Document:

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                                                                   EXHIBIT 10.14

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                SUPPLY AGREEMENT

         This Supply Agreement ("Agreement") is entered into between Systron
Donner Automotive Division, a division of BEI Technologies, Inc., a Delaware
corporation ("SDAD"), and Continental TevEs AG & Co. oHG, a corporation
organized under the laws of Germany ("CT"). SDAD and CT may be referred to
herein individually as a "party" and collectively as the "parties."

                                    RECITALS

         A.       SDAD is a manufacturer of inertial rate sensor products (as
                  defined below, "Rate Sensor Products"). Rate Sensor Products
                  range in complexity (and cost) from basic [*] elements (as
                  defined below, "[*]"), to [*] sensors, to [*] sensors (as
                  defined below, "[*]").

         B.       CT develops and markets brake-related systems for use in
                  automobiles and trucks. These systems include as components
                  certain [*] (referred to by the parties as [*]) that CT and
                  SDAD have jointly developed and that SDAD is supplying to CT
                  pursuant to a Development and Supply Agreement dated April 26,
                  2001 ("2001 Supply Agreement"). Under the 2001 Supply
                  Agreement, [*] in developing the [*] and in acquiring
                  production capacity used by SDAD to supply these [*] to CT.

         C.       CT also purchases certain [*] sensors from SDAD pursuant to a
                  Development and Supply Agreement dated May 30, 1997 (as
                  amended, the "1997 Supply Agreement" and together with the
                  2001 Supply Agreement, the "Existing Supply Agreements").

         D.       The parties now desire to modify their existing relationship
                  by transferring to CT [*]. During the transition of
                  production, SDAD would continue to supply CT under the 2001
                  Supply Agreement with [*] and certain [*] known as [*].

         E.       After the transition of production to CT, SDAD would supply CT
                  under this Agreement with components - such as [*] - to be
                  used in the manufacture of [*]. SDAD would also continue to
                  supply [*] under the 2001 Supply Agreement for [*] for the [*]
                  program and [*] sensors under the 1997 Supply Agreement.

         F.       In connection with the transfer of production to CT, the
                  parties wish to modify certain of CT's purchase obligations
                  under the 2001 Supply Agreement by [*] to purchase under the
                  2001 Supply Agreement.

         G.       In return for transferring production of [*] from SDAD to CT,
                  the parties desire that CT make a firm commitment (with
                  certain limited exceptions) for [*] to purchase from SDAD [*].

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         H.       In transitioning production to CT, the parties desire that
                  SDAD grant CT a [*] license under SDAD's patents and know how
                  to assemble [*] as well as certain [*], all using components
                  supplied by SDAD.

         I.       Because CT has participated - financially and otherwise - in
                  the development of certain SDAD products, the parties desire
                  that SDAD supply its Rate Sensor Products [*], with certain
                  exceptions, in [*] (as defined below).

         J.       The parties desire that SDAD grant CT [*] to use certain of
                  SDAD's products for use in [*].

         K.       The parties desire that CT purchase from SDAD certain
                  equipment currently used by SDAD in the manufacture of [*] and
                  that CT reimburse SDAD for certain [*] of SDAD and its
                  suppliers incurred under the Existing Supply Agreements and
                  this Agreement.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the mutual promises set forth in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

1.       DEFINITIONS. Capitalized terms used in this Agreement are defined in
         this Section 1 or in the Section where they are first used.

         1.1      "Affiliate" means, with respect to either party, any Person
                  that directly or indirectly controls, is controlled by or is
                  under common control with that party, where "control" means
                  ownership of [*] or more of the outstanding voting securities
                  (but only as long as such Person meets these requirements).

         1.2      "[*]" means an [*] that is designed by SDAD to drive a [*].

         1.3      "Authorized Fabricator" means a third-party fabricator
                  licensed by SDAD to manufacture SDAD-proprietary [*] (not [*])
                  and designated by SDAD in accordance with Section 9.3.

         1.4      "[*]" means a rate sensor [*] designed by SDAD under the 2001
                  Supply Agreement that is [*] and that [*].

         1.5      "[*]" means the use of inertial rate sensors in [*] when
                  either directly linked to brakes or when used in combination
                  with a brake function as in a [*]. [*] do not include [*]
                  sensors that are not directly linked to brakes.

         1.6      "Burden Rate" means that portion of the price of each Product
                  attributable to SDAD's overhead including amortized [*] Costs.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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         1.7      "[*].

         1.8      "[*]" means an [*], including rate sensors, for use in motor
                  vehicles. [*] are examples of [*].

         1.9      "[*]" means a particular configuration of [*] designed by SDAD
                  for sale to CT, including [*].

         1.10     "[*]" means a particular configuration of [*] designed by SDAD
                  for sale to CT, including [*].

         1.11     "Competitive Targets" has the meaning assigned to it in
                  Section 7.4(a).

         1.12     "Confidential Information" means, with respect to either
                  party, all confidential and proprietary information of that
                  party, including, without limitation, documents, data,
                  reports, know-how and other information related to the past,
                  current or proposed operations, products, technology, services
                  and business of such party disclosed or otherwise made
                  available by such party to the other party in connection with
                  this Agreement and that the receiving party would reasonably
                  know or expect to be confidential or that is marked with a
                  legend indicating that such information or data is
                  confidential or, for oral information, that is reduced to
                  writing and so marked within thirty (30) days after
                  disclosure.

         1.13     "Effective Date" means the date on which both parties have
                  executed this Agreement.

         1.14     "[*]" or "[*]" means the [*] unit of the [*] which monitors
                  [*].

         1.15     "[*]" or "[*]" constitutes [*] which utilize inertial sensors
                  to [*].

         1.16     "F04" is a release state in development of a product defined
                  as functional samples, purpose is for presentation of
                  function.

         1.17     "F05" is a release state in development of a product defined
                  as close to series production samples, which utilizes final
                  principle and circuit. The purpose is for the check of the
                  principle series suitability of interface and function.

         1.18     "F06" is a release state in development of a product defined
                  as pre-series production samples in the final configuration
                  but not produced on production tooling. The purpose is for
                  unrestricted check of the series suitability and keeping of
                  product specification with customer release.

         1.19     "F07" is a release state in development of a product defined
                  as series production samples in the final configuration and
                  produced on production tooling, purpose is for qualification
                  and limited production volume.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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         1.20     "F08" is a release state in production of a product defined as
                  series production deliverables in the final configuration and
                  produced on production tooling, purpose is for series use.

         1.21     "Intellectual Property Rights" means: (a) all patents and
                  other rights throughout the world in useful inventions and
                  ornamental designs that are granted under patent law,
                  including any rights in patent applications or rights to file
                  patent applications; (b) copyrights, moral rights and other
                  related rights throughout the world in works of authorship,
                  including all registrations and applications therefor; and (c)
                  rights throughout the world to proprietary know-how, trade
                  secrets and other confidential information, whether arising by
                  law or contractual obligation of non-disclosure, and all other
                  industrial property rights or other rights covering intangible
                  property recognized in any jurisdiction; provided, however,
                  that Intellectual Property Rights will not include trademarks,
                  service marks, logos, insignias or other proprietary trade
                  descriptions protected by law.

         1.22     "[*]" means cars, vans, SUVs, and trucks not more than [*] in
                  weight. For the avoidance of doubt, Light Vehicles do not
                  include trucks in excess of [*] in weight or [*].

         1.23     "[*]" means an SDAD-proprietary packaged [*] sensor including
                  [*] that is a [*] that is ready to integrate into CT's product
                  [*].

         1.24     "[*]" means, for a particular calendar year, the [*] of Rate
                  Sensor Products that [*], in accordance with Section 3.

         1.25     "[*]" means a packaged, SDAD-proprietary [*] element, [*].

         1.26     "Order" has the meaning assigned to it in Section 4.3.

         1.27     "Person" means any individual, partnership, corporation,
                  limited liability company or other entity or any government or
                  political subdivision, or any agency, department or
                  instrumentality thereof.

         1.28     "Products" means the specific Rate Sensor Products to be
                  supplied by SDAD to CT under this Agreement. The Products to
                  be initially supplied are set forth on Schedule A.

         1.29     "Rate Sensor Product" means [*],[*],[*],[*],[*] and any other
                  product or component family at or below the level of [*] that
                  constitutes or includes a rate sensor.

         1.30     "SDAD Proprietary Know-How" has the meaning assigned to it in
                  Section 9.1.

         1.31     "[*]" means a rate sensor module designed by SDAD under the
                  2001 Supply Agreement that [*] and that consists of a [*].

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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         1.32     "Specifications" means, with respect to a particular Product,
                  the technical specifications provided by SDAD for that Product
                  as agreed to and executed by the parties as of January 31,
                  2004. Specifications do not include advertising or marketing
                  materials.

         1.33     "Transition Plan" means the transition plan as agreed to and
                  executed by the parties as of January 31, 2004.

2.       STRUCTURE OF RELATIONSHIP.

2.1               SUPPLY. Subject to the terms and conditions of this Agreement,
                  SDAD will supply and CT will purchase the Products for use by
                  CT as components to [*] and other CT products. The parties may
                  from time to time add additional Products to Schedule A by
                  mutual agreement, and [*] any Rate Sensor Products that it
                  makes generally available to SDAD's other customers.

         2.2      [*].

                  (A)      Subject to its second source rights under Section
                           7.4, CT and its Affiliates will purchase from SDAD
                           [*] Rate Sensor Products for use in [*].
                           Notwithstanding the foregoing, (i) CT may [*]
                           schedule set forth in the Transition Plan; CT will
                           [*] to secure approval from its OEM customers to [*];
                           and (ii) CT may manufacture [*] in accordance with
                           the Transition Plan using components supplied by SDAD
                           under this Agreement or the Existing Supply
                           Agreements.

                  (B)      [*]

                  (C)      If either party breaches its obligations under this
                           Section 2.2, and such breach is not cured within
                           ninety (90) days after the non-breaching party
                           objects in writing, then the non-breaching party may,
                           in addition to its other remedies that may be
                           available at law or under this Agreement, terminate
                           [*] under this Section 2.2 by giving the breaching
                           party [*] days notice.

         2.3      TRANSITION PLAN. Each party will fulfill its responsibilities
                  under the Transition Plan to transfer current production of
                  [*] under the 2001 Supply Agreement from SDAD to CT. The
                  Transition Plan is hereby incorporated by reference.

                  (A)      In accordance with the Transition Plan, CT will
                           assume the following additional responsibilities in
                           connection with the manufacture of [*]:

                           (I)      Design of products above the [*] level, upon
                                    transfer of final assembly of [*].

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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                           (II)     Validation above the level of manufacture of
                                    SDAD or its subcontractors.

                           (III)    Procurement and validation of all components
                                    above the level of manufacture of SDAD.

                           (IV)     Failure analysis of products assembled by CT
                                    down to the level of the part or assembly
                                    supplied by SDAD. Upon transfer of
                                    production of a [*] in accordance with the
                                    Transition Plan, SDAD will have no further
                                    obligation or liability under the 2001
                                    Supply Agreement for [*], whether made by CT
                                    or SDAD and whether made before or after the
                                    transfer or production.

                           (V)      Warranty to OEM customers for products
                                    assembled by CT.

                           (VI)     [*] costs that are incurred as a result of
                                    [*] to support the transition of production
                                    to CT as shown in the Transition Plan;
                                    provided, however, that SDAD shall take any
                                    reasonable effort to minimize such cost, to
                                    be evaluated and negotiated in advance by
                                    the joint project term.

                           (VII)    Establishing price to OEM customers for
                                    products assembled by CT.

                  (B)      In accordance with the Transition Plan, SDAD will
                           maintain the following responsibilities:

                           (I)      Manufacture of the [*] for all products and
                                    [*].

                           (II)     Design control over [*],[*].

                           (III)    Design control and manufacture of [*] prior
                                    to transfer of production to CT; upon
                                    transfer of final assembly of a [*] to CT,
                                    CT will assume design control of same.

                           (IV)     SDAD may either manufacture or subcontract
                                    manufacturing of [*] and [*] in accordance
                                    with the Transition Plan. SDAD will be
                                    responsible for the selection and
                                    performance of its subcontractors.
                                    Subcontractors must be validated through the
                                    industry-standard PPAP process. CT may
                                    contradict the use of a specific
                                    subcontractor subject to the presentation of
                                    a valid reason. Such reason is subject to
                                    acceptance by SDAD, which acceptance may not
                                    be unreasonably withheld.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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         2.4      EXISTING AGREEMENTS.

                  (A)      The Existing Supply Agreements will remain in effect
                           in accordance with their terms subject to this
                           Section 2.4, with respect to the specific components
                           supplied thereunder. Thus, the 2001 Development and
                           Supply Agreement will continue to govern purchases by
                           CT from SDAD of [*], [*], and [*]. The 1997
                           Development and Supply Agreement will continue to
                           govern [*] rate sensors in the [*] as specified
                           therein.

                  (B)      Notwithstanding the foregoing, the following will
                           apply to the Existing Supply Agreements as of the
                           Effective Date of this Agreement notwithstanding any
                           provision in those agreements to the contrary:

                           (I)      CT may fulfill its obligation under [*] of
                                    the 2001 Supply Agreement [*] over the term
                                    of the 2001 Supply Agreement.

