AGREEMENT
Drawn up and signed in Petach Tikva, on 10.2.1997
Between : Nur Advanced Technologies Ltd.
of 5 Xxxxx Xxxxx
Magshmim
(hereinafter: "Nur")
of the one part
----------------
and between : I.T.S. Machinery Development Ltd.
of 0 Xxxxxxx Xxxxxx
Petach Tikva
(hereinafter: "I.T.S.")
Of the second part
------------------
Whereas : Nur is engaged among other things in research,
development and production of unique (digital) computerized
printing systems, which are designated for color printing
in large formats and which use various ink-jet
technologies;
and whereas : In the context of its operations Nur initiated
the development of a printing systems known as Blueboard,
which prints in various widths of up to 16 ft., including
using the use of water-based ink, and which is meant by Nur
for sale in various countries throughout the world
(hereinafter: "the BB printer");
and whereas : In the context of developing the BB printer Nur is assisted
by I.T.S. which carries out the mechanical development of
the BB printer (hereinafter: "development work") for Nur,
and this in accordance with the main technical
specifications attached to this agreement as Appendix A
(hereinafter: "the specifications");
and whereas : Nur is interested, subject to completing development of the
BB printer, to give to an external source, who will act as
an independent contractor, the manufacture of the
mechanical components and the assembling of the BB series
of printers, based on the conditions detailed in the this
agreement (hereinafter: "the production work");
and whereas : I.T.S. is interested to carry out the production work for
Nur, and Nur agrees to give I.T.S. the execution of the
production work, including granting I.T.S.,
in consideration for I.T.S.'s contribution to the
successful execution of the engineering design work
included in the development work, certain rights with
regard to the production work, and all in accordance with
the terms detailed in this agreement;
and whereas: The parties wish to base their agreement in relating to the
development work and the conditions for carrying out the
production work in writing,
it is hereby agreed and conditioned among the parties as follows:
1. Preamble and interpretation
---------------------------
1.1. The preamble and the Appendices to this agreement are an integral
part thereof. The parties hereby agree that they will cooperate in
order to complete those Appendices which at the time of signing the
agreement have not yet been prepared, and the said Appendices will
be attached to the agreement not later than sixty (60) days from the
date of this agreement.
1.2. The headings to the paragraphs in this agreement are intended for
reference only and should not used for interpreting this agreement.
2. I.T.S.'s presentations
----------------------
I.T.S. declares, certifies and undertakes as follows:
2.1 That the specifications of the BB printer were presented to it and that
they were fully satisfied with them.
2.2 That it knows that as the development work advances during the
execution of the production work there are likely to be changes in the
specifications and the plans of the BB printer.
2.3 That it has the know-how, experience and ability required to carry out
the development and production work in the conditions detailed in this
agreement.
2.4 That the B.B. Printer and all the rights, existing and future, in the
B.B. Printer, in the future developments of the B.B. Printer and the
know-how included in the B.B. Printer, including the rights for
intellectual property included in the B.B. Printer, in the plans for
the B.B. Printer developed by Nur, in the commercial secrets and the
production file, as defined below, belong to Nur and that apart from
the rights it specifically grants in this agreement, it has not and
will not have any claim, demand or contention with regard to the
ownership of the B.B. Printer and the rights in the B.B. Printer and
that it waives all such claims, demands or contentions.
2.5 That all know-how connected with the B.B. Printer is the property of
Nur, and that it does not have and will not have any claims, demands or
contentions to the know-how rights as mentioned, and that it will
transfer it to Nur at Nur's demand. Regarding this agreement: any
"know-how" or information given to I.T.S. or to someone on its behalf
by Nur and/or by others on behalf of Nur and/or know-how or information
which will accumulate at I.T.S., during and as a result of carrying out
the development and/or production work, including the production file,
plans, drawing, blueprints, specifications, engineering plans,
computer software, methods of work and production, copyrights in
patents, lists of suppliers, business plans, price lists etc., and all
these were in writing, verbally, whether in a computer, whether the
original or a copy and whether in any other form.
2.6 As long as this agreement is in effect, and after the termination of
this agreement, I.T.S. will assist Nur to the best of its ability
including in the field of any paperwork required for the purpose of
registering the patents discovered during and with regard to the
development and/or production work in the name of Nur, and in
consideration will be entitled to a refund of the expenses which are
related to the said assistance.
2.7 It is hereby agreed that the declarations and obligations of I.T.S.
pursuant to clauses 2.4 and 2.5 above will be in effect in all cases on
the termination of this agreement including as a result of its
cancellation.
3. Development work
----------------
3.1 The parties certify that Nur gave I.T.S. and I.T.S. received from Nur
the execution of the development work and all the terms detailed in
this agreement.
3.2. I.T.S. carried out and is carrying out the development work in
accordance with the stages and the timetables detailed in the work
program attached to this agreement as Appendix B and which include
among other things the production and assembly of a prototype of the
B.B. Printer according to the specifications (hereinafter: "the Alpha
Printer"), the production and the assembly of two printers (Beta site
series) (hereinafter: the "Beta Printers") and preparation for the
regular production including preparing the production file as
mentioned in clause 5 below.
3.3 It is hereby clarified that the execution of the development work by
I.T.S. is part of the development process of the B.B. Printer which is
carried out by Nur and that the development work will be carried out by
I.T.S. in coordination with Nur. In accordance with the aforesaid, Nur
will supply I.T.S. on Nur's account, the electronic components and
software and the ink-jet head which will be combined in the Alpha
Printer and the Beta Printers, and all as detailed in Appendix A to
this agreement.
3.4. It is hereby agreed that the Alpha Printer and Beta Printer will be
produced and assembled by I.T.S. only after receiving the approval of
Nur to the Alpha Printer and they will be manufactured while
applying the changes, adjustments and additions required by Nur to
the Alpha Printer. To avoid doubt, it is hereby clarified that the
changes, adjustments and additions as mentioned are part of the
development work and will be carried out by I.T.S.
3.5 Should Nur during the execution of the development work carry out
significant changes in the specifications and/or the B.B. Printers
plans, then notwithstanding the aforesaid in clause 3.2 above, these
will be coordinated
between Nur and I.T.S. These changes required in the timetables
detailed in Appendix B to this agreement.
3.6 Notwithstanding the aforesaid in clause 3 above, should the Alpha
Printer not be in accordance with the specifications, Nur will be
entitled within 30 days from the date of supplying the Alpha Printer to
terminate this agreement with a notice in writing to I.T.S. In the
event of a notice for termination as said, I.T.S. will not be entitled
to any payment of any type whatsoever, apart from the payment as
mentioned in clause 4.1 below.
