Master Agreement For Manufacturing Services

SANMINA CORPORATION,
EVANS & SUTHERLAND COMPUTER CORPORATION
MASTER AGREEMENT FOR
ELECTRONIC MANUFACTURING SERVICES


This Master Agreement for Electronic Manufacturing Services (the "Agreement") is made and entered into effective as of June 3, 1999, by and between Sanmina Corporation, a Delaware corporation ("Sanmina") and Evans & Sutherland Computer Corporation, a Utah Corporation ("Customer" or "E&S").


RECITALS


Sanmina and E&S have entered into an Asset Purchase Agreement dated concurrently with the date of this Agreement (the "Purchase Agreement"), pursuant to which Sanmina is acquiring certain assets associated with E&S' Salt Lake City, Utah prototype, printed circuit board and other electronic assemblies manufacturing operation (the "Electronics Manufacturing Operation"). In connection with the execution and performance of the Purchase Agreement, and as a condition and inducement to the parties' undertakings therein, this Agreement is being executed to provide for a continuing relationship between Sanmina and E&S, pursuant to which Sanmina will perform manufacturing services for E&S, upon the terms and conditions set forth herein.


AGREEMENT


I. Manufacturing Services to be Performed


A. Products. The products covered by this Agreement (collectively the
"Products") are those electronic products and assemblies, including
printed circuit boards, prototypes and Legacy Products (as defined
below) which Customer may desire to have Sanmina manufacture for
Customer during the term of this Agreement. "Legacy Products" means
those electronics products, boards and assemblies having no
identifiable, forecastable demand (i.e., driven solely by discreet
orders) which were previously produced at the Electronics
Manufacturing Operation, for which Customer may need replacements or
additional inventory.


B. Manufacturing Services. During the term of this Agreement, and in
accordance with the provisions hereof, Sanmina will manufacture and
sell Products to Customer.


C. Scope of Agreement. All manufacturing and sales of Products by
Sanmina, its subsidiaries and affiliates (collectively referred
hereinafter as "Sanmina") for and to Customer during the term of this
Agreement shall be governed by and subject to the terms and conditions
of this Agreement.


II. Orders and Acceptances for Products


A. Purchase Orders and Acceptances. Customer will purchase Products by
issuing purchase orders ("Order" or "Orders") to Sanmina. Orders will
contain such things as quantity, prices, specified delivery dates,
specifications, and Product number or designation, consistent with the
terms of this Agreement. Repeat Orders for Products may initially be
placed by electronic transmission, provided that Customer will make
commercially reasonable efforts to send a confirmational written Order
to Sanmina (except as otherwise agreed) within one week after the
electronic order. Blanket Orders may be placed, with subsequent
electronic or written instructions to authorize shipment and delivery
of Products, up to the maximum quantities covered by the blanket
Orders. Sanmina will sign and return written confirmation of each
Order within five business days after receipt. All Orders and
acceptances relating to Products will be governed by the terms of this
Agreement, and nothing contained in any Order or acceptance will in
any way modify the terms or conditions of this Agreement, unless
expressly agreed to in writing by Sanmina and Customer. Sanmina and
Customer hereby give notice of their objection to any additional or
different terms.


B. Placement of Orders; Delivery of Forecasts. Upon execution of this
Agreement, Customer will submit an Order for Products deliverable over
the first three months of the term of this Agreement. Thereafter,
Customer will provide Orders to Sanmina on a monthly basis, including
orders for Products to be delivered in the third month following the
date of the Order, resulting in a rolling three month period covered
by Orders. Upon execution of this Agreement, and on a monthly basis
thereafter, concurrently with the submission of the monthly Orders
referenced above, Customer will provide a rolling nine month forecast
of Customer's anticipated Product purchases, for the nine month period
immediately following the three month period covered by submitted
Orders. Obligations to purchase Products, and any liability of the
parties with respect to anticipated Product requirements, will arise
only as actual Orders are submitted to Sanmina, with the sole
exception that with respect to any long lead-time parts for which a
forecast would cause procurement activity as provided herein, Customer
shall have those obligations set forth in Section III below. Actual
Orders may be different from forecasted numbers. Orders may be
submitted other than at the monthly intervals provided above,
consistent with the terms of this Agreement. Where appropriate,
Customer will level load requirements for certain Products in order to
provide a steady flow of Product to Customer and a steady production
schedule for Sanmina. Sanmina will review forecasts provided by
Customer and advise Customer if Sanmina anticipates that it will be
unable to achieve the Product volumes reflected in such forecasts.


C. Acceptance of Orders. Sanmina will accept all orders for Products
submitted by Customer in accordance with the terms and conditions of
this Agreement up to the greater of (i) 125% of the amount specified
in the forecast delivered in the preceding month with respect to the
period covered by such Orders, or (ii) the amount of Products for
which Sanmina has purchased Materials, as provided herein. Sanmina
will use its reasonable best efforts to accept Orders submitted by
Customer for Products in excess of the committed volume levels. Orders
submitted in excess of the committed quantity levels that Sanmina is
unable to accept must be rejected within five business days after
receipt by Sanmina.


III. Materials Planning, Procurement Process and Liabilities


A. Master Production Schedule. Based on the Orders and forecasts received
from Customer as provided above, Sanmina will on a monthly basis
generate a Master Production Schedule ("MPS") for a rolling twelve
month period. This MPS will define the master plan on which Sanmina
will base its procurement, internal capacity projections and
commitments. The MPS created as described above will not impose any
liability on either Sanmina or Customer, except that with respect to
any long lead-time parts and that portion of the MPS related to firm
orders as described in Section II paragraph B of this document, for
which the MPS would cause procurement activity as provided herein,
Customer shall have those obligations set forth in this Section III.


