Document:

WWW.EXFILE.COM, INC. -- 13929 -- MEDIS TECHNOLOGIES LTD. -- EXHIBIT 10.2 TO FORM 10-Q

    EXHIBIT
      10.2

    

    

    

    

    

    

    

    

    
      	
               

               

               

              AGREEMENT
                FOR MANUFACTURE

               

              BETWEEN

               

              MORE
                ENERGY LIMITED

               

              AND

               

              CELESTICA
                IRELAND LIMITED

               

               

               

              Final
                Version dated 27th
                September 2005

               

               

               

               

               

               

               

            

    

    

    

    

    

    
      
        
        

      

      
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      CONTENTS

      
        	 	 	 
	
                1.

              	
                DEFINITIONS

              	
                3

              
	
                2.

              	
                SCOPE
                  OF AGREEMENT

              	
                4

              
	
                3.

              	
                FORECAST
                  AND ORDER PROCEDURE

              	
                5

              
	
                4.

              	
                MATERIALS

              	
                6

              
	
                5.

              	
                DELIVERY
                  OF CONSIGNED MATERIALS TO CELESTICA

              	
                7

              
	
                6.

              	
                DELIVERY
                  AND RISK

              	
                8

              
	
                7.

              	
                ACCEPTANCE
                  OF CONSIGNED MATERIALS 

              	
                9

              
	
                8.

              	
                ORDER
                  AND FORECAST, UPSIDE FLEXIBILITY, AND RESCHEDULING

              	
                9

              
	
                9.

              	
                CANCELLATION

              	
                10

              
	
                10.

              	
                PRICES

              	
                11

              
	
                11.

              	
                PAYMENT

              	
                12

              
	
                12.

              	
                CUSTOMER
                  CREDIT LIMIT

              	
                12

              
	
                13.

              	
                TITLE

              	
                13

              
	
                14.

              	
                INTELLECTUAL
                  PROPERTY

              	
                13

              
	
                15.

              	
                QUALITY
                  ASSURANCE

              	
                14

              
	
                16.

              	
                CHANGE
                  CONTROL

              	
                15

              
	
                17.

              	
                COST
                  SAVING SHARING

              	
                16

              
	
                18.

              	
                EXCESS
                  AND/OR OBSOLETE MATERIAL

              	
                16

              
	
                19.

              	
                CELESTICA
                  WARRANTY

              	
                18

              
	
                20.

              	
                CUSTOMER
                  WARRANTY

              	
                19

              
	
                21.

              	
                INDEMNIFICATION

              	
                20

              
	
                22.

              	
                CUSTOMER
                  PROPERTY

              	
                20

              
	
                23.

              	
                CONFIDENTIALITY

              	
                21

              
	
                24.

              	
                FREEDOM
                  OF ACTION

              	
                21

              
	
                25.

              	
                EXCLUSIONS
                  AND LIMITATION OF LIABILITY

              	
                21

              
	
                26.

              	
                TERM
                  AND TERMINATION

              	
                22

              
	
                27.

              	
                GENERAL

              	
                23

              
	
                SCHEDULE
                  1

              	
                27

              
	
                SCHEDULE
                  2

              	
                28

              
	
                SCHEDULE
                  3

              	
                29

              

      

      

      
        
          
          

        

        
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    THIS
      AGREEMENT
      is made
      effective the 27th
      day of
      September, 2005 (the “Effective Date”)

    

    BETWEEN

    

    CELESTICA
      IRELAND LIMITED, whose
      registered office is located at Parkmore Business Park West, Ballybrit, Galway,
      Ireland ("Celestica”).

    

    AND

    

    MORE
      ENERGY LIMITED, with its principal place of business at 4
      Yodfat,
      Global Park, Lod, Israel (the “Customer”).

     

    WHEREAS

    

    This
      Agreement sets out the terms and conditions upon which Celestica will
      manufacture and supply to the Customer certain Products and supply certain
      Services as herein defined.

     

    IT
      IS AGREED

     

    1. DEFINITIONS 

     

    

    The
      following words and expressions shall have the following meanings:

    

    
      	1.1  	
              “Affiliate”
                means, with respect to a party hereto, a corporation that directly
                or
                indirectly controls, is controlled by or is under common control
                with that
                party.

            

    

    

    
      	1.2  	
              “Consigned
                Materials” shall mean the Materials that are consigned by the Customer to
                Celestica that support the manufacture of the Products by Celestica
                as
                listed in Schedule 2.

            

    

    

    
      	1.3  	
              “Customer
                Information” shall mean the specification for the relevant Product and all
                drawings, documentation, data, software, information and know-how,
                and any
                tooling provided by the Customer to
                Celestica.

            

    

    

    
      	1.4  	
              “Days”
                means calendar days unless otherwise identified
                herein

            

    

    

    
      	1.5  	
              “Excess”
                Material shall have the meaning set forth in Article 19.1

            

    

    

    
      	1.6  	
              “Forecast”
                shall have the meaning set forth in Article 3.1(b)

            

    

    

    
      	1.7  	
              “Intellectual
                Property” shall mean all patents, applications for patents, copyrights,
                mask works, trade secrets and any other intellectual property rights
                recognised by any jurisdiction 

            

    

    

    
      
        
        

      

      
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      	1.8  	
              “Material”
                shall mean any Consigned Materials and components and other Materials
                comprising or comprised in
                Products.

            

    

    

    
      	1.9  	
              “Obsolete”
                Material shall have the meaning set forth in Article 19.4.
                

            

    

    

    
      	1.10  	
              “Order”
                shall mean purchase order for Products and/or Services placed by
                the
                Customer subject to the terms and conditions of this
                Agreement.

            

    

    

    
      	1.11  	
              “Prices”
                shall mean the prices for Products and/or Services and/or non-recurring
                expenditure (“NRE”) (including, without limitation, tooling and fixtures
                and other agreed items) agreed between the parties from time to
                time.

            

    

    

    
      	1.12  	
              “Products”
                shall mean the products listed in Schedule 1 and described in the
                Specifications.

            

    

    

    
      	1.13  	
              “RMA”
                shall mean a return material authorisation to be provided by Celestica
                to
                the Customer.

            

    

    

    
      	1.14  	
              “Services”
                shall have the meaning set forth in Article 2.2.

            

    

    

    
      	1.15  	
              “Turnkey
                Materials” shall mean all materials required to manufacture a given
                Product that exclude the Consigned Materials consigned by the
                Customer.

