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Exhibit
10.1
 
 70-10135l4l-05
 COST-PLUS-FIXED-FEE/COMPLETION SUBCONTRACT
    GENERAL DYNAMICS ADVANCED
    
    JSI MICROELECTIONICS INC.INFORMATION SYSTEMS, INC.BY:
/s/ Steven A. Deal
    
    BY: /s/ Larry R. JohnsonNAME: Steve Deal
    
    NAME: Larry JohnsonTITLE: Manager of Subcontracts
    
    TITLE: PresidentDATE: 27 February 2006
    
    DATE 2/28/06
  GDAIS PROPRIETARY INFORMATION




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70-10135l4l-05
 SPECIAL AGREEMENTS AND OTHER IMPORTANT PROVISIONS AND
NOTIFICATIONS
 A.1 ORDER OF PRECEDENCE
  1.
    
    Sections A through H (Schedule Provisions)2.
    
    Contract Security Classification Specification (DD Form 254), (if applicable)3.
    
    Section I -1.1 (Standard Subcontract Terms and Conditions)4.
    
    Section I -1.2 (Additional Provisions)5.
    
    Section I -1.3 (Government Provisions)4.
    
    Non-Disclosure Agreement (NDA PI-04252 and PI-04252 Mod. 01)5.
    
    Statement of Work6.
    
    Cover/Signature Page7.
    
    All Other Attachments, Exhibits and Documents listed in Section J.
  A.2 SUBCONTRACT MODIFICATIONS (AND LIVING CONTRACT)
   GDAIS PROPRIETARY INFORMATION




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70-10135141-05
 GOODS/SERVICES AND PRICES/COSTS
 B.1 TYPE OF SUBCONTRACT
  STATEMENT OF REQUIREMENTS
  SUBCONTRACT LINE ITEM NUMBERS (SCLINs)
  EST.SCLIN
    
    GOODS/SERVICES
    
    QTY
    
    UNIT
    
    AMOUNT0001
    
    ARMS Foundry and SEGIT Facility Upgrades and Enhancements
    
    1
    
    LOTin accordance with the Statement of Work (SOW),Attachment 2, Section J hereof.Estimated Cost
    
    
    
    
    
    $
    3,929,785.00Fixed Fee
    
    
    
    
    
    $
    293,775.00Cost Plus Fixed Fee
    
    
    
    
    
    $
    4,223,560.000002
    
    Data Requirements in accordance with Appendix 1
    
    
    
    LOT
    
    The cost & feeof the SOW, Attachment 2, Section J hereof.
    
    
    
    
    
    for this item areincluded in thecost & fee in SCLIN 0001
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70-10135141-05
 B-4 ESTIMATED COST, FIXED FEE AND TOTAL AMOUNT (ALL SCLINS)
 (a)
    
    The reimbursement of costs and the payment of fee will be in accordance with the
Allowable Cost and Payment clause in the General Provisions of this Subcontract.(b)
    
    The estimated cost contemplated by the Allowable Cost and Payment clause in the General
Provisions of this Subcontract and the fixed fee as contemplated by this Subcontract are as
follows:
 SCLIN
    
    Estimated Cost
    
    Fixed Fee
    
    Total Cost Plus Fixed Fee0001
    
    $
    3,929,785.00
    
    
    $
    293,775.00
    
    
    $
    4,223,560.000002
    
    
    
    
    
    not separately pricedTOTALS
    
    $
    3,929,785.00
    
    
    $
    293,775.00
    
    
    $
    4,223,560.00
 B.5 RESERVED
  GDAIS PROPRIETARY INFORMATION




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70-10135141-05
 STATEMENT OF WORK/SPECIFICATIONS
 C.1
    
    STATEMENT OF WORK
  C.2
    
    RESERVED
  GDAIS PROPRIETARY INFORMATION
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70-10135141-05
 PRESERVATION, PACKAGING, MARKING AND SHIPPING
 D.1
    
    COMMERCIAL PRACTICES
  D.2
    
    DATA, REPORTS AND CERTIFICATIONS
  
    
    marked with the subcontract number
    
    mailed first-class (fax copies are acceptable provided they are followed up by
mailed originals)
    
    provided in triplicate (one original and two copies)
    
    directed to the attention of the Buyers designated Subcontract Representative.
  D.3
    
