**Exhibit 10.23**

 

**ADVANCED POWER TECHNOLOGY, INC.**

**NORTH AMERICA DISTRIBUTOR AGREEMENT**

 

This Agreement is made this 1st day of August 2002, by and betweenAdvanced Power Technology, Inc., with its principal place of business at 405 S.W. Columbia Street, Bend, Oregon 97702, U.S.A. and Advanced Power TechnologyRF, Inc., with its principle place of business at 3350 Scott Blvd. Bldg 27,Santa Clara, CA U.S.A. and Advanced Power Technology RF, PA with its principleplace of business at 140 Commerce Drive, Montgomeryville PA, U.S.A.(hereinafter and together referred to as “Company”), and RichardsonElectronics. Ltd., a company organized and existing under the laws of Delawarewith its principal place of business at 40W267 Keslinger Road. LaFox IL 60147 (Hereinafterreferred to as “Distributor”).

 

RECITALS

 

A.            Company is engaged inthe business of manufacturing and selling RF transistors and discrete powersemiconductors.

 

B.            Company wishes tosupplement its own sales efforts through the appointment of a non-exclusive andindependent distributor.

 

C.            Distributor wishes toact as a distributor of Company’s products.

 

NOW, THEREFORE, in consideration of the mutual promises, terms,provisions and conditions contained herein, the parties hereto agree asfollows:

 

Section 1.               Appointmentof Distributor.

 

Company hereby appoints Distributor, and Distributor hereby acceptssuch appointment as a non-exclusive and authorized distributor of Companyduring the term of this Agreement for the sale of Company’s Products, asdefined in Section 2.1, from listed locations.

 

Section 2.               Products.

 

2.1.          The products covered bythis Agreement shall be those identified on Exhibit “B,” attached hereto (the “Products”).

 

2.2.          Company may add Productsto, or delete Products from, Exhibit “B” upon written notice to theDistributor.

 

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2.3.          Notwithstanding anythingto the contrary contained herein, Company reserves the right, in its solediscretion and without notice, to modify specifications and characteristics ofits Products, to discontinue the distribution and sale of such Products, and tocancel, modify or condition any right of the Distributor to prevent a violationof law.

 

Section 3.               Obligationsof Distributor.

 

During the term of this Agreement, Distributor shall at all times usebest efforts **and commensurate withDistributor’s overall business** to enhance the image and reputationof Company and the Products which are the subject matter hereof, and agrees:

 

3.1.          Distributor shall notdisclose information of Company considered by Company to be confidential orproprietary including, but not limited to, customer and price lists and dataregarding the design or methods of manufacture of the Products and will not useany such information except as contemplated by this Agreement. Such informationwill be appropriately marked or identified by Company and the obligation ofDistributor not to disclose or improperly use such information will survive thetermination of this Agreement. Upon the termination of this Agreement or theearlier request of Company, all such information will be promptly returned toCompany. The restrictions of this Section 3.1 are in addition to any otheragreement between the parties with respect to the protection and use ofinformation. **All confidential informationsupplied to Company (including, without limit, customer names and data) byDistributor shall remain Distributor’s property and shall not be disclosed byCompany or used to Distributor’s detriment.**

 

3.2.          Distributor agrees thatthey will comply with all applicable federal, state, and local laws orregulations in performing any act arising out of or in connection with this Agreement.Distributor agrees to maintain such records as are required by all applicablelaws and regulations and this Agreement and to promptly provide such records orwritten assurances as may be required by Company in connection therewith.

 

The parties agree that each will use its best efforts to secure anylicenses or permits as may now or hereafter be required in connection with theperformance of its obligations under this Agreement, but this Agreement shallnot be deemed to require any performance on the part of either party whichcannot lawfully be done pursuant to the laws and regulations referred to above.

 

3.3.          Distributor shall sellonly Company’s Products that bear Company’s markings or trademarks and will notalter, modify or in any way change the Products, marking or trademarks thereonwithout prior written approval of Company.

 

3.4.          Distributor shall offerand sell Products only in accordance with specifications and warranty schedulesprovided by Company.

 

3.5.          Distributor shallprovide Company by the 15th day of each month a report detailing the totalsales and inventory levels of the Products for the prior month.

 

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3.6.          Distributor shall useits best efforts to actively promote the sale of the Products to customers inits territory, **commensurate with its overallbusiness**. Such efforts shall include, but not be limited to,promptly servicing all customer accounts, soliciting new customer accounts, andcooperating and participating in Company’s advertising and sales promotionalprograms.

