Exhibit 10.38


 


MANUFACTURING SERVICES
AGREEMENT


(hereafter MSA)


 


	
  Advanced Power Technology

  	
   

  	
  Semiconductor Assembler &
  Manufacturer Sdn Bhd

  
	
  140 Commerce Drive

  	
   

  	
  PT 2108 & 2109, Sri Senawang Light

  
	
  Montgomeryville, PA 18936

  	
   

  	
  Industries Centre,

  
	
   

  	
   

  	
  Jalan Tampin, 70450 Seremban, N.S.

  
	
  Tel: 215-631-9840

  	
   

  	
  Tel: 606-6777778

  
	
  Fax: 215-631-9855

  	
   

  	
  Fax: 606-6777773

  
	
  E-Mail:
  csrfpa@Advancedpower.com

  	
   

  	
  E-Mail:
  info@semiconductor.com.my

  
	
   

  	
   

  	
   

  
	
  (hereafter BUYER)

  	
   

  	
  (hereafter SELLER)

  



 


This Agreement by and between Advanced Power
Technology, and Semiconductor Assembler and Manufacturer, shall have an
Effective Date of 11/1/05,


 


and defines the basic considerations under which business will be
conducted between the parties.


 


WHEREAS, BUYER may from time to time desire
SELLER to perform certain assembly and other services for BUYER pursuant to the
terms and conditions of this Agreement; and


 


WHEREAS, SELLER desires to perform such
assembly and other services for BUYER pursuant to the terms and conditions of
this Agreement;


 


NOW THEREFORE, in consideration of the
premises and mutual promises contained herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound, BUYER and SELLER hereby agree as follows:


 


1.                                       PURPOSE
/ TERM


 


This Agreement shall apply to all orders for
assembly and other services to be provided by SELLER to BUYER from the
Effective Date hereof until December 31, 2006, unless otherwise terminated
as provided herein.  Unless notice of
termination is given by either party upon ninety (90) days prior written
notice, this Agreement shall be automatically renewed for successive one year
periods until its termination.


 


2.                                       QUALITY


 


A.   
SELLER agrees to establish and maintain a quality system in accordance
with ISO 9002, and to utilize assembly and test processes in full compliance
therewith ISO 9002, and to ensure SELLER’S compliance therewith, specific
details shall be specified in Attachment A. 
SELLER further agrees that the assembled product and/or other services
will also conform to BUYER’S quality assurance specifications and meet the
intent of BUYER’S Quality Systems Procedures specified in Attachment A.


 





















 


B.   
BUYER agrees to use SELLER’S process flow, so long as such process flow
complies with BUYER’S specifications and quality requirements as set forth in
Attachment A.


 


3.                                       CHANGES


 


A.   
SELLER agrees that it shall not make any change in its processes or
materials which may impact BUYER’S products without prior written approval from
BUYER.


 


B.   
BUYER shall not make any changes to the specifications without prior
notice to SELLER.  When such change
notices are incompatible with existing equipment or adversely affect existing
productivity rates, SELLER shall so notify BUYER in writing within ten (10) days
of its receipt of BUYER’S notice.  If
BUYER proceeds with such changes notwithstanding SELLER’S notice of impact,
BUYER shall reimburse SELLER for the negotiated cost of such changes.


 


4.                                       WARRANTIES


 


A.   
SELLER warrants, for a period of twelve (12) months following shipment
of the finished goods to BUYER, that all products supplied to BUYER pursuant to
this Agreement will be in conformance with BUYER’S specifications and will be
free from defects in material and workmanship. 
In the event of any breach by SELLER of the warranties contained herein,
SELLER’S liability shall be limited to an amount equal to the value added by
SELLER to the devices assembled pursuant to this Agreement.


 


B.   
Notwithstanding the foregoing, the parties recognize that certain
components will be supplied by BUYER for use in the assembly process.  SELLER makes no warranty to BUYER as to the
quality or functionality of the components supplied by BUYER.


 


C.   
THE EXPRESS WARRANTIES SET FORTH HEREIN ARE IN LIEU OF ALL OTHER
WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION,
WARRANTIES AS TO CONDITION, DESCRIPTION, FITNESS FOR A PARTICULAR PURPOSE,
MERCHANTABILITY OR AS TO ANY OTHER MATTER.


