Document:

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                                                                   EXHIBIT 10.14

                             AMENDED AND RESTATED
                  RESEARCH AND DEVELOPMENT SERVICES AGREEMENT

     This Amended and Restated Research and Development Services Agreement (the
"Agreement") is effective as of October 1, 1999, between X10 Ltd., a Bermuda
corporation ("X10 Ltd."), and X10 Wireless Technology, Inc., a Delaware
corporation ("X10 Wireless Technology").

                                   RECITALS

     A.   Whereas, X10 Ltd. is in the business of designing and developing
powerline-based home and small office networking products, and has technical
expertise and facilities dedicated to research and development of such products;

     B.   Whereas, X10 Wireless Technology is in the business of designing,
developing, marketing, selling and distributing broadband wireless- and
powerline-based home and small office networking products;

     C.   Whereas, X10 Ltd. and X10 Wireless Technology have previously entered
into that certain Research and Developmental Services Agreement (the "Original
Agreement") dated and effective as of October 1, 1999, pursuant to which X10
Wireless Technology contracted for research and development services provided by
X10 Ltd.;

     D.   Whereas, the Original Agreement did not adequately set forth the
entire understanding between the parties with respect to the provision of
research and development services by X10 Ltd. and with respect to certain other
terms incidental thereto; and

     E.   Whereas, the parties now wish to amend and restate the Original
Agreement in order to clarify and memorialize the correct understanding of the
parties with respect to the research and development services to be provided
under the Original Agreement and to further describe the obligations and
existing practices of the parties in connection therewith;

                                   AGREEMENT

     Now, therefore, in consideration of the foregoing, the mutual covenants and
conditions contained in this Agreement and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as
follows:

     1.   Development Services.  X10 Ltd. shall, at the direction of X10
Wireless Technology:

          a.   Undertake such research and development for the design and
production of broadband wireless- and powerline-based home and small office
networking products and other electronic products as may be requested from time
to time by X10 Wireless Technology in accordance with design criteria and
specifications provided from time to time by X10 Wireless Technology.

                                       1.
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          b.   Submit binding quotes for completion of the services described in
Section 1.a. above and production of workable prototypes of products identified
by X10 Wireless Technology.

          c.   Provide quotes of the cost per unit to manufacture products
selected by X10 Wireless Technology.

          d.   Determine all necessary or appropriate production standards and
licensing requirements for each product, in order to ensure that if and when the
product is produced, marketed and sold, it will be in compliance with all
applicable federal laws and regulations within the United States, or other
applicable country of sale, and the country of origin.

          e.   Produce workable prototypes of products as requested by X10
Wireless Technology, in quantities specified by X10 Wireless Technology.

          f.   Provide to X10 Wireless Technology detailed specifications for
all prototypes produced under this Agreement as well as provide appropriate
specifications for the packaging and labeling of such prototypes.

     2.   No Obligation.  X10 Wireless Technology shall be under no obligation
to use X10 Ltd. for research and development services, to purchase or source
from X10 Ltd. any products developed under this Agreement or to utilize any
manufacturing services of X10 Ltd. in connection with the production of any such
products. X10 Wireless Technology shall be entitled to use the research and
development services of any third party to meet its design and production needs.
Further, X10 Wireless Technology shall be entitled to use the materials and/or
services of any supplier or manufacturer in connection with the production of
any such products and any materials required for such manufacturing, and X10
Ltd. hereby grants any necessary license of X10 Ltd.'s technology and
intellectual property rights in order to allow such manufacture of products.

     3.   Production Schedule.  The delivery of designs, specifications and
prototypes  being produced by X10 Ltd. shall be in accordance with a production
schedule to be agreed upon by the parties in connection with each proposed
product.  In order to provide timely service to X10 Wireless Technology in all
phases of development, X10 Ltd. agrees to accord design requests submitted by
X10 Wireless Technology priority in preference to any other research,
development or engineering projects undertaken by X10 Ltd., including, but not
limited to, any research, development or engineering projects undertaken by X10,
Ltd. on its own behalf.

     4.   Service Fees.  X10 Wireless Technology shall pay to X10 Ltd. a service
fee in connection with the services provided by X10 Ltd. under this Agreement,
in an amount equal to the quote provided to X10 Wireless Technology by X10 Ltd.
pursuant to Section 1.b above (the "Fee").  The Fee for each product shall be
payable one-third at the commencement of design and development, one-third upon
receipt of the initial prototype or a tooled sample of the product, and the
balance upon approval and acceptance of the final product by X10 Wireless
Technology.  In the event that the final product(s) requested to be developed by
X10 Wireless Technology do not, in the reasonable commercial judgment of X10
Wireless Technology, perform in accordance

                                       2.
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with the design criteria and specifications provided, X10 Ltd. agrees to refund
any payments made by X10 Wireless Technology for the non-performing product(s).

