PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
Exhibit E
Pricing and Pricing Principles
V 3.0
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
Document Information
Project Manager: Xxx Xxx
Customer Project Na'ama Halperin
Manager:
Prepared by:
Document Version No. :
Preparation Date:
2
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
TABLE OF CONTENTS
1. GENERAL....................................................................................... 4
2. THE TARGET PRICE AND TERMS OF PAYMENT......................................................... 5
2.1. TARGET PRICE AMOUNT........................................................................... 5
2.2. TARGET PRICE COMPONENTS....................................................................... 5
2.3. RIGHT TO USE.................................................................................. 5
2.4. QUARTERLY PAYMENTS............................................................................ 6
2.4.1. PAYMENT OF INVOICES........................................................................ 7
2.5. INVOICING METHOD.............................................................................. 8
2.5.1. QUARTERLY PAYMENT DIVIDED INTO 5 INVOICES.................................................. 8
2.5.2. CURRENCY................................................................................... 8
3. PRICE IMPLICATIONS OF CHANGES................................................................. 10
3.1. AGREED PRINCIPLES............................................................................. 10
3.2. BANK OF WORK HOURS............................................................................ 10
3.3. ADD-ON ASSETS................................................................................. 13
4. PRICING ADJUSTMENT............................................................................ 15
4.1. CURRENCY ADJUSTMENT........................................................................... 15
4.2. PAYMENTS DEDUCTION............................................................................
5. MINIMUM PAYMENT PERIOD........................................................................ 18
6. TRANSITION AND STABILIZATION FEES............................................................. 19
6.1. GAP UPGRADES PROJECTS......................................................................... 19
6.2. EXHIBIT D PROJECTS............................................................................ 20
7. TERMINATION................................................................................... 21
7.1. REFRESHED ASSETS, NEW CUSTOMER EMPLOYEE
ASSETS AND LEASED ADD ON ASSETS......... ...................................................
7.2. GENERAL SETUP COSTS...........................................................................
7.3. EARLY TERMINATION COMPENSATION................................................................ 32
8. CONTRACT EXPIRATION...........................................................................
9. TAXATION...................................................................................... 33
9.1. WITHHOLDING TAX............................................................................... 33
9.2. VAT PAYMENTS FOR EQUIPMENT OUTSIDE ISRAEL..................................................... 33
9.3. TAXATION UPON EXPIRATION OR TERMINATION OF THE CONTRACT....................................... 34
APPENDIX A: BANDWIDTH PRICING AND CAPACITY CALCULATIONS/ EXAMPLES..................................... 36
APPENDIX B: TECHNOLOGY GAPS UPGRADES PROJECTS......................................................... 45
APPENDIX C: FINANCIAL RECORDS MANAGEMENT.............................................................. 49
APPENDIX D:........................................................................................... 51
LIST OF FIVE GROUPS OF CUSTOMER SITES................................................................. 51
3
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
1. GENERAL
This Exhibit E (the "EXHIBIT") is attached to the Services Agreement for HP-OMS
Operations Services (the "SERVICES AGREEMENT") dated as _____________ by and
between HP-OMS and Customer.
Capitalized terms not otherwise defined herein shall have the meaning specified
in the Services Agreement and in the exhibits attached hereto to which this
document is attached as Exhibit E. This Exhibit sets forth the pricing and
pricing principles regarding HP-OMS's provision of the Services to Tecnomatix
("CUSTOMER").
4
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
2. THE TARGET PRICE AND TERMS OF PAYMENT
2.1. TARGET PRICE AMOUNT
The annual Target Price payable by Customer to HP-OMS during each [**] period of
the Term of the Services Agreement is [**] U.S Dollars.
Said annual Target Price will be based on the actual number of Customer
Employees as of the Commencement Date. Within fifteen (15) working days of the
Commencement Date Customer shall notify HP-OMS in writing of the number of
Customer Employees on the Commencement Date (the "INITIAL EMPLOYEE NUMBER"). The
annual Target Price will be adjusted according to the mechanism described in
Appendix A herein.
2.2. SERVICES COMPONENTS
The Target Price constitutes payment for the following services:
(a) Transition and Stabilization Projects (as detailed in Exhibit D)
except for Gap Upgrade projects (as detailed in Exhibit D and Exhibit
E Appendix C herein)
(b) Services, Hardware and Software delivery (as detailed in the Services
Agreement and all of its Exhibits).
5
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
2.3. RIGHT TO USE
In order to allow HP-OMS to provide the Services under the Services Agreement,
the Customer shall grant HP-OMS the right to use (the "RIGHT TO USE") the
Hardware and Software owned, leased and/or licensed by Customer, as applicable,
immediately prior to the Commencement Date (the "RIGHT TO USE ASSETS") until
their full amortization in the Customer's books. HP-OMS will pay Customer for
the said Right to Use, a one time fee which will be as follows:
(a) a sum of [**]
(b) payable within ten (10) calendar days from the Commencement Date
against one invoice to be issued in Israel by the Customer.
(c) HP-OMS shall add Israeli VAT to said amount against invoice
("HESHBONIT MASS") to be issued by Customer. The VAT amount shall be
paid by HP-OMS to Customer seven days before Customer has to pay the
VAT amount to the VAT authorities.
HP-OMS will use said Right to Use Assets solely for the provision of the
Services under the Services Agreement and its Exhibits. The Right to Use shall
terminate automatically in the event of early termination or expiration of the
Services Agreement for any reason whatsoever (including, without limitation,
termination for convenience by Customer or by HP-OMS, termination for cause by
either Customer or HP-OMS).
2.4. QUARTERLY PAYMENTS
HP-OMS will invoice Customer for the Target Price on a quarterly basis by
invoicing one-fourth (1/4) of the annual Target Price, as adjusted from time to
time in accordance with this Exhibit E (the "QUARTERLY PAYMENT"), not earlier
than on the first day of the first month of the applicable calendar quarter.
6
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
2.4.1. PAYMENT OF INVOICES
Customer shall pay the Quarterly Payment within forty-five (45) days from the
invoice date (e.g. invoice on February 28, payment due on April 15).
Customer shall add to all payments due from it to HP-OMS pursuant to
this Agreement, if made in arrears, interest at the rate of [**],
computed from the period commencing as of their payment due date
until actual payment thereof in full.
The above notwithstanding, Customer will be exempt from said
interest payments to the extent that the total number of days for
any part of the outstanding payments in arrears throughout the
Initial Term of this agreement is less than 45 calendar days and a
separate count for the Extended Term shall apply. In case however
that payment in arrears is less then 25% of the total outstanding
amount then an additional period of fourteen (14) days of non
interest accrual and payment will be added to said forty five (45)
calendar days
Examples:
o Customer exceeds for the first time the payment due date by 6 days:
no interest will be paid by Customer and the number of allowed
arrears days will be reduced by 6 days and will be set to 39 days.
o Customer exceeds the payment due date by 7 days and the number of
allowed arrears days is 4: Customer will pay interest only for 3
days (according to the interest set above).
