Document:

EXHIBIT 10.21
                                                                   -------------

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY
FILED HEREWITH OMITS THE INFORMATION SUBJECT TO THE CONFIDENTIALITY REQUEST.
OMISSIONS ARE DESIGNATED AS *. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED
SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION.

                              DEVELOPMENT AGREEMENT
                                     BETWEEN
                                   ENIKIA LLC
                                       AND
                         LEVITON MANUFACTURING CO. INC.

This Agreement, by and between ENIKIA LLC, a Delaware limited liability company
("Enikia"), with a place of business at 948 US Highway 22, North Plainfield, NJ
07062, and LEVITON MANUFACTURING CO., INC. ("Leviton"), a Delaware corporation
with a place of business at 59-25 Little Neck Parkway, Little Neck, NY
11362-2591, shall have an effective date of (Effective Date).

WHEREAS, Enikia has experience in the design and manufacture of power line
carrier chip sets and power line carrier applications in commercial sites; and

WHEREAS, Leviton has experience in the design, manufacture, marketing and
selling of devices and systems, which interface to the power line, for the
purpose of data, voice, video transmission and automation; and

WHEREAS, the Parties believe that there are business development opportunities
for power line carrier devices and systems, for retrofitting of Residential,
MDU/MTU and Light Commercial sites, with products incorporating technology and
products from both Enikia and Leviton; and

WHEREAS, the Parties desire to work together to develop such products.

THEREFORE, the Parties hereby enter into this Agreement.

1.   DEFINITIONS

     1.1  "Party/Parties" shall mean Enikia and/or Leviton.

     1.2  *

     1.3  "NDA" shall mean the Non-Disclosure Agreement dated 8 November 2002
          between Enikia and Leviton.

     1.4  "Enikia Product(s)" shall mean semiconductor chips, chip sets(s) and
          designs, including related firmware and software, for incorporation in
          electrical and/or, electronic devices and/or PLC Products developed by
          Enikia apart from those developed under this Agreement.

     1.5  *

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     1.6  "Project" shall mean the effort to be undertaken by the Parties hereto
          pursuant to this Agreement for the development and incorporation of
          Enikia Special Products into Joint PLC Products as described in
          SCHEDULE A.

2    DEVELOPMENT PLANS, RESPONSIBILITIES. PROJECT MANAGEMENT

     2.1  *

     2.2  *

     2.3  *

     2.4  It is the intention of the Parties to expand the number of Projects
          being pursued in the future as opportunities are identified by either
          Party.

     2.5  Enikia and Leviton shall cooperate with one another on Projects to
          determine the responsibilities and cost allocations of each Party.

     2.6  *

3    PATENTS AND INVENTIONS

     3.1  Each of the Parties hereby represents to the other that it has, or
          will have, prior to commencement of the Project, valid and sufficient
          arrangements and agreements with its respective employees and/or
          nonemployee consultants, such that the ownership of any and all
          inventions pertaining to any Joint PLC Products made by an employee
          and/or consultant vests in the Party hereto employing said employee
          and/or consultant, subject to the provisions of the applicable law
          governing ownership of such inventions.

     3.2  Each of the Parties agrees to reasonably enforce its respective
          intellectual property rights against infringement of same by third
          parties with regard to inventions, copyrightable material, or
          proprietary information for products covered under the scope of this
          Agreement.

     3.3  All inventions, copyrightable material, and proprietary information
          made or developed jointly by employees of Enikia and Leviton in
          performance under this Agreement, including, without limitation the
          Joint PLC Products, shall be jointly owned by Enikia and Leviton; each
          Party has the right to exploit and grant licenses in respect to such
          inventions, copyrightable material or proprietary information and any
          patents and copyrights arising there from, with the written consent of
          the other Party. In the event of a joint invention, the Parties shall
          mutually agree which Party shall have the responsibility for preparing
          and filing any patent application(s) on the invention in the United
          States and foreign countries; and the Parties agree that each will
          bear one-half of the actual out-of-pocket expenses associated with
          obtaining and maintaining such patents. In the event one Party (a
          "non-electing Party") elects not to file application for or maintain
          patent protection for any joint invention in any particular country or
          not to share equally in the expenses thereof with the other Party,
          then the other Party (the "electing Party") shall have the right to
          apply for and maintain such patent protection in such country at its
          own expense (the non-electing Party undertaking to execute all such
          documents as may be necessary) and shall have full control over the
          prosecution and maintenance thereof, whereupon the non-electing

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          Party shall assign its patent rights to the electing Party. An
          irrevocable royalty-free, non-exclusive, personal license to said
          PATENT rights shall then be granted by the electing Party to the
          non-electing Party. Should neither Party elect to file application for
          letters patent or take other necessary legal steps to protect such
          invention, the invention shall remain jointly owned.

4    INDEPENDENT DEVELOPMENT

     Nothing in the Agreement shall prevent either Party from continuing its
     independent development, manufacture and sale of its own technologies,
     including technology and products that are the subject matter of this
     Agreement nor require the same to become subject thereto, provided, that
     nothing herein shall be construed as a grant by either Party to the other
     Party of any rights in or licenses to the such Party's own technology in
     connection with such independent research and development efforts.

5    DILIGENCE

     The Parties agree to use their own customary commercially reasonable
     efforts throughout the life of this Agreement to achieve any milestones or
     commitments mutually agreed upon between the Parties.

6    CONFIDENTIAL INFORMATION

     The terms and conditions of the NDA shall govern the exchange of
     proprietary information under this Agreement and are incorporated herein by
     reference.

7    TERM AND TERMINATION

     This Agreement shall commence on the Effective Date and shall continue for
     a period of twelve (12) months thereafter ("the initial term"); provided,
     however, that either party may terminate this Agreement prior to the
     expiration of the initial term upon (60) days written notice to the other
     if the party exercising such earlier right has a reasonable business basis
     for such termination. After the expiration of the initial term, either
     party may terminate this Agreement for any reason, with or without cause,
     upon (60) days written notice to the other. Irrespective of when
     termination occurs, all rights accruing prior to termination, namely
     intellectual property rights, shall survive termination.

8    GENERAL

     8.1  The laws of the State of New York shall, without regard to its
          conflicts of laws, govern the construction and interpretation of this
          Agreement and all disputes between the Parties.

     8.2  Except with respect to a the transfer or sale of the entire business
          of a Party hereto with respect to which this Agreement pertains,
          neither Party may assign, pledge, hypothecate or in any manner
          transfer, convey, alienate or encumber any right or interest in this
          Agreement, without the written permission of the other Party, which
          permission shall not be unreasonably withheld, and any such
          non-permitted, purported assignment, pledge, hypothecation, transfer,
          conveyance, alienation, or encumbrance shall be void.