B. Material Procurement Schedule. Sanmina will process the MPS through
industry-standard MRP software that will convert the MPS reflecting
Customer's Orders and forecasts into requirements for components
utilized to make the applicable Products. In doing so, Sanmina will
off-set the requirements for receipt of components or materials by
allowing for the time required to build the Products per the following
times:


1. In-Circuit Test/Functional Test - 5 Working Days
2. Assembly - 7 Working Days
3. Kitting - 2 Working Days
4. Material Handling - 2 Working Days


Per this Agreement, Sanmina will plan and schedule material to be at
Sanmina eleven working days before the Products are due to ship to
Customer where no test is required, and sixteen working days before
the Products are due to ship to Customer where testing is required.


C. Sanmina Orders for Materials. Sanmina will release (launch) orders to
suppliers of materials required in connection with the production of
Products a reasonable period of time prior to the anticipated date
that the material is needed (as set forth in the preceding paragraph).
When these orders are launched will depend on the vendor lead time
determined by Sanmina from time to time and maintained as a parameter
of Sanmina's manufacturing or materials planning systems. Sanmina,
through its MRP system, will also issue an instruction ("MRP signal")
to its procurement group to buy a part approximately seven days before
the order is due to be placed in accordance with this paragraph.
Unless otherwise directed by Customer, Sanmina will purchase
components for Products in accordance with a vendor list approved by
Sanmina and Customer ("AVL"). In the event Sanmina for any reason
cannot purchase any components from an approved vendor named on the
AVL, Sanmina may purchase such components from an alternate vendor
with the prior written consent of Customer. In no event will Sanmina,
without the prior written consent of Customer, be authorized to
purchase (or to impose obligations on Customer with respect to,
pursuant to Section III of this Agreement), materials, parts and
components beyond those necessary to support Orders actually delivered
by Customer, with the exception of minimum quantity requirements
imposed by vendors for parts being procured by Sanmina for Customer,
and any anticipated Orders for the next 30 day period, as reflected in
any forecasts delivered by Customer to Sanmina. Proto-type and
Quick-turn Orders will not appear on the MPS, but will be managed on a
manual basis due to the critical time factor and lot size of these
orders. Customer agrees that it will be liable for all materials ,
including minimum purchase requirements, purchased for any Quick-turn
or Proto-Type Order that Customer places with Sanmina.


D. Materials Classifications and Periods of Supply. When Sanmina places
an order with its suppliers in accordance with the preceding
paragraph, Sanmina will order parts in various quantities (defined in
periods-worth-of-supply) that are defined by the part's ABC
classification. This classification, as well as the expected
distribution or characteristics of various classes of parts, and the
periods-worth-of-supply ("Periods-of-Supply") that will be bought for
each class of part, are shown on the following table:


ABC Classifications, Descriptions and Periods-of-Supply - --------------------------- -------------------------- -------------------------- --------------------------
Part Class Expected Expected Periods Worth of
Percentage of Total Percentage of Total Supply to be Bought
Parts Value (of Gross With Each Order
Requirements)


A 3% 80% 4 Weeks - --------------------------- -------------------------- -------------------------- --------------------------
B 17% 17% 3 Months - --------------------------- -------------------------- -------------------------- --------------------------
C 80% 3% 12 Months - --------------------------- -------------------------- -------------------------- --------------------------


E. Materials Quantities Criteria. In addition to ordering parts for
various Periods-of-Supply as referenced above, Sanmina will order
parts according to appropriate minimum-buy quantities, tape and reel
quantities, and multiples of packaging quantities.


F. Customer Liability for Materials. In the event that Sanmina procures
(other than pursuant to the terms of the Purchase Agreement)
components, parts or materials unique to, and specifically for use in,
Products ordered or forecasted by Customer (collectively "Materials"),
consistent with the procurement procedures set forth above, and any
such Materials become obsolete or surplus to Customer, so as to be
unusable in current Orders for Products from Customer, then Sanmina
will provide to Customer prompt notice of such obsolescence/surplus,
and the potential cost to Customer hereunder as a result of such
obsolescence or surplus. Sanmina shall use its reasonable best efforts
(for a period of at least four weeks) to cancel any outstanding orders
for any such Materials, use excess/uncancelable Materials for the
manufacture of products for other customers, and return such Materials
back to the original supplier or sell such Materials to the original
supplier or a third party at the original purchase price, or on such
other terms as Supplier and Customer may agree upon. After the
exhaustion of such remedies, Sanmina will be entitled to: (a) sell to
Customer any remaining obsolescent/surplus Materials, at an amount
equal to 116% of Sanmina's out-of-pocket costs therefor (the
"Materials Transfer Price"); and (b) invoice Customer for (i) the
amount by which the Materials Transfer Price for any such Materials
which Sanmina was able to sell to third parties as provided above
exceeded the price obtained from such third parties with respect
thereto, and (ii) the amount of any re-stocking or other fees charged
to Sanmina with respect to any order cancellations and returns of
obsolete/surplus Materials. Customer's obligations with respect to
obsolete/surplus Materials as set forth herein shall not extend to any
materials acquired by Sanmina pursuant to the terms of the Purchase
Agreement. Customer's only obligations with respect to such Materials
shall be as set forth in the Purchase Agreement.


G. Acquisition of Tooling. If necessary and with the Customer's written
consent, Sanmina will acquire any necessary tools and tooling to
fulfill any Orders. All such tooling required by Sanmina shall remain
the Customer's property, and Sanmina shall return such tooling (normal
wear and tear excepted) to Customer upon request, following the
completion of the relevant Order ...