**EXHIBIT
      10.17**





**MANUFACTURING
      AGREEMENT**





THIS
      MANUFACTURING AGREEMENT (this " Agreement ")
      is
      dated as of the 1st day of August, 2005, (the " Effective
      Date ")
      by and
      between ClearOne Communications, Inc., a Utah corporation, having a principal
      place of business at 1825 Research Way, Salt Lake City, Utah 84119
      (" Buyer "),
      and
      Inovar, Inc., a Utah corporation, having a principal place of business at 1073
      West 1700 North, Logan, Utah 84321 (" Manufacturer ").





Recitals





WHEREAS,
      Manufacturer is an electronics manufacturing services provider that furnishes
      the necessary personnel, material, equipment, services and facilities to
      manufacture products for original equipment manufacturers and other third
      parties in accordance with detailed specifications provided by such OEMs and
      third parties;





WHEREAS,
      Buyer desires to engage Manufacturer to manufacture certain of Buyer's products
      in accordance with orders to be issued from time to time by Buyer;





WHEREAS,
      Manufacturer is willing to enter into a business agreement and to accept orders
      to manufacture Buyer's products upon terms and conditions, which, among other
      things, reimburse Manufacturer for certain costs that Manufacturer reasonably
      incurs in reliance on Buyer's orders and forecasts but cannot recover because
      Buyer's requirements change; and





WHEREAS,
      the parties hereto desire to enter into a business agreement upon the terms
      and
      conditions set forth herein.





NOW,
      THEREFORE, in consideration of the mutual agreements hereinafter set forth,
      it
      is hereby agreed between the parties hereto as follows:





**1.**
            **DEFINITIONS.**





(a) Defect .
      "Defect" means any defect in a Product that results from Manufacturer's failure
      to comply with the applicable IPC Workmanship Standard.





(b) Exclusive
      Products .
      "Exclusive Products" means all of Buyer's products as of the Effective Date
      as
      set forth on Exhibit
      D hereto,
      together with any product that is added as an Exclusive Product in accordance
      with Section 2(b).





(c) Inventory .
      "Inventory" means the materials and components required to manufacture the
      Products.





(d) IPC
      Workmanship Standard .
      "IPC
      Workmanship Standard" means the Workmanship Standard promulgated by IPC
      specified in the applicable Product Schedule.





(e) Long
      Lead Inventory .
      "Long
      Lead Inventory" means Inventory that has a long lead time from a supplier and
      must be purchased in advance of receipt of a Purchase Order in order for
      Manufacturer to be able to meet the delivery schedule for Products as set forth
      in the applicable Product Schedule.





(f) Master
      Product Schedule .
      "Master
      Product Schedule" means a product schedule for each Product inclusive of
      information on the sample product schedule attached as Exhibit
      A .





(g) Minimum
      Buy Inventory .
      "Minimum Buy Inventory" means Inventory that may only be purchased in minimum
      lot sizes.


1


(h) Minimum
      Order Size .
      "Minimum Order Size" means the minimum dollar or quantity amount that Buyer
      must
      order per Product on each individual Purchase Order as specified in the
      applicable Product Schedule.





(i) NCNR
      Inventory .
      "NCNR
      Inventory" means all Inventory that is (i) on order and not cancelable, or
      (ii)
      in Manufacturer's possession and not returnable to the vendor/supplier or
      usable, within a reasonable time not to exceed three (3) **** months
      from purchase, for other accepted Purchase Orders or other buyers.





(j) Non-Exclusive
      Products .
      "Non-Exclusive Products" as set forth on Exhibit
      E hereto.





(k) Product
      Schedule .
      "Product Schedule" means a schedule in the form of Exhibit A hereto, as amended
      from time to time by mutual agreement of the parties, that (i) references this
      Agreement and is executed by the parties hereto, (ii) sets forth information
      relating to a Product to be manufactured for Buyer pursuant to this Agreement
      and applicable Purchase Orders, and (iii) is attached to this Agreement and
      incorporated herein by reference.





(l) Products .
      "Products" means the Exclusive Products and the Non-Exclusive
      Products.





(m) Purchase
      Order .
      "Purchase Order" means an order meeting the requirements of this Agreement
      submitted by Buyer for acceptance by Manufacturer.





(n) Purchase
      Price .
      "Purchase Price" means the unit price for a Product as established by
      Manufacturer in accordance with Section 8.





(o) Safety
      Stock Inventory .
      "Safety
      Stock Inventory" means Inventory that, unless purchased in advance of Purchase
      Orders, may not be available in sufficient quantities to manufacture Products
      as
      set forth in the applicable Product Schedule.





(p) Specifications .
      "Specifications" means the bill of materials, Product documentation, schematics,
      assembly drawings, designs, test specifications, current revision number,
      approved vendor list and other manufacturing information for each Product as
      set
      forth in the applicable Product Schedules.