     5.   Ownership of Designs, Specifications and Prototypes.  X10 Ltd.
acknowledges and agrees that all right, title and interest in and to (i) all
patents, copyrights, trade names, logos, trademarks, service marks, know-how,
ideas, inventions, concepts and other intellectual property rights which are
embodied in, developed in connection with, incorporated into or placed upon any
of the designs, specifications or prototypes developed by X10 Ltd. pursuant to
this Agreement, or any products developed in connection therewith (the
"Intellectual Property Rights"), and (ii) all designs, specifications and
prototypes developed by X10 Ltd. pursuant to this Agreement, and any products or
technology developed in connection therewith (the "Technology"), shall be owned
exclusively by X10 Wireless Technology.  X10 Ltd. shall cause any third parties
who design or develop any Intellectual Property Rights or Technology  to assign
all right, title and interest in and to the Intellectual Property Rights and
Technology to X10 Wireless Technology.  At any time during the term of this
Agreement, upon X10 Wireless Technology's request, X10 Ltd. shall deliver to X10
Wireless Technology, in the manner requested by X10 Wireless Technology, all
designs, specifications, prototypes and other information relating to the
Intellectual Property Rights, the Technology, and any request for or performance
of any services or the design or development of any products pursuant to this
Agreement.

     6.   Warranties.  X10 Ltd. represents and warrants that:

          a.   To its knowledge, none of the designs, specifications or
prototypes designed and developed by X10 Ltd. pursuant to this Agreement, or any
products developed in connection therewith, will infringe any patent, copyright,
trademark, trade name, trade secret or other intellectual property or
proprietary right of any third party;

          b.   To its knowledge, the resale by X10 Wireless Technology of any
products designed and developed by X10 Ltd. pursuant to this Agreement will not
violate any laws, regulations, orders or ordinances of the federal law of the
United States, any applicable country in which products are sold, or the country
of origin, or any agency of the foregoing; and

          c.   All design, production, manufacturing and associated activities
undertaken by X10 Ltd. pursuant to this Agreement will be performed in a
workmanlike manner in accordance with prevailing professional standards.

     7.   Indemnity.

          a.   Indemnification.  Each party (the "Indemnifying Party") shall
defend, indemnify and hold the other party and its officers, directors, agents,
customers and sublicensees harmless from and against any loss, damage, injury,
liability, claim, causes of action or other expense, including reasonable
attorneys' fees involved in the defense of any such action, that the other party
may suffer arising out of or resulting from the indemnifying party's services,
or activities performed pursuant to this Agreement including, without
limitation, (i) any claim based on the negligence or willful misconduct of the
indemnifying party or any of the indemnifying

                                       3.
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party's Affiliates; and (ii) any breach of the representations and warranties,
if any, set forth in Section 6 of this Agreement.

          b.   Indemnification Procedure.  In the event the Indemnifying Party
is obligated to indemnify the other Party (the "Indemnified Party") under this
Agreement, the Indemnified Party will, as soon as is reasonably practicable, (i)
provide the Indemnifying Party with prompt written notice of any claim for which
indemnification is required, (ii) tender the defense of any such claim to the
Indemnifying Party, (iii) provide full cooperation for such defense at the
Indemnifying Party's expense, and (iv) not settle without the Indemnifying
Party's prior written approval, not to be unreasonably withheld. Notwithstanding
the foregoing, failure to give prompt notice as required by this Section 7.b.
shall not preclude any claim for indemnification unless such failure has the
effect of prejudicing the rights of the Indemnifying Party with respect to such
claim. The Indemnified Party may participate in any such defense or settlement
with counsel of its own choosing at its expense.

     8.   Limitation of Liability.  In no event will X10 Ltd. be liable for any
consequential, indirect, exemplary, special or incidental damages including,
without limitation, any lost profits, arising from or relating to this
Agreement. X10 Ltd.'s total cumulative liability in connection with this
Agreement, whether in contract, tort or otherwise, will not exceed the amount of
fees actually paid to X10 Ltd. hereunder.

     9.   Confidentiality.

          a.   Confidential Information.  "Confidential Information" shall
consist of all information and materials clearly identified in writing as
Confidential Information including, without limitation, formulas, methods, know
how, processes, designs, new products and the terms and pricing under this
Agreement.

          b.   Confidentiality Obligations.  Each party agrees not to use or
disclose any Confidential Information of the other, except as may be necessary
to (i) third parties who have a specific need to know in order to facilitate the
design, development and manufacture of prototypes and products and who have
executed confidentiality agreements with such party sufficient to cover the
confidential information disclosed, or (ii) employees of such disclosing party
who have a specific need to know in order to fulfill the terms of this Agreement
and who agree, in writing, to hold all such information in confidence.  Further,
each party agrees not to disclose any Confidential Information of the other
party to any third party, including affiliates of such disclosing party,
without the prior express written permission of the other party.  These
confidentiality provisions of this Section 9 shall not apply to any information
that is or becomes generally available to the public through no fault of the
party seeking to disclose the information, or any information properly obtained
from a completely independent source under no obligation of confidentiality.
The confidentiality provisions of this Section 9 shall also not apply to
prohibit disclosure of Confidential Information (x) as required by applicable
disclosure laws; or (y) in connection with a court order requiring disclosure,
in which case the party required to disclose the Confidential Information must
provide immediate notice of such order to the other party and cooperate in any
attempt to quash such order.

