ex_10-27.htm


    
      

      

    

    
      Exhibit
10.27

       

      

      
 

      MANUFACTURING
SERVICES AGREEMENT

      


      


      between

      


      


      JABIL
CIRCUIT, INC.

      


      and

      


      Location
Based Technologies Inc.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

         

        INDEX

         

      

      
        
          	
                  1

                	
                  Definitions

                	
                  3

                
	
                  2

                	
                  List
      of Schedules.

                	
                  6

                
	
                  3

                	
                  Build
      Schedule Forecasts.

                	
                  6

                
	
                  4

                	
                  Manufacturing
      Services

                	
                  7

                
	
                  5

                	
                  Warranty
      & Remedy.

                	
                  8

                
	
                  6

                	
                  Limitation
      of Damages

                	
                  9

                
	
                  7

                	
                  Delivery,
      Risk of Loss and Payment Terms.

                	
                  9

                
	
                  8

                	
                  Import
      and Export.

                	
                  10

                
	
                  9

                	
                  Design
      or Repair Services; US Government Contracts.

                	
                  10

                
	
                  10

                	
                  Change
      Orders, Rescheduling and Cancellation.

                	
                  10

                
	
                  11

                	
                  Term.

                	
                  13

                
	
                  12

                	
                  Termination.

                	
                  13

                
	
                  13

                	
                  Confidentiality.

                	
                  14

                
	
                  14

                	
                  Intellectual
      Property Rights; Assignment.

                	
                  14

                
	
                  15

                	
                  Manufacturing
      Rights.

                	
                  15

                
	
                  16

                	
                  Company
      Warranty and Indemnification.

                	
                  15

                
	
                  17

                	
                  Relationship
      of Parties.

                	
                  15

                
	
                  18

                	
                  Insurance.

                	
                  15

                
	
                  19

                	
                  Publicity

                	
                  15

                
	
                  20

                	
                  Force
      Majeure.

                	
                  16

                
	
                  21

                	
                  Miscellaneous.

                	
                  16

                
	
                  SCHEDULES:

                	
                  19

                
	
                  22

                	
                  SCHEDULE
      1 - STATEMENT OF WORK

                	
                  19

                
	
                  23

                	
                  SCHEDULE
      2 – CURRENCY POLICY

                	
                  20

                
	
                  24

                	
                  SCHEDULE
      3 - MANUFACTURING SERVICES LETTER AGREEMENT (if
      applicable)

                	
                  23

                


        

      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      MANUFACTURING
SERVICES AGREEMENT

      


      This
Manufacturing Agreement (“Agreement”) is entered into by and between Jabil
Circuit, Inc., a Delaware corporation (“Jabil”), having offices at 10560 Dr.
M.L. King Jr. Street North St. Petersburg, Florida 33716, on behalf of Jabil and
its Subsidiaries, and Location Based Technologies, a Nevada corporation
(“Company”), having its principal place of business at 4999 E.La Palma Av.
Anaheim CA 92807 U.S.A. Jabil and Company are referred to herein as “Party” or
“Parties”.

       

      RECITALS

      


      A.           Jabil
is in the business of designing, developing, manufacturing, testing,
configuring, assembling, packaging and shipping electronic assemblies and
systems.

      


      B.           Company
is in the business of designing, developing, distributing, marketing and selling
products containing electronic assemblies and systems.

      


      C.           Whereas,
the Parties desire that Jabil manufacture, test, configure, assemble, package
and/or ship certain electronic assemblies and systems pursuant to the terms and
conditions set forth in this Agreement.

      


      NOW, THEREFORE, in
consideration of the foregoing and the mutual covenants contained herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Parties agree as follows:

       

      TERMS

       

      
        	
                1  

              	
                Definitions

              


      

       

      In
addition to terms defined elsewhere in this Agreement, the capitalized terms set
forth below shall have the following meaning:

       

      
        	
                1.1  

              	
                ‘‘Additionnals
      Services’’

              


      

       

      means
services such as, design for manufacturability, manufacturing design test
support, computer assisted design for manufacturability, test development
services, volume production and advanced packaging technologies all as specified
and approved by Company and agreed to by Jabil.

       

      
        	
                1.2  

              	
                ‘‘Affiliate’’

              


      

       

      means
with respect to a Person, any other Person which directly or indirectly
controls, or is controlled by, or is under common control with, the specified
Person or an officer, director or 10% or more shareholder of the specified
Person.  For purposes of the preceding sentence, "control" of a Person
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person, or direct or
indirect ownership (beneficially or of record) of, or direct or indirect power
to vote, 5% or more of the outstanding shares of any class of capital stock of
such Person (or in the case of a Person that is not a corporation, 5% or more of
any class of equity interest).

       

      
        	
                1.3  

              	
                "Build
      Schedule"

              


      

       

      means a
manufacturing schedule provided to Jabil by Company in writing which specifies
the Product to be manufactured, including the quantity of each Product, its
description and part number, shipping instructions and requested delivery
date.

       

      
        	
                1.4  

              	
                "Build
      Schedule Forecast"

              


      

       

      means the
monthly forecast provided to Jabil by Company, in writing, of quantity
requirements of each Product that Company anticipates requiring during the next
twelve (12) month period.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      
        	
                1.5  

              	
                “Commercially
      Reasonable Efforts”

              


      

       

      means
those efforts that would be deemed both commercially practicable and reasonably
financially prudent after having taken into account all relevant commercial
considerations.  “Relevant commercial
considerations” shall be
deemed to include, without limitation, (1) all pertinent facts and
circumstances; (2) financial costs; (3) resource availability and impact; (4)
probability of success; and (5) other commercial practicalities.

       

      
        	
                1.6  

              	
                "Components
      Supplied by Company"

              


      

       

      means
those components or materials that Company provides, directly or indirectly, to
Jabil to be incorporated into the Product.

       

      
        	
                1.7  

              	
                "EDI"

              


      

       

       shall mean electronic
data interchange.

       

      
        	
                1.8  

              	
                "Effective
      Date"

              


      

       

      shall
mean the date upon which the terms and conditions of this Agreement shall become
effective by and between the Parties. The Parties have agreed that the Effective
Date of this Agreement shall be the 30 day of MAY, 2008, or if no date is
entered here, the last date of signature.

       

      
        	
                1.9  

              	
                "Fee
      and Price Schedule"

              


      

       

      shall
mean the prices and fees set forth Schedule 1.

       

      
        	
                1.10  

              	
                "FOB"

              


      

       

      shall
mean the shipper must at its own expense and risk transport the goods to the
place of destination.

       

      
        	
                1.11  

              	
                “including”

              


      

       

      shall be
defined to have the meaning “including, without limitation.”

       

      
        	
                1.12  

              	
                “in
      writing”

              


      

       

      shall
mean written documents, EDI with phone confirmation, verified faxes and
successfully transmitted e-mails.

       

      
        	
                1.13  

              	
                “Jabil
      Circuit, Inc.” and “Jabil”

              


      

       

      shall be
defined to include any Jabil Subsidiary.

       

      
        	
                1.14  

              	
                “Jabil
      Created Intellectual Property”

              


      

       

      means any
discoveries, inventions, technical information, procedures, manufacturing or
other processes, software, firmware, technology, know-how or other intellectual
property rights newly created or developed, and reduced to practice by or for
Jabil in (i) preparing any Product provided pursuant to this Agreement, or (ii)
performing the Manufacturing Services or any other work provided pursuant to
this Agreement; but shall not include any Jabil Existing Intellectual
Property.

       

      
        	
                1.15  

              	
                “Jabil
      Existing Intellectual Property”

              


      

       

      means any
discoveries, inventions, technical information, procedures, manufacturing or
other processes, software, firmware, technology, know-how or other intellectual
property rights owned or developed by Jabil outside of this Agreement or owned
or controlled by Jabil prior to the execution of this Agreement that are used by
Jabil in creating, or are embodied within, any Product, the Manufacturing
Services or other work performed under this Agreement; and all improvements,
modifications or enhancements to the foregoing made by or on behalf of
Jabil.

       

      
        	
                1.16  

              	
                “Jabil
      Intellectual Property”

              


      

       

      shall
mean both Jabil Created Intellectual Property and Jabil Existing Intellectual
Property, collectively.

       

      
        	
                1.17  

              	
                "Jabil
      Manufacturing Process"

              


      

       

      means
Jabil's process employed to manufacture, test, configure and assemble Product
manufactured for Company pursuant to the terms of this Agreement.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      
        	
                1.18  

              	
                "Lead-time"

              


      

       

      means the
mutually agreed upon minimum amount of time in advance of shipment that Jabil
must receive a Build Schedule in order to deliver Product by the requested
delivery date.