 


5.                                       REWORK
OR REIMBURSEMENT


 


A.   In
the event that products delivered pursuant to this Agreement are determined by
BUYER to be either in nonconformance with the required specifications or
defective in material or workmanship, SELLER shall, at BUYER’S sole option, (i) replace
or rework the material or products, (ii) refund to BUYER the cost of the
materials supplied by BUYER for such products, and the amount paid to SELLER
for such products (at the cost of the value added) or (iii) grant BUYER an
offset against


 





















 


SELLER’S current or future invoices for products delivered pursuant to
this Agreement in an amount equal to the cost of the materials supplied by


 


BUYER for such products, and the amount paid to SELLER for such
products (at the cost of the value added).


 


B.   
In no event will SELLER commence rework, replacement, reimbursement or
set off prior to its receipt from BUYER of BUYER’S election.


 


6.                                       LIMITATION
OF LIABILITY


 


A.   
NEITHER SELLER NOR BUYER SHALL BE LIABLE FOR ANY CONSEQUENTIAL,
INDIRECT, INCIDENTAL, PUNITIVE OR SPECIAL DAMAGES ARISING, DIRECTLY OR
INDIRECTLY, FROM THIS AGREEMENT OR ANY WORK OR SERVICE PERFORMED HEREUNDER,
INCLUDING, BUT NOT LIMITED TO THE ASSEBLY, DELIVERY, SALE, INSTALLATION, USE OR
FAILURE OF ANY PRODUCTS ASSEMBLED BY SELLER PURSUANT TO THIS AGREEMENT, EXCEPT
THAT NOTHING CONTAINED HEREIN EXCLUDES OR LIMITS SELLER’S LIABILITY TO BUYER
FOR NEGLIGENCE OR WILLFUL MISCONDUCT.


 


B.   
No action shall be brought for any breach of this Agreement or any order
placed hereunder more than two (2) years after the accrual of such cause
of action.


 


7.                                       EQUIPMENT


 


A.   
BUYER may provide to SELLER, at BUYER’S sole option, equipment to be
used by SELLER in providing services under this Agreement.  Any such equipment shall be listed on EXHIBIT B,
which shall be signed by the parties and by reference therein deemed
incorporated herein.


 


B.   
Ownership to such equipment will at all times remain in BUYER.  SELLER agrees to segregate and label such
equipment as belonging to BUYER, as set forth in more detail in EXHIBIT B.  The parties agree and understand that this
equipment list may be modified by BUYER from time to time to add or delete
certain equipment.


 


C.   
SELLER will conduct an annual physical audit of the equipment supplied
to SELLER hereunder, and will notify BUYER thirty (30) days prior to
commencement of such audit.  SELLER shall
deliver to BUYER a copy of each annual physical audit of equipment.


 


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D.   
SELLER agrees not to alter the equipment without BUYER’S prior written
consent.  SELLER shall promptly notify
BUYER of any defects or faults in the equipment.  While equipment is in SELLER’S possession,
SELLER shall use due care to insure that the equipment is not lost, damaged or
destroyed.


 


E.   
Upon the expiration or termination hereof, all equipment supplied to
SELLER hereunder shall be returned by SELLER to BUYER in the same condition as
when first received from BUYER, less ordinary wear and tear.


 


8.                                       TERMINATION


 


A.   
BUYER may terminate this Agreement, or any individual order for services
hereunder, without cause and for BUYER’S convenience upon ninety (90) days
prior written notice to SELLER.


 


B.   
After notice of termination for convenience has been tendered, the
parties shall coordinate an orderly termination of this Agreement or the
terminated order, and all affected work and subcontracts there under, and
return to BUYER any hardware, materials, records, specifications and other
documents supplied or owned by BUYER.


 


C.   
In the event of any such termination for convenience, BUYER will
purchase from SELLER all of the scheduled work in process affected by the
termination at a price not to exceed SELLER’S audited, burdened cost for such
items.


 


D.   
SELLER agrees, in the event of any such termination for convenience, to (i) immediately
terminate all open purchase orders for materials for the terminated portion of
work, (ii) pursue the return for refund or credit of materials already
received but not yet in process, and (iii) follow all reasonable
instructions to minimize the cost of such termination to BUYER.  Packing and freight costs for items returned
to BUYER shall be borne by BUYER.


 


E.   
In the event either party receives from the other a written notice of a
breach of this Agreement and after fifteen (15) days, has not cured such
breach; or becomes insolvent; or is placed in voluntary or involuntary
bankruptcy, this Agreement shall be deemed to be canceled for cause
immediately.  The aggrieved party shall
be free to pursue all of its available remedies at law or in equity.


