Document:

Exhibit 10.160

                       EXCLUSIVE DISTRIBUTORSHIP AGREEMENT

DEFINITIONS (Capitalized terms used in the Agreement shall be defined as
follows):
      A.    "Agreement" shall mean this exclusive distributorship agreement.
      B.    "Confidential Information" shall mean all written information and
            data provided by the parties to each other hereunder and marked as
            confidential, except any portion thereof which:
            A.    is known to the receiving party, as evidenced by the receiving
                  party's written record, before receipt hereof under this
                  Agreement;
            B.    is disclosed to the receiving party by a third person who has
                  a right to make such disclosure; or
            C.    is or becomes part of the public domain through no fault of
                  the receiving party.
      C.    "Patents" shall mean the patents and patent applications on file in
            the countries/governmental jurisdictions of the Market Area.
      D.    "Company Products" shall mean those current products
            manufactured/distributed by HiEnergy Technologies, Inc. such as
            "stoichiometric technology or AtometryTM based products, and related
            support services, software and accessories.
      E.    "Market Area" shall mean any commercial nuclear power plant in North
            America.

AGREEMENT:
This Agreement is made and effective this October 24, 2006, by and between
HiEnergy Technologies, Inc., a Delaware Corporation ("Company") and Bartlett
Nuclear, Inc., a Massachusetts Corporation ("Distributor"). Company desires to
appoint Distributor, and Distributor desires to accept appointment, as an
exclusive distributor of Company's Products within the defined Market Area.

      NOW, THEREFORE, in consideration of the mutual agreements and promises set
forth herein, the parties agree as follows:

1. RIGHTS GRANTED
Company hereby grants to Distributor the exclusive right, on the terms and
conditions contained herein, to purchase, inventory, promote and resell
"Company's Products" within the Market Area.

2. CONFIDENTIAL INFORMATION
It is contemplated that in the course of the performance of this Agreement each
party may, from time to time, disclose Confidential Information to the other.
Each party agrees to take all reasonable steps to prevent disclosure of
Confidential Information; provided; however, no provision of this Agreement
shall be construed so as to preclude such disclosure of Confidential Information
as may be inherent in or reasonably necessary for marketing Company Products
pursuant to this Agreement, or for securing from any governmental agency any
necessary approval or license relating to the subject or performance of this
Agreement.

<PAGE>

3. COMPANY PRODUCTS
During the term of this Agreement, Company grants the Distributor the first
right and option to obtain exclusive rights to market, distribute and sell any
new devices or systems (including related software) in the Market Area, on the
terms and conditions of this Agreement.

4. TERMS OF SALE
All sales of Company's Products to Distributor shall be made pursuant to this
Agreement at such list prices and on such standard terms as Company shall
establish from time to time on at least thirty (30) days notice. All list prices
are FOB Company's plant. Except as otherwise expressly agreed by Company in
advance, this Agreement shall control all aspects of the dealings between
Company and Distributor with respect to the Company's Products. Company will
discount all items by, or pay a sales commission of, 15%. Distributor agrees
that all Company Products sold by Distributor will be at prices or in accordance
with Company pricing policies.

5. MARKETING POLICIES
Company will provide adequate access to Company's Products, marketing brochures,
catalogs, manuals, advertising literature and others sales aids to the
Distributor. Company and Distributor will effectively promote the sale of
Company's Products in the Market Area, in conformity with Company's established
marketing policies and programs. Distributor will use its best efforts to sell
Company's Products to reputable and financially capable end users throughout the
Market Area. Company will invite Distributor to national tradeshows where the
Distributor's Market Area is expected to be represented. Distributor will invite
Company to national tradeshows where the Company's Products will be represented,
in order to support the Distributor's marketing effort.

6. DISTRIBUTOR'S GENERAL DUTIES
      A.    Distributor shall maintain a business presence in the Market Area,
            including suitable facilities. Any service and support provided by
            Distributor on Company's Products sold in the Market Area shall be
            made using qualified personnel trained by Company and subject to
            service policies satisfactory to Company. Company will provide
            technical support 24/7 to maintenance service technicians.
      B.    Distributor shall utilize its current sales personnel and/or appoint
            representatives to introduce, promote, market and sell Company's
            Products in the Market Area. Such personnel and/or representatives
            shall be adequately trained by Company. Distributor shall employ
            sufficient numbers of sales personnel and/or representatives
            properly trained to market Company's Products in the Market Area.
      C.    Distributor agrees not to engage in the distribution, promotion,
            marketing or sale of any goods or products that compete or conflict
            with Company's Products. Distributor agrees to supply to Company a
            list of items handled by Distributor following Company's request to
            ensure that no conflict exists.

7. ADVERTISING POLICIES
Company will cooperate with Distributor in providing for effective promotion of
Company's Products throughout the Market Area, and Distributor agrees to
participate in, actively promote and faithfully comply with the terms and
conditions of such cooperative promotional programs as Company may establish and
offer Distributor from time to time. Nothing herein shall prevent Distributor
from independently advertising and marketing the Company's Products within the
Market Area, provided the form and content of the advertising or marketing
materials are approved by Company in advance.

<PAGE>

8. PRODUCT WARRANTY POLICIES
Company shall provide to Distributor information with respect to Company's
limited warranties to be extended to the original purchaser of Company's
Products. COMPANY MAKES NO WARRANTY TO DISTRIBUTOR WITH RESPECT TO THE PRODUCTS,
EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

9. SOFTWARE LICENSE GRANT
During the term of this Agreement, Company grants to Distributor a
non-exclusive, non-transferable license to distribute the Company's
Interrogator(TM) software ("Software") to Distributor customers ("License"). The
Software shall be and remain the sole and exclusive products of Company, and
Distributor shall have no rights whatsoever in or to the Software. Distributor
agrees not to remove from any copies of the Software any statements appearing
thereon regarding copyrights or proprietary rights of Company. Distributor shall
not copy (in any form), distribute, sell, lease, assign, encumber, license or
sub-license this Software or programs written using this Software, including
derivative modifications or extensions of them, to any Distributor Customer or
other party without prior written consent from Company. Distributor hereby
acknowledges and agrees that the Software may be licensed by Company to other
users outside the Market Area without limitation of any kind. Distributor
acknowledges that the license granted hereby extends solely to Distributor
Customer and that Software shall not be used by any other division, subsidiary
or affiliated entity. Distributor acknowledges that the computer program,
manuals and related data which comprise or are related to the Software are
proprietary products of Company who retains all rights, title and interest,
including copyright to these products. Distributor agrees that the Software
source code of Interrogator(TM) constitutes protected information, which is
equivalent to trade secret information of Company, whether or not any portion
thereof is or may be the subject of a valid copyright or patent. Distributor
agrees not to reverse assemble, reverse compile, reverse engineer or otherwise
attempt to discover the source code of any of the Software, except to the extent
Distributor may be expressly permitted by Company. The software is provided
subject to Company's standard commercial software license ("Commercial
License"); provided, however, software acquired for use within or for any United
States federal agency is provided with "LIMITED RIGHTS" and "RESTRICTED RIGHTS"
as defined in DFARS 252.227-7015 and FAR 52.227-19.

<PAGE>

10. INDEMNIFICATION
      A.    Company agrees to protect Distributor and hold Distributor harmless
            from any loss or claim arising out of defects in any of Company's
            Products during the warranty period, provided that Distributor gives
            Company immediate notice of any such loss or claim and cooperates
            fully with Company in the handling thereof.
      B.    Distributor agrees to protect Company and hold Company harmless from
            any loss or claim arising out of the gross negligence or willful
            misconduct of Distributor, Distributor's agents, employees or
            representatives in the installation, use, sale or servicing of
            Company's Products, or arising out of any representation or warranty
            made by Distributor, its agents, employees or representations with
            respect to Company's Products that exceeds Company's limited
            warranty.

11. ORDER PROCESSING AND RETURNS
Company will employ its best efforts to fill Distributor's orders promptly on
acceptance, but reserves the right to allot available inventories among
distributors at its discretion. Except for Company's Products that are
defective, Company shall not be obligated to accept any of Company's Products
that are returned. In the event such returns are accepted, Company may impose a
reasonable restocking charge.