       

      
        	
                1.19  

              	
                "Loaned
      Equipment"

              


      

       

      means
capital equipment (including tools) which is loaned to Jabil by or on behalf of
Company to be used by Jabil to perform the Manufacturing Services and includes
all equipment, tools and fixtures purchased specifically for Company, by Jabil,
to perform the Manufacturing Services and that are paid for in full by
Company.

       

      
        	
                1.20  

              	
                "Manufacturing
      Services"

              


      

       

      means the
services performed by Jabil hereunder which shall include but not be limited to
manufacturing, testing, configuring, assembling, packaging and/or shipping of
the Product, including any Additional Services, all in accordance with the
Specifications.

       

      
        	
                1.21  

              	
                “Materials
      Declaration Requirements”

              


      

       

      means any
requirements, obligations, standards, duties or responsibilities pursuant to any
environmental, product composition and/or materials declaration laws,
directives, or regulations, including international laws and treaties regarding
such subject matter; and any regulations, interpretive guidance or enforcement
policies related to any of the foregoing, including for
example:  Directive 2002/95/EC of the European Parliament and of the
Council of 27 January 2003 on the restriction of the use of certain hazardous
substances in electrical and electronic equipment (“RoHS”), Directive 2002/96/EC
of the European Parliament and of the Council of 27 January 2003 on waste
electrical and electronic equipment (“WEEE”), and European Union Member State
implementations of the foregoing; the People's Republic of China (PRC) Measures
for the Administration of the Control of Pollution by Electronic Information
Products (电子信息产品污染控制管理办法)
promulgated on February 28, 2006 (including any pre-market certification ("CCC
mark") requirements thereunder and including relevant standards adopted by the
PRC Ministry of Information Industry or other applicable PRC authority); PRC
General Administration of Quality Supervision, Inspection and Quarantine's
Circular 441 (2006); Japanese Industrial Standard C0950:2005; the California
Electronic Waste Recycling Act of 2003; and/or other similar
legislation.

       

      
        	
                1.22  

              	
                "NRE
      Costs"

              


      

       

      shall
consist of expenses incurred by Jabil under this Agreement, including design
engineering services, testing, fixturing and tooling and other out-of-pocket
costs.

       

      
        	
                1.23  

              	
                "Packaging
      and Shipping Specifications"

              


      

       

      means the
packaging and shipping specifications set forth in Schedule 1 and otherwise
supplied and/or approved by Company.

       

      
        	
                1.24  

              	
                "Person"

              


      

       

      means any
corporation, business entity, natural person, firm, joint venture, limited or
general partnership, limited liability entity, limited liability partnership,
trust, unincorporated organization, association, government, or any department
or agency of any government.

       

      
        	
                1.25  

              	
                "Product(s)"

              


      

       

      means the
product(s) manufactured and assembled by Jabil on behalf of Company under this
Agreement as identified in Schedule 1 (or any subsequent Schedule 1 prepared for
any product to be manufactured hereunder) including any updates, renewals,
modifications or amendments thereto.

       

      
        	
                1.26  

              	
                "Proprietary
      Information and Technology"

              


      

       

      means
software, firmware, hardware, technology and know-how and other proprietary
information or intellectual property embodied therein that is known, owned or
licensed by and proprietary to either Party and not generally available to the
public, including plans, analyses, trade secrets, patent rights, copyrights,
trademarks, inventions, fees and pricing information, operating procedures,
procedure manuals, processes, methods, computer applications, programs and
designs, and any processed or collected data. The failure to label any of the
foregoing as “confidential” or “proprietary” shall not mean it is not
Proprietary Information and Technology.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      
        	
                1.27  

              	
                "Specifications"

              


      

       

      means the
technical specifications for manufacturing set forth in Schedule 1 and otherwise
supplied and/or approved by Company.  Specifications may be amended
from time to time by amendments in the form of written engineering change orders
agreed to by the Parties.

       

      
        	
                1.28  

              	
                "SOW"

              


      

       

      means the
statement of work for each Product set forth in any Schedule 1 as amended in
writing from time to time upon mutual agreement of the Parties.

       

      
        	
                1.29  

              	
                “Subsidiary(ies)”

              


      

       

      means any
corporation, partnership, joint venture, limited liability entity, trust,
association or other business entity of which a Party or one or more of its
Subsidiaries, owns or controls more than 50% of the voting power for the
election of directors, managers, partners, trustees or similar
parties.

       

      
        	
                1.30  

              	
                “Suppliers
      Designated by Company”

              


      

       

      means
suppliers designated, specified and/or approved by Company.

       

      
        	
                1.31  

              	
                "Test
      Procedures"

              


      

       

      means the
testing specifications, standards, procedures and parameters set forth in
Schedule 1 and otherwise supplied and/or approved by Company.

       

      
        	
                1.32  

              	
                "Unique
      Components"

              


      

       

      means
those non-standard components or materials procured exclusively for
incorporation into the Product.

       

      
        	
                2  

              	
                List of
      Schedules.

              


      

       

      This
Agreement includes the following Schedules for each Product to be manufactured
hereunder, which are hereby incorporated herein and made a part of this
Agreement:

       

             
 Schedule 1 - Statement of Work

           
   Schedule 2 - Currency Policy

            
  Schedule 3 - Manufacturing Services Letter Agreement (if applicable)

       

      
        
          	
                  1.32  

                	
                  "Unique
      Components"

                


        

         

      

      
        	
                3  

              	
                Build Schedule
      Forecasts.

              


      

       

      As soon
as practicably possible and no later than one month following the execution of
this Agreement, Company shall provide Jabil with a Build Schedule
Forecast.  The Build Schedule Forecast shall be updated by Company, in
writing, on at least a monthly basis.  Any rescheduling or
cancellation of the orders set forth in a Build Schedule Forecast shall be
subject to the terms set forth in Section 10.5.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      
        	
                4  

              	
                Manufacturing
      Services

              


      

       

      Jabil
will manufacture the Product in accordance with the Specifications and any
applicable Build Schedules.  Jabil will reply to each proposed Build
Schedule that is submitted in accordance with the terms of this Agreement by
notifying Company of its acceptance or rejection within five (5) business days
of receipt of any proposed Build Schedule. In the event of Jabil’s rejection of
a proposed Build Schedule, Jabil’s notice of rejection will specify the basis
for such rejection.  When requested by Company, and subject to
appropriate fee and cost adjustments, Jabil will provide Additional Services for
existing or future Product manufactured by Jabil. Company shall be solely
responsible for the sufficiency and adequacy of the Specifications and shall
hold Jabil harmless for any claim arising there from except where
Jabil changes or deviates from the Specifications without prior written consent
of the Company. Jabil will notify Company in writing of any questions regarding
the submitted Specifications within 10 days of receipt

       

      
        	
                4.1  

              	
                Testing.

              


      

       

      Jabil
will test the Product in accordance with the Test Procedures.  Company
shall be solely responsible for the sufficiency and adequacy of the Test
Procedures and shall hold Jabil harmless for any claim arising there from.
except where Jabil changes or deviates from the Specifications without prior
written consent of the Company

       

      
        	
                4.2  

              	
                Packaging
      and Shipping.

              


      

       

      Jabil
will package and ship the Product in accordance with Packaging and Shipping
Specifications.  Company shall be solely responsible for the
sufficiency and adequacy of the Packaging and Shipping Specifications and shall
hold Jabil harmless for any claim arising there from. except where Jabil changes
or deviates from the Specifications without prior written consent of the
Company

       

      
        	
                4.3  

              	
                Items
      to be Supplied by Company.

              


      

       

      Company
shall supply to Jabil, according to the terms and conditions specified herein,
Company Proprietary Information and Technology and, if applicable, the Loaned
Equipment, Components Supplied by Company and Unique Components necessary for
Jabil to perform the Manufacturing Services. Company will also provide to Jabil
all Specifications, Test Procedures, Packaging and Shipping Specifications,
Product design drawings, approved vendor listings, material component
descriptions (including approved substitutions), manufacturing process
requirements, and any other specifications necessary for Jabil to perform the
Manufacturing Services.  Company shall be solely responsible for delay
in delivery, defects and enforcement of warranties related to the Loaned
Equipment, Components Supplied by Company and Unique Components and shall hold
Jabil harmless for any claim arising there from.

       

      
        	
                4.4  

              	
                Items
      to be Supplied by Jabil.

              


      

       

      Jabil
will employ the
Jabil Manufacturing Process, any required manufacturing technology,
manufacturing capacity, labor, transportation logistics, systems and facilities
necessary for Jabil to perform the Manufacturing Services.

       

      
        	
                4.5  

              	
                Company
      Inspection.