 


F.   
After notice of termination has been tendered, the SELLER shall not use,
either directly or indirectly, or disclose to others, any Technical Data, as
defined in Paragraph 12 herein, furnished or first created hereunder.


 


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9.                                       SCRAP


 


SELLER will dispose of scrap generated while
performing services pursuant to this Agreement or any rejected material,
including material rejected or returned by BUYER, in accordance with applicable
law and BUYER’S written instructions. 
Surplus material which has been furnished by BUYER shall be disposed of
in accordance with BUYER’S written instructions.


 


10.                                 SECURITY


 


SELLER agrees to take all necessary
precautions to secure the areas in its facility relative to the performance of
this Agreement, including, but not limited to storage areas for piece parts,
finished goods, and refuse areas containing scrap, rejects or other
material.  SELLER will immediately report
to BUYER any breaches or suspected breaches of its security, but this reporting
will in no way relieve SELLER of its responsibilities hereunder.


 


11.                                 TECHNICAL
DATA AND DATA RIGHTS


 


A.   
SELLER hereby assigns to BUYER all rights in Technical Data prepared in
connection with the performance of services under this Agreement, including,
but not limited to, any reports, drawings, sketches, formulas, designs,
analyses, graphs, notes, and notebooks. 
SELLER agrees that all rights, title and interest in and to such
Technical Data shall vest immediately in BUYER upon preparation.


 


B.   
SELLER further agrees that all notes, drawings, designs, analyses,
memoranda, and other Technical Data prepared or produced in the performance of
services under this Agreement or produced and provided by BUYER and shall be
the sole property of BUYER; that SELLER shall not disclose such Technical Data
to any third party; and that SELLER shall mark such Technical Data with a
mutually approved restrictive use legend such as BUYER CONFIDENTIAL.


 


C.   
Upon termination of this Agreement, whether by expiration, cancellation,
termination or otherwise, SELLER agrees to promptly deliver to BUYER’S
authorized representative all data, documents, and other records which relate
to the business activities of BUYER, and all other materials and security badges
which are the property of BUYER.


 


12.                                 CONFIDENTIAL
INFORMATION


 


A.   
SELLER agrees not to disclose to BUYER, nor use in any work it performs
for BUYER, any confidential or proprietary information belonging to others,
unless it has


 


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first obtained written authorization of the owner to do so, and SELLER
shall not disclose to BUYER any intellectual property of which BUYER is not
authorized or otherwise entitled to receive or use.


 


B.   
One party (OWNER) may disclose to the other party (RECIPIENT) certain
information pursuant to this Agreement which the OWNER deems CONFIDENTIAL, such
information shall include, but not be limited to, all information of a
confidential or trade secret nature and is clearly designated, labeled or
marked as CONFIDENTIAL or its equivalent.


 


C.   
For a period of three (3) years from the Effective Date of this
Agreement, RECIPIENT shall:


 


(1)  
Not disclose any information it receives from OWNER that is marked PROPRIETARY
(or other comparable legend) to any other person, firm or corporation; nor


 


(2)   Use such CONFIDENTIAL Information for its own
benefit except as provided herein; and


 


(3)  
Restrict dissemination of such CONFIDENTIAL Information only to those
employees who must be directly involved with such CONFIDENTIAL Information; and


 


(4)  
Use the same degree of care to avoid wrongful use or disclosure of such
CONFIDENTIAL Information as RECIPIENT employs with respect to its own
information of like importance.


 


D.   
Information shall not be deemed CONFIDENTIAL, and RECIPIENT shall have
no obligation whatsoever with respect to any such information which:


 


(1)                Is or becomes part
of the public domain without a breach of this Agreement by the RECIPIENT; or


 


(2)  
Is generally available or becomes available and known to people skilled
in their field of endeavor without a breach of this Agreement by the RECIPIENT;
or


 


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(3)  
Was at the time of receipt otherwise known to the RECIPIENT as evidenced
by written records or other writing in existence and kept in the ordinary
course of business by the RECIPIENT or by actual proof of use by the RECIPIENT
prior to the disclosure by the OWNER; or


 


(4)  
Is received from a third party without similar restriction and without
breach of this Agreement; or


 


(5)  
Is independently developed by RECIPIENT; or


 


(6)  
Is furnished to a third party by OWNER without a similar restriction on
the third part’s rights; or


 


(7)  
Is disclosed pursuant to the requirement for request of a Government
agency or disclosure is permitted by operation of law.