3.7 In the context of carrying out the development work I.T.S. will be
obligated to add and carry out all the changes, adjustments and
additions required by Nur in the Beta Printer, and this until the
completion of the regular production model of the B.B. Printer. For
this purpose it is agreed that the regular production model of the B.B.
Printer will include multi-roller printing system and fitting for a
forklift. In the context of the contents of this clause 3.7 above,
I.T.S. will carry out all the changes and adjustments required in order
to ensure B.B. Printers compliance with the standards applying to B.B.
Printers and this both in Israel and in any country in the world.
4. Consideration for the development work
--------------------------------------
4.1 In consideration for carrying out the development work connected with
the Alpha Printer including the production and assembly of the Alpha
Printer, I.T.S. will be entitled to receive a one time payment in NIS
equal to one hundred and forty-five thousand three hundred and ninety
(145,390) US dollars (hereinafter: "the Alpha consideration"). The
Alpha consideration will be paid to I.T.S. within 60 days of the date
of delivery of the Alpha Printer to Nur with Nur's full satisfaction.
4.2 In consideration for executing the development work connected with each
of the Beta Printers, including the production work and the assembly of
each printer, I.T.S. will be entitled to a onetime payment of NIS equal
to one hundred thousand (100,000) US dollars (hereinafter: "the Beta
consideration"). The payment for consideration for each of the Beta
Printers will be carried out in accordance detailed in clause 8.4
below.
4.3 I.T.S. will be entitled, in addition to the Alpha consideration and the
Beta consideration to a refund of its costs for work hours (excluding
planning hours) connected with carrying out changes, adjustment and
additions as mentioned in Clause 3.4 and/or 3.7 above, which will be
required by Nur after the date of this agreement and the raw materials
required to carry out those changes, adjustments and additions, which
will be calculated in accordance with the tables attached to this
agreement as Appendix C (hereinafter: "consideration for additional
work").
I.T.S. undertakes that prior to carrying out the work as detailed in
clause 4.3 above, for which consideration for the additional work will
exceed $1,000 it
will give a prior written notice of this to Nur and will not carry out
any work until after receiving Nur's written approval.
In consideration for the additional work I.T.S. will be paid within 30
days of the end of the calendar month in which I.T.S. submits a
detailed account to Nur, which will include details of the work hours
which entitle them to consideration for the additional work and raw
materials purchased, as mentioned in this clause 4.3 above, and the
consideration for additional work which is due.
4.4. Apart from the payment of the Alpha consideration, the Beta
consideration and the consideration for additional work, I.T.S. will
not be entitled to any additional considerations for carrying out the
development work and I.T.S. hereby certifies that it will not be
entitled to any additional payment for carrying out the development
work, including work of preparing the production file, as defined in
5.1 below and preparations for regular production.
4.5 All payments which I.T.S. will be entitled to from Nur as mentioned in
this clause 4 will be paid to I.T.S. according to the representative
rate of the dollar at the actual time of the payment and against a tax
invoice prepared according to law.
4.6. It is hereby clarified that in addition to the payments detailed in
this clause 4 above, Nur will bear various expenses with regard to the
development of the B.B. Printer including for payments to external
designers and consultants which I.T.S. requires during the development
work and for whose their employment they will receive Nur's prior
approval for the development of the computer software for the B.B.
Printer.
5. Production file
---------------
5.1 Until the completion of the development work and in every case not
later than 90 days from the date of supplying the second Beta Printer,
I.T.S. will prepare for Nur and will hand it a production file of the
B.B. Printer (hereinafter: "production file").
5.2 In addition to the aforesaid in clause 5.1 above I.T.S. will prepare at
every stage of the stages of development as detailed in Appendix B a
partial production file (hereinafter: "the partial production file").
The partial production file for each of the development stages will be
handed to Nur as soon as possible, but in any case not later than 30
days from the end of that stage.
5.3 The production file and/or the partial production file will be prepared
and include details of the components, the raw materials and processes
required in order to prepare and start production of the B.B. Printer,
and all this as detailed in Appendix D to this agreement, and all the
know-how required in order to continue the development work,
preparation and start of production of the
B.B. Printer by Nur and/or by anyone on Nur's behalf which has the
know-how to carry out mechanical production work.
5.4 In addition to the aforesaid in this clause 5 above, and after
completion of the development work, and as long as I.T.S. carries out
the production work for Nur, I.T.S. will update the production file in
every case where there is a change in its details, and this not later
than 21 days from the date of carrying out each such change.
5.5. Without derogating from the aforesaid in clauses 2.4 and 2.5 above, the
production file and/or the partial production file will be owned solely
by Nur and will be kept by it. Nur's right to receive the production
file and/or the partial production file will be in effect also after
the termination of this agreement and this for any reason including due
to its cancellation.
5.6 Without derogating from the aforesaid I.T.S. will supply Nur all the
drawings and explanations required by Nur in order to prepare the
literature and documentation for the B.B. Printer.
6. Production work
---------------
6.1 Subject to the completion of production work as mentioned in clause 3
above, Nur hereby gives I.T.S. and I.T.S. hereby receives from Nur the
execution of the production work, and all this under the terms detailed
in this agreement.
6.2 I.T.S. will complete the preparation for the regular production of the
B.B. Printer by January 31, 1997.
6.3 Within six (6) months of the date of this agreement I.T.S. will
allocate an area to be used as a production hall for the assembly which
complies with standards which are acceptable in industry for assembling
high-tech systems, and which will be designated solely for carrying out
the production work (hereinafter: "the production hall").
Should during the period of a calendar year (from 1997 and thereafter)
the number of B.B. Printers actually ordered by Nur from I.T.S. be less
than 36 B.B. Printers, I.T.S. will be entitled to make use of the
production hall for other uses of a similar character, which will not
interfere in any way with executing the production work, apart from the
production work, and this up to the time where the number of B.B.
Printers ordered by Nur will be not less than the number mentioned
above.
6.4 In the context of executing the production work, I.T.S. will be
responsible for the production and supply of all the mechanical parts
of the B.B. Printer and its mechanical assembly and the equipping of
the B.B. Printer and all this in accordance with the production file as
mentioned in clause 5.1 above.
In accordance with the aforesaid, Nur will supply I.T.S. on Nur's
account the electronic components and software (including the
electronic casing) and the
6
ink-jet heads, which will be incorporated into the B.B. Printer and
all this as detailed in Appendix A to this agreement and subject to
the changes mutually determined in the production file. In addition
Nur will be responsible to carry out the integration work of the B.B.
Printers.