                           (II)     Upon transfer of production of a [*] to CT
                                    in accordance with the Transition Plan, SDAD
                                    will have no further obligation or liability
                                    under the 2001 Supply Agreement for [*],
                                    documentation, configuration control, or
                                    indemnity (including those obligations set
                                    forth in Sections [*] of the 2001 Supply
                                    Agreement) of such [*] as manufactured by
                                    CT.

                  (C)      In the event of any conflict or inconsistency between
                           the provisions of this Agreement and those in the
                           Existing Supply Agreements, the provisions of this
                           Agreement will control.

                  (D)      For the avoidance of doubt, the supply of [*] will be
                           governed only by this Agreement.

3.       PRICES AND VOLUME COMMITMENT.

         3.1      PRICES. The parties will negotiate in good faith prices for
                  each calendar year based on CT's [*] for that year, and,
                  additionally, taking into account [*]. Prices for [*] are set
                  forth in Schedule B. Prices do not include shipping expense or
                  insurance, which will be separately invoiced.

         3.2      [*].

         3.3      ANNUAL NEGOTIATIONS. The parties will negotiate in good faith
                  each year to agree by [*] of that year upon Burden Rates and
                  prices for the coming calendar year based on CT's proposed [*]
                  and the methodology set forth in Schedule C. Once the parties
                  have reached an agreement, they will prepare and execute an
                  addendum to Schedule B setting forth the [*], pricing and
                  Burden Rate for the coming year.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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         3.4      OTHER ADJUSTMENTS. The parties may otherwise adjust Schedule B
                  by mutual agreement during the course of a calendar year, such
                  as to add or remove Products or take other pricing action on
                  which they each agree. Additionally, the parties contemplate
                  that SDAD will subcontract the manufacturing of [*]. In that
                  case, any increase or decrease in the baseline price charged
                  to SDAD by [*] will be [*] as an adjustment in the price
                  charged to CT by SDAD for such [*] notwithstanding any
                  provision in the Existing Agreement to the contrary.

         3.5      TARGET PRICES. The parties have already specified target
                  prices until calendar year [*] on [*]. The parties recognize
                  that CT's [*] and BEI's [*] for calendar years [*] are not
                  aligned as to [*]. To achieve cost benefits along with CT's
                  desired target prices, BEI commits to: (a) execute its [*];
                  (b) implement the [*] process; and (c) restructure [*]. SDAD
                  will prepare a pricing model for [*] as of the close of
                  calendar year [*] and thereafter the parties will meet to
                  review and establish target prices for calendar years [*].

4.       ORDER, DELIVERY AND ACCEPTANCE.

         4.1      FORECASTS. CT will provide a good faith, non-binding [*]
                  forecast of its and its Affiliates' requirements, on a [*]
                  basis, for Products ("Forecast"). The Forecast will form the
                  basis of capacity planning and capital investment by CT and
                  SDAD. CT may change the Forecast for a particular [*] notice
                  to SDAD so long as the change does not exceed SDAD's capacity
                  or the supply-chain availability of materials, and so long as
                  CT continues to meet the applicable [*] for the [*] falls.

         4.2      CAPACITY. SDAD will maintain a capacity each year at
                  agreed-upon levels, including a [*] capacity. If CT proposes a
                  Forecast that would require SDAD to increase its capacity,
                  then parties will agree on a plan for increasing capacity of
                  SDAD or its suppliers to meet the Forecast, including funding
                  participation by CT of any required capital investment.

         4.3      PURCHASE ORDER INITIATION. All purchase and sales between SDAD
                  and CT shall be initiated by CT's issuance of written purchase
                  order or by telephone confirmed by written purchase order
                  ("Purchase Order"). The initial Purchase Order issued shall
                  state unit quantities, unit price, unit description, requested
                  delivery date and shipping instructions. CT may issue EDI
                  orders under such Purchase Orders ("EDI Orders" and together
                  with the Purchase Orders, "Orders") which shall reflect units
                  part number, quantities required and requested delivery dates.
                  The subject EDI Order shall be a binding extension of its
                  initial Purchase Order regarding quantity of units to be
                  delivered and required delivery of units, except as limited by
                  contractual capacity, lead-time planning and supply-chain
                  material availability. For all Products, CT shall issue Orders
                  for material at least [*] prior to requested deliveries and
                  for production at least [*] days prior to requested delivery
                  to expend labor for production delivery of units. Orders to
                  expend labor

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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                  shall be for firm quantities to be delivered, with [*] from
                  the beginning of the [*] period.

         4.4      PURCHASE ORDER ACCEPTANCE. SDAD's acceptance of an Order shall
                  be by written acknowledgment thereof by SDAD. Orders not
                  acknowledged within [*] weeks of receipt are accepted subject
                  to determination of actual receipt verification and procedural
                  protocol for submission. SDAD, upon acceptance shall fulfill
                  CT's purchase orders complying with the terms of the
                  Agreement. If CT requests either a delivery prior to the
                  required [*] lead time or a shipment volume that would exceed
                  the Forecast or SDAD's capacity, then SDAD will use
                  commercially reasonable efforts to accommodate such request on
                  prices and terms to be mutually agreed upon between the
                  parties.

         4.5      PURCHASE ORDER TERMS AND CONDITIONS. The terms and conditions
                  of this Agreement, shall control all sales of Products
                  hereunder, and any additional or different terms or conditions
                  to the contrary, in a purchase order, acknowledgment, or
                  similar document, shall be of no effect (unless approved by
                  the express written consent of the other party).

         4.6      PURCHASE ORDERS FROM CT AFFILIATES. Subject to direction from
                  Continental Teves, Frankfurt and receipt of acceptance of an
                  Order, SDAD will deliver Products hereunder to CT's Affiliates
                  worldwide under the terms and conditions of this Agreement.
                  Pricing shall be based on this Agreement, with adjustments for
                  any additional requirements not accounted for in this
                  Agreement.

         4.7      DELIVERY. Delivery of Products hereunder shall be F.O.B.
                  SDAD's manufacturing facility in Concord, CA, USA or the
                  manufacturing facility in which the units were produced. Title
                  to and all risk of loss or damage with respect to the Products
                  shall pass to CT upon their delivery by SDAD or its
                  subcontractor to the carrier at the F.O.B. point.

         4.8      ACCEPTANCE. CT, either directly or through its Affiliate, may
                  reject any specific units of Products that do not conform to
                  their applicable Specifications and then-current
                  mutually-agreed acceptance test procedures, upon CT giving
                  notice as soon as CT detects such nonconformance in the normal
                  course of CT's business practices. Rejection of certain units
                  within a delivery lot does not entitle CT to reject the whole
                  lot.

         4.9      RETURNS PROCEDURE. To return a Product for any reason
                  permitted under this Agreement, CT must notify SDAD in writing
                  of its proposed return, and request a return merchandise
                  authorization ("RMA") number, which SDAD will promptly provide
                  in circumstances when CT is entitled to return Products.
                  Within [*] days after receipt of the RMA number, CT may return
                  the relevant Product, complete with its original packaging and
                  documentation, to SDAD freight pre-paid (except as otherwise
                  provided herein) with the RMA number displayed on the outside
                  of the shipping container. CT must comply with SDAD's
                  reasonable shipping

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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                  instructions in returning Products. SDAD may reject any
                  attempted return of a Product that is not made substantially
                  in accordance with this Section 4.9.

5.       PAYMENT.

         5.1      INVOICING AND PAYMENT. SDAD shall invoice CT (or, at CT's
                  request, the Affiliate of CT through which CT placed the
                  applicable Order) on or after delivery. Payment to SDAD for
                  Products sold hereunder shall be due [*] days after the date
                  of delivery, by wire transfer to such bank or account as SDAD
                  may from time to time designate in writing. If CT fails to pay
                  all or any portion within [*] days, SDAD reserves the right to
                  assess interest charges at [*] per annum on such amounts from
                  the date due until paid. CT agrees to pay such charges and all
                  associated collection and legal fees.

         5.2      TAXES AND DUTIES. Prices do not include, and CT will be
                  responsible for paying, any applicable tax, duty or other
                  governmental charge on the sale and transfer of Products,
                  including sales tax, excise tax, withholding tax, value-added
                  tax and customs duties, except for taxes based on SDAD's net
                  income.

         5.3      [*]. To the extent that the total number of units of Rate
                  Sensor Products ordered by CT and its Affiliates for delivery
                  during a particular calendar year under this Agreement and the
                  Existing Supply Agreements ("Actual Shipments") is [*] of the
                  [*] for that year, CT will pay SDAD [*] equal to [*] of the
                  [*]; provided, however, that no [*] will be payable for any
                  portion of such shortfall that was caused by SDAD's material
                  breach of this Agreement or by a force majeure event as
                  defined in Section 15.12. In any case however, the parties
                  agree to give notice in writing to each other as soon as
                  circumstances are detected which may lead to such deviation.

                  For clarity, SDAD will not be entitled to an [*] for
                  shortfalls of [*] of the [*].

                  SDAD will calculate and invoice the [*] by [*] of each year
                  based on actual [*] to date shipments through [*] and CT's
                  Forecast and Orders for the [*] of that year. To the extent
                  actual shipments in the [*] vary from the Forecast and Orders,
                  SDAD will issue a credit or supplemental invoice by no earlier
                  than [*] days before the end of the [*] to reconcile the
                  previously billed [*] for that [*].

                           To the extent that Actual Shipments in a given
                  calendar year exceed [*] for that year, the parties will meet
                  to determine the over-absorption of fixed overhead and G&A
                  that SDAD will refund to CT. For clarity, such refund will be
                  based only on the number of units by which Actual Shipments
                  [*]. The parties recognize that SDAD may have incurred
                  additional costs not contemplated in the annual fixed burden
                  due to implementation of capacity or additional infrastructure
                  to support the additional demand and that SDAD shall be
                  entitled to recover these costs.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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         5.4      AUDIT RIGHTS. During [*], each party on ten (10) days notice
                  may audit the other party's business records directly
                  pertaining to the performance of this Agreement (including the
                  computation of impaired [*] Costs). Any such records and
                  information will be deemed to be Confidential Information of
                  the audited party, and if the auditing party conducts the
                  audit using third party auditors, such auditors must, as a
                  condition to gaining access to such records, execute customary
                  and reasonable confidentiality agreements with the audited
                  party. The auditing party will conduct such audit at its own
                  expense during normal business hours of the audited party or
                  its Affiliates, as the case may be, in a manner that minimizes
                  disruption to the audited party's business activities. Such
                  audits will be conducted for the sole purpose of verifying
                  compliance with the terms of this Agreement and the accuracy
                  of amounts claimed by the audited party.

6.       [*] COSTS.

         6.1      REIMBURSEMENT OF [*] COSTS. Upon the occurrence of each of the
                  transfer of final [*] and the transfer of final [*] (each, a
                  "Transfer Milestone"), in accordance with the Transition Plan,
                  CT will promptly pay to SDAD an amount equal to SDAD's [*]
                  Costs as relating to [*]. Such [*] Costs will not include any
                  [*] Costs attributable [*] Equipment (defined below) sold to
                  CT under Section 6.2 or to equipment that SDAD is reasonably
                  able to re-use for a production purpose other than to perform
                  [*]. SDAD will use reasonable efforts to minimize [*] Costs
                  associated with [*] between the Effective Date and the
                  transfer of final assembly to CT.

         6.2      PURCHASE OF EQUIPMENT. Within [*] days after the occurrence of
                  each Transfer Milestone, CT will purchase from SDAD the
                  equipment and tooling used by SDAD in final assembly,
                  calibration or testing of the transferred production ("[*]
                  Equipment") on the following terms and in accordance with the
                  Transition Plan; CT will reimburse SDAD for [*]:

                  (A)      EXCEPT AS PROVIDED IN SECTION 6.2(C), [*] EQUIPMENT
                           IS SOLD ON AN AS IS/WHERE IS BASIS WITHOUT WARRANTY
                           OF ANY KIND; SDAD HEREBY DISCLAIMS ALL EXPRESS,
                           IMPLIED OR STATUTORY WARRANTIES INCLUDING ANY IMPLIED
                           WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
                           PARTICULAR PURPOSE, TITLE OR NON-INFRINGEMENT.

                  (B)      The purchase price for the [*] Equipment will be
                           equal to [*]; the purchase price will be payable on
                           delivery but no later than [*] days after the
                           applicable Transfer Milestone; provided, however,
                           that any audit permitted hereunder with respect to
                           the schedule of [*] Equipment and the net book value
                           of same must be conducted within such [*] day period.

                  (C)      In case of existing warranty rights vis a vis the
                           original manufacturer of [*] Equipment, SDAD will
                           transfer such warranty rights to CT (if such

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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<PAGE>

                           rights are in effect and transferable) and assist CT
                           with any possible warranty claim. SDAD shall in
                           addition transfer any [*]. To the extent such
                           material is proprietary to SDAD, it will be included
                           in the SDAD Proprietary Know-How licensed to CT under
                           Section 9.1 with the exclusion of any license fee to
                           be paid by CT. SDAD however shall be responsible that
                           CT gets clear title to such equipment without
                           existence of any third party rights except as
                           applicable to any third-party software licenses. In
                           any case of such transfer the parties shall make a
                           joint technical test at SDAD's working place to prove
                           that such equipment is workable and can be used for
                           further production.