     8.3  Any notice, request or statement hereunder shall be deemed to be
          sufficiently given or rendered upon the date mailed when sent by
          registered mail, postage prepaid, and if given or rendered to Enikia
          addressed to:

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<PAGE>

                              Enikia LLC
                              948 US Highway 22
                              North Plainfield, NJ 07062
                              ATTN: Oleg Logvinov

                   or, if given or rendered to Leviton, addressed to:

                              Leviton Manufacturing Co. Inc.
                              *

     8.4  Neither Party shall disclose to any third party the terms of this
          Agreement without the prior consent of the other, which consent will
          not be unreasonably withheld. Any press release or other similar
          announcement relating to this Agreement requires approval by both
          Parties.

     8.5  This Agreement, along with its Schedules, is the entire Agreement
          between the Parties with respect to the subject matter hereof and
          supersedes all prior Agreements, understandings or representations
          between the Parties with respect to the subject matter hereof except
          for the Nondisclosure Agreement as referenced herein. No alteration,
          modification, interpretation or amendment of this Agreement shall be
          binding on the Parties unless in writing, designated as an amendment
          hereto and signed by an officer or other individual authorized in
          writing by each of the Parties to sign such documents.

     8.6  Neither Party in connection with the performance of this Agreement
          shall either directly or indirectly make, give or promise any payment
          or other thing of value to any person for any purpose, or commit any
          other act which is unlawful under the laws of the United States,
          including, but not limited to the Foreign Corrupt Practices Act, the
          Export Administration Act, the Sherman Antitrust Act, the Internal
          Revenue Code, and, to the extent not inconsistent with the laws of the
          United States, the laws of any other applicable jurisdiction.

     8.7  Each Party is independently responsible for the timely and proper
          performance of that part of the scope of work as is from time to time
          assigned to it by mutual agreement. Neither Party is, directly or
          indirectly, authorized expressly or by inference to hold itself out as
          the agent, servant or employee of the other or having any other status
          by which to bind the other contractually or otherwise to any third
          party.

     8.8  Neither Party makes any representation or commitment under this
          Agreement to develop any future or proposed products other than the
          PLC Product. Nothing in this Agreement shall be construed as limiting
          or restricting, in any way, the right of either Party to conduct its
          existing and future business independently of the other Party.

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IN WITNESS WHEREOF, both Parties have caused this Agreement to be duly executed
effective as of the Effective Date stated above.

LEVITON MANUFACTURING CO.,                    ENIKIA, LLC

By:      /s/ Daryoush Larizadeh               By:     /s/ Oleg Logvinov
         ------------------------------               --------------------------

Name:    Daryoush Larizadeh                   Name:   Oleg Logvinov
         ------------------------------               --------------------------

Title:   VP of Strategic Business             Title:  President
         ------------------------------               --------------------------

Date:    7/21/04                              Date:   7/18/03
         ------------------------------               --------------------------

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                                   Schedule A

None.

                                        6EXHIBIT 10.23
                                                                   -------------

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY
FILED HEREWITH OMITS THE INFORMATION SUBJECT TO THE CONFIDENTIALITY REQUEST.
OMISSIONS ARE DESIGNATED AS *. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED
SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION.

                           SILICON PRODUCT DEVELOPMENT
                           ---------------------------
                                       AND
                                       ---
                       PRODUCTION COLLABORATION AGREEMENT
                       ----------------------------------

Silicon Product Development and Production Collaboration Agreement (this
"Agreement"), dated as of July 28, 2004 (the "Effective Date"), is by and
between GDA Technologies, Inc., a California corporation having principal place
of business at 1010 Rincon Circle, San Jose, CA , 95131 ("GDA"), and Arkados,
Inc., a Delaware Corporation having its principal place of business at 948 US
Highway 22, North Plainfield, NJ 07060 ("Arkados"). GDA and Arkados are referred
to individually hereinafter as a "Party" and collectively as the "Parties".

                                    RECITALS
                                    --------

     WHEREAS, Arkados has created and markets a power line based technology that
permits data transmission over active "in-building" power networks and also
developed technology for data transmission over powerline distribution networks;

     WHEREAS, Arkados has designed a semiconductor component for in-building
power networks and owns certain technology related thereto and GDA possesses
know-how relating to the development, fabrication, and testing of semiconductor
products;

     WHEREAS, GDA and Arkados desire to collaborate in the production of a
semiconductor component product for in-building power networks that will be sold
by Arkados in the open market;

     WHEREAS, the parties will explore future cooperation related to other
semiconductor products of Arkados. The Parties may enter into one or more
separate agreements with respect to such future cooperation if they see fit for
their business.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the above recitals and the mutual
promises and covenants contained herein, the Parties hereby agree as follows:

ARTICLE I. DEFINITIONS

     For purposes of this Agreement, the terms defined in this Article shall
have the meanings specified below:

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1.1       "AFFILIATE" shall mean any corporation or other entity, which
          controls, is controlled by, or is under common control with, a Party
          to this Agreement. A corporation or other entity shall be regarded as
          in control of another corporation or entity if it owns or directly or
          indirectly controls at least fifty-one (51) percent of the voting
          stock or other voting equity interest of the other corporation or
          entity.

1.2       "GDA SERVICES" shall mean the services to be provided by GDA pursuant
          to this Agreement and as outlined in Annex-A. Details of the GDA
          Services shall be as described in Task Orders to be entered into by
          the Parties. GDA shall perform the GDA Services in a professional
          manner using qualified personnel.

1.3       "BUSINESS DAY" shall mean all days other than Saturdays, Sundays, and
          other days on which United States banks are closed.

1.4       "DESIGN LICENSE" shall have the meaning set forth in Section 3.1.

1.5       "EFFECTIVE DATE" shall have the meaning set forth in the preamble this
          Agreement.

1.6       "FOUNDRY" shall mean a third party foundry selected by Arkados, in its
          discretion after consultation with GDA, to provide silicon foundry
          services with respect to the Product.

1.7       "INTELLECTUAL PROPERTY RIGHTS" shall mean any and all (i) Letters
          Patent and all pending applications for Letters Patent, including any
          reissue, reexamination, division, continuation, or
          continuation-in-part applications throughout the world; (ii) trade
          secret rights and equivalent rights arising under the common law,
          state law, federal law, and laws of foreign countries; (iii)
          copyrights, mask works, other literary property or authors rights,
          whether or not protected by copyright or as a mask work, under common
          law, state law, federal law, and laws of foreign countries; and (iv)
          proprietary indicia, trademarks, service marks, trade names, symbols,
          logos, and/or brand names under common law, state law, federal law,
          and laws of foreign countries.