            

    

    

    

     

    
      	2.  	
              SCOPE
                OF AGREEMENT

            

    

     

    

    
      	2.1  	
              This
                Agreement will apply to all Orders for Products and Services placed
                by the
                Customer and accepted by Celestica under this Agreement.
                

            

    

    

    
      	2.2  	
              From
                time to time, Customer or its Affiliates may wish to purchase services
                from Celestica. Such “Services” may include, but shall not be limited to:
                development, design, engineering, out-of-warranty repair, prototyping,
                distribution or other services as Customer may request and Celestica
                may
                provide from time to time and which may be described in more detail
                in
                various statements of work or Orders. Unless otherwise agreed to
                in
                writing between the parties, Celestica shall perform all Services
                in
                accordance with the terms and conditions set forth in this Agreement
                and
                in accordance with Celestica’s then-current fee schedule for such service,
                or if no fee exists for such service, at a mutually agreed upon
                price. 

            

    

    

    
      	2.3  	
              From
                time to time the Customer or its Affiliates may wish to purchase
                Products
                and/or Services directly from a Celestica Affiliate. In such event
                the
                Customer or its Affiliate, as applicable, shall issue an Order directly
                to
                Celestica’s Affiliate. The Order shall incorporate by reference the terms
                and conditions of this Agreement and, with respect to that Order,
                this
                Agreement shall be interpreted as if it had been entered into directly
                by

            

    

     

    
      
        
        

      

      
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                the
                  Celestica Affiliate and the Customer or Customer Affiliate, as
                  applicable.
                  By
                  issuing an Order, Customer’s Affiliates agree to be bound to the terms and
                  conditions of this Agreement. Customer will provide a copy of this
                  Agreement to its Affiliates who wish to place
                  Orders.

              

      

       

    

    
      	2.4  	
              Celestica
                will manufacture and deliver Products and supply Services pursuant
                to the
                terms of this Agreement, subject to the Customer first having provided
                Celestica with the Consigned Materials, the specification for the
                Product,
                together with any Customer Information and all other necessary drawings,
                documentation, data, software, and other information of the Customer
                and
                any consigned materials necessary for the manufacture of Products
                and the
                provision of Services.

            

    

    

    
      	2.5  	
              The
                Customer will accept Products and Services delivered, at agreed upon
                Prices, pursuant to the terms of this
                Agreement.

            

    

    

     

    
      	3.  	
              FORECAST
                AND ORDER PROCEDURE

            

    

     

    

    
      	3.1  	
              Each
                month, or on an more frequent basis as the parties may mutually agree,
                the
                Customer will provide Celestica with updated Orders and Forecasts
                for the
                Products so as to maintain a minimum of twelve (12) months of Order
                and
                Forecast coverage at all times. This monthly update shall
                include:

            

    

    

     

    
      	(a)  	
              Order(s)
                for Product requirements, in weekly increments, for that month and
                the
                following three (3) months, so as to maintain a minimum of three
                (3)
                months of required Product Orders at all times. 

            

    

    

     

    
      	(b)  	
              A
                forecast (the “Forecast”) of its intended purchases of Products for all
                remaining months in the Order and Forecast coverage period described
                above. Customer will use its best efforts to ensure that the Forecast
                is
                accurate but he Forecast will not constitute an
                Order.

            

    

    

    
      	3.2  	
              Celestica
                will acknowledge receipt of Orders as soon as reasonably practicable
                and
                notify the Customer of acceptance or non-acceptance of Orders within
                five
                working (5) days of receipt. 

            

    

    

    
      	3.3  	
              Celestica
                will use its commercially reasonable efforts to accept unplanned
                Orders or
                an increase in the quantity to be delivered relative to an Order,
                subject
                to the Customer's agreement to pay any related premium costs and
                charges
                incurred by Celestica. 

            

    

    

    
      	3.4  	
              Orders
                will incorporate by reference, the terms and conditions of this Agreement.
                This Agreement shall supersede the terms and conditions of such Orders
                and
                exclude any pre-printed terms and conditions found on the Customer’s
                Orders, which shall be deemed deleted. Orders will describe in more
                detail
                the required Product and/or Service to be rendered by Celestica and
                will
                include: the description and Price per unit of Product; the quantities
                ordered; Product revision details and such other information as the
                parties may

            

    

     

    
      
        
        

      

      
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                agree
                  is required. Orders may be issued in writing, by mail or facsimile,
                  or by
                  electronic means as agreed to by the
                  parties.

              

      

       

    

    
      	 	
              3.5

            	
              It
                is understood that the product of Customer is a new product and the
                rate
                of delivery to the market is not presently known and may be gradual.
                Accordingly, the Parties will coordinate a gradual increase in the
                quantity capabilities of Celestica (personnel and materials etc.)
                so as to
                manage the risk of the costs of the program.

            

    

     

    
      	4.  	
              MATERIALS

            

    

     

    
      	4.1  	
              The
                Customer hereby authorises Celestica, and Celestica shall be entitled,
                to
                order Turnkey Materials in accordance with Material leadtimes (for
                which
                Customer will be responsible in accordance with Article 19
                herein), as necessary to support Orders and Forecasts. Such authorisation
                shall include without limitation, additional Materials as are, in
                Celestica’s opinion, reasonably required, taking into account any supplier
                minimum order requirements, packaging sizes and economic order
                quantities.

            

    

    

    
      	4.2  	
              Without
                limiting Article 4.1above,
                where lead times for Materials are at any time longer than the period
                covered by Orders set out in Article 3.1(a)above,
                Celestica shall be authorized to order such Materials on the basis
                of the
                Forecast in order to meet the Customer's delivery requirements requested
                therein.

            

    

    

    
      	4.3  	
              Where
                the Customer so directs, Celestica will procure Turnkey Materials
                in
                accordance with the Customer’s approved vendor list. To use other vendors
                of Turnkey Materials, Celestica must obtain the Customer’s prior written
                consent, which consent shall normally be provided within fourteen
                (14)
                Days and, in any event, shall not be unreasonably withheld or
                delayed.

            

    

    

    
      	4.4  	
              In
                the event of any inconsistency between the terms and conditions of
                this
                Agreement and Customer negotiated terms and conditions with suppliers
                for
                Customer controlled components, then to the extent of any such
                inconsistencies or in the event of any Materials quality issues,
                Celestica
                shall be relieved of any liability to Customer with respect to Customer
                controlled components. 