7
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
2.5. INVOICING METHOD
2.5.1. QUARTERLY PAYMENT DIVIDED INTO 10 INVOICES
In accordance with the Services Agreement, Section 10.1 (TARGET PRICE AND BANK
OF WORK HOURS INVOICING AND PAYMENT), for each quarterly payment of the Target
Price, HP-OMS shall deliver to Customer ten (10) invoices (equal, in the
aggregate, to the applicable Quarterly Payment of the Target Price), each such
invoice in an amount equal to a fraction of the Quarterly Payment of the Target
Price, the numerator of which shall be the then current aggregate number of
Customer Employees within each of the applicable ten (10) groups of Customer
Sites listed in Appendix E herein (none of the groups being in the U.S.A), and
the denominator of which shall be the total number of Customer Employees. The
sum of all Customer Employees in the ten (10) groups shall equal the total
number of Customer Employees. Customer shall provide HP-OMS the number of
Customer Employees in each group no later than the beginning of each applicable
quarter in the Term.
2.5.2. PAYMENTS AND COLLECTION OF 10 INVOICES
It is the Customer responsibility to perform the collection of the Quarterly
Payment from all the entities to which HP-OMS has issued an invoice, in
accordance with Section 2.4.1 (PAYMENT OF INVOICES) herein. In case one or more
of the entities has failed to pay to HP-OMS said payments (fully or partly),
Customer shall pay such outstanding amounts. Delays in the Quarterly Payment for
any reason whatsoever are subject to section 2.4.1 herein.
8
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
For the avoidance of doubt, in case any of the entities to whom HP-OMS has
issued an invoice in accordance with Section 2.5.1 fails to pay said outstanding
amount or a part of it, and Customer also fails to pay on their behalf, HP-OMS
shall notify Customer of such failure. Customer will have fourteen (14) business
days from such notice to pay any unpaid amount. Failure to pay any unpaid amount
fourteen (14) business days after such notice will be considered a breach by
Customer, subject to Sections 10.5 (ESCROW OF DISPUTED AMOUNTS) and 20.4
(TERMINATION FOR CAUSE BY HP-OMS) of the Services Agreement.
2.5.3. CURRENCY
Each of the ten (10) quarterly invoices referenced above shall be issued in
local currencies according to Appendix E herein. Invoices which will not be
issued in US Dollar will be converted from US Dollars to the local currency,
corresponding to the applicable group of Customer Sites listed in Appendix E
below, by multiplying the original US dollar amount by the Euro/US Dollar Ratio,
Yen/US Dollar Ratio, Singapore Dollar/US Dollar Ratio or the US Dollar/NIS
Exchange Rate (each as applicable and as defined in section 4.1 herein) plus an
additional twenty-five one hundredths of a percent (0.25%). The exchange
rates/ratios defined above will be those published by the Bank of Israel for the
last business day prior to the date that such invoice is issued.
9
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
3. PRICE IMPLICATIONS OF CHANGES
3.1. AGREED PRINCIPLES
(a) The Target Price will be adjusted according to changes in the number of
Customer Employees, as specified in Appendix A to this Exhibit.
(b) "Customer Employees" has the meaning ascribed to such term in Section 1.13
of the Services Agreement .
3.2. BANK OF WORK HOURS
(a) As requested by Customer, HP-OMS will provide on-call services (outside
the General Services Window) at Bank of Work Hours rates, in accordance with
Exhibit C, Section 3.4 (ON-CALL SERVICE OUTSIDE THE GENERAL SERVICE WINDOW).
(b) HP-OMS will provide IMAC services at Bank of Work Hours rates, in
accordance with Exhibit B, Section 6.13 (INSTALL, MOVE ADD OR CHANGE)
(c) HP-OMS will provide projects, which will be provided in less ten 50 hours,
at Bank of Work Hours rates.
(d) The Customer may purchase "Bank of Work Hours", for the above, according
to the following criteria:
10
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
o Minimum number of hours for any single purchase order to be used only in the
Israel Customer Site: five hundred (500) hours
o Minimum number of hours for any single purchase order to be used only in
sites outside of Israel: five hundred (500) hours
o Price per hour:
o For services provided in Israel:
Flat rate of $[**] per hour.
The above price does not include VAT
o For services provided outside Israel:
Flat rate of $[**]per hour.
The above price does not include VAT
(e) HP-OMS will invoice Customer immediately upon purchasing Bank of
Work Hours package at the applicable Bank of Work Hours rates.
Customer shall pay invoices within sixty (60) days from the end of
the month of the invoice date.
11
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
(f) HP-OMS shall deliver, for Customer approval, at the end of each
month a detailed list of the actual working hours performed during
the previous month. Following Customer approval of such list HP-OMS
shall deduct the approved hours from the Bank of Work Hours balance.
(g) Customer may use the Bank of Work Hours with no time limitation.
(h) Customer may purchase Bank of Work Hours as often as required.
(i) As part of the Services Agreement and at no additional charge, HP-OMS will
provide the Customer with a one time Bank of Work Hours package as follows:
o [**] Bank of Work Hours for the Israel Customer Site
o [**] Bank of Work Hours for Customer Sites located outside of
Israel sites
3.3. MCC ON CALL SERVICES
(j) As requested by Customer, HP-OMS will provide MCC on-call services
(outside the General Services Window), in accordance with Exhibit C,
Section 3.2 (MCC SERVICE WINDOW).
(k) The Customer will pay for the on-call service [**] USD [**] per
month.
12
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
(l) HP-OMS will charge the Customer with [**] USD [**] per hour, with a
minimum charge of 2 hours per call.
(m) HP-OMS will invoice the Customer at the end of the quarter according
to the hourly on call usage at the applicable quarter. Such invoice
is subject to Customer prior approval of a detailed list of hours
delivered.
Customer shall pay invoices within sixty (60) days from the end of the month of
the invoice date.
3.4. ADD-ON ASSETS
Without derogating from HP-OMS' obligations under the Services Agreement,
including without limitation, with respect to the Technology Refresh
Program, Customer may, in its discretion, purchase or lease new Hardware
and/or Software, as part of Purchased/Leased Add-On Assets, from HP-OMS at
a discount off of HP-OMS' then current local Internet website price list,
as follows:
o On HP-branded personal computers, laptops, software, printers, personal
digital assistants, hubs and switches, the discount will be at least [**]%
off the Internet list price.
o On HP UNIX servers, operating systems and HP data storage systems and
their components, the discount will be at least [**]% off the Internet
list price.
o On HP brand Software sold by HP the discount will be at least [**]% off
the Internet list price
13
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
3.5. LEASING PROCESS BY 3RD PARTY
HP-OMS shall not use the services of any third party (except for HP-OMS'
Affiliates) for leasing the Refreshed Assets without the prior written approval
of Customer.