It is hereby agreed that Nur will be entitled to transfer the execution
of the wiring work of the B.B. Printer (which are included in the
production work carried out I.T.S.). In the event of such a transfer,
the provisions of clause 8.3 below will apply.
Any other change in the volume of production work, carried out by
I.T.S. and this whether by transfer to Nur of the execution of certain
operations included in the production work, and by way of adding the
execution of certain operations in the context of the production work,
will be carried out by agreement between the parties.
6.5 I.T.S. will carry out the production work with high standards of work
while complying with the standards stipulated by Nur.
6.6. On the supply dates as defined in clause 7.3 below, I.T.S. will add a
product file to every B.B. Printer (hereinafter: "the machine file"),
which will include all the quality control and receipt reports of the
various printer components, including process control. Moreover, I.T.S.
will xxxx every component of the printer with a serial number which
will enable its identification and the date of production. The serial
numbers as mentioned and details will be included in the machine file.
6.7 I.T.S. will assist Nur in renting a suitable area, close to the
production hall, and this whether by sub-rental from I.T.S. or by
separate rental by Nur (hereinafter: "Nur's area"). Nur will use Nur's
area for purposes connected with the B.B. Printer, including carrying
out operations connected with the production of the B.B. Printers,
which will be carried out by Nur after initial delivery as defined in
clause 7.3a below, the storage of components of the B.B. Printer which
will be supplied through Nur, the accompaniment and supervision of the
production work, as mentioned in clause 12 below, the execution and
checking of receipt of the B.B. Printers, to store B.B. Printers before
their delivery and packaging and the delivery of the printers. Nur will
solely bear all the expenses resulting from renting the Nur area and
its use. Until the date of completion of the development, Nur and
I.T.S. will finalize the terms of the rental and the use of the Nur
area.
7. Orders and delivery
-------------------
7.1 Nur will give I.T.S. written orders in which it will specify the
volume of production it orders, and this for every quarter of the
calendar year (hereinafter: "the orders"). In the orders they will
state the volume of production work by specifying the number of B.B.
Printers which Nur orders for production, and will state in the order
the requested date of completion of
the production work with regard to each of the B.B. Printer and
their delivery to Nur. The orders for the first quarter of each year
will be given not later than the 20 December of the previous year,
and for the second quarter - not later than 20 March, for the third
quarter - not later than 20 June and for the fourth quarter - 20
September.
7.2 In addition to the aforesaid in clause 7.1 above, together with the
order, Nur will submit to I.T.S. a forecast of the number of printers
which will be required for production for the quarter after the quarter
to which the order relates (hereinafter: "the forecast"). The forecast
will be used by I.T.S. to estimate the production of printers in the
number determined in the forecast, but in each case it will not
obligate Nur and will not be construed as an order for B.B. Printers.
Notwithstanding the aforesaid in clause 7.2 above, in every order Nur
will be able to increase or decrease the number of printers included in
that order, by not more than fifty percent (50%) of the number of
printers included in the forecast for that quarter.
7.3 Supply of all the B.B. Printers will be according to the
following stages:
a. After completion of the production work with regard to each B.B.
Printer an initial delivery will be carried out for that printer
by I.T.S. to Nur (hereinafter: "initial delivery"). I.T.S. will
inform Nur at least ten (10) days in advance of the date of the
initial delivery of every B.B. Printer.
b. After completion of the integration of every B.B. Printer and
final acceptance tests, as defined in clause 7.8 below, the final
supply will be carried out on that printer by I.T.S. to Nur
(hereinafter: "the final supply").
It is hereby agreed that the time period between the date of the
initial delivery and the date of final delivery will not exceed fifteen
(15) days, but in this period of time the period required to carry out
repairs and adjustments discovered during the initial and final
acceptance tests as defined in clause 7.8 below will not be included.
7.4 Immediately after receipt of every order the parties will adjust the
initial date of delivery and final supply (hereinafter together: "date
of supply") of the B.B. Printers included in the order, but it is
agreed that in each case I.T.S. will carry out the initial delivery of
the printers on a current basis during the period starting not later
than the end of fifty (50) days from the date of the order, and that it
will be completed by the end of seventy (70) days from the date of the
order, but in every case the final and last date of order of those
printers will not be more than fifteen (15) days before the termination
of that quarter.
Should I.T.S. not be able to supply the B.B. Printers by the date of
supply, and this due to the existence of one of the circumstances
detailed in this clause
below, the date of supply will be delayed respectively over the period
in which the following circumstances existed.
a. Force-majeur. For the purpose of this clause it is agreed that
force-majeur will include among others a general strike in the
Israeli economy or in a certain sector of the economy or a
general mobilization for active reserve duty, provided that as a
result of the strike or mobilization, most of I.T.S.'s workers
will be absent from their work.
b. A delay in carrying out those actions connected with the
production of the printer which are said to be carried out by/or
on the responsibility of Nur, as mentioned in clause 6.4 above,
concurrently with carrying out the production work.
c. Nur's objection to approve the replacement of the components, raw
materials, suppliers or sub-contractors as mentioned in clause
10.2 below, after the end of 14 days from the date on which
I.T.S. informed Nur in writing that without such replacement
(which is not for reasons of economic feasibility) it is not
possible to continue carrying out the production work.
d. Nur not being present at the time stipulated for the start for
the initial delivery, after notice was given to Nur in accordance
with clause 7.3a above.
7.6 In addition to the aforesaid in clause 7.5 above, should the number of
printers included in the order exceed more than fifty percent (50%) of
the number of orders stated in the forecast for that quarter, and will
exceed 12 printers (hereinafter: "the excess printers"), I.T.S. will be
entitled, without this being a violation of its obligations according
to this agreement, to inform Nur that it will not supply the surplus
printers by the delivery date.
In the event that such notice was given by I.T.S., I.T.S. undertakes to
organize itself by the end of the current quarter to carry out the
production work in the total volume of the volume of forecast for that
quarter, plus the surplus printers (hereinafter together: "the volume
of the increased work"). Should I.T.S. inform Nur that it is not able
to organize itself within one quarter to carry out the production of
the volume of increased work, Nur will be entitled, at its sole
discretion, to approach a third parties and/or to produce the surplus
printers itself.
7.7 Should I.T.S. not supply Nur the B.B. Printers by the date of supply
(including delays in accordance with clause 7.5 above) I.T.S. will pay
Nur, a pre-agreed compensation, an amount equal to one fifth of a
percent (0.2%) of the proceeds of the production, as defined in clause
8.1 below, for every day of delay in the said supply, as of the date of
final supply stipulated for that printer (hereinafter: "the agreed
compensation"). The parties hereby declare that the agreed compensation
is determined as a reasonable ratio to the damage caused to the Company
as a result of the delay in the final date of supply by I.T.S.