            

    

    

    
      	4.5  	
              For
                Customer controlled Materials, Customer will use its commercially
                reasonable efforts to require its vendors to provide inbound hubs
                for the
                benefit of Celestica and Customer. Celestica will only be required
                to
                purchase Materials from such inbound hubs consistent with Customer’s
                immediate requirements for the manufacture of Products in accordance
                with
                Orders placed by Customer and accepted by
                Celestica.

            

    

    

    
      	4.6  	
              When
                requested by the Customer and upon receipt of a Customer Order, Celestica
                will purchase lifetime buys of Turnkey Materials that exceed the
                Forecast
                horizon. Upon receipt of the Turnkey Materials, Celestica will invoice
                the
                Customer for such Turnkey Materials. Payment shall be due to Celestica
                in
                US dollars, without offset or deduction, within thirty (30) Days
                from the
                date of Celestica’s invoice to Customer for such Turnkey Materials. For
                the period of time that Celestica stores such Materials for Customer,
                such

            

    

    
      

      
        
          
          

        

        
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                Materials
                  will be subject to warehousing charges at Celestica’s then-current rates.
                  Warehousing charges will be invoiced to Customer on a monthly
                  basis.

              

      

       

    

    
      	4.7  	
              Where
                the Customer directs Celestica to buy Turnkey Materials from contracts
                that are negotiated by the Customer, the Customer will have primary
                responsibility for directing its suppliers to perform in accordance
                with
                these contracts, including resolving any quality issues. The Customer
                shall make reasonable commercial efforts to align the terms and conditions
                for Customer controlled components with the terms and conditions
                of this
                Agreement. The Customer agrees to disclose the relevant terms and
                conditions of such supplier agreements to Celestica, including but
                not
                limited to terms related to payment, forecast, materials liability,
                return
                rights, flexibility terms, and MOQ. The Customer will be responsible
                for
                compensating Celestica for its reasonable costs related to Material
                quality issues or as a result of misalignments between Customer’s supplier
                agreements and this Agreement. Notwithstanding the aforesaid, the
                parties
                shall agree a Quality Assurance Plan including inspection and testing
                requirements in accordance with Article 16.
                Celestica shall maintain quality assurance systems for the control
                of
                Material quality and shall promptly notify Customer of any identified
                Material quality issues or deficiencies..

            

    

     

      
        	4.8  	
                
                  From
                    time to time, the Customer may request that Celestica sell Turnkey
                    Materials to Customer or its third party designee. Celestica
                    will make
                    reasonable efforts to accommodate any such request, provided
                    that any such
                    sale of Turnkey Materials does not interfere with Celestica’s ability to
                    perform Services and provide Product under this Agreement. Such
                    Turnkey
                    Materials shall be sold to Customer at the price reflected in
                    the current
                    cost of the Products, together with the applicable Material markup,
                    SG&A and profit rates, or as otherwise
                    agreed.

                

              

      

       

    

     

    
      	5.  	
              DELIVERY
                OF CONSIGNED MATERIALS TO
                CELESTICA

            

    

     

    

    
      	5.1  	
              Except
                as agreed otherwise, all Consigned Materials consigned to Celestica
                are
                delivered DDP (INCOTERMS 2000) Celestica’s premises. Arrangement for
                Carrier transportation is the responsibility of the
                Customer.

            

    

    

    
      	5.2  	
              Risk
                of loss and damage will pass from the Customer to Celestica upon
                delivery
                by the Customer pursuant to clause 5.1
                above.

            

    

    

    
      	5.3  	
              The
                Customer will ship Consigned Materials in mutually agreed upon form
                and
                packaging that supports Celestica’s manufacturing process and conforms to
                the Consigned Material specifications as supplied by the
                Customer.

            

    

    

    
      	5.4  	
              Celestica
                shall store Consigned Materials in a separate, secure location to
                prevent
                loss or damage.

            

    

    

    
      	5.5  	
              It
                is the responsibility of the Customer to ensure that enough Consigned
                Materials are delivered on a timely basis to support Orders and Forecasts
                including any additional

            

    

    
      

      
        
          
          

        

        
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                quantities
                  for mutually agreed upon process fallout per Quality Assurance
                  section
                  16.
                  Celestica will have no liability for delayed delivery of Product
                  due to
                  late or non-delivery of Consigned
                  Materials.

              

      

       

    

    
      	5.6  	
              Celestica
                shall not use Consigned Materials for any purpose other than for
                manufacturing Product, unless otherwise specified by the Customer
                in
                writing.

            

    

     

    
      	6.  	
              DELIVERY
                AND RISK

            

    

     

    
      	6.1  	
              Except
                as agreed otherwise, all Products sold to the Customer are delivered
                ExWorks (INCOTERMS 2000) Celestica's premises of manufacture, after
                packaging and certification by Celestica of conformance with the
                specifications and other terms of this
                Agreement.

            

    

    

    
      	6.2  	
              The
                Customer will arrange transportation and specify carrier and
                transportation instructions. If the Customer has not done so, Celestica
                shall arrange for transportation on the Customer’s behalf and at the
                Customer’s cost as directed in writing by
                Customer.

            

    

    

    
      	6.3  	
              Celestica
                will use its reasonable efforts to meet agreed delivery dates. Celestica
                will bear the cost of any reasonable additional freight charges
                necessarily incurred as a result of persistently late delivery, where
                such
                costs have been agreed by Celestica in advance.

            

    

    

    
      	6.4  	
              Risk
                of loss and damage will pass from Celestica to the Customer upon
                delivery
                by Celestica pursuant to Article 6.1above.

            

    

    

    
      	6.5  	
              All
                Products will be packed by Celestica in secure packaging considered
                appropriate by Celestica or otherwise as may be agreed to by the
                parties.

            

    

    

    
      	6.6  	
              The
                Customer is responsible for
                obtaining:

            

    

    

    
      	 	
              (a)

            	
              any
                necessary export and import licenses beyond the delivery point in
                Article
                6.1
                relating to Products; and 

            

    

     

    
      	 	
              (b)

            	
              any
                government or regulatory approvals relating to the marketing, sale
                or use
                of Products and maintaining compliance with all applicable laws and
                regulations in any jurisdiction to or from which Products are shipped
                or
                in or from which the Products are marketed, distributed or
                sold.