1.8       "NECESSARY CLAIMS" shall mean those claims of all patents, other than
          design patents and design registrations, which are necessarily
          infringed by an implementation of standards based technologies
          incorporated into the Product which cannot be avoided by another
          commercially reasonable non-infringing implementation of such
          standards based technologies.

1.9       "PRELIMINARY SPECIFICATIONS" means the preliminary functional
          specifications for the Product that set forth in Annex-B.

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<PAGE>

1.10      "PRODUCT" shall mean the semiconductor component product that Arkados
          has code-named "PowerWave" and the specification of which conforms
          substantially to the Specification.

1.11      "PRODUCT TECHNOLOGY" shall mean any Intellectual Property Rights in
          and to any technology that is developed or improved by a Party in
          connection with the development activities relating to the Product
          that are carried out under this Agreement, Using Arkados' or Arkados'
          licensors intellectual property.

1.12      "PRODUCT-RELATED MATERIALS" shall mean drawings, documents,
          specifications, designs and other materials, whether in tangible or
          electronic form, that comprise or incorporate Product Technology.
          Except for PG-tape, mask set, CP testing program and FT testing
          program.

1.13      "PRODUCTION COST" shall mean the sum of the following: Foundry die
          cost, assembly and package cost, component test cost, and any
          royalties payable by Arkados directly or indirectly through GDA to any
          third party by reason of the incorporation of any IP blocks of such
          third party in the Product or otherwise by reason of the making or
          selling of the Product. Production Cost shall be denominated in US
          dollars. (Royalties related to licensing of Necessary Claims shall not
          be included in Production Cost. Production Cost shall be determined by
          Arkados within fifteen (15) days after the end of each fiscal
          quarter.)

1.14      "SIGNOFF" shall mean the iteration of data In and Physical Layout will
          be repeated until the results of netlist, timing and post simulation
          satisfies both Parties by signing a sign-off document

1.15      "SPECIFICATIONS" means the Preliminary Specifications, as modified
          from time to time by Arkados in its sole discretion.

1.16      "STEERING COMMITTEE" shall mean a committee consisting of
          representatives of each of Arkados and GDA that are designated from
          time to time by the respective Party. The Steering Committee will meet
          at least once a month pursuant to an agreed schedule. The members of
          the Steering Committee are specified in Annex D. The Parties agree
          that either party may change its designated representatives provided
          the other Party is notified in writing in advance and approves such
          change, such approval shall not to be unreasonably withheld or
          delayed. The Steering Committee shall act only by unanimous agreement
          of its members; provided that if the Steering Committee is deadlocked
          on any issue that the it is assigned responsibility under this
          Agreement to determine or resolve, the issue shall be determined or
          resolved by the Presidents of each of the Parties, who shall determine
          or resolve the issue by mutual agreement.

1.17      "THIRD PARTIES" shall mean any person or entity other than Arkados and
          GDA or their respective Affiliates.

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<PAGE>

1.18      "TASK ORDER" shall mean a separate addendum to this Agreement setting
          forth the specific GDA Services to be performed by GDA pursuant to
          this Agreement. Task Orders entered into by the parties shall: (i)
          refer expressly to this Agreement; (ii) designate the date as of which
          the provisions of the Task Order will be effective and, if applicable,
          the term or period of time during which GDA will perform services,
          provide resources or otherwise discharge its obligations as specified
          in the Task Order; (iii) describe the services to be performed,
          resources to be provided or obligations to be discharged by GDA
          pursuant to the Task Order and any applicable development milestones
          and acceptance requirements; (iv) describe the obligations of Arkados
          related to the Task Order, including any facilities, equipment,
          personnel and tasks or other support to be provided or performed by
          Arkados; and (v) specify any other terms and conditions appropriate to
          the services to be performed and the obligations of the Parties.

1.19      "GDA DELIVERABLES" shall mean materials resulted from performance of
          GDA services by GDA pursuant to this agreement and as outlined in
          Annex-A.

ARTICLE II.                GENERAL STRUCTURE OF RELATIONSHIP

2.1       ROLE OF ARKADOS. The Parties agree and acknowledge that, subject to
          the performance by GDA of the GDA Services, Arkados is responsible for
          completion of the design and development of the Product, including the
          design and development of (i) powerline MAC layer, Powerline PHY layer
          and related hardware blocks, which will be the core of the Product;
          (ii) overall Product architecture; and (iii) relevant firmware and
          software drivers for the Product. In connection with such design and
          development, Arkados shall be responsible for preparing the
          deliverables listed in Annex-A (marked as Arkados deliverables ARK-DE)
          hereto (the "Arkados Deliverables").

2.2       INTELLECTUAL PROPERTY OWNERSHIP. Arkados is and shall remain the sole
          owner of all Intellectual Property Rights associated with the Product
          and related technologies, including without limitation all Product
          Technology and Product-Related Materials and any derivative works
          based on any of the foregoing, subject to any grant by Arkados of the
          Design License pursuant to Section 3.1.

2.3       PERFORMANCE OF SERVICES BY GDA. GDA will provide to Arkados the GDA
          Services in accordance with the terms of Task Orders enter into by and
          between Arkados and GDA. GDA and Arkados agree to negotiate in good
          faith the terms of, and to use reasonable efforts to enter into, the
          initial Task Order providing for the performance by GDA of the GDA
          Services outlined in Annex-A hereto within 30days of the Effective
          Date. GDA shall perform the GDA Services in accordance with the terms
          of the relevant Task Order and will use its best efforts to comply
          with the project schedule set out in Annex-C, as it may be amended by
          mutual agreement in writing from time to time. If GDA determines that
          it is unable or unwilling to continue with the development of the
          Product pursuant to this Agreement (including by reason of cessation
          of business or the bankruptcy of

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<PAGE>

          GDA) GDA agrees to negotiate in good faith with Arkados the terms of
          mutually acceptable alternative arrangements for continuing with the
          development and manufacture of the Product, which would include
          providing Arkados with a license to use the GDA Deliverables and other
          information owned by GDA, data and information including business
          relationships needed to complete the development and production of the
          Product.

2.4       DELIVERY. GDA shall use commercially reasonable efforts to deliver GDA
          Deliverables specified in Annex A and Annex C for testing and/or
          acceptance. At each delivery, GDA shall memorialize such delivery in a
          signed delivery confirmation sheet that sets forth the nature and
          condition of the GDA Deliverables, the medium in which GDA
          Deliverables reside, and the date of the delivery. Arkados shall
          countersign such delivery confirmation sheet so as to indicate the
          receipt of the contents described therein.