                  (D)      Delivery will be FOB (UCC) the location of the [*]
                           Equipment no later than [*] days after the applicable
                           Transfer Milestone; CT will be responsible for
                           arranging and paying for shipping; title and risk of
                           loss transfer to CT upon delivery. If CT has not made
                           arrangements for shipping the [*] Equipment within
                           [*] days after the applicable Transfer Milestone,
                           then SDAD will store, or otherwise reasonably dispose
                           of, the equipment at CT's expense.

                  (E)      SDAD will prepare and execute a bill of sale in a
                           form reasonably acceptable to CT that itemizes each
                           piece of [*] Equipment that has been purchased and
                           price for same, and will deliver the bill of sale to
                           CT concurrently with payment for the equipment.

                  (F)      SDAD will have an option to repurchase from CT, on
                           the same terms as were made available to CT under
                           Section 6.2(a) through Section 6.2(e), any piece of
                           the [*] Equipment at [*], if CT stops using the
                           equipment for regular production activity or if CT
                           intends to transfer equipment to a third party
                           (whether by sale or lease or otherwise) for any
                           reason other than to continue production of CT volume
                           requirements. Before transferring the equipment to a
                           third party, CT will notify SDAD of CT's intention to
                           do so. Upon its receipt of such notice, SDAD will
                           have [*] days to exercise the option to purchase as
                           set forth in this Section. If SDAD does not exercise
                           its option under this Section by the end of such [*]
                           day period, then CT may, at any time during the
                           following [*] months, transfer such equipment to a
                           third party. If CT does not transfer the equipment
                           within such [*] month time period, then SDAD's option
                           rights under this Section will be reinstated and CT
                           must again notify SDAD in accordance with this
                           Section prior to transferring the equipment. CT will
                           also notify SDAD within [*] days after CT stops using
                           the equipment for regular production, and SDAD may at
                           any time thereafter exercise the option to purchase
                           as set forth in this Section.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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<PAGE>

         6.3      RESIDUAL [*] COSTS.

                  (A)      "Residual [*] Costs" means SDAD's [*] Costs as of the
                           Effective Date (less the reimbursement [*] Costs paid
                           by CT under Section 6.1 and the purchase price of [*]
                           Equipment paid by CT under Section 6.2) and any
                           future [*] Costs acquired by mutual agreement after
                           the Effective Date (such as to expand capacity or
                           develop new Products). The Transition Plan includes a
                           [*] for the [*] departments and estimated [*] for
                           those departments [*]. The parties will update this
                           Schedule as additional agreed-upon Residual [*] Costs
                           are acquired.

                  (B)      Residual [*] Costs as of the Effective Date will be
                           amortized over [*] and incorporated in the Burden
                           Rate. Residual [*] Costs acquired after the Effective
                           Date will be [*] as mutually agreed by the parties.
                           As to such future Residual [*] Costs, the [*].

         6.4      RECOVERY OF CERTAIN IMPAIRED RESIDUAL [*] COSTS. If CT's
                  obligation to purchase a Product is reduced or cancelled
                  because the Agreement, expires, terminates or is not
                  enforceable in whole or in part, or because CT exercises its
                  rights to use a second source (including itself or its
                  Affiliates) in accordance with Section 7.4, then CT will
                  reimburse SDAD for that [*] Costs relating to [*] departments
                  that becomes impaired as a result of such event ("Impaired
                  Residual [*] Costs") in accordance with the following:

                  (A)      If CT terminates the Agreement for cause in
                           accordance with Section 14.2 based on a material
                           breach by SDAD that has not been cured (other than a
                           failure to meet the Competitive Targets), then CT
                           will [*].

                  (B)      If the Agreement expires or if SDAD terminates for
                           cause in accordance with Section 14.2 based on a
                           material breach by CT that has not been cured, then
                           CT will [*].

                  (C)      Except as provided in Section 6.4(f), if CT exercise
                           its rights under Section 7.4 to procure a Product
                           from a second source based on SDAD's failure to meet
                           Competitive Targets, then CT will reimburse SDAD for
                           the resulting Impaired Residual [*] Costs in
                           accordance with the following allocations:

                           (I)      If SDAD has proposed solutions conforming to
                                    the valid Specifications that, if
                                    implemented, would have resulted in SDAD
                                    meeting the Competitive Targets, then CT
                                    will [*].

                           (II)     If the negotiated price for the Product in
                                    question is at or below the target price
                                    (specified in Schedule B) for the year in
                                    which

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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<PAGE>

                                    SDAD fails to meet the Competitive Price
                                    Targets for the Product, then CT will [*].

                           (III)    If the negotiated price for the Product in
                                    question is above the target price for that
                                    given year, and SDAD is unable to meet the
                                    Competitive Price Target despite SDAD [*]
                                    while conforming with the valid
                                    Specifications, then CT will [*].

                  (D)      In all other cases, the parties will negotiate in
                           good faith [*].

                  (E)      [*].

                  (F)      For future [*] Costs made by SDAD for [*] departments
                           which are not covered by the Transition Plan, the
                           parties will mutually agree upon the investment and
                           the apportionment of any Impaired Residual [*] Costs
                           so invested. (For example, [*]). SDAD's financial
                           participation resulting therefrom will be added to
                           [*].

                  (G)      The payment for Impaired Residual [*] Costs is
                           reimbursement for SDAD's investment and is not an
                           acquisition of any specific asset nor does title
                           transfer to CT, except as provided in this Section
                           6.4(g). SDAD will work diligently to find economic
                           value for the impaired assets during the [*] after
                           each payment by CT of reimbursement for SDAD's
                           Impaired Residual [*] Costs. If SDAD is successful in
                           finding such economic value, then SDAD will negotiate
                           with CT to determine a refund payable to CT, [*] with
                           respect such asset's newly-found economic value. If
                           SDAD is unable to find economic value at the end of
                           the [*] period, then with respect to non-common
                           utilized equipment (i.e. equipment not used by other
                           SDAD customers) that was purchased by SDAD
                           specifically to meet CT's capacity demand, then SDAD
                           will deliver and transfer title in such non-common
                           utilized equipment to CT. Alternatively, SDAD will
                           [*] for such non-common utilized equipment that SDAD
                           wishes to retain, and thereby retain title with SDAD.

7.       OTHER MATTERS.

         7.1      TRANSITION COSTS. CT assumes (and agrees to reimburse SDAD to
                  the extent it is required to pay) all liabilities of SDAD to
                  its third party contractors that arise as a direct consequence
                  of the termination by SDAD of orders or contracts with such
                  contractors in accordance with the Transition Plan.

         7.2      PRODUCT DEVELOPMENT. CT will be responsible for all future
                  design activities for products that CT assembles or otherwise
                  manufactures. CT will not knowingly make changes to the design
                  of the product which are not consistent with the

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      -14-

<PAGE>

                  capabilities of the design, performance and process of the
                  Products that are provided by SDAD as components to such CT
                  products.

         7.3      TECHNICAL SUPPORT. Subject to availability of SDAD's
                  personnel, CT may purchase from SDAD technical support
                  services for products and processes above the level of [*],
                  pursuant to separate agreement on such terms and prices as the
                  parties may agree.

         7.4      COMPETITIVENESS. [*]. If [*] because a Product supplied by
                  SDAD is not competitive in [*], then CT may purchase that
                  Product (or a comparable substitute) from another source in
                  accordance with this Section 7.4, and thus [*] its obligation
                  hereunder to purchase that Product from SDAD.

                  (A)      SDAD will meet the following targets (collectively,
                           the "Competitive Targets") with respect to any given
                           reference date:

                           (I)      The price charged by SDAD for each Product
                                    under this Agreement [*] (or a substitute
                                    meeting comparable [*]) that is the subject
                                    of a legally-binding offer by a bona fide
                                    named second source, including CT or an
                                    Affiliate of CT subject to Sections 7.4(e)
                                    and 7.4(f), that has capacity available to
                                    manufacture the Product and guarantees the
                                    [*].

                           (II)     SDAD must deliver each Product to CT on the
                                    scheduled delivery day in at least [*] of
                                    all deliveries under Conforming Orders as
                                    measured over the [*] period preceding any
                                    given reference date; for purposes of this
                                    clause, a "Conforming Order" is an Order
                                    placed in accordance with Section 4 of the
                                    Agreement.

                           (III)    Each Product must have an [*] over the
                                    [*] period preceding any given reference
                                    date) that is less than the target [*] rate
                                    in effect on date that the Product is
                                    delivered to CT. For Products other than the
                                    [*] the target [*] rates will be as follows:

                                            [*] upon execution of contract
                                            [*] upon completion of all
                                            milestones of the Transition Plan
                                            [*] from and after [*] (but only for
                                            [*]) [*] from and after [*] (but
                                            only for [*])

                                    The quality targets are the reasonable
                                    result of careful considerations in line
                                    with general business and marketing
                                    conditions. In case however SDAD should give
                                    evidence that such quality targets cannot be
                                    achieved even under SDAD's requested
                                    assistance of CT's quality expertise, as
                                    requested by SDAD, for general objective
                                    reasons then the parties shall agree on an

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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<PAGE>

                                    adjustment of the quality targets according
                                    to the joint quality findings.

                                    For the [*] however, based on the defined
                                    quality targets of CT, the parties shall
                                    jointly define and establish milestones to
                                    achieve the [*] target of [*] within [*]
                                    months after SOP at the latest. In case
                                    however, based on joint findings, these
                                    quality targets should not be achievable for
                                    objective reasons then the quality target
                                    shall be jointly adjusted accordingly.

                                    This however, shall not relieve SDAD from
                                    its obligation to take any reasonable effort
                                    to achieve such target and CT, upon request,
                                    to assist with any reasonable quality
                                    assistance within such activities.

                                    For purposes of determining under this
                                    Section 7.4(a)(iii) whether a Product's [*]
                                    rate is below the applicable target [*]
                                    rate, the following [*] will not be counted:
                                    [*].

                  (B)      If SDAD fails to meet the Competitive Targets with
                           respect to a particular Product (other than an [*]),
                           then CT may, as its exclusive remedy, purchase that
                           Product (or a comparable substitute if the Product is
                           proprietary to SDAD) from a named second source,
                           subject to the fulfillment of any pending Orders if:
                           (i) CT notifies SDAD in writing of CT's intention to
                           purchase the Product from the second source,
                           specifying, in reasonable detail, the proposed second
                           source, the specific Products and the Competitive
                           Targets that SDAD has failed to meet ("Notice of
                           Intent"); such notice must be given within a
                           reasonable time after SDAD fails to meet the
                           Competitive Targets; (ii) CT uses its best efforts to
                           help SDAD meet the Competitive Targets cited in the
                           Notice of Intent; and (iii) despite the best efforts
                           of both parties, SDAD is not able to meet, within [*]
                           after its receipt of the Notice of Intent, the
                           Competitive Targets cited in the Notice of Intent. If
                           SDAD effects cure within the allotted [*] period,
                           then CT may not undertake the second-source purchase
                           of such Product as described in its Notice of Intent.
                           Otherwise, CT may undertake the second-source
                           purchase of such Product as described in its Notice
                           of Intent Only in case such Notice of Intent is given
                           to SDAD within the time frame of [*] and [*], then
                           second source supply shall not start earlier than the
                           [*] following the expiration of the [*] cure period.

                  (C)      No [*] provision in this Agreement, including Section
                           [*], will apply to any Product for which CT elects to
                           procure from a second source pursuant to this
                           Section.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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<PAGE>

                  (D)      In case that CT, in accordance with the provision
                           above, reduces delivery volume or replaces SDAD as
                           delivery source because of missing competitiveness
                           and informs SDAD of such decision accordingly in
                           writing, then SDAD is granted an option to [*].

                  (E)      [*]. CT shall during the lifetime of such contract
                           immediately inform SDAD in case [*].

                  (F)      CT may not, [*], exercise its second source rights
                           under Section 7.4 with itself or its Affiliate as the
                           proposed second source. [*], CT may exercise its
                           second source rights under Section 7.4 with itself or
                           its Affiliate as the proposed second source, but
                           subject to the following: (i) CT and its Affiliates
                           may not act as a second source for any purpose for
                           orders placed [*], notwithstanding any provision in
                           this Agreement to the contrary; (ii) CT and its
                           Affiliates may not act as a second source for [*],
                           notwithstanding any provision in this Agreement to
                           the contrary; (iii) the comparison of SDAD's price
                           with the price offered by CT or its Affiliate, for
                           purposes of determining whether the Competitive Price
                           Target has been met, must [*]; (iv) if CT or its
                           Affiliate in any circumstance acts as a second
                           source, then [*] Sections [*] will automatically
                           terminate and the provisions of [*] will apply.

                  (G)      In case SDAD's [*] development activities after joint
                           analysis of the parties cannot be successfully
                           completed, then CT and SDAD shall no longer be
                           restricted by this Agreement with regard to the [*].
                           For purposes of clarity, in such event, CT may
                           purchase [*]type products from a second source,
                           including CT itself or an Affiliate, subject to
                           Section 6.4(d), and the [*]will terminate, and [*].