 


E.    In
the event CONFIDENTIAL information is orally disclosed by the OWNER thereof
agrees to notify RECIPIENT of such oral disclosure, and reduce same to writing or
other tangible media within thirty (30) days of such oral disclosure,
referencing the place and date thereof, and the names of the employees of
RECIPIENT to whom such oral disclosure was made.


 


F.   
The parties agrees that all CONFIDENTIAL Information received hereunder
is and will remain the property of the OWNER and that such CONFIDENTIAL
Information shall not be copied or reproduced without the express written
permission of the OWNER, except for such copies as may be absolutely necessary
in order to perform tasks for the benefit of the OWNER.


 


G.   
After the tasks relating to the use of CONFIDENTIAL Information are
completed and upon written request, RECIPIENT will return all of such
CONFIDENTIAL Information to the OWNER along with all copies and/or derivatives
made, including copies of portions of such CONFIDENTIAL Information, or certify
by written memorandum that all such Confidential Information has been
destroyed, except that RECIPIENT may retain archival copies of the CONFIDENTIAL
Information, which are to be used only in case of a dispute concerning this
Agreement.


 


H.   
Upon the execution of this Agreement, each party shall appoint in
writing its Data Control Coordinator for the receipt and dispatch, on its
behalf, of all CONFIDENTIAL Information it receives from or dispatches to the
other party hereunder.  Each party may
change its Data Control Coordinator by giving the other party written notice
thereof.


 


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I.   
SELLER agrees that it will not use its knowledge of BUYER’S business for
its benefit or for the benefit of any third party, or divulge to others
information or data concerning BUYER’S business affairs, including the names of
customers, name and qualifications of employees, organizational structures,
number and character of contracts, marketing or manufacturing processes,
equipment, or strategies, products, facilities, prices, terms or other
particulars of BUYER’S business, whether by sale, gift, or any device,
subterfuge, or evasion.  SELLER will, in
all things and in good faith, protect the good will of BUYER’S business affairs
acquired prior to and during the term of this agreement.


 


13.                                 INTELLECTUAL
PROPERTY


 


A.   
Seller agrees to disclose promptly, and agrees to and does hereby assign
to BUYER, as BUYER’S exclusive property, seller’s right, title, and interest in
and to intellectual property, including inventions, discoveries, improvements,
ideas, and copyrights, conceived or made by seller solely, or jointly with
others, during the term of its work for BUYER which result from information
made available by BUYER to SELLER, or relate to the products, processes,
developments, equipment, supplies, facilities, research activities, or other
business activities of BUYER, or result from, or are suggested by, work which
it may perform for BUYER.


 


B.   
SELLER agrees to make and maintain written records of all intellectual
property referred to in the preceding paragraph, and shall submit promptly such
records, and supplemental oral or written disclosures, to designated
representatives of BUYER.


 


C.   
SELLER agrees to execute all papers, and otherwise proper assistance, at
BUYER’S request and expense, during and subsequent to its work for BUYER, to
enable BUYER or its nominees to obtain patents, copyrights, and legal
protection for intellectual property in any country.


 


D.   
As a precondition to the assignment of any of its employees to perform
services under this Agreement, SELLER shall inform each employee who will
perform services under this Agreement of the obligations of confidentiality and
of the agreement on intellectual property entered into in this Agreement prior
to such assignment.


 


14.                                 TRADEMARKS


 


SELLER may be required, as part of this
services hereunder, to apply BUYER’S name, trademark or logo (hereafter
collectively Marks) to the assembled products or parts thereof.  SELLER shall not acquire nor claim any
rights, title or interest in BUYER’S Marks nor shall SELLER use BUYER’S Marks
in any other manner.  All such Marks are
and will remain the property of BUYER’S.


 


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15.                                 EXPORT
/ RE-EXPORT;


 


SELLER agrees that it will not in any form
export, re-export, resell, ship or divert or cause to be exported, re-exported,
resold, shipped or diverted, directly, or indirectly, any product or Technical
Data furnished or first created hereunder to any other party or to any country
for which the United States Government or any agency thereof, at the time of
export or re-export, requires an export license or any other government
approval without first obtaining such license or government approval and the
written approval of BUYER.


 


16.                                 INSURANCE


 


SELLER shall bear all risk of loss or damage
to material owned by BUYER while it is in SELLER’S possession.  SELLER shall have and maintain insurance
coverage at its expense against any loss or damage to all such material whether
caused by fire, theft, vandalism or misconduct, or by the negligence of SELLER,
is employees or agents.  Such insurance
shall be in an amount and form satisfactory to BUYER.