              


      

       

      Company
shall have the right, by providing not less than three (3) business
days  advance notice, during normal business hours and at its expense
to inspect, review, monitor and oversee the Manufacturing Services, provided
that such inspection shall not disrupt Jabil's normal business
operations.  Company shall cause each of its employees, agents and
representatives who have access to Jabil’s facilities, to maintain, preserve and
protect all Proprietary Information and Technology of Jabil and the confidential
or proprietary information and technology of Jabil's other
customers.

       

      
        	
                4.6  

              	
                Materials
      Procurement.

              


      

       

      Jabil
will use Commercially Reasonable Efforts to procure components, per Company's
approved vendor list, necessary to fulfill mutually agreed upon Build
Schedules.  Company shall be responsible for the performance of
suppliers and quality of the components.  Jabil will not substitute
any component without the prior written consent of the Company.  Jabil
will use Commercially Reasonable Efforts in supporting Company to get the
components supplier to bear any costs associated with such supplier’s component
quality issues

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      
        	
                4.7  

              	
                Materials
      Declaration.

              


      

       

      Company
represents and warrants that the Product is not subject to Materials Declaration
Requirements.  Where Company notifies Jabil in writing that the
Product is subject to Materials Declaration Requirements, Jabil will use
Commercially Reasonable Efforts to assist Company in procuring parts, components
and/or materials that are compliant with Materials Declaration
Requirements.  However, for all parts, components and or /materials
included in the Specifications, Company understands and agrees that

       

      
        	
                4.7.1  

              	 
	 	 
	 	
                Company is
      responsible for notifying Jabil in writing of the specific Materials
      Declaration Requirements that Company determines to be applicable to the
      Product and shall be solely liable for the adequacy and sufficiency of
      such determination and information;

              


      

       

      
        	
                4.7.2  

              	 
	 	 
	 	
                Any information
      regarding Materials Declaration Requirements compliance of parts,
      components, packaging or materials used in the Products shall come from
      the relevant supplier.  Jabil does not test, certify or
      otherwise warrant component, part, packaging or materials compliance, on a
      homogenous material level or any other level, with Materials Declaration
      Requirement

              


      

       

      
        	
                4.7.3  

              	 
	 	 
	 	
                Company is
      ultimately and solely responsible for ensuring that any parts components
      or materials used in the Products, and the Product itself, are compliant
      with applicable Materials Declaration
  Requirements.

              


      

       

      Notwithstanding
any other provision set forth in this Agreement, including amendments,
attachments, or any other document incorporated herein, this Section 4.7 sets
forth Jabil’s sole responsibility and liability and Company’s entire remedy from
Jabil with respect to Materials Declaration Requirements and any third party
claims against Company related to the Materials Declaration Requirements, and
that absent this provision, Jabil would not enter this Agreement.

       

      
        	
                5  

              	
                Warranty &
      Remedy.

              


      

       

      
        	
                5.1  

              	
                Jabil
      Warranty.

              


      

       

      Jabil
warrants (i) that it will manufacture the Product in accordance with IPC-A 610
Class 2 workmanship standard, and (ii) that at the time of manufacture, the
Product will conform, in all material respects, to the Specifications. The above
warranty shall remain in effect for a period of  18
months  from the date any Product is initially shipped by
Jabil   (“Warranty Period”).  This warranty is extended
to, and may only be enforced by, Company.

       

      
        	
                5.2  

              	
                Repair
      or Replacement of Defective Product

              


      

       

      In
accordance with Jabil's standard return material authorization process and
procedure ("RMA"), Jabil will either repair or replace, in its sole discretion,
any Product that contains a defect caused by a breach of the warranty set forth
in this Section 5 provided that the Product is received within thirty (30) days
following the end of any applicable Warranty Period (“RMA
Product”).  The Company shall provide the first line of testing for
returned devices and, if Company desires to return a Product based on a claim of
breach of the warranty set forth in this Section 5, Company shall request an RMA
number from Jabil.  Company shall then consign the alleged defective
Product, FOB Jabil’s designated repair facility, and specify the Jabil assigned
RMA number.  Jabil will analyze any such RMA Product and, if a breach
of warranty is found (“Defect”), then Jabil will repair or replace the RMA
Product within twenty (20) business days of receipt by Jabil of the RMA Product
and all required associated documentation. In the event a Defect is found, Jabil
will reimburse Company for the reasonable cost of transporting the RMA Product
to Jabil's designated repair facility and Jabil will deliver the repaired RMA
Product or its replacement, FCA Company’s designated destination.  If
no such Defect is found, Company shall reimburse Jabil for all fees, costs and
expenses incurred to analyze and, if requested by Company, repair or replace the
non-Defective RMA Product and Company shall bear responsibility for all
transportation costs to and from Jabil’s designated repair
facility.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      
        	
                5.3  

              	
                Limitation
      of Warranty.

              


      

       

      THE
REMEDY SET FORTH IN SECTION 5.2 SHALL CONSTITUTE COMPANY’S SOLE AND EXCLUSIVE
REMEDY FOR A BREACH OF THE WARRANTY MADE BY JABIL HEREIN OR ANY OTHER OBLIGATION
OF JABIL HEREUNDER. THE WARRANTY SET FORTH IN THIS SECTION 5 IS IN LIEU OF, AND
JABIL EXPRESSLY DISCLAIMS, AND COMPANY EXPRESSLY WAIVES, ALL OTHER WARRANTIES
AND REPRESENTATIONS OF ANY KIND WHATSOEVER WHETHER EXPRESS, IMPLIED, STATUTORY,
ARISING BY COURSE OF DEALING OR PERFORMANCE, CUSTOM, USAGE IN THE TRADE OR
OTHERWISE, INCLUDING COMPLIANCE WITH MATERIALS DECLARATION REQUIREMENTS, ANY
WARRANTY OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OR INFRINGEMENT
OR MISAPPROPRIATION OF ANY RIGHT, TITLE OR INTEREST OF COMPANY OR ANY THIRD
PARTY.  COMPANY UNDERSTANDS AND AGREES THAT IT SHALL HAVE FULL AND
EXCLUSIVE LIABILITY WITH RESPECT TO ANY PRODUCT, WHETHER FOR PRODUCT DESIGN
LIABILITY, PRODUCT LIABILITY, DAMAGE TO PERSON OR PROPERTY AND/OR INFRINGEMENT
OR MISAPPROPRIATION OF THIRD PARTY RIGHTS.  NO ORAL OR WRITTEN
STATEMENT OR REPRESENTATION BY JABIL, ITS AGENTS OR EMPLOYEES SHALL CONSTITUTE
OR CREATE A WARRANTY OR EXPAND THE SCOPE OF ANY WARRANTY
HEREUNDER.  

      


      JABIL'S
WARRANTY SHALL NOT APPLY TO ANY PRODUCT JABIL DETERMINES TO HAVE BEEN SUBJECTED
TO TESTING FOR OTHER THAN SPECIFIED ELECTRICAL CHARACTERISTICS OR TO OPERATING
AND/OR ENVIRONMENTAL CONDITIONS IN EXCESS OF THE MAXIMUM VALUES ESTABLISHED IN
APPLICABLE SPECIFICATIONS, OR TO HAVE BEEN THE SUBJECT OF MISHANDLING, ACCIDENT,
MISUSE, NEGLECT, IMPROPER TESTING, IMPROPER OR UNAUTHORIZED REPAIR, ALTERATION,
DAMAGE, ASSEMBLY, PROCESSING OR ANY OTHER INAPPROPRIATE OR UNAUTHORIZED ACTION
OR INACTION THAT ALTERS PHYSICAL OR ELECTRICAL PROPERTIES.  THIS
WARRANTY SHALL NOT APPLY TO ANY DEFECT IN THE PRODUCT ARISING FROM ANY DRAWING,
DESIGN, SPECIFICATION, PROCESS, TESTING OR OTHER PROCEDURE, ADJUSTMENT OR
MODIFICATION SUPPLIED AND/OR APPROVED BY COMPANY.

       

      
        	
                5.4  

              	
                ECO
      Upgrade.

              


      

       

      RMA’s for
engineering change order (ECO) upgrades will also be subject to the RMA process.
Jabil will analyze the ECO and provide a per unit upgrade cost and expected
completion and delivery date.

       

      
        	
                6  

              	
                Limitation of
      Damages 

              


      

       

      EXCEPT
WITH REGARD TO ANY INDEMNITIES SET FORTH HEREIN, UNDER NO CIRCUMSTANCES SHALL
EITHER PARTY BE LIABLE TO THE OTHER PARTY OR TO ANY OTHER PERSON OR ENTITY UNDER
ANY CONTRACT, TORT, STRICT LIABILITY, NEGLIGENCE, OR OTHER LEGAL OR EQUITABLE
CLAIM OR THEORY FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR INDIRECT DAMAGES,
LOSS OF GOODWILL OR BUSINESS PROFITS, LOST REVENUE, WORK STOPPAGE, DATA LOSS,
COMPUTER FAILURE OR MALFUNCTION, OR FOR ANY AND ALL OTHER DAMAGES, LOSS, OR
EXEMPLARY OR PUNITIVE DAMAGES WHETHER SUCH PARTY WAS INFORMED OR WAS AWARE OF
THE POSSIBILITY OF SUCH LOSS OR DAMAGE.  THE FOREGOING SHALL NOT
EXCLUDE OR LIMIT EITHER PARTY’S LIABILITY FOR DEATH OR PERSONAL INJURY RESULTING
FROM ITS NEGLIGENCE TO THE EXTENT THAT SUCH LIABILITY CANNOT BY LAW BE LIMITED
OR EXCLUDED.