Notwithstanding the aforesaid in this clause, a delay in the final
supply not exceeding seven days from the date of final supply, Nur will
not be entitled to such compensation, but in the case of a delay
exceeding seven days, the agreed compensation will be considered as of
the date of the final supply. It is agreed that the agreed amount of
compensation will not exceed the production profit as defined in clause
8.1(d) below. Nur will be entitled to set-off the agreed amount of
compensation from any payment to which I.T.S. is entitled to receive
from it.
7.8 A condition for executing the initial delivery is that the B.B. Printer
will be available for initial acceptance testing as detailed in
Xxxxxxxx X0 to this agreement (hereinafter: "initial acceptance
testing").
The terms of carrying out the execution of the final supply is that the
B.B. Printer will be available for final acceptance testing, as
detailed in Xxxxxxxx X0 to this agreement (hereinafter: "final
acceptance tests").
I.T.S. undertakes that should, in the framework of the initial
acceptance test and/or the final acceptance tests, it be found that
repairs and/or adjustments to the B.B. Printers are required, it will
act continuously and to the best of its ability to complete the repairs
and adjustments as mentioned as soon as possible.
7.9 The supply of the printer, after completing the production work and the
final acceptance tests, will be at Nur's area. It is hereby clarified
that the packaging and delivery of the printers will be carried out by
Nur and on its account.
7.10 Should after the date of the order, as mentioned in clause 7.1 above,
Nur deliver to I.T.S. an order to execute additional production works,
whose required date of supply is in that quarter, I.T.S. will act to
the best of its ability to complete that work by the date of supply.
It is hereby clarified with regard to additional orders as
mentioned, the provisions of clause 7.4 - 7.8 above will not apply.
8. Consideration for the production work
-------------------------------------
8.1 It is hereby agreed that in consideration for carrying out all I.T.S.'s
obligations with regard to executing the production work for each of
the B.B. Printers supplied by I.T.S. to Nur, in accordance with the
provisions of clause 7 above, I.T.S. will be entitled to a payment
which will be specified as the aggregate of the following components
(hereinafter: "production consideration"):
a. Total actual costs of I.T.S. for the components and raw materials
used in the production work (hereinafter: "cost in materials").
The method of calculating the cost of materials is stated in
clause 1 to Appendix F of this agreement.
b. I.T.S.'s total actual costs for the employing the personnel to
carry out the production work (hereinafter: "cost of labor"). The
method of calculating the cost of labor is stated in clause 2 to
Appendix F.
C. Participation in half of the rent paid by I.T.S. The production
hall and this as long as it is used solely for carrying out the
production work (hereinafter: "participation in rent").
d. Fixed payment for indirect variable costs and overhead costs of
I.T.S. with regard to the execution of the production work for
every printer (hereinafter: "indirect expenses). The amount of
indirect expenses will be fixed for each printer and will
decrease in accordance with the number of printers ordered in
each quarter, as determined in clause 3 to Appendix F.
e. I.T.S. profit for the execution of the production work for every
printer (hereinafter: "the production profit"). The amount of
production profit will be fixed for every printer and will
decrease in accordance with the total accumulated number of B.B.
Printers ordered by Nur, as determined in clause 4 to A Appendix
F.
8.2 At the end of each of the first two quarters of regular production of
B.B. Printers and thereafter at the end of every two successive
quarters, a check of the costs in materials and the cost of labor which
I.T.S. bore, for the execution of the production work for every B.B.
Printer will be carried out (hereinafter: "a check of costs"). The
check of costs will be carried out jointly by the parties according to
I.T.S.'s books and in accordance with the methods of calculation
specified in Appendix F. As a result of the costs check, the
elements of the costs of materials and costs of labor for the printers
to be ordered will be determined, up to the date of the next check of
costs
8.3 The parties will act to the best of their ability and on a current
basis in order to bring down the cost of materials and cost of labor.
At the time of checking the costs, the parties will check the cost of
materials and cost of labor and update them when necessary (by way of
adding or deducting).
Moreover it is agreed that should there be changes in the volume of
production work, as mentioned in clause 6.4 above, or in the event that
I.T.S. will use the production hall for other uses, as mentioned in
clause 6.3 above, the parties will carry out the necessary adjustments
in the indirect expenses (by way of addition or reduction). It is
agreed that for every saving and cost in materials and/or the cost of
labor, I.T.S. will be entitled to an additional production profit equal
to ten percent (10%) of the amount of said savings.
8.4 In consideration for the production of every B.B. Printer I.T.S.
will be paid as follows:
a 35% of the proceeds from the production will be paid to I.T.S. on
the date of the delivery of the order to I.T.S. for the number of
printers included in that order.
b. 35% of the proceeds of the production will be paid to I.T.S. on
the date of final supply of each B.B. Printer. Should there be a
delay of over 14 days from the date of final supply due to
reasons mentioned in clause 7.5(b) above, I.T.S. will be entitled
to immediately receive from Nur, part of the proceeds of the
production pursuant to this clause.
c. 30% of the proceeds of the production will be paid to I.T.S. not
later than 75 days from the date of final supply.
8.5 Not withstanding clause 8.4 above, Nur will pay I.T.S. its share of the
proceeds of production for LLI, as defined in clause 10.8 below
according to those, (including dates and amounts) which I.T.S. will pay
the suppliers of LLI (hereinafter: "the consideration for LLI"). In
accordance with the aforesaid, from the payments of the proceeds of
production as mentioned in clause 8.4 above, a proportional amount will
be deducted from the LLI consideration paid by Nur for those printers.
8.6 All payment of the consideration for production which I.T.S. will be
entitled from Nur as mentioned in this clause 8, will be paid to I.T.S.
according to the representative rate of the dollar at the time of
actual payment and in consideration for a tax invoice properly
prepared. Should Nur be in arrears in paying the consideration for
production, I.T.S. will be entitled to receive from Nur, as from the
7th day of delay, interest for the amount in arrears at a rate equal
to the rate of exceptional debit interest on overdraft accounts as
will be in force at that time at Bank Hapoalim B.M.
8.7 It is hereby declared that apart from the production considerations
I.T.S. will not be entitled to any additional payment for the execution
of the production work.
9. Employees
---------
9.1 I.T.S. undertakes to carry out development and production work and it
will only employ workers with the know-how, ability and experience
required in order to execute the development and production work.