(q) Total
      Cost of Ownership .
      "Total
      Cost of Ownership" means total Product cost to Buyer including price, quality,
      logistic cost and terms and conditions of purchase.





(r) Minimum
      Revenue Requirements .
      “Minimum Revenue Requirements” means by Buyer projected revenue to Manufacturer
      for a period of 12 (twelve) months.





**2.**
            **STATEMENT
                OF WORK.**





(a)  Engagement .
      Buyer
      hereby engages Manufacturer, and Manufacturer hereby accepts Buyer's engagement,
      to furnish the necessary personnel, material, equipment, services and facilities
      to be the exclusive manufacturer of the Exclusive Products (Exhibit D, these
      products are Exclusive as long as Manufacturer provides competitive Total Cost
      of Ownership), and a non-exclusive manufacturer of the Non-Exclusive Products,
      in accordance with the applicable Specifications as required by Purchase Orders
      issued by Buyer and accepted by Manufacturer in accordance with Section
      4(a) herein.
      Manufacturer shall also provide repair service and warranty support and
      proto-type services for new product introduction as mutually agreed by
      Manufacturer and Buyer. Manufacturer's electronic manufacturing services shall
      be performed in accordance with the applicable IPC Workmanship Standard for
      each
      Product being manufactured. A Master Product Schedule will be developed for
      each
      Product.





(b)  Additional
      Products .
      Manufacturer shall have a right of first refusal to manufacture any new product
      that is developed and proposed for production by Buyer after the Effective
      Date.
      Buyer shall provide Manufacturer at least thirty (30) days notice of any
      proposal to have a product manufactured by a bona fide third party manufacturer,
      which notice shall set forth the Total Cost of Ownership of the proposed
      manufacturing agreement provided that such disclosure is not limited or
      prohibited by the third party manufacturer or prohibited by law Manufacturer
      shall then have the right to designate such product as an Exclusive Product
      hereunder at a Total Cost of Ownership equal to or better than that proposed
      by
      any bona fide third party manufacturer (to be verified in writing by Buyer),
      and
      Buyer and Manufacturer shall execute a Product Schedule for such Product, which
      shall be attached hereto and incorporated herein by reference. If Manufacturer
      does not exercise such right within thirty (30) days after receipt of Buyer's
      notice, Buyer may have such product manufactured by the third party at. Upon
      written request by Buyer, Manufacturer shall provide prototype manufacturing
      and
      engineering support services for Buyer's new product introductions at such
      prices and upon such terms as are mutually agreed upon by the
      parties.


2


(c)  Certifications .
      Manufacturer shall maintain its ISO 9001:2000 certification and shall target
      RoHS manufacturing capability by October 2005 with full compliance to occur
      by
      June 30, 2006.





(d)  Transition;
      Technical Support; Employees .
      The
      parties acknowledge and agree that in connection with the performance of
      Manufacturer's obligations hereunder, Manufacturer will be assuming Buyer's
      manufacturing operations, which will involve Manufacturer subleasing a portion
      of Buyer's manufacturing facility, acquiring an option to purchase Buyer's
      manufacturing equipment, leasing Buyer's manufacturing equipment and leasing
      the
      employees used by Buyer in its Manufacturing operations from a third party
      employee leasing company. During any period in which the Sublease (as defined
      in
      Exhibit B below) is in effect, Buyer shall provide to Manufacturer, at the
      premises covered by the Sublease, such technical assistance and manufacturing
      support as may be reasonably necessary to ensure a smooth transition of
      manufacturing operations from Buyer to Manufacturer. In connection with the
      assumption of Buyer's manufacturing operations by Manufacturer, Buyer shall
      make
      all identified manufacturing employees available to a third party employee
      leasing company, and Manufacturer shall have the right to lease such employees
      from the third party employee leasing company.





(e)  Buyer's
      Inventory .
      On the
      Effective Date, Manufacturer shall purchase Buyer's parts and materials on
      hand
      and in transit that can be used in the manufacturing of any ordered Products
      ("Buyer's Inventory"), other than materials deemed obsolete or otherwise
      unusable by Manufacturer, at Buyer's cost for such parts and materials. The
      purchase price for Buyer's Inventory shall be Buyer's standard cost for such
      Inventory as of July 31, 2005, which shall be payable as follows: Within five
      (5) business days after each calendar month, Manufacturer shall send to Buyer
      a
      statement setting forth the portion of Buyer's Inventory used (including the
      part number, description, quantity, unit cost and extended cost) in the
      manufacturing of the Products during such calendar month and within thirty
      (30)
      days after such calendar month, Manufacturer shall pay Buyer for the portion
      of
      the Buyer's Inventory used. Buyer shall have the right to audit the monthly
      inventory statement provided by Manufacturer. In the event any Buyer's Inventory
      remains unused nine (9) months after the Effective Date, or in the event this
      Agreement is terminated for any reason prior to the end of such 9-month period,
      Manufacturer shall return such unused Buyer's Inventory to Buyer and any balance
      remaining on the Purchase Price shall be canceled. Manufacturer agrees that
      in
      cases where Manufacturer may have common components, Manufacturer will consume
      Buyer’s components before consuming any of Manufacturer’s
      components.





