of the G05 can described as the basic cell, which consists of a platform and
      outer structure, and the modules, autonomous fully functional assembly units.
      These elements permit a number of benefits to be realized, for example, if
      we
      require integrating additional product variants or new product generation
      changes, these can be easily integrated into an existing system in the shortest
      possible time. The modules themselves can be completely constructed, tested
      and
      accepted Standard Basic Cells Quotation D04.05.012 Page 63 of 90 external to the
      assembly system and then only have to be inserted into the basic cell, thus
      ensuring the process if fully de-bugged before its integration and therefore
      minimizing possible downtime.

     

    This
      building block philosophy therefore allows for a rapid integration of the most
      varied equipment for the assembly and processing of parts. The arrangement
      of
      the workstations and the peripheral units provide the operator with a good
      overall view of the whole production process with good visibility and
      accessibility to the pallets which carry the parts.

     

    This
      modular concept not only helps Mikron but also offers the customer the
      possibility of carrying out their own investigations, trials and proving on
      site. In some case of processes have to be developed afresh by the customer,
      this concept allows them to develop the process so that it is ready for series
      production and subsequently integrating this equipment into the system. For
      this
      purpose, a module is made available to the customer at a very early stage in
      the
      project. A start can therefore be made with building the assembly equipment
      in
      parallel with the process definition, thus it is possible to leave the
      integration of the developed and proven process module until the last possible
      moment. This may, under certain circumstances, even be the point of final
      acceptance.

     

    23.1.1    
      Operating
      principle 

     

    The
      parts
      of the assembly are placed on free flowing pallets, which enter the cells and
      leave them again by means of logistic modules (conveyor systems). A
      servo-controlled indexing system, using linear motors, is used to transport
      of
      the pallets through the G05 assembly cells or modules, positioning them
      accurately at each work station. The pallet index system allows for the
      transport of one or more pallets to a distance of up to 480mm. This distance
      is
      set by the size of pallet and the number of pallets indexed together. Pallet
      widths are 60mm, 120mm and 240mm.

     

    
      	
              23.2

            	
              Standard
                basic G05

            

    

     

    The
      standard basic cell is designed to accept two (optionally one) process or
      logistic modules. It consists of the basic elements of frame module, process
      module and logistics module. The design of the system has a clear division,
      with
      the working and assembly operations carried out at the front of the cell and
      a
      maintenance area at the rear, thus the plant to be operated simply and safely.
      As a standard the platform and structure are manufactured from stainless steel.
      This construction ensures cleanliness, long life and compliance for the demands
      of a clean room environment.

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        47
          of
          62

        
          

        

      

      
        
        

      

    

    23.2.1 Frame
      Module 

     

    [*]

     

    23.2.2 Process
      Module 

    

    [*]

     

    23.2.3 Logistics
      Module 

    

    [*]

     

    23.2.4 Common
      Drive Shaft 

    

    [*]

     

    23.2.5 Standard
      assembly and handling units 

    

    [*]

     

    23.2.6 Standard
      inspection units 

    

    [*]

     

    
      	
              23.4

            	
              Pallet
                and traceability

            

    

     

    [*]

     

    

      
        
           

           

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

        
          48
            of
            62

          
            

          

        

         

      

    
      
        	24.	
                Technical
                  information

              

      

    

     

    
      	
              24.1

            	
              Electrical
                and electromagnetic safety
                equipment

            

    

     

    All
      the
      electrical equipment meets the North American and European
      regulations.

    The
      most
      reliable techniques are employed to produce the safety devices. The control
      voltage is 24 V DC.

     

    
      	
              24.2

            	
              Safety
                devices for personnel
                protection

            

    

     

    At
      the
      front, the lower part of the basic G05 cell, which contains the drive systems
      and the transmission, is protected by a guard, which can be lowered downward.
      At
      the rear the lower guard is formed at the bottom by the electrical control
      cabinet of the process module.

     

    The
      upper
      part, which contains the operational and inspection stations at the front and
      the return belts at the rear, is protected by two transparent protective doors
      in polycarbonate. These can be opened upward. When the front protective doors
      are opened, the lower cover is also lowered automatically. These units are
      equipped with SCHMERSAL safety switches, which trigger the cell emergency stop
      if they are opened during operation of the cell.