                                       4.
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     10.  Term and Termination.

          a.   Term.  The term of this Agreement (the "Term") shall commence on
the date hereof and continue in effect until December 31, 2019. Thereafter, the
Term shall automatically be renewed for subsequent five-year terms unless
terminated by X10 Wireless Technology by written notice to X10 Ltd. at least
ninety (90) days prior to the expiration of the preceding term or as otherwise
provided herein.

          b.   Termination.  This Agreement may be terminated by either party
upon breach of any material obligation or condition hereof by the other,
effective thirty (30) days after giving written notice to the other of such
termination specifying such breach; provided, however, that if the default or
breach is cured or shown not to exist within such period, the notice shall be
deemed withdrawn and of no effect; provided, however, that this Agreement may be
terminated immediately by X10 Wireless Technology upon breach of the
confidentiality obligations in Section 9 hereof by X10 Ltd. The right to
terminate hereunder is not exclusive and may be exercised in conjunction with or
in addition to any other right or remedy such party might have, at law or
equity.

     11.  Continuing Obligations.  Upon termination of this Agreement, X10 Ltd.
shall deliver to X10 Wireless Technology, in the manner requested by X10
Wireless Technology, all designs, specifications, prototypes and other
information relating to any request for or performance of any services or the
design or development of any products pursuant to this Agreement.  In addition,
X10 Ltd. shall promptly refund to X10 Wireless Technology all Fees paid by X10
Wireless Technology for any project for which X10 Wireless Technology has not
provided final approval and acceptance.  The provisions of this section and
Sections 5 ("Ownership of Designs, Specifications and Prototypes"), 7
("Indemnification"), 9 ("Confidentiality"), 17 ("Waiver"), 18 ("Governing Law"),
19 ("Severability") and 20 ("Attorneys' Fees") shall survive termination or
expiration of this Agreement for any reason.

     12.  Force Majeure.  No failure or omission by either party in the
performance of any obligation hereunder shall be deemed a breach of this
Agreement, nor create any liability if same shall arise from acts of God, acts
of war, condemnation, appropriation, governmental regulations or orders, floods,
the elements, fire, explosions and other casualties, accidents, transportation
delays, embargo, or any other occurrences beyond the reasonable control of such
party ("Force Majeure").  Each party agrees to promptly notify the other party
of any of the foregoing occurrences and the non-performing party shall be
excused from performance, to the extent it relates to the Force Majeure, so long
as such conditions prevail; provided, however, that if the non-performing party
remains unable to perform for a continuous period of ninety (90) days, the other
party may engage another party to perform the services described in this
agreement at the expense of the non-performing party.

     13.  Relationship of Parties.  The relationship between X10 Ltd. and X10
Wireless Technology is and during the term of this Agreement shall be solely
that of independent contractors.  X10 Ltd. will not have, and will not represent
that it has, any power, right or authority to bind X10 Wireless Technology, or
to assume or create any obligation or responsibility, express or implied, on
behalf of X10 Wireless Technology or in X10 Wireless Technology's name, except
as herein expressly provided.  Nothing stated in this Agreement shall

                                       5.
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be construed as making partners of X10 Ltd. and X10 Wireless Technology, nor as
creating any agency, employment or franchise relationship between the parties.

     14.  Assignment.  X10 Ltd. may not assign, encumber or in any way transfer
or delegate any interest, right or duty under this Agreement without prior
written consent of X10 Wireless Technology. X10 Wireless Technology shall be
entitled to assign, encumber or in any way transfer or delegate any interest,
right or duty under this Agreement to any affiliate of X10 Wireless Technology,
or to any third party, without consent of X10 Ltd., provided that such affiliate
or third party agrees to be bound by all of the terms and obligations of this
Agreement.

     15.  Notices.  All notices or other communications hereunder shall be in
writing and shall be made by hand delivery, internationally-recognized overnight
courier, electronic mail or registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:

          X10 Wireless Technology, Inc.:     X10 Wireless Technology, Inc.
                                             15200 52nd Avenue South
                                             Seattle, WA  98188-2335
                                             Attn:  President
                                             e-mail: wade@x10.com

          X10 Ltd.:                          X10 Ltd.
                                             Room 1103-4,
                                             Hilder Center
                                             2 Sung Ping Street
                                             Hunghom, Kowloon
                                             Hong Kong
                                             e-mail: gseow@ibm.net

or at such other address as shall be furnished by any of the parties by like
notice, and such notice or communication shall be deemed to have been given or
made as of the date so delivered, if delivered personally one (1) day after
deposit with an internationally-recognized overnight courier, and three (3)
calendar days after so mailed, if sent by registered or certified mail.