8.       OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS.

         8.1      SDAD OWNERSHIP RIGHTS. As between the parties, SDAD will own
                  all right, title and interest in and to Intellectual Property
                  Rights including any designs, patterns, schematics, copyrights
                  and other proprietary rights and know-how, embodied in the
                  Products (including but not limited to any [*]) offered by or
                  on behalf of SDAD pursuant to the Agreement. SDAD will have
                  the exclusive right to apply for or register patents,
                  copyrights, and such other proprietary protections as it
                  wishes with respect to such Intellectual Property Rights.
                  Integration of SDAD's technology into a [*] and/or [*]
                  supplied by CT does not transfer ownership of rights or rights
                  thereof. Notwithstanding any provision of this Agreement to
                  the contrary, SDAD will retain rights and sole interest in any
                  [*] and any [*].

         8.2      CT OWNERSHIP RIGHTS. Subject to the rights of SDAD in
                  accordance with the terms of this Agreement, herein, as
                  between the parties CT will own all right, title and interest
                  in and to any Intellectual Property Rights, including designs,
                  patterns, schematics, logic, copyrights, other proprietary
                  rights and know-how embodied in

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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<PAGE>

                  the [*] as developed by CT pursuant to the Existing Supply
                  Agreements. For purposes of this Section, "[*]" means the
                  following items as used in the [*]: [*] and [*] supplied to CT
                  by [*]. CT will have the exclusive right to apply for or
                  register patents, copyrights, and such other proprietary
                  protections as it wishes with respect to such Intellectual
                  Property Rights.

         8.3      JOINT SDAD/CT OWNERSHIP RIGHTS. Subject to mutual future
                  agreement, SDAD and CT may perform joint development efforts
                  for increased automotive market competitiveness. Both
                  companies may elect to pursue joint worldwide right, title and
                  interest in any designs, patterns, schematics, copyrights and
                  other proprietary rights and know-how embodied in jointly
                  developed systems. SDAD will retain rights and sole interest
                  in any [*] and any [*], whether or not jointly developed. CT
                  will retain rights and sole interest in any packaging
                  technology that it provides to SDAD in such joint development
                  efforts. CT on request of SDAD accepts to grant SDAD a [*]
                  unlimited right and license, with right to sublicense to SDAD
                  subcontractor, to use such CT [*] technology in SDAD's [*]
                  business, however, after expiration of this Agreement, SDAD
                  will pay a license fee [*].

         8.4      PROTECTION OF PROPRIETARY RIGHTS. Each party agrees to execute
                  such documents, render such assistance, and take such other
                  action as reasonably requested, to apply for, register,
                  perfect, confirm and protect the requesting party's rights in
                  its proprietary rights relating to this Agreement. SDAD and CT
                  may document the other party's proprietary information on its
                  own internal documentation as required to conduct the project,
                  without explicit written permission from the other party. Each
                  party shall document by listing the documents that have the
                  other party's proprietary data and supply this listing to the
                  other party. Documents containing the other party's
                  proprietary data shall be noted as such. Dissemination of such
                  documents shall be restricted and not provided to third
                  parties without the prior express written approval of the
                  other party.

         8.5      CONFIDENTIALITY. The provisions of Schedule D are hereby
                  incorporated by reference. It is understood and agreed between
                  the parties that any disclosure of information on the
                  agreement and its content by one party requires the prior
                  approval of the other party before announcement. Such approval
                  may however not be withheld to the extent such disclosure of
                  information and/or announcement is required by law.

         8.6      FURTHER ASSURANCES. If under applicable mandatory law the
                  allocation of Intellectual Property Rights set forth in this
                  Section 8 does not automatically vest in the party entitled to
                  own such rights as set forth in this Section (the "Entitled
                  Party"), then the other party (the "Assigning Party") hereby
                  irrevocably transfers, conveys and assigns (and covenants to
                  irrevocably transfer, convey and assign) to the Entitled Party
                  such of its right, title and interest in the Entitled Party's
                  Intellectual Property Rights as necessary to achieve the
                  allocation of ownership set forth in this Section 8.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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<PAGE>

9.       LICENSE OF INTELLECTUAL PROPERTY RIGHTS.

         9.1      DELIVERY AND LICENSE OF [*] TECHNOLOGY. SDAD has, prior to the
                  Effective Date, and will, during the term of this Agreement,
                  deliver to CT certain confidential and proprietary technology
                  including know-how for use by CT in [*] and in [*] for use in
                  the [*] ("SDAD Proprietary Know-How"). CT will treat SDAD
                  Proprietary Know-How as Confidential Information of SDAD.
                  Subject to the Transition Plan and the terms of this
                  Agreement, SDAD hereby grants CT the following licenses
                  throughout the world during the term of this Agreement:

                  (A)      a [*] license under the SDAD Proprietary Know-How
                           solely to [*] for the [*] using [*] supplied by SDAD
                           or, as applicable to [*], an [*];

                  (B)      a [*], license under the SDAD Proprietary Know-How
                           solely to [*]: (i) [*] supplied by SDAD, and (ii) [*]
                           either supplied by SDAD under the 2001 Supply
                           Agreement or manufactured by or for CT under the
                           license of Section 9.1(a); and

                  (C)      a [*], license under the patents listed in Schedule E
                           solely to [*] the [*] using [*] and [*] supplied by
                           SDAD or an [*]; and [*] units that incorporate such
                           [*];

                           provided however that, relative to the have made
                           rights contained in this Section 9.1, any third party
                           supplier of CT will keep confidential any SDAD
                           Proprietary Know-How to the same extent as CT's
                           obligations under this Agreement and shall only make
                           use of such know-how for the production of CT's
                           requirements. CT however shall advise SDAD of the
                           disclosure to any third party CT supplier.

         9.2      [*] LICENSE TO USE AND SELL [*]. The Products include [*] as
                  designated in Schedule A. [*] are subject to patents and other
                  Intellectual Property Rights of SDAD including the patents
                  listed on Schedule E (collectively, the "[*] IP"). CT
                  acknowledges and agrees that sales of [*] under this Agreement
                  to CT or any of its Affiliates are not unconditional and that
                  SDAD's rights in [*] IP (including SDAD's exclusive right to
                  use and sell under applicable patent law) remain in full
                  effect and are not exhausted upon sale of [*] by SDAD to CT or
                  any of its Affiliates. Subject to the foregoing and the other
                  terms of this Agreement, SDAD hereby grants CT the following
                  license [*]:

                  (A)      an [*] license under the [*] IP, during the [*]
                           (defined below), to use [*] supplied by SDAD [*]
                           solely for use in [*], and to [*], subject to the
                           reservations of Section 9.5; and

                  (B)      a [*] license under the [*] IP, during the term of
                           this Agreement, to use [*] supplied by SDAD to [*]
                           solely for use in [*], and to [*].

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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<PAGE>

         9.3      LICENSE TO MANUFACTURE [*]. Subject to and in accordance with
                  the Transition Plan and the terms of this Agreement, SDAD
                  grants CT an [*] license under SDAD's applicable Intellectual
                  Property Rights to have the [*] made by an [*] and to use,
                  sell, offer for sale and import such [*] supplied by SDAD.
                  SDAD will from time to time designate one or more [*] in
                  writing to CT. CT must make its own arrangements with [*],
                  subject to the terms and conditions of this Agreement. SDAD
                  will have no responsibility for the performance of the [*] and
                  no liability arising out of any contract between CT and the
                  [*]. For the avoidance of doubt, CT will not be entitled under
                  this Section to any [*]. CT may at its own expense and risk
                  contract with the [*] to provide an [*] pursuant to this
                  license that is manufactured with quality control or other
                  processes specified by CT; provided, however, that CT must
                  permit and require the [*] to assign a [*] produced using such
                  modified process so that SDAD's other customers can continue
                  to order the non-modified [*] from the [*] under its original
                  part number.

         9.4      [*] TERM. The "[*] Term" commences upon the Effective Date and
                  terminates on the earlier of [*] or [*] CT has initiated
                  continuous series production of [*] using the [*]; provided,
                  however, that the [*] Term will end and the license granted
                  under Section 9.2 will become [*] if: (a) [*]; or (b) CT by
                  its own actions does not make a commitment to meeting defined
                  milestones that would result in continuous series production
                  by [*].

         9.5      RESERVATION OF RIGHTS. SDAD may use and further license the
                  SDAD Proprietary Know-How to any party without restriction.
                  Subject only to CT's [*] rights under Section 9.2, SDAD may
                  sell [*] to third parties. Notwithstanding any provision in
                  this Agreement to the contrary (including Sections [*]), SDAD
                  may: (a) make, have made, use, sell, offer for sale and import
                  [*] in [*] at any time, [*], but only [*]; and (b) sell [*] to
                  [*] Rate Sensor Products from SDAD (including [*]), for use in
                  [*]. After the expiration or other termination of the [*]Term,
                  SDAD will be free to [*].

         9.6      ROYALTIES. Royalties payable under this Section 9 will be
                  included in the price of the [*] and other Products that CT is
                  required to use in exercising its license rights under this
                  Section 9. Should CT be entitled under the terms of this
                  Agreement to use a second source of Rate Sensor Products, and
                  should in that case CT desire to use SDAD Proprietary Know-How
                  to manufacture [*] that do not include Products supplied by
                  SDAD, then the parties will agree on license terms to permit
                  such use that are otherwise consistent with the terms of this
                  Agreement, including a reasonable royalty rate, not to exceed
                  [*] of the [*] of such [*], payable to SDAD.

         9.7      EXCLUSIONS. No rights are granted by SDAD under this Section 9
                  to: (i) any source code of any software or HDL files for any
                  [*]; (ii) modify the [*]; (iii) use the [*] to develop sensors
                  having similar functions as the [*]; or (iv) manufacture or
                  have manufactured a [*] or any other rate sensor. CT, for
                  itself and its

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      -20-

<PAGE>

                  Affiliates, agrees that it and they will not disassemble,
                  decompile or otherwise reverse engineer any software in the
                  [*] except to the extent permitted according to compulsory
                  applicable law notwithstanding the foregoing prohibition, and
                  then only upon giving prior notice to SDAD that gives a
                  detailed explanation as to the reverse engineering to be
                  performed and the legal basis for doing so.

         9.8      PROHIBITIONS. CT expressly agrees for itself and its
                  Affiliates not to use, sell, offer for sale, or otherwise
                  dispose of SDAD Proprietary Know-How or [*] except as
                  expressly permitted by this Agreement. CT may not assign,
                  sublicense or otherwise transfer the license rights granted
                  under this Section 9, except that CT may sublicense the rights
                  granted under this Section 9 to its Affiliates; provided,
                  however, that CT gives SDAD prior written notice of such
                  sublicenses and further provided that each Affiliate to whom
                  CT grants a license agrees in writing to be bound by the terms
                  and conditions of this Agreement applicable to CT in respect
                  of such license, including the provisions of this Section 9.

         9.9      REMEDIES. If CT breaches its obligations under this Section 9,
                  and such breach is not cured within [*] days after SDAD
                  objects in writing, then SDAD may, in addition to its other
                  remedies that are available at law or under this Agreement,
                  terminate at its election [*] or [*] by giving CT [*] days
                  notice.

         9.10     MARKING. CT will mark any [*] manufactured under the licenses
                  of this Section 9 with patent numbers specified by SDAD in
                  accordance with applicable law including 35 U.S.C. 287 in the
                  United States.

10.      WARRANTIES.

         10.1     MUTUAL REPRESENTATIONS AND WARRANTIES. Each party represents
                  and warrants, solely to and for the benefit of the other,
                  that: (a) it is a corporation duly organized and in good
                  standing under the laws of its respective jurisdiction of
                  incorporation indicated in the preamble to this Agreement; (b)
                  it has the full corporate right, power and authority to enter
                  into this Agreement, grant the rights set forth herein and
                  perform its obligations hereunder; (c) its performance of this
                  Agreement, and the other party's exercise of such other
                  party's rights under this Agreement, will not conflict with or
                  result in a breach or violation of any of the terms or
                  provisions or constitute a default under any other agreement
                  by which it is bound; (d) when executed and delivered, this
                  Agreement will constitute a legal, valid and binding
                  obligation enforceable against it in accordance with its
                  terms; and (e) it will comply with all applicable laws,
                  regulations and orders of any governmental authority of
                  competent jurisdiction in its performance of this Agreement.

         10.2     LICENSED IP. SDAD warrants to and for the sole benefit of CT
                  that SDAD owns the SDAD Proprietary Know-How and has the right
                  to grant the licenses granted in Section 9.1 and 9.2. CT's
                  exclusive remedy for breach of this warranty is to seek
                  indemnification under Section 11.2. SDAD makes no warranty or
                  promise

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      -21-

<PAGE>

                  under this Agreement: (a) as to the validity or scope of the
                  SDAD Proprietary Know-How or any other Intellectual Property
                  Rights licensed hereunder; (b) that the use, manufacture, or
                  sale of any product, process or service using the SDAD
                  Proprietary Know-How will be free from infringement of the
                  Intellectual Property Rights of any third-party; (c) that SDAD
                  will file, register, prosecute, maintain, or enforce any
                  patent or other Intellectual Property Right; or (d) that SDAD
                  Proprietary Know-How will meet CT's requirements or achieve
                  any particular result.