 

3.7.          Distributor shallprovide and maintain, without expense to Company, a suitable place of businesswith adequate facilities and sufficient personnel for the sale and distributionof the Products and to fulfill all other additional objectives agreed to inwriting by Company and Distributor.

 

3.8.          Distributor shall payall fees, taxes and duties, which may be imposed on the Products purchased byDistributor. To the extent that Company must pay any fees, taxes or duties onProducts sold to Distributor, Distributor shall promptly reimburse Company.

 

3.9.          Distributor shallrefrain from any activities which are illegal, unethical, or which might damageCompany’s reputation..;

 

3.10.        Distributor shall fullycomply with all agreements with Company, including without limitation, theobligations to pay amounts due when due.

 

3.11.        Distributor shall use itsbest efforts to consolidate purchase orders to promote efficiency and reducesupporting documentation.

 

Section 4.               Obligationsof Company.

 

4.1.          Company, in its solediscretion, shall maintain the necessary personnel needed to fulfill the agreedupon sales objectives of Company and Distributor.

 

4.2.          Company shall use itsbest efforts to manufacture sufficient quantities of Products to meet therequirements of Distributor. Company shall consult with Distributor regardinginventory levels, and shall advise Distributor of promotional efforts toincrease the sale of Products.

 

4.3.          Company shall subjectall Products delivered to Distributor to its usual standards of quality controland inspection and all Products sold or delivered under this Agreement shall besubject to the limited warranty set forth in paragraph 17 below.

 

Section 5.               Deliveries

 

5.1.          All deliveries ofProducts by Company pursuant to this Agreement will be made F.O.B. Bend,Oregon. Products will be consigned to carriers for shipment to Distributor,however, upon the written approval of Company and Distributor, Company willconsign Products to carriers for shipment directly to Distributor’s customers.

 

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5.2.          Minimum orderquantities: The minimum order quantities for all products shall be the standardminimum order quantities in effect at the time of acceptance by Company fromthe Distributor.

 

Section 6.               Titleand Risk of Loss.

 

Title to and risk of loss of Products sold hereunder shall pass to theDistributor upon delivery to the carrier at the F.O.B. point.

 

Section 7.               Price.

 

Company agrees to sell the Products to Distributor at the prices setforth in the published Distributor Cost and Price Schedule. All prices aresubject to change by Company at any time upon written notice to Distributor.

 

7.1.          If the price for anyProduct is increased prior to full shipment of any Order, the price charged toDistributor will be that in effect at the time of Company’s acceptance ofDistributor’s Order. If the price for any Product is decreased, all Productsshipped on or after the effective date of any price decrease will be shippedand invoiced at the price in effect at the time of shipment.

 

7.2.          In order to assistDistributor in competitive markets, Company will, under certain limitedcircumstances, adjust the effective price of the Products to Distributor. Theunit price of any Product(s) as set forth in Exhibit “B” shall be ultimatelyadjusted pursuant to the following procedure: Distributor must contact Company,or Company’s local representative, and provide to the same the customer’s name,Company part number, quantity, delivery schedule, price per unit requested byDistributor, resale price per unit to customer and competitive productsavailable in the market. Upon acceptance by Company of the information andapproval of Distributor’s request for a price reduction, Company or Company’slocal representative shall provide Distributor with the Company’s authorized “shipand debit” price per unit for the particular order and the Company’sauthorization number. Within 30 days from the invoice date to Distributor’scustomer, Distributor shall provide Company with a copy of the invoice, or asubstitute deemed acceptable by Company, and a debit memorandum with Company’sauthorization number to obtain a credit. Upon Company’s request, Distributorshall produce for inspection the original invoice. Upon satisfaction of theconditions set forth above, Company shall issue to Distributor, within 30 daysof receipt of the supporting documentation set forth above, a credit. A creditwill only be issued for those amounts authorized.

 

Section 8.               Payments.

 

Payment for Products delivered to Distributor shall be in United Statesdollars and is due within [ * ] days of invoice date.

 

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Section 9.               Cancellationof Order.

 

9.1.          In the event Distributorcancels an Order for any customized Product which has been accepted by Company,Distributor shall pay Company for all direct and indirect costs incurred byCompany as a result of such cancellation.

 

9.2.          Distributor may reschedule deliverydates of product on order by written request to Company; provided, however,that no such changes shall be allowed within thirty (30) days of first factorypromise date.

 

9.3.          Distributor may cancelstandard product by written notice to Company; provided, however, that noorders may be canceled within thirty (30) days of first factory promise date.