     

    

      
        
           

           

          [
            * ] = Certain confidential information contained in this document, marked
            by
            brackets, has been omitted and filed separately with the Securities and
            Exchange
            Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
            as
            amended. 

        

        
          49
            of
            62

          
            

          

        

         

      

    
      
        	25.	
                GO5TM
                  Control System 

              

      

    

     

    This
      section provides an overview of the Allen-Bradley Control Logix Processor based
      control system for the Mikron G05 and its variations.

     

    
      	
              25.1

            	
              System
                Architecture

            

    

     

    The
      control system for the Mikron G05 is based around an Allen-Bradley Control
      Logix
      PLC processor and an Allen-Bradley Panel View Plus touch screen.

     

    [*]

     

    
      	
              25.2

            	
              Operator
                Control Station

            

    

     

    The
      operator control station is the central point for the operator to interface
      with
      the machine. It is commonly referred to as the HMI (Human Machine Interface)
      or
      simply as the Touch Screen throughout this description. The operator control
      panel contains a touch screen as well as a series of push buttons and switches.
      The push buttons and switches perform basic functions such as switching modes,
      starting, stopping, or manually jogging the machine.

     

    

    [*]

     

    25.2.1   
      Touch
      Screen 

     

    The
      touch
      screen provides a Graphical User Interface to detailed machine
      functions.

    It
      is
      used for setting up production batches, viewing machine performance data, and
      for trouble shooting purposes.

     

    25.2.2   
      Operator
      Station Buttons 

     

    The
      buttons on the Operator Station perform the following functions: Emergency
      Stop and Safety Guard ON/OFF.

     

    25.2.3   
      Hand
      Held
      Controller 

     

    The
      buttons on the hand held controller perform the following
      functions:
      AUTO/MANUAL Mode Selector, Fault Reset, Master Start, Start, Stop Immediate,
      and
      Stop at Zero.

     

    
      
         

         

        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        50
          of
          62

        
          

        

      

       

    

    
      
        	25.3	
                Control
                  Panels

              

      

    

     

    The
      modular nature of the G05 assembly cell dictates the use of numerous small
      electrical panels instead of a single large panel. The single process module
      G05
      has 5 control panels. A double process module G05 has 8 control panels. In
      the
      second process module of a Double G05, there are up to three empty electrical
      panels available for optional equipment.

     

    [*]

     

    25.3.1 The
      Power
      Distribution Panel 

    

    The
      power
      from the customer facility is connected to this panel, and it contains the
      main
      power disconnect switch. The typical machine requires 25amps at 480 volts three
      phase.

     

    25.3.2 The
      Motor
      Control Panel 

    

    This
      panel typically contains the Motor Starters and Overloads for the conveyor
      motors.

     

    25.3.3 The
      Primary/Secondary Servo Control Panels 

    

    Each
      process module has a servo control panel that typically contains both the
      208/120 AC and the 24v DC Branch Circuit Breakers and Terminal Blocks, Power
      Supplies, some of the ASI Bus (I/O) components, and the Servo Drive(s) for
      the
      cam motor and the pallet indexer.

     

    25.3.4 The
      PLC
      Control Panel 

    

    The
      primary process module usually will contain the PLC panel and typically contains
      the Programmable Controller, Ethernet Communications Hub, and some of the ASI
      Bus (I/O) components.

     

    25.3.5 The
      Safety Control Panel

    

    The
      safety control panel typically contains Components for the emergency stop
      circuits and the guard door circuits, and ASi I/O blocks related to the machine
      frame and HMI.

     

    
      	
              25.4

            	
              Machine
                Operation

            

    

     

    [*]

     

    25.4.1 Batch
      and
      Mode Indicator 

     

    The
      BATCH
      status indicator can display one of the following: FILLING, IN PROGRESS,
      EMPTYING, and DONE.

     

    The
      MODE
      indicator can display the following: 

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        51
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    MANUAL,
      AUTO STOP, AUTO RUN, FAULTED and PAUSED.

     

    25.4.2 Production
      Status 

     

    The
      PRODUCTION status indicator shows the production counters and the variant that
      is being run: GOOD, BAD, REWORK, and VARIANT.

     

    25.4.3 Operator
      Indicator 

     

    The
      OPERATOR indicator shows what security level the machine is currently logged
      into.

     

    25.4.4 Rate
      and
      Cam Angle Indicator 

     

    The
      RATE
      Indicator shows the current rate the machine is running in RPM (revolutions
      per
      minute).

