<PAGE>
Exhibit 10.20
CONFIDENTIAL TREATMENT REQUESTED UNDER C.F.R. SECTIONS
200.80(b)(4), 200.83 AND
230.406
**** INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A
CONFIDENTIAL TREATMENT
REQUEST FILED SEPARATELY WITH THE COMMISSION
1
(ZIRKON LOGO)
zirkon Druckmaschinen GmbH Riesaer Str 72-04328 Leipzig
zirkon Druckmaschinen GmbH
Riesaer StraBe 72
04328 Leipzig
CONTRACT: 1056-R2
Telefon: 0341-2584-0
Telefax: 0341-2584-338
CONTRACT DATE: August 22 2005
E-Mail: info@zirkon-print.com
SALES CONTRACT
"BUYER"
Name:
Network Communications, Inc.
Address:
2305 Newpoint Parkway
City, State, Zip: Lawrenceville, GA 30043
Attention:
Mr. Stuart Christian, Senior Vice President Operations
Telephone:
(770)962-7220
"SELLER"
Zirkon Druckmaschinen GmbH Leipzig
Riesaer Str, 72
04328 Leipzig
Germany
Attention:
Holger Rohrs
Telephone:
011-49-341-2584331
"EQUIPMENT"
DESCRIPTION:
ONE (1) Four unit, one web Zirkon Model 6720 web press plus
auxiliary equipment.
BY:
---------------------------------
----------------------------------------
Buyer's full name and type of entity
DATE: September 1, 2005
----------------------------------------
Date & state of incorporation or
organization
/s/ Holger Rohrs
BY: /s/ Gerard Parker
-------------------------------------
------------------------------------
Signature of authorized owner, partner
or officer
ATTEST:
--------------------------------
(ZIRKON LOGO)
Druckmaschinen GmbH
Riesaer Str 72-04328 Leipzig
Deutsche Bank AG Leipzig (BLZ 860 700 00) Konto Nr: 1 165 455
(Illegible)
<PAGE>
-2-
(ZIRKON LOGO)
August 22, 2005
NETWORK COMMUNICATIONS, INC.
2305 Newpoint Parkway
Contract #1056-R2
Lawrenceville, GA 30043
ZIRKON MODEL 6720
1. Technical
Data/Performance Standards
<TABLE>
<S>
<C>
Mechanical speed
35,000 cylinder rev./h ("CRPH")
Web speed
8.78 m/s
Cut-off length
452mm
17.795"
Cylinder circumference 904mm
35.591"
Maximum web width
673mm
26.50"
Minimum web width
450mm
17.717"
Maximum printing length 892mm
35.118"
Maximum printing width 673mm
26,496"
Paper grammage, Jaw fold 30-140 gsm 20-94 lb
Chopper fold
30-80 gsm
20-60 lb*
Printing plate size
688 x 950mm 27.087" x 37.402"
Blanket size, clamped 710 x
985mm 28.071" x 38.780"
</TABLE>
<TABLE>
<CAPTION>
Products per hour
collect non-collect
-----------------
-----------
-----------
<S>
<C>
<C>
Tabloid fold operation (jaw fold) 35,000 CRPH 70,000 CRPH
Quarter page fold operation
30,000 CRPH
60,000 CRPH
</TABLE>
The maximum production speed shall be achieved for NCI product (as
defined in
Exhibit A) using 60 lb. Paper with NCI press crews in the NCI
pressroom.
<PAGE>
-3-
(ZIRKON LOGO)
Folding formats
<TABLE>
<CAPTION>
Size
Pages per copy
------------------- --------------
<S>
<C>
<C>
Jaw fold max.