       

      
        	
                7  

              	
                Delivery, Risk of Loss
      and Payment Terms.

              


      

       

      For
purposes of this Agreement delivery shall be FCA (per Incoterms 2000) Jabil’s
facility and deemed to have occurred, and all risk of loss shall be transferred
to Company, when Product (or any other items) are tendered to the carrier
approved by Company. The Fee and Price Schedule will be reviewed by the Parties
on a quarterly basis and will be revised consistent with increases or decreases
in materials, components, equipment and other costs and expenses applicable to
the manufacture of the Product.  For any shipments where Jabil acts as
an agent in completing the Shipper’s Export Declaration and managing Company’s
exports on behalf of Company, where the Company is the exporter of record
(Principal Party in Interest - PPI), the Company hereby grants Jabil Power of
Attorney to act on its behalf in managing its exports.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      
        	
                7.1  

              	
                Payment.

              


      

       

      Company
shall pay Jabil all monies when due, including all NRE Costs associated with
this Agreement. Payment of all invoices shall be net thirty (30) days from date
of invoice. Payment to Jabil shall be in U.S. dollars and in immediately
available funds.  In the event any amounts are invoiced or paid in a
different currency, the process in Schedule 2 “Currency Policy” will
apply.  Company hereby unconditionally guarantees the payment by any
of its subsidiaries or Affiliates who place orders under this Agreement to Jabil
and/or its Affiliates.  Any equipment, tooling, component, material or
other goods or property, which is purchased by Jabil in order to perform its
obligations under this Agreement, shall become the property of Company once
Jabil is reimbursed for all NRE Costs. Jabil shall invoice Company for actual
outstanding NRE Costs and other monies due at monthly intervals (or such other
intervals as deemed appropriate) during the term of this Agreement and upon
cancellation, termination or expiration of this Agreement.  Jabil
agrees to request advance written approval from Company should resource
requirements, and thereby NRE Costs, increase materially relative to estimated
NRE Costs initially agreed by the Parties.  Upon such request, Jabil
shall provide to Company reasonably detailed supporting documentation and/or
descriptions of the NRE Costs for which Jabil seeks
reimbursement.  Notwithstanding anything to the contrary contained in
this Agreement, Company will pay all Jabil invoices except for those that are
disputed, which shall be governed by the dispute resolution provisions of
paragraph 21.13 herein..

       

      
        	
                7.2  

              	
                Taxes.

              


      

       

      Company
shall be responsible for all federal, foreign, state and local sales, use,
excise and other taxes (except taxes based on Jabil’s income), all delivery,
shipping, and transportation charges and all foreign agent or brokerage fees,
document fees, custom charges and duties.

       

      
        	
                8  

              	
                Import and
      Export.

              


      

       

      Company
shall be responsible for obtaining any required import or export licenses
necessary for Jabil to ship Product, including certificates of origin,
manufacturer's affidavits, and U.S. Federal Communications Commission’s
identifier, if applicable and any other licenses required under US or foreign
law and Company shall be the importer of record.  Company agrees that
it shall not export, re-export, resell or transfer, or otherwise require Jabil
to ship or deliver any Product, assembly, component or any technical data or
software which violate any export controls or limitations imposed by the United
States or any other governmental authority, or to any country for which an
export license or other governmental approval is required at the time of export
without first obtaining all necessary licenses and approvals and paying all
duties and fees. Company shall provide Jabil with all licenses, certifications,
approvals and authorizations in order to permit Jabil to comply with all import
and export laws, rules and regulations for the shipment and delivery of the
Product. Company shall also be responsible for complying with any legislation or
regulations governing the importation of the Product into the country of
destination and for payment of any duties thereon.

       

      
        	
                9  

              	
                Design or Repair
      Services; US Government
Contracts.

              


      

       

      In the
event that the Parties agree that Jabil will provide design or repair (i.e., out
of warranty) services for Company, or US government subcontract services for
Company, the terms and conditions of such services shall be set forth in a
mutually agreed upon separate agreement prior to the commencement of any such
services.  No FAR, DFAR, or any other FAR Supplement clauses shall be
applicable to this Agreement. If Company requires Jabil to perform any of the
foregoing services prior to execution of a separate services agreement, Jabil’s
services will be provided “as is” and Company shall be fully responsible for any
claims or liability arising from such services and corresponding deliverables or
products.

       

      
        	
                10  

              	
                Change Orders,
      Rescheduling and
Cancellation.

              


      

       

      
        	
                10.1  

              	
                Changes
      to Manufacturing Services, Packaging and Shipping Specifications and Test
      Procedures.

              


      

       

      Company
may, in writing, request a change to the Manufacturing Services, Packaging and
Shipping Specifications and Test Procedures at any time.  Jabil will
analyze the requested change and provide Company with an assessment of the
effect that the requested change will have on cost, manufacturing, scheduling,
delivery and implementation.  Company will be responsible for all
costs associated with any accepted changes.  Any such change shall be
documented in a written change order and shall become effective only upon mutual
written agreement of both Parties to the terms and conditions of such change
order, including changes in time required for performance, cost and applicable
delivery schedules.

       

      
        	
                10.2  

              	
                Production
      Increases.

              


      

       

      Company
may, in writing, request increases in production volume of Product for an
outstanding Build Schedule at any time.  Jabil will analyze the
request and determine if it can meet the requested increase within the required
Lead-time.  If Jabil can satisfy the requested increase it will
provide Company with a new Build Schedule setting forth the expected delivery
date of the changed order.  If Jabil is unable to satisfy or comply
with Company's requested increase in production volume within the requested time
frame for delivery, Jabil will provide the reasons preventing Jabil from
satisfying the requested increase within five (5) business days after receipt of
Company's request.  Any such change shall be
documented in a written change order and shall become effective only upon mutual
written agreement of both Parties to the terms and conditions of such change
order, including changes in time required for performance, cost and applicable
delivery schedules.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      
        	
                10.3  

              	
                Product
      Configuration Changes and Engineering
Changes.

              


      

       

      Company
may request configuration or engineering changes to Product in writing at any
time.  Jabil will analyze the request and determine if it can meet the
requested changes within the required Lead-time.  If Jabil can satisfy
the requested change it will provide Company within five5business days after
receipt of the configuration or engineering request notice, a notice of
acceptance of the requested changes along with any additional costs and expected
changes to delivery schedules.  If Jabil is unable to satisfy or
comply with Company's requested changes within the requested time frame for
delivery, Jabil will provide the reasons preventing Jabil from satisfying the
requested increase within five (5) business days after receipt of Company's
request. Any such change shall be documented in writing and shall become
effective only upon mutual written agreement of both Parties of the terms and
conditions of such change, including changes in time required for performance,
cost (including cost of materials on hand or on order in accordance with
original Build Schedule) and applicable delivery schedules. 

       

      
        	
                10.4  

              	
                Treatment
      of Obsolete/End-of-Life Material.

              


      

       

      Upon
receiving notice from Company of an engineering change or that any Product,
component or assembly has become obsolete or has reached end-of-life Jabil will,
within a reasonable period after receiving such notice, provide Company with an
analysis of Company's liability to Jabil for components and materials acquired
or scheduled to be acquired to manufacture such Product.  Company's
liability shall include the price of finished Product and Jabil’s costs
(including cancellation fees and charges), plus applicable margin, of work in
progress, safety stock components and materials and components and materials on
hand or on order within applicable Lead-times.  Jabil will use
Commercially Reasonable Efforts to assist Company in minimizing Company's
liability by taking the following steps:

      


      
        	
                · 
       

              	
                As
      soon as is commercially practical reduce or cancel component and material
      orders to the extent contractually
permitted.

              


      

      
        	
                · 
       

              	
                Return
      all components and materials to the extent contractually
      permitted.

              


      

      
        	
                ·
        

              	
                Make
      all Commercially Reasonable Efforts to sell components and materials to
      third parties.

              


      

      
        	
                ·
        

              	
                Assist
      Company to determine whether current work in progress should be completed,
      scrapped or shipped "as is".

              


      

       

      
        	
                10.5  

              	
                Rescheduled
      Delivery and Cancellation of
Orders.

