Document:

<PAGE>

                         ADVANCED POWER TECHNOLOGY, INC.

                       NORTH AMERICA DISTRIBUTOR AGREEMENT

         This Agreement is made this 1st day of APRIL, 1997, by and between
Advanced Power Technology, Inc., a Delaware Corporation with its principal place
of business at 405 S. W. Columbia Street, Bend, Oregon 97702, U.S.A.
(hereinafter referred to as "Company"), and Richardson Electronics. Ltd. , a
company organized and existing under the laws of Delaware with its principal
place of business at 40W267 Keslinger Road, LaFox., Illinois 60147 (hereinafter
referred to as "Distributor").

                                    RECITALS

         A. Company is engaged in the business of manufacturing and selling
power transistors.

         B. Company wishes to supplement its own sales efforts through the
appointment of a non-exclusive and independent distributor.

         C. Distributor wishes to act 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 as follows:

SECTION 1.  APPOINTMENT OF DISTRIBUTOR.

         Company hereby appoints Distributor, and Distributor hereby accepts
such appointment as a non-exclusive and authorized distributor of Company during
the term of this Agreement for the sale of Company's Products, as defined in
Section 2.1, from listed locations.

SECTION 2.  PRODUCTS.

         2.1 The products covered by this Agreement shall be those identified on
Exhibit "B," attached hereto (the "Products").

         2.2 Company may add Products to, or delete Products from, Exhibit "B"
upon written notice to the Distributor.

         2.3 Notwithstanding anything to the contrary contained herein,, Company
reserves the right, in its sole discretion and without notice, to modify
specifications and characteristics of its Products, to discontinue the
distribution and sale of such Products, and to cancel, modify or condition any
right of the Distributor to prevent a violation of law.

PAGE 1    NORTH AMERICA DISTRIBUTOR AGREEMENT

[ * ] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

SECTION 3.  OBLIGATIONS OF DISTRIBUTOR.

         During the term of this Agreement, Distributor shall at all times use
best efforts and commensurate with distributor's overall business to enhance the
image and reputation of Company and the Products which are the subject matter
hereof, and agrees:

         3.1 Distributor shall not disclose information of Company considered by
Company to be confidential or proprietary including, but not limited to,
customer and price lists and data regarding the design or methods of manufacture
of the Products and will not use any such information except as contemplated by
this Agreement. Such information will be appropriately marked or identified by
Company and the obligation of Distributor not to disclose or improperly use such
information will survive the termination of this Agreement. Upon the termination
of this Agreement or the earlier request of Company, all such information will
be promptly returned to Company. The restrictions of this Section 3.1 are in
addition to any other agreement between the parties with respect to the
protection and use of information. ALL CONFIDENTIAL INFORMATION SUPPLIED TO
COMPANY (INCLUDING, WITHOUT LIMIT, CUSTOMER NAMES AND DATA) BY DISTRIBUTOR SHALL
REMAIN DISTRIBUTOR'S PROPERTY AND SHALL NOT BE DISCLOSED BY COMPANY OR USED TO
DISTRIBUTOR'S DETRIMENT.

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

                  The parties agree that each will use its best efforts to
secure any licenses or permits as may now or hereafter be required in connection
with the performance of its obligations under this Agreement, but this Agreement
shall not be deemed to require any performance on the part of either party which
cannot lawfully be done pursuant to the laws and regulations referred to above.

         3.3 Distributor shall sell only Company's Products that bear Company's
markings or trademarks and will not alter, modify or in any way change the
Products, marking or trademarks thereon without prior written approval of
Company.

         3.4 Distributor shall offer and sell Products only in accordance with
specifications and warranty schedules provided by Company.

         3.5 Distributor shall provide Company by the 15th day of each month a
report detailing the total sales and inventory levels of the Products for the
prior month.

         3.6 Distributor shall use its best efforts to actively promote the sale
of the Products to customers in its territory commensurate with its overall
business. Such efforts shall include, but not be limited to, promptly servicing
all customer accounts, soliciting new customer accounts, and cooperating and
participating in Company's advertising and sales promotional programs.

PAGE 2    NORTH AMERICA DISTRIBUTOR AGREEMENT
<PAGE>

         3.7 Distributor shall provide and maintain, without expense to Company,
a suitable place of business with adequate facilities and sufficient personnel
for the sale and distribution of the Products and to fulfill all other
additional objectives agreed to in writing by Company and Distributor.

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

         3.9 Distributor shall refrain from any activities which are illegal,
unethical, or which might damage Company's reputation.

         3.10 Distributor shall fully comply with all agreements with Company,
including without limitation, the obligations to pay amounts due when due.

         3.11 Distributor shall use its best efforts to consolidate purchase
orders to promote efficiency and reduce supporting documentation.

SECTION 4.  OBLIGATIONS OF COMPANY.

         4.1 Company, in its sole discretion, shall maintain the necessary
personnel needed to fulfill the agreed upon sales objectives of Company and
Distributor.

         4.2 Company shall use its best efforts to manufacture sufficient
quantities of Products to meet the requirements of Distributor. Company shall
consult with Distributor regarding inventory levels, and shall advise
Distributor of promotional efforts to increase the sale of Products.

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

SECTION 5.  DELIVERIES

         5.1 All deliveries of Products 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 will consign Products to carriers for shipment directly to
Distributor's customers.

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

SECTION 6.  TITLE AND RISK OF LOSS.

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

PAGE 3    NORTH AMERICA DISTRIBUTOR AGREEMENT
<PAGE>

SECTION 7.  PRICE.

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

         7.1 If the price for any Product is increased prior to full shipment of
any Order, the price charged to Distributor will be that in effect at the time
of Company's acceptance of Distributor's Order. If the price for any Product is
decreased, all Products shipped on or after the effective date of any price
decrease will be shipped and invoiced at the price in effect at the time of
shipment.

         7.2 In order to assist Distributor in competitive markets, Company
will, under certain limited circumstances, adjust the effective price of the
Products to Distributor. The unit price of any Product(s) as set forth in
Exhibit "B" shall be ultimately adjusted 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 by Distributor, resale price per unit to
customer and competitive products available in the market. Upon acceptance by
Company of the information and approval of Distributor's request for a price
reduction, Company or Company's local representative shall provide Distributor
with the Company's authorized "ship and debit" price per unit for the particular
order and the Company's authorization number. Within 30 days from the invoice
date to Distributor's customer, Distributor shall provide Company with a copy of
the invoice, or a substitute deemed acceptable by Company, and a debit
memorandum with Company's authorization number to obtain a credit. Upon
Company's request, Distributor shall produce for inspection the original
invoice. Upon satisfaction of the conditions set forth above, Company shall
issue to Distributor, within 30 days of receipt of the supporting documentation
set forth above, a credit. A credit will only be issued for those amounts
authorized.

SECTION 8.  PAYMENTS.

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

SECTION 9.  CANCELLATION OF ORDER.

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

         9.2 Distributor may reschedule delivery dates of production order by
written request to Company; provided, however, that no such changes shall be
allowed within thirty (30) days of first factory promise date.

         9.3 Distributor may cancel standard product by written notice to
Company; provided, however, that no orders may be canceled within thirty (30)
days of first factory promise date.