14
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
4. PRICING ADJUSTMENT
4.1. CURRENCY ADJUSTMENT
(A) DEFINITIONS
EURO REFERENCE CURRENCY RATIO - means the Euro/US Dollar Ratio (as defined
below) as of the Commencement Date
YEN REFERENCE CURRENCY RATIO - means the Yen/US Dollar Ratio (as defined below)
as of the Commencement Date
The Euro Reference Currency Ratio and the Yen Reference Currency Ratio will be
used to calculate the quarterly currency adjustment of the Quarterly Payment.
PUBLISHED EURO RATIO - means the Euro/US Dollar Ratio as of the day prior to the
last day of the applicable quarter.
PUBLISHED YEN RATIO - means the Yen/US Dollar Ratio as of the day prior to the
last day of the applicable quarter.
EURO/US DOLLAR RATIO - means the (i) Euro/NIS Exchange Rate, divided by (ii) the
US Dollar/NIS Exchange Rate.
US DOLLAR/NIS EXCHANGE RATE - means the representative rate of exchange of the
US Dollar to the NIS as published by the Bank of Israel for the applicable date
(in case the applicable date is not a date for which the Bank of Israel
publishes an exchange rate, then the last exchange rate published by the Bank of
Israel prior to such date).
YEN/US DOLLAR RATIO - means the (i) Yen/NIS Exchange Rate, divided by (ii) the
US Dollar/NIS Exchange Rate.
15
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
SINGAPORE DOLLAR/US DOLLAR RATIO - means the (i) Singapore Dollar/NIS Exchange
Rate, divided by (ii) the US Dollar/NIS Exchange Rate.
(b) HP-OMS shall adjust the Target Price on a quarterly basis (I.E., every
3-months) one day before the end of the applicable calendar quarter (i.e,
at March 30th) according to the currency adjustment formula described
below:
REVISED TARGET PRICE = TARGET PRICE IN US$ * 0.5 + TARGET PRICE IN US$ * 0.4 *
(RATIO BETWEEN THE EURO REFERENCE CURRENCY RATIO AND PUBLISHED EURO RATIO) +
TARGET PRICE IN US$ * 0.1* (RATIO BETWEEN THE YEN REFERENCE CURRENCY RATIO AND
PUBLISHED YEN RATIO)
BOTH EXAMPLES:
TARGET PRICE = US $7M
On the Commencement Date, the EURO REFERENCE CURRENCY RATIO is: 0.95Euro/1US$ =
0.95
On the Commencement Date, the YEN REFERENCE CURRENCY RATIO is: 120Yen/1US$ = 120
16
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
EXAMPLE 1:
On 30.12.03 the PUBLISHED EURO RATIO is: 0.90Euro/1US$ = 0.9
On 30.12.03 the PUBLISHED YEN RATIO is: 110Yen/1US$ = 110
THE ADJUSTED TARGET PRICE FOR Q4/03 (31.12.03) WILL BE:
(7*0.5)+(7*0.4*0.95/0.9)+(7*0.1*120/110)= US $7.21M
EXAMPLE 2:
On 29.6.04 the PUBLISHED EURO RATIO is: 1.05Euro/1US$ = 1.05
On 29.6.04 the PUBLISHED YEN RATIO is: 125Yen/1US$ = 125
THE ADJUSTED TARGET PRICE FOR Q2/04 (30.6.04) WILL BE:
(7*0.5)+(7*0.4*0.95/1.05)+( 7*0.1*120/125)= $ US6.705M
17
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
5. MINIMUM PAYMENT PERIOD -
(a) During the first twelve (12) months following the Commencement Date (the
"MINIMUM PAYMENT PERIOD"), the parties agree that no reduction to the Target
Price will occur (i.e., Customer shall pay the Target Price identified in
Section 2.1 (TARGET PRICE AMOUNT) for the first twelve (12) months of the
Services Agreement, regardless of a change in number of Customer Employees).
During the six (6) months following said initial twelve (12) month period the
Target Price will be calculated according to Appendix A herein with the
following exception: in case of a decrease in the number of Customer Employees
upon such calculation, the minimum Customer Employees number (to be used for
purposes of reducing the Target Price) will be 625.
(b) During the Minimum Payment Period HP-OMS shall not reduce the agreed
Services.
(c) After the Minimum Payment Period any increase or decrease in the scope of
Services will be handled according to Appendix A to this Exhibit (except as
stated in Section 5(a) above).
18
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
6. TRANSITION AND STABILIZATION FEES
6.1. GAPS UPGRADES PROJECTS.
(a) The Gaps Upgrades projects described in Appendix C below ("GAPS UPGRADES
PROJECTS") are intended, among other things, to complete technology gaps
in Customer's infrastructure, in the absence of which certain operating
activities may be affected.
(b) Such projects will address, for example, infrastructure investment in
the areas of backup, passive infrastructure, network connectivity and
Antivirus, all in accordance with Exhibit D to the Services Agreement.
(c) If immediately prior to the Commencement Date any workstation used by
Customer, which, in Customer's discretion, requires antivirus software
or lacks such anti-virus software, Customer shall be responsible for
purchasing such additional license. For the avoidance of doubt, Customer
shall not be responsible for purchasing such additional license where a
workstation has an antivirus software license which simply does not
conform to the requirements or policies of HP-OMS.
(d) Implementation of the Gaps Upgrades Projects requires that Customer pay
a one-time project charge of [**] US dollars (US $[**]) plus VAT at the
invoice date (see gaps details Appendix C), in addition to the Target
Price (the "GAPS UPGRADES PROJECT CHARGE"). The Customer will pay an
additional amount for Gap Upgrade Projects required for USDATA offices
according to a proposal that will be submitted by HP-OMS. In any case,
the cost of Gap Upgrades Projects required for USDATA offices will not
exceed [**] USD ($[**]).
19
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
(e) HP-OMS shall invoice the Customer for the Gaps Upgrades Project Charge
in two (2) separate installments as follows: (i) 50% to be invoiced on
the Commencement Date, and (ii) 50% to be invoiced upon Customer's
Acceptance and written approval confirming finalization of all the Gaps
Upgrades Projects.
(f) Payment terms are sixty (60) days following the last day of the month in
which HP-OMS' invoices for the Gaps Upgrades Project Charge are received
by Customer.
(g) The parties acknowledge that the Gaps Upgrades Projects, when completed,
will bring Customer to a technology level sufficient to enable HP-OMS to
meet the Service Levels. Accordingly, if it is determined that
additional technology gaps exist beyond those listed in Appendix C,
which prevent HP-OMS from meeting the Service Levels, HP-OMS shall
perform such additional technology gaps projects without additional
charge to Customer.
6.2. TRANSITION AND STABILIZATION (EXHIBIT D) PROJECTS
Except with respect to the Gaps Upgrades Projects, the Target Price includes all
fees and costs in connection with all the projects to be performed by HP-OMS
during the Transition Phase, as described in Exhibit D.