            

    

     

    Celestica
      will at Customer expense, use commercially reasonable efforts to assist Customer
      in these activities.

    

    
      	6.7  	
              Celestica
                will have the risk of loss for all Materials as
                follows:

            

    

    
      	a.  	
              Risk
                of loss and damage to Consigned Materials will pass from Customer
                to
                Celestica upon delivery by Customer pursuant to Article 5.1

            

    

     

    
      	b.  	
              Risk
                or loss and damage to Turnkey Materials will pass from Celestica
                to
                Customer upon deliver in the form of finished product pursuant to
                Article
                6.1or
                otherwise, subject to the terms of this
                Agreement.

            

    

     

    
      
        
        

      

      
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      	7.  	
              ACCEPTANCE
                OF CONSIGNED MATERIALS

            

    

     

    
      	7.1  	
              Celestica
                may reject Consigned Materials which are established, a) to have
                been
                materially damaged prior to delivery or b) not to have met, in all
                material respects, the specifications provided by the Customer (“Rejected
                Consigned Materials”).

            

    

     

    
      	7.2  	
              Celestica
                will notify the Customer in writing of Rejected Consigned Materials
                within
                three (3) Days of original discovery and will return Rejected Consigned
                Materials at the Customer’s risk and expense to the Customer within a
                further thirty (30) Days.

            

    

    

    
      	7.3  	
              The
                Customer will then at its election either promptly replace with Consigned
                Materials free from defect or reduce the forecast by the appropriate
                amount in respect to Rejected Consigned Materials and notify Celestica
                of
                its action.

            

    

     

    
      	8.  	
              ACCEPTANCE
                OF
                PRODUCTS BY CUSTOMER

            

    

     

    
      	8.1  	
              Customer
                may reject Products which are established, a) to have been materially
                damaged prior to delivery or b) not to have met, in all material
                respects,
                the specifications provided by the Customer (“Rejected
                Products”).

            

    

    

    
      	8.2  	
              Customer
                will notify Celestica in writing of Rejected Products within ten
                (10) Days
                of original receipt of shipment and will return Rejected Products
                at
                Celestica’s risk and expense to Celestica within a further thirty (30)
                Days. The Customer requires an RMA from Celestica prior to returning
                any
                Product. Celestica’s issuance of an RMA will not be unreasonably withheld.
                In the case of replacement or credit, title to the Rejected Product
                shall
                pass to Celestica on delivery to Celestica and verification of Rejected
                Product.

            

    

    

    
      	8.3  	
              Celestica
                will then promptly repair or replace with Products free from defects
                established in Article 8.1
                and reship at Celestica’s expense the new Products or credit as
                agreed.

            

    

    

    
      	8.4  	
              Upon
                acceptance by Customer of Product (including non-rejection as stated
                above) the provisions of Article 20
                shall apply. In the absence of earlier notification of rejection,
                the
                Customer will be deemed to have accepted Products ten (10) Days after
                delivery.

            

    

     

    
      	9.  	
              ORDER
                AND FORECAST, UPSIDE FLEXIBILITY, AND
                RESCHEDULING

            

    

     

    
      	9.1  	
              Upon
                Customer’s request, Celestica shall use its commercially reasonable
                efforts to:

            

    

     

    (a) accept
      unplanned Orders, or

     

    (b) accelerate
      delivery dates of existing Orders, or

     

    (c) accept
      increases in quantities on existing Orders;

     

    subject
      to Customer agreeing to meet any increased costs or premium charges incurred
      by
      Celestica as a result of such activity. 

    

    
      
        
        

      

      
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      	9.2  	
              Subject
                to Article 10.4,
                Customer may request Order delay or reschedule, which Celestica shall
                accept, provided Customer agrees to
                pay:

            

    

    

    
      	(a)  	
              No
                additional charge if delay or reschedule is outside the fixed 90
                Day Order
                period;

            

    

    

    
      	(b)  	
              The
                transformation and related costs of such Order(s) (or any part thereof)
                so
                delayed or rescheduled that Celestica is unable to mitigate, where
                "Transformation Cost" is defined as the full costs of Celestica
                attributable to such delayed or rescheduled Product manufacture which
                are
                not otherwise covered by Product being completed, including personnel,
                space, utilities, and the like, minus Celestica’s Material cost for such
                Products, plus a reasonable margin. Celestica will use its reasonable
                efforts to reallocate costs and thereby mitigate the costs to Customer
                of
                such delay or rescheduling. On Customers request, Celestica shall
                provide
                evidence of such costs.

            

    

    

    
      	9.3  	
              Further
                to article 9.2,
                Celestica shall use its commercially reasonable efforts to mitigate
                the
                costs caused by any such delay or rescheduling and any Excess or
                Obsolete
                Material created as a result of such delay or rescheduling will be
                dealt
                with in accordance with Article 19. 

            

    

    
      	9.4  	
              In
                the event that Customer requests completed Product be stored at Celestica
                prior to shipment to delivery pursuant to Article 6.1
                Celestica shall invoice on delivery of Product into the finished
                Product
                store and the Customer shall pay pursuant to Article 12.
                The parties shall agree the quantity of Product to be retained in
                the
                finished Product store at risk of loss and damage to Celestica. Celestica
                may apply a reasonable warehousing charge, which shall be invoiced
                to
                Customer on a monthly basis..

            

    

     

    
      	10.  	
              CANCELLATION

            

    

     

    
      	10.1  	
              Subject
                to Article 10.2,
                if
                Customer cancels an
                Order, (or
                any part thereof)
                or if an Order is deemed to be cancelled pursuant to
                Article 10.5,
                then:

            

    

     

    
      	
            	(a)	
              in
                the case of prototypes, pilot, pre-production, work-in-process (which
                Supplier shall be entitled to complete and deliver to Customer) or
                finished Products, Customershall pay to Supplier the full Price for
                such
                Order (or any part thereof) so
                cancelled;

            

    

     

    
      	
            	(b)	
              if
                the Order (or any part thereof) is cancelled
                within ninety (90) days of the original
                scheduled delivery date
                specified in such
                Order,
                then,
                for all Products that Celestica has not at such time commenced the
                manufacturing process,
                Customer shall pay
                to
                Celestica
                the transformation cost of the Order(s)
                (or any part thereof)
                so cancelled, where "transformation
                cost"
                is
                defined as the full
                Product price
                that the Celestica would have received for such Products if it had
                completed the manufacturing process
                on
                the date the Order(s)
                (or any part thereof)
                was cancelled,
                minus Celestica’s
                Material cost for such Products;

            

    

     

    
      
        
        

      

      
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            	(c)	
              Customer
                shall
                pay
                for all
                costs associated with
                any
                Obsolete Inventory and/or Excess Inventory that
                arises as a result of the cancellation of such Order (or any part
                thereof), in
                accordance with Article 19
                of
                this Agreement;
                and

            

    

     

    
      	
            	(d)	
              Customer
                shall pay Celestica an amount equal to
                any investment incurred by Celestica specifically in relation to
                that
                Order or this Agreement if the entire Agreement is terminated with
                the
                prior agreement of Customer and which has not been fully recovered
                by
                Celestica from Customer through amortization or other means.
                