 


17.                                 AUDIT


 


BUYER shall have the right, upon prior
written notice to SELLER, to audit SELLER’S inventory records, SELLER’S
processes, and SELLER’S security procedures, with regard to the work performed
for BUYER pursuant to this Agreement as frequently as reasonably deemed
necessary by BUYER.  SELLER shall fully
cooperate with BUYER’S exercise of such rights.


 


18.                                 FORCE
MAJEURE


 


A.   
Neither party will be liable for delay in performance or failure to
perform, in whole or in part due to labor dispute, strike, war or act of war
(whether actual declaration is made or not), insurrection, riot, civil
commotion, act of public enemy, fire, flood or other act of God, or the acts of
any governmental authority, or other causes beyond the control of such party.


 


B.   
The party experiencing such cause or delay shall immediately notify the
other party of the circumstances which may prevent or significantly delay its
performance hereunder, and shall use its best efforts to alleviate the effects
of such cause or delay.


 


C.   
The party experiencing such cause or delay shall be entitled to a
day-for-day slip in the schedule for its performance, except that the
other party shall be entitled to terminate this Agreement or any affected orders
for its convenience in such event.


 


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19.                                 AGREEMENT
COORDINATORS


 


Within ten (10) days after the execution
of this Agreement by the parties, each party shall appoint an Agreement
Coordinator who shall be responsible for all matters regarding the management
of this Agreement and for the performance of the duties of its respective
party.  If either party changes its
coordinator it shall inform the other party in writing of such change.


 


20.                                 APPLICABLE
LAW / ALTERNATIVE DISPUTE RESOLUTION


 


A.   
BUYER and SELLER agree that they shall attempt to settle any claim or
controversy arising out of this Agreement through consultation and negotiation
in the spirit of mutual friendship and cooperation.  If any such attempt shall fail, then the
dispute shall first be submitted to a mutually acceptable neutral advisor for
initial fact finding and mediation. 
Neither party shall unreasonably withhold acceptance of such advisor,
and selection of such an advisor shall be made within forty five (45) days
after written notice by one of the parties for such fact finding and
mediation.  The cost of such fact finding
and mediation, and of any other subsequent alternative dispute resolution agreed
upon by the parties, shall be shared equally by BUYER and SELLER.


 


B.   
Any dispute which the parties cannot so resolve between themselves in
good faith within six months of the date of the initial demand by either party
for such fact finding shall be finally determined by a court within the state
of Oregon.


 


21.                                 MISCELLANEOUS


 


A.   
SELLER warrants that the assembly and manufacture performed hereunder
shall not use any Class one Ozone Depleting Substances (ODS) as specified
in Section 601-618 of the Federal Clean Air Act, 42 U.S.C. 7661f et
seq.  SELLER further warrants that no
materials provided by SELLER hereunder shall contain and/or were produced or
manufactured with a process using an ODS.


 


B.   
All raw material and other components supplied by BUYER to SELLER shall
be controlled by SELLER in accordance with BUYER’S instructions, and all
surplus material and components must be returned to BUYER either at the
termination of the Agreement or upon BUYER’S written request, whichever first
occurs.


 


C.   
This Agreement may not be assigned or subcontracted (except to the
parent company of either firm), without prior written agreement of both
parties.


 


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D.   
SELLER hereby grants to all BUYER divisions, subdivisions, and other
affiliated companies, foreign and domestic, an option to procure services from
SELLER similar to those to be performed hereunder at the terms and conditions
of this Agreement.


 


E.   
The failure of either party to exercise any right hereunder will not be
deemed to be a waiver of such rights for any subsequent breach or default, and
the failure of either party to insist upon timely or adequate performance by
the other party in any instance shall not effect that party’s right to insist
upon timely or adequate performance in the future.


 


F.   
This Agreement, together with any exhibits, attachments, and appendices,
constitutes the complete and exclusive statement of the agreement and the
understanding of BUYER and SELLER relating to the manufacturing services of the
type comprehended herein.


 


G.   
This Agreement supersedes all other agreements, understandings,
communications, and proposals, oral or written, between the parties relating to
the manufacturing services of the type comprehended hereunder.  Amendments or modifications to the Agreement
must be in writing and signed by the authorized representatives of both BUYER
and SELLER.


 


22.                                 NOTICES


 


A.   
In any case where notification is required to be given, with regard to
this Agreement, such notice or communication will be deemed to be received when
sent as follows:  If by manual delivery
or facsimile/telecopier, receipt occurs on the day delivered.  If by class mail, receipt occurs on the third
calendar day following deposit in the mail.