9.2 Without derogating from the generality of the aforesaid in clause 9.1
above, I.T.S. undertakes to allocate to the development and production
work specific personnel among its employees, and to appoint a
production manager among its employees who will be responsible for the
production work. Should Nur request I.T.S. to replace the production
manager by another person, I.T.S. will not refuse Nur's request, unless
for reasonable cause.
9.3 To avoid doubt it is hereby agreed and declared that I.T.S. is an
independent contractor for the purpose of executing the development
work and there will be no employee/employer relations and/or agency
relations between Nur and I.T.S. and/or I.T.S.'s employees and/or
anyone employed by it and/or through it in executing the development or
production work. I.T.S. will be responsible for carrying out all the
provisions and deductions which much be carried out
according to law with regard to its employees and it alone has the
responsibility for this.
Moreover, it is agreed that I.T.S. will not be responsible for Nur's
employees and/or the responsible person as defined in clause 12 below
and there will be no employee/employer relations and/or agency
relations between I.T.S. and any of them.
10. Components, raw materials and sub-contractors
10.1 In order to execute the production work Nur will supply I.T.S. with the
electronic components of software and the ink-jet heads which will be
incorporated into the B.B. Printers and all this as detailed in
Appendix B to this agreement.
10.2 In executing the development and/or production work I.T.S. will be
entitled, in addition to the components supplied to it by Nur, as
mentioned in clauses 3.3. and 10.1 above, to use only those components
and raw materials of the highest quality, and on the condition that it
received Nur's prior written approval; moreover I.T.S. will be entitled
to contact only those suppliers and sub-contractors which for which it
received prior approval from Nur.
Should I.T.S. request to replace components or raw materials used in
carrying out the development and/or production work, or any of the
supplier and/or sub-contractors, I.T.S. will deliver notice of this to
Nur in which it will state the effects of such changes on the cost of
the materials. I.T.S. will not be entitled to replace the components,
raw material, suppliers or sub-contractors without receiving Nur's
prior written approval.
10.3 In order to obtain the approvals, as mentioned in clause 10.2 above,
I.T.S. will give Nur a written notice in which it will detail the
identity of the manufacturer, identity of the supplier, specifications
of the components and raw materials which it requests to use, or
details of the sub-contractor and any other detail demanded by Nur,
whichever relevant.
10.4 Nur will inform I.T.S. within 30 days of the date of receipt of the
notice of I.T.S. as mentioned in clause 10.2 above, of its agreement or
objection to the use of components or raw materials, fully or partly,
or the engagement with a supplier or sub-contractor, or its demand to
receive additional details with regard to those materials or
components.
It is hereby agreed that during the production of the Beta Printer, the
parties will determine a list of alternative suppliers, which will be
approved in advance by Nur, and which in the case of the purchase of
components from those suppliers, I.T.S. will be obligated to inform Nur
only and the obligation to receive Nur's approval will not apply.
10.5 In addition to the aforesaid in clause 10 above, it is agreed that all
changes in the terms of engagement of I.T.S. with one of the
sub-contractors or suppliers
and/or a change in the components or raw materials will be carried out
subject to receiving the prior written approval of Nur. In order to
receive the approval as mentioned I.T.S. undertakes to give Nur, at
least 30 days in advance a written notice which will detail the
character of the change and the reason for the change (hereinafter:
"notice of change"), and within 7 days of the date of receipt of the
notice of change, Nur will inform, at its sole discretion, I.T.S. of
its approval or objection to the change.
10.6 I.T.S. undertakes that the components and raw materials which it will
use will go through acceptance quality control testing in accordance
with usual practice in high-tech industry, and in accordance with the
procedures determined by Nur and I.T.S. during the execution of the
development work. The tests and checking as mentioned will be carried
out by I.T.S. through a qualified tester on its behalf and these will
be detailed in the production file as mentioned in clause 5.1 above.
It is hereby clarified that I.T.S. will not be entitled to use
components and/or raw materials which deviate from the specifications
included in the production file, and this without the prior written
approval of Nur.
10.7 In every case where in order to carry out a production work I.T.S. will
require special tools, of any type whatsoever, I.T.S. will purchase or
manufacture the tools as mentioned on its account. It is agreed that if
the production work for any reason whatsoever will be terminated, Nur
will be entitled, at its sole discretion, to demand from I.T.S. that it
sells it the said tools, fully or partly, at a price to be agreed upon
between the parties or in the event of dispute regarding the price, it
will be determined by an assessor to be appointed in the procedure as
mentioned in clause 20 below.
10.8 I.T.S. will maintain an inventory of components and raw materials used
for the production work and this in a volume and quantities as
determined by the parties on completion of the Beta Printers, in order
to supply Nur all the components and raw materials rapidly and
regularly.
Up to the date specified in clause 6.2 above, Nur and I.T.S. will
together decide a list of components and raw materials used for the
production work and for which their equipping requires the handing of
orders to suppliers a fairly long time prior to the supply date (long
lead items), I.T.S. will order and maintain the inventory of LLI
required to perform the production work of the B.B. Printers in
quantities stated in the forecast given to it by Nur in accordance with
clause 7.2 above.
I.T.S. will maintain an inventory of spare parts manufactured by it
for the printer for a period not less than the last date by which
I.T.S. will supply Nur with B.B. Printers.
10.9 Nur will purchase from I.T.S. components as mentioned in clause 10.8
above as spare parts for the printers, and this for a consideration to
be calculated as detailed in Appendix G attached hereto to the
Agreement. It is hereby agreed
that Nur will not be obligated to purchase from I.T.S. those parts
purchased from third parties and not manufactured by I.T.S. and Nur
will supply and install in the B.B. Printers only those components
approved in accordance with the provisions of clause 10 above.
11. Training and support
--------------------
11.1 I.T.S. will train and teach Nur's employees as decided by Nur, for
handling and supporting for all purposes the mechanical aspects of the
B.B. Printers, and this through I.T.S.'s employees who have suitable
qualifications ("training services").
Training services include the process of assembling the printers and
accompanying the operation of the mechanical system of the printers at
a level which will enable Nur's technicians to give independent service
and support to the printers.
11.2 After supplying the Beta Printers I.T.S. undertakes, in the framework
of the development work, to supply Nur the training services of up to
200 labor hours, in the context of up to 3 courses to service
engineers.
11.3 In addition to the aforesaid in clause 11.1 above, as long as I.T.S.
carries out the production work for Nur it will supply Nur at Nur's
request, the training services and in consideration will receive $1,500
per course for service engineers (about 60 hours). Such a course will
be carried out in the production hall.