    RESERVED
 D.4
    
    SHIPMENTS OF GOODS (ROUTING/CARRIER, SHIPPING ADDRESS,
F.O.B. POINT,
MARKING & NOTIFICATION INSTRUCTIONS, ADVANCE SHIPPING NOTICE)
 The Subcontractor shall ship all deliverable goods under the Subcontract in accordance with
the following:(a)
    
    Routing/Carrier:All shipments of goods shall be shipped Federal Express OvernightSUBCONTRACTOR SHALL REFERENCE BUYERS SUBCONTRACT NUMBER ON ALL SHIPPING/FREIGHT DOCUMENTS.
 (b)
    
    Shipping Address:
    
    F.O.B. Point:General Dynamics AIS
    
    Destination8800 Queen Ave. S.Bloomington,MN 55431
 (c)
    
    Mark each crate, container and shipping document with the following minimum
information:
 
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70-10135141-05
 Prime Contract Number, as applicable(d)
    
    Reserved(e)
    
    Advance Shipping Notice:Prior to shipment of supplies, Subcontractor shall notify the following GDAIS
personnel by separate telefax of the forthcoming shipment:The faxed notice of shipment shall include the following: Subcontract number, item
description, quantity, approximate weight of shipment, method of shipment, carrier name,
bill of lading number, time of departure, and estimated time to arrival.
SUCH NOTIFICATION SHALL BE GIVEN AT LEAST 24 HOURS PRIOR TO SHIPMENT.When shipment is made, Subcontractor shall mail a copy of the packing sheet (or equivalent)
with applicable test report, inspection sheets, certifications, etc., to the Buyers designated Subcontract
Representative.
  GDAIS PROPRIETARY INFORMATION
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70-10135141-05
 INSPECTION AND ACCEPTANCE/QUALITY ASSURANCE
 E-1
    
    INSPECTION AND ACCEPTANCE
 (a)
    
    The Buyer has the right to inspect and evaluate the work performed or being performed
under the Subcontract, and the premises where the work is being performed, at all reasonable
times and in a manner that will not unduly delay the work. If the Buyer performs inspection or
evaluation on the premises of the Subcontractor or its subcontractor(s), the Subcontractor
shall furnish and require its subcontractor(s) to furnish, without additional charge, all
reasonable facilities and assistance for the safe and convenient performance of these duties.(b)
    
    Final inspection and acceptance of goods and data shall occur at Buyers facility upon the
Buyers acceptance of same in accordance with the inspection, test and acceptance criteria of
the Subcontract Statement of Work.(c)
    
    Data requirements and inspection and acceptance thereof shall be as indicated in the
Subcontract Data Requirements of the Statement of Work.(d)
    
    Quality assurance requirements shall be as indicated in the Subcontract Product Assurance
Requirements of the Statement of Work.(e)
    
    The provisions of Section E are in addition to any other inspection and acceptance provisions
of the Subcontract. In the event of a conflict between Section E and any other inspection and
acceptance provisions of the Subcontract, including the inspection and acceptance provisions
set forth by the Subcontract Statement of Work and the Subcontract General Provisions, the
full text provisions of Section E shall prevail.
  GDAIS PROPRIETARY INFORMATION
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(GENERAL DYNAMICS LOGO)Subcontract No. 70-10135141-05
DPAS Rating: DOA7
 DELIVERY/PERFORMANCE
 F.l
    
    PERIOD OF PERFORMANCE
 (a)
    
    SCLINs 0001  0002: The Subcontractor shall accomplish the work required in Section B
commencing 02/01/05 (effective date of Subcontract) through the performance period end date of
01/31/07. The parties agree that the Subcontractor shall perform reasonable and necessary closeout
duties after the performance period end date noted herein. Any extension of this performance period
requires Buyers written approval.(b)
    
    The Buyer shall not be obligated to reimburse the Subcontractor for any work performed
or charges incurred before or after this time period, unless agreed to in writing by the Buyers
designated Subcontract Representative.F.2
    
    SUBCONTRACT DELIVERABLEThe goods, data and reports to be furnished hereunder shall be delivered to the Buyer as specified
in the Statement of Work.F.3
    
    SUBCONTRACT MILESTONES/EVENTS(a)
    
    Subcontractor shall be fully prepared to meet and/or support the program schedule as set
forth in SOW.
  GDAIS PROPRIETARY INFORMATION
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(GENERAL DYNAMICS LOGO)Subcontract
No. 70-10135141-05
DPAS Rating: DOA7
 SUBCONTRACT ADMINISTRATION DATA
 G.1
    