20
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
7. TERMINATION
In the event of termination of the Services Agreement for any reason
whatsoever HP-OMS shall transfer to Customer and Customer shall purchase from
HP-OMS the Refreshed Assets, New Customer Employees Assets, Transition Project
Assets and Leased Add-On Assets (together in this Section the "ASSETS") in
accordance with the terms detailed herein.
7.1. REFRESHED ASSETS
(a) GENERAL
HP-OMS shall transfer to Customer ownership of the Refreshed Assets in
any case of expiration or termination immediately upon payment
completion by the Customer where payment is required, as set out in this
Section 7.1.
(b) TERMINATION FOR CAUSE BY HP-OMS.
(i) Consideration
The amount to be paid by the Customer, in case of early termination of
the Services Agreement for cause by HP-OMS, in accordance with Section
20.4 (TERMINATION FOR CAUSE BY HP-OMS), for such Refreshed Assets shall
be the Net Book Value of such Refreshed Assets as of the effective date
of such termination (the "TERMINATION DATE"), calculated according to
the rules set out in Appendix D herein.
21
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
(ii) Payment Terms
The Customer will pay the whole amount due for the Refreshed Assets (as
set out in subsection 7.1(b)(i) above) within sixty (60) days from such
Termination Date. If after the sixty (60) day period Customer fails to
pay all said outstanding amount, HP-OMS will so notify Customer in
writing, and Customer will have another fourteen (14) days to complete
such payment. Failure by Customer to pay such outstanding amounts shall
constitute a material breach of the Services Agreement by Customer.
(c) ALL OTHER TERMINATION EVENTS
(i) Consideration
The amount to be paid by Customer, in case of early termination of the
Services Agreement by any of the parties and for any other reason
(except for termination for cause by HP-OMS which is dealt with in
Section (b) above and expiration which is dealt with under Section (d)
below) for such Refreshed Assets, shall be the Net Book Value of such
Refreshed Assets, calculated according to the rules set in Appendix D
herein.
(ii) Payment Terms
Customer shall have the right to choose, in Customer's sole discretion,
between two payments options: (A) pay the whole sum sixty (60) days from
such Termination Date; or (B) pay to HP-OMS for such Refreshed Assets
under a Capital Lease Payment Mechanism (as defined in section 7.5). The
process for choosing between the foregoing payment options is defined in
section 7.5 herein.
22
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
(d) EXPIRATION
Customer will not pay any amount for the transfer of ownership of the
Refreshed Assets, in case of expiration of the Services Agreement at the
expiration of the Initial Term or Extended Term (as the case may be).
7.2. NEW CUSTOMER EMPLOYEE ASSETS
(a) GENERAL
HP-OMS shall transfer to Customer ownership of the New Customer Employee
Assets in any case of expiration or termination immediately upon payment
completion by the Customer, as set out in this Section 7.2.
(b) TERMINATION FOR CAUSE BY HP-OMS
(i) Consideration
The amount to be paid by the Customer, in case of early termination of
the Services Agreement for cause by HP-OMS, in accordance with Section
20.4 (TERMINATION FOR CAUSE BY HP-OMS), or upon expiration of the
Services Agreement at the expiration of the Initial Term or Extended
Term (as the case may be), for such New Customer Employee Assets shall
be the Net Book Value of such New Customer Employee Assets as of such
termination or expiration date, calculated according to the rules set
out in Appendix D herein.
23
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
(ii) Payment Terms
The Customer will pay the whole amount due for the New Customer Employee
Assets (as set out in subsection 7.2(b)(i) above) within sixty (60) days
from such termination or expiration date. If after the sixty (60) day
period Customer fails to pay all said outstanding amount, HP-OMS will so
notify Customer in writing and Customer will have another fourteen (14)
days to complete such payment. Failure by Customer to pay such
outstanding amounts shall constitute a material breach of the Services
Agreement by Customer.
(c) ALL OTHER TERMINATION EVENTS
(i) Consideration
The amount to be paid by Customer, in case of early termination of the
Services Agreement by any of the parties and for any other reason
(except for termination for cause by HP-OMS and expiration which are
dealt with in Section 7.2(b) above) for such New Customer Employee
Assets shall be the Net Book Value of such New Customer Employee Assets
as of such Termination Date, calculated according to the rules set in
Appendix D herein.
(ii) Payment Terms
Customer shall have the right to choose, in Customer's sole discretion,
between two payments options: the Customer can either (A) pay the whole
sum sixty (60) days from such Termination Date, or (B) pay HP-OMS for
such Refreshed Assets under a Capital Lease Payment Mechanism (as
defined below). The process for choosing between the foregoing payment
options is defined in section 7.5 herein.
24
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
7.3. LEASED ADD-ON ASSETS
(a) GENERAL
HP-OMS shall transfer to Customer ownership of the Leased Add-on Assets
in any case of termination by any party and for any reason whatsoever or
expiration immediately upon payment completion by the Customer, as set
out in this Section 7.3.
(b) ALL TERMINATION EVENTS
(i) Consideration
The amount to be paid by Customer, in case of early termination of the
Services Agreement by any of the parties and for any other reason, for
such Leased Add-on Assets shall be the Net Book Value of such Leased
Add-on Assets as of such Termination Date, calculated according to the
rules set in Appendix D herein.
(d)
(ii) Payment Terms
Customer shall have the right choose, in Customer's sole discretion,
between two payments options: the Customer can either (A) pay the whole
sum within sixty (60) days from such Termination Date, or (B) pay HP-OMS
for such Leased Add-on Assets under a Capital Lease Payment Mechanism
(as defined below). The process for choosing between the foregoing
payment options is defined in section 7.5 herein.
25
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
7.4. TRANSITION PROJECT ASSETS
(a) GENERAL
HP-OMS shall transfer to Customer ownership of the Transition Project
Assets (including but not limited to the MCC General Setup Assets) in
any case of termination or expiration immediately upon payment
completion by the Customer where payment is required, as set out in this
Section 7.4.
(b) TERMINATION FOR CAUSE BY HP-OMS AND TERMINATION FOR CONVENIENCE BY
CUSTOMER
(i) Consideration
In the event of early termination by Customer for Convenience, in
accordance with Section 20.5 (TERMINATION FOR CONVENIENCE) or early
termination by HP-OMS for cause, in accordance with Section 20.4
(TERMINATION FOR CAUSE BY HP-OMS), of the Services Agreement, the
Customer will have to pay only for the MCC General Setup Cost (out of
the Transition Project Assets), as follows:
The amount to be paid by the Customer, in such cases of early
termination of the Services Agreement, shall be the MCC General Setup
Cost as detailed in Appendix F (GENERAL MCC SETUP COST) herein, the
value of which as of such Termination Date shall be calculated according
to the rules set out in Appendix D (Financial Records Management) herein
The Customer shall not pay for the transfer of ownership of any of the
Transition Project Assets, except for the MCC General Setup Assets, as
detailed above.