11.4 After the completion of the period of warranty, I.T.S. undertakes in
every case where there is a breakdown and/or mechanical problem which
Nur technicians are unable to repair, to put repair services at Nur's
disposal through its employees, and this in consideration for the
amount as determined in the agreement by the parties.
12. Supervision
-----------
12.1 Nur will be entitled, at its absolute discretion, to appoint on its
behalf one or more persons who will be responsible on Nur's behalf for
the supervision, coordination and direction of the development and
production work carried out by I.T.S., pursuant to this agreement,
including sub-contractors who will be employed by I.T.S. in carrying
out development work or production work (hereinafter: "the
Supervisor").
12.2 The supervisor will be engaged by Nur and on its account. Nur will
inform I.T.S. of the identity of the supervisor and/or the supervisors
and in the case of their replacement Nur will give I.T.S. notice of
this.
12.3 In the context of carrying out his functions, the supervisor will be
entitled and qualified, among other things to follow up and check the
method of carrying out the work by I.T.S., I.T.S.'s compliance with
planned timetables for
carrying out the development and production work, the quality of the
work carried out by I.T.S. and the raw materials and components used in
carrying out the development of the production work, and the
safeguarding of confidentiality of know-how and rights of Nur in the
know-how, and be involved and integrated in all the stages of the
planning and execution of the development and production work
(hereinafter: "the Inspection").
12.4 In order to carry out the inspection the supervisor will be entitled to
enter I.T.S.'s plants or any other place in which the development or
production work is carried out, and to receive all information,
documents and data required to carry out the inspection and this during
regular working hours.
12.5 Should the supervisor during the performance of the inspection find
that there were defects in carrying out I.T.S.'s obligations under this
agreement and including I.T.S. not complying with timetables for
carrying out the development or production work, the supervisor will be
entitled to warn I. T.S. and, at his discretion, also to instruct
I.T.S. to amend the defects found and/or to take steps in order to
ensure compliance with the timetables. Should I.T.S. receive a warning
and/or such an instruction, it will take all the steps required in
order to repair the defect found or to take necessary steps, and this
within a reasonable time, as to be determined by the supervisor.
12.6 It is hereby declared that subject to clause 12.7 below, the
appointment of the supervisor and/or the giving of any instruction,
directive and/or recommendation by him, will not derogate from I.T.S.'s
obligations in accordance with this agreement.
12.7 Should the supervisor give I.T.S. an instruction or directive, I.T.S.
will be entitled to inform Nur in writing within 7 days, that that
instruction or directive is, in its opinion, a mistake. Should I.T.S.
give such notice to Nur, I.T.S. will not be responsible for the defect
and/or fault discovered in the B.B. Printers, where the main direct
factor is the performance of that instruction or directive given by the
supervisor.
13. Warranty
--------
13.1 I.T.S. will give every B.B. Printer supplied to Nur a warranty for the
production work including the mechanical operations of the printer, the
precondition of all the printer's components, apart from components
supplied by Nur as mentioned in clause 10.1 above, and the assembly of
the printer (hereinafter: "the warranty"), and this for a period of 18
months from the date of supply of every printer but not later than 1
year after the assembly of the printer at the final customer
(hereinafter: "the warranty period").
13.2 In the framework of the warranty I.T.S. will be obligated during the
period of the warranty as follows:
a. To replace, on its account any component of the B.B. Printer
excluding components supplied by Nur in accordance with clause
10.1 above,
which will be found to be defective or not in order (hereinafter:
"the defective component").
b. immediately on receipt of the notice from Nur regarding a
defective component, I.T.S. will supply Nur an alternative
component to replace the defective component (hereinafter: "the
alternative component"), and this even if the defective component
itself has not been given to it. Nur will give I.T.S. the
defective component, unless it finds that the component was not
defective and in such a case will credit I.T.S. with the cost of
the replacement component.
c. Should the service and maintenance system for the B.B. Printers
operated by Nur or someone on its behalf, not be able to repair a
breakdown and/or defect in the assembly of the printer caused
and/or discovered in one of the B.B. Printers, I.T.S. will supply
a specialist on its behalf to correct the breakdown and/or defect
as mentioned. I.T.S. will bear all the expenses of this expert,
but I.T.S. and Nur will bear in equal shares the transport and
the board and lodging expenses outside Israel of such a
specialist.
d. Should a breakdown or defect be found in a regular B.B. Printer
(i.e. the breakdown or defect was discovered in circumstances
similar to a number of B.B. Printers, I.T.S. will participate in
half of expenses of Nur or someone on its behalf, in correcting
the said defect.
13.3 The warranty will not apply for the repair of breakdowns caused as a
result of one of the following reasons:
a. The use of the B.B. Printer contrary to Nur's instructions.
b. Carrying out a repair or change in the printer or in any element
of the printer, not by Nur or I.T.S.
c. Damages caused by an external cause not by Nur or I.T.S. or on
their responsibility which include damage due to fire, water,
lightening, power failures, mechanical breakdown of the
equipment, the effects of chemical materials, war and terror
actions.
d. Intentionally caused the breakdown.
14. Insurance
---------
14.1 I.T.S. declares that it has a valid professional liability insurance
policy which covers the performance of the machinery design work, in an
amount of up to five hundred (500) thousand dollars per event and for
the period, and it undertakes that this policy will remain in effect in
an amount which will not be less than the said amount for a period up
to the end of two years from the date
of completing the development work. I.T.S. will submit a copy of this
policy to Nur.
14.2 I.T.S. undertakes that in every case where a demand and/or claim is
submitted to it which is covered by the insurance policy mentioned in
clause 14.1 above, it will gave notice to Nur of this and on Nur's
first demand will increase the amount of the policy.
14.3 I.T.S. will purchase and keep valid during the whole period of this
agreement up to an agreed date after its termination of the production
work by it, a product warranty insurance which will apply in Israel on
B.B. Printers manufactured by it in the framework of the production
work.
15. Exclusivity
-----------
15.1 Subject to the successful completion of the development work Nur will
give I.T.S. exclusivity in performing the production work of the B.B.
Printers and this up to the supply of 85 B.B. Printers by I.T.S. or at
the end of 24 months from the date of completion of the development
work, whichever later (hereinafter: "the exclusivity period").
15.2 After the end of the exclusivity period Nur will be entitled to itself
produce the B.B. Printers including making unlimited use of the
production file.