(f)  Other
      Agreements .
      This
      Agreement shall be contingent upon the execution by Buyer and Manufacturer
      of a
      sublease for Buyer's manufacturing facilities in the form of Exhibit B hereto
      (the " Sublease "),
      and
      the Equipment Purchase Option Agreement in the form of Exhibit C
      hereto.





(g)  Disaster
      recovery plan .
      Manufacture shall develop and provide a disaster recovery plan in writing to
      secure product supply in the event of a catastrophic occurrence to the Buyer
      within 60 days of the effective date of the Manufacturing Agreement.


3


**3.**
            **TERM
                AND TERMINATION.**





(a)  Term .
      Unless
      sooner terminated as set forth in this Section
      3 ,
      the
      term of this Agreement shall commence on the Effective Date and continue for
      an
      initial term of three (3) years (the " Initial
      Term ")
      unless
      either party provides a written termination notice to the other party pursuant
      to Section
      3(c) .





(b) Renewal .
      Unless
      terminated in accordance with Section
      3(c) below,
      this Agreement shall be automatically renewed for successive one-year terms
      (each a " Renewal
      Term "
      and,
      together with the Initial Term, the " Term ").





(c) Termination .
      (i)
      After the second anniversary of the Effective Date, either party may terminate
      this Agreement for any reason, upon one hundred twenty (120) **** days
      written notice to the other party, and (ii) either party may terminate this
      Agreement sixty (60) days after written notification to the other party of
      material breach of this Agreement, or immediately in the case of failure to
      make
      any payment hereunder or breach of confidentiality obligations, if such breach
      is not cured within such period or, if such breach cannot reasonably be cured
      within sixty (60) days, the defaulting party fails to commence a cure within
      the
      sixty (60) day period and thereafter pursue such cure to
      completion.





(d) Effect
      of Termination .
      The
      expiration or termination of this Agreement shall not affect any obligations
      that exist as of the date of termination, including without limitation accepted
      Purchase Orders under Section
      4 .





**4.**
            **ORDERING.**





(a) Purchase
      Orders .
      Performance under this Agreement shall be initiated by Purchase Orders issued
      by
      Buyer and accepted by Manufacturer in accordance with Section 4(b) below. Except
      as set forth in Section 4(e) below, Buyer shall be under no obligation to
      purchase, and Manufacturer shall be under no obligation to manufacture, Products
      hereunder unless and until Buyer issues a Purchase Order and Manufacturer has
      accepted Buyer's Purchase Order. Buyer's Purchase Orders shall set forth for
      each ordered Product: (i) the quantity, which shall not be less than the
      applicable Minimum Order Size, (ii) the applicable Purchase Price and total
      price, (iii) the delivery and shipping instructions, and (iv) the requested
      delivery schedule, which shall comply with the delivery schedule limitations
      set
      forth in the applicable Product Schedule. Notwithstanding the foregoing, if
      Manufacturer's Long Lead Time Inventory is not compatible with Buyer's requested
      delivery schedule, the parties may agree in writing or by Purchase Order that
      Manufacturer may begin work in advance of having a definitive delivery schedule
      and that the parties will, within ten (10) days, finalize the delivery schedule
      based upon the information on the Long Lead Time Inventory. All Purchase Orders
      shall be subject to and governed by the terms and conditions of this Agreement
      and the applicable Product Schedules, which shall not be changed or supplemented
      by an accepted Purchase Order unless such changed or supplemental terms and
      conditions are set forth on the face of the Purchase Order and specifically
      reference this Section
      4(a) .
      Buyer
      and Manufacturer acknowledges that pre-printed terms and conditions on its
      Purchase Order form, if any, shall not apply to the Purchase Order.





Manufacture
      shall make reasonable effort to accommodate Buyers PO’s not limited to
      expediting product and material.





(b)  Purchase
      Order Timing .
      Purchase Orders shall be submitted on a weekly basis. Upon execution of this
      Agreement, Buyer shall submit five (5) Purchase Orders to Manufacturer, with
      each Purchase Order representing one (1) week of Buyer's requirements. Each
      week
      thereafter Buyer will submit a new one (1) week Purchase Order to maintain
      a
      five (5) week rolling requirement.





(c)  Cancellation
      of Purchase Orders .
      Purchase Orders may only be modified or cancelled, and scheduled shipments
      may
      only be deferred, with Manufacturer's prior written consent or according to
      the
      terms of this Agreement. Both parties agree that written consent can be in
      the
      form of an e-mail. Modification, change, or cancellation is not deemed approved
      until e-mail acknowledgement is received from the authorized person subject
      to
      section 5b.