         10.3     PRODUCT WARRANTY. SDAD warrants to and for the sole benefit of
                  CT that, for a period ending on the earlier of: (a) [*]; or
                  (b) [*] ("Product Warranty Period"), each Product (other than
                  any [*] procured by CT or its Affiliate from an [*]) will be
                  free from defects in materials and workmanship and will
                  perform in accordance with its applicable Specifications. CT's
                  exclusive remedy for breach of this warranty is to notify SDAD
                  of the breach in writing during the applicable Product
                  Warranty Period, whereupon SDAD, as its sole obligation and
                  liability, will either repair or replace the defective Product
                  or, at SDAD's election refund to CT the price paid for the
                  defective Product. This warranty does not apply to Products
                  that have been subject to misuse, unauthorized, modification,
                  neglect, improper testing or installation, attempts to repair
                  or accident, flood, fire, radiation or other hazard. [*], then
                  the parties shall agree on such [*]. The price for those parts
                  under such [*] shall then jointly be adjusted according to the
                  economic effects of such [*].

         10.4     [*]. SDAD warrants to and for the sole benefit of CT that, for
                  a period ending on the earlier of: (a) [*]; or (b) [*] ("[*]
                  Warranty Period"), that the design of such [*] will conform to
                  the [*] Specifications. The foregoing warranty applies only to
                  [*] purchased by CT or its Affiliate from an [*]. SDAD does
                  not warrant under this Section 10.4 that any [*] purchased
                  from an [*] will be free from defects [*] relating to or
                  occurring in the [*]. CT's exclusive remedy for breach of this
                  warranty is to notify SDAD of the breach in writing during the
                  applicable [*] Warranty Period, whereupon SDAD, as its sole
                  obligation and liability, will[*]. In case however a car
                  manufacturer requests a longer warranty period, then the
                  parties shall agree on such longer warranty period which shall
                  not be in excess of the warranty period granted by CT. The
                  price for those parts under such longer warranty period shall
                  then jointly be adjusted according to the economic effects of
                  such period extension.

         10.5     DISCLAIMER. THE WARRANTIES OF SECTIONS 10.1 THROUGH 10.4 ARE
                  IN LIEU OF ANY OTHER WARRANTY WITH RESPECT TO THE PRODUCTS,
                  SDAD PROPRIETARY KNOW-HOW OR OTHER INTELLECTUAL PROPERTY
                  LICENSED HEREUNDER, WHETHER EXPRESSED OR IMPLIED, WRITTEN OR
                  ORAL, WHICH SDAD HEREBY DISCLAIMS, INCLUDING ANY WARRANTY OF
                  MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      -22-

<PAGE>

                  TITLE, NONINFRINGEMENT AND ANY IMPLIED WARRANTIES ARISING FROM
                  USAGE OF TRADE, COURSE OF DEALING OR COURSE OF PERFORMANCE. TO
                  THE EXTENT THAT SDAD MAY NOT DISCLAIM ANY WARRANTY AS A MATTER
                  OF APPLICABLE LAW, THE SCOPE AND DURATION OF SUCH WARRANTY
                  WILL BE THE MINIMUM PERMITTED UNDER SUCH LAW. SDAD
                  SPECIFICALLY DISCLAIMS ANY WARRANTY HEREUNDER WITH RESPECT TO
                  [*] THAT ARE MANUFACTURED OR ASSEMBLED BY CT (REGARDLESS OF
                  WHETHER SUCH [*] WERE DESIGNED BY SDAD) AND FOR ANY GOOD OR
                  SERVICE THAT CT PROCURES FROM A THIRD PARTY (INCLUDING AN
                  AUTHORIZED FABRICATOR) IN CONNECTION WITH CT'S MANUFACTURE OF
                  [*] AND [*].

11.      IP INDEMNIFICATION.

         11.1     OBLIGATIONS OF CT. CT agrees (a) to assume the defense of any
                  suit or claim brought against SDAD for infringement of any
                  patent, copyright or other proprietary rights arising from or
                  caused by the manufacture, sale or use of the [*] or other
                  products by CT or the use by SDAD of specifications,
                  technology, designs or customer furnished (CF) material
                  provided to SDAD by CT, (b) to pay the expense of such
                  defense, and (c) to indemnify SDAD against any money damages
                  or costs, including counsel fees, awarded in such suits or
                  claims by reason of such infringement; provided that (i) CT be
                  given exclusive control of the defense of such suit or claim
                  and all negotiations relative to the settlement thereof; after
                  consultation with SDAD, (ii) CT will have no responsibility
                  under this Section to the extent that the suit or claim will
                  have arisen solely in connection with the sale or use of
                  Products supplied by SDAD or because of specifications,
                  technology or designs contributed by SDAD to CT as SDAD
                  Proprietary Know-How and (iii) SDAD promptly informs CT in
                  writing of any, suits or claims with respect to which CT
                  assumes responsibility hereunder; provided, however, that no
                  failure or delay in providing such notice will relieve CT of
                  any of its obligations under this Section 11.1 except to the
                  extent CT is actually prejudiced thereby. If specifications,
                  technology, designs or CF material furnished by CT to SDAD for
                  use under this Agreement are, or in the opinion of CT may
                  become, the subject of any claim, suit or proceeding for
                  infringement of any [*], or if it is adjudicatively determined
                  that the specifications, technology or designs infringe any
                  [*], or if the manufacture, sale or use of the [*], or any
                  part thereof, is, as a result, enjoined, then CT may, at its
                  option and expense; (i) procure for SDAD and its customers the
                  right under such [*] to use the specifications, technology or
                  designs as required to perform hereunder; (ii) suitably modify
                  such specifications, technology or designs (iii) replace the
                  specifications, technology or designs with other suitable
                  alternatives; or (iv) if the use of such specifications,
                  technology or designs is prevented by injunction,

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      -23-

<PAGE>

                  remove such specifications, technology or designs. CT will not
                  be liable for any cost or expenses incurred without its prior
                  written authorization.

                  SDAD will have the right to participate in the defense of any
                  such suit or claim with its own counsel and at its own
                  expense. CT will not settle a claim without SDAD's prior
                  written consent, which consent will however not unreasonably
                  be withheld, if (a) any portion of the settlement would
                  involve an admission that a Product directly or indirectly
                  infringes any proprietary right of any third party, (b) the
                  settlement would involve a payment by SDAD for which SDAD
                  would not be indemnified by CT under this Section 11.1, or (c)
                  the settlement does not include a complete release of SDAD.

         11.2     OBLIGATIONS OF SDAD. SDAD agrees (a) to assume the defense of
                  any suit or claim brought against CT for the infringement of
                  any patent, copyright or other proprietary right arising from
                  or caused by the manufacture, sale or use of the Products or
                  the disclosure of SDAD Proprietary Know-How by SDAD to CT, (b)
                  to pay the expense of such defense, and (c) to indemnify CT
                  against any money damages or costs, including counsel fees,
                  awarded in such suits or claims by reason of such
                  infringement; provided that (i) SDAD will be given exclusive
                  control of the defense of such suit or claim and all
                  negotiations relative to the settlement thereof, after
                  consultation with CT, (ii) SDAD will have no responsibility
                  under this Section to the extent that the suit or claim arises
                  from the use of specifications, technology or designs
                  contributed by CT hereunder or from the combination or use of
                  Products or SDAD Proprietary Know-How with other components or
                  processes if the Product or SDAD Proprietary Know-How by
                  itself would not have directly infringed, and (iii) CT
                  promptly informs SDAD in writing of any suits or claims with
                  respect to which SDAD assumes responsibility hereunder,
                  provided however, that no failure or delay in providing such
                  notice will relieve SDAD of any of it obligations under this
                  section except to the extent SDAD is actually prejudiced
                  thereby. SDAD will not be liable for any costs or expenses
                  incurred without its prior written authorization. If CT
                  chooses to provide its own defense, CT will bear that expense.
                  If Products furnished by SDAD for use in the [*] units are, or
                  in the opinion of SDAD may become the subject of any claim,
                  suit, or proceeding for infringement of any [*] or if the sale
                  or use of the Products, or a part thereof, is, as a result
                  enjoined, then SDAD may, at its option and expense; (i)
                  procure for CT and its customers the right under such [*] to
                  use the Product as incorporated in the [*]; (ii) suitably
                  modify the specifications, technology or designs utilized in
                  the Product; (iii) replace the specifications, technology or
                  designs utilized in the Product with other suitable
                  alternatives; or (iv) if the use of the specifications,
                  technology or designs utilized in the Product is prevented by
                  injunction, remove such specifications, technology or designs
                  utilized in the Product.

                  CT will have the right to participate in the defense of any
                  such suit or claim with its own counsel and at its own
                  expense. SDAD will not settle a claim without

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      -24-

<PAGE>

                  CT's prior written consent, which consent will however not
                  unreasonably be withheld, if (a) any portion of the settlement
                  would involve an admission that a [*] directly or indirectly
                  infringes any proprietary right of any third party, (b) the
                  settlement would involve a payment by CT or which SDAD would
                  not be indemnified by CT under this Section 11.2, or (c) the
                  settlement does not include a complete release of CT.

         11.3     ENTIRE LIABILITY. This indemnity states the entire liability
                  of the parties for infringement by Products or the
                  SDAD-Proprietary Know How and is in lieu of any other
                  indemnity, express, implied or statutory and no agreement
                  altering it will be binding upon either party unless in
                  writing and signed by a duly authorized officer or
                  representative of each party.

12.      PRODUCTS LIABILITY INDEMNITY.

         12.1     PRODUCTS LIABILITY INDEMNITY BY CT. CT will defend, indemnify
                  and hold SDAD harmless from and against all claims,
                  liabilities and expenses, including reasonable attorneys'
                  fees, arising out of the death of or bodily injury to any
                  person or persons or damage to property resulting from CT's
                  manufacturing or marketing of CT's products into which SDAD's
                  Products are incorporated; provided, however, that (i) SDAD
                  provides CT prompt written notice of any such claims provided,
                  however, that any failure or delay in providing such notice
                  will not relieve CT of its obligations under this section,
                  except to the extent that CT is actually prejudiced by such
                  failure or delay, (ii) CT will not be obligated to indemnify
                  SDAD for any claims in connection with any settlement unless
                  CT consents in writing to such settlement and (iii) CT will
                  have the exclusive right to defend any such claim. CT will not
                  have the right to settle any such claim without prior written
                  consent of SDAD, which consent cannot be unreasonably
                  withheld.

         12.2     PRODUCTS LIABILITY INDEMNITY BY SDAD. SDAD will defend,
                  indemnify and hold CT harmless from and against all claims and
                  expenses, including reasonable attorneys' fees, arising out of
                  the death of or bodily injury to any person or persons or
                  damage to property resulting from [*] in Products supplied by
                  SDAD hereunder (other than [*]) ; provided, however, that (i)
                  CT provides SDAD prompt written notice of any such claim
                  provided, however, that any failure or delay in providing such
                  notice will not relieve SDAD of its obligation under this
                  section except to the extent that SDAD is actually prejudiced
                  by such failure or delay; (ii) SDAD will not be obligated to
                  indemnify CT for any loss in connection with any settlement
                  unless SDAD consents in writing to such settlement; and (iii)
                  SDAD will have the exclusive right to defend any such claim.
                  SDAD will not have the right to settle any such claim without
                  the prior written consent of CT, with consent cannot be
                  unreasonably withheld.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      -25-

<PAGE>

         12.3     INSURANCE. During the term of this Agreement and for [*]
                  thereafter, each party will maintain, at its own expense,
                  commercial property, casualty, and liability insurance in
                  amounts customary for businesses operating in such party's
                  respective industry, which at a minimum will include
                  comprehensive general liability insurance with coverage of at
                  least [*] dollars ($[*]) in product liability insurance.. Each
                  party will provide the other party with prompt written notice
                  of any material changes in its insurance coverage.

13.      LIMITATIONS OF LIABILITY.

         13.1     EXCEPT AS PROVIDED IN THIS SECTION 13, NEITHER SDAD NOR CT
                  WILL BE LIABLE OR OBLIGATED IN ANY MANNER FOR ANY SPECIAL,
                  INDIRECT, INCIDENTAL, EXEMPLARY, PUNITIVE, OR CONSEQUENTIAL
                  DAMAGES UNDER ANY CAUSE OF ACTION AND EVEN IF INFORMED OF THE
                  POSSIBILITY THEREOF IN ADVANCE, ARISING OUT OF THIS AGREEMENT
                  OR BY REASON OF BREACH OF THIS AGREEMENT. THESE LIMITATIONS
                  WILL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF
                  ANY EXCLUSIVE REMEDY.

         13.2     SDAD'S AND CT'S LIMITATIONS OF LIABILITY AND DAMAGES IN THIS
                  SECTION 13 WILL NOT APPLY IN CASES OF GROSS NEGLIGENCE OR
                  FRAUDULENT INTENT, OR TO CLAIMS BY EITHER PARTY FOR
                  MISAPPROPRIATION OF ITS CONFIDENTIAL INFORMATION OR
                  INFRINGEMENT OF SUCH PARTY'S INTELLECTUAL PROPERTY RIGHTS, OR
                  [*].