    16.   Entire Agreement.  This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, and supersedes
all prior arrangements and negotiations between the parties. This Agreement may
be modified or amended only by mutual written consent of the parties; provided,
however, that after the effective date of X10 Wireless Technology's first firm
commitment underwritten public offering of its securities registered under the
Securities Act of 1933, as amended, any such modification or amendment shall be
effective only if it is approved by a majority of the directors serving on the
Audit Committee of the Board of Directors of X10 Wireless Technology.

     17.  Waiver.  Failure by either party to enforce at any time any term or
condition under this Agreement shall not be a waiver of the right to act on the
failure of such term or condition and shall not impair or waive that party's
right thereafter to enforce each and every term and condition of this Agreement.

                                       6.
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     18.  Governing Law.  This Agreement will be governed and construed in
accordance with the laws of the State of Washington as applied to transactions
taking place wholly within Washington between Washington residents. The parties
hereby expressly consent to the exclusive personal jurisdiction of and venue in
the state and federal courts located in King County, Washington for any lawsuit
filed there arising from or related to this Agreement. Notwithstanding the
foregoing, however, Licensee may bring an action for injunctive or equitable
relief in any jurisdiction it deems reasonably necessary to protect its
proprietary rights. This Agreement shall not be subject to or governed by the
United Nations Convention on Contracts for the International Sale of Goods,
which is specifically disclaimed by the parties.

     19.  Severability.  If any portion of this Agreement shall be held invalid
or inoperative, then, so far as is reasonable and possible, the remainder of
this Agreement shall be considered valid and operative, and effect shall be
given to the intent manifested by the portion held invalid or inoperative.

     20.  Attorneys' Fees.  The substantially prevailing party in any action
between the parties which is based on this Agreement or any document related
hereto shall have its reasonable attorneys' fees and other costs incurred in
such action or proceeding, including any incurred for pre-suit, trial,
arbitration, post-judgment and appeal, paid by the other party.

     21.  Waiver of Conflicts.  Each party to this Agreement acknowledges that
Cooley Godward LLP ("Cooley Godward"), outside general counsel to the X10
Wireless Technology, represents only the X10 Wireless Technology with respect to
the matters contained in this Agreement and does not represent X10 Ltd. in
connection herewith.  X10 Ltd. understands that and agrees that it should not
rely upon the advice of Cooley Godward with respect to the matters contained
herein, and that it has had adequate opportunity to obtain the advice of
independent legal counsel with respect to the matters contained in this
Agreement.

                                       7.
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     In Witness Whereof, the parties have executed this Amended and Restated
Research and Development Services Agreement as of the date set forth below.

X10 Ltd., a Bermuda corporation           X10 Wireless Technology, Inc., a
                                          Delaware corporation

By /s/ George Stevenson                   By /s/ Wade Pfeiffer
  ----------------------------------        ----------------------------------
George Stevenson, President               Wade Pfeiffer, Chief Financial Officer

Dated:  August 9, 2000                    Dated:  August 9, 2000

                                       8.<PAGE>

                                                                   EXHIBIT 10.15

                       CONTRACT MANUFACTURING AGREEMENT

     This Contract Manufacturing Agreement ("Agreement") is dated as of April 1,
2000, between X10 Wireless Technology, Inc., a Delaware corporation ("X10"), and
X10 Ltd., a Bermuda corporation ("Manufacturer").

                                   RECITALS

     A.   X10 owns or licenses certain technology and other intellectual
property rights, which are utilized in various products that are designed,
developed, manufactured, marketed, distributed and sold by X10;

     B.   X10 and Manufacturer have entered into an Amended and Restated Product
Supply Agreement (the "Supply Agreement"), under which Manufacturer has agreed
to manufacture various products for X10;

     C.   X10 desires to engage Manufacturer to manufacture and sell certain
products to resellers of customized, bundled or private-labeled products, in
accordance with the terms and conditions of this Agreement; and

     D.   Manufacturer desires to sell certain broadband wireless products owned
by X10 to resellers of customized, bundled or private-labeled products, in
accordance with the terms and conditions of this agreement.

                                   AGREEMENT

     In consideration of the foregoing, the mutual covenants and conditions
contained in this Agreement and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties agree as follows:

     1.   Definitions.

          a.   "Affiliate" means any corporation or other person or entity which
directly or indirectly controls, or is, directly or indirectly, controlled by,
or is under common control with X10 or Manufacturer, as the case may be.

          b.   "Ancillary Agreements" means the Amended and Restated Bill of
Sale and Assignment (the "Bill of Sale"), the Amended and Restated License
Agreement (the "License Agreement"), the Supply Agreement and the Amended and
Restated Research and Development Services Agreement (the "Research and
Development Agreement"), all of which have been made effective as of October 1,
1999.

          c.   "OEM" means a reseller of Products that are customized for that
OEM, bundled with or incorporated into other products of the OEM, or private-
labeled for the OEM.

          d.   "Products" means the products designed, developed, manufactured,
marketed, distributed or sold by X10 including, without limitation, those
products licensed or acquired by X10 pursuant to the License Agreement and the
Bill of Sale and any additional products that may be developed pursuant to the
Research and Development Agreement.

          e.   "X10 Technology" means technical information, plans,
specifications, circuit designs, market information, statistics and other
technical information and assistance and all other
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confidential, trade secret or other proprietary information, know how and
technology owned or licensed by X10 relating to the Products.