            

    

    

    
      	10.2  	
              If
                any Order (or part thereof) is cancelled due to a termination pursuant
                to
                Article 27,
                Customer may direct Celestica to cease its manufacturing operations
                in
                respect of Products affected by such termination. In the event of
                such
                termination, Customer shall pay to Celestica all relevant amounts
                specified in Article 10.1.

            

    

     

    
      	10.3  	
              Celestica
                will use its commercially reasonable efforts to attempt to mitigate
                the
                costs described above on behalf of the Customer. All costs of Obsolete
                or
                Excess Materials and related handling charges shall be addressed
                in
                accordance with Article 19.

            

    

    

    
      	10.4  	
              In
                the event of Order cancellation, delay or reschedule that results
                in no
                Product manufacture for one (1) month or more. Customer and Celestica
                shall review and agree the minimum requirement of resources and fixed
                costs that Celestica shall maintain at Customers cost until Product
                Orders
                are placed, which shall be invoiced to Customer on a monthly
                basis.

            

    

    

    
      	10.5  	
              If
                the Customer refuses or fails to accept any delivery made by Celestica
                pursuant to any Order or this Agreement, such Order (or the relevant
                part
                thereof) may, at Celestica’s option, be deemed to have been cancelled by
                the Customer.

            

    

     

    
      	11.  	
              PRICES

            

    

     

    
      	11.1  	
              Prices
                are subject to volume of units and the number of shifts and are set
                forth
                in Schedule 3 to this Agreement. Prices will be subject to review
                by the
                Parties on a quarterly basis (and at such other times as may be agreed)
                at
                a Price review meeting to be arranged by the authorised representatives
                of
                the parties. Unless mutually agreed in writing the Prices in Schedule
                3
                (as modified hereunder by mutual agreement from time to time) will
                apply.

            

    

    

    
      	11.2  	
              Changes
                to Prices, and the manner and timing of their implementation, will
                be
                agreed by the parties on a fair and reasonable basis at such review
                meeting. In the event that Celestica holds any Product on behalf
                of the
                Customer, and Product is re-priced, Customer shall pay to Celestica
                an
                inventory revaluation charge equal to the difference between the
                previous
                Price and the new Price, multiplied by the total quantity of such
                Product
                owned by Celestica as of the effective date of the new
                Price.

            

    

    

    
      	11.3  	
              Prices
                are related to volume and in the event Customer does not purchase
                the
                anticipated volume of Product, Celestica reserves the right to adjust
                Prices to reflect the

            

    

    

    
      
        
        

      

      
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                actual
                  quantities of Product shipped to the Customer and invoice the Customer
                  for
                  the difference between the Price paid and the adjusted
                  Price.

              

      

       

    

    
      	12.  	
              PAYMENT

            

    

     

    
      	12.1  	
              All
                payments by Customer to Celestica under this Agreement shall be in
                the
                currency quoted by Celestica in the relevant quotation, unless otherwise
                restricted by the laws of a particular country in which the Products
                or
                Services are being purchased. Payment is due, without set off or
                deduction, net thirty (30) days from the date of
                invoice.

            

    

    

    
      	12.2  	
              Celestica
                will invoice on, or as soon as reasonably practicable after, the
                delivery
                of Products pursuant to Article 6.1
                and Article 9.4,
                or the rendering of Services.

            

    

    

    
      	12.3  	
              Unless
                the Customer provides appropriate exemption certificates, the Customer
                will be solely responsible for and will pay all taxes including value
                added taxes, duties or other governmental or regulatory charges in
                any
                country resulting from the performance of this Agreement, except
                for any
                income related taxes for which Celestica is directly
                liable.

            

    

    

    
      	12.4  	
              If
                the Customer fails to make any payment by the due date Celestica
                may, in
                addition to its other rights and remedies, charge interest on any
                overdue
                amounts, together with any additional costs and charges incurred
                by
                Celestica in collecting the overdue payment. If payment is not received
                within seven (7) Days of the due date, Celestica will notify Customer
                of
                its default and if the delay is due to a genuine error in Customer
                payment
                processing and payment is not received within a further seven (7)
                Days,
                then Celestica shall charge a late payment charge at a rate of one
                (1)
                percent per month after such fourteen (14) Day period, up to a maximum
                of
                thirty (30) Days from original due date. A late payment charge at
                a rate
                of one and a half (1.5) percent per month shall apply thereafter.
                It is
                anticipated that such genuine error would constitute an exceptional
                circumstance and in any other event Celestica may charge a late payment
                charge at a rate of two (2) percent per month from the original due
                date.
                Furthermore, Celestica may elect not to perform any further obligations
                under this Agreement and/or any Order until payment is received.
                

            

    

     

    
      	13.  	
              CUSTOMER
                CREDIT LIMIT
                AND PARENT GUARANTY 

            

    

     

    
      	13.1  	
              The
                Customer acknowledges that Celestica, in the performance of its
                obligations under this Agreement, will incur financial obligations
                on
                behalf of the Customer. The parties agree that Celestica will, before
                it
                incurs financial obligations on behalf of the Customer, and from
                time to
                time, establish, and advise the Customer in writing, the Customer’s credit
                limit with Celestica. The credit limit will be established after
                consultation between Customer and Celestica. Customer agrees to operate
                within its credit limit. In the event that Customer’s financial liability
                exceeds the amount of this credit limit, Celestica will give Customer
                notice of its default of this condition and,
                if

            

    

     

    
      
        
        

      

      
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                not
                  remedied within 7 Days, Celestica has the right to take appropriate
                  action
                  to reduce its financial
                  obligations.

