NOTE: CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FROM THE SECURITIES AND
EXCHANGE COMMISSION FOR PORTIONS OF THIS EXHIBIT.
*** = confidential portion omitted and filed separately with SEC
AMENDMENT TO
LONG TERM SUPPLY AGREEMENT
This Amendment dated as of May 21, 1999 (the "Amendment") amends that
certain Long Term Supply Agreement dated March 19, 1999, by and between
Honeywell, Inc., a Delaware corporation acting on behalf of its various
divisions and subsidiaries (hereinafter collectively referred to as
"Honeywell"), and EFTC Corporation, a Colorado corporation ("EFTC") (the
"Original Supply Agreement"). The Amendment and the Original Supply Agreement
are collectively referred to herein as the "Agreement."
RECITALS
A. Honeywell and EFTC have entered into an Amendment of even date herewith (the
"Amendment to Master Agreement") to the Master Agreement Regarding Asset
Purchase and Related Transactions dated March 19, 1999 (the "Master Agreement").
Pursuant to the Amendment to the Master Agreement, Honeywell has agreed to
transfer to EFTC certain additional intellectual property, assets and employees
relating to the manufacture of electronic assemblies, and EFTC and Honeywell
entered into the Original Supply Agreement providing for the manufacture by EFTC
of electronic assemblies for Honeywell and its affiliated entities.
B. Honeywell and EFTC now wish to amend the Original Supply Agreement to
provide for the manufacture of additional products by EFTC for Honeywell.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements hereinafter set forth, and in consideration of the execution and
performance of the Amendment to Master Agreement, the parties hereto agree as
follows:
1. All capitalized terms used in this Amendment without definition shall have
the meanings ascribed thereto in the Original Supply Agreement. All capitalized
terms used in the Original Supply Agreement without definition shall have the
meanings ascribed thereto in the Master Agreement, as amended. Except as
specifically provided in this Amendment, all other terms and conditions of the
Original Supply Agreement shall remain in full force and effect.
2. An additional ATS Attachment A shall be attached to this Agreement to
add the additional Products to be manufactured under the Agreement, and
the prices for such Products. Prices for the additional Products in ATS
Attachment A shall be effective as of the ATS Inventory Transfer Date
or the Honeymex BCAS Inventory Transfer Date (as those terms are
defined in the Master Agreement, as amended).
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NOTE: Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Omissions are designed as
***. Confidential treatment has been requested with respect to the
omitted portions.
3. Section 4.1 of the Original Supply Agreement is hereby amended to read
in its entirety as follows:
4.1 Payments by Honeywell to EFTC shall be (a) for the calendar
years 1999 and 2000, net thirty (30) days and (b) thereafter,
net forty-five (45) days, in each case measured from Honeywell
receipt of Products (which shall be no earlier than the
delivery date stated in the Purchase Order), with a 2%
discount for payments made within ten (10) business days from
Honeywell's receipt of Products.
4. Section 6.5 is hereby amended to add the following additional sentence
to the end:
In the event that product is returned for rework or
replacement under this Section 6.5, the costs of such reworking or replacement
shall be calculated in the same manner as the costs described in Section 2.3 of
the On-Site Services Agreement, as amended to date.
5. Section 8 of the Original Supply Agreement is hereby amended to add the
following new Section 8.3:
8.3 Honeywell's liabilities under this Section 8 for material
purchases by EFTC in excess of Honeywell's forecasts shall be reviewed at least
quarterly, with more frequent reviews if appropriate. EFTC shall sell to
Honeywell such excess inventory and invoice Honeywell for this excess inventory
after the end of each calendar quarter, and Honeywell shall pay such invoices
within thirty (30) days of receipt thereof.
6. The title of Section 9 of the Original Supply Agreement is hereby
amended to be: "COST CONTAINMENT AND PROFIT SHARING."
7. Section 9.1 of the Original Supply Agreement is hereby amended to read
in its entirety as follows:
9.1 By July 31, 2000, the Parties shall review the Product costs then
in effect, which costs shall serve as a baseline for the discussions of
Product pricing in September 2000. Starting January 1, 2001, EFTC shall
offer *** . By September 30, 2000, the Parties shall mutually agree to
establish the Product price base line that will be used as the basis
for *** . EFTC and Honeywell agree to *** . The Parties will, in good
faith, review and revise as appropriate these commitments every year in
September for the following calendar year.
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NOTE: Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Omissions are designed as
***. Confidential treatment has been requested with respect to the
omitted portions.
8. A new Section 9.3 is hereby added to the end of Section 9:
9.3 For EFTC's fiscal years ending December 31, 2000 and 2001, EFTC
shall pay to Honeywell *** within ten (10)
business days after the filing of EFTC's Form 10-Q Report for that
quarter with the Securities and Exchange Commission (the "SEC") for the
first three quarters of each of EFTC's fiscal year. Within ten (10)
days after the filing with the SEC of EFTC's Form 10-K Report for the
fiscal years ending December 31, 2000 and 2001, EFTC shall pay to
Honeywell any additional amounts due under this Section 9.3 *** as
determined under this Section 9.3. If EFTC has made excess payments to
Honeywell *** Honeywell shall re-pay to EFTC any excess amounts. In
the event that EFTC has not paid *** to Honeywell under this Section
9.3, EFTC shall pay the difference to Honeywell within ten (10) days
after the filing with the SEC of EFTC's Form 10-K Report for the
fiscal year ending December 31, 2001; *** The maximum payments to
Honeywell for fiscal years 2000 and 2001 under this Section 9.3 shall
be ***.
8. The last sentence of Section 31.1 shall be amended to add the following
subsection at the end:
"...and (vii) material price variances (MPV)."
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the day
and year first above written.
HONEYWELL, INC. EFTC CORPORATION
By:/s/ Michael A. Smith By: /s/ Jack Calderon
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Its: President Its: Chief Executive Officer
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