    TECHNICAL AND ADMINISTRATIVE REPRESENTATIVES(a)

    The following technical and administrative representatives of the Buyer and
Subcontractor are hereby designated for this Subcontract:
 Subcontractors Representatives are:
    
    Buyers Representatives are:Larry
Johnson  Technical Representative
    
    Nan Hauser  Technical RepresentativeLarry Johnson  Contract Representative
    
    Lowell Barie  Subcontract Representative
 In the event Lowell Barie is not available, Steve Deal or their duly authorized representatives
shall serve as Buyers Subcontract Representative. In the event Larry Johnson is not available, his
duly authorized representative shall serve as Subcontractors Contract Representative.(b)
    
    The Buyers Technical Representative is responsible for day-to-day clarifications,
guidance and technical direction as may be required within the scope of the technical work
requirements. Technical direction shall be in accordance
with the Technical Direction provision of the
General  Provisions of the Subcontract.(c)
    
    Contact with the Buyer regarding prices, terms, quantities, deliveries, and financial
adjustments shall be made only between the Buyers Subcontract Representative and the
Subcontractors contract Representative. Actions taken by the Subcontractor, which by their nature
effect a change to this Subcontract, shall only be binding upon the Buyer when such action is
specifically authorized in writing by the Buyers Subcontract Representative. Unless specified
otherwise in this Subcontract, all written communications between Subcontractor and Buyer shall be
addressed and directed to the Buyers Subcontract Representative and Subcontractors Contract
Representative.(d)
    
    The Buyer shall be responsible for all liaison and communications with the Buyers
customer as well as the Buyers other subcontractors for the term of this Subcontract. The
Subcontractor shall not communicate with the Buyers customer nor the Buyers other subcontractors
regarding this Subcontract except with the prior consent of the Buyer.(e)
    
    No request, notice, authorization, direction or order received by the Subcontractor
shall be binding upon the Buyer, or serve as the basis for a change in the Subcontract, unless
issued (or confirmed) in writing by the Buyers Subcontract Representative.(f)
    
    The Subcontractor shall immediately notify the Buyers Subcontract Representative
whenever a verbal or written change notification has been received from an employee of the Buyer
(other than the Subcontract Representative), which would affect any of the terms, conditions, cost,
schedules, etc., or this Subcontract, and the Subcontractor is to perform no work or make any
changes in response to any such notification or make any claim on Buyer unless the Buyers
Subcontract Representative directs the Subcontractor, in writing, to implement such change
notification.
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(GENERAL DYNAMICS LOGO)Subcontract No. 70-10135141-05
DPAS Rating: DOA7
 G.2
    
    COMMUNICATIONS(a)
    
    All notices and other binding communications shall be in writing and sent by
cable, telex, U.S mail, telefax, or other customary means, addressed as follows:
 Subcontractor:
    
    Buyer:JSI Microelectronics Inc.
    
    General Dynamics Advanced InformationSystems, Inc4235 Forcum Ave., Suite 500
    
    8800 Queen Ave S.McClellan, CA 95652
    
    Bloomington, MN 55431Attn. Larry Johnson
    
    Attn. Lowell Barie
 or to such other address as the Subcontractors Contract Representative or Buyers Subcontract
Representative shall designate by written notice.(b)
    
    All correspondence and data submitted by Subcontractor under this Subcontract shall
reference the Subcontract number.G.3
    
    SUBMISSION OF INVOICES(a)
    
    Subcontractors invoices shall be submitted no more than once a month, in triplicate
(one original and two copies) and addressed as follows for Buyers review and provisional approval:
 (1)
    
    Original and one (1) copy to:
General Dynamics Advanced Information Systems, Inc. 
Accounts Payable  Attn: Suleman Bagha
3021 American Blvd. East
Bloomington, MN 55425(2)
    
    Fax one (1) copy to: (952) 921-6869
General Dynamics Advanced Information Systems, Inc.
8800 Queen Ave. S.
Bloomington, MN 55431
Attention: Lowell Barie
 (b)
    
    Invoices submitted shall reflect incurred costs at the SCLIN level of performance. Final
payment shall be made in accordance with the Allowable Cost and Payment clause in the General
Provisions of this Subcontract.(c)
    