     

    25.4.5 Menu
      Tab

     

    The
      MENU
      tabs along the bottom are present on all screens.

     

    25.4.6 Alarm
      Button 

     

    The
      alarm
      button is located at the lower right of the screen, only if alarm is
      present.

     

    25.4.7 Back
      Button 

     

    This
      button will display the screen that was active before the operator switched
      to
      the current displayed screen.

     

    
      	
              25.5

            	
              Stations

            

    

     

    The
      stations screen gives a summary of information about each station on the
      machine.

     

    [*]

     

    
      	
              25.5.1

            	
              Station
                Number & Description 

            

    

     

    The
      station number is shown in the left most column. A descriptive name for each
      station is displayed in the station column.

     

    25.5.2 Station
      Type 

     

    Station
      types mainly control how parts are counted in the machine.

     

    • INIT-
      this is where the process starts and where injected parts are
      counted.

     

    • PICK
      & PLACE - parts are added to the assembly at this station type.

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        52
          of
          62

        
          

        

      

      
        
        

      

    

    • CHECK
      -
      Verification of part placement, and/or process completion, is done at this
      station type.

     

    • PROCESS
      -
      A Process station modifies the assembly without adding more parts to the
      assembly. An example of this would be a pressing operation.

     

    • UNLOAD
      GOOD - Only good assemblies are unloaded at this station. Each time a good
      assembly is unloaded the good part count gets incremented.

     

    • UNLOAD
      BAD - Only bad assemblies are unloaded at this station. Each time a bad assembly
      is unloaded, the bad part counter gets incremented.

     

    • UNLOAD
      GOOD/BAD - This type of station can unload both good and bad assemblies. If
      either is unloaded, the appropriate good or bad counter gets
      incremented.

     

    • NEXT
      CELL
      - This type of station doesn’t physically unload parts. But the good & bad
      part counters are incremented as parts pass through it. This type is used to
      pass parts to another cell.

     

    25.5.3 Station
      Status 

     

    The
      status column shows the condition of the station. The status can be as follows:
      IDLE, FAULT, OFF, and WORKING.

     

    [*]

     

    25.5.4 Pallet
      Status at Station 

     

    The
      status column shows the condition of the pallet positioned at the station.
      The
      pallet status can be as follows: EMPTY, GOOD PART, BAD PART, MIXED, and
      REWORK.

     

    25.5.5 Pallet
      Number 

     

    This
      indicator shows what pallet is in the corresponding station.

     

    25.5.6 Station
      Select Buttons 

     

    Using
      these buttons, a specific station can be highlighted for detailed functions,
      such as turning it on and off, manual controls, and configuration.

     

    25.5.7 Station
      Counters 

     

    This
      tab
      provides a detailed status of assemblies by stations that are GOOD, BAD, REWORK,
      and FAULT.

     

    [*]

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        53
          of
          62

        
          

        

      

      
        
        

      

    

    25.5.8    
      Station
      Tabs 

     

    The
      4
      tabs below the STATION SUMMARY tab provide detailed information and control
      for
      each station.

     

    
      	
              25.6

            	
              Station
                Cams

            

    

     

    The
      station cams screen shows how the electronic cams for each station are
      programmed. The machine contains an encoder, which provides the control system
      with a number indicating degrees of camshaft rotation (0-359). These electronic
      cams are used in the program to trigger valves and to check for sensors to
      be ON
      or OFF. The CAMS screen allows these angles to be modified without changing
      the
      PLC program.

     

    [*]

     

    25.6.1     
      Cam
      Number 

     

    This
      column shows the electronic cam number.

     

    25.6.2     
      Set
      Point

     

    This
      is
      the angle at which the electronic cam turns on.

     

    25.6.3     
      ON/OFF
      indicator column 

     

    This
      indicator shows the current state of the cam.

     

    25.6.4     
      Reset
      Point 

     

    This
      is
      the angle at which the electronic cam turns off.

     

    25.6.5     
      Cam
      Description 

     

    The
      description of the electronic cam function is displayed here. The description
      also shows the input, (sensor), address or the output, (valve), address that
      is
      used with this electronic cam.

     

    25.6.6     
      EDIT
      CAM
      (Window) 

     

    For
      debug
      purposes, each electronic cam can be selectively enabled or
      disabled.