4


(d)  Acceptance .
      Manufacturer shall use reasonable commercial efforts to accept all Buyer
      Purchase Orders. No Purchase Order shall be deemed accepted unless Manufacturer
      provides Buyer written notice accepting the Purchase Order. Both parties agree
      that written consent can be in the form of an e-mail. Acceptance is not approved
      until e-mail acknowledgment is received from the authorized representative
      of
      Manufacturer.




(e)  Minimum
      Revenue Requirement (MRR) .
      Buyer
      and Manufacturer agree to use MRR to set the transfer price for a 12 month
      period. During the first year of the Term, the aggregate amount paid to
      Manufacturer by Buyer shall not be less than 75% of the initial Long Range
      Forecast (as defined below), which shall be approved by Manufacturer in writing.
      Manufacturer and Buyer shall review and compare the Mid-Range forecast to the
      MRR quarterly and mutually agree to price increases or decreases going forward.
      The foregoing amounts are collectively referred to herein as the " Minimum
      Revenue Requirement ."
      The
      agreed upon MRR as of the date of execution based on the Long Range Forecast
      is
      $9.6 million dollars. In the event amounts paid to Manufacturer by Buyer fall
      below 75% or exceed 125% of the Minimum Revenue Requirement, the parties agree
      that the pricing of Products shall be adjusted in accordance with Section 8(b)
      below.





**5.**
            **FORECASTS.**





(a)  Manufacturer's
      Reliance on Forecasts .
      On or
      before the last day of each calendar month, Buyer shall provide to Manufacturer
      the estimated quantity of each Product that will be ordered during the six
      (6)
      month period following such date (the " Mid-Range
      Forecast "),
      and
      the estimated quantity of each Product that will be ordered during the one
      (1)
      year period following such date (the " Long
      Range Forecast ").
      The
      Long Range Forecast shall be for planning purposes only. Buyer understands
      and
      acknowledges that Manufacturer will use the Mid-Range Forecast, among other
      things, to determine the amount of Inventory to purchase in advance of Purchase
      Orders. Such Inventory may include Long Lead, Minimum Buy, NCNR, and Safety
      Stock Inventory. The parties will review monthly Mid-Range Forecasts and
      mutually agree on the Long Lead, Minimum Buy, NCNR and Safety Stock Inventory
      to
      be acquired by Manufacturer pursuant to such Mid-Range Forecast. Buyer agrees
      that if any such Inventory purchased in advance of the Purchase Orders is not
      used for Buyer's Purchase Orders and cannot be returned or used on other orders
      within three (3) months (or as the parties may otherwise mutually and expressly
      agree), then Buyer shall purchase any such Inventory at Manufacturer's cost
      provided that Manufacturer can show that such Inventory was purchased to meet
      mutually agreed Long Lead, Minimum Buy, NCNR and/or Safety Stock Inventory
      requirements. In addition, Manufacturer shall be compensated for otherwise
      unrecoverable costs reasonab l y
      incurred by Manufacturer in reliance on the Mid-Range Forecast, including but
      not limited to, the cost of all NCNR Inventory or other unused Inventory
      specifically ordered for Buyer in Manufacturer's possession (plus Manufacturer's
      standard material handling fee not to exceed 8%), any vendor cancellation
      charges (including restocking fees), and any nonrecurring engineering or
      production costs provided that Manufacturer can show that such Inventory was
      purchased to meet mutually agreed Long Lead, Minimum Buy, NCNR and/or Safety
      Stock Inventory requirements. **** Manufacturer
      shall use reasonable commercial efforts to return unused Inventory specifically
      purchased for Buyer and to cancel pending orders with suppliers. Upon
      Manufacturer's receipt of payment from Buyer for any Inventory, Buyer shall
      have
      the option to: (i) direct Manufacturer to ship to Buyer, at Buyer's cost, the
      Inventory, or (ii) request Manufacturer store the Inventory in an ESD compliant
      and temperature controlled environment at customary storage charges for use
      on
      future Purchase Orders for a period of up to three (3) months or as the parties
      may otherwise mutually agree. Buyer agrees to notify Manufacturer promptly
      in
      writing if and when Buyer determines that it will not order at least the
      estimated quantity set forth in the applicable Mid-Range Forecast for a
      Produ c t.


5


(b)  Manufacturing
      Flexibility and Minimum Order Quantities .
      Manufacturer agrees to allow up to (i) a 50% reduction/addition in the quantity
      of a Product actually ordered from the quantity set forth in the Mid-Range
      Forecast for the period 61 - 90 days following the date of the Mid-Range
      Forecast; and (ii) a 25% reduction/addition in the quantity of a Product
      actually ordered from the quantity set forth in the Mid-Range Forecast for
      the
      period 36 - 60 days following the date of the Mid-Range Forecast. If the
      quantity actually ordered falls below the foregoing thresholds, then the
      Purchase Price for that Product going forward may be equitably adjusted to
      reflect the impact of Buyer's failure to purchase the estimated quantity as
      mutually agreed by both parties. The parties agree to negotiate such request
      in
      good faith. The minimum order quantity (MOQ) for each Product shall be as set
      forth on Exhibits D and E hereto.