15.3 Should Nur request to carry out the production work, fully or partly,
through a third party (hereinafter: "additional manufacturing work"),
and subject to the performance of its obligations to I.T.S., pursuant
to this agreement, the following provisions will apply:
a. Nur will give written notice to I.T.S. of its intention to
supply additional work to be carried out.
b. Within 14 days of the date of Nur's notice as mentioned in
sub-clause(a) above, I.T.S. will be entitled to submit to Nur a
price offer for carrying out the additional production work
(hereinafter in clause 15: "I.T.S.'s offer").
c. Should Nur receive an offer by a third party to carry out the
additional production work which includes terms which are
superior to I.T.S.'s offer (hereinafter in clause 15: "the third
party offer"), I.T.S. will be given an opportunity to offer to
Nur, within 14 days, an additional offer to carry out the
additional production work on the same terms as the offer of
the third party or at better terms the terms (hereinafter in
clause 15: "additional offer").
d. To avoid any doubt it is hereby clarified that Nur will be
entitled to negotiate with I.T.S., and/or with third parties with
regard to carrying out the additional production work, provided
that the provisions of sub clause (c) will apply with the
necessary changes to such negotiations.
e. Nur will give I.T.S. the performance of the additional production
work and this unless the offer of the third party included
significantly better terms than the terms offered by I.T.S., (or
the additional offer if submitted by I.T.S.). Without derogating
from the generality of the aforesaid, it is hereby clarified that
a price lower by 10% or more than the price offered to Nur in
I.T.S.'s offer (or in the additional offer if submitted by I.T.S.)
while safeguarding the similar level of quality (price
performance), will be considered as significantly better terms.
To avoid doubt it is hereby clarified that in such an event Nur
will not be obligated to accept the offer if it thinks that the
terms are not identical or preferable to those of the preferable
offer.
f. Should Nur decide to give the additional production work to
I.T.S., the parties will negotiate in good faith and in the
regular way in order to engage in a detailed agreement with
everything connected with carrying out the additional production
work, including the terms of the order for the additional
production work and the supply of the additional production work
by I.T.S.
15.4 Should during the exclusivity period Nur develop a printer in the
format similar to the B.B. Printers, which will not be based on the
technical design of the B.B. Printers, then the contents of clause 15.1
will not apply to such printers. Should Nur request to give the
development and mechanical and/or production work of that printer to a
third party the provisions of clause 15.3 above will apply.
15.5. I.T.S. undertakes that as long as it carries out the production work
and for an additional period of 24 months it will not carry out any the
development and/or production work of digital printing system, but only
for Nur, and all this whether directly or indirectly, whether working
for itself or for others. I.T.S. undertakes to obtain an identical
obligation also from its shareholders. I.T.S.'s obligations under this
paragraph will be in effect even after termination of this agreement,
and this for any reason including due to its cancellation.
16. Additional development work
---------------------------
16.1 Should at any time during the exclusivity period Nur decide to carry
out changes which are not significant in the mechanical design of the
B.B. Printer, it will give notice of this to I.T.S.. I.T.S. will be
obliged to carry out on its account the changes in the design as
mentioned, and will be entitled to a refund of the direct expenses
which it bears to third parties with regard to the performance of these
changes. The performance of these changes will be a condition for
protecting I.T.S.'s exclusivity rights as mentioned in clause 15 above.
16.2 Should at any time during the exclusivity period Nur decide to carry
out significant changes in the mechanical design of the B.B. Printer
(hereinafter:
"additional development work"), it will give written notice to I.T.S.
and the notice will detail the significance of the additional
development work required.
16.3 Within 14 days of the date of Nur's written notice, I.T.S. will be
entitled to inform Nur that it is interested to carry out the
additional development work. Should U.S. inform Nur that it is not
interested to carry out the additional development work, the
exclusivity rights of I.T.S. as mentioned in sub-clause 15 will come to
an end.
16.4 Subject to the performance of I.T.S.'s obligations under this
agreement, should I.T.S. give Nur such notice as mentioned in clause
16.3 above, according to which it is interested to carry out the
additional development work, Nur undertakes to give the additional
development work to I.T.S. For the execution of the additional
development work the provisions of clauses 2, 4 and 5 will apply
with the necessary changes.
16.5 After the end of the exclusivity period the provisions of this clause
16 will not apply to the parties.
17. Confidentiality
---------------
17.1 I.T.S. hereby undertakes to keep all the know-how secret, not to
disclose or to transfer to others the know-how, fully or partly, or to
enable others to have access to the know-how and/or to copy the
know-how, all this apart from the use of the know-how by its employees
as far as necessary in order to perform the production work.
17.2. I.T.S. will receive from its employees or others on its account who
will be employed in carrying out the production work, an obligation of
confidentiality and non-competition as mentioned in this clause 17.
17.3 The provision of this clause 17 will be in effect in every case of the
termination of this agreement including due to its cancellation.
18. Period of the agreement
-----------------------
18.1 The period of this agreement is as from the date of its signature.
18.2 As of the date of the end of the exclusivity period each of the parties
is entitled to terminate this agreement with a written notice given to
the other party at least 6 months in advance.
18.3 Notwithstanding the provisions of this clause 18, Nur will be entitled
to terminate this agreement immediately on the occurrence of a basic
violation of the this agreement by I.T.S., including each of the
following occurrences:
a. The violation of the undertakings of I.T.S. to safeguard
confidentiality and non-competition as mentioned in clause 17
above.
b. The transfer of I.T.S.'s rights and/or liabilities contrary to
the provisions of clause 19 below.
c. Appointment of a receiver or liquidator for I.T.S., provided that
this appointment is not canceled within 45 days.
For every case of the termination of the agreement in accordance
with the provisions of this clause 18.3, I.T.S. undertakes to
complete the production work of the B.B. Printers for which it
received orders up to the date of such notice. It is hereby
clarified that the provisions of this clause will be in effect
even after termination of this agreement.
18.4 Unless otherwise specifically specified in this agreement after the
date of termination of the agreement, the provisions of this agreement
will not obligate and/or entitle the parties to it.
19. Prohibition of transfer
-----------------------
19.1 I.T.S. will not be entitled to endorse and/or transfer its obligations
and/or rights under this agreement or the performance of the
development work and/or production work to any third party, and this
unless it receives Nur's prior written agreement.
19.2. Nur will be entitled to endorse and transfer to a third party its
obligations and rights under this agreement (hereinafter: "the
transferee") provided that the transferee will give I.T.S. a written
notice in which it undertakes all the undertakings of Nur according to
this agreement and should I.T.S. inform Nur in writing, within 15 days
from the date of receiving the notice of transfer, of its objection to
the endorsement and transfer to the transferee, provided such
objections will be for reasonable reasons relating to the identity of
the transferee, Nur will guarantee to I.T.S. the performance of the
obligations of the transferee pursuant to clauses 15 and 16 to this
agreement. To avoid doubt it hereby declared that the assignment and
transfer by Nur does not reduce the obligations and rights of the
parties which applied before the said endorsement and transfer.