              

      

       

    

    
      	13.2  	
              If
                the Customer entity entering into this Agreement is the parent
                corporation, then Customer unconditionally and irrevocably guarantees
                all
                payment and financial obligations, which arise directly or indirectly,
                from non-performance of an Affiliate’s obligations to Celestica and/or its
                Affiliates. In the event that a Customer Affiliate fails to perform
                any of
                its payment or other financial obligations to Celestica and/or its
                Affiliates under this Agreement, Celestica may make a claim against
                Customer under this guarantee. The liability of Customer as guarantor
                hereunder shall not be affected or modified by (i) failure of Celestica
                and/or its Affiliates to exercise any of their respective rights
                or
                remedies under this Agreement, any agreement, instrument or writing
                with
                the Customer Affiliate or at law, or (ii) any waiver by Celestica
                and/or
                its Affiliates of any of their respective rights or remedies under
                this
                Agreement, any agreement, instrument or writing with the Customer
                Affiliate. For greater certainty, Celestica and/or its Affiliates
                shall
                not be required to take any other steps against the Customer Affiliate
                prior to enforcing any of their respective rights or remedies hereunder
                against Customer.

            

    

    

    
      	13.3  	
              If
                the Customer entity entering into this Agreement is not the parent
                corporation, then, in consideration of Celestica’s extension of credit to
                the Customer, Customer shall have its parent corporation enter into
                a
                mutually acceptable agreement with Celestica, on or before the execution
                of this Agreement, to unconditionally and irrevocable guarantee to
                Celestica the prompt payment of all payment and financial obligations
                that
                are or may become due to Celestica from the Customer Affiliate under
                this
                Agreement.

            

    

     

    
      	14.  	
              TITLE

            

    

     

    
      	14.1  	
              Title
                and interest to Consigned Materials shall be with the Customer at
                all
                times. In addition, title and interest to other Materials paid for
                by
                Customer and held by Celestica shall be with the Customer.
                

            

    

    

    
      	14.2  	
              Except
                as otherwise specified in Article 20.2,
                title and interest to Products will pass to the Customer upon delivery
                pursuant to Article 6.1
                or
                on delivery of Product into the finished Product store pursuant to
                Article
                9.4.
                

            

    

     

    
      	15.  	
              INTELLECTUAL
                PROPERTY

            

    

     

    
      	15.1  	
              Except
                as otherwise set forth herein, neither this Agreement nor the provision
                of
                Services hereunder shall give either Celestica or the Customer any
                ownership, interest in, or rights to the intellectual property of
                the
                other party. All intellectual property that is owned or controlled
                by a
                party at the commencement of the Services, or obtained independently
                during the performance of the Services, (“Pre-existing IP”) shall remain
                under the ownership or control of such party throughout the performance
                of
                the Services and thereafter. 

            

    

     

    
      
        
        

      

      
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      	15.2  	
              As
                used herein, the term “Innovations” shall mean any improvements,
                inventions, developments or modifications conceived or developed
                by
                Celestica solely or jointly with the Customer pursuant to an ECN
                in
                accordance with Article 17
                or
                otherwise during the performance of the Services. The Customer shall
                be
                assigned ownership and sole intellectual property rights to any and
                all
                Innovations that are derived from or which contain any of the Customer
                Information, and/or the Customer Pre-existing IP therein (the "Customer
                Innovations”), Celestica shall retain all ownership and Intellectual
                Property rights to, including all other Innovations (the “Celestica
                Innovations”), whether or not jointly conceived,
                which:

            

    

    

    
      	 	
              (a)

            	
              derive
                in whole or in part from Celestica’s Pre-existing IP, proprietary
                information, materials and/or intellectual property;
                and/or

            

    

    

    
      	 	
              (b)

            	
              relate
                to the business of electronic design automation, the provision of
                printed
                circuit board or semiconductor design, generic manufacturing or design
                know-how, generic design processes, or generic design consulting
                services.
                For clarity sake, the term “generic” is meant to exclude innovations with
                specific application to fuel cell products or related technologies,
                which
                innovations, if any, will be the sole property of Customer..
                

            

    

    

    
      	15.3  	
              To
                perfect a party’s (“IP Owner”) ownership of its Pre-existing IP or
                Innovations in accordance with Clauses 15.1
                and 15.2
                above, the other party agrees, at the IP Owner’s expense, to assign to the
                IP Owner all rights the other party may have in the Pre-existing
                IP or
                Innovations and, if requested, to assist and co-operate with the
                IP Owner
                in all reasonable respects, execute all documents, and take all further
                acts reasonably necessary for the IP Owner to acquire, transfer,
                maintain
                and enforce its right in such Pre-existing IP or Innovations. Each
                party
                hereby waives, and shall secure the waiver of its employees, agents,
                and
                subcontractors relating to, any moral rights in such Pre-existing
                IP or
                Innovations in favor of the IP Owner, its successors and assigns
                to the
                fullest extent permitted by law.

            

    

    

    
      	15.4  	
              Each
                party agrees not to directly or indirectly reverse engineer any tangibles
                resulting from the Pre-existing IP or Innovations of the other party.
                Each
                party agrees not to alter, remove or destroy any proprietary markings
                or
                confidentiality legends or notices placed upon or contained within
                the
                Pre-existing IP or Innovations of the other party. Nothing in this
                Agreement gives either party the right to use the other party’s name,
                trade mark (s) or refer to or disclose the content hereof, whether
                directly or indirectly, in connection with any marketing or other
                activities, without the other party’s prior written
                consent.

            

    

     

    
      	16.  	
              QUALITY
                ASSURANCE

            

    

     

    
      	16.1  	
              Celestica
                will maintain quality assurance systems for the control of material
                quality, processing, assembly, testing, packaging and shipping in
                accordance with its usual policies and practices. The workmanship
                standard
                to be used by Celestica in building

            

    

    
       

      
        
          
          

        

        
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                PCB
                  sub-assembly Products is IPC-A-610 Rev. C Class 2, as published
                  by the
                  Institute for Interconnecting and Packaging Electronic Circuits.
                  Celestica
                  will carry-out the work hereunder pursuant to a mutually agreed
                  Quality
                  Assurance Plan. Any change to the aforementioned standard or Plan
                  shall
                  require the mutual agreement of the Parties.