              


      

       

      Company
may request Jabil to reschedule the delivery date for Product(s) and cancel
pending orders in accordance with this Section 10.5. The charges to Company for
deferring or accelerating delivery of an order (rescheduled) or cancellation of
an order are outlined below:

       

      
        	
                Days Prior to
      Delivery
      Date

              	 	
                Reschedule
      Terms

              	 	
                Cancellation
      Liability

              
	 	 	 	 	 
	
                0-30
      Days

              	 	
                Company
      may not reschedule an order within 30 days of the delivery date without
      payment in full for the order.

              	 	
                Company
      may not cancel an order to be delivered within 30 days of the applicable
      delivery date without payment to Jabil in full for the
    order.

              
	 	 	 	 	 
	
                31-60
      Days from original delivery date

              	 	
                Company
      may reschedule the delivery of up to 50% of an order without additional
      liability provided that such rescheduled order is rescheduled to be
      delivered within 30  days of the original delivery
      date.

              	 	
                Company
      will be charged 100_% of Jabil's incurred costs plus margin for any order
      cancelled more than 30 and up to 60 days from the applicable delivery
      date.

              
	 	 	 	 	 
	
                61-90
      days from original delivery date

              	 	
                Company
      may reschedule delivery of up to 75% of an order without additional
      liability provided that such rescheduled order is rescheduled to be
      delivered within 60 days of the original delivery date.

              	 	
                Company
      will be charged -100% of Jabil's incurred costs plus margin for any order
      cancelled more than 60 and up to 90 days from the applicable delivery
      date.

              
	 	 	 	 	 
	
                90
      days and beyond from original delivery date

              	 	
                Company
      may reschedule  100% of an order without additional liability
      provided that such rescheduled order is rescheduled to be delivered within
      (90) days of the original delivery date

              	 	
                Company
      will be charged Jabil’s incurred costs of non cancellable and non
      returnable materials plus margin for any order cancelled more than 90 days
      prior to the applicable delivery
date.

              


      

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      In
addition to the charges set forth above, Company shall be responsible for all
inventory costs resulting from a reschedule or cancellation. Such inventory
costs shall be billed on a monthly basis plus an interest rate of one and
one-quarter percent (1.25%) per month, and shall be applied to the inventory
applicable to the rescheduled or cancelled order. Reschedules in excess of the
maximum deferred quantity or period (set forth above) will be considered
cancellations and subject to applicable cancellation charges. Reschedules and
cancellations may result in revised product pricing.  In addition to
the charges and costs set forth above, Company shall also be liable for the
depreciation (determined in accordance with U.S. Generally Accepted Accounting
Principles) for the period of time any piece of equipment is idle as a result of
the reschedule or cancellation for up to six months from the date of termination
or cancellation.

       

      
        	
                10.6  

              	
                Termination
      Charges.

              


      

       

      Upon
termination, expiration or cancellation of this Agreement for any reason, Jabil
shall submit to Company Jabil's invoices for termination/cancellation charges
within (a) 60 days from the effective date of such termination, expiration or
cancellation for materials and component costs and applicable margin and (b) 60
days after the end of the 6 month period following termination, expiration or
cancellation for the depreciation expense on idle equipment.  Jabil's
invoice for such charges shall be based upon costs incurred by Jabil up to the
date of termination, expiration or cancellation (“Termination Effective Date”)
and shall also include the following: (i) costs accrued after the Termination
Effective Date but resulting from such termination, expiration or cancellation;
(ii) applicable margin in all cases and (iii) the depreciation expense, except
in the event of termination due to Jabil’s default hereunder, on all equipment
used to manufacture Product that remains idle due to such termination,
expiration or cancellation for up to  three months based on the
monthly average of the previous 90 days   from the date of the
Termination Effective Date in accordance with U.S. Generally Accepted Accounting
Principles.  Jabil will provide to Company all information reasonably
necessary to confirm the costs, expenses, applicable margin and depreciation
expenses on idle equipment sustained by Jabil due to termination, expiration or
cancellation. To the extent that Jabil cannot mitigate its costs as set forth in
Section 10.7 below, upon cancellation, expiration or termination for any reason,
Company's obligation shall be to pay the charges claimed by Jabil as
follows:

       

      
        
          	
                  
                    10.6.1  

                  

                	 
	 	 
	 	
                  The applicable price
      for the Product of which Jabil has completed manufacture prior to the
      Termination Effective Date pursuant to an issued Build Schedule for which
      payment has not been made;

                


        

      

       

      
        
          
            	
                    
                      10.6.2  

                    

                  	 
	 	 
	 	
                    Reimbursements for
      material acquisition costs, components, subassemblies and work-in-process
      at the time of Termination Effective Date which were purchased or ordered
      pursuant to issued Build Schedules or Build Schedule Forecasts plus
      applicable margin ;

                  


          

        

      

      
         

        
          
            	
                    
                      10.6.3  

                    

                  	 
	 	 
	 	
                    Jabil's reasonable
      cancellation costs incurred for components, materials and subcontracted
      items that Jabil had on order on behalf of Company on the Termination
      Effective Date pursuant to issued Build Schedules or Build Schedule
      Forecasts plus applicable
margin;

                  


          

        

         

      

      
        
          
            	
                    
                      10.6.4  

                    

                  	 
	 	 
	 	
                    Except in the event
      of termination due to Jabil’s default hereunder, depreciation on equipment
      idle up to  three months after the Termination Effective
      Date;

                  


          

        

         

         

        
          
            
            

          

          
            12

            
              

            

          

          
            
            

          

           

        

      

      
        
          
            	
                    
                      10.6.5 

                    

                  	 
	 	 
	 	
                    Jabil’s cost of
      equipment or tooling purchased by Jabil specifically for the manufacture,
      test, design, or packaging of Product and any other services rendered or
      costs incurred by Jabil under this Agreement. All goods for which Company
      shall have paid 100% of Jabil’s incurred cost or more shall be held by
      Jabil for Company’s account and Company may arrange for its acquisition of
      them on AS-IS, WHERE-IS
basis.

                  


          

        

      

       

      
        	
                10.7  

              	
                Duty
      to Mitigate Costs.

              


      

       

      Both
Parties shall, in good faith, undertake Commercially Reasonable Efforts to
mitigate the costs of termination, expiration or cancellation.  Jabil
shall make Commercially Reasonable Efforts to cancel all applicable component
and material purchase orders and reduce component inventory through return for
credit programs or allocate such components and materials for alternate Company
programs if applicable, or other customer orders provided the same can be used
within thirty (30) days of the termination date.

       

      
        	
                11  

              	
                Term.

              


      

       

      The term
of this Agreement shall begin on the Effective Date and shall end upon final
payment to Jabil of all monies due to Jabil under this
Agreement.  Notwithstanding the foregoing, Sections 4.1, 4.2, 4.3,
4.6, 5, 6, 7, 8, 10.4, 10.5, 10.6, 10.7, 11, 12.4, 13, 14, 15, 16, 17, 19 and 21
herein shall survive the expiration, cancellation or termination of this
Agreement.

       

      
        	
                12  

              	
                Termination.

              


      

       

      This
Agreement may be terminated as follows:

       

      
        	
                12.1  

              	
                Termination
      for Convenience.

              


      

       

      This
Agreement may be terminated at any time upon the mutual written consent of the
Parties or upon the date for termination set forth in a written notice given by
one Party to the other not less than ninety (90) days prior to such
date.

       

      
        	
                12.2  

              	
                Termination
      for Cause.

              


      

       

      Either
Party may terminate this Agreement based on the material breach by the other
Party of the terms of this Agreement, provided that the Party alleged to be in
material breach receives written notice setting forth the nature of the breach
at least thirty (30) days prior to the intended termination date. During such
time the Party in material breach may cure the alleged breach and if such breach
is cured within such thirty (30) day period, no termination will occur and this
Agreement will continue in accordance with its terms.  If such breach
shall not have been cured, termination shall occur upon the termination date set
forth in such notice.

       

      
        	
                12.3  

              	
                Termination
      for Bankruptcy/Insolvency.

              


      

       

      Upon the
happening of any of the following events with respect to a Party, this Agreement
may be terminated immediately:

       

      
        
          
            
              	
                      
                        12.3.1

                      

                    	 
	 	 
	 	
                      
                        The
      appointment of a receiver or custodian to take possession of any or all of
      the assets of a Party, or should a Party make an assignment for the
      benefit of creditors, or should there be an attachment, execution, or
      other judicial seizure of all or a substantial portion of a Party's
      assets, and such attachment, execution or seizure is not discharged within
      thirty (30) days.

                      

                    


            

          

           

          
            
              
                	
                        
                          12.3.2

                        

                      	 
	 	 
	 	
                        A Party becomes a
      debtor, either voluntarily or involuntarily, under Title 11 of the United
      States Code or any other similar law and, in the case of an involuntary
      proceeding, such proceeding is not dismissed within thirty (30) days of
      the date of filing.