2.5       TESTING AND ACCEPTANCE. Upon receipt of GDA Deliverables, Arkados
          shall immediately commence, and conclude as promptly as practical,
          acceptance testing of such deliverable items in accordance with
          acceptance criteria mutually agreeable to both parties. Upon
          completion of such acceptance testing, Arkados shall issue to GDA a
          notice of acceptance or a notice of rejection. In the event of
          rejection, Arkados shall give its reasons for rejection in reasonable
          detail, and GDA shall use its reasonable effort to correct the
          deficiency or nonconformity and redeliver the GDA Deliverables as
          promptly as practical. In the event Arkados has not delivered a notice
          of acceptance or a notice of rejection within 15 business days of
          receipt of GDA Deliverables, Arkados will be deemed to have accepted
          such GDA Deliverables.

2.4       MANUFACTURING OF PRODUCT. Arkados will be responsible for the
          manufacturing of the Product; provided, that GDA, acting on behalf of
          Arkados, will be responsible for (i) negotiating (subject to Arkados'
          approval) the terms of a foundry agreement with the Foundry under
          which the Product would be manufactured, including without limitation
          any pricing terms, (ii) monitoring and managing the Foundry's
          performance under the foundry agreement; and (iii) accepting,
          packaging and testing Product delivered by the Foundry.

2.5       BRANDING Product will be sold under the Arkados logo as a brand name
          or such other names as Arkados, in its sole discretion, shall select.
          The size and location of any placement of the Arkados logo on the
          Product or any packaging will be determined by Arkados.

ARTICLE III. LICENSE GRANT

3.1       Subject to the terms and conditions of this Agreement, Arkados hereby
          grants to GDA, a personal, nonexclusive, and nontransferable internal
          use license to use (the "Design License") Arkados' Intellectual
          Property Rights in and to the Product solely for the purpose of
          performing GDA Services and its obligations

                                        5
<PAGE>

          pursuant to this Agreement, including without limitation in connection
          with the design and development of Product Technology or
          Product-Related Materials. No right to sublicense is granted to GDA
          hereunder.

3.2       Arkados and its licensors retain sole and exclusive title to and
          ownership of the Intellectual Property Rights in and to the Product
          and the technologies incorporated therein and any derivative works
          based thereon, including all copies, whether made by Arkados or GDA
          and regardless of the form or media in or on which the original and
          copies may exist Arkados and its licensors retain sole and exclusive
          title to and ownership of any and all modifications and updates to or
          of such Intellectual Property Rights made by Arkados and its
          licensors. Arkados shall have sole and exclusive title to and
          ownership of the Product Technology, the Product-Related Materials.

3.3       Arkados, as the sole and exclusive owner of the Intellectual Property
          Rights in the Product, shall have full responsibility, in its sole
          discretion, for filing, prosecuting and maintaining of patents and/or
          other applications or registrations worldwide with respect to any
          patentable or registerable inventions associated with the Product.

3.4       Except as expressly provided in this Agreement, GDA shall not, and
          shall not permit any third party to, use, copy, modify, sublicense,
          distribute or otherwise transfer to any third party, the Intellectual
          Property Rights, the Product Technology or the Product-Related
          Materials or any other product or technology incorporating or
          utilizing any Intellectual Property Rights of Arkados.

3.5       GDA will promptly disclose to Arkados all inventions relating to or
          based upon Product Technology, Product-Related Materials and
          Intellectual Property Rights developed by GDA during the Term and will
          execute such assignment, and other documents reasonably requested by
          Arkados, to perfect and record Arkados' rights as set forth in
          paragraph 3.3 above.

ARTICLE IV. PAYMENTS

4.1       In consideration of the work performed under the paragraph 1 of the
          Initial Task Order (a) Arkados will pay GDA $* (*). Arkados will pay
          $* as advance at the start of the project and the remaining ($*)
          payments to be made in equal monthly installments of $* (*) for the
          first * months of the project. Parties further agree that above
          described payments could be made in a form of * if mutually agreed by
          the parties at the time when a specific payment is due. If no
          agreement is reached then payment will occur in cash. Should GDA fails
          to adhere to mutually agreed upon schedule Arkados has the right to
          stop payments and parties shall resolve the issue as provided for in
          2.3. If the project is terminated for any reason, all payments owed up
          to and including the termination date shall be due and payable in full
          immediately upon termination; and

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<PAGE>

          (b) CDKnet.Com, Inc., Arkados' corporate parent and a Delaware
          corporation, ("CDK") shall issue an aggregate of 150,000 shares of its
          common stock to GDA pursuant to a Restricted Stock Purchase Agreement.

4.2       In consideration of the work performed under the paragraph 2 of the
          Initial Task Order Arkados will pay GDA the fee that shall be
          calculated as ** GDA shall provide all necessary information to allow
          Arkados to determine Production Cost and Product quantities.

4.3       GDA will be solely responsible for payment to the Foundry and other
          Third Parties for the following: Foundry NRE, mask charges,
          engineering (sample) lot production fee, packaging NRE, testing NRE
          and other tooling related fees, but will be promptly reimbursed by
          Arkados upon written request of GDA. Such written request shall be
          accompanied with all necessary supporting information that would allow
          Arkados to confirm such costs. If re-spins of the Product are
          necessary, the responsibility for the cost of such re-spins shall be
          determined as provided in Section 4.4. GDA will need advance payment
          from Arkados for making such payments.

4.4       If a new production run is needed due to a logic design flaw or other
          defects for which Arkados is responsible, Arkados will be solely
          responsible for the incremental fees and costs associated with the new
          production run. If a new production run is needed due to problems,
          which relate to an aspect of the GDA Services for which GDA is
          responsible GDA will redo the required services free of charge to get
          to the new production but the incremental fees and costs associated
          with the new production run will be equally split between GDA and
          Arkados.