12. FINANCIAL POLICIES
Distributor acknowledges the importance to Company of Distributor's sound
financial operation and Distributor expressly agrees that it will:
      A.    Maintain and employ in connection with Distributor's business and
            operations under this Agreement such working capital and net worth
            as may be required to enable Distributor properly and fully to carry
            out and perform all of Distributor's duties, obligations and
            responsibilities under this Agreement; and
      B.    Pay promptly all amounts due Company in accordance with terms of
            sale extended by Company from time to time. In addition to any other
            right or remedy to which Company may be entitled, shipments may be
            suspended at Company's discretion in the event that Distributor
            fails to promptly and faithfully discharge each and every obligation
            in this Section.

13. USE OF COMPANY'S NAME
Distributor will not use, authorize or permit the use of; the name "HiEnergy
Technologies, Inc." or any other trademark or trade name owned by Company (such
as AtometryTM, AtometerTM, SIEGMATM, CARBOMB FINDERTM, STARRAYTM) as part of its
firm, corporate or business name in any way. Distributor shall not contest the
right of Company to exclusive use of any trademark or trade name used or claimed
by Company. Distributor may, subject to Company's policies regarding
reproduction of same, utilize Company's name, trademarks or logos in advertising
on stationery and business cards, without written permission.

14. RELATIONSHIP OF THE PARTIES
The relationship between Company and Distributor is that of vendor and vendee.
Distributor, its agents and employees shall, under no circumstances, be deemed
employees, agents or representatives of Company. Distributor will not modify any
of Company's Products without written permission from Company. Neither
Distributor nor Company shall have any right to enter into any contract or
commitment in the name of, or on behalf of the other, or to bind the other in
any respect whatsoever.

<PAGE>

15. TERM AND TERMINATION
Unless earlier terminated as provided below, the term of this Agreement shall
commence October 24, 2006 and shall continue for one (1) year. Thereafter, the
Company and Distributor shall review the status of this Agreement and determine
whether to extend the term. If at such time, there is no discernable revenue or
any forecasting of revenues, the relationship may be terminated with at least
(30) days prior notice.

Distributor may terminate this Agreement at any time with at least ninety (90)
days prior notice. In the event of termination by the Distributor, the
Distributor agrees not to distribute any competing product or technology for two
years.

Company may terminate this Agreement upon notice to Distributor, upon any of the
following events:
      A.    failure of Distributor to fulfill or perform any one of the duties,
            obligations or responsibilities of Distributor in this Agreement,
            which failure is not cured with ten (10) days notice from Company;
      B.    any assignment or attempted assignment by Distributor of any
            interest in this agreement or delegation of Distributor's
            obligations without Company's written consent;
      C.    any sale, transfer or relinquishment, voluntary or involuntary, by
            operation of law or otherwise, of any material interest in the
            direct or indirect ownership or any change in the management of
            Distributor;
      D.    failure of Distributor for any reason to function in the ordinary
            course of business;
      E.    conviction in a court of competent jurisdiction of Distributor, or a
            manager, partner, principal officer or major stockholder of
            Distributor for any violation of law tending, in Company's opinion,
            to affect adversely the operation or business of Distributor or the
            good name, goodwill, or reputation of Company, products of Company,
            or Distributor; or
      F.    submission by Distributor to Company of false or fraudulent reports
            or statements, including, without limitation, claims for any refund,
            credit, rebate, incentive, allowance, discount, reimbursement or
            other payment by Company. Upon termination by the Company and
            successful completion of Section 15, Obligations on Termination,
            Distributor is free to distribute any product line, even competing
            products and technologies.

16. OBLIGATIONS ON TERMINATION

On termination of this Agreement, Distributor shall cease to be an authorized
distributor of Company and:
      A.    All amounts owing by Distributor to Company shall, notwithstanding
            prior terms of sale, become immediately due and payable;
      B.    All unshipped orders shall be cancelled without liability of either
            party to the other;

<PAGE>

      C.    Distributor will resell and deliver to Company on demand, free and
            clear of liens and encumbrances, such of Company's Products and
            materials bearing Company's name as Company shall elect to
            repurchase, at a mutually agreed price, but not in excess of
            Company's current price to distributors for such products and
            materials, provided that Company shall not be obligated to pay
            Distributor for any item originally provided free of charge; and
      D.    Neither party shall be liable to the other because of such
            termination for compensation, reimbursement or damages on account of
            the loss of prospective profits or anticipated sales, or on account
            of expenditures, investments, lease or commitments in connection
            with the business or goodwill of Company or Distributor or for any
            other reason whatsoever growing out of such termination.
      E.    On termination of this Agreement, Distributor will remove and not
            thereafter use any sign containing any trade name, logo or trademark
            of Company including, but not limited to, "HiEnergy Technologies,
            Inc.", and will immediately destroy all stationery, advertising
            matter and other printed matter in its possession or under its
            control containing such name, or any of Company's trademarks, trade
            names or logos. Distributor will not at any time after such
            termination use or permit any such trademark, trade name or logo to
            be used in any manner in connection with any business conducted by
            it or in which it may have an interest, or otherwise whatsoever as
            descriptive of or referring to anything other than merchandise or
            products of Company. Regardless of the cause of termination,
            Distributor will immediately take all appropriate steps to remove
            and cancel its listings in telephone books, and other directories,
            and public records, or elsewhere that contain the Company's name,
            logo or trademark.

17. ACKNOWLEDGMENTS
Each party acknowledges that no representation or statement, and no
understanding or prior agreement, has been made, or exists, and that in entering
into this Agreement each party has not relied on anything done or said or on any
presumption in fact or in law,
                  (1)   with respect to this Agreement, or to the duration,
                        termination or renewal of this Agreement, or with
                        respect to the relationship between the parties, other
                        than as expressly set forth in this Agreement; or
                  (2)   that in any way tends to change or modify the terms, or
                        any of them, of this Agreement or to prevent this
                        Agreement becoming effective; or that
                  (3)   in any way affects or relates to the subject matter
                        hereof. Distributor also acknowledges that the terms and
                        conditions of this Agreement are reasonable and fair and
                        equitable.

18. FINAL AGREEMENT
This Agreement terminates and supersedes all prior understandings or agreements
on the subject matter hereof. This Agreement may be modified only by a further
writing that is duly executed by both parties.

<PAGE>

19. ASSIGNMENT
Neither this Agreement nor any interest in this Agreement may be assigned by
Distributor without the prior express written approval of Company, which may be
withheld by Company at Company's absolute discretion.

20. NO IMPLIED WAIVERS
Except as expressly provided in this Agreement, waiver by either party, or
failure by either party to claim a default, of any provision of this Agreement
shall not be a waiver of any default or subsequent default.

21. NOTICES
Any notice required by this Agreement or given in connection with it, shall be
in writing and shall be given to the appropriate party by personal delivery or
by certified mail, postage prepaid, or recognized overnight delivery services.

If to Company:
HiEnergy Technologies, Inc.
1601 Alton Parkway, Unit B
Irvine, California 92606

If to Distributor:
Bartlett Nuclear, Inc.
60 Industrial Park Road
Plymouth, Massachusetts 02360
Attn: William Nevelos, President

22. COMPLIANCE WITH LAWS
Both parties and their duly authorized representatives shall comply, at their
own expense, with all applicable federal, state, and local laws, statues,
ordinances, administrative or executive orders, regulations, and rules. As may
be required by law, both parties agree to submit all reports, certifications,
and other documents and shall provide all product information related to the
handling of the products purchased under this Agreement.

Distributor agrees to comply fully with all relevant export laws and regulations
of the United States ("Export Laws") to assure that the product is not (1)
exported, directly or indirectly, in violation of Export Laws; or (2) intended
to be used for any purposes prohibited by the Export Laws.

23. FORCE MAJEURE
Neither party shall be liable for failing to fulfill its obligations due to
causes beyond its reasonable control and without its fault or gross negligence.
Examples of such causes include but are not limited to (1) acts of God or of the
public enemy, (2) acts of the Government in either of its sovereign or
contractual capacities, (3) fires, (4) floods, (5) epidemics, (6) quarantine
restrictions, (7) strikes, (8) freight embargoes, and (9) unusually severe
weather. Each party must use reasonably best efforts to notify the other party
of conditions that are expected to result in a delay in or failure of
performance ("Force Majeure Conditions") within five (5) working days of the
occurrence. If a Force Majeure Condition, which limits, delays or prevents the
Company from performing its obligations under this Agreement, Distributor may
elect to: (1) terminate an Order without any cost or penalty or (2) suspend an
Order for the duration of the Force Majeure Condition.