     

    
      	
              25.7

            	
              System
                Cams

            

    

     

    In
      addition to 20 cams for each station, there are 40 system cams. The first 20,
      (cell cams), are reserved for base machine functions such as pallet indexing
      and
      data tracking and can only be modified if the security level is at Mikron.
      System cams 21- 40, (global cams), are for general use and can be used for
      system wide functions.

     

    [*]

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        54
          of
          62

        
          

        

      

      
        
        

      

    

    
      	
              25.8

            	
              Station
                Setup Screen

            

    

     

    The
      Station Setup screen controls the configuration of each station on the GO5.
      It
      covers station type and setup as well as pallet routing and consecutive failure
      alarming.

     

    [*]

     

    25.8.1 Station
      Type 

     

    The
      station type controls how the station counts good and bad parts.

     

    25.8.2 Pallet
      Routing 

     

    When
      a
      pallet arrives in a station, the pallet routing information from the previous
      operation is examined for each available nest. If the routing matches Line,
      Cell, and Station of the pallet location, the part in that nest is worked
      on.

    After
      a
      station works on a pallet, the pallet can be routed to another station based
      on
      whether it was passed, failed, or can be reworked. The numbers specified in
      this
      section of the screen control which line, cell, and station will work on parts
      next.

    Typically
      for a good part, the pallet is routed to the next station on the Cell. In the
      case of Bad or Reworked parts, the pallet routing can send the pallet anywhere,
      including stations that the pallet has already passed through. Pallet routing
      can be specified for each nest on the pallet.

     

    
      	
              25.9

            	
              Pallet
                Data 

            

    

     

    The
      pallet data screen displays the status of the pallet and its routing. The pallet
      information contains the next station the pallet nest will be worked on, the
      last station the pallet nest failed, and the last station the pallet nest
      passed. The pallet information also contains the status of each nest. The
      station information contains the status of the pallet and the consecutive bad
      part count status.

     

    [*]

     

    25.9.1 Pallet
      Status 

     

    The
      status of each nest of the pallet in station is shown in this area. The status
      can be EMPTY, GOOD, BAD, or REWORK. The next station that will work on the
      selected pallet nest is displayed under NEXT OPERATION. The last station that
      passed the selected pallet nest as a good part is displayed under LAST STATION
      PASSED. The last station that failed the selected pallet nest is displayed
      under
      LAST STATION FAILED.

     

    25.9.2 View
      by
      Mode 

     

    The
      pallet data is viewed for the pallet that is at the selected station, or you
      can
      navigate to the others.

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        55
          of
          62

        
          

        

      

      
        
        

      

    

    25.9.3 Process
      Measurements 

     

    For
      each
      measurement made on the machine, the measured value and resulting pass/fail
      status is shown in this box. These process measurements are values where and
      analog value is read and compared against limits to determine a Good or Pass
      status.

     

    25.9.4 Station
      Status 

     

    A
      yes or
      a no under the WORK ON NEST column will indicate if the pallet nest selected
      will or will not be worked on. The BYPASS column will indicate if the selected
      pallet nest will be bypassed. The FAIL COUNTERS columns will indicate how many
      consecutive parts have failed in the selected nest. The FAIL COUNTERS columns
      will also indicate how many failures are allowed before the machine is to be
      stopped.

     

    
      	
              25.10

            	
              Peripheral
                Devices

            

    

     

    The
      peripheral screen contains settings and controls for devices that are not
      directly connected to a single station, are system wide or single devices used
      across multiple stations. Controls are provided to monitor, calibrate, and/or
      manually control peripheral devices attached to the machine. Examples of these
      are (but are not limited to) LVDT systems, Color Sensors, Welders, Force
      measurements and Weighing systems. Below is an example of the Gantry Peripheral
      screen.

     

    [*]

     

    
      	
              25.11

            	
              STATISTICS
                - Production Summary

            

    

     

    The
      machine provides detailed production statistics which track machine run time,
      faults, and stops. The statistics look at the basic cell system and the
      individual stations. The data can be displayed both in a table as well as
      graphically.

    The
      Production summary screen shows machine performance for the batch that is
      currently running. It gives percentages of good, bad, and rework parts as well
      as details about machine run time, and stop time. Machine production rate data
      is included as well. A Maintenance section displays some overall machine
      information.

     

    [*]

     

    25.11.1 Part
      Count 

     

    A
      count
      of good, bad, and rework parts is shown. Additionally, each of these categories
      is shown as a percentage of the total.