         13.3     NOTWITHSTANDING ANY PROVISION IN THIS AGREEMENT TO THE
                  CONTRARY, SDAD WILL HAVE NO OBLIGATION OR RESPONSIBILITY
                  WHATSOEVER WITH RESPECT TO ANY THIRD PARTY SUPPLIER ENGAGED BY
                  CT TO PERFORM FINAL ASSEMBLY OR TO PROVIDE [*] UNITS OR OTHER
                  COMPONENTS OR ANY ASPECT OF ANY RATE SENSOR PRODUCT ABOVE THE
                  LEVEL OF THE PRODUCT SUPPLIED BY SDAD.

         13.4     NOTHING IN THIS SECTION SHALL ALLOW CT TO [*] OR OTHERWISE [*]
                  TO PURCHASE [*] OF RATE SENSOR PRODUCTS FROM SDAD UNDER THIS
                  AGREEMENT OR THE EXISTING SUPPLY AGREEMENTS HEREUNDER OR TO
                  AVOID OR LIMIT CT'S LIABILITY FOR SDAD'S DAMAGES ATTRIBUTABLE
                  TO CT'S FAILURE TO MEET THIS OBLIGATION, UNLESS THAT FAILURE
                  IS A RESULT OF A MATERIAL BREACH BY SDAD OF THIS AGREEMENT OR
                  THE EXISTING SUPPLY AGREEMENT WHICH IS NOT CURED BY SDAD
                  WITHIN [*] DAYS AFTER CT NOTIFIES SDAD OF THE BREACH IN
                  WRITING.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      -26-

<PAGE>

         13.5     THE PARTIES ACKNOWLEDGE THAT THE PRICES CHARGED BY SDAD FOR
                  PRODUCTS REFLECT THE ALLOCATION OF RISK BETWEEN THE PARTIES
                  AND THAT NEITHER PARTY WOULD ENTER INTO THIS AGREEMENT WITHOUT
                  THESE LIMITATIONS ON ITS LIABILITY.

14.      TERM AND TERMINATION.

         14.1     TERM. This Agreement will commence upon the Effective Date and
                  will remain in effect for an initial term of [*]. The term of
                  this Agreement may be extended by mutual agreement of the
                  parties to be reached at least [*] months before expiration of
                  the then-current term.

         14.2     TERMINATION FOR CAUSE. Either party will have the right to
                  terminate the Agreement for cause hereunder upon the
                  occurrence of any of the following events of default (subject
                  to the other party's ability to cure or remedy such event as
                  described in Section 14.3):

                  (A)      The other party materially breaches any of its
                           confidentiality, nondisclosure or other obligations
                           under the Agreement; or

                  (B)      The other party becomes the subject of any voluntary
                           or involuntary bankruptcy proceeding or any other
                           proceeding concerning insolvency, dissolution,
                           cessation of operations, reorganization of
                           indebtedness, an assignment for the benefit of
                           creditors, or the like, and the proceeding is not
                           resolved in its favor within ninety (90) days after
                           appropriate service of process.

         14.3     RIGHT TO CURE EVENT OF DEFAULT. Other than an event described
                  in Section 14.2(b), upon the occurrence of any event of
                  default entitling a party to terminate the Agreement, the
                  non-defaulting party will send written notice of termination,
                  specifying the nature of the default, to the other party. The
                  defaulting party will have [*] days following the date such
                  notice is given to cure the default or to resolve the default
                  to the non-defaulting party's reasonable satisfaction. Failure
                  to cure or to resolve the default will result in termination
                  without further notice by the non-defaulting party, unless
                  such non-defaulting party extends the cure period by written
                  notice or withdraws the default notice. However, the willful
                  material breach of Section 8.5 (Confidentiality) will be
                  considered a breach, which cannot be cured and may be the
                  basis for immediate termination of the Agreement.

         14.4     EFFECT OF TERMINATION. Upon the expiration or other
                  termination of this Agreement for any reason, the following
                  will apply:

                  (A)      Subject to the terms and conditions of this
                           Agreement, CT may buy a Product for [*] following
                           termination in accordance with the terms of this
                           Agreement, but only if CT has commenced production of
                           CT's products using the Product prior to termination
                           of this Agreement and only to the

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      -27-

<PAGE>

                           extent that alternatives to the Product are not
                           reasonably available from other suppliers, taking
                           into account [*]. The parties will negotiate prices
                           for such post-termination sales at the time this
                           Agreement terminates.

                  (B)      For [*] following termination, SDAD will produce and
                           deliver Products to CT in accordance with the terms
                           of this Agreement, as necessary for CT to fulfill its
                           warranty obligations to its customers with respect to
                           CT's products in production at the time of
                           termination, at prices to be negotiated by the
                           parties at the time this Agreement terminates.

                  (C)      CT will destroy or return and will not use, or cause
                           to be used, any of SDAD's Confidential Information or
                           patented technology that SDAD provides to CT during
                           the term of this Agreement, except as necessary to
                           exercise its post-termination rights under Section
                           14.4(e). Upon SDAD's request, CT will certify its
                           compliance with this Section within [*] after
                           termination.

                  (D)      SDAD will destroy or return and will not use, or
                           cause to be used, any of CT's Confidential
                           Information or patented technology that CT provides
                           to SDAD for use in the [*], except as may be required
                           for SDAD to perform its post-termination sales
                           obligations under Sections 14.4(a) and (b). Upon CT's
                           request, SDAD will certify its compliance with this
                           Section within thirty (30) days after termination.

                  (E)      The licenses and sublicenses granted under Section 9
                           will terminate, except that subject to all the terms
                           and conditions of this Agreement, CT may continue to
                           [*], subject to the terms of this Agreement, solely
                           as necessary to build CT products using Products
                           ordered during the term of this Agreement or supplied
                           after termination of this Agreement under Section
                           14.4(a) or 14.4(b) and further subject to Section
                           14.5.

                  (F)      If this Agreement terminates during a calendar year
                           for any reason (other than a termination for cause by
                           CT in accordance with Section 14.2), then within [*]
                           days after such termination, CT will [*] for that
                           year calculated by SDAD in accordance with Section
                           5.3 but based on actual [*] as of the date of
                           termination without regard to the Forecast or pending
                           Orders. In accordance with Section 5.3, SDAD will
                           reconcile the [*] by [*] of the year in which this
                           Agreement terminates to take into account any
                           post-termination [*] made under Sections 14.4(a) and
                           14.4(b).

                  (G)      Neither party will have any further obligations [*]
                           and the [*] Term (as defined in Section 9.4) will
                           terminate.

                  (H)      The Existing Supply Agreements will remain in effect
                           in accordance with their terms, subject to Section
                           2.4 of this Agreement.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      -28-

<PAGE>

                  (I)      The expiration or other termination of this Agreement
                           will not relieve either party of any obligation or
                           liability accrued under this Agreement prior to
                           termination or rescind any payment made by either
                           party or anything done by either party prior to
                           termination.

         14.5     SURVIVAL CLAUSE. The following provisions will survive
                  expiration or other termination of this Agreement for any
                  reason: [*]. After termination of the agreement, CT is granted
                  an option to have a non exclusive license in accordance with
                  Section 9 only however on those rights which have already been
                  granted and used by CT for its production to continue with its
                  production programs. For such non-exclusive license, CT agrees
                  to pay SDAD a license fee [*].

15.      GENERAL PROVISIONS.

         15.1     NOTICE. Any notice provided for or permitted under this
                  Agreement will be treated as having been given when (a)
                  delivered personally, (b) sent by confirmed facsimile, telex
                  or telecopy, or (c) sent by commercial overnight courier with
                  written verification of receipt, to the party to be notified,
                  at the address set forth below, or at such other place of
                  which the other party has been notified in accordance with the
                  provision of this Section.

                  If to SDAD:              SYSTRON DONNER AUTOMOTIVE DIVISION
                                           BEI TECHNOLOGIES, INC.
                                           2700 Systron Drive
                                           Concord, CA 94518
                                           USA
                                           Attention: [*]
                                           Fax: [*]
                                           [*]

                  With a copy to:          Cooley Godward LLP
                                           One Maritime Plaza
                                           San Francisco, CA 94114
                                           USA
                                           Attention: [*]
                                           Fax: [*]

                  If to CT:                Continental Teves AG & Co. oHG
                                           Guerickestrasse 7
                                           60488 Frankfurt
                                           Germany
                                           Attention: [*]
                                           Fax: [*]

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      -29-

<PAGE>

15.2     COMPLIANCE WITH EXPORT RESTRICTIONS.

                  (A)      The ultimate shipment of Products to CT or any of its
                           Affiliates shall be subject to the right and ability
                           of SDAD to obtain any export licenses or other
                           approvals that may be required under United States
                           export control laws, regulations and requirements
                           presently in effect or which may be in effect or
                           hereafter adopted.

                  (B)      CT hereby agrees: (i) to assist SDAD in obtaining any
                           such required export licenses or other approvals by
                           supplying such documentation or information as may be
                           requested by SDAD (ii) to comply with export control
                           laws, regulations and requirements of the government
                           of the United States (iii) to maintain the necessary
                           records to comply with such laws, regulations and
                           requirements; (iv) to not re-export any Product
                           except in compliance with such laws, regulations and
                           requirements; (v) to obtain all import licenses or
                           other approvals necessary to import Products; (vi) to
                           refrain from selling, transferring, or otherwise
                           disposing of the Products in violation of the export
                           control laws, regulations and requirements of the
                           United States of America; and (vii) to indemnify,
                           defend and hold harmless SDAD from any and all fines,
                           damages, losses, costs and expenses (including
                           reasonable attorneys' fees) incurred by SDAD as a
                           result of any breach of this Section 15.2 by CT or
                           any of CT's Affiliates or customers.

                  (C)      CT hereby expressly acknowledges that the technical
                           data and the direct product thereof associated with
                           the Products are subject to export control laws,
                           regulations and requirements of the United States of
                           America and agrees that neither the technical data
                           nor the direct product thereof will be transferred,
                           directly or indirectly, to any destination contrary
                           to the provisions of License Exception TSR of the
                           Export Administration Regulations as well as the
                           applicable provisions (if any) of the International
                           Trafficking in Arms Regulations (ITAR) and such other
                           regulations as the U.S. Department of Commerce, the
                           U.S. Department of State and the U.S. Department of
                           Treasury may issue from time to time. This provision
                           shall survive the termination of this agreement. CT
                           hereby provides its assurance that it will not
                           participate in any transaction which may involve any
                           commodity or technical data, or the direct product
                           thereof, exported or to be exported from the United
                           States of America, or in any re-export thereof, or in
                           any other transaction that is subject to export
                           controls of the United States of America, if a person
                           denied export privileges from the United States of
                           America, may obtain any benefit from or have any
                           interest in, directly or indirectly, these
                           transactions. CT further provides its assurance that
                           it will not participate knowingly in any transaction
                           with a party engaged, directly or indirectly, in the
                           design,

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      -30-

<PAGE>

                           development, stockpiling or use of nuclear, chemical
                           or biological weapons or missiles.

         15.3     WAIVER. No term or provision hereof will be considered waived
                  by either party, and no breach excused by either party, unless
                  such waiver or consent is in writing signed by both parties.
                  No consent by either party to, or waive of, a breach by either
                  party, whether express or implied, will constitute a consent
                  to, waiver or, or excuse of any other, different, or
                  subsequent breach by either party.

         15.4     ASSIGNMENT. SDAD or CT may assign the Agreement to any person
                  to whom it transfers all or substantially all of its
                  proprietary rights in [*] or the [*], respectively, so long as
                  such assignee agrees to be bound by all provisions of this
                  Agreement applicable to the assigning party. Otherwise,
                  neither party may assign, voluntarily, by operation of law, or
                  otherwise, any rights or delegate any duties under this
                  Agreement without the other party's prior written consent,
                  such consent not to be unreasonably withheld, and any attempt
                  to do so without that consent will be void. The Agreement will
                  bind and inure to the benefit of the parties and their
                  respective successors and permitted assigns.

         15.5     RELATIONSHIP OF THE PARTIES. The parties to the Agreement are
                  independent contractors. There is no relationship of agency,
                  partnership, joint venture, employment, or franchise between
                  the parties. Neither party has the authority to bind the other
                  or to incur any obligation on its behalf. Neither party has
                  the power or authority as agent, employee or in any other
                  capacity to represent, act for, bind or otherwise create or
                  assume any obligation on behalf of the other party for any
                  purpose whatsoever. There are no third party beneficiaries
                  under this Agreement, including CT's Affiliates. CT will
                  defend and indemnify SDAD against any claim by an Affiliate of
                  CT arising under or relating to this Agreement. With respect
                  to the performance or breach of this Agreement, an act or
                  omission of an Affiliate of a party will be deemed an act or
                  omission of the party.

         15.6     AMENDMENT. The Agreement may be amended or supplemented only
                  by a writing that is signed by duly authorized representatives
                  of both parties.