 


B.   
All notices shall be sent postage prepaid, or by telex, facsimile, cable
or telegraph addressed as follows:


 


If to BUYER:


 


 


If to SELLER:


 


 


 


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IN WITNESS WHEREOF, the parties hereto
execute this Agreement, as of the Effective Date set forth above.


 


	
  SELLER

  	
   

  	
  BUYER

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  	
   

  	
  Title

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  	
   

  	
  Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MAS/eas (File XXX)

  	
   

  	
  C;
  \STDDOCS\MSA.199

  
										



 


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EXHIBIT A


 


TO THE MANUFACTURING SERVICES
AGREEMENT (MSA)


 


between


 


Advanced Power Technology
(BUYER)


 


and


 


Semiconductor Assembler &
Manufacturer Sdn Bhd (SELLER)


 


DATED October 5, 2005


 


Pursuant to paragraph 2A of the above
captioned MSA, the parties mutually agree to the terms and conditions specified
herein, which by this reference are incorporated therein.


 


1.                                       The
“Basic Plant” is owned by APT RF,


and is located at Montgomeryville


(hereafter BUYER)


 


2.                                       The
“Contract Plant” is owned by Semiconductor Assembler & Manufacturer


and is located in Malaysia


(hereafter SELLER)


 


3.                                       The
scope of the MSA is basically the assembly and screening of


RF Power Transistors, and comprehends


the projects listed below at the prices
specified.


 


PROJECTS


 


Assembly using Manual & Automatic
Equipment


Die Attach


Wire Bond


Resistance Cap Weld


Commercial Epoxy Seal


Internal Visual Inspection


JTXV Level


Screening


Electrical Test


 





















 


Storage Bake


Gross Leak


 


Branding


 


4.                                       In
compliance with paragraph 3A of the MSA, SELLER shall be responsible for
establishing and maintaining a Quality System in full compliance with ISO 9002
REV. 2000, latest revision.  Any changes
to SELLER’S Quality System requires written notification to BUYER prior to
implementation thereof.


 


5.                                       In
compliance with paragraph 3A of the MSA, SELLER shall be responsible for
establishing and maintaining an Assembly and Test System in full compliance
with APT RF PA Document System, latest revision.  Any changes to SELLER’S Assembly and Test
System requires written notification to BUYER prior to implementation thereof.


 


6.                                       In
the event SELLER plans to make any changes in management, its corporate
organization, or in the location where the services are to be performed, SELLER
agrees to promptly notify BUYER prior to the implementation thereof.  Upon notice of such proposed changes, BUYER
may terminate the MSA as provide in the MSA thereof.


 


7.                                       In
the event SELLER plans to make any changes in the processes, equipment,
materials and designs utilized in it performance under the MSA, SELLER agrees
to promptly notify BUYER prior to the implementation thereof.  Upon notice of such proposed changes, BUYER
may terminate the MSA as provide therein.


 


8.                                       SELLER
agrees to use only materials specified by BUYER, and shall not substitute any
other material without the express written authorization of BUYER.


 


9.                                       SELLER
agrees to provide BUYER with flow charts, travelers, procedures and baselines
and such other data as reasonably required by BUYER.


 


10.                                 SELLER
shall establish control and security of all data, documents, piece parts,
materials, work-in-process, finished goods and equipments utilized in
performing its services under the MSA.


 


11.                                 BUYER
shall define in writing total flow of product and process.


 


12.                                 BUYER
will provide SELLER in kit form all necessary production material, and will be
responsible for the inspection of such materials as received by the


 





















 


suppliers
thereof.  BUYER shall maintain all
receiving inspection records and documentation for all kited materials.


 


13.                                 SELLER
is responsible for piecepart, material and product accountability, including
but not limited to, rework, rejects and setup devices.


 


14.                                 The
title to materials provided by the BUYER to the SELLER under the MSA shall
remain with the BUYER, and such materials shall not be used for the benefit of
any other entity without BUYER’S express written authorization.


 


15.                                 In
the event SELLER develops an incoming inspection process, it will notify BUYER
in writing of such event, whereupon the parties will negotiate in good faith
the transfer of the procurement responsibility from BUYER to the SELLER, which
includes purchase, inspection, documentation and traceability.


 


16.                                 SELLER
shall establish and maintain a Calibration System in full compliance with
ANSI/NCSL Z540-1-1994, latest revision.