PAGE 4    NORTH AMERICA DISTRIBUTOR AGREEMENT

[ * ] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

SECTION 10.  EXCUSABLE DELAYS AND FAILURES (Force Majeure)

         Company shall be excused for delays in performing and failures to
perform pursuant to this Agreement and to any Order issued hereunder to the
extent that any such delay or failure results from any cause beyond its control,
including, solely by way of example and without limitation, delays caused by
Distributor or a third party, acts of God, strikes, and other labor disputes,
government regulations, public disorders, international disputes, inability to
obtain or shortage of any material used in the manufacture or shipping and
delivery of the Products, transportation or trade embargoes, customs
restrictions, and catastrophes of nature, fire and explosion, whether any such
cause affects Company, any supplier or provider of service to Company. Company
agrees to exert reasonable effort to prevent such occurrences from affecting its
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 maintain a minimum level of inventory of
Products. The level of inventory shall be established by Company and adjusted
from time to time as market conditions warrant. Company retains the right to
inspect Distributor's inventory at any time.

         11.2 In the event of a decrease in 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 an amount equal to the difference in the
price of the Product(s) excluding transportation charges, duties and taxes)
before and after such decrease on the unsold Products) in Distributor's
inventory and/or the affected Product(s) in transit to Distributor. This credit
shall be calculated upon receipt of an itemized inventory from Distributor and
shall be applied against future Orders from Distributor. Company will have the
right to inspect the inventory subject to the credit and all records relating
thereto.

SECTION 12.  RETURNS.

         12.1 Company will accept returned Products only if such return is made
in accordance with Company's current procedures which are set forth in this
Section 12. Company reserves the right to unilaterally change these procedures,
such changes will become effective upon reasonable notice to Distributor.

         12.2 Distributor may return any and all Products within 6 months of the
delivery of the Initial Stocking Package recommended by Company after obtaining
Company's prior written authorization and the return material authorization
number given with such prior written authorization, and a dollar for dollar
off-setting order is received. Upon receipt of such Products in a condition
acceptable to Company, a credit, less shipping and handling costs, will be
issued to Distributor. After the Initial Stocking Package period has expired,
Products may be returned in accordance with Company's current return policy.

         12.3 Company shall give Distributor written notice of the
discontinuance of any Product. Within 30 days of receipt of such notice,
Distributor shall notify Company in writing of its intention to return
discontinued Products for credit. On receipt of such Product in a condition

PAGE 5    NORTH AMERICA DISTRIBUTOR AGREEMENT
<PAGE>

acceptable to Company, freight prepaid by Distributor, Company shall issue a
credit to Distributor.

         12.4 Distributor is authorized to return slow-moving items for
exchange in only the months of January and July. All such returns shall
require Company's prior written authorization and the return material
authorization number given with such prior written authorization, and a
dollar for dollar offsetting order is received, and shall be limited to [ * ]
of the U.S. dollar amount (excluding costs associated with shipping,
handling, duties and taxes) of standard purchases of Product over the prior
six months. All returned material must be returned in a condition acceptable
to Company.

SECTION 13.  ADVERTISING.

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

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

         13.3 Distributor may conduct advertising programs other than those
programs undertaken with Company provided Distributor obtains Company's approval
of all aspects of the advertising program. Distributor shall refrain from making
any representations or claims concerning the Products which are inconsistent or
exceed Company's written representations.

SECTION 14.  DURATION AND TERMINATION.

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

         14.2 If either party commits a material breach of this Agreement or
becomes insolvent or bankrupt, or admits in writing its inability to pay its
debts as they mature, or makes an assignment for the benefit of creditors, or
ceases to function as a going concern or to conduct its operations in the normal
course of business, the other party shall have the right to cancel this
Agreement by giving immediate written notice of its election to do so.

         14.3 Upon expiration or termination of this Agreement by Distributor,
Distributor will return to Company at such place as Company may designate, all
promotional materials which had originally been furnished by Company to
Distributor. Distributor shall be responsible for all return charges. Upon
expiration or termination of this Agreement by Company, Company shall be
responsible for all return charges.

         14.4 Company and Distributor agree that upon the expiration or
termination of this Agreement, neither party shall be liable to the other for
any damages, expenditures, loss, of

PAGE 6    NORTH AMERICA DISTRIBUTOR AGREEMENT

[ * ] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

profits or prospective profits of any kind or nature sustained or arising out
of, or alleged to have been sustained or to have arisen out of, such
termination. The expiration or termination of this Agreement shall not, however,
release either party from making payments which may be owing to either party
under the terms of this Agreement.

         14.5 Upon termination or expiration of this Agreement by Company,
Company will accept, within 30 days after effective date of termination or
expiration, the Distributor's stock inventory valued at the effective
Distributor cost as of the date of termination or expiration or at Distributor's
acquisition price, whichever is lower. Upon termination or expiration of this
agreement by Distributor, Company will have the option. of accepting the
Distributor stock inventory valued at the effective Distributor cost as of the
date of termination or at Distributor acquisition price, whichever is lower.
Stock inventory not returned within the 30-day period will not be accepted by
Company. This reacquisition formula applies only to the Products shipped by
Company to Distributor within one year of the date of termination or expiration
of the Agreement. For Products which are custom Products, Company may repurchase
such items at prices within its sole discretion. Products specially prepared by
Company to Distributor's specifications will not be repurchased.

         14.6 In event of termination of this Agreement for any reason, APT
shall not be liable to the Distributor or any employee or agent of the
Distributor for compensation, reimbursement or damages on account of the loss of
prospective profits or anticipated sales or on account of expenditures,
investments, leases or commitments in connection with the business or goodwill
of the Distributor or for any reason arising out of such termination. The
Distributor hereby waives any and all rights it might have to compensation upon
termination of this agreement pursuant to the local and national laws of any
country within the territory and hereby agrees to indemnify APT and hold
harmless from any and all claims of its employees or subcontractors for similar
compensation or for severance, liability or other pay.

SECTION 15.  RELATIONSHIP BETWEEN PARTIES.

         15.1 This Agreement does not create an employer-employee relationship
between Company and Distributor, or a joint venture or partnership. The
relationship between Company and Distributor shall be that of seller and buyer
and in such relationship Distributor shall be an independent contractor and
shall have no authority to act for or to bind Company in any matter. Distributor
agrees to hold Company harmless from all claims, actions or judgments arising
from acts or omissions of Distributor, its agents or employees.

         15.2 Company shall indemnify, protect and save harmless Distributor
from and against all claims, demands and proceedings, actions, liabilities and
costs resulting from any actual or alleged infringement of any patent,
industrial and commercial property rights of third parties related to the
Products.

SECTION 16.  EXPORT CONTROLS.

         Distributor -acknowledges that exportation of the Products may be
subject to compliance with `various United States Export Administration Acts and
the rules and regulations promulgated from time to time thereunder, which
restrict the export and re-export of certain

PAGE 7    NORTH AMERICA DISTRIBUTOR AGREEMENT
<PAGE>

products, technical data and direct products of technical data. Distributor
agrees to comply with such United States export control laws, rules and
regulations and all other applicable laws and governmental regulations,
domestic, foreign and local.