     

    25.11.2 Machine
      Time 

     

    Time
      is
      logged for auto run time, machine stop time, and manual time. Additionally,
      each
      of these categories is shown as a percentage of the total time.

     

    Stop
      Time

     

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        56
          of
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    Details
      of the machine stop count as well as stop time are shown in this section.
Additionally
      each of the stop count categories (machine pauses, operator stops, system
      faults, station faults, total stop time) is shown as a percentage of the
      total.

     

    25.11.3 Production
      Rate 

     

    Details
      of the machine throughput 

     

    25.11.4 Batch
      from History 

     

    Details
      of the last 10 batch’s ran and display the data. When a previous batch is
      selected from this window, it will also display the data in Production Summary
      window and change the Current Batch indictor to Batch History.

     

    [*]

     

    
      	
              25.12

            	
              Statistics
                Data

            

    

     

    25.12.1 Table
      of
      Station Data 

     

    The
      Table
      of Station Data displays, in tabular form, the number of good parts, bad parts,
      faults, pauses, and downtime attributable to a specific station.

     

    [*]

     

    25.12.2 Statistics
      - Station Graphs 

     

    Station
      stops can be viewed graphically by pressing the Station Graphs button. The
      bar
      chart allows easy visualization of the most troublesome station in the
      system.

    This
      graph can show Good Part Count, Bad Part Count, Fault Count, Pause Count, and
      Fault + Pause Combined Time data.

     

    [*]

     

    25.12.3 Statistics
      - Station Process Statistics 

     

    The
      process graphs screen is an optional job specific screen. The process graphs
      screen can display graphical data associated with a process measurement. This
      is
      typically data that is recorded and stored for offload to a data collection
      system.

     

    
      	
              25.13

            	
              ALARMS

            

    

     

    25.13.1 ALARM
      DISPLAY 

     

    Whenever
      an alarm occurs, a small alarm window will be displayed on top of the current
      screen and in the lower portion of the screen.

     

    [*]

     

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        57
          of
          62

        
          

        

      

      
        
        

      

    

    The
      alarms are displayed with three most recent listed at the top of alarm
      banner.

     

    25.13.2 ALARM
      HISTORY SCREEN

     

    [*]

     

    Alarm
      messages are displayed chronologically as they occur, with the most recent
      message listed first. However, this listing displays a history of all messages
      that have been displayed whether they have been reset or not.

     

    25.13.3 ALARM
      STATISTICS SCREEN

     

    Alarms
      are listed chronologically with the most recent listed at the top of the screen.
      

     

    [*]

     

    

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        58
          of
          62

        
          

        

      

      
        
        

      

    

     

    
      
        	
                1.
                  PROPOSED SOLUTION 

              	 	 	
                6

              	 
	
                1.1
                  Task definition 

              	 	 	
                6

              	 
	
                2.
                  Key points 

              	 	 	
                7

              	 
	
                2.1
                  Production

              	 	 	
                7

              	 
	
                2.2
                  Price 

              	 	 	
                7

              	 
	
                2.3
                  Shipping time

              	 	 	
                7

              	 
	
                2.4
                  Warranty  

              	 	 	
                7

              	 
	
                2.5
                  Confidentiality 

              	 	 	
                7

              	 
	
                2.6
                  Floor space requirements

              	 	 	
                7

              	 
	
                2.7
                  Training 

              	 	 	
                7

              	 
	
                2.8
                  Production assistance: improved productivity 

              	 	 	
                7

              	 
	
                2.9
                  Customer service 

              	 	 	
                7

              	 
	
                2.10
                  Project management

              	 	 	
                8

              	 
	
                3.
                  Rights to proposal 

              	 	 	
                9

              	 
	
                4.
                  Parts to be assembled

              	 	 	
                10

              	 
	
                4.1
                  Description of parts to be assembled 

              	 	 	
                10

              	 
	
                4.2
                  Description and drawings of components (products) to be assembled
                  

              	 	 	
                10

              	 
	
                4.3
                  Definition of variants 

              	 	 	
                10

              	 
	
                4.4
                  Overall Assumptions 

              	 	 	
                10

              	 
	
                5.
                  Description of the assembly system

              	 	 	
                11

              	 
	
                5.1
                  Sequence of operations and description 

              	 	 	
                11

              	 
	