<PAGE>

24. SEVERABILITY
If any term of this Agreement is held by a court of competent jurisdiction to be
invalid or unenforceable, then this Agreement, including all of the remaining
terms, will remain in full force and effect as if such invalid or unenforceable
term had never been included.

25. HEADINGS
Headings used in this Agreement are provided for convenience only and shall not
be used to construe meaning or intent.

26. GOVERNING LAW
This Agreement shall be construed and enforced in accordance with the laws of
the State of California, USA.

27. DISPUTES
Any dispute not disposed of within one-hundred twenty (120) days from the date
either party receives written notification from the other party of the dispute,
regardless of the causes of action alleged, will be resolved by arbitration in
the State of California, before a single arbitrator who is knowledgeable in
diagnostic equipment and technologies. Such arbitration will be conducted
pursuant to the then current Commercial Arbitration Rules of the American
Arbitration Association The Arbitrator shall be bound to follow the applicable
subcontract provisions and the laws of the State of California and the federal
substantive and procedural law of arbitration in adjudicating the dispute. Both
Parties, may appeal the Arbitrator's decision and may take any action, judicial
or administrative, to appeal and overturn this decision. The arbitrator shall
not have the power to award punitive or exemplary damages. Each Party will bear
its own attorneys' fees and costs related to the arbitration. Any claim or
action must be brought within two (2) years after the cause of such action.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

Bartlett Nuclear, Inc                     HiEnergy Technologies, Inc.

By: /s/ William Nevelos                   By: /s/ Roger Spillmann
   ----------------------------              -----------------------------
         President & CEO                           President & CEO

Date: November 3, 2006                    Date: November 3, 2006Manufacturing
      and Supply Agreement

     

    This
      Manufacturing and Supply Agreement (“Agreement”)
      is
      entered into as of this 6th
      day of
      November, 2006 (“Effective
      Date”)
      by and
      between Phantom Entertainment, Inc., a Delaware corporation having a place
      of
      business at 800 Fifth Avenue, Suite 4100, Seattle, Washington 98104, United
      States of America (“Purchaser”),
      Itron
      Technology Inc., a Taiwanese corporation having its principal place of business
      at 9F, No.75, Sec.1, Hsin Tai Wu Road, Hsih Chi city, Taipei Hsien 221, Taiwan
      (“Manufacturer”).
      

     

    Recitals

     

    Whereas,
      the
      Manufacturer and Purchaser are parties to a Product Development and
      Manufacturing Agreement entered into on April 17, 2006; and 

     

    Whereas,
      the
      parties desire to enter into a non-exclusive agreement whereby Manufacturer
      will
      manufacture the Products defined in Exhibit A and related parts according to
      industry standard manufacturing practices (defined below) and Product
      Specifications provided by Purchaser, in quantities ordered by Purchaser and
      solely for sale to Purchaser; and 

     

    Whereas,
      Purchaser desires to purchase the Products and related parts from Manufacturer
      in such quantities;

     

    Now,
      Therefore,
      in
      consideration of the foregoing and of the mutual promises contained herein,
      the
      receipt and sufficiency of which is hereby acknowledged, the parties agree
      as
      follows:

     

    Agreement

     

    	1  	
            Definitions

          

     

    	1.1 
             	
            “Agreement”
              shall have the meaning set forth in the first paragraph set forth above
              and shall include each Exhibit.

          

     

    	1.2
              	
            “Approved
              Vendor List”
              shall have the meaning set forth in Section 3.3.

          

     

    	1.3
              	
            “Components”
              shall mean any part or assemblies used for manufacturing, processing
              and
              packaging the Product (as defined below) pursuant to the Specifications
              (as defined below).

          

     

    	1.4
              	
            “Confidential
              Information”
              shall mean any and all information and materials disclosed by one party
              (“Discloser”)
              to the other party (“Recipient”)
              (whether in writing or in oral, graphic, electronic or any other form)
              that are marked or described as, identified in writing as, or provided
              under circumstances indicating that such information and materials
              are
              confidential or proprietary. The Confidential Information of Purchaser
              includes, without limitation, all Technical Information (as defined
              below)
              and all information and materials provided by Purchaser relating to
              Purchaser’s customers. 

          

     

    	1.5 
             	
            “Delivery
              Date”
              shall mean the date specified in a Purchase Order (as defined below)
              on
              which Manufacturer is required to deliver a specific quantity of the
              Product to the delivery place designated on such Purchase
              Order.

          

     

    	1.6 
             	
            “Effective
              Date”
              is the calendar date upon which Purchaser and Manufacturer agree to
              enter
              the Agreement as evidenced by their respective approval signatures.
              This
              date is set forth in the first paragraph set forth above.
              

          

     

    	1.7 
             	
            “Environmental
              Claim”
              shall mean, with respect to any person or entity, any notice; claim;
              administrative, regulatory or judicial action, suit, judgment or demand;
              or other written communication applicable to the Project (as defined
              below) by any other person or entity (including, without limitation,
              any
              government authority) alleging or asserting such person’s or entity’s
              liability for investigatory costs, cleanup costs, governmental response
              costs, damages to natural resources or other property of such person
              or
              entity, personal injuries or death, losses, fines or penalties arising
              out
              of, based on or resulting from (a) the presence, Use (as defined
              below), Release (as defined below) or threatened Release into the
              environment of any Hazardous Material (as defined below) at any location,
              whether or not owned by such person or entity, or (b) any fact,
              circumstance, condition or occurrence forming the basis of any violation
              or alleged violation of any Environmental Law (as defined below).
              

          

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    	1.8
              	
            “Environmental
              Laws”
              shall mean any and all Laws (as defined below) applicable to the Project
              relating to the indoor or outdoor environment, or to the health or
              safety
              of natural persons affected by the environment, or to the Release or
              threatened Release of Hazardous Materials into the indoor or outdoor
              environment, including, without limitation, ambient air, soil, surface
              water, groundwater, sea water, wetlands, land or subsurface strata,
              or
              otherwise relating to the Use of Hazardous Materials, whether now or
              hereafter in effect. 

          

     

    	1.9 
             	
            “Hazardous
              Material”
              shall mean any of the following: any chemicals, materials, substances
              or
              wastes that are now or hereafter become (a) defined or listed as, or
              included in the definition of, “hazardous substances,” “hazardous wastes,”
              “hazardous materials,” “extremely hazardous wastes,” “restricted hazardous
              wastes,” “toxic substances,” “toxic pollutants,” “contaminants,”
              “pollutants” or terms of similar import under any Environmental Law, and
              (b) prohibited, limited or regulated under any Environmental Law.
              

          

     

    	1.10  	
            “Initial
              Term”
              shall have the meaning set forth in Section 8.1.

          

     

    	1.11  	
            “Inventory”
              shall mean the collection of all Components which have been purchased
              by
              Manufacturer for the purpose of manufacturing Products. Inventory shall
              also mean finished Products in the Manufacturers’
              possession.

          

     

    	1.12  	
            “Laws”
              shall mean any statute, law, regulation, ordinance, rule, judgment,
              order,
              decree, permit, concession, grant, franchise, license, agreement,
              directive, guideline, policy or rule of common law, or any governmental
              requirement or other governmental restriction or similar form of decision
              or determination, or any interpretation or administration of any of
              the
              foregoing by any national, state or local government (or any association,
              organization or institution of which any of the foregoing is a member,
              or
              to whose jurisdiction any thereof is subject, or in whose activities
              any
              thereof is a participant), whether now or hereafter in
              effect.

          

     

    	1.13  	
            “Manufacturer
              Facility”
              shall mean the Manufacturer manufacturing facility located at Sec.
              B,
              Hopewell Industrial City, Sima, Changping Town, Dongguan City, Guangdong
              Province, Post code: 523570, P.R.C.

          

     

    	1.14  	
            “Manufacturer”
              shall have the meaning set forth in the first paragraph set forth
              above.

          

     

    	1.15  	
            “Product
              Price”
              shall mean the price per each Product at which Manufacturer shall sell
              the
              Product to Purchaser.

          

     

    	1.16  	
            “Product”
              shall mean the Products and related parts as described more fully on
              Exhibit A
              attached hereto meeting the
              Specifications.