SECTION 17.  WARRANTY

         17.1 Products sold pursuant hereto are covered by APT's standard
warranty in effect as set forth in the APT sales contract under which the
Products are sold provided that APT's obligations under such warranty are
limited to, and shall not run beyond, two years from the date of APT's shipment
of the Products, except where specific customer or user requirements are agreed
to by APT in writing. APT shall have no liability to Representative or to the
customer or user with respect to any alleged defective Products sold by APT
except as specifically set forth in APT's warranty, if any, included as part of
the terms and conditions of the sale made by APT. Representative shall have no
authority to and shall not make any warranty representation with respect to the
Products contrary to or inconsistent with APT's warranty.

         17.2 The products are not authorized for use as critical components of
life support systems. A critical component is any component of a life support
device or system whose failure to perform may be expected to cause the failure
of the life support device or to affect its safety or effectiveness.

SECTION 18.  MISCELLANEOUS.

         18.1 This Agreement does not convey, nor shall Distributor claim any
title or property interest in Company's trademarks, trade names, copyrights,
patents or other such property so marked by Company. Distributor acknowledges
ownership by Company of trademarks, names, copyrights, patents and other such
property so marked by Company, so identified or so identifiable.

         18.2 Distributor shall not delegate any duties or assign any rights
under this Agreement or any interest herein without Company's prior written
consent.

         18.3 The validity, meaning enforceability and effect of this Agreement,
and the rights and liabilities of the parties, shall be determined in accordance
with the laws of the State of Oregon.

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

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

PAGE 8    NORTH AMERICA DISTRIBUTOR AGREEMENT
<PAGE>

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

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

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

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

SECTION 19.  COMPLIANCE WITH LAW.

         19.1 Distributor agrees that it will not violate any applicable law or
regulation of any country or political subdivision thereof in performing or
purporting to perform any act arising out of or in connection with this
Agreement. Pursuant thereto, Distributor agrees to maintain such records as are
required by all applicable laws and regulations and to provide such written
assurances as are required by APT in connection therewith.

         19.2 This Agreement is subject to all applicable laws, regulations and
other statutory and administrative acts, now or hereafter in effect of the
United States and the Territory. The Distributor agrees that it will use its
best efforts to secure any licenses or permits as may now or hereafter be
required in connection with the performance of its obligations under this
Agreement, but this Agreement shall not be deemed to require any performance on
the part of either party which cannot lawfully be done pursuant to the laws,
regulations and statutory and administrative acts referred to above.

PAGE 9    NORTH AMERICA DISTRIBUTOR AGREEMENT
<PAGE>

              IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Agreement in duplicate as of the day and year first above written.

COMPANY:                                          DISTRIBUTOR:

ADVANCED POWER TECHNOLOGY,                        RICHARDSON ELECTRONICS,
INC., a Delaware corporation                      LTD.

By             S/S                                By          S/S
  --------------------------                         ------------------------
Its:     President                                Its:
    ------------------------                          -----------------------

Date                                              Date
    ------------------------                          -----------------------

PAGE 10    NORTH AMERICA DISTRIBUTOR AGREEMENT
<PAGE>

                                    EXHIBIT A
                              AUTHORIZED LOCATIONS

<TABLE>
<S>                                       <C>
          -     North America & Hawaii    -     China (including Hong Kong)
          -     Central America           -     Japan
          -     South America             -     Southeast Asia
          -     Africa                    -     France
          -     Australia & New Zealand   -     Spain
          -     India                     -     Portugal
          -     Korea                     -     Italy
</TABLE>

COMPANY:                                          DISTRIBUTOR:

ADVANCED POWER TECHNOLOGY,                        RICHARDSON ELECTRONICS
INC., a Delaware corporation                      LTD.

By             S/S                                By          S/S
  --------------------------                         ------------------------
Its:     President                                Its:
    ------------------------                          -----------------------

Date                                              Date
    ------------------------                          -----------------------

PAGE 11    NORTH AMERICA DISTRIBUTOR AGREEMENT
<PAGE>

                                    EXHIBIT B

         PRODUCTS

                                ALL APT PRODUCTS

PAGE 12    NORTH AMERICA DISTRIBUTOR AGREEMENT
<PAGE>

         Page 11. NORTH AMERICA DISTRIBUTOR AGREEMENT               5/96

PAGE 13    NORTH AMERICA DISTRIBUTOR AGREEMENT
<PAGE>

PAGE 14    NORTH AMERICA DISTRIBUTOR AGREEMENT<PAGE>

                              MANUFACTURING AGREEMENT

[*] = CONFIDENTIAL TREATMENT REQUESTED
<PAGE>

This agreement is made as of ____________________, 1997 by and between SIEMENS
AG, a German corporation located in Munich, Germany, hereinafter referred to as
"SIEMENS", and Advanced Power Technology, a Delaware Corporation located in
Bend, Oregon, USA, and its subsidiaries and affiliates, hereinafter referred to
as "APT".

                                     WITNESSETH:

WHEREAS, APT desires to enter into a long-term  agreement with SIEMENS for the
procurement of products to be manufactured by SIEMENS in accordance with
specifications submitted by APT, including IGBT discrete products and IGBT
processed wafers as listed in ATTACHMENT A. Attachment A can be changed every
time if both parties mutually agree in this change in writing.

NOW, THEREFORE, and in consideration of the mutual promises contained herein,
APT and SIEMENS agree as follows:

1.     MANUFACTURE OF PRODUCTS

       SIEMENS hereby agrees to manufacture certain IGBT discrete products and
       IGBT processed wafers for APT in accordance with orders for specified
       products to be communicated to SIEMENS from to time to time via fax, and
       in a accordance with specifications for those ordered products to be
       provided to-SIEMENS by APT and APT agrees to pay for such products in
       U.S. Dollars in accordance with SIEMENS's price schedules contained in
       the attached quotations.  SIEMENS agrees to be bound by the terms and
       conditions of this Agreement in connection with the manufacture and sale
       of these products.  APT is not required to purchase any minimum quantity
       of products from, nor is APT required to purchase these or similar IGBT
       discrete products and IGBT processed wafers exclusively from SIEMENS

2.     COORDINATION

       APT has identified its Vice President, Discrete Power Products, currently
       Mr. John Hess as its coordinator.  SIEMENS has identified its Senior
       Director, Power Semiconductors, currently Mr. Claus Geisler, as its
       coordinator.  The coordinators represent their companies for the
       implementation and communications of all items contained in this
       Agreement.  In the event that a coordinator is changed by either party,
       notice of such change shall be made in writing to the other party.

                                          1

<PAGE>

3.     PAYMENT

       A.     APT shall pay SIEMENS by international bank transfer, [*],
              in accordance with the agreed upon fixed schedules of product and
              processed wafer shipments.

       B.     Prices will be in U.S. Dollar.

       C.     Prices in U.S. Dollar shall be as set forth in annual quotation
              and cannot be changed during a twelve-month period after signature
              unless otherwise agreed upon in writing by both parties.  All
              prices of products included in these quotations and any future
              prices or products will be reviewed annually by both parties.  Any
              prices agreed upon for products or wafers not included in an
              annual price quotation or review will be fixed until the end of
              these twelve-month period to ensure that all pricing remains on
              the same annual price cycle.

       D.     All APT divisions, subsidiaries and other affiliated companies,
              foreign and domestic are permitted to purchase all SIEMENS items
              at the prices which appear in the above referenced quotation and
              in accordance with the terms of this Agreement.

       E.     Price per good die and wafer quantities are set forth in
              Attachment A1 and A2.Siemens and APT will review quantities on a
              yearly basis to set up the pricing.  The prices for 1998 are
              agreed.