 

Section 10.             ExcusableDelays and Failures (Force Majeure)

 

Company shall be excused for delays in performing and failures toperform pursuant to this Agreement and to any Order issued hereunder to theextent that any such delay or failure results from any cause beyond itscontrol, including, solely by way of example and without limitation, delayscaused by Distributor or a third party, acts of God, strikes, and other labordisputes, government regulations, public disorders, international disputes,inability to obtain or shortage of any material used in the manufacture orshipping and delivery of the Products, transportation or trade embargoes,customs restrictions, and catastrophes of nature, fire and explosion, whetherany such cause affects Company, any supplier or provider of service to Company.Company agrees to exert reasonable effort to prevent such occurrences from affectingits performance hereunder. Company shall not be liable for damages, general,specific or otherwise resulting from such excusable delays and failures.

 

Section 11.             Inventory.

 

11.1.        Distributor shall maintaina minimum level of inventory of Products. The level of inventory shall beestablished by Company and adjusted from time to time as market conditionswarrant. Company retains the right to inspect Distributor’s inventory at anytime.

 

11.2.        In the event of a decreasein the price of any of Company’s Products, Distributor shall be entitled,within thirty (30) days following such decrease, to apply for a credit in anamount equal to the difference in the price of the Product(s) excludingtransportation charges, duties and taxes) before and after such decrease on theunsold Product(s) in Distributor’s inventory and/or the affected Product(s) intransit to Distributor. This credit shall be calculated upon receipt of anitemized inventory from Distributor and shall be applied against future Ordersfrom Distributor. Company will have the right to inspect the inventory subjectto the credit and all records relating thereto.

 

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Section 12.             Returns.

 

12.1.        Company will acceptreturned Products only if such return is made in accordance with Company’scurrent procedures which are set forth in this Section 12. Companyreserves the right to unilaterally change these procedures, such changes willbecome effective upon reasonable notice to Distributor.

 

12.2.       [ * ]

 

12.3.        Company shall giveDistributor written notice of the discontinuance of any Product. Within 30 daysof receipt of such notice, Distributor shall notify Company in writing of itsintention to return discontinued Products for credit. On receipt of suchProduct in a condition acceptable to Company, freight prepaid by Distributor,Company shall issue a credit to Distributor.

 

12.4.        Distributor is authorizedto return slow-moving items for exchange in only the months of January andJuly. All such returns shall require Company’s prior written authorization andthe return material authorization number given with such prior writtenauthorization, and a dollar for dollar offsetting order is received, and shallbe limited to five percent (5%) of the U.S. dollar amount (excluding costsassociated with shipping, handling, duties and taxes) of standard purchases ofProduct over the prior six months. All returned material must be returned in acondition acceptable to Company.

 

Section 13.             Advertising.

 

13.1.        Company and Distributorshall jointly agree from time to time on advertising programs and other formsof promotion of the Products in the Territory. Company shall share suchexpenses equally with Distributor; provided, however, Company’s share of suchexpenses shall not exceed [ * ] of Company’s prior 12 month’s sales toDistributor.

 

13.2.        Company shall provideDistributor reasonable quantities of its Product catalogs, data sheets andother promotional material free of charge. Additional quantities of any suchmaterial requested by Distributor shall also be supplied free of charge, F.O.B.point of origin.

 

13.3. Distributor may conduct advertisingprograms other than those programs undertaken with Company provided Distributorobtains Company’s approval of all aspects of the advertising program.Distributor shall refrain from making any representations or claims concerningthe Products, which are inconsistent or exceed Company’s writtenrepresentations.

 

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Section 14.             Duration and Termination.

 

14.1.        Unless terminated asprovided for herein, this Agreement shall continue in force for one year fromthe date first above mentioned. This agreement shall continue thereafter unlesseither party gives written notice to the other party of its intention to terminatethe agreement, giving at least thirty (30) days written notice.

 

14.2.        If either party commits amaterial breach of this Agreement or becomes insolvent or bankrupt, or admitsin writing its inability to pay its debts as they mature, or makes anassignment for the benefit of creditors, or ceases to function as a goingconcern or to conduct its operations in the normal course of business, theother party shall have the right to cancel this Agreement by giving immediatewritten notice of its election to do so.

 

14.3.        Upon expiration or terminationof this Agreement by Distributor, Distributor will return to Company at suchplace as Company may designate, all promotional materials, which had originallybeen furnished by Company to Distributor. Distributor shall be responsible forall return charges. Upon expiration or termination of this Agreement byCompany, Company shall be responsible for all return charges.