    Subcontractors invoices and attachments thereto shall include the following minimum
information, as applicable: Subcontractors name and business address, remittance address, date
of invoice, Subcontract number, Buyers internal accounting numbers or Cost Charge Numbers (CCNs),
prime contract number, name of Buyers designated Subcontract Representative, Subcontract Line Item
Numbers (SCLINs), description of goods and/or services with corresponding sizes, quantities and
unit prices, separately itemized taxes, extended totals, Subcontractors signature and payment
terms.(d)
    
    Reserved
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(GENERAL DYNAMICS LOGO)Subcontract No. 70-10135141-05
DPAS Rating: DOA7
 (e)
    
    Invoices submitted without the above information may be returned to the
Subcontractor for correction.(f)
    
    If a tax exemption applies to this Subcontract, the following is the tax exemption
number: CA SR OH 100-171968(g)
    
    Submit on an annual basis (or at the end of performance whichever is sooner), a
reconciliation of invoices billed and paid.(h)
    
    Notify the Buyer immediately upon receipt of an overpayment for farther direction.G.4
    
    PAYMENT TERMS(a)
    
    Payment terms are 30 days after receipt of an acceptable invoice.For SCLINS 0001/0002, payment to the Subcontractor shall be in accordance with the General
Provisions, entitled Payment.G.5
    
    CALIFORNIA SALES  USB TAXAll goods and services purchased under this Subcontract are for resale.G.6
    
    RESERVED
  GDAIS PROPRIETARY INFORMATION
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(GENERAL DYNAMICS LOGO)Subcontract No. 70-10135141-05
DPAS Rating: DOA7
 SPECIAL PROVISIONS
 H.1
    
    RESERVEDH.2
    
    PLACE OF PERFORMANCEThe work under this Subcontract shall be performed at the DMEA Foundry located at 4234 54th
Street McClellan, CA 95652-2100.H.3
    
    BUYER/CUSTOMER-FURNISHED SPECIAL TOOLING (ST), SPECIAL TEST EQUIPMENT (STE), PLANT EQUIPMENT (PE), MATERIAL AND/OR FACILITIES.(a)
    
    Pursuant to the Property Clause of this Subcontract, the Buyer shall furnish for use in
the performance of this Subcontract, the following Buyer and/or Customer-furnished ST, STE, PE,
material and/or facilities identified in paragraph(s) (b) and (c) below on or before the date(s)
specified.(b)
    
    Buyer-Furnished ST, STE, PE, material and/or facilities:
 N/A
 Customer-Furnished ST, STE, PE, material and/or facilities:
 N/A
 H.4
    
    BUYER-FURNISHED INFORMATIONThe Buyer may provide to the Subcontractor various reports, documents and other data to assist the
Subcontractor in performing the work defined in the Subcontract. The Buyer does not warrant
Buyer-furnished information to be free from error or to be complete and accurate in all instances.
The information is provided with the understanding that, to the best of Buyers ability to so
determine, it is pertinent and useful in the fulfillment of the Subcontract work; however, the
Subcontractor has no right, either actual or implied, to an adjustment of price or indemnification
for cost associated with any data or information obtained from the Buyer.H.5
    
    DPAS PRIORITY RATINGThe priority rating of this Subcontract is DOAZ. This is a rated Subcontract certified for
national defense use, and you are required to follow all the provisions of the Defense Priorities
and Allocations System Regulation (15 CFR Part 700).H.6
    
    NONDISCLOSURE AGREEMENTThe parties shall exchange proprietary information in accordance with the NONDISCLOSURE AGREEMENT
set forth in Section J, which is incorporated herein by this reference.H.7
    
    IDENTIFICATION OF RESTRICTIONS ON RIGHTS IN TECHNICAL DATA AND
COMPUTER SOFTWARENone
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(GENERAL DYNAMICS LOGO)Subcontract No. 70-10135141-05
DPAS Rating: DOA7
 H.8
    
    RESERVEDH.9
    
    RESERVED
  GDAIS PROPRIETARY INFORMATION
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\

70-10135141-05
 GENERAL PROVISIONS
  I.1
    
    STANDARD SUBCONTRACT TERMS AND CONDITIONSThis Subcontract incorporates Attachment 4 GDAIS Standard Subcontract Terms and Conditions.
 I.2
    
    ADDITIONAL PROVISIONS (Full Text)(a)
    
    The following Special Requirements and Conditions are applicable to this subcontract:None
 I.3
    