              

      

       

    

    
      	16.2  	
              Celestica
                will perform its normal test procedures relating to Products and
                Services.
                If Celestica performs tests using test equipment, procedures or software
                provided by the Customer, Celestica will have no liability for defects
                in
                Products where failure to isolate the defect is attributable to such
                equipment, procedures or software.

            

    

    

    
      	16.3  	
              Either
                party may during normal business hours and following reasonable notice
                and
                subject to the other party’s normal security and confidentiality
                requirements, review the other party’s facilities and quality control
                procedures as reasonably necessary for the first party to satisfy
                itself
                of the other party's compliance with its obligations under this
                Agreement.

            

    

    

    
      	16.4  	
              The
                parties will endeavour to meet quarterly to discuss and resolve any
                issues
                which may have arisen including those relating to quality, performance,
                engineering changes, obsolescence or excess.

            

    

    

    
      	16.5  	
              For
                Consigned Materials, it is recognised by the Customer that through
                the
                regular course of manufacturing, Celestica will experience a certain
                amount of fallout. The Parties will agree on an accepted level of
                fallout
                of the Consignment Materials, and the Customer will not hold Celestica
                liable for this level of fallout. Beyond this level, Celestica will
                be
                responsible for the cost of replacing such Consigned Materials. The
                parties will review the previous quarters percentage fallout at the
                quarterly business review and the Customer will thus provide additional
                Consigned Materials to ensure that Orders can be fulfilled. . If
                fallout
                is due to defective Consigned Materials, the Customer will be advised
                and
                the Customer will direct Celestica to either return such defective
                Consigned Materials for failure analysis or
                scrap.

            

    

     

    
      	17.  	
              CHANGE
                CONTROL

            

    

     

    
      	17.1  	
              Either
                party may at any time propose changes to the relevant specification
                or the
                Products by a written Engineering Change Notice (“ECN”) to the other
                party.

            

    

    

    
      	17.2  	
              The
                recipient of an ECN will use all reasonable efforts to provide a
                detailed
                response within fourteen (14) Days of
                receipt.

            

    

    

    
      	17.3  	
              Celestica
                will advise the Customer of the likely impact of an ECN (including
                but not
                limited to delivery scheduling and Prices) on the provisions of any
                relevant Orders.

            

    

    

    
      	17.4  	
              Neither
                party will unreasonably withhold or delay agreement to an ECN and
                the
                parties will endeavor to agree and implement at the earliest opportunity
                ECN’s relating to personal and product
                safety.

            

    

     

    
      
        
        

      

      
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      	17.5  	
              Until
                an ECN and any associated impact have been agreed in writing, the
                parties
                will continue to perform their obligations without taking account
                of that
                ECN.

            

    

    

    
      	17.6  	
              Any Obsolete
                and/or Excess Materials resulting from an ECN will be dealt with
                in
                accordance with Article 19
                below.

            

    

    

    
      	17.7  	
              All
                costs of assessing and implementing ECN’s (including without limitation:
                premium costs of Materials; Material handling charges; process and
                tooling
                charges; administrative charges; engineering charges; and evaluation
                and
                testing costs) will be the responsibility of the Customer, except
                for
                ECN’s initiated by Celestica solely to improve its manufacturing
                processes. 

            

    

     

    
      	18.  	
              COST
                SAVING SHARING 

            

    

     

    
      	18.1  	
              Any
                cost savings which are achieved by Celestica as a result of changes
                proposed by Celestica will be dealt with in the following manner
                and the
                calculation of such cost savings sharing will commence in the quarter
                following the quarter in which Celestica’s implementation costs were fully
                recovered: (a) Celestica will retain 75% of the cost savings to the
                end of
                the first full quarter after Celestica fully recovers any costs of
                implementation; (b) the savings will be shared by Celestica and the
                Customer on a 50/50 basis in the subsequent quarter: and (c) thereafter,
                100% of the savings will be to the benefit of the Customer. The Parties
                will agree targets within a formal cost reduction plan to be administered
                between them.

            

    

     

    
      	19.  	
              EXCESS
                AND/OR OBSOLETE MATERIAL

            

    

     

    
      	19.1  	
              If
                at any time, the aggregate quantity of any item of Turnkey Material
                that
                Celestica has on hand, which has been ordered, manufactured or acquired
                in
                accordance with Article 3
                and Article 4,
                is greater than the sum of: (i) the quantity of such item of Turnkey
                Material consumed by Celestica in the manufacture of Products for
                the
                Customer under this Agreement in the preceding thirty (30) Days and
                (ii)
                the quantity of such Material Forecasted to be consumed by Celestica
                in
                the manufacture of Products for Customer under this Agreement in
                the
                subsequent fifteen (15) Days, then such excess quantity of Turnkey
                Material shall be deemed “Excess”.

            

    

    
      
         

      

      
        	19.2  	
                On
                  or about the fifteenth (15th) day of each month, Celestica shall
                  provide
                  Customer with a notice, setting out the amount and value of any
                  Excess
                  Turnkey Material on hand at the end of the previous month. Within
                  sixty
                  (60) Days of the date on which Customer receives such notice from
                  Celestica (the “Notice Receipt Date”), Customer shall contemporaneously
                  issue to Celestica (i) an inventory purchase order for any remaining
                  Excess Turnkey Material, pursuant to Article 19.5
                  below, and (ii) a purchase order for an inventory carrying charge
                  (the
                  “Inventory Carrying Purchase Order”) in the amount of one and a half (1.5)
                  percent per month of the average value of such Excess Material
                  carried by
                  Celestica from the Notice Receipt Date to the date that
                  the

              

      

    

     

    
      
        
          
          

        

        
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                  inventory
                    purchase order and the Inventory Carrying Purchase Order for
                    such Excess
                    Turnkey Material is issued by Customer to Celestica. The calculation
                    of
                    such average shall be based on month-ending inventory levels
                    unless
                    otherwise agreed in writing.

                

        

        
           

        

      

    

    
      	19.3  	
              Customer
                shall keep Celestica’s procurement organization apprised of any Turnkey
                Material purchased by Customer from Celestica under this Article
                19,
                which is suitable for use in the manufacture of Products and Celestica
                shall purchase such Material from Customer, on an as-needed basis,
                prior
                to purchasing such Turnkey Material from Material vendors. The purchase
                price of such Material shall be at the cost reflected in the then
                current
                Product pricing or as otherwise agreed in
                writing.