ARTICLE V.                 CONFIDENTIALITY

5.1       Nondisclosure Obligations. During the term of this Agreement and for a
          period of three (3) years thereafter, each Party shall maintain in
          confidence and use only for purposes of this Agreement any information
          supplied by the other Party (whether or not designated at the time of
          disclosure as "confidential" or the like) either in writing or
          verbally in connection with this Agreement, including information
          exchanged pursuant to the Mutual Confidentiality Agreement. For
          purpose of this Article V, such information and data that has been so
          supplied by a Party shall be referred to herein as "Information."
          Notwithstanding the foregoing, to the extent it is reasonably
          necessary or appropriate to fulfill its obligations under this
          Agreement, a Party may disclose Information to its Affiliates,
          consultants, and outside contractors, strictly on a need-to-know
          basis, on the condition that such entities or persons shall have
          agreed in writing to keep the Information confidential for the same
          time periods and to the same extent as such Party is required to keep
          the Information confidential; and a Party may disclose such
          Information to government or other regulatory authorities to the
          extent that such disclosure is reasonably necessary to obtain patents
          or authorizations to conduct

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<PAGE>

          trials with and to commercially market the Product or if such
          disclosure is required by applicable law or order of the court. The
          obligation not to disclose Information shall not apply to any part of
          such Information that (i) is or becomes patented, published, or
          otherwise part of the public domain other than by acts of the Party
          obligated not to disclose such Information or its Affiliates or sub
          licensees in contravention of this Agreement; or (ii) is disclosed to
          the receiving Party or its Affiliates by a Third Party, unless such
          Information was obtained by such Third Party directly or indirectly
          from the other Party to this Agreement on a confidential basis; or
          (iii) prior to disclosure under this Agreement, was already in the
          possession of the receiving Party or its Affiliates, unless such
          Information was obtained directly or indirectly from the other Party
          to this Agreement on a confidential basis.

5.2       Terms of This Agreement. Arkados and GDA each agrees not to disclose
          any terms or conditions of this Agreement to any Third Party without
          the prior written consent of the other Party hereto, except as
          required by applicable laws or except to such Party's existing or
          prospective investors, lenders or possible acquirers or merger
          partners that are bound by appropriate confidentiality undertakings.

5.4       Press Releases and Public Disclosure. No Party shall make a press
          release or public disclosure related to the Project, without first
          obtaining the written consent of the other Party, which consent may
          not be unreasonably withheld.

ARTICLE VI INTENTIONALLY OMITTED.

ARTICLE VII. TERM AND TERMINATION

7.1       EFFECTIVE DATE. This Agreement shall become effective as of the
          Effective Date.

7.2       EXPIRATION. This Agreement shall expire at the end of five (5) years
          from the Effective Date unless earlier terminated as provided herein.

7.3       TERMINATION FOR CAUSE. Either Party may terminate this Agreement upon
          the occurrence of any of the following:

          (a)  upon or after the bankruptcy, insolvency, dissolution, or winding
               up of the other Party; or

          (b)  upon or after the breach of any material provision of this
               Agreement by the other Party if the breaching Party has not
               commenced to cure such breach within thirty (30) days after
               written notice thereof by the other Party and thereafter
               proceeded diligently to cure such breach within a reasonable
               time. In no event shall such reasonable time to cure such breach
               exceed ninety (90) days from the date of such notice.

                                        8
<PAGE>

7.4       CHANGE OF CONTROL. A Party (the "Non-changing Party") may terminate
          this Agreement upon written notice to the other Party (the "Changing
          Party") if a change of control relating to a competitor occurs with
          respect to the Changing Party. For the purposes hereof, (i) a "change
          of Control relating to a competitor" shall mean (A) the Changing Party
          merges with or into a competitor of the Non-changing Party (whether or
          not the Changing Party is the surviving entity following such merger)
          and as a result of such merger the holders of the Changing Party's
          voting securities prior to the merger do not hold a Controlling
          interest of the surviving entity from such merger; (B) the Changing
          Party becomes a subsidiary of a competitor of the Non-changing Party
          or (C) a competitor of the Non-changing Party acquires all or
          substantially all of the Changing Party's assets; (ii) "Control" means
          ownership of securities possessing more than 51 percent of the total
          combined voting power of all classes of securities entitled to vote
          and at least 51 percent of the total number of securities of all other
          classes of securities; and (iii) "competitor" means any entity that
          the Non-changing Party reasonably determines at the relevant time to
          be a competitor or any entity controlling, controlled by or under
          common control with such competitor.

7.5       TERMINATION WITHOUT CAUSE

          7.5.1 Arkados may terminate this agreement as follows:

               a)   Termination during the period covered by the Paragraph 1 of
                    the Scope Of Work. During this period Arkados may terminate
                    this agreement with the 60 days notice. No fees other than
                    as described in 4.1 shall be due as of the Termination Date.

               b)   Termination upon the completion of the work covered by the
                    Paragraph 1 of the Scope Of Work. If Arkados decides not to
                    proceed with the manufacturing of the Product no fees other
                    than as described in 4.1 shall be due as of the Termination
                    Date.

               c)   Termination during the phase described by paragraph 2 of the
                    Scope Of Work.

                    a.   If Arkados decides to continue the manufacturing of the
                         Product without GDA, Arkados shall pay GDA $* less the
                         amount already paid that was due to GDA under 4.2 of
                         this agreement.

                    b.   If Arkados decides to stop the manufacturing of the
                         Product no fees other than as described in 4.1 and the
                         amount due to GDA under 4.2 shall be due as of the
                         Termination Date.

          7.5.2 GDA may terminate agreement as follows, GDA shall provide
                Arkados with 60 days written notice.

7.6       EFFECT OF TERMINATION; SURVIVAL. Expiration or termination of this
          Agreement shall not relieve the Parties of any obligation accruing
          prior to such expiration or termination. Upon termination, each Party
          shall destroy or return to the other

                                        9
<PAGE>

          Party all documents, files (whether electronic or otherwise) and other
          materials containing confidential information of the other Party.
          Unless GDA has terminated this Agreement for breach by Arkados,
          promptly following termination of this Agreement GDA shall deliver to
          Arkados all copies of documents or other tangible media containing or
          embodying any Product Technology or Product-Related Materials or other
          Intellectual Property Rights of Arkados. The provisions of Article
          III, Article V, Article VIII, Section 9.3, and Article X shall survive
          the termination of this Agreement.

ARTICLE VIII INDEMNITY

8.1       Each Party (the "Indemnifying Party") shall protect, defend, and,
          indemnify and hold harmless the other Party, its officers, directors,
          agents, employees, contractors, and representatives (the "Indemnified
          Party") from and against all claims, demands, liabilities,
          obligations, deficiencies, losses, damages, actions, suits,
          proceedings, assessments, judgments, or settlements, (including all
          reasonable attorneys' fees) (each a "Claim") arising out of the acts
          or omissions of the Indemnifying Party or its Affiliates in connection
          with the work performed pursuant to this Agreement, excluding any
          Claim that is attributable to the willful misconduct or negligence of
          the Indemnified Party.

8.2       Each Party shall protect, defend, and, indemnify and hold harmless the
          other Party, its officers, directors, agents, employees, contractors,
          and representatives from and against all Claims arising out of a Third
          Party claim that the design of the Product infringes upon the
          intellectual property or other rights of such Third Party.