8.898 x 13.250
16 collect
min. 8.898 x 8.858 8
non-collect
Chopper fold
max. 8.898 x 6.625 32 collect
min. 8.898 x 4.429 16 non-collect
</TABLE>
NCI
has been informed that use of 60 lb. paper will require:
-
Softening silicone applicator (included)
- Scoring,
cross and longitudinal perforation (included)
- Special
folder pins (included)
2. Specification
of the Press (hereinafter collectively referred to as
"Equipment")
<TABLE>
<S>
<C>
ONE Infeed
-
Omega pull
roller system with speed modulation gearbox from Tandler
</TABLE>
<PAGE>
(ZIRKON LOGO)
<TABLE>
<S>
<C>
FOUR Printing
units
-
Zirkon
dampening units for use with or without alcohol substitutes
-
Ductor
type inking system
-
Servo
motor control of dampening roller and doctor roller
-
Motorized
lateral and circumferential register adjustment with
manual cocking
-
Remote
control of ink keys, 19 ink keys for each inking system
-
Lateral
stops in the plate cylinders
-
Chillable
distributors set-up for water cooling
-
Continuous
oil circulation on operator and drive side with oil
control system
ONE Chill
roll stand
-
Five 15"
diameter chilling cylinders with rotary unions and piping
prepared for two separate cooling circuits
-
Sensitive
and precisely adjustable speed modulation with gear box
Tandler
-
Individual
electronic drive
ONE Folder
superstructure
-
Draw
roller system including individual drives
-
Individually adjustable nip rollers at draw rollers
-
Slitter
-
Compensating roller for cut-off register
-
Former
board including blower and heat exchanger for air cooling
ONE Folder
basic module
-
Electromotive single drives
-
Infeed system including
scoring, longitudinal and cross perforation
-
Pneumatically adjustable and controllable draw rollers
-
Cutting
knife cylinder (double cut-off)
-
Collecting
cylinder
-
Web
severing and clamping system
-
Set-up for
overlap adjustment 1st cross fold during press operation
-
One
delivery for jaw fold
</TABLE>
<PAGE>
-5-
(ZIRKON LOGO)
<TABLE>
<S>
<C>
ONE
Chopper folder
-
Stacked
design
-
Electromotive single drives
-
Two
deliveries
ONE
Gallery
-
Including
one stair in the area of the folder superstructure
ONE Main drive system, with
-
Electronically synchronized individual drives based on a
programmable logic controller from Siemens-S7 for the sections
infeed and print units, chill roll stand, folder, chopper
folder
Central control desk
for
-
Machine
control
-
Drive
control
-
Web guide
and monitoring
ONE Color
control system fss3 - Eltromat
-
One
control desk
-
Control of
ink keys
-
Register
control
-
Inking and
damping unit control
ONE Plate
bender, 2B -Prazisionstechnik
ONE Plate
punch, 2B - Prazisionstechnik
ONE
Telecommunication system (modem)
ONE Spare
roller
For
inking and dampening unit for one printing unit
ONE Basic
accessories to the press
Including one set of special tools with tool box
</TABLE>
<PAGE>
-6-
(ZIRKON LOGO)
<TABLE>
<S>
<C>
ONE
Complete set of installation, operating and maintenance manuals
(including one set of engineering drawings containing electrical
for
all foregoing Zirkon equipment) in English.
AUXILIARY EQUIPMENT
ONE Megtec
Model 1-CP-391-28 dryers, including PLC controls and web break
detector.
****
ONE Megtec
Model 1.5-4050-16 splicer.
****
ONE A.W.S.
Model VP-2H vibra pac.
****
ONE A.W.S.
Model CRP-1H chill roll pac.
****
ONE A.W.S.
Model CRP-3H1R chill roll pac.
****
ONE A.W.S.
Model UF-300-3T circulating system, including conductivity
meter.
****
ONE W.P.C.
Model 9501 cut-off control.
****
TWO W.P.C.
Model 9400 web guides.
****
FOUR Q.T.I.
Model 2500 web severers.
****
ONE PGE
dual stream horizontal drumless stacker/bundler, including two
(2) dual stream
straight conveyors, 3' long; five (5) 90 degree flow
turns; two (2) dual stream spreader conveyors, 3' long. One (1)
straight double section 8' long.
****
ONE W.P.C.
Model 926 silicone applicators.
****
ONE W.P.C.
Model 9841 color-to-color register system.