 

14.4.        Company and Distributoragree that upon the expiration or termination of this Agreement, neither partyshall be liable to the other for any damages, expenditures, loss of profits orprospective profits of any kind or nature sustained or arising out of, oralleged to have been sustained or to have arisen out of, such termination. Theexpiration or termination of this Agreement shall not, however, release eitherparty from making payments; which may be owing to either party under the termsof this Agreement.

 

14.5.        Upon termination orexpiration of this Agreement by Company, Company will accept, within 30 daysafter effective date of termination or expiration, the Distributor’s stockinventory valued at the effective Distributor cost as of the date of terminationor expiration or at Distributor’s acquisition price, whichever is lower. Upontermination or expiration of this agreement by Distributor, Company will havethe option of accepting the Distributor stock inventory valued at the effectiveDistributor cost as of the date of termination or at Distributor acquisitionprice, whichever is lower. Company will not accept stock inventory not returnedwithin the 30-day period. This reacquisition formula applies only to theProducts shipped by Company to Distributor within one year of the date of terminationor expiration of the Agreement. For Products which are custom Products, Companymay repurchase such items at prices within its sole discretion. Productsspecially prepared by Company to Distributor’s specifications will not berepurchased.

 

14.6.        In event of termination ofthis Agreement for any reason, Company shall not be liable to the Distributoror any employee or agent of the Distributor for compensation, reimbursement ordamages on account of the loss of prospective profits or anticipated sales oron account of expenditures, investments, leases or commitments in connectionwith the business or goodwill of the Distributor or for any reason arising outof such termination. The Distributor hereby waives any and all rights it mighthave to compensation upon termination of this agreement pursuant to the localand national laws of any country within the territory and hereby agrees toindemnify Company and hold harmless from any and all claims of its employees or

 

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subcontractorsfor similar compensation or for severance, liability or other pay.

 

Section 15.             RelationshipBetween Parties.

 

15.1.        This Agreement does notcreate an employer-employee relationship between Company and Distributor, or ajoint venture or partnership. The relationship between Company and Distributorshall be that of seller and buyer and in such relationship Distributor shall bean independent contractor and shall have no authority to act for or to bind Companyin any matter. Distributor agrees to hold Company harmless from all claims,actions or judgments arising from acts or omissions of Distributor, its agentsor employees.

 

15.2.        Company shall indemnify,protect and save harmless Distributor from and against all claims, demands andproceedings, actions, liabilities and costs resulting from any actual oralleged infringement of any patent, industrial and commercial property rightsof third parties related to the Products **orfrom Company’s failure to comply with all applicable federal, state and locallaws and regulations or from acts or omissions of Company, its agents oremployees.**

 

Section 16.             ExportControls.

 

Distributor acknowledges that exportation of the Products may besubject to compliance with various United States Export Administration Acts andthe rules and regulations promulgated from time to time thereunder, whichrestrict the export and re-export of certain products, technical data anddirect products of technical data. Distributor agrees to comply with suchUnited States export control laws, rules and regulations and all otherapplicable laws and governmental regulations, domestic, foreign and local.

 

Section 17.             Warranty

 

17.1         Products sold pursuanthereto are covered by Company’s standard warranty in effect as set forth in theCompany sales contract under which the Products are sold provided that Company’sobligations under such warranty are limited to, and shall not run beyond, thewarranty period provided from the date of Company’s shipment of the Products,except where specific customer or user requirements are agreed to by Company inwriting. Company shall have no liability to Distributor or to the customer oruser with respect to any alleged defective Products sold by Company except asspecifically set forth in Company’s warranty, if any, included as part of theterms and conditions of the sale made by Company. Distributor shall have noauthority to and shall not make any warranty representation with respect to theProducts contrary to or inconsistent with Company’s warranty.

 

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17.2         The products are notauthorized for use as critical components of life support systems. A criticalcomponent is any component of a life support device or system whose failure toperform may be expected to cause the failure of the life support device or toaffect its safety or effectiveness.

 

Section 18.             Miscellaneous.

 

18.1.        This Agreement does notconvey, nor shall Distributor claim any title or property interest in Company’strademarks, trade names, copyrights, patents or other such property so markedby Company. Distributor acknowledges ownership by Company of trademarks, names,copyrights, patents and other such property so marked by Company, so identifiedor so identifiable.

 

18.2.        Distributor shall notdelegate any duties or assign any rights under this Agreement or any interestherein without Company’s prior written consent.

 

18.3.        The validity, meaningenforceability and effect of this Agreement, and the rights and liabilities ofthe parties, shall be determined in accordance with the laws of the State ofOregon.