(c)  Product
      End-of-Life .
      Buyer
      shall provide not less than ninety (90) days written notice to Manufacturer
      of
      any Product end-of-life.





**6.**
            **SHIPMENT
                AND DELIVERY.**





Manufacturer
      shall ship Products in accordance with each accepted Purchase Order, subject
      to
      the terms and conditions of this Agreement. Delivery of Products shall be made
      F.O.B. at the loading dock of Buyer's facility on the dates specified in the
      applicable Purchase Order. Title to, and risk of loss for, Products shall pass
      to Buyer at the time of delivery of possession of the Products at Buyer's
      facility.





**7.**
            **ACCEPTANCE.**





The
      Product shall be deemed accepted when Buyer has tested and inspected the Product
      in accordance with the contracted level of testing and inspections, and such
      Products have passed the testing and inspections.





**8.**
            **PRICES;
                OTHER COSTS; PRICE CHANGES;
                INVOICING.**





(a)  Prices;
      Taxes .
      Buyer
      shall pay Manufacturer the Purchase Price as mutually agreed upon by
      Manufacturer and Buyer, which Purchase Price may be adjusted from time to time
      pursuant to the terms of this Agreement. The Purchase Price is inclusive
      of **** the
      costs
      of packaging, shipping and insurance and any applicable federal, state and
      local
      taxes.





(b)  Price
      Changes .
      In
      addition to other provisions in this Agreement allowing for changes in the
      Purchase Price, if fluctuations occur at any time in the costs of manufacturing
      any Product, Manufacturer may request an adjustment in the Purchase Price to
      account for such fluctuations, and the parties agree to negotiate any such
      adjustment in good faith. Buyer has the right to request a review of cost
      changes impacting the proposed increase or decrease of prices. Except as
      otherwise set forth in this Agreement, the Purchase Prices for the Products
      shall not be adjusted unless, during any calendar month MOQ or contract year,
      Buyer fails to meet the Minimum Revenue Requirement, in which event Manufacturer
      shall be entitled to an equitable adjustment going forward in the Purchase
      Price. . Notwithstanding the foregoing, the Purchase Price as of the effective
      date shall be reduced as follows:





a.
            Manufacturer
                shall use its commercially reasonable efforts to reduce it costs
                of
                manufacturing by 10% prior to April 15, 2006. Effective as of April
                15,
                2006, the Purchase price for each product shall be reduced by an
                amount
                equal to (A) 10% of the Manufacturer’s non-materials cost of manufacturing
                such Product on the effective Date (B) the amount of any reduction
                in
                Manufacturer’s costs of materials for such Product between the effective
                Date and April 15, 2006.





(c)  Tooling/Non-Recurring
      Expenses .
      Buyer
      shall pay for, or obtain and consign to Manufacturer, any Product specific
      tooling and shall prepay other non-recurring expenses as set forth in the
      applicable Product Schedule. Manufacture shall insure adequate maintenance
      for
      all consigned tooling. Upon request by Buyer, Manufacturer shall return all
      items paid for by Buyer pursuant to this Section
      8(c) .


6


(d)  Invoicing
      and Payment .
      Manufacturer shall invoice Buyer with each shipment of Products. A proper
      invoice shall include Manufacturer's name and invoice date, the Purchase Order
      number, the total price and the name (if applicable), title, complete mailing
      address where payment is to be sent and must be submitted to the appropriate
      invoice address listed in the applicable Product Schedule or Purchase
      Order. **** Terms
      will be 2% 10, net 30 days, Buyer to pay all invoices within thirty (30) days
      of
      the date of invoice. Payments shall be made in U.S. dollars. Any payment or
      part
      of a payment that is not paid after thirty (30) days past due shall bear
      interest at the rate of one percent (1%) per month from its due date until
      paid.
      All payments are due at Manufacturer's place of business.





**9.**
            **ENGINEERING
                CHANGES AND COST SAVINGS.**





Buyer
      may
      request in writing that Manufacturer incorporate an engineering change into
      a
      Product. Such request shall include a description of the proposed change
      sufficient to permit Manufacturer to evaluate it. Manufacturer's evaluation
      shall be in writing and shall state the impact of the requested change on
      delivery schedule and expected cost. Manufacturer shall not proceed with the
      requested engineering change until the parties have agreed in writing on the
      changes to the Product, Specifications, delivery schedule and pricing, including
      without limitation the cost to be paid by Buyer for re-assembly, retooling
      and
      Inventory on hand and on order that becomes obsolete. Pricing for obsolete
      Inventory as a result of such change shall be based upon the cost of such
      Inventory plus Manufacturer's standard material handling fee. Any cost reduction
      programs may also have an affect on the Purchase Price.