****
ONE Set of
operating and maintenance manuals in English for each piece of
auxiliary equipment, if provided by manufacturers.
</TABLE>
<PAGE>
-7-
(ZIRKON LOGO)
3. PRICE / TERMS
OF PAYMENT
<TABLE>
<S>
<C>
TOTAL AUXILIARIES:
****
TOTAL PRESS:
****
TURNKEY INSTALLATION: ****
----------
TOTAL
****
==========
</TABLE>
SUMMARY:
<TABLE>
<S>
<C>
Zirkon Content (Exchange rate on August 22, 2005; $1.2233)
****
Auxiliaries
****
Total
****
Less 7% Discount
****
----------
Sub-Total
****
Plus Turnkey Installation
****
----------
CONTRACT VALUE
****
</TABLE>
ALL PAYMENTS TO BE MADE IN US DOLLARS
TERMS OF PAYMENT
Installment Number
1. **** with
order
2. **** six (6)
months prior to anticipated shipment date
3. **** three
(3) months prior to anticipated shipment date
4. **** ten (10)
days prior to shipment
5. **** sixty
(60) days after date of shipment
6. **** after
completion of press installation, press ready to run
7. **** at
completion of "Initial Acceptance"
8. **** at
completion of "Final Acceptance"
- The
criteria for initial and final acceptance will be described in
detail
within the Contract. Press testing will take place upon completion
of the
press installation.
<PAGE>
-8-
(ZIRKON LOGO)
- Criteria
for acceptance should be matching a representative sample or
samples of product at NCI attached to the Contract (sample to be
provided).
Payments to be made via wire transfer to Zirkon, Germany.
4. DELIVERY
Time
of Delivery
Approximately fourteen (14) months from Seller's Acceptance of
Contract.
Basis of delivery
DDU
- Atlanta, according to Incoterms 2000 (alongside plant RAMP).
Project Schedule. Within forty-five (45) days of Seller's
acceptance of
this
Contract, the parties shall agree on a detailed project
schedule,
which shall include important target dates for each party's
completion. The
project schedule, subject to section 14, shall be an important part
of this
Agreement.
NCI
Plant Visits NCI representatives at NCI'S expense, shall at least
twice
before shipment visit Zirkon's Germany plant and inspect progress.
Buyer
will
notify Seller at least fourteen (14) days prior to each
intended
visit.
5. INSTALLATION
/ COMMISSIONING
Installation and commissioning shall be by specialists from
Zirkon.
The
installation of Eltromat fss3 equipment will be connected with
connection to the installed CIP 3 data conversion system included
in the
price.
The
turnkey installation is provided in Exhibit B attached hereto.
6. PRESS TESTING
AND ACCEPTANCE BY NCI
Immediately after installation of the press and completion of
Seller's
responsibilities according to the Turnkey Agreement attached hereto
as
Exhibit B, the parties shall complete NCI product testing on Phase
1 -
Phase 7, as outlined in Exhibit C attached hereto. If the press,
operated
by
NCI trained personnel produces quality product as compared to
NCI
product samples at 35,000 CRPH for tabloid, then NCI shall give
its
"Initial Acceptance".
<PAGE>
-9-
(ZIRKON LOGO)
Immediately after NCI has given its' Initial Acceptance, Phase 1 -
Phase 7
testing shall be conducted at 27,500 CRPH for quarter fold
operations of
NCI
product. If the press produces quality product as compared to the
NCI
product samples at 27,500 CRPH for quarter fold operations, then
NCI shall
give
its "Final Acceptance".
If,
within 45 days after Initial Acceptance and attempts by the parties
to
remedy any problems which arise and which Buyer, in good faith,
then
determines prevent the press from producing such quality product,
Buyer may
refuse to give its Final Acceptance. Such refusal shall be
expressed in
writing to Seller, which shall also state the specific instance(s)
or
manner(s) in which the product produced fails to satisfy such NCI
product
in
accordance with the terms of this Contract and the special
Press
Specifications contained in Exhibit A hereto. In making such
refusal, Buyer
may
rescind this purchase and may demand that Seller remove all
Equipment
within a reasonable time and refund to Buyer, within 190 days after
Initial
Acceptance, all payments made with respect thereto. The provisions
of the
third paragraph of Section 8, "Warranties", shall apply to the
pickup and
return of the Equipment.