                5.2
                  Machine speed 

              	 	 	
                11

              	 
	
                5.3
                  Effective output 

              	 	 	
                11

              	 
	
                5.4
                  Feeding systems 

              	 	 	
                12

              	 
	
                5.5
                  Noise level 

              	 	 	
                12

              	 
	
                5.6
                  Floor space required

              	 	 	
                12

              	 
	
                5.7
                  Calibration 

              	 	 	
                12

              	 
	
                5.8
                  Machine capability index 

              	 	 	
                12

              	 
	
                6.
                  Installation Conditions & Terms 

              	 	 	
                13

              	 
	
                6.1
                  Packing 

              	 	 	
                13

              	 
	
                6.2
                  Installation supervision and final acceptance 

              	 	 	
                13

              	 
	
                6.3
                  Unspecified work outside Mikron Corporation Denver
                  Facility

              	 	 	
                13

              	 
	
                6.4
                  Validity of proposal 

              	 	 	
                13

              	 
	
                6.5
                  Payment terms 1

              	 	 	
                14

              	 
	
                6.6
                  Acceptance terms 

              	 	 	
                14

              	 
	
                7.
                  Risk Management 

              	 	 	
                15

              	 
	
                7.1
                  Efficiency 

              	 	 	
                15

              	 
	
                7.2
                  Machine downtime 

              	 	 	
                15

              	 
	
                7.3
                  Information on production costs 

              	 	 	
                17

              	 
	
                7.4
                  Customer responsibilities 

              	 	 	
                17

              	 
	
                7.5
                  Project schedule 

              	 	 	
                18

              	 
	
                8.
                  Changes and deviations from Mikron Corporation Denver standards
                  

              	 	 	
                18

              	 
	
                8.1
                  Changes during the project 

              	 	 	
                18

              	 
	
                8.2
                  Deviation from Mikron Corporation Denver standards 

              	 	 	
                19

              	 

      

       

    

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        59
          of
          62

        
          

        

      

      
        
        

      

    

    
       

      
        
          	
                  9.
                    Parts for testing and preliminary acceptance 

                	 	 	
                  19

                	 
	
                  10.
                    Warranty 

                	 	 	
                  21

                	 
	
                  11.
                    Terms and Conditions of Sale 

                	 	 	
                  22

                	 
	
                  11.1
                    General Terms and Conditions of Sale 

                	 	 	
                  22

                	 
	
                  11.2
                    Verification, Preliminary and Final Acceptance and Clearance
                    of the
                    Delivered Goods for Production Purposes 

                	 	 	
                  23

                	 
	
                  11.3
                    Warranty and Liability for Defects 

                	 	 	
                  23

                	 
	
                  11.4
                    Title 

                	 	 	
                  25

                	 
	
                  11.5
                    Protected Rights 

                	 	 	
                  26

                	 
	
                  11.6
                    Environmental and operational safety 

                	 	 	
                  26

                	 
	
                  11.7
                    Prior Agreements 

                	 	 	
                  27

                	 
	
                  11.8
                    Force Majeure 

                	 	 	
                  27

                	 
	
                  11.9
                    Applicable Law 

                	 	 	
                  27

                	 
	
                  11.10
                    Taxes 

                	 	 	
                  28

                	 
	
                  11.11
                    Modification 

                	 	 	
                  28

                	 
	
                  11.12
                    Rights or Remedies 

                	 	 	
                  28

                	 
	
                  11.13
                    Cancellation 

                	 	 	
                  28

                	 
	
                  12.
                    Mikron Assistance Beyond Installation 

                	 	 	
                  29

                	 
	
                  12.1
                    Assistance rates 

                	 	 	
                  29

                	 
	
                  12.2
                    Travel time 

                	 	 	
                  29

                	 
	
                  12.3
                    Working time 

                	 	 	
                  29

                	 
	
                  12.4
                    Waiting time 

                	 	 	
                  29

                	 
	
                  12.5
                    Holidays 

                	 	 	
                  29

                	 
	
                  12.6
                    Traveling expenses 

                	 	 	
                  30

                	 
	
                  12.7
                    Incidental expenses 

                	 	 	
                  30

                	 
	
                  12.8
                    Taxes 

                	 	 	
                  30

                	 
	
                  12.9
                    Formation of contract 

                	 	 	
                  30

                	 
	