**10.**
            **FORCE
                MAJEURE.**





Neither
      party shall be liable for its failure to perform hereunder due to any acts
      of
      God, including fires, floods, wars, terror, sabotage, accidents, labor disputes,
      governmental laws, ordinances, rules and regulations, whether valid or invalid.
      Additionally, neither party shall be liable for its failure to perform hereunder
      to the extent operational occurrences are beyond its reasonably control,
      including, without limitation, inability to obtain material, equipment or
      transportation, shortages, accidents, priorities, requisitions, allocation
      price
      adjustment restrictions and any other similar occurrence; provided, however,
      that obligations for payment for Products produced and shipped shall not be
      relieved or suspended by any event of force majeure. The party whose performance
      is prevented by any such occurrence shall notify the other party thereof in
      writing as soon as is reasonably possible after the commencement of such
      occurrence, and shall promptly give written notice to the other party of the
      cessation of such occurrence. The party affected by such occurrence shall use
      reasonable commercial efforts to remedy or remove such event of force majeure
      as
      expeditiously as possible.





**11.**
            **INTELLECTUAL
                PROPERTY.**





(a)  Ownership
      of Intellectual Property; License .
      Title
      to and ownership of all of the technology, trade secrets, trademarks, know-how,
      and information regarding the Products, and the manufacture of the Products,
      supplied by Buyer to Manufacturer hereunder shall remain in Buyer. Buyer hereby
      grants Manufacturer a limited, non-transferable, non-exclusive, revocable
      license to use Buyer's software, technology, trade secrets, know-how, and other
      proprietary information (" Buyer's
      Proprietary Information ")
      for
      the purposes of this Agreement, free of any claim or allegation by Buyer of
      misappropriation of Buyer's Proprietary Information or infringement by
      Manufacturer of any Buyer intellectual property rights covering Buyer's
      Proprietary Information; provided, however, that Manufacturer's rights and
      freedom of use in connection with the manufacture of Products for Buyer
      hereunder shall endure only for the term of this Agreement. After the
      termination or expiration of this Agreement, (i) such license shall expire
      and
      Manufacturer shall have no further rights to use Buyer's Proprietary
      Information, and (ii) Manufacturer shall return to Buyer all written documents
      and other materials relating to Buyer's Proprietary Information. Notwithstanding
      the foregoing, title to and ownership of any software, technology, trade
      secrets, know-how, and information of Manufacturer (" Manufacturer's
      Proprietary Information ")
      used
      by Manufacturer hereunder shall remain the property of
      Manufacturer.


7


(b)  Confidentiality .
      Both
      parties agree that either party may acquire information that is confidential
      and
      proprietary to the other party including, but not limited to, business plans,
      finances, financial results, strategies, customers, suppliers, product
      specifications, and the Proprietary Information set forth in Section
      11(a) .
      Both
      parties agree that each party's information is the sole and exclusive property
      of that respective party. Each party agrees that it will maintain and protect
      the confidentiality of the other party's Proprietary Information using the
      same
      standard of care that such party uses to protect its own Proprietary
      Information, which in no event shall be less than reasonable care. The
      obligation to keep each party's Proprietary Information confidential shall
      survive the termination or expiration of this Agreement. Terms and conditions
      of
      NDA apply. NDA is attached by reference as Exhibit F.





(c)  Warranty .
      Buyer
      warrants that it has the right to manufacture and market the Products, and
      that
      the Products and all Specifications provided to Manufacturer do not infringe
      upon any patent, trademark or copyright of any third party. Manufacturer
      warrants that any manufacturing services provided will be of a professional
      quality, conforming to IPC workmanship standards and practices.




**12.**
            **MANUFACTURER
                RESTRICTIONS AS TO USE OF
                PRODUCTS.**





Buyer
      acknowledges and agrees that the Products are not designed for and, absent
      Manufacturer's express written authorization, are not to be used in IPC Class
      3
      product (equipment where continued performance or performance on demand is
      critical such as life support systems or critical weapons systems).