                      


              

            

          

          
             

          

        

        
          
            	
                    12.3.3

                  	
                    The dissolution or termination of the existence
      of a Party whether voluntarily, by operation of law or otherwise.
      

                  


          

           

          
            
              
              

            

            
              13

              
                

              

            

            
              
              

            

          

        

      

       

      
        	
                12.4  

              	
                Termination
      Consequences.

              


      

       

      If this
Agreement is terminated for any reason, Company shall not be excused from
performing its obligations under this Agreement with respect to payment for all
monies due Jabil hereunder including fees, costs and expenses incurred by Jabil
up to and including the Termination Effective Date.

       

      
        	
                13  

              	
                Confidentiality.

              


      

       

      
        	
                13.1  

              	
                Confidentiality
      Obligations.

              


      

       

      In order
to protect both Parties’ Proprietary Information and Technology the Parties
agree that each Party shall use the same degree of care, but no less than a
reasonable degree of care, as such Party uses with respect to its own similar
information to protect the Proprietary Information and Technology of the other
Party and to prevent any use of Proprietary Information and Technology other
than for the purposes of this Agreement.  This Section 13 imposes no
obligation upon a Party with respect to Proprietary Information and Technology
which (a) was known to such Party before receipt from the disclosing Party; (b)
is or becomes publicly available through no fault of the receiving Party; (c) is
rightfully received by the receiving Party from a third party without a duty of
confidentiality; (d) is disclosed by the disclosing Party to a third party
without imposing a duty of confidentiality on the third party; (e) is
independently developed by the receiving Party without a breach of this
Agreement; or (f) is disclosed by the receiving Party with the disclosing
Party’s prior written approval.  If a Party is required by a
government body or court of law to disclose Proprietary Information and
Technology, this Agreement or any portion hereof, then such Party agrees to give
the other Party reasonable advance notice so that the other Party may seek a
protective order or otherwise contest the disclosure.

       

      
        	
                13.2  

              	
                Employees,
      Agents and Representatives.

              


      

       

      Each
Party represents and warrants to the other that it has adopted policies and
procedures with respect to the receipt and disclosure of confidential or
proprietary information, such as the Proprietary Information and Technology with
its employees, agents and representatives.  Each Party represents and
warrants to the other Party that it will cause each of its employees, agents and
representatives to maintain and protect the confidentiality of the other Party's
Proprietary Information and Technology. 

       

      
        	
                13.3  

              	
                Term
      and Enforcement.

              


      

       

      The
confidentiality obligation set forth in this Agreement shall be observed during
the term of the Agreement and for a period of two (2) years following the
termination of this Agreement. Each Party acknowledges that a breach of any of
the terms of this Section 13 may cause the non-breaching Party irreparable
damage, for which the award of damages would not be adequate compensation.
Consequently, the non-breaching Party may institute an action to enjoin the
breaching Party from any and all acts in violation of those provisions, which
remedy shall be cumulative and not exclusive, and shall be in addition to any
other relief to which the non-breaching Party may be entitled at law or in
equity.  Such remedy shall not be subject to the arbitration
provisions set forth in Section 21.13. 

       

      
        	
                13.4  

              	
                Return
      of Proprietary Information and
Technology.

              


      

       

      Upon the
termination, cancellation or expiration of this Agreement all Proprietary
Information and Technology shall, upon written request, be returned to the
respective Party, or at the respective Party’s discretion, destroyed by the
receiving Party.

       

      
        	
                14  

              	
                Intellectual Property
      Rights; Assignment.

              


      

       

      
        	
                14.1  

              	
                Jabil
      Existing Intellectual Property.

              


      

       

      Jabil
shall retain all right, title and ownership to any Jabil Existing Intellectual
Property

      


      Upon full
payment of all monies due and owing under this Agreement and all other monies
due and owing to Jabil pursuant to any other related agreement executed by the
Parties, Jabil will grant to Company a worldwide, non-exclusive, fully paid-up,
royalty free right and license under Jabil’s intellectual property rights to the
Jabil Existing Intellectual Property only insofar as is required for Company to
use, sell or distribute the Product provided as part of the Manufacturing
Services performed by Jabil pursuant to this Agreement; provided however, that
no license to manufacturing processes and/or manufacturing process improvements
shall be granted hereunder.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      
        	
                14.2  

              	
                Jabil
      Created Intellectual Property.

              


      

       

      Jabil
shall retain all right, title and ownership to any Jabil Created Intellectual
Property that is incorporated into any Product that is prepared as part of the
Manufacturing Services or into any other work provided pursuant to this
Agreement or any other related agreement executed by the Parties.

      


      Upon full
payment of all monies due and owing under this Agreement and all other monies
due and owing to Jabil pursuant to any other related agreement executed by the
Parties, Jabil will assign to Company all of Jabil’s right, title and interest
in and to the Jabil Created Intellectual Property.  Company hereby
grants to Jabil a worldwide, non-exclusive, irrevocable, fully paid-up,
royalty-free right and license in and to the Jabil Created Intellectual
Property.

       

      
        	
                15  

              	
                Manufacturing
      Rights.

              


      

       

      No Jabil
I.P. is currently included in LBT product, if in the future any such an I.P. is
to be included  the parties will agree this separately in
writing.

       

      
        	
                16  

              	
                Company Warranty and
      Indemnification.

              


      

       

      Company
represents and warrants that it has conducted, and will conduct, all patent,
trademark and copyright searches necessary to identify and evaluate any
potential infringement claims with respect to the Product.  Except to
the extent caused by Jabil’s, gross negligence and intentional
wrongdoing,  Company agrees to indemnify, defend and hold Jabil and
its employees, Subsidiaries, Affiliates, successors and assigns harmless from
and against all claims, damages, losses, costs and expenses, including
attorneys' fees, arising from any recall, replacement or
impoundment of any Product  and any third party claims asserted
against Jabil and its employees, Subsidiaries, Affiliates, successors and
assigns, that are based in part or in whole on any of the following: (a)
Specifications, Company Proprietary Information and Technology, any Product, or
any information, technology and processes supplied and/or approved by Company or
otherwise required by Company of Jabil; (b) actual or alleged noncompliance with
Materials Declaration Requirements; (c) that any item in subsection (a)
infringes or violates any patent, copyright or other intellectual property right
of a third party, and (d) design or product liability alleging that any item in
subsection (a)  has caused or will in the future cause damages of any
kind. Jabil may employ counsel, at its own expense to assist Jabil with respect
to any such claims,. Company shall not enter into any settlement that affects
Jabil's rights or interests without Jabil's prior written approval, which shall
not be unreasonably withheld. Jabil will provide such assistance and cooperation
as is reasonably requested by Company or its counsel in connection with such
indemnified claims.  To the extent that Jabil is named in a lawsuit
that it claims is subject to defense, indemnity or hold harmless obligations of
Company under this Agreement, Company shall have sole and unfettered discretion
to choose counsel for Jabil to the extent that Company and Jabil cannot be
represented by common counsel.

       

      
        	
                17  

              	
                Relationship of
      Parties.

              


      

       

      Jabil
shall perform its obligations hereunder as an independent
contractor.  Nothing contained herein shall be construed to imply a
partnership or joint venture relationship between the Parties. The Parties shall
not be entitled to create any obligations on behalf of the other Party, except
as expressly contemplated by this Agreement.  The Parties will not
enter into any contracts with third parties in the name of the other Party
without the prior written consent of the other Party.

       

      
        	
                18  

              	
                Insurance.

              


      

       

      Each
Party will keep its business and properties insured at all times against such
risks for which insurance is usually maintained by reasonably prudent Persons
engaged in a similar business (including insurance for hazards and insurance
against liability on account of damage to Persons or property and insurance
under all applicable workers’ compensation laws). The insurance maintained shall
be in such monies and with such limits and deductibles usually carried by
Persons engaged in the same or a similar business.

       

      
        	
                19  

              	
                Publicity

              


      

       

      Without
the consent of the other Party, neither Party shall refer to this Agreement in
any publicity or advertising or disclose to any third party any of the terms of
this Agreement. Notwithstanding the foregoing, neither Party will be prevented
from, at any time, furnishing any information to any governmental or regulatory
authority, including the United States Securities and Exchange Commission or any
other foreign stock exchange regulatory authority, that it is by law,
regulation, rule or other legal process obligated to disclose, so long as the
other Party is given advance written notice of such disclosure pursuant to
Section 13.1.  A Party may disclose the existence of this Agreement
and its terms to its attorneys and accountants, suppliers, customers and others
only to the extent necessary to perform its obligations and enforce its rights
hereunder.