          

     

    	1.17  	
            “Project”
              shall mean the work conducted and services provided by Manufacturer
              pursuant to this Agreement.

          

     

    	1.18  	
            “Proprietary
              Rights” shall have the meaning set forth in Section 2.4.3

          

     

    	1.19  	
            “Purchase
              Order”
              shall have the meaning set forth in Section 3.1

          

     

    	1.20  	
            “Purchaser”
              shall have the meaning set forth in the first paragraph set forth
              above.

          

     

    	1.21  	
            “Release”
              shall mean, with respect to any Hazardous Material, any release, spill,
              emission, emanation, leaking, pumping, injection, deposit, disposal,
              discharge, dispersal, leaching or migration of such Hazardous Material
              into the indoor or outdoor environment, including, without limitation,
              the
              movement of such Hazardous Material through ambient air, soil, surface
              water, groundwater, sea water, wetlands, land or subsurface strata.
              

          

     

    	1.22  	
            “Specifications”
              shall mean the industry
              standard Specifications and Purchaser Specifications listed in Exhibit
              C
              including but not limited to bill of materials, fabrication drawings,
              assembly drawings, assembly procedures, test procedures and inspection
              procedures.

          

     

    	1.23  	
            “Technical
              Information”
              shall mean all information, materials, knowledge, data, drawings and
              other
              Specifications involving or relating to the generation, manufacture
              and
              processing of the Product provided to Manufacturer by Purchaser pursuant
              to this Agreement, including, without limitation, the
              Specifications.

          

     

    	1.24  	
            “Unusable
              Inventory”
              shall have the meaning set forth in Section 3.6..

          

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    	1.25  	
            “Use”
              shall mean, with respect to any Hazardous Material and with respect
              to any
              person or entity, the generation, manufacture, processing, distribution,
              handling, use, treatment, recycling, storage or disposal of such Hazardous
              Material or transportation to or from the property controlled by such
              person or entity of such Hazardous Material.

          

     

    	1.26  	
            “Work
              Product” shall have the meaning set forth in Section 2.4.2 

          

     

    	2  	
            Technology
              Transfer and Ownership

          

     

    	2.1  	
            License
              Grant.
              Subject to the terms and conditions of this Agreement, Purchaser hereby
              grants to Manufacturer for the term of this Agreement a non-exclusive,
              non-transferable, non-sublicensable license for Manufacturer to use
              the
              Technical Information solely to manufacture the Product, solely at
              the
              Manufacturer Facility and solely for sale to Purchaser. 

          

     

    	2.2  	
            Restrictions
              and Reservation of Rights.
              Manufacturer agrees not to use the Technical Information or make or
              sell
              the Product except as expressly permitted in Section 2.1.
              All intellectual property rights in and to the Product and the Technical
              Information are and shall at all times be owned by Purchaser, subject
              only
              to the license rights expressly granted to Manufacturer in
              Section 2.1.
              Any and all rights not expressly granted to Manufacturer herein are
              reserved by Purchaser.

          

     

    	2.3  	
            Information
              Exchange.
              Purchaser shall provide to Manufacturer such Technical Information
              as it
              determines in its sole discretion is advisable to facilitate
              Manufacturer’s completion of the Project. At Manufacturer’s request,
              Purchaser shall answer reasonable questions with respect to the Technical
              Information. All Technical Information shall constitute the Confidential
              Information of Purchaser. At Purchaser’s request, Manufacturer shall
              provide to Purchaser all information and materials reasonably requested
              by
              Purchaser with respect to the Project and cooperate with Purchaser
              in
              obtaining such information and materials, including, without limitation,
              any information necessary or useful to allow Purchaser to verify that
              deliveries of the Product conform to the
              Specifications.

          

     

    	2.4  	
            Manufacturer
              shall assign to Purchaser all right, title and interest related to
              unique
              aspects of manufacturing, assembly and test of specified Products.
              

          

     

    2.4.1  To
      the
      extent, if any, Manufacturer retains any right, title or interest in and to
      any
      Work Product, as defined in Section 2.4.2, Manufacturer (a) unconditionally
      and irrevocably waives the enforcement of such rights, and all claims and causes
      of action of any kind against Purchaser with respect to such rights;
      (b) agrees, at Purchaser’s request and expense, to consent to and join in
      any action to enforce such rights; and (c) hereby grants to Purchaser a
      perpetual, irrevocable, fully paid-up, royalty-free, transferable,
      sub-licensable (through multiple levels of sub-licensees),
      exclusive, worldwide
      right and license to use, reproduce, distribute, display and perform (whether
      publicly or otherwise), prepare derivative works of and otherwise modify, make,
      sell, offer to sell, import and otherwise use and exploit (and have others
      exercise such rights on behalf of Purchaser) all or any portion of such Work
      Product, in any form or media (now known or later developed). The foregoing
      license includes, without limitation, the right to make any modifications to
      such Work Product regardless of the effect of such modifications on the
      integrity of such Work Product, and to identify Manufacturer, or not to identify
      Manufacturer, as one or more authors of or contributors to such Work Product
      or
      any portion thereof, whether or not such Work Product or any portion thereof
      have been modified. Manufacturer further irrevocably waives any “moral
      rights”
or
      other rights with respect to attribution of authorship or integrity of such
      Work
      Product that Purchaser may have under any applicable law under any legal theory.
      Manufacturer hereby waives and quitclaims to Purchaser any and all claims,
      of
      any nature whatsoever, which Purchaser now or may hereafter have for
      infringement of any Work Product or proprietary rights assigned and/or licensed
      hereunder to Purchaser. Manufacturer covenants that it will not directly or
      indirectly promote, sell or deliver any visibly or functionally similar product
      to the Products 

     

    2.4.2  As
      used
      in this Agreement, the term “Work
      Product”
shall
      include, without limitation, all engineering specifications, discoveries, ideas,
      inventions, concepts, developments, know-how, trade secrets, works of
      authorship, materials, software (source and object code), HTML, writings,
      drawings, designs, processes, techniques, formulas, data, specifications,
      technology, patent applications (and contributions thereto), and other creations
      (and any related improvements or modifications to the foregoing or to any
      Confidential Information of Purchaser), whether or not patentable, relating
      to
      any activities of Purchaser that are created or otherwise developed by
      Manufacturer (alone or with others). 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    2.4.3  Manufacturer
      agrees to disclose promptly in writing to Purchaser all Work Product. ,
      Manufacturer further agrees that any and all Work Product created or developed
      by Manufacturer pursuant to this Agreement shall be the sole and exclusive
      property and Confidential Information of Purchaser. Manufacturer hereby
      irrevocably assigns and agrees to assign to Purchaser all right, title and
      interest worldwide in and to the Work Product, including, without limitation,
      all copyrights, trademarks, trade secrets, patents, industrial rights and all
      other intellectual and proprietary rights related thereto (the “Proprietary
      Rights”),
      effective immediately upon the inception, conception, creation or development
      thereof. The Proprietary Rights shall include, without limitation, all rights,
      whether existing now or in the future, whether statutory or common law, in
      any
      jurisdiction in the world, related to the Work Product, together with all
      national, foreign and state registrations, applications for registration and
      all
      renewals and extensions thereof (including, without limitation, any
      continuations, continuations-in-part, divisional, reissues, substitutions and
      reexaminations); all goodwill associated therewith; and all benefits,
      privileges, causes of action and remedies relating to any of the foregoing,
      whether before or hereafter accrued (including, without limitation, the
      exclusive rights to apply for and maintain all such registrations, renewals
      and
      extensions; to sue for all past, present and future infringements or other
      violations of any rights relating thereto; and to settle and retain proceeds
      from any such actions). Except as may be set forth in the applicable exhibits,
      as amended, or otherwise agreed in writing by the parties, Manufacturer retains
      no rights to use the Work Product and agrees not to challenge the validity
      of
      Purchaser’s ownership in the Work Product.

     

    

    	3  	
            Ordering,
              Processing and Packaging

          

     

    	3.1 
             	
            Orders.
              To purchase Product hereunder, Purchaser shall issue Purchase Orders
              which
              shall specify the Purchase Order number, Product part number, quantity
              of
              Product ordered, Product Price, method of shipment, FOB point, and
              Delivery Date(s). Purchaser shall place each Purchase Order with
              Manufacturer at least sixty (60) days in advance of the Delivery
              Date.
              Manufacturer will acknowledge in writing (i) receipt of Purchaser’s
              Purchase Order, (ii) confirmation of the Delivery Date and (iii)
              confirmation that all information specified on the Purchase Order is
              accepted by the Manufacturer. This written notice conveys the
              Manufacturers ability, intent and commitment to deliver all Products
              specified on the Purchase Order within the parameters specified therein.
              