     2.   X10 Product Delivery Requests for OEM Sales.

          a.   In the event that X10 shall identify a potential OEM purchaser of
Products, X10 may submit to Manufacturer a request for estimate containing
specifications for Products which X10 desires to sell to such OEM. Manufacturer
shall provide to X10, within thirty (30) days, a binding estimate of the cost
for manufacturing the proposed Products calculated pursuant to Section 5.c.
below and the minimum volume required for a production run. If the estimated
cost and volume is acceptable to X10, then X10 may, at its sole option, either:

               (i)    accept a purchase order from the OEM(s) for the sale of
     the Product, at the agreed sales price, quantity and shipment date (each,
     an "X10 Sale"); or

               (ii)   disclose the identity of the OEM(s) to Manufacturer and
     authorize Manufacturer to accept a purchase order directly from the OEM(s)
     upon the same terms as offered to X10; provided, that Manufacturer must
     receive a purchase order within ninety (90) days after disclosure of the
     identity of the OEM(s) by X10; provided, further, that upon execution of
     the purchase order, Manufacturer shall provide an executed copy of the
     purchase order to X10 (each, a "Manufacturer Sale").

          b.   In the event that Manufacturer identifies a potential OEM
purchaser of broadband wireless Products owned by X10, Manufacturer shall
disclose the identity of the OEM to X10 and X10 may, at its sole option, either:

               (i)    complete an X10 Sale of such broadband wireless Products;
     or

               (ii)   authorize Manufacturer to complete a Manufacturer Sale of
     such broadband wireless Products.

          c.   If X10 accepts a purchase order from the proposed OEM(s), X10 may
then submit to Manufacturer a purchase order for the manufacture of the Product
by Manufacturer. If Manufacturer accepts a purchase order from the OEM(s), then
Manufacturer shall proceed with the manufacture and sale of the Product directly
to the OEM(s) in accordance with the terms of such purchase order.

     3.   Manufacture and Shipment of Products.  In the event of an X10 Sale:

          a.   Manufacturer agrees to manufacture the Products in accordance
with specifications provided by X10, in such quantities and for such delivery
dates as mutually agreed by the parties and in accordance with the terms and
conditions of this Agreement. X10 shall deliver a letter of credit to
Manufacturer prior to any shipment of Products hereunder, and Manufacturer's
shipment of products shall be conditioned on the timely delivery of such letter
of credit. X10 may inspect the manufacture of the Products for the purpose of
ensuring compliance with X10's specifications and evaluating the use of X10
Technology by Manufacturer. Any units of the Products which are returned due to
a defect or other manufacturing deficiency will be promptly replaced by
Manufacturer.

          b.   Manufacturer shall provide such packaging, instructions, warranty
information and other documentation (collectively, the "Documentation") as may
be specified by X10.  All trademarks, trade names, service marks and copyrights
utilized by X10 in the Documentation shall remain the exclusive property of X10.

          c.   Manufacturer shall, pursuant to X10's instructions, ship the
Products ordered to the designated OEM on or prior to the shipment date
specified in the notice delivered pursuant to subsection 2.a(i), 2.a(ii), 2.b(i)
or 2.b(ii) above, as may be adjusted pursuant to this Section 3.

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     4.   No Competitive Products.

          a.   Manufacturer agrees that it shall not manufacture, nor cause or
allow any of its Affiliates (other than X10) to manufacture, the Products for
any reason except (i) as provided in this Agreement or the Ancillary Agreements,
or (ii) for its own account in connection with the sale of non-branded Products
listed in the License Agreement to OEMs and other resellers, which were not
introduced to Manufacturer by X10.

          b.   Except as provided in this Agreement or the Ancillary Agreements,
during the term of this Agreement, Manufacturer shall not manufacture, nor cause
any of its Affiliates (other than X10) to manufacture, for itself or for any
other party any product that is the same as, or similar in design, function or
appearance to, the Products.