If
Seller, in good faith, disputes Buyer's aforesaid determination,
the
dispute shall be submitted to binding arbitration in accordance
with
Section 20, "Arbitration", hereof. The Equipment shall remain in
place if
requested by the arbitrator(s) to permit time for examination
thereof.
<PAGE>
-10-
(ZIRKON LOGO)
OTHER SALE AND PURCHASE TERMS
1. Purchase and Sale. Seller agrees to sell and Buyer agrees to
purchase from
Seller the Equipment at the purchase price and on all of the terms
and
conditions set forth herein. The price indicated is delivered
alongside plant
ramp in Lawrenceville, Georgia, as to items of Equipment
manufactured by Seller
and all auxillary equipment. The prices quoted exclude all sales,
use, excise
and like taxes.
2. Terms of Payment. See Page 7 (seven) attached hereto and
incorporated by
reference.
3. Time of Shipment. Seller shall ship the Equipment approximately
14 months
from Seller's acceptance of this Contract.
4. Contract Modifications. The purchase price and the payment
schedule are based
on the inclusion of all of the Terms and Conditions of this
Contract without
modification. The Terms and Conditions represent an attempt to
allocate business
responsibilities between the parties. Modification of any of the
Terms and
Conditions may require a price and/or payment adjustment.
5. Acceptance. This Contract is subject to the approval of, and
acceptance by,
an authorized representative of the Seller at its Leipzig, Germany
office, and
is not binding on the Seller until so accepted by Seller. The
acceptance of a
deposit or part payment by Seller shall not constitute an
acceptance of this
Contract by Seller.
6. Installation. Buyer is responsible for the prompt preparatory
work to enable
installation of the Equipment. To that end, Buyer shall, at its
cost, provide an
adequate foundation and adequate access to the installation site
for the
Equipment and Seller's supervisory personnel.
Installation responsibilities are defined in the Turnkey
Installation provisions
attached hereto as Exhibit B.
7. Maintenance. Buyer is responsible for full and proper
maintenance of the
Equipment in accordance with good engineering practices and
Seller's
operation/maintenance manual.
<PAGE>
-11-
(ZIRKON LOGO)
8. Warranty. Seller warrants each item of Equipment of Seller's
manufacture
against defects in material or workmanship that appear within a
period of one
year from the date of Final Acceptance as defined in section 6;
provided that:
(a) any such defect occurs under proper and normal conditions of
use; (b) Buyer
is in compliance with its obligations under the Installation and
Maintenance
Sections; (c) Buyer utilizes paper, ink and plates as used in the
NCI product
and competent personnel; and (d) Buyer gives Seller prompt written
notice of the
discovery of such defect (which notice must in any event be given
within the
warranty period of one year).
The warranty applies to the extent provided to any parts supplied
in the course
of fulfilling the warranty. The warranty, however, does not apply
to second hand
or reconditioned Equipment (which is sold on an AS IS and WHERE IS
basis) or to
Equipment not manufactured by Seller. The Auxiliaries being sold as
part of the
Equipment carry only the standard warranties, if any, of the
manufacturers of
the Auxiliaries AND SELLER MAKES NO WARRANTY WITH RESPECT TO THE
AUXILIARIES.
Seller assumes no responsibility for design characteristics of
special equipment
manufactured to specifications supplied by or on behalf of Buyer or
for
modifications made by Buyer to the Equipment without prior written
consent of
Seller. Seller agrees to assign all auxiliary equipment
manufacturers warranties
to Buyer.