26
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
(ii) Payment Terms
The Customer will pay the whole amount due for the MCC General Setup
Cost (as set out in subsection 7.4(b)(i) above) within sixty (60) days
from such Termination Date. If after the sixty (60) day period Customer
fails to pay all said outstanding amount, HP-OMS will so notify Customer
in writing and Customer will have another fourteen (14) days to complete
such payment. Failure by Customer to pay such outstanding amounts shall
constitute a material breach of the Services Agreement by Customer.
(c) TERMINATION FOR FORCE MAJUER
(i) Consideration
In the event of Termination by Customer due to Force Majuer Event as
defined in Section 21.6 (FORCE MAJEUR), of the Services Agreement, the
Customer will have to pay only for fifty percent (50%) of the MCC
General Setup Cost (out of the Transition Project Assets), as follows:
The amount to be paid by the Customer, in such cases of early
termination of the Services Agreement, shall be fifty percent (50%0 of
the MCC General Setup Cost as detailed in Appendix F (GENERAL MCC SETUP
COST) herein, the value of which as of such Termination Date shall be
calculated according to the rules set out in Appendix D (Financial
Records Management) herein The Customer shall not pay for the transfer
of ownership of any of the Transition Project Assets, except for the MCC
General Setup Assets, as detailed above.
27
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
(d) (ii) Payment Terms
The Customer will pay the whole amount due for the MCC General Setup
Cost (as set out in subsection 7.4(b)(i) above) within sixty (60) days
from such Termination Date. If after the sixty (60) day period Customer
fails to pay all said outstanding amount, HP-OMS will so notify Customer
in writing and Customer will have another fourteen (14) days to complete
such payment. Failure by Customer to pay such outstanding amounts shall
constitute a material breach of the Services Agreement by Customer.
(e) ALL OTHER TERMINATION EVENTS
In any case of early termination of the Services Agreement by any of the
parties and for any other reason (except for termination for cause by
HP-OMS and termination for convenience by Customer, which are dealt with
under Section 7.4(b) above), Customer will not pay any amount for the
transfer of ownership of the Transition Project Assets (including for
the MCC General Setup Assets).
(f) EXPIRATION
Customer will not pay any amount, for any of the Transition Project
Assets (including the MCC General Setup Assets) in case of expiration of
the Initial Term or the Extended Term.
28
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
7.5. CHOICE PROCESS
7.5.1. GENERAL
If Customer wishes to utilize the Capital Lease Payment Mechanism option
marked "(B)" in Sections 7.1 (c) (ii), 7.2 (c) (ii), or 7.3 (c) (ii)
above, HP-OMS undertakes to provide Customer with a proposal for a
Capital Lease Payment Mechanism, the terms and conditions for which will
be in accordance with those offered in similar transactions between HP
Financial Services and its other customers at the time of the Agreement
termination, within fifteen (15) working days from Customer's written
notification thereof to HP-OMS. Customer shall notify HP-OMS within
sixty (60) working days from Customer's receipt of HP-OMS' proposal as
to which payment option (under Sections 7.1 (c) (ii), 7.2 (c) (ii), or
7.3 (c) (ii) above) Customer has chosen. Option A - Lump Sum Payment
If option (A) above is chosen and after the sixty (60) day period
(referred to under Sections 7.1 (c) (ii), 7.2 (c) (ii), or 7.3 (c) (ii)
above) Customer fails to pay all said outstanding amount, HP-OMS will so
notify Customer in writing and Customer will have another fourteen (14)
days to complete such payment. Failure by Customer to pay such
outstanding amounts shall constitute a material breach of the Services
Agreement by Customer.
29
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
7.5.2. OPTION B - CAPITAL LEASE
If option (B) above is chosen the rules set forth below will apply.
7.5.2.1. CAPITAL LEASE DEFINITIONS
(i) "CAPITAL LEASE PAYMENT MECHANISM" in this Schedule shall mean a
mechanism by which the ownership of the applicable Assets is transferred to
the Customer upon termination and the Customer pays to HP-OMS for such
applicable Assets the Capital Lease Payment Sum (as defined below), payment
to be made via equal quarterly or monthly installments over a lease period
which will agreed upon in the lease contract between the parties.
(ii) "CAPITAL LEASE PAYMENT SUM" shall mean the sum of the Net Book Value of
the applicable Assets on the Termination Date calculated according to the
rules set in Appendix D herein PLUS the Total Interest.
(iii) "TOTAL INTEREST" shall mean the aggregate interest for the entire
lease period. The interest per each month or quarter shall be calculated
according to the annual interest rate determined by good faith negotiation
between the Customer and HP Financial Services, but not more than the
interest rate that HP Financial Services charges for similar transactions at
the time of the termination (e.g., the factors for the determination of such
interest rate shall be based on the lease period, Customer's credit rating
and the then applicable market interest rate).
30
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
For the avoidance of doubt, the Customer and HP-OMS hereby agree that, as
all such Assets mentioned above in this Section 7 are a critical element of
Customer's ongoing operations, the following shall apply: During the Term or
upon termination or expiration of the Services Agreement for any reason
whatsoever, HP-OMS shall not remove any of the Assets from the Customer's
premises without the Customer's prior written approval. No dispute of any
kind or type whatsoever between HP-OMS and the Customer will affect or
derogate from the Customer's ability and right to have physical possession
of the Assets and the right to have such Assets transferred to the Customer
in accordance with the terms detailed herein above and without derogating
from the above, until such dispute is resolved in accordance with the
Services Agreement, all the Assets shall remain in the physical possession
of the Customer. HP-OMS hereby waives any right it may have under law,
contract or otherwise to take physical possession of any of the Assets due
to any reason whatsoever including due to any dispute, debts, moneys due or
any other allegations of breach or termination of the Services Agreement. In
accordance with the above principles, upon termination or expiration of the
Services Agreement for any reason whatsoever, all the Assets will be
immediately and unconditionally transferred to the Customer from HP-OMS and
HP-OMS shall not remove any of the Assets from the Customers premises
without the Customer's prior written permission to do so.
31
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
7.6. EARLY TERMINATION COMPENSATION
"EARLY TERMINATION COMPENSATION" is the total amount payable by the Customer to
HP-OMS in order to compensate HP-OMS for the fact that the Services Agreement
has been terminated before the expiration of the Initial Term. Customer
undertakes to pay HP-OMS, in each case of such early termination as per section
7 above, the compensation amounts in accordance with the Termination
Compensation Table below.
TERMINATION COMPENSATION TABLE (payments are in U.S Dollars):
[**]
32
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
8. TAXATION
8.1. WITHHOLDING TAX
Any withholding tax applicable under the law of the countries to which each of
the 10 invoices will be issued according to Appendix E herein will be borne and
paid by HP-OMS. Accordingly, any withholding tax which applies to Customer and
Customer Affiliates under the local law of each such entity paying HP-OMS in
accordance with Section 2.5.1 (QUARTERLY PAYMENT DIVIDED INTO 10 INVOICES) shall
be deducted from the portion of the Quarterly Payments payable by the paying
entity, and Customer undertakes to promptly provide HP-OMS with a certificate
evidencing such payment of local withholding tax, which shall enable HP-OMS to
receive a corresponding tax credit.
