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SUPPLY CONTRACT
Advanced Power Technology intends to secure silicon wafers for the manufacture
of power switch devices. Wacker Siltronic Corporation manufactures silicon
wafers and intends to supply this material. Set forth is the "Silicon Supply
Agreement" between Advanced Power Technology (APT) located in Bend, OR and
Wacker Siltronic Corporation (WSC) located in Portland, OR.
1.0 Term of Agreement
1.1 Two (2) year agreement commencing January 01, 1999 and expiring on
December 31, 2000.
1.2 Renegotiating discussions will commence each September of the final
year for an extension of an additional year.
1.3 Cause for early termination of this agreement would be for
non-performance by WSC and/or APT, including but not limiting
non-payment by APT.
2.0 Volume
2.1 WSC will be given a [ * ] minimum member share of APT's [ * ]
business per year.
2.2 Should it become necessary, WSC agrees to support [ * ] of APT's
requirements.
3.0 Pricing
3.1 Pricing is set forth below:
1999 = [ * ]
2000 = [ * ]
See attachment # 1
3.2 WSC and APT agree, through a committed effort to come up with [ * ]
through a joint
"Reduction of WSC Production Costs" project in 1999.
[ * ] . A list of ideas will be
discussed between APT and WSC by the end of March 1999.
3.3 Where possible, WSC will "help" keep APT competitive in both price and
technology through cost reduction programs and technology
improvements.
[*] = Material has been omitted pursuant to a request for confidential
treatment, and such material has been filed separately with the SEC.
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4.0 Payment and Freight Terms
4.1 Net [ * ] from date of WSC invoice. Currency in US dollars.
4.2 F.O.B. Wacker Siltronic Corporation, Portland, OR, freight collect.
Freight carrier as specified by APT.
4.3 Freight costs for expedited shipments, if requested by APT, will be
the responsibility of APT. WSC will incur all expedited freight costs
for late shipments caused by WSC.
5.0 Substrate Buffer Stock
5.1 WSC agrees to maintain a three week inventory equivalent to APT's
consumption of one common substrate. This substrate inventory will be
maintained in Portland.
5.2 WSC agrees to replenish the Substrate Buffer Stock within four weeks.
6.0 Lead-time
6.1 WSC will commit to a three week lead-time provided the forecast is not
increased more than [ * ] in the same lead-time period and that it
is a current product.
6.2 APT agrees to give WSC a five week "rolling forecast". The first will
be firm, the second and third week may change [ * ], the fourth week
may change [ * ] and the fifth week may change [ * ].
6.3 APT agrees to give WSC an additional eight week visibility beyond the
five week "rolling forecast".
6.4 Releases for weeks one through three will be by product and for weeks
four through thirteen, it will be by total only.
See attachment # 2 for 6.2, 6.3, 6.4
7.0 Quality
7.1 WSC warrants that their products shall, at the time of delivery, be in
compliance with approved APT specifications as agreed by both parties.
8.0 Engineering Services
8.1 A determination of cost benefit, if any, and ownership will be agreed
upon prior to any new activities in the "Reduction of WSC Production
Cost" project.
[*] = Material has been omitted pursuant to a request for confidential
treatment, and such material has been filed separately with the SEC.
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8.2 WSC agrees to support engineering work involved with new products and
work to meet the stringent specification requirements of those and
current products.
9.0 Confidentiality
9.1 APT and WSC agree to keep secret such information and to take the
necessary measures to prevent complete or partial disclosure to third
parties.
10.0 Force Majeure
10.1 Pertaining to Force Majeure, APT and/or WSC shall promptly notify
the other party and shall use its best efforts to minimize the
consequences. For the duration and to the extent of Force Majeure the
parties will be released from their obligations.
11.0 Indemnification
11.1 WSC's obligation to payment of damages, for whatever reason, shall
be limited to the invoice value of the wafers directly having caused
those damages.
12.0 Sole Agreement
12.1 This Supply Agreement including all attachments referenced herein,
shall be the complete agreement of both APT and WSC and shall
supersede all prior agreements and understanding, oral or written,
between the parties respecting the subject matter hereof. Any
amendments to this Agreement shall be implemented by written amendment
signed by authorized representatives of APT and WSC.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written, accepted and agreed:
WACKER SILTRONIC CORPORATION ADVANCED POWER TECHNOLOGY
By: S/S By: S/S
---------------------------- ----------------------------
Title: Account Manager Title: C.E.O.
------------------------- -------------------------
Date: 12/17/98 Date: 12/17/98
-------------------------- --------------------------
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ATTACHMENT #1
PRICING
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PART NUMBER 1010-H 1020-I 1030-H 1040-I 1050-P 1060-M 1080-J 1100-K 1106-D 1120-E 1126-
1998 Price [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
1999 Price [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
2000 Price [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ] [ * ]
</TABLE>
[*] = Material has been omitted pursuant to a request for confidential
treatment, and such material has been filed separately with the SEC.
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