    GOVERNMENT PROVISIONS(a)
    
    The term FAR, when used in the following clauses, means the cited portion of the
Federal Acquisition Regulation including, when appropriate, the Department of Defense
(DoD) FAR Supplement (DFARS), in effect on the date of this Subcontract. Where appropriate to accomplish the purpose of the FAR or to protect the Buyers interest, the word Buyer
shall be substituted for the word Government or Contracting Officer and the word
Subcontractor shall be considered the Contractor hereunder in the reading of these
regulations, thereby creating a legal relationship between the Buyer and Subcontractor
identical to, but not dependent upon, the legal relationship intended to be created by
said regulations between the Government and a contractor.Any references to the Disputes clause or Changes clause shall refer to the GDAIS Standard Terms
and Conditions incorporated herein.The terms Government or Contracting Officer do not change: (i) when a right, act, authorization
or obligation can be granted or performed only by the Government, (ii) when access to proprietary
financial information or other proprietary data is required, (iii) when title to property is to be
transferred directly to Government.The word Buyer, as it appears in the Subcontract, means General Dynamics Advanced Information
Systems acting through its duly authorized Procurement representative. No other persons may make
commitments or changes under the Subcontract on behalf of the Buyer.Copies of the FAR/DFARS may be obtained by Federal Acquisition Regulation Internet websites
available at http://www.acqnet.gov/far/or
http://www.acq.osd.mil/dp/dars/dfars.html or by contacting GDAIS subcontract
administrator.(b)
    
    COST OR PRICING DATA  Defective Cost of Pricing Data - Subcontractor agrees
to comply with the applicable provisions (without dollar limitation, however) of FAR
15,408 and the applicable regulations of the Cost Accounting Standards Board and to
indemnify and hold harmless GDAIS for any claims, loss, damage or expense (including
without limitation attorneys fees), resulting from any defective, non-current,
incomplete, or inaccurate data supplied by Subcontractor in pricing of this Subcontract,
or any other violation of the provisions of FAR 15,408 and the Cost Accounting Standard
regulations.(c)
    
    OTHER THAN COST OR PRICING DATA  GDAIS or GDAIS, Customer may at their discretion require
Subcontractor to submit information other than cost or pricing data to determine whether
Subcontractors price is fair and reasonable. The requested information may include sales data for
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70-10135141-05
 the same or similar Work for the relevant period, such as the information set forth in FAR
52.215-20 or FAR 52.215-21, in the form regularly maintained by Subcontractor as part of its
commercial operations.(d)
    
    COPYRIGHT, DATA AND PATENT RIGHTS  (i) Government Rights: Notwithstanding any other
provisions in this Subcontract, if this Subcontract is placed under a prime contract which
grants copyright, data, or patent rights to the Government, Subcontractor agrees to comply
with the requirements of such grant insofar as they are applicable to the subject matter
of this Subcontract and with all pertinent provisions of Part 27 of the FAR or
corresponding regulations of the Government Agency supporting the work of this
subcontract. (ii) Authorization and Consent: To the extent that the prime contract under
which this Subcontract is being performed includes Government Authorization and Consent to
use patented inventions without indemnification and to the extent that clause applies, the
provisions of paragraph 14(a) of the General Terms and Conditions do not apply.(e)
    
    OTHER OBLIGATIONS OF SUBCONTRACTOR  Subcontractor will provide whatever reasonable assistance
GDAIS may require to maintain compliance between this Subcontract and any contract under which this
Subcontract is issued, including, but not limited to, complying with the following FAR clauses and, to
the extent the Subcontract is issued in support of a contract with a Department of Defense (DoD)
agency or contractor of a DoD agency, the following DFARS clauses, which are incorporated herein by
reference. Subcontractor shall include in its subcontracts under this Subcontract any provisions
required to be flowed-down to lower-tier subcontractors by the incorporated FAR or DFARS
provisions. If Subcontractor believes that one or more of the following clauses do not apply to
this Subcontract, Subcontractor must advise GDAIS in writing of said clause(s). GDAIS may, in its
sole discretion and in writing, acknowledge its agreement with Subcontractor at which time such
clause(s) will be deemed deleted from this Subcontract. If GDAIS affirmatively rejects
Subcontractors assertion in writing or does not respond to Subcontractors assertion, the
clause(s) shall apply.
 GDAIS PROPRIETARY INFORMATION
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