4.     INSPECTION

       SIEMENS agrees that APT Representatives, designated by APT's Coordinator,
       shall have the right of inspection of SIEMENS's manufacturing facilities,
       the manufacturing work in progress, and those offices areas containing
       documentation and records relevant of this Agreement at normal business
       hours and after at least two (2) weeks prior written notice once a year.

5.     RETURNS

       A.     SIEMENS agrees to supply products to APT which meet the mutually
              agreed upon specifications. If, within 3 months after delivery of
              products from SIEMENS, APT determines that the products do not
              meet those specifications, SIEMENS will replace the defective
              returned products at the SIEMENS expense. Immediately upon such
              determination and' prior to any return by APT of such products,
              SIEMENS shall be so notified and shall have the option of having a
              representative of SIEMENS inspect the products being returned,
              provided that such inspections takes place within two (2) weeks of
              such notification by APT. Following such inspection or expiration
              of the two-week period, APT will ship these products back to
              SIEMENS. SIEMENS will replace such returned defective products
              which meet the mutually agreed upon specification within six (6)
              weeks following SIEMENS's receipt of the returns at any SIEMENS
              location. SIEMENS

     [*] = CONFIDENTIAL TREATMENT REQUESTED

                                          2

<PAGE>

              shall be deemed to have met the six (6) week time table if, within
              six (6) weeks, such replacement products are shipped from a
              SIEMENS facility to a common carrier for shipment to APT. Upon
              SIEMENS's failure to so ship within (6) weeks, APT will be
              entitled to receive the next subsequent shipments of any products
              from SIEMENS at no cost to APT for the goods of the shipping
              thereof, until APT has received the equivalent value of goods
              which were not promptly replaced. In such circumstances the
              equivalent value shall be the original cost of the goods which
              were not properly replaced, without regard to any subsequent price
              changes for the same product.

       B.     No products, other than replacement products, will be accepted by
              APT with date codes older than six (6) months prior to the date of
              receipt at the APT facility. For replacement, date codes will be
              accepted which are up to six (6) months prior to the date of the
              receipt at SIEMENS of returned defective products. Under no
              circumstances will APT accept any replacement products with date
              codes older than 26 weeks prior to the date of receipt at the APT
              facility.

6.     PACKAGING BY SIEMENS

       A.     All packaging will be of anti static materials in accordance with
              the mutually agreed upon specifications.

       B.     Quantities must be packaged as described in Attachment B.

       C.     Boxes shall be taped closed and/or sealed in plastic.

       D.     Packaging must be resistant to lead bend or unit damage of any
              kind.

       E.     Changes in packaging, even if within the mutually agreed upon
              specifications, must be approved by both parties.

7.     QUALITY

       A.     After qualification, SIEMENS may not carry out any significant
              alteration to the product or process which affects the
              suitability, functions, processing or reliability, without
              previously informing the customer. The customer must be informed
              three (3) months before the planned commencement of delivery and
              must receive a detailed description of the alteration. The
              customer will announce his decision within 45 days.

       B.     Device marking will be in accordance with the mutually agreed upon
              specifications.

8.     SHIPPING PROCEDURES

       A.     SIEMENS shall provide APT's Coordinator with a confirmation of
              APT's order, in which the delivery date is announced.

                                          3
<PAGE>

       B.     APT agrees to pay shipping costs F.O.B. Germany for the wafers and
              products shipments other than replacement wafers and products.

       C.     SIEMENS may be required to make deliveries to other specified APT
              locations after procedures are established and agreed upon by both
              parties. Initially, product will be shipped to APT, Bend, USA or
              APTE, Merignac, France, only.

9.     ON-TIME DELIVERY/SCHEDULING

       A.     If the delivery date is by day, SIEMENS shall not deliver more
              than seven (7) days earlier or three (3) days later as the agreed
              delivery day.

              In case SIEMENS realizes that he cannot adhere to the agreed
              delivery date, he shall without delay inform APT and indicate the
              prospective duration of the delay. The Parties shall immediately
              endeavour to find reasonable remedial measures.

              If SIEMENS is in delay with deliveries for which he is responsible
              and if APT  substantiates that he has suffered damages due to the
              delay, he may claim per full  week of delay liquidated damages of
              0,5% of the price of the delayed SIEMENS  Products up to a maximum
              amount of 5% of such price. Any further claims for  damages due to
              the delay shall be excluded.

              APT may terminate the relevant separate purchase contract without
              incurring any liability, provided the Products have not been
              delivered within a reasonable grace period set by APT. Further APT
              may terminate this Agreement, if, during a  nine-week period,
              SIEMENS' on-time delivery performance is less than 85 % in
              quantity for any four (4) weeks of that nine-weeks period.

       B.     a)     Finished Goods

                     APT will provide a thirteen (13) week order requirement
                     schedule to  SIEMENS on a monthly basis with nine (9) weeks
                     being firm and four (4)  weeks floating. The fixed nine (9)
                     week requirement may only be modified  with the consent of
                     both parties. The four (4) week floating requirement
                     schedule may only be reduced by either party by up to 20 %
                     quantity.

              b)     Wafers/Die

                     APT will provide a fourteen (14) week order requirement
                     schedule to SIEMENS on a monthly basis with six (6) weeks
                     being firm and eight (8) weeks floating. The fixed six (6)
                     weeks requirement may only be modified with the consent of
                     both parties. The first four (4) week floating requirement
                     schedule may only be reduced by either party by up to 20 %
                     quantity. The next four (4) week floating requirement
                     schedule may only be reduced by either party by up to 40 %
                     quantity.

                                          4
<PAGE>

10.    PROPRIETARY RIGHTS

       A.     If a third party raises justified claims against APT for
              infringement of US Patents by wafers or other products supplied by
              SIEMENS (hereinafter "Products"), SIEMENS shall at its cost
              acquire for APT a right to use the 'Product. In case this is not
              possible at economically reasonable conditions, SIEMENS' liability
              for infringement of any intellectual property rights or copy
              rights shall be limited as follows:

              (a)    Seller shall indemnify and hold harmless Buyer against any
                     legal costs and  damages of Buyer caused by Protective
                     Right infringement by the Product  as such up to the amount
                     of an appropriate license fee, which the owner of    the
                     Protective Rights could claim directly from Seller for the
                     use of the  infringing Product.

              (b)    For future deliveries SIEMENS shall, if economically
                     reasonable, at its option and in compliance with the
                     specifications modify the Product to become non infringing
                     or deliver an equivalent non infringing product.

              Claims shall be deemed justified only if they are acknowledged as
              such by Seller or finally adjudicated as such by a court of
              competent jurisdiction.

       B.     The obligations of SIEMENS mentioned in Section 10.A above apply
              under the precondition that APT informs SIEMENS without delay in
              writing of any claims for infringement of Protective Rights, does
              not accept on its own any such claims and conducts any disputes,
              including settlements out of court, only in agreement with
              SIEMENS.

       C.     Any liability of SIEMENS shall also be excluded, if the
              infringement of US patents results from specific instructions
              given by APT or the fact that the Product has been changed by APT
              or is being used in conjunction with products not delivered by
              SIEMENS, which convert an otherwise non-infringing Product to an
              infringing Product.