         15.7     GOVERNING LAW AND JURISDICTION. The Agreement shall be
                  governed by and constituted under the laws of the United
                  States and the State of Michigan, without regard to that
                  state's conflict of laws principles. The United Nations
                  Convention on Contracts for the International Sale of Goods
                  will not apply to this Agreement. Any legal action arising out
                  of or relating to this Agreement or the transactions
                  contemplated hereby will be instituted exclusively in the
                  federal courts for the Eastern District of Michigan or the
                  state court sitting in Oakland County, Michigan, and each
                  party (on behalf of itself and, in the case of CT, its
                  Affiliates) hereby irrevocably submits to the exclusive
                  jurisdiction of such courts in any such action, and agrees not
                  to assert as a defense that an action brought before such

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      -31-

<PAGE>

                  courts is brought in an inconvenient forum or that the venue
                  of such action is improper.

         15.8     SEVERABILITY. If at any time any provision of this Agreement
                  is or becomes illegal, invalid or unenforceable in any respect
                  under the law of any jurisdiction, neither the legality,
                  validity or enforceability of the remaining provisions hereof
                  nor the legality, validity, or enforceability of such
                  provision under the law of any other jurisdiction will in any
                  way be affected or impaired thereby, and the remainder of the
                  provisions of this Agreement will remain in full force and
                  effect. The parties will endeavor in good faith negotiations
                  to replace any illegal, invalid or unenforceable provision
                  with a valid, legal and enforceable provision, the economic
                  effect of which comes as close as possible to the illegal,
                  invalid or unenforceable provision. If any [*] provision in
                  this Agreement, including the provisions of Sections [*], is
                  unenforceable under the laws of a particular jurisdiction,
                  then the [*] provisions of this Agreement will not apply to
                  either party solely in such jurisdiction but will otherwise
                  remain in force.

         15.9     EQUITABLE RELIEF. Each party acknowledges that money damages
                  may not be an adequate remedy for breach this Agreement,
                  including Sections [*], and agrees that the other party may
                  apply to any court of law or equity of competent jurisdiction
                  for specific performance or injunctive relief (without posting
                  a bond or other security or showing irreparable harm) to
                  enforce or prevent any violation of those provisions of this
                  Agreement notwithstanding the exclusive jurisdiction and venue
                  provisions of Section 15.7.

         15.10    ATTORNEYS FEES. In any action, suit or proceeding to enforce
                  or construe the provisions of this Agreement, the prevailing
                  party will be entitled to recover its reasonable attorney's
                  fees, court costs and other expenses incurred in connection
                  with such proceeding in addition to any other relief that it
                  may receive without regard to the limitations of liability
                  imposed in Section 13.

         15.11    COSTS AND EXPENSES. Except as expressly provided for elsewhere
                  in this Agreement, each party will be responsible for all
                  costs and expenses incurred by it in performing its
                  obligations or exercising its rights under this Agreement.

         15.12    FORCE MAJEURE. Any delay in or failure of performance by
                  either party under this Agreement (other than failure to pay
                  amounts owed) will not be considered a breach of this
                  Agreement and will be excused to the extent caused by any
                  occurrence beyond the reasonable control of such party
                  including, but not limited to fires, floods, epidemics,
                  famines, earthquakes, hurricanes and other natural disasters
                  or acts of God; regulation or acts of any civilian or military
                  authority or act of any self-regulatory authority; wars,
                  terrorism, riots, civil unrest, sabotage, or theft or other
                  criminal acts of third parties; failure of electronic or
                  mechanical equipment; and fluctuations in or failures of
                  electric power, heat, light, air

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      -32-

<PAGE>

                  conditioning or telecommunications and shortages of
                  relied-upon services or supplies. This Section will not excuse
                  delay or failure to pay money when due.

         15.13    CONSTRUCTION. The following rules will govern construction of
                  this Agreement:

                  (A)      section headings are for convenience only and are not
                           to be used in interpreting this Agreement;

                  (B)      as used in this Agreement, the word "including" means
                           "including but not limited to";

                  (C)      in constructing the terms of this Agreement, no
                           presumption will operate in favor of or against any
                           party as a result of its counsel's role in drafting
                           the terms and provisions hereof;

                  (D)      all references to Sections, Schedules and Exhibits
                           refer to the Sections, Schedules and Exhibits,
                           respectively, of this Agreement unless otherwise
                           indicated;

                  (E)      in the event of a conflict between the main body of
                           this Agreement and its Schedules or Exhibits, the
                           language of this Agreement controls unless the
                           Schedule or Exhibit expressly references the
                           conflicting section of this Agreement (e.g.,
                           "Notwithstanding Section 5, the following will
                           apply...");

                  (F)      any capitalized terms used in any Schedule or Exhibit
                           but not otherwise defined therein will have the
                           meaning as defined in this Agreement;

                  (G)      all capitalized terms defined herein apply equally to
                           both the singular and plural forms of such terms;

                  (H)      all monetary amounts refer to U.S. dollars unless
                           otherwise indicated;

                  (I)      all times are with reference to the Pacific time zone
                           unless otherwise indicated; and

                  (J)      references to the "term" of this Agreement will
                           include the initial term and any renewal term unless
                           otherwise indicated.

         15.14    ENTIRE AGREEMENT. This Agreement, including all Schedules and
                  Exhibits, constitutes the final and entire agreement between
                  the parties and is intended as the complete and exclusive
                  statement thereof, regarding the supply of Rate Sensor
                  Products by SDAD to CT. This Agreement supersedes all prior or
                  contemporaneous agreements (other than the Existing Supply
                  Agreements), understandings and communications between the
                  parties relating to the subject matter hereof (including the
                  term sheet dated [*]), which hereafter will have no

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      -33-

<PAGE>

                  effect. Subject to Section 2.4, the Existing Supply Agreements
                  will remain in force in accordance with their terms.

         15.15    COUNTERPARTS. The Agreement may be executed simultaneously in
                  counterparts, each of which will constitute an original, but
                  all of which together shall constitute one and the same
                  instrument.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      -34-

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute and deliver this Agreement as of the
Effective Date.

CONTINENTAL TEVES AG AND CO. OHG

By:      /s/ [*]
   -----------------------------------------
   Its: [*]
      --------------------------------------

Date: March 2, 2004

By:      /s/ [*]
   -----------------------------------------
   Its: [*]
      --------------------------------------

Date: March 2, 2004

SYSTRON DONNER AUTOMOTIVE DIVISION
OF BEI TECHNOLOGIES, INC.

By:      /s/ [*]
   -----------------------------------------
   Its: [*]
      --------------------------------------

Date: March 2, 2004

By:      /s/ [*]
   -----------------------------------------
   Its: [*]
      --------------------------------------

Date: March 2, 2004

                                       [*]

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      -35-

<PAGE>

                               TABLE OF SCHEDULES

Schedule A:       Products Supplied under this Agreement

Schedule B:       Target Quantities and Pricing

Schedule C:       Methodology for Setting Price and Burden Rate

Schedule D:       Confidentiality Provisions

Schedule E:       SDAD Patents

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

<PAGE>

                                   SCHEDULE A

                     PRODUCTS SUPPLIED UNDER THIS AGREEMENT

The products supplied under this contract extension may include:

         ITEM                       SDAD P/N         COMMENTS

         [*]

Subject to the Transition Plan, the following items are supplied under the
Existing Agreements:

         [*]                        Entire Product Family

         [*]

         [*]

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      A-1
<PAGE>

                                   SCHEDULE B

                          TARGET QUANTITIES AND PRICING

CT TARGET PRICING

      --------------------------------------------------------------------------
          CY04           CY05         CY06         CY07        CY08         CY09
      --------------------------------------------------------------------------

[*]

[*]

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       B-1

<PAGE>

SDAD QUOTED PRICING

     --------------------------------------------------------------------------

[*]                                                                         Y09

     --------------------------------------------------------------------------

[*]

NOTES:

1. This analysis represents current configurations and specification.

2. No changes have been assumed in the [*]

3. Price targets are dependant on CT volumes noted above. Volume variances will
   impact annual negotiated prices.

(Continued)

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       B-2

<PAGE>

4. Burden rates are dependant on [*]

5. Prices incorporated additional SDAD investment to achieve capacity as
   established by the joint CT transition team into the[*]

6. Increased volume year over year reflected in above target prices.

7. Nugget price targets were derived utilizing[*]

8. Burden rates for CY04 are the FY04 SDAD annual operating plan rates.

9. Capital assets are depreciated over a [*].

                                     * * * *

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       B-3

<PAGE>

                                   SCHEDULE C

                  METHODOLOGY FOR SETTING PRICE AND BURDEN RATE

PUBLISHING OF CT ANNUAL DEMAND REQUIREMENTS

Continental Teves production demands (both FPV and CPV) on SDAD will be
published in accordance with section 3.2 of the contract. This data provides the
foundation for SDAD to develop its [*] for the coming year.

DEVELOPMENT OF SDAD ANNUAL OPERATING PLAN

On an annual basis, SDAD develops a detailed operating plan for the next year on
a department by department, and account by account basis. This plan includes
SG&A costs, which are Selling, General and Administration, as well as
Engineering & R&D and corporate allocations. These costs will typically include
salaries, fringe benefits, supplies, and materials, depreciation, legal and
audit, travel, etc. The other major cost group is Overhead costs, with consists
of the manufacturing departments for [*], as well as the support departments for
Quality, Materials/Logistics and Manufacturing Engineering and maintenance.
These costs will typically include salaries, fringe benefits, (on both direct
and indirect employees), manufacturing supplies, depreciation, facilities,
repair and maintenance, freight and customs, etc.

These costs are review and approved through all levels of management up through
BEI corporate.

CALCULATION OF BURDEN RATE (SG&A AND OVERHEAD RATES)

In general the calculation of burden rates is developed by taking [*]. In
developing the overhead rate, [*].

CALCULATION OF SELLING PRICE

The calculation of selling price consists of taking [*]. [*]

CALCULATION OF UNDER-UTILIZATION COSTS

Any under-utilization costs are calculated as per section 5.3 of the contract.
The rate that is multiplied against the applicable volume reduction is the fixed
burden rate. The fixed burden rate consists of all SG&A, Corporate and fixed
overhead rates. The fixed overhead rates, exclude such costs as the fringe
benefits of direct employees, and variable manufacturing supplies, as these
costs are assumed to fluctuate with volume changes.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       C-1

<PAGE>

                                   SCHEDULE D

                           CONFIDENTIALITY PROVISIONS

This Agreement is effective between

Systron Donner Automotive Division a division of BEI Sensors and Systems
Company, having a principal place of business at 2700 Systron Drive, Concord,
California 94518-1399 (hereinafter "SDID").

and

Continental Teves AG & CO oHG,

a corporation of Germany, having a principal place of business at 7
Guerickestrasse, 60488 Frankfurt/Main, Federal Republic of Germany (hereinafter
"CT").

1.   Information, Documents, Samples

     CT, or their representative, and SDAD, or their representative (hereinafter
     each "Company" and collectively "Companies") will supply to each other for
     the purpose of the supply relationship between SDAD and CT concerning Rate
     Sensor Products

       -       various oral information including the SDAD Proprietary Know-How
               and other Confidential Information (hereinafter "Information")
               and/or

       -       documents such as hardware, firmware, software and related
               papers, computer printouts, other data carriers, electronic data
               processing records,

               programs and/or other documents, in particular illustrative
               media, drawings, descriptions, specifications, reports, cards,
               microfilms, (hereinafter "Documents") and/or samples or models
               (hereinafter "Samples").

2.   Confidentiality, Restriction of Use

     The Companies agree to keep confidential all Information and Documents
     and/or Samples supplied to each other, to keep them under lock and key when
     stored. The receiving Company will give access to Information, Documents
     and/or Samples only to those of its employees who need to know. All
     employees of the receiving Company are obliged to confidentiality, even if
     they are not directly involved in the project.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       D-1

<PAGE>

4.   Property

         The Information and the Documents and/or Samples supplied remain the
         property of the respective supplier. They are supplied on a lend basis
         only. The Companies shall return the Documents and/or Samples at any
         time upon request.

4.   Exceptions

         Notwithstanding any other provisions of this Agreement, the commitment
         of confidentiality shall not apply to any information which:

         (a)      is or becomes publicly known through no wrongful act on the
                  receiving companies' part;

         (b)      is already known to the receiving Company at the time of
                  disclosure through the supplying Company or their
                  representative and is designated to be known by the receiving
                  Company without undue delay;

         (c)      is received by the Companies from a third party through no
                  wrongful act on the part of the third party or the receiving
                  company or anyone else.

5.   Reproduction

     The Documents and/or Samples supplied may not be reproduced. Only in
     special cases will the Companies check whether prior express written
     consent to reproduce the Documents, which may however be withdrawn at any
     time, can be given. In the event that such consent is withdrawn, the
     companies shall also return the copies of the Documents upon request.

6.   Conditions of Delivery

     The supplied Information, Documents and/or Samples-are entrusted to each of
     the Companies pursuant the regulations of the Laws Prohibiting Unfair
     Competition.

     The Companies may use them solely for the purpose provided or permitted by
     each other. In particular, the Companies may not use them for
     manufacturing, or having manufactured, the products concerned for
     themselves or for third parties and may not dismantle Samples, except as
     expressly licensed under the Supply Agreement dated January 16, 2004.