8.2 VAT IN ISRAEL
With respect to any invoice between Israeli entities, value-added tax, according
to Israeli law, shall be added by Customer to the Target Price payable by the
Israeli Customer Affiliate against an Israeli VAT invoice ("HESHBONIT MAS")
issued by HP-OMS.
8.3 VAT PAYMENTS FOR ASSETS OUTSIDE ISRAEL
Value-added tax (VAT) for which Customer Affiliate will be able to receive a
refund with respect to any Assets provided by HP-OMS to a Customer Affiliate in
the various countries (except Israel) in which Customer and its Affiliates
operate shall be borne and paid by Customer. In case Customer will not succeed
to receive such refund, HP-OMS will use its best commercial efforts to receive
the refund. In case neither Customer nor HP-OMS will be able to receive such
refund, the parties will negotiate in good faith to find a solution. If the
parties fail to reach an agreement, the Customer will have the right to purchase
the assets and deduct the purchase amount from the Target Price. Such purchase
is subject to HP-OMS prior written approval of the price.
33
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
8.4 CUSTOMS DUTIES AND OTHER LEVIES AND TAXES FOR ASSETS OUTSIDE ISRAEL
Customs duties and all other levies and taxes payments (excluding VAT which is
refundable to the Customer and withholding Tax) imposed on the Assets and
Services in the various countries (except for Israel) in which Customer and
Customer Affiliates operate - shall be paid by Customer. Such customs duties and
all other levies and taxes payments will be deducted from the Quarterly Payments
of the entity which made the payment. Customer undertakes to promptly provide
HP-OMS with a certificate for such Customs duties payments and all other levies
and taxes payments.
8.5 TAXATION UPON EXPIRATION OR TERMINATION OF THE SERVICES AGREEMENT
Upon termination or expiration of the Services Agreement as per section 7 of
this Exhibit:
8.5.1 If Customer elects to lease the Assets from HP-OMS (or a party
designated by HP-OMS) under the Capital Lease Payment Mechanism set out
in Section 7.5.3 (OPTION B - CAPITAL LEASE), value added tax, purchase
tax, or similar taxes or levies imposed on the lease shall be added by
Customer to the lease amount;
8.5.2 If Customer elects to purchase said Assets in a lump sum, asset out in
Section 7.5.2 (OPTION A - LUMP SUM PAYMENT), Value Added Tax, purchase
tax, or similar taxes or levies imposed on the purchase shall be added
by Customer to the purchase price set out in Section 7 above.
34
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
8.5.3 In either case, whether Customer elects the Capital Lease Payment
Mechanism or the lump sum payment mechanism, and where the applicable
transaction is between Israeli entities value added tax according to
applicable law shall be added by Customer to the lease amount/price
payable by the Israeli Customer entity against Israeli VAT invoice
(HESHBONIT MAS) issued by HP-OMS.
8.5.4 In case Customer elects the lump sum payment mechanism, if withholding
tax is refundable to HP-OMS or (or to the party designated by HP-OMS to
sell or lease the Assets, as applicable) such withholding tax will be
borne and paid by HP-OMS or its affiliates.
8.5.5 In case Customer elects the Capital lease mechanism, If withholding Tax
is refundable to HP-OMS (or to the party designated by HP-OMS to lease
the Assets, as applicable), HP-OMS will do its best commercial efforts
to reduce the capital lease amount by such withholding Tax.
35
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
APPENDIX A: BANDWIDTH PRICING AND CAPACITY CALCULATIONS/ EXAMPLES
This Appendix A is the sole basis for any change to the Target Price due to
changes to the number of Customer Employees:
1. BANDWIDTH PRICING
Changes to the Target Price will be calculated using the Bandwidth Pricing model
described below:
1.1. CUSTOMER EMPLOYEE INCREASE/DECREASE:
In case of changes in Customer Employees (according to the Calculation
Rules below), the following shall apply:
o Increase and decrease calculation will maintain reciprocity concept;
o The reduction in the Target Price shall not reflect reduction of
Customer Employees below 590
o Customer Employee head count will be split into 2 categories:
o Category 1: Up to (and including) the INITIAL CUSTOMER EMPLOYEE
NUMBER
o Category 2: Above the INITIAL CUSTOMER EMPLOYEE NUMBER
o The new Target Price will be calculated on the basis of the following
formula for Category 1 (up to and including) the INITIAL CUSTOMER
EMPLOYEE NUMBER):
NT = OT - (CT X 0.8) IN CASE OF DECREASE IN HEAD COUNT
NT = OT + (CT X 0.8) IN CASE OF INCREASE IN HEAD COUNT
36
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
o The new Target Price will be calculated on the basis of the following
formula for Category 2 (above INITIAL CUSTOMER EMPLOYEE NUMBER):
NT = OT - CT IN CASE OF DECREASE IN HEAD COUNT
NT = OT + CT IN CASE OF INCREASE IN HEAD COUNT
DEFINITIONS:
NT = New Target Price for the remaining contract years/months of the
Initial Term.
OT = Original Target Price of the Service Agreement for the
remaining contract years/months of The Initial Term
o CT = Change in Target Price due to changes in Customer head count;
CT will be calculated on the basis of the following formula:
CT = ORIGINAL TARGET PRICE (SEE SECTION 3.2 ABOVE)/INITIAL EMPLOYEE
NUMBER*(NUMBER OF INCREASE OR DECREASE OF CUSTOMER HEAD COUNT)
o CALCULATION RULES:
i. Change in Customer Employee head count will be reviewed by the parties
every quarter after the Minimum Payment Period.
ii. If the number of Customer Employees increases or decreases by at least
ten (10) persons compared to the number of Customer Employees in
effect at the same time that the Target Price was last established,
then as of the beginning of the next quarter, the New Target Price
(NT) will be updated according to the change.
37
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
Note: for the purposes of these Examples: the Initial Customer Employee
Number used is 700, and the NT used is 7,000.
o Example 1 (Increase of 12 Customer Employees above 700):
On 1.1.2003 Customer has 700 Employees. Between 1.1.2003 and
31.3.2003 the Customer adds 12 Employees. The calculation of the
adjustment to the Target Price will be as follows (in thousands of
US$):
NT = 7,000 + 7,000/700*12 = 7,120
The new Target Price will be effective from the beginning of the
next quarter - 1.4.2003.
o Example 2 (Decrease of less than 10 Customer Employees from the last
review):
On 1.4.2003 Customer has 712 Employees. Between 1.4.2003 and
30.6.2003 the Customer reduces the number of Customer Employees by 8
persons. The calculation of the adjustment to the Target Price will
be as follows (in thousands of US$):
NT = 7,120 (No change in Target Price as change in Customer
Employees is less than 10)
o Example 3 (Combination of Customer Employee decrease - From a number
above 700 to a new number below 700):
On 1.7.2003 Customer has 704 Customer Employees. During 1.7.2003 and
30.9.2003 the Customer reduces the number of Customer Employees by
14 persons. The calculation of the adjustment to the Target Price
will be as follows (in thousands of US$):
NT = 7,120 - 7,000/700*12 - 7,000/700*10*0.8 = 6,920
The New Target Price will be effective from the beginning of the
next quarter - 1.10.2003.