8.3       The Indemnifying Party's obligation to indemnify the Indemnified Party
          is subject to the Indemnifying Party's compliance with the following:

          (a)  The Indemnified Party notifies the Indemnifying Party in writing
               promptly upon receipt of notification of a Claim. To the extent
               an intentional delay materially prejudices the Indemnifying
               Party's defense of a Claim, the Indemnifying Party shall be
               relieved of the defense of that part of the defense.

          (b)  The Indemnifying Party has sole control of the defense and all
               related settlement negotiations, subject to the right of the
               Indemnified Party to participate in and monitor such defense, at
               its own cost and option and through its own counsel.

          (c)  The Indemnified Party provides the Indemnifying Party with the
               assistance, information, and authority necessary to perform as
               required above, provided that reasonable costs and expenses
               incurred by the

                                       10
<PAGE>

               Indemnified Party in providing such assistance and information
               will be reimbursed by the Indemnifying Party.

          (d)  The Indemnified Party is not an Affiliate of the third party
               making the claim.

ARTICLE IX REPRESENTATIONS AND WARRANTIES

9.1       Authorization. Each Party warrants and represents to the other that it
          has the legal rights and power to assign or extend the rights and/or
          licenses granted to the other Party in this Agreement, that it has the
          full right and power to enter into this Agreement and to fully perform
          its obligations hereunder, and that it has not made nor will it make
          any commitments to others in conflict with or in derogation, of any
          such rights or this Agreement. Each Party further represents to the
          other that it is not aware of any legal obstacles, including patent
          rights of others, which could prevent either Party from carrying out
          the provisions of this Agreement.

9.2       Patent Validity; Non-Infringement. Nothing in this Agreement shall be
          construed as a warranty or representation by either Party as to the
          validity or scope of any patent rights or that the exercise of any
          Intellectual Property Rights granted or assigned by such Party shall
          not infringe any Intellectual Property Rights of any Third Parties.

9.3       GDA Deliverables. GDA will use its best efforts to conform
          deliverables to Arkados with the applicable specifications.

9.4       Disclaimer of Warranties. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
          HEREUNDER, THE DELIVERABLES AND TECHNOLOGY BEING PROVIDED OR LICENSED
          BY EITHER PARTY HEREUNDER ARE BEING PROVIDED "AS IS" AND SUCH PARTY
          MAKES NO, AND SUCH PARTY HEREBY DISCLAIMS ALL, OTHER WARRANTIES,
          EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES OF
          MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR
          NON-INFRINGEMENT WITH REGARD TO ANY SUCH DELIVERABLES AND TECHNOLOGY.

ARTICLE X LIMITATION OF LIABILITY

GDA's LIABILITY ARISING OUT OF THIS AGREEMENT OR THE DEVELOPMENT OF THE PRODUCTS
SHALL BE LIMITED TO THE PAYMENT IT RECEIVED FOR ITS SERVICES (NOT INCLUDING ANY
PAYMENTS TO THIRD PARTIES). IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY OR ANY OTHER PERSON OR ENTITY FOR ANY EXEMPLARY, SPECIAL,
CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES, OR FOR ANY LOST PROFITS,
BUSINESS INTERRUPTION, OR LOSS OF BUSINESS INFORMATION, HOWEVER CAUSED, ON ANY
THEORY OF LIABILITY, AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. THESE LIMITATIONS SHALL APPLY

                                       11
<PAGE>

NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. GDA'S
LIABILITY WILL EXPIRE 1 YEAR AFTER THE FINAL DELIVERABLES.

ARTICLE XI MISCELLANEOUS

11.1      EXPORT. In order to comply with the U.S. Export Administration Act of
          1979, as amended from time to time (the "Export Act"), each Party
          hereby certifies that no technology or information licensed from the
          other, and no product thereof, will be made available or re-exported,
          directly or indirectly, to any areas outside the United States except
          in compliance with all applicable laws and regulations of the Bureau
          of Export Administration in accordance with the Export Act (the
          provisions of this clause shall be extended in accordance with U.S.
          law or regulation).

11.2      FORCE MAJEURE. Neither Party shall be held liable or responsible to
          the other Party nor be deemed to have defaulted under or breached this
          Agreement for failure or delay in fulfilling or performing any term of
          this Agreement when such failure or delay is caused by or results from
          causes beyond the reasonable control of the affected Party, including
          but not limited to fire or floods; embargoes, war, acts of war
          (whether war be declared or not), insurrections, riots, or civil
          commotions; strikes, lockouts, or other labor disturbances; acts of
          God; or acts, omissions, or delays in acting by any governmental
          authority or the other Party; provided, however, it is understood that
          this Section 11.2 is intended only to suspend and not discharge a
          Party's obligations under this Agreement and that when the causes of
          the failure or delay are removed or alleviated, the affected Party
          shall resume performance of its obligations hereunder, provided,
          however, that if the forece majeure event persist for a period of year
          or more, the Party may agree to terminate this Agreement without
          either Party being liable for such termination.

11.3      ASSIGNMENT. This Agreement may not be assigned or otherwise
          transferred, nor, except as expressly provided hereunder, may any
          right or obligations hereunder be assigned or transferred, by either
          Party without the written consent of the other Party; provided,
          however, that either Arkados or GDA may, without such consent, assign
          this Agreement and its rights and obligations thereunder (a) in
          connection with the transfer or sale of all or substantially all of
          its business, if such assets include substantially all of the assets
          relating to its performance of its respective obligations hereunder;
          (b) to a wholly owned subsidiary; or (c) in the event of its merger or
          consolidation with another company; provided that, in the case of an
          transaction involving a Party of the type described in subparagraph
          (a) or (c) of this provision, the transferee of the assets or the
          entity with which such Party is being merged or consolidated is not a
          competitor of the other Party. Any purported assignment in violation
          of the preceding sentence shall be void. Any permitted assignee shall
          assume all obligations of its assignor under this Agreement. Consent
          to any such assignment shall not operate as a waiver of the necessity
          for consent to any subsequent assignment.

                                       12
<PAGE>

11.4      SUBCONTRACTS. Arkados and GDA each may subcontract their respective
          obligations hereunder without the prior written consent of the other,
          provided that (i) such subcontracting does not result in the transfer
          of significant know-how to the subcontractor; (ii) the subcontractor
          has entered into a confidentiality agreement with the contracting
          Party on terms substantially equivalent to the requirements set forth
          in Article V; and (iii) the contracting Party reasonably supervises
          such contract work.

11.5      NO SOLICITATION. During the term of this Agreement and for a period of
          one (1) year thereafter, each party agrees not to recruit or solicit
          the services of any of the other's employees or contractors.