Seller's sole responsibility for any breach of its warranty is, at
its option,
(a) to repair or replace the defective part of the Equipment
covered by its
warranty or (b) to remove the Equipment covered by its warranty at
its expense
and refund to Buyer all payments made with respect thereto, without
Interest,
(provided Buyer properly repacks the Equipment and makes the
Equipment available
at Buyer's loading dock for pick-up by Seller in good physical
condition and
free and clear of all liens, claims and encumbrances, other than
those which may
have been created by Seller). At Seller's request, Buyer shall, at
Seller's
expense, return a defective part to Schaumburg, Illinois, in which
event a
repaired or new part will be supplied to Buyer (but not installed)
free of
charge, excluding freight. Buyer shall pay local living expenses
and
transportation of Seller's personnel to and from Schaumburg,
Illinois, If
Seller's personnel work overtime to perform under its warranty,
Buyer shall pay
the overtime premium to perform, at Seller's then prevailing
rate.
Buyer agrees that any action for any breach of the warranty
contained in this
section, or any other cause of action arising out of this Contract,
must be
commenced against the Seller within one year after such cause of
action arises.
9. Title and Risk of Loss. Title to the Equipment and all
responsibility for
risk of loss of, and damage to, the Equipment shall pass to Buyer
upon arrival
at point of delivery specified herein.
10. Security Interest and Remedies. Buyer hereby grants Seller a
First priority
purchase money security interest in the Equipment and in all parts,
additions
and accessories thereto as security for all obligations of Buyer
hereunder and
all other obligations of Buyer to Seller and Seller's affiliate,
Zirkon, Inc.
(whether represented by notes, open account, bills of exchange or
otherwise).
Whether or not the Equipment is attached to realty, the Equipment
shall be
considered personal property.
If requested by Seller, Buyer shall promptly execute and/or deliver
to Seller,
in form and substance satisfactory to Seller, chattel mortgages,
supplemental
security agreements, financing statements, landlord and/or
mortgagee consents
and waivers and other instruments which Seller may request in order
to
constitute the Equipment, and such parts, addition, and
accessories, as the
unencumbered security for the obligations of Buyer or to enable
Seller to comply
with all applicable filing or recording laws.
<PAGE>
(ZIRKON LOGO)
Buyer represents and warrants to Seller that it was duly
incorporated and is in
good standing in the State of Georgia.
Buyer hereby authorizes and appoints Seller, its assignee and each
of their
respective officers, as Buyer's attorney-in-fact, to sign, on
behalf and in the
name of Buyer, financing statements and amendments hereto and
continuations
thereof in order to perfect the Seller's security interest. A
carbon,
photographic or other reproduction of this Contract is sufficient
as a financing
statement.
If Buyer defaults in payment or performing any of its obligations
hereunder, or
any other of its obligations to Seller or Seller's affiliate,
Zirkon, Inc., or
becomes subject to Insolvency, receivership or bankruptcy
proceedings, or makes
an assignment for the benefit of creditors, or any of the Equipment
is misused
or substantially damaged, or Buyer without the prior written
consent of Seller,
sells, transfers, leases or mortgages the Equipment; or moves the
Equipment to a
site other than Buyer's address as shown on the first page of this
Contract
without notifying Seller at least thirty (30) days prior to moving
the Equipment
or any lien is placed thereon, or other persons acquire any
interest therein, or
the Equipment is seized or attached by process of law, or Seller in
good faith
deems itself insecure, then in any such event Seller, with or
without notice,
may declare all amounts owing hereunder by Buyer, regardless of
maturity date,
to be immediately due and payable and if the Equipment has not been
delivered,
withhold delivery and/or suspend all further work, or If the
Equipment has been
delivered, repossess the Equipment with or without process of law.
The foregoing
rights of Seller are cumulative and not alternative and Seller may
exercise all
other rights and remedies provided by applicable law.
The prevailing party shall indemnify and reimburse the other for
all costs and
expenses (including reasonable attorney's fees) incurred by the
other in
enforcing or attempting to enforce this Contract or in being named
a defendant
or otherwise becoming involved in litigation as a result of the
sale,
installation, operation, ownership or use of the Equipment not due
to any fault
of the party to be recompensed.
11. Taxes. Buyer shall bear and p