       D.     Any liability of SIEMENS pursuant to Section 10.A shall be
              excluded, if the infringement of US patents is not caused by the
              Product itself, for example if such infringement results from the
              application of the Product (including any application specific
              circuitry implemented in the Product), unless SIEMENS did offer
              the Product especially for such infringing application.

11.    RISK, TITLE

       A.     Risk of loss or damages shall pass onto APT according to the
              clause of the incoterms 990 as defined in Section 8. B.

       B.     SIEMENS retains title to the Products until all payments due to
              SIEMENS have been finally effected by APT.

                                          5
<PAGE>

12.    WARRANTY

       A.     The warranty period shall be [*] starting on the date the risk of
              loss or damage has passed onto APT according to Section 11 A.

       B.     SIEMENS' liability for any further damages resulting from the
              defects) of the Products shall be limited pursuant to the
              stipulations of Section 13.

13.    LIABILITY

       A.     SIEMENS assumes liability for any personal injury for which he is
              found responsible without limitation. If found. responsible for
              property damages of APT, SIEMENS shall indemnify APT for expenses
              incurred for restoration of the damaged property up to a maximum
              amount of DM 1 Million per damage event.

       B.     Apart from warranties and liabilities expressly stipulated in this
              Agreement, SIEMENS disclaims ail liability regardless of the cause
              in law, in particular the liability for indirect or consequential
              damages arising from interrupted operation, loss of profits, loss
              of information and data, unless in cases of gross negligence,
              intent, lack of assured characteristics or in any cases where
              liability is mandatory at law.

14.    NON-DISCLOSURE

       A.     In consideration of the disclosure of Proprietary and Confidential
              information by both parties to each other, both parties agree that
              the information relating to requirements, processes,
              specifications, schedules, materials, financial data and pricing
              exchanged between parties is hereby designated as Proprietary and
              Confidential by APT and SIEMENS.

       B.      It is agreed that for a period of ten (10) years, both parties
              shall (1) restrict dissemination of the above as Proprietary and
              Confidential information to only those employees who must be
              directly involved in the manufacturing of wafers and products for
              APT and (2) use the same degree of care as its uses for its own
              information of like importance against disclosure to other
              employees within each party or others outside of it.

       C.     Any breach of these Non-Disclosure restrictions shall be deemed as
              a breach of the Manufacturing Agreement. Both Parties shall pursue
              all remedies of law for such breaches.

       D.     This obligation shall not apply to information, which is or
              becomes public knowledge or which is provably independently
              developed or lawfully received from a third party.

15.    NON-ASSIGNMENT

       Neither party is entitled to assign this Agreement without the prior
       written consent of the

       [*] = CONFIDENTIAL TREATMENT REQUESTED

                                          6
<PAGE>

       other party.

16.    APPLICABLE LAW AND JURISDICTION

       A.     This Agreement and individual purchase contracts signed between
              the Parties hereunder shall be governed by and construed in
              accordance with the law in force in Switzerland without reference
              to its conflicts of law provisions. The application of the United
              Nations Convention on Contracts for the International Sale of
              Goods of April 11, 1980 shall be excluded.

       B.      All disputes arising out of or in connection with this Agreement
              or individual  purchase contracts signed hereunder, including any
              question regarding their  existence, validity or termination,
              shall be finally settled under the Rules of  Arbitration of the
              International Chamber of Commerce, Paris ("Rules") by three
              arbitrators in accordance with the said Rules.

       C.     Each party shall nominate one arbitrator for confirmation by the
              competent  authority under the applicable Rules ("Appointing
              Authority"). Both arbitrators shall  agree on the third arbitrator
              within 30 days. Should the two arbitrators fail within  the above
              time-limit to reach agreement on the third arbitrator, he shall be
              appointed by the Appointing Authority.

       D.     The seat of arbitration shall be Zurich. The procedural law of
              this place shall apply  where the Rules are silent.

       E.     The language to be used in the arbitration proceeding shall be
              English.

17.    DURATION OF THIS AGREEMENT

       The effective date of this Agreement shall be the date on which it is
       signed by the last party to sign it. This Agreement shall continue until
       it is terminated by either party, provided such terminating party gives
       the other party twelve (12) months written notice.

       Upon such notice of termination, the Coordinators for both parties shall
       proceed with the details of reducing schedules and  returning to APT  any
       previously supplied documentation. The intent is to provide an orderly
       transition by both parties, during the notification period until the
       final date of termination.

18.    AMENDMENT AND WAIVER

       This Agreement may be amended from time to time only by written document
       signed by the parties. No provisions of this Agreement can be waived
       except by a written document signed by the party waiving the provision,
       nor shall any failure to object to any breach of a provision of this
       Agreement waive the right to object to a subsequent breach of the same or
       any other provision.

                                          7

<PAGE>

19.    PUBLICITY

       SIEMENS and APT shall consult with one another before issuing any press
       release or public announcement about the transactions contemplated by
       this Agreement. Except as required by applicable law, neither SIEMENS nor
       APT shall issue any press release or other public announcement without
       the consent of the other party, which consent shall not be unreasonably
       withheld.

20.    FORCE MAJEURE

       Neither party will be liable for delay in performance or failure to
       perform, in whole or in  part, the terms of this Agreement when due to
       labor dispute, strike, war or act of war  (whether an actual declaration
       is made or not), insurrection, riot, civil commotion, act of  public
       enemy, fire, flood, or other act of God, act of any governmental
       authority, judicial  actions, or other causes beyond the control of such
       party, which are similar to, but not  limited to, the matters herein
       enumerated, and any such delay or failure shall not be  considered a
       breach of the Agreement. Either party shall immediately notify the other
       party of any circumstances which occurs which may prevent or
       significantly delay delivery  of processed wafers and products as is
       provides herein.

The parties hereto have executed this Agreement as of the day and year written
below:

APT                                SIEMENS,

By:           S/S                  By:           S/S
   -------------------------          -------------------------------
Name: John Hess                    Name: Claus Geisler

Title: Vice President              Title: Senior Director, Power Semiconductors

-Date :       10/17/97             Date:         10/14/97
       -------------------------        -------------------------------

                                          8

<PAGE>

                                             1998 WAFER / DIE PRICING

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                     DIE         APPROX        1999       1998 COST
                        WAFER                CHIP       PART                        SIZE        GOOD DIE       WAFER       PER GOOD
TYPE                  SIZE INS     TECH      NAME        NO      VOLT    AMPS       SQ MN      PER WAFER     COST $US       DIE $US
------------------------------------------------------------------------------------------------------------------------------------
<S>                   <C>          <C>      <C>        <C>       <C>     <C>       <C>         <C>           <C>          <C>
SIGC12T60                 5         PT      L7222B     BUP400     600    10.0       12.30         [*]
SIGC14T60                 5         PT      L7232B     BUP401     600    15.0       14.40         [*]
SIGC18T60                 5         PT      L7242B     BUP402     600    20.0       18.50         [*]
SIGC25T60                 5         PT      L7262B     BUP403     600    30.0       25.70         [*]
SIGC42T60                 5         PT      L7272B     BUP604     600    50.0       42.30         [*]
SIGC81T60R2               5         PT      L7162B      BSM...    600    75.0       81.00         [*]
SIGC156T60R2              5         PT      L7282B      BSM...    600    200.0     156.30         [*]