          

     

    	3.2 
             	
            Components.
              Manufacturer shall procure and supply, using standard purchasing
              practices, all materials necessary to manufacture, process, pack and
              deliver the Product according to the Specifications. Manufacturer
              agrees to inspect Components prior to use in Products manufactured
              for
              Purchaser. Manufacturer will utilize industry standard practices to
              perform inspection of Components.

          

     

    	3.3 
             	
            Approved
              Vendor List.
              Manufacturer will provide Purchaser with a list of all Components used
              in
              the Product and the names of the approved sources where these Components
              will be purchased (Approved Vendor List). Purchaser will provide
              Manufacturer written approval of the Approved Vendor List. Thereafter
              any
              changes, additions or deletions to the sources identified on this list
              must be approved by Purchaser. Purchaser will also identify in writing
              those Components which don’t require source approval by the Purchaser.
              Manufacturer will maintain the Approved Vendor List throughout the
              life of
              the Agreement and make the most current version available to Purchaser
              at
              all times.

          

     

    	3.4
              	
            Packaging.
              Product supplied by Manufacturer shall be delivered in packaging in
              accordance with the Specifications. 

          

     

    	3.5
              	
            Engineering
              Changes.
              Purchaser may at any time request, in writing, that Manufacturer
              incorporate engineering changes into the Product. Such requests shall
              include a description of the proposed engineering change sufficient
              to
              permit Manufacturer to evaluate its feasibility and cost. Manufacturer’s
              evaluation shall be delivered to Purchaser in writing and shall state
              the
              increase or decrease in Manufacturer’s actual costs, if any, expected to
              result from such engineering change and the amount of time, if any,
              required to implement such engineering change. Manufacturer shall not
              proceed with the engineering change unless and until it receives prior
              written instructions to do so from Purchaser, in which case the Product
              Price shall be adjusted in the amount of such increase or decrease
              in
              Manufacturer’s costs (including, without limitation, the cost of Unusable
              Inventory due to such engineering change, as calculated in accordance
              with
              Section 3.6)),
              the delivery schedule for the Product shall be amended to reflect such
              additional implementation time and the Specifications for the Product
              shall be amended to reflect the engineering change. Manufacturer shall
              not
              refuse to implement any engineering change requested by Purchaser unless
              Manufacturer reasonably determines that such engineering change is
              technically unworkable. 

          

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    	3.6 
             	
            Rescheduling
              and Cancellations.
              Purchaser
              may cancel or reschedule Products ordered on a Purchase Order using
              the
              guidelines detailed in Exhibit B. To the extent that any unused Inventory
              procured by Manufacturer prior to the cancelled Purchase Order or portion
              thereof cannot be used by Manufacturer in the manufacture, testing
              or
              assembly of other products for Purchaser or any of Manufacturer’s other
              customers products (“Unusable
              Inventory”),
              Manufacturer shall use its best efforts to (a) cancel any pending
              orders for such Unusable Inventory, and (b) return any such Unusable
              Inventory in Manufacturer’s possession to the applicable suppliers or (c)
              redirect this Unsable Inventory to other products which utilize the
              same
              Components. If Manufacturer is unable to return any Unusable Inventory
              in
              its possession to the applicable suppliers or redirect to another product,
              Manufacturer shall notify Purchaser of such Unusable Inventory and,
              at
              Purchaser’s instruction, Manufacturer shall either deliver such Unusable
              Inventory to Purchaser or use its best efforts to resell such Unusable
              Inventory. After such efforts have been completed, Purchaser shall
              pay
              Manufacturer for Products and Unusable Inventory affected by the
              cancellation as follows: (i) one hundred percent (100%) of the contract
              price for all finished Products in Manufacturer’s possession that are
              delivered to Purchaser and accepted by Purchaser in accordance with
              the
              testing and inspection procedures set forth in Section 5, (ii) one
              hundred
              percent (100%) of the cost of Unusable Inventory delivered to Purchaser,
              (iii) one hundred percent (100%) of the difference between the cost
              of all
              Unusable Inventory that was resold by Manufacturer at less than cost
              and
              the proceeds from such resale, (iv) one hundred percent (100%) of the
              difference between the cost of all Unusable Inventory that could not
              be
              resold by Manufacturer and the salvage value thereof, and (v) one hundred
              percent (100%) of any vendor cancellation charges incurred with respect
              to
              the Unusable Inventory accepted for cancellation or return by the vendor.
              Notwithstanding any of the foregoing, Manufacturer shall use all
              reasonable commercial efforts to mitigate the amounts payable by Purchaser
              under this Section in connection with any cancellations. 

          

     

    	4  	
            Shipment
              and Inspection

          

     

    	4.1
              	
            Shipping
              and Delivery.
              Manufacturer shall notify Purchaser at the time of shipment as to the
              quantity of Product shipped and the specific shipping information.
              Shipping quantities may not vary from those established by the Purchase
              Order unless otherwise mutually agreed upon in writing by the parties.
              Manufacturer shall ship the Product to the delivery address(es) set
              forth
              in the applicable Purchase Order. Purchaser may, from time to time,
              instruct Manufacturer to deliver all or a portion of Product ordered
              pursuant to a Purchase Order to non-Purchaser locations, this is covered
              under “Rescheduling” and “Insurance” sections. Manufacturer shall deliver
              the Product by the applicable Delivery Date, provided that Manufacturer
              may not deliver the Product more than five (5) calendar days prior
              to the
              Delivery Date without prior written consent of Purchaser. In the event
              that Manufacturer ships Product more than five (5) calendar prior to
              Delivery Date specified on the Purchase Order, Manufacturer will reduce
              the purchase price of all units shipped by three (3) percent unless
              the
              Purchaser authorizes the early shipment in writing. In the event that
              Manufacturer ships Product more than ten (10) days after the Delivery
              Date
              specified on the Purchase Order, Manufacturer will reduce the purchase
              price of all affected Product by three (3) percent. For each subsequent
              week of delay Manufacturer will reduce the purchase price of all affected
              Product by an additional three (3) percent unless the Purchaser authorizes
              the late shipment in writing. These price reductions will only be required
              in the event that early or late shipments are caused by the Manufacturer.
              The percentage of price reduction resulted from Manufacturer’s late
              shipment is limited to 10% of purchase price. The specific cause of
              any
              early or late delivery will be solely determined by the
              Purchaser.

          

     

    	4.2
              	
            Title
              and Risk of Loss.
              Manufacturer shall deliver the Product to the Purchasers designated
              carrier. at the mutually agreed upon FOB location. Title to and risk
              of
              loss of the Product shall pass from Manufacturer to Purchaser only
              upon
              Manufacturer’s delivery of the Product to the designated carrier for
              shipment.

          

     

    	4.3
              	
            Inspection.
              During
              normal business hours, upon reasonable notice to Manufacturer, Purchaser
              shall have the right, but not the obligation, to (a) inspect the work
              conducted and services provided by Manufacturer under this Agreement;
              (b) inspect and test, at Purchaser’s own expense, the Manufacturer
              Facility and any vehicles, containers or other equipment used in such
              work
              or services, including, without limitation, any areas where Components
              or
              Product are stored, handled, packaged, or manufactured; and
              (c) inspect and obtain copies of licenses, authorizations, approvals
              or written communications from any governmental entity or agency
              applicable or related to such work or
              services.

          

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    	4.4
              	
            Source
              Inspection.
              Manufacturer shall give Purchaser written notice of and reasonable
              access
              to completed Product batches so that Purchaser may perform source
              inspections of such Product batches prior to shipment by Manufacturer.
              Such source inspection shall be conducted by Purchaser within ten (10)
              days of receipt of Manufacturer’s notice of completion of such Product
              batches. If Product is found to be defective in material or workmanship,
              or if Product does not conform to the Specifications, Purchaser has
              the
              right to reject such Product. Purchaser waives right to Source Inspection
              if not completed within the allocated period for source inspection.
              Rejected Product shall be replaced with conforming Product. Purchaser
              shall have the right to perform source inspections of such replacement
              Product prior to shipment by
              Manufacturer.