 


17.                                 SELLER
shall be responsible for the establishment and enforcement of a Material
Control Procedure that maintains control of BUYER’S products while at SELLER’S
facility or while in transit to BUYER’S facility.


 


18.                                 SELLER
shall establish and support a mutually acceptable “feedback loop” for the
reporting and of nonconforming material. 
Any nonconforming material shall be promptly returned to the BUYER.


 


19.                                 SELLER
shall develop and implement a Statistical Process Control Program that is
mutually acceptable to the parties.  The
Statistical Process Control Program shall be in full compliance with ISO-9002
REV. 2000, latest revision.


 


20.                                 SELLER
shall be responsible for maintaining and supplying traceability documentation
and records to BUYER.  These documents
include, but are not limited to, travelers, process monitor data, incoming
records, training records, calibration records, etc. and shall be retained a
minimum of five (5) years.  Upon
expiration or termination of the MSA, all original records, and any copies
thereof, shall be returned to BUYER within sixty (60) days after such
expiration or termination of the MSA.


 


3





















 


21.                                 Product
supplied by SELLER under the MSA shall be manufactured under controlled
conditions using quality assurance methods and systems, such as, work
environment, frequency of monitors, monitor location, level of inspection,
personnel training, which have been approved by the BUYER and shall be subject
to audit as specified in the MSA.


 


22.                                 BUYER
shall (a) maintain inventories of completed product, (b) supply any
necessary military documentation, (c) be responsible for qualification of
product and date code assignment, (d) be responsible for compiling and
maintaining the retention reports and PPM data in full compliance with APT RF
PA Document System, latest revision.


 


23.                                 All
items specified under the MSA shall be stored and packaged in a manner that
prevents damage or deterioration in accordance with generally accepted
practices.  All storage of materials,
packaging materials and methods for storage must be approved by the BUYER.


 


24.                                 SELLER
will provide lead-free products when directed by BUYER in compliance with the
lead-free initiative established by the BUYER. 
No changes to the established lead-free initiative without written
authorization of the BUYER.


 


IN WITNESS WHEREOF, the parties hereto
execute this Attachment A effective as of                                                     .


 


 


	
  ADVANCED POWER TECHNOLOGY (BUYER)

  	
   

  	
  (SELLER)

  
	
   

  	
   

  
	
  BY

  	
   

  	
   

  	
  BY

  	
   

  	
   

  
	
   

  	
   

  
	
  TITLE

  	
   

  	
   

  	
  TITLE

  	
   

  	
   

  
	
   

  	
   

  
	
  DATE

  	
   

  	
   

  	
  DATE

  	
   

  	
   

  
	
   

  	
   

  
	
  MAS/eas 
  (File XXX)

  	
  C:\MSASTD.199

  	
   

  
									



 


4





















 


Exhibit B


 


	
  System

  No

  	
   

  	
  Company

  Asset No

  	
   

  	
  Acquisition

  Date

  	
   

  	
  In

  Service

  Date

  	
   

  	
  Location

  	
   

  	
  Description

  	
   

  	
  Mfg Serial
  No

  
	
  123

  	
   

  	
  871-880/931-952

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  MACRO XT EQUIP (MOTOROLA)

  	
   

  	
   

  
	
  124

  	
   

  	
  953-956/961-976

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  MOTOROLA S-08

  	
   

  	
   

  
	
  167

  	
   

  	
  1127-32,1133,1135

  	
   

  	
  04/07/04

  	
   

  	
  04/15/04

  	
   

  	
  MALAYSIA

  	
   

  	
  TESEC TESTER

  	
   

  	
  45540-0957, 45210-0094,

  
	
  193

  	
   

  	
  1223

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  EUTECTIC WIRE BONDER W/MICROSCOPE

  	
   

  	
  16124

  
	
  194

  	
   

  	
  1248

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  EUTECTIC WIRE BONDER W/MICROSCOPE

  	
   

  	
  16125

  
	
  195

  	
   

  	
  1228

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  KULICKE & SOFFA

  	
   

  	
  958

  
	
  197

  	
   

  	
  1217

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  COUNTING SCALE

  	
   

  	
  980502

  
	
  213

  	
   

  	
  1217

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  COUNTING SCALE

  	
   

  	
  980502

  
	
  214

  	
   

  	
  1238

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  BRANDING MACHINE

  	
   

  	
  740786

  
	
  215

  	
   

  	
  1237

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  CAPPING SYSTEM

  	
   

  	
  300076

  
	
  216

  	
   