     5.   Fees.

          a.   As consideration for the manufacturing and shipping services
performed by Manufacturer under subsection 2.a(i) or 2.b(i) of this Agreement,
X10 shall pay Manufacturer a fee equal to the actual costs of manufacturing and
shipping the Products ordered as calculated pursuant to subsection 5.c below.
Such fee shall be payable pursuant to a letter of credit after delivery of the
Products to the F.O.B. shipping point.

          b.   As consideration for the referrals generated by X10 in connection
with a Manufacturer Sale pursuant to subsection 2.a(ii) or 2.b(ii) of this
Agreement, Manufacturer shall pay to X10, on a quarterly basis, a fee,
calculated on a Product by Product basis, equal to the aggregate proceeds
received by Manufacturer from the sales of each such Product sold during such
period, less actual trade discounts, allowances, sales tax, freight charges and
returns (the "Net Proceeds"), less Manufacturer's costs of manufacturing each
such Product and less:

               (1)  15% of the Net Proceeds for each Product sold, until the Net
     Proceeds for such Product during the term of this Agreement reaches
     $2,000,000; and

               (2)  10% of the Net Proceeds for each Product sold, after the Net
     Proceeds for such Product during the term of this Agreement reaches
     $2,000,000.

          c.   Manufacturer shall provide an annual audited statement prepared
by an internationally-recognized auditor, agreeable to both parties, that
documents and itemizes, on an aggregate basis, the cost of manufacturing all
Products sold pursuant to this Agreement during the preceding year ended
December 31. X10 shall have the right to conduct, at any time, its own audit of
such costs, and Manufacturer shall make available to X10 and its representatives
all records and documentation required to conduct such audit, but in no event
more than two (2) times per calendar year. If the costs of manufacturing are
determined to be less than those provided by Manufacturer, Manufacturer shall
pay the shortfall to X10, as well as the costs of such audit. Costs of
manufacturing shall include:

               i.    Costs of materials;
               ii.   Factory overhead, including labor costs;

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<PAGE>

               iii.  Incoming freight for raw materials; and
               iv.   Consumables.

          d.   The manufacturing fees shall be examined on an annual basis
during the term of this Agreement and may be amended in writing by mutual
agreement of the parties.

          e.   Manufacturer shall be responsible for collecting payment of the
purchase price by all OEMs for Products sold by Manufacturer pursuant to
Subsection 2.a.(ii) or 2.b(ii) of this Agreement, including arrangement for any
required letters of credit. Within five (5) business days after the end of each
calendar quarter, Manufacturer shall provide X10 a statement of all OEM sales
made by Manufacturer during such quarter. Within thirty (30) days after the end
of each calendar quarter, Manufacturer shall remit to X10 the aggregate fees due
and payable to X10 on Manufacturer Sales completed during such quarter as
determined in accordance with Section 5.b above.

     6.   Shipping.

          a.   For all X10 Sales, Manufacturer shall deliver the Products to the
F.O.B. shipping point. For Manufacturer Sales, the Products shall be shipped and
title shall transfer as agreed by Manufacturer and the respective OEM(s).

          b.   For all X10 Sales, X10 shall be responsible, at its sole cost,
for compliance with all applicable laws and regulations concerning the
importation of the Products into the United States or any other destination
country, as well as for payment of all customs duties and freight costs for
shipment of the Products from Manufacturer to the destination specified by X10.
For Manufacturer Sales, responsibility for payment of customs duties and freight
costs and compliance with laws and regulations concerning the importation of
Products shall be determined by agreement between Manufacturer and each OEM.

     7.   Warranties.

          a.   X10 represents and warrants that it has the full right and power
to enter into this Agreement.

          b.   Manufacturer represents and warrants that it has, and shall
maintain throughout the term of this Agreement, all licenses, registrations and
other certifications required for it to operate its business and manufacture the
Products and has the full right and power to enter into this Agreement.

          c.   Manufacturer warrants to X10 and to all purchasers of Products
that all units of Products shipped will meet or exceed (1) the specifications of
the Products as developed by X10, as enhanced to X10's satisfaction, (2) X10's
standards of quality, and (3) all requirements of all applicable laws of the
United States or other jurisdictions in which the Products are sold, as well as
the country of origin with respect to the manufacture, packaging and labeling of
the Products.

          d.   Manufacturer shall obtain and maintain during the term of this
Agreement a policy of product liability insurance in an amount of not less than
$5 Million per claim, which

                                       4
<PAGE>

covers the Products manufactured under this Agreement. Such insurance policy
shall be issued by an insurance company acceptable to X10 and shall name X10 as
an additional insured.

     8.   Assignment.  Neither party may assign or otherwise transfer this
Agreement, its right and benefits, without the prior written consent of the
other party.  Any attempted transfer without such consent shall be void and of
no effect.

     9.   Confidentiality.

          a.   "Confidential Information" shall consist of all information and
materials clearly identified in writing as Confidential Information including,
without limitation, formulas, methods, know how, processes, designs and new
products of X10.

          b.   Manufacturer agrees to protect and preserve as confidential the
Confidential Information.  Except as otherwise expressly permitted under this
Agreement, Manufacturer will not disclose the Confidential Information to any
person or entity other than third parties who have a specific need to know such
information for use in furtherance of this Agreement and who agree, in writing,
to hold all such information in confidence.  Manufacturer will use the
Confidential Information only to manufacture and sell Products in accordance
with this Agreement, and will not use the Confidential Information for any other
purpose.  Manufacturer will not allow any other person or entity (including
Affiliates) to use any of the Confidential Information in any way, without X10's
prior written consent.

          c.   The Confidential Information shall not include (i) information
which at the time of disclosure to Manufacturer is generally available to the
public, or which after disclosure becomes generally available to the public by
publication or otherwise; and (ii) information received from a third party under
no obligation of confidentiality. Further, the confidentiality provisions of
this Section 9 shall not apply to prohibit disclosure of Confidential
Information (x) as required by applicable disclosure laws; or (y) in connection
with a court order requiring disclosure, in which case Manufacturer must provide
immediate notice of such order to X10 and cooperate in any attempt to quash such
order.