SIGC12T60N                5        NPT      L7222E      BSM...    600    10.0       12.30         [*]           [*]          [*]
SIGC14T60N                5        NPT      L7232E      BSM...    600    15.0       14.40         [*]           [*]          [*]
SIGC18T60N                5        NPT      L7242E      BSM...    600    20.0       18.50         [*]           [*]          [*]
SIGC25T60N                5        NPT      L7262E      BSM...    600    30.0       25.70         [*]           [*]          [*]
SIGC42T60N                5        NPT      L7272E      BSM...    600    50.0       42.30         [*]           [*]          [*]

SIGC6T120                 5        NPT                           1200     1.5       6.00                        [*]          [*]
SIGC14T120                5        NPT                           1200     5.0       14.40                       [*]          [*]
SIGC16T120                5        NPT                           1200     8.0       16.00                       [*]          [*]
SIGC25T120                5        NPT                           1200    15.0       25.70                       [*]          [*]
SIGC42T120                5        NPT                           1200    25.0       42.30                       [*]          [*]
SIGC81T120R2              5        NPT                           1200    50.0       81.00                       [*]          [*]
SIGC121T120R2             5        NPT                           1200    75.0      121.00                       [*]          [*]
SIGC156T120R2             5        NPT                           1200    100.0     156.30                       [*]          [*]

SIGC16T120C               6        NPT      L7131M      BSM...   1200     8.0       16.00         [*]           [*]          [*]
SIGC25T120C               6        NPT      L7141M     BUP213    1200    15.0       25.87         [*]           [*]          [*]
SIGC42T120C               6        NPT      L7151M     BUP314    1200    25.0       42.30         [*]           [*]          [*]
SIGC81T120R2C             6        NPT      L7161M      BSM...   1200    50.0       81.00         [*]           [*]          [*]
SIGC121T120R2C            6        NPT      L7171M      BSM...   1200    75.0      121.00         [*]           [*]          [*]
SIGC156T120R2C            6        NPT      L7181M      BSM...   1200    100.0     156.00         [*]           [*]          [*]

SIGC16T120CL              6        NPT      L7131P      BSM...   1200     8.0       16.00         [*]           [*]          [*]
SIGC25T120CL              6        NPT      L7141P      BSM...   1200    15.0       25.87         [*]           [*]          [*]
SIGC42T120CL              6        NPT      L7151P      BSM...   1200    25.0       42.30         [*]           [*]          [*]
SIGC81T120R2CL            6        NPT      L7161P      BSM...   1200    50.0       81.00         [*]           [*]          [*]
SIGC121T120R2CL           6        NPT      L7171P      BSM...   1200    75.0      121.00         [*]           [*]          [*]
SIGC156T120R2CL           6        NPT      L7181P      BSM...   1200    100.0     156.00         [*]           [*]          [*]

SIGC42T170                5        NPT      L7101B     BUP309    1700    15.0       42.30         [*]           [*]          [*]
SIGC144T170               5        NPT      L7071B      BSM...   1700    50.0      144.00         [*]           [*]          [*]
SIGC185T170               5        NPT      L7081B      BSM...   1700    75.0      185.00         [*]           [*]          [*]
</TABLE>

[*] = CONFIDENTIAL TREATMENT REQUESTED

                                       9

<PAGE>

                                   Attachment A2

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
                                   "price projection"
---------------------------------------------------------------------------------------------
                               1998                 1999                2000
---------------------------------------------------------------------------------------------
<S>                      <C>    <C>    <C>    <C>    <C>    <C>    <C>   <C>    <C>
number of 125mm
(total number of         1.0    1.5    3.5    3.5    6.5    13.5   5.0   10.0   20.0
wafer in thousands)
---------------------------------------------------------------------------------------------
SIGC42T60N               [*]    [*]    [*]    [*]    [*]    [*]    [*]    [*]    [*]
---------------------------------------------------------------------------------------------
SIGC42T120               [*]    [*]    [*]    [*]    [*]    [*]    [*]    [*]    [*]
---------------------------------------------------------------------------------------------
SIBC81T120R2C            [*]    [*]    [*]    [*]    [*]    [*]    [*]    [*]    [*]
---------------------------------------------------------------------------------------------
Price in U$ per wafer.

Die pricing related to above wafer quantities:
---------------------------------------------------------------------------------------------
SIGC42T60N               [*]    [*]    [*]    [*]    [*]    [*]    [*]    [*]    [*]
---------------------------------------------------------------------------------------------
SIGC42T120               [*]    [*]    [*]    [*]    [*]    [*]    [*]    [*]    [*]
---------------------------------------------------------------------------------------------
SIBC81T120R2C            [*]    [*]    [*]    [*]    [*]    [*]    [*]    [*]    [*]
---------------------------------------------------------------------------------------------
Price in U$ per wafer.
</TABLE>

All other types related to these manner.

[*] = CONFIDENTIAL TREATMENT REQUESTED

                                          10
<PAGE>

                                    ATTACHMENT B

             Semiconductor Group, Technical Regulation No. 19, Packing
                           A66003-R19-X-*-7635 dd. 07.96

                                          11

<PAGE>

                                  TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S><C>
1    GENERAL INFORMATION ON PACKING. . . . . . . . . . . . . . . . . . . . . . . . .1

     1.1  Terminology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

     1.2  Fundamentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

     1.3  Contents labeling. . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

     1.4  Scope. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

     1.5  Organizational units involved. . . . . . . . . . . . . . . . . . . . . . .5

     1.6  Documents referred to. . . . . . . . . . . . . . . . . . . . . . . . . . .5

     1.7  Other documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

2    PACKING FOR WAFERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

     2.1  Functional packing . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

     2.2  Packing procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

     2.3  Identification for internal transport from one site to another
     (including subcontractors). . . . . . . . . . . . . . . . . . . . . . . . . . .7

     2.4  Identification of incoming deliveries'to the VKL for external
     customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

     2.5  Transport packing. . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

     2.6  Identification of transport packing. . . . . . . . . . . . . . . . . . . .8

3    PACKING COMPONENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

     3.1  Functional packing . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

     3.2  Identification for transport to the VKL. . . . . . . . . . . . . . . . . .9

     3.3  Transport packing. . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

     3.4  Sending to Dispatch. . . . . . . . . . . . . . . . . . . . . . . . . . . .9

     3.4.1     Deliveries received infunctional packing. . . . . . . . . . . . . . .9

     3.4.2     Deliveries received in transport packing. . . . . . . . . . . . . . 10

4    APPENDIX: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

<PAGE>

                                  TABLE OF CONTENTS

     4.1  Example: Wafer packing . . . . . . . . . . . . . . . . . . . . . . . . . 10

     4.2  Example: Module packing. . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
 RELEASE              OFFICE                  NAME             SITE          TELEPHONE       DATE           SIGNATURE
----------------------------------------------------------------------------------------------------------------------------
 <S>                  <C>                     <C>              <C>           <C>             <C>            <C>
 Author               HL DOK                  Diebold          Mch B         2865            7/10/96        sgd. Diebold
----------------------------------------------------------------------------------------------------------------------------
 Checked by           HL R STA LV             GraBinger        Rgb W         2682            7/10/96        sgd. GraBinger
----------------------------------------------------------------------------------------------------------------------------
 Checked by           HL R CI MT              Seitz            Rgb W         2020            15/10/96       sgd. Seitz
----------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

1.   GENERAL INFORMATION ON PACKING

The aim of this guideline is to ensure that the packing used for products of the
Semiconductor Group is appropriate for the conditions to which it will be
subject, and that the products arrive at the end of the transport chain
undamaged. The guideline describes the components which comprise the packing in
each case.  It sets out the general principles for the packing and transport of
HL products.