          

     

    	4.5
              	
            Inspection
              Upon Delivery.
              Upon receipt of any Product delivery, Purchaser shall have fifteen
              (15)
              days to inspect and test such Product. If the Product is found to be
              defective in material or workmanship, or if the Product does not conform
              to the Specifications, Purchaser has the right to reject such Product
              during such -fifteen (15) day period. Product not rejected during such
              period shall be deemed accepted. Rejected Product shall be replaced
              with
              conforming Product within ten (10) days after Purchaser’s notice of
              rejection. Purchaser shall have the right to inspect and test such
              replacement Product within fifteen (15) days of
              delivery.

          

     

    	5  	
            Price
              and Payment

          

     

    	5.1
              	
            Price.
              The Product Price shall include all costs including, but not limited
              to,
              the cost of materials, labor, overhead and profit. The cost of materials,
              labor and overhead shall be passed through directly to the Purchaser
              without any additional charge. The Manufacturer shall provide detailed
              breakdown of all costs. The Manufacturers only profit will be specified
              as
              such. Manufacturer
              will review materials costs with Purchaser quarterly and all incremental
              or decremental costs will be reflected in Product Price. Overhead,
              labor
              and profit costs will be reviewed on six (6) month intervals and
              incremental or decremental costs will also be reflected in Product
              Price.
              Manufacturer agrees to reasonably pursue Product cost reductions through
              material sourcing, process enhancements, labor and overhead reductions,
              and engineering changes.

          

     

    	5.2  	
            Payment
              Terms.
              Unless otherwise provided, Purchaser shall provide Manufactuer with
              a
              secured Letter of Credit (LOC) for each Purchase Order submitted, on
              terms
              approved by Manufacturer , for the Purchase Order amount for the benefit
              of Manufacturer. This LOC must be executed within five (5) days of
              Purchase Order confirmation from the Manufacturer. The LOC requires
              the
              Manufacturer to deliver the Product in new condition to the FOB point
              designated on the Purchase Order. The Manufacturer shall invoice Purchaser
              for all amounts due and such invoices shall reference the Purchase
              Order
              number and be sent to the “Bill to” address specified on the Purchase
              Order. Manufacturer’s packing list must reference the Purchase Order
              number and be sent to the applicable “Ship to” address on the Purchase
              Order. Manufacturer will provide Purchaser a copy of the Bill of Lading
              issued at the FOB point.

          

     

    	5.3  	
            Secured
              Inventory.
              Subsequent to Purchase Orders for the Pilot and the first order, Purchaser
              agrees to provide Manufacturer with a deposit to secure raw materials
              used
              in production of Products. The amount of this deposit will be negotiated
              and agreed upon by both Purchaser and Manufacturer. The Manufacturer
              will
              hold the deposit as security for goods purchased to support Purchasers
              current and future Purchase Orders. Manufacturer will provide Purchaser
              with a receipt of the initial deposit and a quarterly accounting of
              deposit funds. Manufacturer may use deposit funds to reimburse materials
              costs incurred due to Purchasers failure to fulfill Purchase Order
              requirements as specified in this Agreement. Manufacturer agrees to
              return
              all deposits which are unused upon written demand from Purchaser or
              at the
              termination of this Agreement.

          

     

    	5.4  	
            Taxes.
              All applicable taxes, including, without limitation, sales or use taxes,
              transaction privilege taxes, gross receipts taxes and other charges
              such
              as duties, customs, tariffs, imposts and government-imposed surcharges
              shall be stated separately on Manufacturer’s invoice. Manufacturer shall
              remit all such charges to the appropriate tax authority unless Purchaser
              provides sufficient proof of tax exemption. When property is delivered
              and/or services are provided or the benefit of services occurs within
              jurisdictions in which Manufacturer’s collection and remittance of taxes
              is required by Law, Manufacturer shall have sole responsibility for
              payment of such taxes to the appropriate tax authorities. In the event
              Manufacturer does not collect tax from Purchaser, and is subsequently
              audited by any tax authority, liability of Purchaser shall be limited
              to
              the tax assessment, with no reimbursement for penalty or interest charges.
              Each party is responsible for its own respective income taxes or taxes
              based upon gross revenues, including, without limitation, business
              and
              occupation taxes.

          

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    	6  	
            Representations,
              Warranties and Additional
              Covenants

          

     

    	6.1
              	
            Manufacturer
              shall provide copies of all Specifications and data related to
              Manufacturing including but not limited to bill of materials, approved
              vendor lists, test procedures, and assembly procedures. Manufacturer
              will
              provide semi-monthly (twice per month) periodic product quality reports
              describing Product defects and associated corrective actions. Manufacturer
              shall maintain a Manufacturing Configuration Record of all Products
              delivered to Purchaser. 

          

     

    	6.2 
             	
            Products
              and Services.
              Manufacturer represents, warrants and covenants that: (a) the
              services performed and Products furnished hereunder shall meet the
              quality, operating conditions and performance requirements described
              in
              the Specifications and any applicable Purchase Order; (b) any
              services furnished hereunder shall be performed in a professional and
              competent manner; (c) the Products, including the Components, are
              merchantable, shall be free from defects in workmanship and material,
              and
              shall be new, fit and sufficient for the particular purpose of Purchaser
              and Purchaser’s customers if known to Manufacturer; and
              (d) Manufacturer has good and marketable title to the Products to be
              furnished hereunder and there are no liens, claims or encumbrances
              of any
              kind whatsoever against the same. The warranties herein contained are
              not
              to be deemed exclusive, and Purchaser shall be entitled to all other
              warranties and remedies available to it at Law or in
              equity.

          

     

    	6.3
              	
            Manufacturer
              further represents and warrants all Products delivered to Purchaser
              for a
              period of 15 months from the date the carrier for shipment receives
              shipment of Product from the Manufacturer. This warranty covers Product
              failures caused by Components and/or processes utilized by the
              Manufacturer in the production of Products. Components and processes
              utilized by the Manufacturer includes but is not limited to; the complete
              Component and subassembly supply chain, all internal and external
              manufacturing processes, all existing and new Components, and all existing
              and new suppliers.

          

     

    	6.4
              	
            Manufacturer
              further represents and warrants that all Products comply with the
              regulatory requirements specified in the Exhibit C. These regulatory
              requirements include but are not limited to radio frequency immunity,
              radio frequency emissions, safety and
              environmental.

          

     

    

    	6.5 
             	
            Manufacturer
              further represents and warrants he will maintain a list of Product
              serial
              numbers and the associated ship date. This data will be accessible
              to the
              Purchaser at all times. New Product shipments will be added to the
              list
              within seven (7) days of shipment from the Manufacturer. Purchaser
              will
              use this data to determine warranty status of all returned
              Products.

          

     

    	6.6 
             	
            Manufacturer
              further represents and warrants to take all reasonable actions to assist
              Purchaser in determining root cause and remedy of common failure modes
              found in returned Products.

          

     

    	6.7 
             	
            Manufacturer
              agrees to compensate Purchaser for Product warranty failures as defined
              in
              section 6.3.
              Purchaser will report failures to Manufacturer on a monthly basis.
              Manufacturer will refund the purchase price of each failing unit to
              the
              Purchaser within thirty (30) days of confirmation of such failure by
              Manufacturer.. 

          

     

    	6.8 
             	
            Section
              6
              does not extend a warranty by Manufacturer for failures caused by end-user
              neglect or misuse nor does it apply to damage from shipping and handling
              after ownership of the Product has transferred to the Purchaser. Purchaser
              will solely determine the cause of all Product
              failures.

          

     

    

    	6.9 
             	
            Compliance
              with Law Generally.
              Manufacturer represents, warrants and covenants that (a) Manufacturer
              shall comply with all Laws applicable to its performance pursuant to
              this
              Agreement, including, without limitation, the Project and the provision
              of
              Products hereunder; (b) all Products comply with the regulatory
              requirements specified in the Exhibit C and the these regulatory
              requirements include but are not limited to radio frequency immunity,
              radio frequency emissions, safety and environmental, and (c) Manufacturer
              shall at all times perform any work required under this Agreement safely
              and in a manner which shall present no threat of bodily injury or property
              damage, and shall enforce compliance with the highest standards of
              safety
              and accident prevention found in applicable
              Laws.