38
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
1.2. NEW CUSTOMER SITE:
Subject to Section 11.3 (CUSTOMER'S RIGHT TO USE CUSTOMER CONTRACTORS) of the
Services Agreement, in the event of additional Customer Sites other than those
listed in Exhibit B table 2, the following algorithm will be implemented:
o Customer may issue a Service Change Request in accordance with Exhibit
B section 8 to add a new Customer Site.
o HP-OMS will submit a proposal for Customer approval that will include
the one time setup cost for the new Customer Site(s), if needed
o The maximum price for such proposal will be [**] US Dollar
o In case the invested required for the new site setup will be
significant higher then the above maximum price the process will be
done by using Change Management process
o The change to Target Price due to changes in Customer Employee head
count will be according to Appendix A Section 1.1 above.
o Services for the new Customer Site will be according to the Services
Agreement.
39
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
1.3. REMOVAL OF EXISTING CUSTOMER SITE:
Subject to Section 11.3 (CUSTOMER'S RIGHT TO USE THIRD PARTIES CONTRACTORS) of
the Services Agreement, in the event of the removal of an existing Customer
Site, the following algorithm will be implemented:
o Customer may issue a Service Change Request according to Exhibit B
section 8 to remove an Existing Customer Site. Customer must notify
HP-OMS of Customer's intention to remove an Existing Customer Site at
least sixty (60) days in advance.
o HP-OMS will submit a proposal to the Customer that will include the
one-time removal cost of the Customer Site, if needed. HP-OMS's removal
costs shall not exceed US $ [**].
o HP-OMS will use the removed Assets for the sole benefit of the Customer
at other Customer Sites.
o The change to Target Price due to changes in Customer Employee head
count will be according to Appendix A Section 1.1 above.
1.4. INTRODUCING A NEW SYSTEM (ADD-ON ASSETS):
Subject to Section 11.3 (CUSTOMER'S RIGHT TO USE CUSTOMER CONTRACTORS) of the
Services Agreement, in the event that the Customer wishes to implement any
Add-On Assets (e.g., a new ERP application, technology leap etc...):
40
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
o Customer may issue a Service change order according to Exhibit B
section 8 for implementation of such new system.
o The Service change order proposed by HP-OMS shall specify the change in
the Target Price and the purchase or lease price of the Add-On Asset.
1.5. INTRODUCING OR ELIMINATING A SERVICE (BEYOND THE SCOPE OF THE SERVICES):
Subject to Section 11.3 (CUSTOMER'S RIGHT TO USE CUSTOMER CONTRACTORS) of the
Services Agreement, in the event that the Customer wishes to implement a new
service outside the scope of the Services (e.g., manned phone support company
wide, Voice over IP etc...):
o Customer may issue a Service change order according to Exhibit B
section 8 for implementation or eliminating such service.
o The Service change order proposed by HP-OMS shall specify the change in
the Target Price.
41
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
APPENDIX B: HP-OMS'S TIME AND MATERIALS SERVICE RATES
The prices in Table 3 below will be used to calculate the cost of Service Change
Requests as described in Exhibit B, Section 8.
TABLE3: HP-OMS TIME & MATERIALS RATES
SENIOR
ENGINEER
AND UNIX
ON-SITE SYSTEM PROJECT
COST PER HOUR IN: TECHNICIAN ENGINEER ENGINEER MANAGER OTHER
---------------- ---------- -------- --------- -------- ----------
ISRAEL [**] [**] [**] [**]
ISRAELI WORKER ABROAD (*) [**] [**] [**] [**]
LOCAL IN USA WEST COAST [**] [**] [**] [**]
LOCAL IN USA EAST COAST [**] [**] [**] [**]
LOCAL IN EUROPE [**] [**] [**] [**]
LOCAL IN JAPAN [**] [**] [**] [**]
LOCAL IN SINGAPORE [**] [**] [**] [**]
LOCAL IN CHINA [**] [**] [**] [**]
LOCAL IN TAIWAN [**] [**] [**] [**]
42
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
SENIOR
ENGINEER
AND UNIX
ON-SITE SYSTEM PROJECT
COST PER HOUR IN: TECHNICIAN ENGINEER ENGINEER MANAGER OTHER
---------------- ---------- -------- --------- -------- ----------
LOCAL IN KOREA [**] [**] [**] [**]
ASSUMPTIONS:
o Prices are in US $ per hour
o Section 10.4 (TAXES) of the Services Agreement shall apply.
o The sole basis for adjustment of the time and materials rates set out
above shall be the currency adjustment mechanism set out in Section 4.1
(CURRENCY ADJUSTMENT) of this Exhibit E.
o *The time and materials rates for HP-OMS Personnel located in Israel, who
are requested by Customer to provide services outside of Israel, do not
include flights and hotels which will be borne by Customer according to
the applicable travel site/s.
o Prices are for general working window hours, local time not including
holidays and weekends
DESCRIPTION OF LABOR TYPE:
ON-SITE TECHNICIAN (1ST LEVEL SUPPORT):
Basic IT operational skills. Works according to documented routines and
procedures. Is able to handle typical problems that cannot be solved remotely by
the Service Desk but require local intervention (Break/Fix). Supports central
Incident Management from the Service Desk by executing specific tasks as
instructed from the Service Desk Engineer. Can carry out hardware installations
and installation/configuration of predefined software packages.
43
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
ENGINEER:
Medium to high IT-operational skills and training level for Microsoft based
environments. Able to work independently, self-driven, ability to act as 2nd
level IT specialist and to supervise more junior people. Can participate as
resource in projects, works on defined tasks under supervision of a Senior
Engineer or Project Manager.
SENIOR ENGINEER, UNIX SYSTEM ENGINEER PROGRAMMER:
High operational or technical IT skills - highly trained or experienced within a
defined focus area. Acts as 3rd level support and/or able to oversee complex
situations and problems. As a consultant, a Senior Engineer will deliver core
tasks within medium to large projects maintaining his own planning and timing.
Can act as an owner of defined parts of such a project.
PROJECT MANAGER:
Practical knowledge of project management tools and methodologies, skills and
experience in managing IT projects. The Project Manager drives medium to large
projects and will lead a full project team. He/she will hold overall
responsibility for deadlines and financials of the project and be measured on
project on-time and on-budget delivery.