**13.**
            **PRODUCT
                WARRANTY AND DISCLAIMER.**





(a)  Product
      Warranty .
      Manufacturer warrants that Products manufactured hereunder will conform to
      the
      Specifications and will be free from Defects in material and workmanship for
      a
      period of one (1) year from the date of delivery of the Products to Buyer.
      Buyer
      shall promptly notify Manufacturer in writing of any malfunction in the
      Products, which notification shall describe the malfunction in sufficient detail
      to permit Manufacturer to isolate the malfunction. Upon notification from Buyer,
      Manufacturer will provide Buyer with instructions on returning the Product
      under
      a warranty claim. Upon receipt of any Products returned by Buyer pursuant to
      this Section
      13 ,
      Manufacturer shall test the Products in accordance with the contracted level
      of
      testing as set forth in the applicable Product Schedule in order to isolate
      any
      malfunctions in the Product. If Manufacturer determines that the malfunction
      is
      not due to nonconformity with the Specifications or Defect, then Manufacturer
      will seek instructions from the Buyer regarding whether Manufacturer should
      return the Product to Buyer or dispose of it. If Manufacturer is unable to
      isolate any malfunctions in the Product using the contracted level of testing
      as
      set forth in the applicable Product Schedule, then Buyer is solely responsible
      for isolation of the malfunction and Manufacturer will seek instructions from
      the Buyer regarding whether Buyer will authorize additional testing on the
      returned Product or whether Manufacturer should return the Product to Buyer
      or
      dispose of it. **** If
      any
      returned Product contains malfunctions due to nonconformity with the
      Specifications or Defects in material or workmanship, then **** Buyer's
      exclusive remedy and Manufacturer's sole liability under this warranty will
      be
      for Manufacturer, at its sole option and expense, to correct or replace the
      nonconforming or defective Product. **** This
      warranty does not apply to: (i) any first articles, prototypes, pre-production
      units, or test units of a Product; (ii) any Products that have been repaired
      by
      Buyer or a third party; (iii) any Products that have been altered or modified
      in
      any way by Buyer or a third party; or (iv) any Products that have been subject
      to misuse, abnormal use or neglect.





(b)  Disclaimer . ** THE
      WARRANTY STATED ABOVE IS IN LIEU OF ALL OTHER WARRANTIES, CONDITIONS OR OTHER
      TERMS, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION
      ANY IMPLIED WARRANTIES OF TERMS AS TO QUALITY, FITNESS FOR PARTICULAR PURPOSE,
      MERCHANTABILITY OR OTHERWISE, WHETHER IMPLIED BY CUSTOM OR LAW. Component
      manufacturer’s warranty will pass thru to Buyer where applicable.


8


**14.**
            **LIMITATIONS
                OF LIABILITY.**





EXCEPT
      AS
      EXPRESSLY PROVIDED IN SECTION
      15 (INDEMNIFICATION) OF THIS AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE
      TO
      THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, LOST PROFITS,
      SPECIAL OR PUNITIVE DAMAGES OF ANY KIND OR NATURE ARISING OUT OF OR RELATING
      TO
      THIS AGREEMENT OR CONNECTED WITH OR RESULTING FROM THE MANUFACTURE, SALE,
      DELIVERY, RESALE, REPAIR, REPLACEMENT, OR USE OF ANY PRODUCTS OR THE FURNISHING
      OF ANY SERVICE OR PART THEREOF, WHETHER SUCH LIABILITY IS BASED IN CONTRACT,
      TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, EVEN IF SUCH PARTY HAD BEEN
      WARNED OF THE POSSIBILITY OF ANY SUCH DAMAGES.





**15.**
            **INDEMNIFICATION.**





(a)  Buyer's
      Indemnification .
      Buyer
      shall defend, indemnify and hold Manufacturer and its parent companies,
      subsidiaries, affiliates, officers, directors, employees, agents and
      representatives harmless from any and all claims, demands, liabilities, actions,
      suits, proceedings, losses, injuries and death, including damages, judgments,
      expenses and/or costs (including without limitation reasonable attorneys' fees
      and related costs) based on or arising out of: (i) any claims or demands that
      use of Buyer's Proprietary Information in manufacturing the Products constitutes
      infringement; (ii) any claims or demands relating to the design of the Products;
      (iii) any claims or demands by any third party that there was a failure to
      warn
      of any foreseeable use, improper use, misuse or defects of any Products; (iv)
      any claims or demands relating to Buyer's negligence, use, ownership,
      maintenance, transfer, transportation or disposal of the Products; (v) any
      claims or demands of Buyer's violation or alleged violation of any federal,
      state, or local laws or regulation, including without limitation, the laws
      and
      regulations governing product safety, labeling, packaging and labor practices;
      (vi) any claims of patent, trademark, or copyright infringement; or (vii) any
      claims or demands arising out of a breach by Buyer of any of the terms and
      conditions of this Agreement. Manufacturer shall give written notice of any
      claim or potential claim to Buyer within a reasonable time following the time
      at
      which Manufacturer first became aware of the circumstances which gave rise
      to
      such claim for indemnification hereunder. Buyer may, at its option, have control
      of any litigation and appointment of counsel in defense of any third party
      claims for which Manufacturer seeks indemnification hereunder. The obligation
      to
      indemnify under this Section
      15 shall
      survive the termination or expiration of this Agreement but not extend any
      longer than two (2) years beyond the termination date.