7.   Reserve of Rights

     The Companies reserve all rights, including copyrights, in respect of the
     supplied Samples and/or Information and Documents and the products and
     parts thereof depicted therein as well as their information contained, at
     home and abroad, also in the event of a patent being granted or a utility
     model being registered.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       D-2

<PAGE>

8.   Subject Matter

     Nothing contained in this Agreement shall constitute an obligation for
     either Company to supply specific Information, Documents and/or Samples to
     the other Company. Nothing in this Agreement shall grant to either Company
     the right to make commitments to any kind for or on behalf of the other
     Company. This Agreement shall not constitute, create, give effect to or
     otherwise imply a joint venture or partnership or formal business
     Organization of any kind. The exchange of Information, Documents and/or
     Samples hereunder does not constitute or otherwise imply an offer,
     acceptance, or promise for any-future contract, or amendment to any
     existing contract between the Companies.

9.   Disclosure to Third Parties

     Unless otherwise provided in this Agreement, the Information, the Documents
     and any copies thereof and/or the Samples may not be disclosed to third
     parties without the prior written consent of the respective supplying
     Company. If the respective supplying Company consents to the disclosure to
     a third party, the receiving Company shall, prior to such disclosure, make
     it binding on the third party to abide by the preceding provisions.

10.  Applicable Law

     This Agreement shall be interpreted and ruled in accordance with the Law of
     the State of Michigan, and place of venue will be in Oakland County,
     Michigan, USA.

IN WITNESS WHEREOF, the companies have executed this Agreement effective the
date of signature of the last of the Companies set forth below.

CONTINENTAL TEVES AG AND CO. OHG         SYSTRON DONNER AUTOMOTIVE DIVISION
                                         OF BEI TECHNOLOGIES, INC.

By: _________________________________    By: ___________________________________

Name: _______________________________    Name: _________________________________

Title: ______________________________    Title: ________________________________

Date: _______________________________    Date: _________________________________

By: _________________________________    By: ___________________________________

Name: _______________________________    Name: _________________________________

Title: ______________________________    Title: ________________________________

Date: _______________________________    Date: _________________________________

By: _________________________________    By: ___________________________________

Name: _______________________________    Name: _________________________________

Title: ______________________________    Title: ________________________________

Date: _______________________________    Date: _________________________________

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      D-3

<PAGE>

                                   SCHEDULE E

                                  SDAD PATENTS

The intellectual property, trade secrets and patents involved in the upcoming
contract extension between Systron Donner Automotive Division of BEI
Technologies Inc. (SDAD) and Continental Teves (CT) fall into three categories:

1)       Items that relate to SDAD core technologies [*]

All rights to patents, trade secrets and other technology related to the
manufacture of these devices shall remain the property of SDAD. CT will procure
[*] directly from SDAD. CT will procure [*] with written license permission for
procurement from SDAD. Since these items are not licensed to CT, there is no
listing of patents in this category.

BEI will provide specifications to CT containing adequate information to perform
these procurements. The specifications will not contain detail design
characteristics.

2)       Items that relate to final assemblies: [*]

The following patents shall be nonexclusively licensed by SDAD to CT for CT use
in [*] in accordance with Section 9.1 of the Agreement.

SDAD patents applicable to Cluster Assemblies are:

         US Patent
                  [*]

         US Patent
                  [*]

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       E-1

<PAGE>

         US Patent
                  [*]

Other intellectual property and trade secrets shall include training and
on-going support of CT in the design of final assembly circuit boards and
housings that utilize [*]. This information will impart significant proprietary
knowledge, including for example [*]. CT will keep this information in
confidence for the benefit of SDAD.

3) Items that relate to [*]

The [*] shall be manufactured by SDAD and all intellectual property,
patents and trade secrets shall remain the sole property of SDAD. The following
patents will be licensed to CT solely for use and distribution of [*] in
accordance with Section 9.2 of the Agreement

[*] patents are:

         [*]

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SUCURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      E-2<PAGE>
EXHIBIT 10.1

                                AMENDMENT NO. 14
                                       TO
                             TRANSACTION AGREEMENT

         This Amendment No. 14 ("AMENDMENT") to the Transaction Agreement dated
as of July 8, 1998, as amended by Amendment No. 1 dated as of December 18, 1998,
by Amendment No. 2 dated as of February 18, 1999, by Amendment No. 3 dated as of
May 14, 1999, by Amendment No. 4 dated as of June 30, 1999, by Amendment No. 5
dated as of June 30, 1999, by Amendment No. 6 dated as of November 18, 1999, by
Amendment No. 7 dated as of August 1, 2000, by Amendment No. 8 dated as of
December 20, 2000, by Amendment No. 9 dated as of March 13, 2001, by Amendment
No. 10 dated as of June 21, 2001, by a separate and distinct Amendment No. 10
dated as of November 9, 2001, by Amendment No. 11 dated as of December 19, 2002,
by Amendment No. 12 dated as of May 22, 2002 and by Amendment No. 13 dated as of
September 12, 2002 (as so amended, the "ORIGINAL AGREEMENT"), is made as of
January 16, 2004, among Choice One Communications Inc. (the "CORPORATION") and
the persons listed on the signature pages hereto.

         WHEREAS, the Fleet Entities desire to irrevocably terminate certain of
their rights under the Original Agreement and the parties hereto desire to amend
the Original Agreement to effect such termination and to address certain issues
raised by such termination;

         NOW, THEREFORE, the parties hereto hereby agree as follows:

         SECTION 1. Definitions. Capitalized terms used in this Amendment and
not otherwise defined have the meanings ascribed to them in the Agreement.

         SECTION 2. Termination of Rights. Each of the parties agrees that,
notwithstanding any provision of the Original Agreement to the contrary, none of
the Fleet Entities shall have any rights:

         (a) under Sections 4.01 through 4.04 or Section 4.06 of the Original
Agreement; or

         (b) to participate in sales by a Selling Person pursuant to Section
6.05 of the Original Agreement.

         SECTION 3. Amendments to Section 5.03. Section 5.03 of the Original
Agreement is hereby amended as follows:

         (a) Clause (ii) of Section 5.03(b) of the Original Agreement is hereby
deleted and clauses (iii) through (vi) of Section 5.03(b) are hereby re-numbered
as clauses (ii) through (v) thereof;
<PAGE>
                                      -2-

         (b) Clause (iii) of Section 5.03(f) of the Original Agreement is hereby
deleted, the reference to Section 5.03(b)(iii) in clause (iv) of Section 5.03(f)
is hereby replaced with a reference to Section 5.03(b)(ii), and clause (iv) of
Section 5.03(f) is hereby re-numbered as clause (iii) thereof;

         (c) Clause (iii) of Section 5.03(g) of the Original Agreement is hereby
deleted, the reference to Section 5.03(b)(iii) in clause (iv) of Section 5.03(g)
is hereby replaced with a reference to Section 5.03(b)(ii), and clause (iv) of
Section 5.03(g) is hereby re-numbered as clause (iii) thereof; and

         (d) Section 5.03(k) of the Original Agreement is hereby amended by
adding the following proviso to the end thereof: "; provided, however, that
despite the fact that the Fleet Entities do not have the right to designate a
director, the Fleet Entities shall be subject to the obligations of this Section
5.03(k) so long as they continue to own, in the aggregate, at least 50% of the
Fleet Equity".

         SECTION 4. Amendments to Section 9.04. Clause (x) of Section 9.04 of
the Original Agreement is hereby amended by deleting "Fleet," therefrom.

         SECTION 5. Effect of Amendment; Irrevocable Consent to Future
Amendments, Modifications and Waivers. Except as amended hereby, the Original
Agreement shall remain unchanged and continue in full force and effect. Without
limiting the generality of the foregoing, nothing in this Amendment shall
relieve any of the Fleet Entities from any of their respective obligations under
the Original Agreement including, without limitation, their obligations under
Article 6 of the Original Agreement. This Amendment shall constitute the prior
written consent of the Fleet Entities contemplated by the first sentence of
Section 9.04 of the Original Agreement to any amendment, modification or waiver
after the date hereof except for any amendment, modification or waiver which
both (i) is adverse to any of the Fleet Entities (after giving effect to this
Amendment); and (ii) results in any of the Fleet Entities being treated
differently than holders of Investor Equity generally; provided, however, that
to the extent that the different treatment of the Fleet Entities arises solely
as a result of the different percentage of Investor Equity held such different
treatment shall be disregarded for the purposes of clause (ii). Each of the
Fleet Entities acknowledges that it has not relied on any representations or
warranties of the Corporation or any other party as to the effect of this
Amendment on its rights and obligations under applicable securities laws.

         SECTION 6. Governing Law. This Amendment shall be governed by, and
construed under, the laws of the State of Delaware, all rights and remedies
being governed by said laws, without regard to conflict of laws principles.

         SECTION 7. Counterparts. This Amendment may be executed simultaneously
in two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together shall constitute
one and the same instrument.
<PAGE>

                                      -3-
         IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first written above.

                      CHOICE ONE COMMUNICATIONS INC.

                      By:  /s/ Steve M. Dubnik
                           -----------------------------------------------
                           Steve M. Dubnik
                           Chairman and Chief Executive Officer

                      MANAGEMENT MEMBERS

                           /s/ Steve M. Dubnik
                           -----------------------------------------------
                           Steve M. Dubnik, as a Management
                           Member and as Chief Executive Officer
                           of Choice One Communications Inc.

                           /s/ Mae Squier-Dow
                           -----------------------------------------------
                           Mae Squier-Dow

                           /s/ Kevin Dickens
                           -----------------------------------------------
                           Kevin Dickens

                           /s/ Philip Yawman
                           -----------------------------------------------
                           Philip Yawman

                           /s/ Ajay Sabherwal
                           -----------------------------------------------
                           Ajay Sabherwal

<PAGE>
                                      -4-

                          INVESTOR MEMBERS

                          MORGAN STANLEY CAPITAL
                            PARTNERS III, L.P.

                          By:   MSCP III, LLC, its general partner
                          By:   Morgan Stanley Capital Partners III,
                                  Inc., its Member

                          By:   /s/ John B. Ehrenkranz
                                -----------------------------------------------

                          Its:  Managing Director
                                -----------------------------------------------

                          MSCP III 892 INVESTORS, L.P.

                          By:   MSCP III, LLC, its general partner
                          By:   Morgan Stanley Capital Partners III,
                                  Inc., its Member

                          By:   /s/ John B. Ehrenkranz
                                -----------------------------------------------

                          Its:  Managing Director
                                -----------------------------------------------

                          MORGAN STANLEY CAPITAL
                            INVESTORS, L.P.

                          By:   MSCP III, LLC, its general partner
                          By:   Morgan Stanley Capital Partners III,
                                  Inc., its Member

                          By:   /s/ John B. Ehrenkranz
                                -----------------------------------------------

                          Its:  Managing Director
                                -----------------------------------------------

<PAGE>
                                      -5-

                          MORGAN STANLEY DEAN WITTER
                            CAPITAL PARTNERS IV, L.P.
                          By:   MSDW Capital Partners IV, LLC, its
                                   general partner
                          By:   MSDW Capital Partners IV, Inc., its Member

                          By:   /s/ John B. Ehrenkranz
                                -----------------------------------------------

                          Its:  Managing Director
                                -----------------------------------------------

                          MSDW IV 892 INVESTORS, L.P.
                          By:   MSDW Capital Partners IV, LLC, its
                                  general partner
                          By:   MSDW Capital Partners IV, Inc., its Member

                          By:   /s/ John B. Ehrenkranz
                                -----------------------------------------------

                          Its:  Managing Director
                                -----------------------------------------------

                          MORGAN STANLEY DEAN WITTER
                            CAPITAL INVESTORS IV, L.P.
                          By:   MSDW Capital Partners IV LLC, its
                                   general partner
                          By:   MSDW Capital Partners IV, Inc., its Member

                          By:   /s/ John B. Ehrenkranz
                                -----------------------------------------------

                          Its:  Managing Director
                                -----------------------------------------------

<PAGE>
                                      -6-

                          FLEET VENTURE RESOURCES, INC.

                          By: /s/ Robert M. Van Degna
                              -----------------------------------------------
                              Robert M. Van Degna
                              Under Power of Attorney Dated 8/4/00

                          FLEET EQUITY PARTNERS VI, L.P.

                          By:  Silverado IV Corp., its General Partner

                          By: /s/ Robert M. Van Degna
                              -----------------------------------------------
                              Robert M. Van Degna
                              Chairman & CEO

                          CHISHOLM PARTNERS III, L.P.

                          By: Silverado III, L.P., its General Partner
                          By: Silverado III Corp., its General Partner

                          By: /s/ Robert M. Van Degna
                              -----------------------------------------------
                              Robert M. Van Degna
                              Chairman & CEO

                          KENNEDY PLAZA PARTNERS

                          By: /s/ Robert M. Van Degna
                              -----------------------------------------------
                              Robert M. Van Degna
                              Managing General Partner

                          WALLER-SUTTON MEDIA PARTNERS, L.P.

                          By: Waller Sutton Media, L.L.C. its general partner

                          By: /s/ Bruce Hernandez
                              -----------------------------------------------
                              Bruce Hernandez
                              Chief Executive Officer

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