20. Arbitration
-----------
20.1 Any dispute between the parties regarding the development and/or
production work and/or the reasonability of the instructions of the
supervisor and/or relating to the additional production work and/or
additional development work will be transferred to the decision of
Engineer Xxxx Xxx-Av. Provided that on the date of the transfer of the
dispute for his decision there will be no conflict of interest
resulting from his relations with one of the parties. Should there be a
conflict of interest as mentioned, Xxxx Xxx-Av will determine at his
discretion an alternative engineer who will decide on the dispute
(hereinafter: "the professional arbitrator"). The professional
arbitrator will not be subject to the procedures, the laws of evidence
or the substantive law, but he will have to explain his decision.
20.2 Any dispute between the parties with regard to the execution or the
interpretation of this agreement which does not fall within clause 21
above, will be brought for the decision of the arbitrator whose
identity will be determined by an agreement between the parties, and in
the absence of such an agreement, by the head of the Tel Aviv District
bar Association (hereinafter: "the arbitrator"). The arbitrator will
not be subject to legal procedures or the laws of evidence, but will be
subject to the substantive law and he will have to explain his
decision.
20.3 The provisions of this clause 20 will be considered as an arbitration
agreement between the parties which will obligate the parties for all
purposes resulting from the provisions of this agreement even after the
end of the period of the agreement.
21. General
-------
21.1 The addresses of the parties as are detailed in the preamble to this
agreement and notices sent by registered post to one of the parties to
that address will be considered as if received within 7 days from the
date of its dispatch, unless proved that it arrived earlier to the
other party.
21.2 The terms of this agreement include fully the conditions and agreements
between the parties with regard to the performance of the development
and production work and they supersede any engagement, agreement,
presentation, obligation prior to the signature on this agreement which
was carried out between the parties, whether in writing or verbally,
but they do not derogate from the effect of the confidentiality
agreement signed between the parties on December 26, 1994.
21.3 The parties will take all additional steps including the signature on
additional documents required in order to apply and carry out this
agreement according to its wording and spirit.
21.4 The laws of the State of Israel will apply to this agreement and the
sole jurisdiction regarding it will be the competent court in Tel
Aviv-Jaffa.
2.15 Any change or cancellation of the provisions of this agreement will be
carried out only in a written document which will be signed by the
parties.
In witness whereof the parties hereby sign
------------------------------ ---------------------------------
Nur Advanced Technologies Ltd. I.T.S. Machinery Development Ltd.
Appendix A
Specifications of B.B. Printers
Will be completed as mentioned in 1.1 above
Appendix B
Development Work Plan
Will be completed as mentioned in clause 1.1 above
Appendix C
Proceeds for Additional Work
1. Cost of materials
-----------------
The cost of materials will be determined according to the actual cost
of the components and materials used in the production work, where to
the cost of the materials will be added an amount equal to 25% for
depreciation.
2. Cost of labor
-------------
The cost of labor will be determined according to the number of labor
hours actually performed by I.T.S.'s employees and on the basis of
price per hours (in NIS) as detailed in the following table:
Type of work Price in dollars per labor hour
------------ -------------------------------
Technician/assembler 26
Engineer 40
Cutter 34
Engraver 30
The prices per labor hour detailed in the table above will be updated
in accordance with the rate of cost of living allowance paid to all
employees in Israel.
Appendix D
Contents of Production File
1. Xxxx of materials
2. Drawings - Items
- Marking
- Assembly
3. Specifications of materials.
4. Instructions and work processes.
5. Assembly instructions.
6. Special manufacturing instructions.
7. Gauges and tools.
8. Testing specifications (QA/QC).
9. List of suppliers and sub-contractors in those cases where there is a
unique requirement.
10. Exceptions reports.
11. Specifications of acceptance tests.
12. Quantity specifications.
Xxxxxxxx X0
Specification of Initial Acceptance Tests
To be completed as mentioned in clause 1.1 above
Xxxxxxxx X0
Specifications of Final Acceptance Tests
To be completed as mentioned in clause 1.1 above
Appendix F
Consideration for Production
1. Cost of materials
-----------------
The cost of materials will be determined according to the actual costs
of the components and materials used in the production work and 3% will
be added to the cost of the materials for depreciation.
2. Labor costs
-----------
The cost of labor will be determined according to the number of actual
labor hours performed by I.T.S.'s employees on the basis of actual cost
of the employer of I.T.S. for those employees
3. Indirect costs and participation in rent
----------------------------------------
The amount of indirect costs and participation in rent for each B.B.
Printer in every quarter will be determined (in dollars) according to
the following table, where the amount is determined according to the
total number of printers ordered for that quarter:
Number of total printers ordered in the quarter
------------------------------------------------------------
12 14 16 18 20 22 24
----- ------ ----- ----- ----- ----- -----
Variable indirect expenses 4,250 4,150 3,830 3,540 3,190 2,900 2,660
Overhead expenses 8,850 7,590 6,640 5,900 5,310 4,830 4,430
Participation in rent
----- ------ ----- ----- ----- ----- -----
Total
===== ====== ===== ===== ===== ===== =====
For a number of printers exceeding 12 which are not stated in the above
table the amount of indirect costs will be calculated proportionally.
For the number of printers in the quarter exceeding 24 no indirect cost
will be paid.
It is agreed that even that if the number of printers ordered will be
less than twelve (12) in the quarter the amount of indirect expenses
and participation in them will be determined on the basis of the fixed
amounts for 12 printers. But, should as from the beginning of 1997 in
two consecutive quarters there be less than 12 printers be ordered,
then as of the third quarter the amounts of indirect expenses in
participation in rent will be determined according to the following
table:
Number of total printers ordered in the quarter
----------------------------------------------------
4 6 8 10
----- ------ ------ ------
Variable indirect expenses 10,440 7,500 6,380 5,100
Overhead expenses 26,550 14,000 13,280 10,620
Participation in rent
----- ------ ------ ------
Total
===== =====- ====== ======
Appendix F (Cont.)
4. Production Profit
-----------------
The amount of production profit for every printer (in dollars) will be
determined according to the following table taking into account the
total accrued amount of B.B. Printers ordered by Nur.
Accumulated number of printers
ordered Production profit per printer
------------------------------ -----------------------------
UP to 25 (inclusive) 16,000
Between 26 and 50 (inclusive) 15,000
Between 51 and 75 (inclusive) 14,000
Between 67 and 100 (inclusive) 13,000
From 101 and above 12,500
Appendix G
Costing of Spare Parts