     10.  Term; Termination.

          a.   This Agreement shall be for a term of five (5) years and shall
thereafter be automatically renewed for successive five (5) year terms, unless
terminated by either party by written notice at least thirty (30) days prior to
the end of the current term.

          b.   If Manufacturer defaults in the performance of this Agreement,
X10 may terminate this Agreement by giving written notice to Manufacturer, said
termination to be effective on the thirtieth (30th) day after mailing such
notice if Manufacturer has not prior thereto cured such default to X10's
satisfaction.

          c.   X10 may terminate this Agreement, by giving thirty (30) days'
written notice, in the event of any effort or attempt by Manufacturer to
transfer, without the written consent

                                       5
<PAGE>

of X10, any or all of the rights granted hereunder, whether by assignment,
license, or by any other means.

          d.   Either party may terminate this Agreement, by giving ten (10)
days' written notice, in the event of filing by the other party of a petition
for bankruptcy or insolvency or both, or in the event of any adjudication that
the other party is bankrupt or insolvent or both, or after the filing by the
other party of any petition or pleading asking reorganization, readjustment, or
rearrangement of the other party's business under any law relating to bankruptcy
or insolvency, or upon or after the appointment of a receiver for all or
substantially all of the property of the other party or upon or after the making
by the other party of any assignment for the benefit of creditors or upon or
after the institution of any proceedings for the liquidation or winding-up of
the other party's business or for the termination of its corporate charter.

          e.   Upon termination of this Agreement for any reason whatsoever,
Manufacturer shall immediately return to X10 all information, documents and
materials, and all copies thereof, relating to the X10 Technology, the Products
and any Confidential Information.

     11.  Continuing Obligations.  Upon termination of this Agreement,
Manufacturer shall deliver to X10, in the manner requested by X10, all designs,
specifications, prototypes and other information relating to any request for or
performance of any services or the design, development or manufacture of any
Products pursuant to this Agreement. In addition, Manufacturer shall complete
and ship all outstanding orders to OEMs. Termination of this Agreement shall not
relieve Manufacturer of any obligation to X10 existing at the time of the
termination. In addition, the provisions of Sections 7 ("Warranties"), 9
("Confidentiality"), 10 ("Term; Termination"), 11 ("Continuing Obligations"), 17
("Waiver"), 18 ("Governing Law"), 19 ("Severability") and 20 ("Attorneys' Fees")
shall survive termination or expiration of this Agreement for any reason.

     12.  Indemnity.

          a.   Indemnification.  Each party (the "Indemnifying Party") shall
defend, indemnify and hold the other party and its officers, directors, agents,
customers and sublicensees harmless from and against any loss, damage, injury,
liability, claims, causes of action or other expense, including reasonable
attorneys' fees involved in the defense of any such action, that the other party
may suffer arising out of or resulting from (i) any breach or alleged breach of
any of the terms or conditions of this Agreement or any representations or
warranties of the indemnifying party made in this Agreement, in any purchase
order, or otherwise, or (ii) any act or omission of the indemnifying party, or
the servants, agents or subcontractors of the indemnifying party, in the
delivery of Products or in the performance of any work hereunder.

          b.   Indemnification Procedure.  In the event the Indemnifying Party
is obligated to indemnify the other Party (the "Indemnified Party") under this
Agreement, the Indemnified Party will, as soon as is reasonably practicable, (i)
provide the Indemnifying Party with prompt written notice of any claim for which
indemnification is required, (ii) tender the

                                       6
<PAGE>

defense of any such claim to the Indemnifying Party, (iii) provide full
cooperation for such defense at the Indemnifying Party's expense, and (iv) not
settle without the Indemnifying Party's prior written approval, which approval
shall not be unreasonably withheld. Notwithstanding the foregoing, failure to
give prompt notice as required by this Section 12.b. shall not preclude any
claims for indemnification unless such failure has the effect of prejudicing the
rights of the Indemnifying Party with respect to such claim. The Indemnified
Party may participate in any such defense or settlement with counsel of its own
choosing at its expense.

     13.  Limitation of Liability.  In no event will Manufacturer be liable for
any consequential, indirect, exemplary, special or incidental damages including,
without limitation, any lost profits, arising from or relating to this
Agreement. Manufacturer's total cumulative liability in connection with this
Agreement, whether in contract, tort or otherwise, will not exceed the amount of
fees actually paid to Manufacturer hereunder.