 

18.4.        Except as specificallyprovided in a written waiver signed by a duly authorized officer of the partyor the party seeking enforcement, the failure to enforce or the waiver of anyterm of this Agreement shall not constitute the waiver of such term at any timeor in any circumstance and shall not give rise to any restriction on orcondition to the prompt, full and strict enforcement of the terms of thisAgreement.

 

18.5.        All notices in connectionwith this Agreement shall be in writing and shall be effective upon dispatch ifby telex, telegram or similar means, upon delivery if by hand delivery, and 3days after deposit if deposited in the channels of the United States mails,postage prepaid, in registered form, return receipt requested. In all casesnotices shall be delivered to the other party at the address set forth above orsuch other address such party may have provided by written notice.

 

18.6.        This Agreement, includingany exhibits, schedules and tables attached hereto which either have beenspecifically referred to herein or have been initialed by the parties,constitute the entire agreement between the parties with respect to the subjectmatter. This Agreement supersedes all prior discussions, understandings andagreements with respect to the subject matter.

 

18.7.        This Agreement may beamended or supplemented only in writing designated as such an amendment orsupplement and signed by a duly authorized officer of the party or the partyagainst whom enforcement is sought.

 

18.8.        This Agreement may beexecuted in two or more counterparts, each of which shall be deemed an originaland all of which together shall constitute one and the same Agreement.

 

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18.9.        If any provisions of thisAgreement shall be held by a court of competent jurisdiction to be invalid, theremaining provisions of this Agreement shall remain in full force and effect.

 

Section 19.             Compliancewith Law.

 

19.1         Distributor agrees thatit will not violate any applicable law or regulation of any country orpolitical subdivision thereof in performing or purporting to perform any actarising out of or in connection with this Agreement. Pursuant thereto,Distributor agrees to maintain such records as are required by all applicablelaws and regulations and to provide such written assurances as are required byCompany in connection therewith.

 

19.2         This Agreement is subjectto all applicable laws, regulations and other statutory and administrativeacts, now or hereafter in effect of the United States and the Territory. TheDistributor agrees that it will use its best efforts to secure any licenses orpermits as may now or hereafter be required in connection with the performanceof its obligations under this Agreement, but this Agreement shall not be deemedto require any performance on the part of either party which cannot lawfully bedone pursuant to the laws, regulations and statutory and administrative actsreferred to above.

 

IN WITNESS WHEREOF, the undersigned, being duly authorized, haveexecuted this Agreement in duplicate as of the day and year first abovewritten.

 

 
| Company: | Distributor:                  |
|----------|-------------------------------|
|     |                          |
|     | Richardson  Electronics, Ltd. |
|     |                          |
|     |                          |
| By       |                          |   | By |   |   |
|     |                          |
| Its:     | President,  CEO               | Its: |   |   |
|     |                          |
| Date     |                          |   | Date |   |   |
|          |                               |  |  |  |  |  |  |  |  |

 

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**EXHIBIT A**

**AUTHORIZED LOCATIONS**

 

 

**All Locations Worldwide**

 

 
| Company: | Distributor:                  |
|----------|-------------------------------|
|     |                          |
|     | Richardson  Electronics, Ltd. |
|     |                          |
|     |                          |
| By       |                          |   | By |   |   |
|     |                          |
| Its:     | President,  CEO               | Its: |   |   |
|     |                          |
| Date     |                          |   | Date |   |   |
|          |                               |  |  |  |  |  |  |  |  |

 

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**EXHIBIT B**

 

Products

 

 

ALL STANDARDAND CUSTOM DISCRETE POWER PRODUCTS OFFERED BY THE BEND OREGON LOCATION

 

ALL STANDARDAND CUSTOM ASPM PRODUCTS OFFERED BY THE ADVANCED POWER TECHNOLOGY EUROPELOCATION

 

ALL RFPRODUCTS OFFERED BY THE SANTA CLARA CA AND MONTGOMERYVILLE PA LOCATIONS

 

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**ADDENDUM 1**

 

Section 9.2             Distributormay reschedule delivery dates of product on order by written request toCompany; provided, however, that no such changes shall be allowed within thirty(30) days for Advanced Power Technology, Inc., Bend, Oregon, and sixty (60)days for Advanced Power Technology, RF, Santa Clara, CA and Montgomeryville, PA of first factory promise date.

 

 
| Company: | Distributor:    |
|----------|-----------------|
|     |            |
|     |            |
| By       |            |   | By |   |   |
|     |            |
| Its:     | President,  CEO | Its: |   |   |
|     |            |
| Date     |            |   | Date |   |   |
|          |                 |  |  |  |  |  |  |  |  |

 

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