11.6      SEVERABILITY. Should one or several provisions of the Agreement be or
          become invalid or unenforceable by reason of such a violation, then
          the Parties hereto shall substitute, by mutual consent, valid
          provisions for such invalid provisions, which valid provisions in
          their economic effect come so close to the invalid provisions that it
          can be reasonably assumed that the Parties would have contracted this
          Agreement with those new provisions. In case such provisions cannot be
          found, the invalidity of one or several provisions of the Agreement
          shall not affect the validity of the Agreement as a whole, unless the
          invalid provisions are of such essential importance for this Agreement
          that it is to be reasonably assumed that the Parties would not have
          contracted this Agreement without the invalid provisions.

11.7      DISPUTE RESOLUTIONS. In case any dispute shall arise with respect to
          matters to be determined by the Steering Committee which cannot be
          resolved within a reasonable period of time, the Parties'
          representatives shall meet to attempt to resolve the matter prior to
          either Party taking any legal action, in respect thereof. If the
          Parties' representatives are unable to resolve any such dispute, such
          dispute shall be settled pursuant to final and binding arbitration
          conducted in the English language by a single arbitrator agreed by the
          Parties in New York, NY, USA, in accordance with the Commercial Rules
          of the American Arbitration Association applicable at the time such
          dispute arises, and judgment upon the award may be entered by any
          court of competent jurisdiction. . For purposes of clarification, the
          Parties agree neither to initiate nor to reopen any disputed matter in
          a court proceeding following arbitration but may use the assistance of
          the courts only to enforce any arbitration award. Arkados and GDA
          shall equally share the out-of-pocket costs of said arbitration,
          including the fees for the arbitrator, except that the Arkados and GDA
          each shall pay its respective expenses for legal representation and
          expert witnesses, if any.

11.8      NOTICES. Any notice or report required or permitted to be given or
          made under this Agreement by one of the Parties hereto to the other
          shall be in writing, delivered personally or by facsimile (and
          promptly confirmed by personal delivery or courier) or courier,
          postage prepaid, addressed to such other Party at

                                       13
<PAGE>

          its address indicated below, or to such other address as the addressee
          shall have last furnished in writing to the addressor and shall be
          effective upon receipt by the addressee.

                  Arkados:   Arkados, Inc.
                             948 US Highway 22
                             North Plainfield, NJ 07060
                             Attention: Mike Macaluso, VP of Engineering
                             Tel: 908-769-3232 x258
                             Fax: 908-769-0206

                  GDA:       GDA Technologies, Inc.
                             1010 Rincon Circle
                             San Jose, CA 95131
                             Attention: Ravi Thummarukudy
                             Tel: 408-467-3501
                             Fax: 408-432-3091

11.9      APPLICABLE LAW. This Agreement shall be governed by and construed in
          accordance with the laws of the State of New York without regard to
          its choice of law or conflict of laws provisions and any applicable
          laws of the United States.

11.10     ENTIRE AGREEMENT. This Agreement and Annexes hereto contain the entire
          understanding of the Parties with respect to the subject matter
          hereof. All express or implied agreements and understandings, either
          oral or written, heretofore made are expressly merged in and made a
          part of this Agreement. This Agreement may be amended, or any term
          hereof modified, only by a written instrument duly executed by both
          Parties hereto.

11.11     HEADINGS. The captions to the several Articles hereof are not a part
          of this Agreement, but are merely guides or labels to assist in
          locating and reading the several Articles hereof.

11.12     INDEPENDENT CONTRACTORS. Arkados and GDA are independent contractors
          and relationship between them shall not constitute a partnership or
          agency of any kind (subject to GDA acting as sales agent on behalf of
          Arkados in the GDA Territory). Neither Arkados nor GDA shall have the
          authority to make any statements, representations or commitments of
          any kind, or to take any action, which shall be binding on the other,
          without the prior written authorization of the Party to do so.

11.13     WAIVER. The waiver by either Party hereto of any right hereunder or
          the failure to perform or of a breach by the other Party shall not be
          deemed a waiver of any other right hereunder or of any other breach or
          failure by said other Party whether of a similar nature or otherwise.

                                       14
<PAGE>

11.14     COUNTERPARTS. This Agreement may be executed in two or more
          counterparts, each of which shall be deemed an original, but all of
          which together shall constitute one and the same instrument.

     IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the
date first set forth above as evidenced by the signatures below of their
authorized representatives. This Agreement is signed in two original copies.

                                        GDA TECHNOLOGIES INC.

                                        By: /s/ Ravi Thummarukudy
                                            -------------------------
                                        Name: Ravi Thummarukudy
                                        Title:

                                        ARKADOS INC.

                                        By: /s/ Oleg Logvinov
                                            -------------------------
                                        Name: Oleg Logvinov
                                        Title:  President and CEO

                                       15
<PAGE>

                        ANNEX - A TASKS AND DELIVERABLES
                        --------------------------------

1. DEFINITIONS

     1.   "ARK-DE" shall mean Arkados deliverable
     2.   "GDA-DE" shall mean GDA deliverable
     3.   "ARK-TS" shall mean Arkados task.
     4.   "GDA-TS" shall mean GDA task.
     5.   "Joint-DE" shall mean a joint deliverable for Arkados and GDA.
     6.   "Joint-TS" shall mean a joint task for Arkados and GDA.
     7.   "Third-TS" shall mean a task performed by a Third party
     8.   "Foundry-TS" shall mean a task performed by Foundry

2. SPEC. DEFINITION ESTIMATED COMPLETION DATE *

     *

     System requirement and spec should cover * Arkados' document should cover
     the Arkados provided IPs. GDA's document should cover the *

3. CODING/VERIFICATION ESTIMATED COMPLETION DATE *

     *

4. GATE LEVEL CREATION ESTIMATED COMPLETION DATE_*

     *

GDA will deliver * to Arkados as the task is finished. Note that Foundry IP is
encrypted and cannot be delivered.

5. PHYSICAL LAYOUT

     *

Design reports will be delivered where appropriate. *

6 FABRICATION ESTIMATED COMPLETION DATE *  **

     *

** The * date is subject to change depending on the available * shuttle dates. *

                                       16
<PAGE>

7. POST SILICON ESTIMATED COMPLETION DATE *  ***

     *

*** Note that this date is subject to change depending on the * shuttle dates as
mentioned previously.

Reports will be delivered where appropriate.

8. ENGINEERING CHANGE

Engineering Change happens when partial circuit modification is needed for any
reasons. Part or all of the above flow may be run through depending on the scale
of modification. Also depending on the negotiation with Foundry, some wafers may
need to be held on contract to enhance the modification schedule at the initial
stage of the product.