  	
  1233

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  COMPUTER FOR K&S 1470

  	
   

  	
  4747

  
	
  217

  	
   

  	
  1218

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  DIE BONDER

  	
   

  	
  4386

  
	
  218

  	
   

  	
  1226

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  DIE BONDER

  	
   

  	
  14105

  
	
  219

  	
   

  	
  1242

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  GRAM FORCE GAUGE

  	
   

  	
  NA

  
	
  220

  	
   

  	
  1266

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  HOT PLATE

  	
   

  	
  NA

  
	
  221

  	
   

  	
  1267

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  HOT PLATE

  	
   

  	
  6429083

  
	
  222

  	
   

  	
  1268

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  HOT PLATE

  	
   

  	
   

  
	
  223

  	
   

  	
  1249

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  MICROSCOPE LOW POWER, BAUSCH & LOMB

  	
   

  	
   

  
	
  224

  	
   

  	
  1244

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  MICROSCOPE LOW POWER, BAUSCH & LOMB

  	
   

  	
   

  
	
  225

  	
   

  	
  1227

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  MICROSCOPE LOW POWER, BAUSCH & LOMB

  	
   

  	
   

  
	
  226

  	
   

  	
  1224

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  MICROSCOPE LOW POWER, BAUSCH & LOMB

  	
   

  	
   

  
	
  227

  	
   

  	
  1235

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  MICROSCOPE LOW POWER, BAUSCH & LOMB

  	
   

  	
   

  
	
  228

  	
   

  	
  1229

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  MICROSCOPE LOW POWER, BAUSCH & LOMB

  	
   

  	
   

  
	
  229

  	
   

  	
  1245

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  MICROSCOPE LOW POWER, BAUSCH & LOMB

  	
   

  	
   

  
	
  230

  	
   

  	
  1219

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  MICROSCOPE LOW POWER, BAUSCH & LOMB

  	
   

  	
   

  
	
  231

  	
   

  	
  1243

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  MOISTURE ANALYZER FOR WELDER

  	
   

  	
  NA

  



 





















 


	
  System

  No

  	
   

  	
  Company

  Asset No

  	
   

  	
  Acquisition

  Date

  	
   

  	
  In

  Service

  Date

  	
   

  	
  Location

  	
   

  	
  Description

  	
   

  	
  Mfg Serial
  No

  
	
  232

  	
   

  	
  1231

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  MONITOR FOR K&S 1470

  	
   

  	
  191681

  
	
  233

  	
   

  	
  1240

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  OVEN FOR WELDER

  	
   

  	
  1413-02

  
	
  234

  	
   

  	
  1225

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  TEMPERATURE CONTROLLER

  	
   

  	
  16684

  
	
  235

  	
   

  	
  1230

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  TEMPERATURE CONTROLLER

  	
   

  	
  2461

  
	
  236

  	
   

  	
  1251

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  TEMPERATURE CONTROLLER

  	
   

  	
  3512

  
	
  237

  	
   

  	
  1253

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  TEMPERATURE CONTROLLER

  	
   

  	
  2485

  
	
  238

  	
   

  	
  1220

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  TEMPERATURE CONTROLLER

  	
   

  	
  12059

  
	
  239

  	
   

  	
  1247

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  TEMPERATURE CONTROLLER

  	
   

  	
  14543

  
	
  240

  	
   

  	
  1236

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  TEMPERATURE CONTROLLER

  	
   

  	
  15782

  
	
  241

  	
   

  	
  1273

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  THERMOMETER, FLUKE

  	
   

  	
  6844059

  
	
  242

  	
   

  	
  1246

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  TO-60 CRIMPING MACHINE

  	
   

  	
   

  
	
  243

  	
   

  	
  1241

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  TRANSFORMER FOR WELDER

  	
   

  	
  43912

  
	
  244

  	
   

  	
  1232

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  ULTRASONIC GENERATOR

  	
   

  	
  7669

  
	
  245

  	
   

  	
  1239

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  WELDER

  	
   

  	
  1413-00

  
	
  246

  	
   

  	
  1234

  	
   

  	
  05/31/02

  	
   

  	
  05/31/02

  	
   

  	
  MALAYSIA

  	
   

  	
  WIRE BONDER

  	
   

  	
  1021

  
	
  247

  	
   

  	
   

  	
   

  	
  04/22/05

  	
   

  	
  05/01/05

  	
   

  	
  MALAYSIA

  	
   

  	
  WEDGE BONDER, K&S 1474 AUTOMATIC