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      
        	
                20  

              	
                Force
      Majeure.

              


      

       

      Neither
Party will be liable for any delay in performing, or for failing to perform, its
obligations under this Agreement (other than the payment of money) resulting
from any cause beyond its reasonable control including, acts of God; blackouts;
power failures; inclement weather; fire; explosions; floods;
hurricanes;  typhoons; tornadoes; earthquakes; epidemics; strikes;
work stoppages; labor, component or material shortages; slow-downs; industrial
disputes; sabotage; accidents; destruction of production facilities; riots or
civil disturbances; acts of government or governmental agencies, including
changes in law or regulations that materially and adversely impact the Party,
and U.S. Government priority orders or contracts; provided that the Party
affected by such event promptly notifies (in no event more than ten (10)
business days of discovery of the event) the other Party of the
event.  If the delays caused by the force majeure conditions are not
cured within sixty (60) days of the force majeure event, then either Party may
immediately terminate this Agreement. Termination of this Agreement pursuant to
this Section 20 shall not affect Company’s obligation to pay Jabil, as set forth
herein.

       

      
        	
                21  

              	
                Miscellaneous.

              


      

       

      
        	
                21.1  

              	
                Notices.

              


      

       

      All
notices, demands and other communications made hereunder shall be in writing and
shall be given either by personal delivery, by nationally recognized overnight
courier (with charges prepaid), by facsimile or EDI (with telephone
confirmation) addressed to the respective Parties at the following
addresses:

       

      
        
          	
                  Notice to
      Jabil:

                	
                  Jabil
      Circuit, Inc.

                


        

        10560 Dr.
M.L. King Jr. Street North

        St.
Petersburg, FL 33716

        Facsimile:
(      )

        Attn:

        


        
          	
                  with a copy
      to:

                	
                  Jabil
      Circuit, Inc.

                


        

        10560 Dr.
M.L. King Jr. Street North

        St.
Petersburg, FL 33716

        Facsimile:  (727)
803-3415

        Attn:
General Counsel

        
          


          
            	
                    
                      Notice to
      Company:

                    

                  	
                    
                      Location
      Based Technologies,
Inc.

                    

                  


          

        

        
        

        4989 E.
La Palma Ave.

        Anaheim,
CA 92807

        Facsimile:
(714) 200-0287

        Attn:
Joseph Scalisi

        


        
          	
                  with a copy
      to:

                	
                  Location
      Based Technologies, Inc

                


        

        4989 E.
La Palma Ave

        Anaheim,
CA 92807

        Facsimile:
(714) 200-0287

        Attn:
David Butler

         

      

      
        	
                21.2  

              	
                Attorneys'
      Fees and Costs.

              


      

       

       In
the event that attorneys' fees or other costs are incurred to enforce payment or
performance of any obligation, agreement or covenant between the Parties or to
establish damages for the breach of any obligation, agreement or covenant under
this Agreement, or to obtain any other appropriate relief under this Agreement,
whether by way of prosecution or defense, the prevailing Party shall be entitled
to recover from the other Party its reasonable attorneys' fees and costs,
including any appellate fees and the costs, fees and expenses incurred to
enforce or collect such judgment or award and any other relief
granted.

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      
        	
                21.3  

              	
                Amendment.

              


      

       

       No course of dealing
between the Parties hereto shall be effective to amend, modify, or change any
provision of this Agreement.  This Agreement may not be amended,
modified, or changed in any respect except by an agreement in writing signed by
the Party against whom such change is to be enforced.  The Parties
may, subject to the provisions of this Section 21.3, from time to time, enter
into supplemental written agreements for the purpose of adding any provisions to
this Agreement or changing in any manner the rights and obligations of the
Parties under this Agreement or any Schedule hereto.  Any such
supplemental written agreement executed by the Parties shall be binding upon the
Parties.

       

      
        	
                21.4  

              	
                Partial
      Invalidity.

              


      

       

        Whenever possible,
each provision of this Agreement shall be interpreted in such a way as to be
effective and valid under applicable law.  If a provision is
prohibited by or invalid under applicable law, it shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Agreement.

       

      
        	
                21.5  

              	
                Monies.

              


      

       

        All
references to monies in this Agreement shall be deemed to mean lawful monies of
the United States of America.

       

      
        	
                21.6  

              	
                Entire
      Agreement.

              


      

       

        This Agreement,
the Schedules and any addenda attached hereto or referenced herein, constitute
the complete and exclusive statement of the agreement of the Parties with
respect to the subject matter of this Agreement, and replace and supersede all
prior agreements and negotiations by and between the Parties. Each Party
acknowledges and agrees that no agreements, representations, warranties or
collateral promises or inducements have been made by any Party to this Agreement
except as expressly set forth herein or in the Schedules and any addenda
attached hereto or referenced herein, and that it has not relied upon any other
agreement or document, or any verbal statement or act in executing this
Agreement.  These acknowledgments and agreements are contractual and
not mere recitals.  In the event of any inconsistency between the
provisions of this Agreement and any Schedule and any addenda attached hereto or
referenced herein, the provisions of this Agreement shall prevail unless
expressly stipulated otherwise, in writing executed by the Parties. Pre-printed
language on each Party’s forms, including purchase orders, shall not constitute
part of this Agreement and shall be deemed unenforceable.

       

      
        	
                21.7  

              	
                Binding
      Effect.

              


      

       

      This
Agreement shall be binding on the Parties and their successors and assigns;
provided, however, that neither Party shall assign, delegate or transfer, in
whole or in part, this Agreement or any of its rights or obligations arising
hereunder without the prior written consent of the other Party.  Any
purported assignment without such consent shall be null and
void.  Notwithstanding the foregoing, Jabil shall have the right to
assign its rights to receive monies hereunder without the prior written consent
of Company.

       

      
        	
                21.8  

              	
                Waiver.

              


      

       

      Waiver by
either Party of any breach of any provision of this Agreement shall not be
considered as or constitute a continuing waiver or a waiver of any other breach
of the same or any other provision of this Agreement.

       

      
        	
                21.9  

              	
                Captions.

              


      

       

      The
captions contained in this Agreement are inserted only as a matter of
convenience or reference and in no way define, limit, extend or describe the
scope of this Agreement or the intent of any of its provisions.

       

      
        	
                21.10  

              	
                Construction.

              


      

       

      Since
both Parties have engaged in the drafting of this Agreement, no presumption of
construction against any Party shall apply.

       

      
        	
                21.11  

              	
                Section
      References.

              


      

       

      All
references to Sections or Schedules shall be deemed to be references to Sections
of this Agreement and Schedules attached to this Agreement, except to the extent
that any such reference specifically refers to another document.  All
references to Sections shall be deemed to also refer to all subsections of such
Sections, if any.

       

      
        	
                21.12  

              	
                Business
      Day.

              


      

       

      If any
time period set forth in this Agreement expires upon a Saturday, Sunday or U.S.
national, legal or bank holiday, such period shall be extended to and through
the next succeeding business day. 

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      
        	
                21.13  

              	
                Dispute
      Resolution

              


      

       

      
        
          
            	
                    
                      21.13.1  

                    

                  	 
	 	 
	 	
                    The Parties shall
      use good faith efforts to resolve disputes, within twenty (20) business
      days of written notice of such dispute.  Such efforts shall
      include escalation of such dispute to the corporate officer level of each
      Party.

                  


          

        

         

        
          
            
              	
                      
                        21.13.2

                      

                    	 
	 	 
	 	
                      If the Parties
      cannot resolve any such dispute within said twenty (20) business day
      period, the matter shall be submitted to arbitration for
      resolution.  Arbitration will be initiated by filing a demand at
      the   New York  regional office of the American
      Arbitration Association
(“AAA”).

                    


            

          

        

        
           

          
            
              	
                      
                        21.13.3

                      

                    	 
	 	 
	 	
                      Disputes will be
      heard and determined by a one neutral
      arbitrator   appointed by the AAA. All arbitrators must
      have significant experience in resolving disputes involving electronic
      manufacturing and design
services.

                    


            

          

           

        

        
          
            
              	
                      
                        21.13.4

                      

                    	 
	 	 
	 	
                      Both parties agree
      that arbitration shall be governed by the rules of the American
      Arbitration Association which allows threshold discovery. To the extent
      the matters in dispute are provided for in whole or in part in this
      Agreement, the arbitrator shall be bound to follow such provisions to the
      extent applicable. In the absence of fraud, gross misconduct or an error
      in law appearing on the face of the determination, order or award issued
      by the arbitrator, the written decision of the arbitrator shall be final
      and binding upon the Parties. The prevailing Party in the arbitration
      proceeding shall be entitled to recover its reasonable attorneys' fees,
      costs and expenses including travel-related
  expenses.

                    


            

          

        

      

       

      
        	
                21.14  

              	
                Other
      Documents.