1.1  TERMINOLOGY

The following definitions of terms are based on DIN 55 405 (Packaging; Concepts;
Introduction; Pt1 to Pt7)

PACK GOODS

Goods which are to be packed or are packed. Examples: undiced wafers, diced
wafers, components.

FUNCTIONAL PACKING = PACKAGING

Product made of packing materials which is designed to enclose or hold together
the pack goods.  Functional packing means: the primary protection against
breakage, fixed quantities, and possibly also subsequent machine handling of the
pack goods.  Examples of functional packing/packaging: wafer boxes, wafer
canisters, foil rings for diced chips, foil bags, tape, reels, tubes, trays.

PACKING AIDS

A collective term for aids which are used in conjunction with the packing
materials for packing purposes. Examples of packing aids: adhesive tape, labels,
silica gel, foam padding, transparent foil.

PACKING MATERIAL

Materials/loose packing from which the packaging and packing aids are composed.

PRODUCT PACKING (ALSO REFERRED TO AS TRANSPORT PACKING)

Packing, the form of which is determined by the transport conditions, and which
generally serves as the outermost packing of the functional packing.

TRANSPORT PACKING

Cuboidal packing, consisting of one of more parts, which can be closed up, the
form of which is

<PAGE>

determined by the transport conditions, e.g. aluminum box, case made of solid
and/or corrugated cardboard.

PACKAGE

The result of combining the pack goods and the packing, particularly suitable
for transport.

AIRFREIGHT CONTAINER

A container for airfreight, with the following characteristics: durable
construction for repeated use, transport of goods without repacking, easy to
load and unload, simple to handle when moved from one mode of transport to
another, volume of at least 1 m3.

1.2  FUNDAMENTALS

The packing must be constructed so as to satisfy SN 10 250 Part 1 - Fundamentals
for Packaging Engineering (Planning and Objectives).

The functions of packing are described in SN 10 250, Part 2 - Functions. The
departments in the Semiconductor Group which deal with packing are responsible
for these functions.

New forms of packing must always be the subject of a request. The required
application is described in Org-Handbook Guideline B 5.6,Guideline of Packing
Materials - Part land 2.

HL Packing Coordination issues lists of each of the permitted packing materials.
In the case of new packing materials, for multi-use packing, and the recycling
of packaging and packing aids, the UAS section should also be involved. In this
context, refer to DIN 6120.

When planning and developing packing, reference should be made to SN 10 250,
Fundamentals for Packaging Engineering Attachment 1, "List of questions for use
in selecting the packing". Before new forms of packing, packaging and packing
aids are authorized, these questions should be considered (permitted packing
materials, multi-use, disposal, transport simulation, costs). Items of packing
which have already been authorized should be checked regularly to ensure that
they meet the requirements of their conditions of use (continual improvement
process).

Packaging and packing aids should be reused. The decisive factors are the
financial aspects of return transport and the environmental protection
regulations. Examples of reusable packaging are wafer boxes, wafer canisters,
transport containers with padded inserts, tubes and trays.

1.3  CONTENTS LABELING

The integrity or uniformity of the product within a packing unit must meet the
requirements of SN 72 500 Parts 2, 3, 21 and any additional agreed customer
requirements.

Every item of product packing must have an unambiguous and easily readable
statement of its

<PAGE>

contents affixed. This will take the form of an adhesive label, a tag or a
barcode product label (BPL) as described in TR 32.
The labels will be affixed to the functional/transport packing. The product will
be held in the VKL (sales store) with the label, so that it can be identified
for later processing.

1.4  SCOPE

This guideline applies throughout HL, for all Divisions (GGs) and sites.

1.5  ORGANIZATIONAL UNITS INVOLVED

<TABLE>
<CAPTION>
     -------------------------------------------------------------------------
     Unit                               Primary task(s) in relation to packing
     -------------------------------------------------------------------------
     <S>                                <C>
     MT                                 Devise forms of packing, simulate
                                        transport
     -------------------------------------------------------------------------
     Development, MT, Production        Request new forms of packing and
                                        changes to packing; draw up technical
                                        terms of supply for packing materials
     -------------------------------------------------------------------------
     HL Packing Coordinator             Check packing materials
     -------------------------------------------------------------------------
     Environmental section (UAS)        Check reuse / disposal of packaging
     -------------------------------------------------------------------------
     Production units involved,         Produce APAs and EPAs covering
     in the testing area, stores,       packing, carriage and unpacking
     dispatch
     -------------------------------------------------------------------------
     Wafer production test area         Pack wafers in their functional
                                        packing and affix identifiers
     -------------------------------------------------------------------------
     Module testing area                Pack modules in their product packing
                                        and affix identifiers
     -------------------------------------------------------------------------
     Goods receiving point              Take delivery of packages, check
                                        delivery, report damage
     -------------------------------------------------------------------------
     Dispatch point (VKL)               Prepare packages for dispatch and hand
                                        over to the carrier
     -------------------------------------------------------------------------
     Production, subsequent processing  Unpack, check and report damage
     -------------------------------------------------------------------------
</TABLE>

1.6    DOCUMENTS REFERRED TO

DIN 55 405           Packaging; Concepts; Introduction; Ptl to Pt7

SN 10 250            Fundamentals for Packaging Engineering
                     Part 1        Planning, Objects
                     Part 2        Function
                     Attachment

SN 72 500            Technical Terms of Delivery for electrical/ electronic
                     Components
                     Part 1        General
                     Part 2        Integrated Circuits
                     Part 3        Discrete Semiconductor Devices
                     Part 21       Semiconductor Dice

Org-Handbook Guideline B 5.6
                     Guideline of Packing Materials
                     Part 1 Shipping to Customer

<PAGE>

                     Part 2 Supplier's Packaging

DIN 6120             Marking of packaging materials and packages for reclaiming
                     recycling
                     Part 1: Plastic packaging materials and packages; Graphik
                     symboles.
                     Part 2: Supplementary marking

DIN EN 20 780        Packaging; Pictorial marking for the handling of goods (ISO
                     780:1985) German Version EN 20780:1993

SN 66 769            Shipping marks for packages; Pictorial labels

SN 68 425            Electrostatic sensitive devices; Labels for packages

APAs and EPAs        Process specifications/ Single process specifications

TR 32                Product Labels

SN 18630             Marking of packages; Machine-readable lettering
                     Part 1: Labels for shipping packages
                     Part 2: Labels for product packages

1.7    OTHER DOCUMENTS

Technical drawings and purchase specifications must be available for all the
packaging materials required for packing (functional, product and transport
packing). This is the responsibility of Development, MT and Production.

The instructions (APAs and/or EPAs) required at each of the workplaces concerned
must be produced by the responsible organizational units (FV, PPT) in the
various plants.

2.     PACKING FOR WAFERS

Wafers which are being transported off the site where they are produced
require special functional, product and transport packing, to prevent them
from being damaged.