All changes must go through GDA's Change Control Board and the cost and schedule
impacts if necessary will be negotiated by Parties in good faith.

                                       17
<PAGE>

                      ANNEX - B PRELIMINARY SPECIFICATIONS
                      ------------------------------------

                         1 HOMEPLUG TECHNOLOGY OVERVIEW
                         ------------------------------

     HomePlug technology is used to transport data across AC power lines.
Despite the obvious difference in the transport medium it uses, HomePlug devices
provide the same network interface, and functionality as devices that use common
mediums, such as twisted pair networks.

     A HomePlug device is comprised of a Physical(PHY) layer and Medium Access
Control(MAC) layer. These layers provide the services of layers 1 and 2 in the
OSI Reference Model. HomePlug was designed to adhere the OSI model so that its
interface is compatible to other similar standards such as 802.3 and 802.11. It
is also designed to support bridging to these, and other network types.

     Using the OSI model, a HomePlug device is used as follows:

Layer 3 - Network Layer                                  Layer 3 - Network Layer

 Ethernet    Ethernet                                     Ethernet    Ethernet
   Data       Packet                                        Data       Packet

   HomePlug Device                                          HomePlug Device
      Layer 1/2                                                Layer 1/2

 HomePlug    HomePlug                                     HomePlug    HomePlug
 Protocol     Packet                                      Protocol     Packet

      Ethernet                                                  Ethernet
        Data                                                      Data

                              HomePlug    HomePlug
Powerline                     Protocol     Packet                      Powerline

                                    Ethernet
                                      Data

     In the OSI model, data is transferred between layers. A HomePlug device
interfaces to the Network Layer, Layer 3, as shown above. When a device receives
an Ethernet packet from the Layer 3 protocol, it is responsible for transporting
it across the power line, and delivering it to the Layer 3 protocol at the
destination. This is done in a manner that preserves the integrity of the
Ethernet packet so that it is delivered to the destination in exactly the same
condition that it was received in at the source. The

                                       18
<PAGE>

mechanism that HomePlug uses to transport the data is essentially invisible to
the Layer 3 protocol(1).

     One of the responsibilities of the HomePlug protocol is to transport data
across the power line with a reliability that is near that of a wired data
network. As unstable as the power line is for data communication, the HomePlug
protocol is well suited for sustaining reliable communications.

     An Ethernet packet presented to a HomePlug device for transmission is
encapsulated within one or more HomePlug packets. Each HomePlug packet contains
some protocol related overhead information. This information contains address
and control data that is used by the protocol to reliably transport the Ethernet
data across the power line.

     Several methods are used to deliver an Ethernet packet to the destination.
Depending on the data rate that the power line can currently sustain, and the
size of the data presented, an Ethernet packet may be segmented into smaller
pieces. These smaller pieces are then placed into multiple HomePlug packets to
ensure that the entire Ethernet packet can be delivered to the destination.

     If a HomePlug packet fails to reach its destination, the protocol will
follow a retransmission procedure in an attempt to deliver the packet. This
procedure may include segmenting the Ethernet packet into even smaller HomePlug
packets. Some other methods used to ensure delivery are Reed-Solomon forward
error correction and data redundancy techniques.

     HomePlug technology provides a conduit for transporting data through a
network medium. This function is no different than technology that transports
data through a twisted pair medium, or through a wireless medium. 802.3 uses
twisted pair, 802.11 is wireless, HomePlug uses the power line.

-------------------
(1) In theory, HomePlug is invisible at Layer 3. *

                                       19
<PAGE>

                    2 ARKADOS'S POWERLINE COMMUNICATION CHIP
                    ----------------------------------------

The* and a minimum of external components including an analog front end make a
complete system. The device can be used to build a variety of PLC end products.
Examples of a few in home applications are shown below:

--------------------------------------------------------------------------------
                                   In home AC
--------------------------------------------------------------------------------
                                    Powerline

Enikia Endpoint      USB      Computer                     Enikia enabled PC
    USB to           USB      Scanner                      PHY emulation to PLC
     PLC
                         Kid's Bedroom    Master Bedroom
--------------------------------------------------------------------------------
                                   In home AC
--------------------------------------------------------------------------------
                                    Powerline

  Enikia           Enikia Endpoint          Enikia Endpoint
Print Sevice  ECP   Bluetooth to    Laptop    Ethernet to     DSL/Cable Modem
   Via                  PLC                     PLC        (Residential Gateway)
   PLC

                          Family Room      Living Room
--------------------------------------------------------------------------------

These examples represent a few of the many possible applications. Each depicts
one of a multitude of different implementations and they are provided only to
enhance understanding of the * device. A block diagram of our chipset is shown
below:

                                       20
<PAGE>

*

Based on preliminary analysis, our * will have the following die size and
utilization breakdown:

Total Die Size: *

--------------------------------------------------------- -------------------
                         Block                            Percent Utilization
========================================================= ===================
*                                                                  *
--------------------------------------------------------- -------------------
*                                                                  *
--------------------------------------------------------- -------------------
*                                                                  *
--------------------------------------------------------- -------------------
*                                                                  *
--------------------------------------------------------- -------------------
*                                                                  *
--------------------------------------------------------- -------------------
*                                                                  *
--------------------------------------------------------- -------------------
*                                                                  *
--------------------------------------------------------- -------------------
*                                                                  *
--------------------------------------------------------- -------------------
*                                                                  *
--------------------------------------------------------- -------------------
*                                                                  *
--------------------------------------------------------- -------------------
*                                                                  *
--------------------------------------------------------- -------------------

                                       21
<PAGE>

      3 ARKADOS'S POWERLINE COMMUNICATION CHIP - BUDGETARY PRODUCTION COST
      --------------------------------------------------------------------

*

                              4 BOARD-LEVEL DESIGN
                              --------------------
..
Arkados chipset based design offers the following benefits:
    -   Lower level of product complexity
    -   Lower overall system cost
    -   High level of programmability
    -   It is suitable for vide range of applications

*

                                       22
<PAGE>

                          ANNEX - C INITIAL TASK ORDER
                          ----------------------------

Dated _________________

     1.   STATEMENT OF WORK - DESIGN SERVICES

     2.   STATEMENT OF WORK - PRODUCTION SERVICES

                                       23
<PAGE>

                      ANNEX - D STEERING COMMITTEE MEMBERS
                      ------------------------------------

     1.   Arkados

             Mike Macaluso
             VP of Engineering

     2.   GDA

             Ravi Thummarukudy

                                       24
<PAGE>

                         ANNEX - E ARKADOS DELIVERABLES
                         ------------------------------

None.

                                       25

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