              


      

       

      The
Parties shall take all such actions and execute all such documents that may be
necessary to carry out the purposes of this Agreement, whether or not
specifically provided for in this Agreement. 

       

      
        	
                21.15  

              	
                Counterparts.

              


      

       

      This
Agreement may be executed by facsimile and delivered in one or more
counterparts, each of which shall be deemed to be an original and all of which,
taken together, shall be deemed to be one agreement.

       

      
        	
                21.16  

              	
                Governing
      Law and Jurisdiction.

              


      

       

      This
Agreement and the interpretation of its terms shall be governed by the laws of
the State of Florida, without application of conflicts of law principles. The
provisions of the United Nations Convention on Contracts for the International
Sale of Goods shall not apply to this Agreement. The Parties hereby agree that
the State and Federal Courts with jurisdiction over disputes arising in Pinellas
County, Florida shall have exclusive jurisdiction over any litigation
hereunder.

      


      IN WITNESS WHEREOF, the
Parties have caused this Agreement to be executed by their duly authorized
representatives.

       

      
        
          	 	COMPANY 	 	 	 	JABIL
      CIRCUIT, INC.	 
	 	 	 	 	 	 	 
	By:	
                  /s/ Joseph Scalisi

                	 	 	By:	
                  /s/ Steve Borges

                	 
	 	
                  Signature

                	 	 	 	
                  Signature

                	 
	 	 	 	 	 	 	 
	Name:	JOSEPH SCALISI 	 	 	Name:	STEVE
      BORGES	 
	Title:	Co-
      President 	 	 	Title:	V.P.
      Business Development	 
	Date: 	May
      30, 2008	 	 	Date: 	May
      30, 2008	 


        

      

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      SCHEDULES:

      


      


      SCHEDULE
1

      TO
MANUFACTURING SERVICES AGREEMENT

      BETWEEN
JABIL AND COMPANY

       

      
        	
                22  

              	
                SCHEDULE 1 - STATEMENT
      OF WORK

              


      

       

       

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      SCHEDULE 2

      TO
MANUFACTURING SERVICES AGREEMENT

      BETWEEN
JABIL AND COMPANY

       

      
        	
                23  

              	
                SCHEDULE 2 – CURRENCY
      POLICY

              


      

      
         

        
          1)     Jabil
will invoice in US dollars as agreed with Company in Section 7.1 of the
Agreement, and remain fixed in that currency unless otherwise mutually agreed by
both parties in writing.

        

      

      
        


        
          2)     For
materials that are purchased outside of the currencies identified in Section 7.1
of the Agreement, pricing will be reset quarterly based on calendar
quarters.

        

        


        
          3)     Currency
process:

        

         

        
          a.            
On or before the third Monday of each calendar month, Company will inform Jabil
of purchase volumes per site for month +1, +2, +3, and +4 from the Build
Schedule Forecast as specified in Section 3 of the Agreement.

          


          b.             For
the purpose of establishing invoice prices, the exchange rates will be derived
from the sources specified in paragraph 5 below on the second to last Thursday
of the last month of each calendar quarter (i.e. March, June, September and
December).

          


          c.            
In case Company has not delivered the information as per 3(a), Jabil shall take
the information as communicated during previous month unless this information is
in the meantime changed and communicated to Jabil in writing.

          


          d.             Jabil
will inform the Company outsourcing or relationship manager on a monthly basis
if the Company organization is not complying with 3(a).

          


          4)             Every
three (3) months, Jabil and Company will meet to establish the invoice prices
for the next three (3) month period. The invoice prices are established based on
the following principles:

          


          a.            
Bill of Material components and Value Add, which are priced in various
currencies are recalculated into the invoicing currency at the exchange rates as
established under paragraph 5 below.

          


          b.            
In general, the parties agree that under the Agreement, there will be a
reconciliation process for realized foreign currency gains and losses which will
be based on such gains and losses exceeding 2.5  % for the Calendar
Quarter.

          


          5)             Calculation
method:

          


          a)             All
references to “month” in this section shall be read as “calendar
month.”

          


          
            
              
              

            

            
              20

              
                

              

            

            
              
              

            

          

           

          b)            
The following details how certain currencies will be
established:

        

         

      

      Euro Based
Currencies

      


      The Euro
outright forward contract rates are calculated as follows (i) spot rate against
Euro as defined by the European Central Bank (www.ECB.int) as at the second to
last Thursday of the month plus (ii) the average forward points for two (2)
months as calculated by the difference between forward minus spot rate from the
table “Euro Spot Forward Against the Euro” published by the Financial Times
(“FT”) on the second to last Thursday of the month for the closing values of the
second to last Wednesday of the month of WM/Reuters.  The average rate
is determined from the one (1) month and three (3) month forward rates divided
by two based on the FT.

      


      United States Dollar Based
Currencies

      


      Rates
against United States Dollar are calculated as follows (i) spot rate against
United States Dollar calculated through cross rate based on the rate as defined
by the European Central Bank (www.ECB.int) as at the second to last Thursday of
the month plus (ii) the average forward points for two (2) months as calculated
by the difference between forward minus spot rate from the table “Dollar Spot
Forward Against the Dollar” published by the FT on the second to last Thursday
of the month for the closing values of  the second to last Wednesday
of the month of WM/Reuters.  The average rate is determined from the
one (1) month and three (3) month forward rates divided by two based on the
FT.

      


      Indian
Rupee

      


      Rates for
Indian Rupees are calculated as follows (i) spot rate against United States
Dollar or Euro as defined by the Reserve Bank of India (www.rbi.org.in) as
at  the second to last Thursday of the month plus (ii) average forward
points for two (2) months as calculated by the difference between forward minus
spot rate from the table “Dollar Spot Forward Against the Dollar” or “Euro Spot
Forward Against the Euro”, respectively (as applicable), published by the FT
on  the second to last Thursday of the month for the closing values
of  the second to last Wednesday of the month of
WM/Reuters.  The average rate is determined from the one (1) month and
three (3) month forward rates divided by two based on the FT.

      


      Brazilian
Real

      


      The
Brazilian Real is an exception.  The forward rates will be as
published on the second to last Thursday of the month by Bolsa de Mercadorias e
Futuros (“BMF”) (www.bmf.com.br) for the referential rates of exchange of
Brazilian Real against United States Dollar as at the second to last Wednesday
of the month. The average rate is determined from the one (1) month, two (2)
month and three (3) month forward rates divided by three based on the BMF
rates

      


      The spot
for Brazilian Real, if necessary, will be calculated as the average between bid
and offer rates as published by the Central Bank of Brazil (www.bcb.gov.br) for
the closing rate for the exchange of Brazilian Real against United States Dollar
as at the second to last Wednesday of the month.

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

      


      Mexican
Peso

      


      The spot
rate for Mexican Peso, if necessary, will be established as the Auction Exchange
Rate as published by the Bank of Mexico (www.banxico.org.mx) for the Average
closing rate for the exchange of Mexican Peso against the United States Dollar
as at the second to last Wednesday of the month plus (ii) average forward points
for two (2) months as calculated by the difference between forward minus spot
rate from the table “Dollar Spot Forward Against the Dollar” or “Euro Spot
Forward Against the Euro”, respectively (as applicable), published by the FT on
the second to last Thursday of the month for the closing values
of  the second to last Wednesday of the month of
WM/Reuters.  The average rate is determined from the one (1) month and
three (3) month forward rates divided by two based on the FT.

      


      Malaysian
Ringgit

      


      Rates for
Malaysian Ringgits are calculated as follows (i) spot rate against United States
Dollar or Euro as the Latest Published Rate at 1600 HR published by the Bank of
Negara Malaysia (www.bnm.gov.my) as at the second to last Thursday of the month
plus (ii) average forward points for two (2) months as calculated by the
difference between forward minus spot rate from the table “Dollar Spot Forward
Against the Dollar” published by the FT on  the second to last
Thursday of the month for the closing values of  the second to last
Wednesday of the month of WM/Reuters.  The average rate is determined
from the one (1) month and three (3) month forward rates divided by two based on
the FT.  The Euro forward points will be calculated from the cross
rates of United States Dollar and Euro forward rates.

      


      Chinese
Renminbi

      


      Rates for
the Chinese Renminbi will be determined via a mutually agreeable process until
publicly available websites are able to provide both the spot and forward rates
as applicable.

      


      Other
Currencies

      


      For other
currencies not defined above, a mutually agreed process of establishing such
rates will be defined.

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
3

      TO
MANUFACTURING SERVICES AGREEMENT

      BETWEEN
JABIL AND COMPANY

      


      


      
        	
                24  

              	
                SCHEDULE 3 -
      MANUFACTURING SERVICES LETTER AGREEMENT (if
      applicable)

              


      

       

       

       

       

       

      23