2.1    FUNCTIONAL PACKING

Wafer diameter, wafer thickness and the transport route affect the packing
materials and aids which should be used. The requirements specified in the
applicable APAs must be adhered to.

Table 1 contains examples of forms of functional packing which are currently
being used for the delivery of wafers.

<PAGE>

TABLE I FORMS OF FUNCTIONAL PACKING FOR WAFERS FROM DP/ST/CI/OS (EXAMPLES)

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
    Wafer                       Packing material          Packing aid
--------------------------------------------------------------------------------
<S>                         <C>                         <C>
Undiced                     Wafer box, foil bag
                            ----------------------------------------------------
                            Wafer canister              Support plates
                                                        Transparent foil disks
                                                        Foam inlays
--------------------------------------------------------------------------------
Diced                       Foil ring, foil tubing      Insulating pressboard
                                                        disks
                                                        Transparent foil disks
                            ----------------------------------------------------
                            Waffle pack                 Drying agent
                            Foil
                            Collapsible box
--------------------------------------------------------------------------------
</TABLE>

2.2    PACKING PROCEDURE

Various links in the transport chain connect the HL sites with external
customers, so that the packing will be designed for the corresponding
conditions. The various packing procedures are specified in the appropriate
process instructions (APAs).

2.3    IDENTIFICATION FOR INTERNAL TRANSPORT FROM ONE SITE TO ANOTHER (INCLUDING
       SUBCONTRACTORS)

The pack goods should be clearly identified by an adhesive label or barcode
label attached to an appropriate part of the packaging.
Adhesive labels or tags should be affixed to the box or canister. The
corresponding traveler protocol should be put with the packing.

2.4    IDENTIFICATION OF INCOMING DELIVERIES TO THE VKL FOR EXTERNAL CUSTOMERS

For unambiguous identification of pack goods, adhesive labels or barcode labels
should be affixed to a suitable item of the packaging, with its quality seal
intact.

The adhesive label or tag should be affixed to the box or canister before it is
sealed into heat-welded foil. The corresponding customer lot protocol should be
put with the packing.

2.5    TRANSPORT PACKING

The transport chain, the pack goods and the functional packing determine what
forms of transport packing should be used.
For consignments of undiced wafers which are being transported by heavy goods
vehicle, (e.g. from Villach to Munich), wafer transport containers or transport
boxes are used for transport packing.
Products which need special security, e.g. wafers for smart cards, must only be
transported in

<PAGE>

lockable wafer-transport containers.
Batches of wafers should not be split.
For consignments of chips (diced wafers) the form of packing used for transport
comprises containers with polystyrene foam covers in transport boxes, or special
boxes with foam in lays in transport boxes with rigid foam inserts. This type of
packing is intended for external customers, contract manufacturers or HL sites.
Transport boxes from blank wafer suppliers can be used if this saves time and
reduces costs. The external companies' designations can if necessary be covered
with neutral adhesive paper tape.
The appropriate handling icons and transport markings for the goods should be
affixed to the transport boxes. These should be printed as specified in DIN EN
20 780, Packaging; Pictorial marking for the handling of goods, and SN 66 769,
Shipping marks for packages; Pictorial labels.
When wafers are being air-freighted, the packages should be packed as 'loose
cargo' batches or in LD3 airfreight containers. When doing so, care must be
taken that any movement of the transport boxes is prevented by packing inserts.

2.6    IDENTIFICATION OF TRANSPORT PACKING

An adhesive address label will be put on the transport packing. The freight
documentation will be put into a pocket in the position provided for the
purpose.

3.     PACKING COMPONENTS

3.1    FUNCTIONAL PACKING

Table 2 shows examples of the functional packing currently used for the various
components.

TABLE 2 FUNCTIONAL PACKING FOR COMPONENTS (EXAMPLES)

<TABLE>
<CAPTION>
       ------------------------------------------------------------------
              Component                          Functional Packing
       ------------------------------------------------------------------
       <S>                                <C>
       Components                         Tube
       ------------------------------------------------------------------
                                          Tape and reel
       ------------------------------------------------------------------
                                          Tray
       ------------------------------------------------------------------
                                          Carrier
       ------------------------------------------------------------------
                                          Box
       ------------------------------------------------------------------
                                          Blister
       ------------------------------------------------------------------
       Modules                            Tape and reel
       ------------------------------------------------------------------
       Modules (SIMM/DIMM)                Tray
       ------------------------------------------------------------------
</TABLE>

The protection which is to be afforded to the components determines whether the
packaging used for the functional packing should be further enclosed, and how.

The type of component and the transport route determine whether the packaging is
heat-welded,

<PAGE>

whether in an atmosphere of air or N2 or evacuated, and whether protected from
moisture. Further details are laid down in the appropriate APAs.

3.2    IDENTIFICATION FOR TRANSPORT TO THE VKL

The BPL (= barcode product label) is affixed to the functional and product
packing in the test area.

Further details are laid down in the appropriate APAs.

3.3    TRANSPORT PACKING

The transport chain, the pack goods and the functional packing determine what
form of transport packing is to be used.

3.4    SENDING TO DISPATCH

On the basis of store withdrawal forms, the VKL collects together the components
to make up deliveries, and sends them to Dispatch.

Note: The functional packing must not be opened by the VKL or Dispatch.

3.4.1  DELIVERIES RECEIVED IN FUNCTIONAL PACKING

The items in their functional packing (e.g. bag), sealed and labeled (e.g. with
a BPL), are sent to Dispatch for each order separately, together with the
delivery documentation. Depending on their volume and transport route, one or
more items in their functional packing are packed into transport boxes. Empty
spaces must be filled with loose packing. An address label is affixed to each
package, and each delivery is provided with delivery documentation (e.g.
delivery note/customs documentation).

3.4.2  DELIVERIES RECEIVED IN TRANSPORT PACKING

Items in product packing, sealed and labeled (e.g. with a BPL), are sent to
Dispatch for each order separately, together with the delivery documentation.
Depending on the extent of the delivery, the packages are sent individually or
are collected together into a transport box. Empty spaces must be filled with
loose packing.

An address label is affixed to each package, and each delivery is provided with
delivery documentation (e.g. delivery note/customs documentation).

4.     APPENDIX:

4.1    EXAMPLE: WAFER PACKING

<PAGE>

                           Graphics Depicting:

       Pack goods           Functional packing          Functional packing

       System wafer         Wafer box                   Wafer canister

       Package                            Package
       Wafer box with wafers              Wafer canister with wafers

TRANSPORT PACKING FILLED WITH WAFER BOXES AND WAFER CANISTERS

<PAGE>

                           Graphics Depicting:

AIRFREIGHT CONTAINER FILLED WITH PACKAGES

4.2    EXAMPLE: MODULE PACKING

<TABLE>
<CAPTION>
Pack goods           Functional packing   Product packing
----------           ------------------   ---------------
<S>                  <C>                  <C>
                     = Packaging          in this case also: transport packing

Component            Bar
</TABLE>

<PAGE>

                           Graphics Depicting:

     PACKAGE                       TRANSPORT PACKING

TRANSPORT PACKING, FILLED

                         PACKAGE

<PAGE>

                                Graphics Depicting:
                             SIEMENS IGBT-PRODUCT RANGE

<PAGE>

                                Graphics Depicting:
                           SIEMENS DUO-PACK PRODUCT RANGE

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00010-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00010-of-00352.parquet"}]]