          

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    	6.10 
              	
            Environmental
              Compliance. 

          

     

    	6.10.1  	
            Compliance
              with Environmental Laws.
              Manufacturer shall ensure that the Project complies with all applicable
              Environmental Laws. Manufacturer shall obtain and maintain all licenses,
              authorizations, certifications and approvals required under any applicable
              Environmental Law in connection with the
              Project.

          

     

    	6.10.2  	
            Investigation
              of Hazardous Materials.
              Manufacturer shall not permit the Release of any Hazardous Material
              into
              the environment and, in the event of any such Release, shall promptly
              perform any investigation, study, sampling, testing, cleanup, removal
              and
              remedial or other action necessary to remove and clean up any such
              Hazardous Materials in accordance with the requirements of all applicable
              Environmental Laws.

          

     

    	6.10.3  	
            Environmental
              Reports.
              Manufacturer shall advise Purchaser of any hazard or toxic substance
              which
              is present in or may be encountered by Purchaser and its agents and
              employees in using or possessing the articles or materials furnished
              hereunder, and Manufacturer shall use its best efforts to minimize
              the
              hazard or toxicity thereof. Subject to confidentiality or similar
              non-disclosure requirements, Manufacturer shall promptly provide to
              Purchaser, upon request, copies of all environmental reports or surveys
              received or developed by Manufacturer pertaining to Manufacturer’s
              compliance with applicable Environmental Laws as such Environmental
              Laws
              apply to the Project.

          

     

    	6.10.4  	
            Environmental
              Notices.
              Manufacturer shall deliver the following notices to Purchaser:
              (i) promptly upon obtaining knowledge of (x) any fact,
              circumstance, condition or occurrence that could form the basis of
              an
              Environmental Claim arising with respect to the Project against the
              Project or any party or (y) any pending or threatened Environmental
              Claim arising with respect to the Project against the Project or any
              party, a notice thereof describing the same in reasonable detail and,
              together with such notice or as soon thereafter as possible, a description
              of the action that such person or entity has taken or proposes to take
              with respect thereto and, thereafter, from time to time such detailed
              reports with respect thereto as Purchaser may reasonably request; and
              (ii) promptly upon their becoming available, copies of all written
              communications with any government authority relating to any Environmental
              Law or Environmental Claim arising out of the
              Project.

          

     

    	7
              	
            Indemnification

          

     

    Manufacturer
      agrees to indemnify, defend and hold harmless Purchaser, its affiliates,
      customers, employees, successors and assigns (all referred to in this
      Section 77
      as
“Purchaser”) from and against any losses, liabilities, costs, damages, claims,
      fines, penalties and expenses (including, without limitation, costs of defense
      or settlement and reasonable attorneys’, consultants’ and experts’ fees) that
      arise out of or result from: (a) injuries or death to persons or damage to
      property, including theft, in any way arising out of or caused or alleged to
      have been caused by the work or services performed by, or Product provided
      by,
      Manufacturer; (b) assertions under Workers’ Compensation or similar acts
      made by persons furnished by Manufacturer; (c) any breach of any
      representation or warranty by Manufacturer or failure of Manufacturer to perform
      its obligations under this Agreement; (d) violation of any Law, including,
      without limitation, any Environmental Law, in any way arising out of or caused
      or alleged to have been caused by Manufacturer’s work or services under this
      Agreement or by the Product provided by Manufacturer; (e) any actual or
      alleged Environmental Claim, or any contamination, damage or adverse effect
      on
      the environment or natural resources (including, without limitation, the cost
      of
      any investigation or remediation related thereto) in any way arising out of
      or
      caused or alleged to have been caused by Manufacturer’s work or services under
      this Agreement or by any Product provided by Manufacturer; or (f) a claim that
      the Work Product infringes any third party rights. 

     

    	8
              	
            Term
              and Termination

          

     

    	8.1  
             	
            Term.
              The term of this Agreement shall commence on the Effective Date and
              shall
              continue for one (1) year thereafter (“Initial
              Term”)
              unless earlier terminated as provided in Section 8.2.
              After expiration of the Initial Term, this Agreement shall be
              automatically renewed for successive one (1) year terms unless either
              party provides notice of non-renewal at least ninety (90) days prior
              to
              the end of the Initial Term or any renewal
              term.

          

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    	8.2 
              	
            Termination.
              Either party may terminate this Agreement in the event that (a) the
              other party breaches any material provision of this Agreement and such
              breach continues for a period of thirty (30) calendar days following
              the
              receipt by the defaulting party of notice of such breach, or (b) the
              other party becomes insolvent, is adjudicated bankrupt, voluntarily
              or
              involuntarily files a petition for bankruptcy, makes an assignment
              for the
              benefit of creditors, seeks any other similar relief under any bankruptcy
              Law or related statues or otherwise becomes financially incapable of
              performing its obligations in accordance with the terms of this Agreement,
              and such judgment, assignment or incapacity is not revoked within sixty
              (60) calendar days. 

          

     

    	8.3 
              	
            Effect
              of Termination.
              Any
              provisions of this Agreement, which are intended, by their specific
              terms
              or by necessary implication, to survive the expiration or termination
              of
              this Agreement shall so survive. 

          

     

    	9
              	
            Confidentiality

          

     

    	9.1 
              	
            Restrictions
              on Disclosure and use of Confidential Information.
              Recipient shall not use the Confidential Information of Discloser except
              for the purpose of performing its obligations and exercising its rights
              under this Agreement. Recipient shall maintain the Confidential
              Information of Discloser with at least the same degree of care it uses
              to
              protect its own proprietary information of a similar nature or
              sensitivity, but no less than reasonable care under the circumstances.
              Unless Discloser grants specific, written, advance permission to do
              so,
              Recipient shall not disclose any Confidential Information to any third
              party except as provided for in Section 9.29.2.
              Recipient shall limit access to the Confidential Information of Discloser
              to those employees of Recipient who have a need to know such information
              in order to perform its obligations and exercise its rights under this
              Agreement and who are bound by confidentiality and non-use obligations
              to
              Recipient at least equivalent to Recipient’s obligations to Discloser
              under this Agreement. Should Recipient determine that it needs to disclose
              Confidential Information of Discloser to any non-employee (including
              consultants and contractors) in order to perform its obligations or
              exercise its rights under this Agreement, Recipient shall not do so
              without the prior written permission of Discloser. Upon receiving such
              permission, Recipient may proceed, but only after binding any such
              non-employee to confidentiality and non-use obligations to Recipient
              at
              least equivalent to Recipient’s obligations to Discloser under this
              Agreement. Recipient shall be responsible to Discloser for the acts
              and
              omissions of any such non-employee with respect to such confidentiality
              and non-use obligations.

          

     

    	9.2 
              	
            Exceptions.
              The
              foregoing restrictions shall not apply with respect to Confidential
              Information to the extent such information or materials can be shown
              to
              have been: (a) available to the public prior to the date of
              Discloser’s disclosure to Recipient or to have become available to the
              public thereafter without any unauthorized act or omission by Recipient;
              (b) rightfully in Recipient’s possession prior to the date of
              Discloser’s disclosure to Recipient and not otherwise restricted as to
              disclosure; or (c) disclosed to Recipient without restriction by a
              third party who had a right to disclose and was not otherwise under
              an
              obligation of confidence. Information or materials shall not be deemed
              to
              be “available to the public” or to be “in Recipient’s possession” merely
              if such information or materials can be reconstructed, combined or
              pieced
              together from multiple sources that are available to the public or
              Recipient if no one of those sources actually leads one to the entire
              combination, together with its meaning and importance. Further, Recipient
              may disclose Confidential Information of Discloser to the extent required
              by Law or order of a court of competent jurisdiction, provided that,
              in
              such event, Recipient shall provide Discloser prompt, advance notice
              of
              such requirement to allow intervention (and shall cooperate with
              Discloser) to contest or minimize the scope of the disclosure (including
              through application for a protective
              order).

          

     

    	9.3 
              	
            Return
              of Confidential Information.
              Upon any expiration or termination of this Agreement or upon the request
              of Discloser, Recipient shall return or destroy, at Discloser’s option,
              all Confidential Information of Discloser and any copies thereof. In
              addition, Recipient shall promptly destroy any electronic or otherwise
              non-returnable embodiments of the Confidential
              Information.