     14.  Force Majeure.  No failure or omission by either party in the
performance of any obligation hereunder shall be deemed a breach of this
Agreement, nor create any liability if same shall arise from acts of God, acts
of war, condemnation, appropriation, governmental regulations or orders, floods,
the elements, fire, explosions and other casualties, embargo, or any other
occurrences beyond the reasonable control of such party ("Force Majeure"). Each
party agrees to promptly notify the other party of any of the foregoing
occurrences and the non-performing party shall be excused from performance, to
the extent it relates to the Force Majeure, so long as such conditions prevail;
provided, however, that if the non-performing party remains unable to perform
for a continuous period of ninety (90) days, the other party may terminate this
Agreement on ten (10) days' written notice to the non-performing party.

     15.  Relationship of Parties.  The relationship of Manufacturer to X10 is
and during the term of this Agreement shall be solely that of an independent
contractor. Manufacturer will not have, and will not represent that it has, any
power, right or authority to bind X10, or to assume or create any obligation or
responsibility express or implied, on behalf of X10 or in X10's name, except as
herein expressly provided. Nothing stated in this Agreement shall be construed
as making partners of Manufacturer and X10, nor as creating any agency,
employment or franchise relationship between the parties.

     16.  Notices.  All notices or other communications hereunder shall be in
writing and shall be made by hand delivery, internationally-recognized overnight
courier, electronic mail or registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:

          X10:              X10 Wireless Technology, Inc.
                            15200 52nd Avenue South
                            Seattle, WA  98188-2335
                            Attn:  President
                            e-mail: wade@x10.com

                                       7
<PAGE>

          Manufacturer:     X10 Ltd.
                            Room 1103-4, Hilder Center
                            2 Sung Ping Street
                            Hunghom, Kowloon,
                            Hong Kong
                            e-mail: gseow@ibm.net

or at such other address as shall be furnished by any of the parties by like
notice, and such notice or communication shall be deemed to have been given or
made as of the date so delivered, if delivered personally, one (1) day after
deposit with an internationally-recognized overnight courier, and three (3)
calendar days after so mailed, if sent by registered or certified mail.

     17.  Entire Agreement.  This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, and all prior
arrangements and negotiations between the parties are hereby deemed to be merged
therein. This Agreement may be modified or amended only by mutual written
consent of the parties; provided, however, that after the effective date of
X10's first firm commitment underwritten public offering of its securities
registered under the Securities Act of 1933, as amended, any such modification
or amendment shall be effective only if it is approved by a majority of the
directors serving on the Audit Committee of the Board of Directors of X10.

     18.  Waiver.  Failure by either party to enforce at any time any term or
condition under this Agreement shall not be a waiver of the right to act on the
failure of such term or condition and shall not impair or waive that party's
right thereafter to enforce each and every term and condition of this Agreement.

     19.  Governing Law.  This Agreement will be governed and construed in
accordance with the laws of the State of Washington as applied to transactions
taking place wholly within Washington between Washington residents. The parties
hereby expressly consent to the exclusive personal jurisdiction of and venue in
the state and federal courts located in King County, Washington for any lawsuit
filed there arising from or related to this Agreement. Notwithstanding the
foregoing, however, X10 may bring an action for injunctive or equitable relief
in any jurisdiction it deems reasonably necessary to protect its proprietary
rights. This Agreement shall not be subject to or governed by the United Nations
Convention on Contracts for the International Sale of Goods, which is
specifically disclaimed by the parties.

     20.  Severability.  If any portion of this Agreement shall be held invalid
or inoperative, then, so far as is reasonable and possible, the remainder of
this Agreement shall be considered valid and operative, and effect shall be
given to the intent manifested by the portion held invalid or inoperative.

     21.  Attorneys' Fees.  The substantially prevailing party in any action
between the parties which is based on this Agreement or any document related
hereto shall have its reasonable attorneys' fees and other costs incurred in
such action or proceeding including any incurred for pre-suit, trial,
arbitration, post-judgment and appeal, paid by the other party.

                                       8
<PAGE>

     22.  Waiver of Conflicts.  Each party to this Agreement acknowledges that
Cooley Godward LLP ("Cooley Godward"), outside general counsel to X10,
represents only X10 with respect to the matters contained in this Agreement and
does not represent Manufacturer in connection herewith. Manufacturer understands
that and agrees that it should not rely upon the advice of Cooley Godward with
respect to the matters contained herein, and that it has had adequate
opportunity to obtain the advice of independent legal counsel with respect to
the matters contained in this Agreement.

                                       9
<PAGE>

     In Witness Whereof, the parties have executed this Contract Manufacturing
Agreement as of the date set forth below.

X10 Ltd.,                                 X10 Wireless Technology, Inc.,
a Bermuda corporation                     a Delaware corporation

By: /s/ George Stevenson                  By: /s/ Wade Pfeiffer
   ---------------------------------         ---------------------------------
George Stevenson, President               Wade Pfeiffer, CFO

Date: August 9, 2000                      Date: August 9, 2000

                                       10

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