                  12.10
                    Regulations in force at destination 

                	 	 	
                  30

                	 
	
                  12.11
                    Preliminary work 

                	 	 	
                  30

                	 
	
                  12.12
                    Tools, auxiliary equipment and materials 

                	 	 	
                  31

                	 
	
                  12.13
                    Duration of support 

                	 	 	
                  31

                	 
	
                  12.14
                    Testing and acceptance of machinery/equipment 

                	 	 	
                  31

                	 
	
                  12.15
                    Work not covered by the contract 

                	 	 	
                  32

                	 
	
                  12.16
                    Guarantee 

                	 	 	
                  32

                	 
	
                  12.17
                    Liability 

                	 	 	
                  32

                	 
	
                  12.18
                    Validity 

                	 	 	
                  32

                	 
	
                  12.19
                    Additional conditions 

                	 	 	
                  32

                	 
	
                  12.20
                    Terms of payment 

                	 	 	
                  33

                	 
	
                  12.21
                    Place of jurisdiction and law applicable 

                	 	 	
                  33

                	 
	
                  13.
                    Project development description 

                	 	 	
                  34

                	 
	
                  13.1
                    Kick-off Meeting 

                	 	 	
                  35

                	 
	
                  13.2
                    Project reviews 

                	 	 	
                  35

                	 
	
                  13.3
                    Preliminary Design Review 

                	 	 	
                  35

                	 
	
                  13.4
                    Final Design Review 

                	 	 	
                  35

                	 
	
                  13.5
                    Certification tests 

                	 	 	
                  35

                	 

        

         

      

    

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        60
          of
          62

        
          

        

      

      
        
        

      

       

      
        
          	
                  13.6
                    Pre-acceptance 

                	 	 	
                  36

                	 
	
                  13.7
                    Final acceptance 

                	 	 	
                  36

                	 
	
                  13.8
                    Debriefing 

                	 	 	
                  36

                	 
	
                  14.
                    Customer parts control 

                	 	 	
                  37

                	 
	
                  14.1
                    Parts tracking 

                	 	 	
                  37

                	 
	
                  14.2
                    Parts use and stock control 

                	 	 	
                  37

                	 
	
                  14.3
                    Parts disposal 

                	 	 	
                  37

                	 
	
                  14.4
                    Confidentiality 

                	 	 	
                  37

                	 
	
                  15.
                    Training 

                	 	 	
                  38

                	 
	
                  15.1
                    Basic training 

                	 	 	
                  38

                	 
	
                  15.2
                    Target audience 

                	 	 	
                  38

                	 
	
                  15.3
                    Development and contents 

                	 	 	
                  38

                	 
	
                  15.4
                    Additional training 

                	 	 	
                  38

                	 
	
                  15.5
                    Costs and organization 

                	 	 	
                  39

                	 
	
                  16.
                    Production assistance 

                	 	 	
                  40

                	 
	
                  16.1
                    Description 

                	 	 	
                  40

                	 
	
                  17.
                    Communications 

                	 	 	
                  41

                	 
	
                  17.1
                    Hot-line 

                	 	 	
                  41

                	 
	
                  17.2
                    Remote maintenance 

                	 	 	
                  41

                	 
	
                  18.
                    Documents 

                	 	 	
                  42

                	 
	
                  18.1
                    File No. 0 Transportation and installation instructions 

                	 	 	
                  42

                	 
	
                  18.2
                    File No. 1 standard information (2 copies) 

                	 	 	
                  42

                	 
	
                  18.3
                    File No. 2, specific information (3 copies) 

                	 	 	
                  42

                	 
	
                  18.4
                    File No. 3, supplier documentation (2 copies) 

                	 	 	
                  42

                	 
	
                  18.5
                    File No. 4, automation documentation (1 copy) 

                	 	 	
                  42

                	 
	
                  19.
                    Spare parts 

                	 	 	
                  43

                	 
	
                  19.1
                    Delivery 

                	 	 	
                  43

                	 
	
                  19.2
                    List 

                	 	 	
                  43

                	 
	
                  20.
                    Production simulation (optional) 

                	 	 	
                  44

                	 
	
                  20.1
                    Customized simulation 

                	 	 	
                  44

                	 
	
                  20.2
                    Simulation Goals 

                	 	 	
                  44

                	 
	
                  20.3
                    Data processing 

                	 	 	
                  44

                	 
	