44
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
APPENDIX C: TECHNOLOGY GAPS UPGRADES PROJECTS
TABLE 4: LIST OF PROJECTS
# [**] TOPIC [**] [**]
--------- ---------- -------------- ----------- ---------
1 [**] Backup [**] [**]
2 [**] Backup [**] [**]
3 [**] Backup [**] [**]
4 [**] Backup [**] [**]
5 [**] Backup [**] [**]
6 [**] Backup [**] [**]
7 [**] Backup [**] [**]
8 [**] Backup [**] [**]
9 [**] Backup [**] [**]
10 [**] Backup [**] [**]
11 [**] Backup [**] [**]
12 [**] Backup [**] [**]
13 [**] Backup [**] [**]
14 [**] Backup [**] [**]
45
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
# [**] TOPIC [**] [**]
--------- ---------- -------------- ----------- ---------
15 [**] Backup [**] [**]
16 [**] Computer room [**] [**]
17 [**] Computer room [**] [**]
18 [**] N/A [**] [**]
19 [**] LAN [**] [**]
20 [**] LAN [**] [**]
21 [**] LAN [**] [**]
22 [**] Passive [**] [**]
Network
23 [**] Passive [**] [**]
Network
24 [**] Printer [**] [**]
25 [**] Server Refresh [**] [**]
26 [**] Server Refresh [**] [**]
46
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
# [**] TOPIC [**] [**]
--------- ---------- -------------- ----------- ---------
27 [**] Server Room [**] [**]
Temperature
28 [**] UPS [**] [**]
29 [**] UPS [**] [**]
30 [**] UPS [**] [**]
31 [**] UPS [**] [**]
32 [**] UPS [**] [**]
33 [**] UPS [**] [**]
34 [**] UPS [**] [**]
35 [**] UPS [**] [**]
36 [**] UPS [**] [**]
37 [**] UPS [**] [**]
38 [**] UPS [**] [**]
39 [**] UPS [**] [**]
40 [**] UPS [**] [**]
TOTAL AMOUNT [**]
--------------------------------------------------------------------------------
TECHNOLOGY GAPS UPGRADES PROJECTS FOR USDATA OFFICES WILL BE PROVIDED BY HP-OMS
ACCORDING TO THE STANDARDS DESCRIBED IN EXHIBIT D.
47
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
48
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
APPENDIX D: FINANCIAL RECORDS MANAGEMENT
1. FINANCIAL RECORDS
All Assets (i.e. Leased Add-On Assets, Transition Projects Assets, Refreshed
Assets, and New Customer Employee Assets) will be recorded in HP-OMS'
financial records or it's authorized leasing partner's records according to US
Generally Acceptance Accounting Principles (US GAAP).
All assets will be recoded in separate group of accounts according to the
following groups of assets:
1. Leased Add-On Assets
2. Transition Projects Assets
3. Refreshed Assets
4. New Customer Employee Assets
2. ACCOUNTING PRINCIPLES
All Assets will be recorded in HP-OMS' financial records according to their
fair market value as of the date HP-OMS delivers (or causes to be delivered)
such assets to the applicable Customer Site.
3. DEPRECIATION METHOD; PERIOD OF DEPRECIATION
3.1. Subject to Section 3.2 of this Appendix D, all personal equipment Assets
(e.g., desktops and laptops) will be depreciated according to the straight
line method over a three (3) year period.
3.2. All servers, Unix computer equipment, computer accessories and other
active equipment (e.g. backup systems, network equipment) will be depreciated
according to the straight line method over a four (4) year period.
49
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
3.3. The General Setup Assets will be depreciated according to the straight
line method over a six (6) years period.
50
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
APPENDIX E: LIST OF 12 CUSTOMER ENTITIES TO WHOM HP-OMS WILL PROVIDE INVOICES
The following table details the Customer entities for purposes of dividing the
Quarterly Target Price into ten (10) invoices per section 2.5(INVOICING METHOD)
herein.
Mailing Currency of
Invoice # Entity Name Office Country Address Invoice
--------- ------------------- --------------- --------------- --------------- ---------------
1 TECNOMATIX LTD. Xxxxxxxxx XXXXXX 00 XXXXXXX XXX
XXXXXX
XXXXXXX, 00000
Tecnomatix Northville; MI US
Technologies Inc.
Morgan Hill CA US
Richardson Texas US
Tecnomatix Unicam Portsmouth NH US
Inc.
2 TECNOMATIX Joy en Josses FRANCE 00 XXX XXXXXX Euro
S.A.R.L. (Paris) CALMETTE
ESPACE JOUY
TECHNOLOGIE
78353
JOUY-EN-JOSAS
CEDEX
Tecnomatix A.p.S. Denmark
Tecnomatix Gutenberg Sweden
Technologies
Sweden AB
51
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
Mailing Currency of
Invoice # Entity Name Office Country Address Invoice
--------- ------------------- --------------- --------------- --------------- ---------------
3 NIHON TECNOMATIX Tokyo JAPAN MARUMASU Yen
K.K. KOJIMACHI
XXXX.
0 XXXXXXXXX
0-XXXXX,
XXXXXXX-XX
XXXXX
102-0083T
Seoul KOREA
4 TECNOMATIX UNICAM SINGAPORE 000 XXXXXXXXX Xxxxxxxxx
(XXXXXXXXX) XXX XX Xxxxxx
XXX. #00-00/00 XX
XXXXX
XXXXXXXXX
000000
Tecnomatix Unicam Taipei Taiwan
Taiwan Co., Ltd
Tecnomatix Shenzhen China
Technologies
(Shenzhen) Ltd
Shanghais China
5 Tecnomatix Europe Brussels Belgium Euro
S.A.
Tecnomatix Enschade The Netherlands
Machining
Automation B V
6 Tecnomatix Gmbh Nue-Xxxxxxxx Germany Euro
Stuttgart
Munich
Dueseldorf
52
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
Mailing Currency of
Invoice # Entity Name Office Country Address Invoice
--------- ------------------- --------------- --------------- --------------- ---------------
7 Tecnomatix Turin Italy Euro
Technologies
Italia S.r.l.
Milan Italy
8 Tecnomatix Solihull UK Euro
Technologies Ltd.
Leatherhead UK
9 Tecnomatix Unicam Lindau Germany Euro
Gmbh
Ekental Germany
10 Tecnoamtix Unicam Meylan France Euro
France S.A.
53
PORTIONS OF THIS AGREEMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT FROM THE SEC
PRICING AND PRICING PRINCIPLES FOR TECNOMATIX
("CUSTOMER")
APPENDIX F: MCC GENERAL SETUP COST
TABLE 5: MCC GENERAL SETUP COST INFORMATION
No Item Total Cost Remarks
------------- ----------------------- --------------- --------------------------
1 MCC General Setup costs
1.1 Monitoring system: Including License,
Hardware and implementation
o [**]
1.2 o [**] [**] Including License,
Hardware and implementation
1.3 [**] Including License,
Hardware and implementation
2 o [**] [**] Space, Electricity, Air
Condition, UPS etc.
TOTAL [**]
54