(b)  Manufacturer's
      Indemnification .
      Manufacturer shall defend, indemnify and hold Buyer and its parent companies,
      subsidiaries, affiliates, officers, directors, employees, agents and
      representatives harmless from any and all claims, demands, liabilities, actions,
      suits, proceedings, losses, injuries and death, including damages, judgments,
      expenses and/or costs (including without limitation reasonable attorneys' fees
      and related costs) based on or arising out of: (i) any claims or demands that
      use of Manufacturer's Proprietary Information in manufacturing the Products
      constitutes infringement; (ii) defects in any Products caused by Manufacturer
      in
      manufacturing the Products; (iii) any claims or demands relating to
      Manufacturer's negligence, use, ownership, maintenance, transfer, transportation
      or disposal of the Products; (iv) any claims or demands of Manufacturer's
      violation or alleged violation of any federal, state, or local laws or
      regulation, including labor practices; (v) any claims of patent, trademark,
      or
      copyright infringement where Manufacturer is using Buyer's information not
      in
      conformance with this Agreement; or (vi) any claims or demands arising out
      of a
      breach by Manufacturer of any of the terms and conditions of this Agreement.
      Buyer shall give written notice of any claim or potential claim to Manufacturer
      within a reasonable time following the time at which Buyer first became aware
      of
      the circumstances which gave rise to such claim for indemnification hereunder.
      Manufacturer may, at its option, have control of any litigation and appointment
      of counsel in defense of any third party claims for which Buyer seeks
      indemnification hereunder. The obligation to indemnify under this Section
      15 shall
      survive the termination or expiration of this Agreement but not extend any
      longer than two (2) years beyond the termination date.


9


**16.**
            **MISCELLANEOUS.**





(a)  Notices .
      All
      notices and other communications required or permitted to be given under this
      Agreement shall be in writing and hand-delivered, mailed by first-class mail
      postpaid, sent by facsimile (so long as the party sending the facsimile has
      the
      ability to receive a confirmation of receipt from its facsimile machine) or
      sent
      by an overnight courier with a reliable tracing system, to each of the parties
      to their respective addresses as noted in the first paragraph of this Agreement.
      Notices that are mailed shall be deemed to have been given as of the fourth
      business day following the date of mailing and notices that are hand-delivered
      or sent by overnight courier are deemed to be given the next business day.
      Either party may change its address for the giving of notice by so notifying
      the
      other party by ten (10) days prior written notice given in the manner set forth
      in this section.





(b)  Written
      Modifications .
      No
      amendment, modification or release from any provision of this Agreement, the
      Product Schedules attached hereto or Purchase Orders issued hereunder shall
      be
      of any force or effect unless it is in writing and signed by both authorized
      parties hereto and specifically refers to this Section
      16(b) .





(c)  No
      Assignment .
      This
      Agreement shall not be assigned by either party without the prior written
      consent of the other party and any attempt to do so shall be void, except in
      the
      event of a merger or acquisition resulting the sale of substantially all of
      the
      party's assets.





(d)  No
      Waiver .
      A
      failure to exercise any right hereunder with respect to any breach shall not
      constitute a waiver of such right with respect to any subsequent
      breach.





(e)  Independent
      Contractors .
      Each
      party is acting as an independent contractor and not as agent, partner, or
      joint
      venturer with the other party for any purpose. Except as provided in this
      Agreement neither party shall have any right, power, or authority to act or
      to
      create any obligation, express or implied, on behalf of the other.





(f)  Fair
      Labor Standards Act .
      All
      Products furnished hereunder will be manufactured in accordance with the Fair
      Standards Labor Act of 1938, as amended, and the regulations and orders of
      the
      U.S. Department of Labor issued thereunder.





(g)  Governing
      Law .
      The
      validity, interpretation and performance of this Agreement shall be governed
      by
      the laws of the state of Manufacturer's place of business, being Utah, as set
      forth in the first paragraph of this Agreement, without regard to such state's
      conflicts of laws principles.





(h)  Counterparts .
      This
      Agreement may not be executed in counterpart copies, except that Exhibits A
      and
      D may be supplemented or amended from time to time to reflect the addition
      of
      new products or to modify the terms and specifications for existing Products.
      Any supplement or amendment to Exhibits A to E must be executed by both parties
      hereto in writing and be assigned an appropriate contract tracking number so
      that both parties are able to readily identify the current product schedule
      terms in effect from time to time.





(i)  Entire
      Agreement .
      The
      terms and conditions of this Agreement, including all Product Schedules and
      accepted Purchase Orders, constitute the entire agreement between the parties
      hereto with respect to the subject matter hereof and supersede all previous
      communication, either oral or written, between the parties hereto. There are
      no
      understandings, representations or warranties of any kind whatsoever, except
      as
      expressly set forth herein.




{


10


IN
      WITNESS WHEREOF, the parties hereunto have caused this Agreement to be executed
      as of the day and year first above written.





ClearOne
                Communications, Inc.
            
            Inovar,
                Inc.By:
            s/
                Zee Hakimoglu
            
            By:
            /s/
                Blake KirbyName:
                Zee Hakimoglu
            
            Name:Blake
                KirbyTitle:
                CEO/President
            
            Title:President/CEO








ClearOne
                Communications, Inc.By:
            /s/
                Donald E. FrederickName:
                Donald E. FrederickTitle:
                Chief Financial Officer




11