                  21.
                    Mikron Corporation Denver quality policy 

                	 	 	
                  45

                	 
	
                  21.1
                    Mikron Corporation Denver ISO 9001 Certification--December 8,
                    2001.
                    

                	 	 	
                  45

                	 
	
                  21.2
                    General principles 

                	 	 	
                  45

                	 
	
                  22.
                    Construction standards and rules 

                	 	 	
                  45

                	 
	
                  22.1
                    OSHA Standard 

                	 	 	
                  45

                	 
	
                  22.2
                    Specific standards and rules 

                	 	 	
                  45

                	 
	
                  23.
                    Description of standard cells 

                	 	 	
                  46

                	 
	
                  23.1
                    G05 Overview 

                	 	 	
                  46

                	 
	
                  23.2
                    Standard basic G05 

                	 	 	
                  47

                	 
	
                  23.3
                    Pallet and traceability 

                	 	 	
                  48

                	 
	
                  24.
                    Technical information 

                	 	 	
                  49

                	 
	
                  24.1
                    Electrical and electromagnetic safety equipment 

                	 	 	
                  49

                	 
	
                  24.2
                    Safety devices for personnel protection 

                	 	 	
                  49

                	 

        

         

      

    

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        61
          of
          62

        
          

        

      

      
        
        

      

    

      

    
      
        	
                25.
                  GO5TM Control System 

              	 	 	
                50

              	 
	
                25.1
                  System Architecture 

              	 	 	
                50

              	 
	
                25.2
                  Operator Control Station 

              	 	 	
                50

              	 
	
                25.3
                  Control Panels 

              	 	 	
                51

              	 
	
                25.4
                  Machine Operation 

              	 	 	
                51

              	 
	
                25.5
                  Stations 

              	 	 	
                52

              	 
	
                25.6
                  Station Cams 

              	 	 	
                54

              	 
	
                25.7
                  System Cams 

              	 	 	
                54

              	 
	
                25.8
                  Station Setup Screen 

              	 	 	
                55

              	 
	
                25.9
                  Pallet Data 

              	 	 	
                55

              	 
	
                25.10
                  Peripheral Devices 

              	 	 	
                56

              	 
	
                25.11
                  STATISTICS - Production Summary 

              	 	 	
                56

              	 
	
                25.12
                  Statistics Data 

              	 	 	
                57

              	 
	
                25.13
                  ALARMS 

              	 	 	
                57

              	 

      

       

    

    
      
        [
          * ] = Certain confidential information contained in this document, marked
          by
          brackets, has been omitted and filed separately with the Securities and
          Exchange
          Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
          as
          amended. 

      

      
        62
          of
          62EXHIBIT 10.1

                             COMPENSATION AGREEMENT

This  Compensation  Agreement  is  dated  as of July  25,  2006  among  Knockout
Holdings,  Inc., a Delaware  corporation (the "Company"),  and Gregory Sichenzia
("Consultant").

      WHEREAS,  the Company has requested the  Consultant to provide the Company
with legal services in connection  with their  business,  and the Consultant has
agreed to provide the Company with such legal services; and

      WHEREAS,  the Company wishes to compensate  the Consultant  with shares of
its common stock for such services rendered;

      NOW  THEREFORE,  in  consideration  of the  mutual  covenants  hereinafter
stated, it is agreed as follows:

1. The Company will issue up to 999,999  shares of the  Company's  common stock,
par value  $.001 per  share,  to the  Consultant  subsequent  to the filing of a
registration  statement on Form S-8 with the Securities and Exchange  Commission
registering  such  shares,  as set forth in  Section 2 below.  The  shares to be
issued shall represent  consideration  for legal services to be performed by the
Consultant on behalf of the Company.

2. The above  compensation  shall be  registered  using a Form S-8.  The Company
shall file such Form S-8 with the Securities and Exchange  Commission  within 30
days of the execution of this agreement.

      IN WITNESS WHEREOF,  this Compensation  Agreement has been executed by the
Parties as of the date first above written.

                                            KNOCKOUT HOLDINGS, INC.

                                            /s/ JOHN BELLAMY
                                            -----------------------
                                            John Bellamy
                                            Chief Executive Officer

                                            GREGORY SICHENZIA

                                            /s/ GREGORY SICHENZIA
                                            -----------------------
                                            Gregory Sichenzia

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}]]