          

     

    	10  	
            Limitations
              on Liability

          

     

    EXCEPT
      FOR ANY BREACH OF SECTION 9
      (“CONFIDENTIALITY”) OR SECTION 6.10(“ENVIRONMENTAL
      COMPLIANCE”), AND EXCEPT FOR ANY OBLIGATIONS UNDER SECTION 7
      (“INDEMNIFICATION”), IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL,
      INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY KIND, OR FOR ANY LOSS
      OF
      PROFITS, LOSS OF REVENUE, LOSS RESULTING FROM INTERRUPTION OF BUSINESS OR LOSS
      OF USE OR DATA, WHETHER OR NOT ADVISED OF THE POSSIBILITY OF SUCH
      LOSS.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    	11  	
            Miscellaneous

          

     

    	11.1
              	
            Remedies.
              The parties agree that any breach of Section 9
              shall cause irreparable harm and significant injury to the non-breaching
              party which may be difficult to ascertain. Accordingly, the parties
              agree
              that each party shall have the right, in addition to any other remedies
              available to it, to obtain an immediate injunction, without necessity
              of
              posting a bond, enjoining any breach by the other party of
              Section 9.
              Notwithstanding anything in this Agreement to the contrary, Purchaser
              shall be entitled under this Agreement to all of the rights and remedies
              available to a contracting party under the Uniform Commercial
              Code.

          

     

    	11.2
              	
            Insurance.
              Manufacturer shall maintain in effect at all times the following
              insurance: (a) Comprehensive General Liability Insurance (including
              Owned and Non-Owned Automobile, Contractor’s Protective, Contractual and
              Completed Operation coverage) with policy limits of at least $100,000
              per
              person, $100,000 per occurrence for Bodily Injury Liability, and $100,000
              per occurrence for Property Damage Liability and (b) any other insurance
              necessary ensure the full replacement cost for any loss of the Product
              prior to delivery to Purchaser . Such Comprehensive General Liability
              Insurance shall remain in force for the term of the Agreement and
              Manufacturer shall furnish a Certificate of Insurance prior to the
              commencement of the work naming Purchaser as an additional insured
              thereunder. Certificates of Insurance evidencing such coverage shall
              provide that Purchaser shall be given ten (10) days written notice
              before
              cancellation or reduction of any of the insurance coverage. Certificates
              should be mailed to Purchaser at the address set forth on the first
              page
              of this Agreement. .

          

     

    

    	11.3
              	
            US
              Dollars.
              All references to pricing, including, but not limited to Product Pricing,
              are reflected in US Dollars and no other currency.
              

          

     

    	11.4
              	
            Subcontractors.
              If subcontractors are employed, Manufacturer shall be fully responsible
              for their acts and omissions and the acts and omissions of their
              employees. There shall be no contractual relationship between any
              subcontractor and Purchaser. Manufacturer shall indemnify, defend and
              hold
              harmless Purchaser from and against any and all liability for payment
              of
              Manufacturer’s subcontractors and suppliers, including without limitation,
              mechanic’s liens.

          

     

    	11.5
              	
            Assignment.
              Manufacturer shall not assign, sell, transfer, delegate or otherwise
              dispose of, whether voluntarily or involuntarily, by operation of Law
              or
              otherwise, any rights or obligations under this Agreement without the
              prior written consent of Purchaser. Except as provided herein, any
              purported assignment, transfer or delegation by Manufacturer shall
              be null
              and void. Subject to the foregoing, this Agreement shall be binding
              upon
              and shall inure to the benefit of the parties and their respective
              successors and permitted assigns.

          

     

    	11.6
              	
            Governing
              Law.
              This Agreement shall be governed by and construed pursuant to the Laws
              of
              the State of California, without regard to conflict of Laws provisions
              thereof. Venue of any action arising out of this Agreement shall be
              had in
              the state or federal courts in San Francisco, California, and each
              party
              hereto irrevocably submits to the exclusive jurisdiction and venue
              of any
              such court in any such suit, action or
              proceeding.

          

     

    	11.7
              	
            Non-Waiver.
              Failure by either party to insist upon strict performance of any of
              the
              terms and conditions hereof, or delay in exercising any rights or remedies
              provided herein, shall not release the other party from any of the
              obligations of this Agreement and shall not be deemed a waiver of any
              rights of such other party to insist upon strict performance
              thereof.

          

     

    	11.8
              	
            Attorney’s
              Fees.
              In the event either party brings legal action to enforce any provision
              herein, the prevailing party shall be entitled to collect from the
              losing
              party reasonable attorneys’ fees and costs
              incurred.

          

     

    	11.9
              	
            Entire
              Agreement and Modification.
              No agreement or understanding in any way modifying these terms and
              conditions, either before or after the execution hereof, shall be binding
              upon either party unless in writing and signed by both parties. This
              Agreement, together with any Specifications, Exhibits and documents
              attached hereto and incorporated by reference, constitutes the entire
              agreement between the parties as to the manufacturing of the Products.
              In
              the event of any conflict between the terms and conditions of this
              Agreement and those of any Purchase Order or any other document, the
              terms
              and conditions of this Agreement shall control; in the event of any
              conflict between the terms and conditions of any Purchase Order and
              any
              other document, the terms and conditions of the Purchase Order shall
              control.

          

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    	11.10  	
            Status
              of the Parties.
              Manufacturer hereby represents and warrants that Manufacturer is engaged
              in an independent business and shall perform its obligations under
              this
              Agreement as an independent contractor and not as an agent or employee
              of
              or a joint venturer with Purchaser; that the persons performing the
              services hereunder are not agents or employees of Purchaser; that
              Manufacturer has and hereby retains, except as set forth herein, the
              right
              to exercise full control with respect to the means of its performance
              hereunder and full control over the employment, direction, compensation
              and discharge of all employees, agents and subcontractors assisting
              in
              such performance; that Manufacturer shall be solely responsible for
              all
              matters relating to payment of such employees, including compliance
              with
              worker’s compensation, unemployment and disability insurance, social
              security withholding, and all such matters; and that Manufacturer shall
              be
              responsible for the acts of Manufacturer and the acts of all agents,
              employees and contractors employed by Manufacturer during Manufacturer’s
              performance under this Agreement.

          

     

    	11.11  	
            Severability.
              If any one or more of the provisions contained in this Agreement shall,
              for any reason, be held to be invalid, illegal or unenforceable in
              any
              respect, such invalidity, illegality or unenforceability shall not
              affect
              any other provision hereof, and this Agreement shall be construed as
              if
              such invalid, illegal or unenforceable provision had never been contained
              herein.

          

     

    	11.12  	
            Notice.
              All notices required hereunder shall be in writing and shall be sent
              by
              (a)  internationally recognized courier service (e.g., DHL, Federal
              Express), with all postage or delivery charges prepaid, or
              (b) facsimile, subject to email confirmation , and shall be addressed
              to the parties at their addresses set forth in the first paragraph
              of this
              Agreement or to such other address(es) as may be furnished by written
              notice in the manner set forth herein.

          

     

    	11.13  	
            Headings.
              The headings of the Sections in this Agreement are for convenience
              only
              and shall not be deemed to affect, qualify, simplify, add to or subtract
              from the contents of the clauses which they
              reference.

          

     

    	11.14  	
            Language.
              The
              parties agree that this Agreement shall be executed in English, which
              shall be the official language for all questions and interpretations
              hereunder.

          

     

    	11.15  	
            Counterparts.
              This
              Agreement may be executed in counterparts, by manual or facsimile
              signature, each of which shall be deemed to be an original and both
              together shall be deemed to be one and the same agreement.
              

          

     

    In
      Witness Whereof,
      the
      parties hereto have caused this Agreement to be duly executed by their
      authorized representative as of the Effective Date.

    

    
      	
              Phantom
                Entertainment, Inc.

            	 	
              Itron
                Technology Inc.

            
	 	 	 
	 	 	 
	 	 	 
	
              By:
                /s/ Gregory
                Koler                          
                

            	 	
              By:
                /s/ Charles
                Chen                               
                

            
	 	 	 
	 	 	 
	
              Name:
                Gregory
                Koler                          
                

            	 	
              Name:
                Charles
                Chen                               
                

            
	 	 	 
	
              Title:
                Chief Executive
                Officer             

            	 	
              Title:
                Chief Executive
                Officer

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