            

    

    

    
      	19.4  	
              In
                the event of:

            

    

     

    (a) a
      complete or partial termination, rescheduling or cancellation of an Order,
      or

     

    (b) a
      reduction in a Forecast, or

     

    (c) the
      termination of all or any part of this Agreement, or 

     

    (d) any
      other
      event, including a change in specifications or an engineering
      change,

     

    which
      results in any Turnkey Material which Celestica has purchased or issued a
      purchase order to the Material vendor for in accordance with Article 3 and
      Article 4, no longer being required by Celestica to manufacture Products (or
      being otherwise unsuitable for use in the manufacture of Products due to the
      passage of time) within the subsequent six (6) months, based on the most recent
      Orders and Forecast, such Turnkey Material shall be considered “Obsolete” and
      Customer shall be notified of the same subsequent to Celestica’s mitigation
      efforts as specified in Article 19.6
      below.
      Customer shall, within seven (7) business days of receiving such notice, issue
      an inventory Order to Celestica for such Obsolete Turnkey Material, pursuant
      to
      Article 19.5
      below.

    

    
      	19.5  	
              Customer
                will purchase the Excess Turnkey Material and/or the Obsolete Turnkey
                Material, as the case may be, pursuant to an inventory purchase order
                at
                the following prices: (i) in the case of Excess Turnkey Material,
                at the
                price reflected in the current cost of the Products, together with
                the
                applicable Turnkey Material markup, (ii) in the case of Obsolete
                Turnkey
                Material, at the price paid by Celestica for such Obsolete Turnkey
                Material, together with the applicable Turnkey Material markup. Any
                Excess
                or Obsolete Turnkey Material purchased by Customer from Celestica
                pursuant
                to an inventory purchase order shall be deemed Customer Owned Inventory.
                The inventory purchase order shall include the costs of mitigation
                incurred by Celestica pursuant to Article 19.6
                below, including under-recoveries resulting from the sale of Turnkey
                Material at prices less than the price originally paid by Celestica
                for
                such Turnkey Material, as well as costs relating to re-stocking or
                return
                charges. Any Customer Owned Inventory that Customer requests Celestica
                to
                store will be subject to warehousing charges at Celestica’s then-current
                rates. Warehousing charges will be invoiced to Customer on a monthly
                basis.

            

    

     

    
      
        
        

      

      
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      	19.6  	
              When
                any Turnkey Material is for any reason at any time rendered Excess
                or
                Obsolete, Celestica will use its reasonable efforts
                to:

            

    

     

    (a) cancel
      outstanding orders for such Turnkey Materials; and

     

    (b) return
      or
      sell such Turnkey Materials back to the original supplier or to a third party
      on
      such terms as Celestica may determine at its discretion; and

     

    (c) use
      excess/non-cancellable Turnkey Materials for the manufacture of other
      Products.

    

    Such
      mitigation efforts shall continue for a period of up to fourteen (14) Days.
      

    

    
      	19.7  	
              Notwithstanding
                the payment term specified in Article 12.1,
                all invoices relating to Excess or Obsolete Turnkey Material, as
                specified
                in this Article 19,
                shall be due to Celestica in the currency quoted by Celestica in
                the
                relevant quotation, without set off or deduction, within seven (7)
                Days of
                the date of such invoice.

            

    

    

    
      	19.8  	
              Notwithstanding
                the persons designated in Article 28.6,
                all notices, inventory purchase orders and any other communication
                required to be made or delivered by either party to the other party
                pursuant to this Article 19
                shall be sent to representatives agreed to by the
                parties.

            

    

     

    
      	20.  	
              CELESTICA
                WARRANTY

            

    

     

    
      	20.1  	
              Celestica
                warrants that it will without charge, repair, replace or credit,
                as it may
                elect, any Products which are proved to be defective as a result
                of a
                failure in Celestica's workmanship provided
                that:

            

    

     

    
      	 	
              (a)

            	
              the
                Customer notifies Celestica in writing within thirty (30) Days after
                discovery of the defect; and

            

    

     

    
      	 	
              (b)

            	
              such
                defective Product has been returned prepaid to Celestica’s designated
                repair location within one year after original delivery by Celestica
                (which period shall not be extended by the repair or replacement
                of
                Product), except where the defect is discovered in the last month
                of the
                warranty, where Customer notifies Celestica in accordance with Article
                20.1(a)
                above and returns the defective Product no later than thirty Days
                after
                the expiration of the warranty
                period.

            

    

    

    The
      Customer requires a return material authorization (RMA) from Celestica prior
      to
      returning any Products. All returned Product shall include documentation
      describing the nature of the defect, how it was discovered and under what
      conditions it occurred. Celestica’s issuance of an RMA will not be unreasonably
      withheld.

    

    
      	20.2  	
              The
                Customer will pay for the return of Products to Celestica’s designated
                premises. Celestica will pay for the redelivery to the Customer's
                premises
                as agreed of all repaired

            

    

    
      

      
        
          
          

        

        
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            29

          
            

          

        

        
          
          

        

         

      

      
        	 	
                or
                  replaced Products, where the returned Products were found by Celestica
                  to
                  be defective under Article 20.1above.
                  Title to replaced Product will pass to Celestica on delivery to
                  Celestica;
                  and title to replacement Product will pass to the Customer on delivery
                  to
                  the Customer.

              

      

       

    

    
      	20.3  	
              The
                above warranties will not apply to:

            

    

     

    
      	 	
              (a)

            	
              Products
                which have been misused, modified, damaged, placed in an unsuitable
                physical or operating environment or maintained improperly or caused
                to
                fail by any product or service not supplied by Celestica or to any
                Products which have been subjected to any repair not authorised in
                writing
                in advance by Celestica;

            

    

     

    
      	 	
              (b)

            	
              any
                defect caused by the Customer or a third party or by an error or
                omission
                or design or other fault in any Customer Information or in any other
                drawings, documentation, data, software, information, know-how or
                Materials provided or specified by the
                Customer;

            

    

     

    
      	 	
              (c)

            	
              prototypes
                and pre-production or pilot versions of Products which will be supplied
                “as is” without warranty of any kind;
                or

            

    

     

    
      	 	
              (d)

            	
              Products
                for which Celestica has not performed the standard inspection and
                test
                procedure at the request of the
                Customer.

            

    

    
       

    

    
      
        	20.4  	
                THIS
                  ARTICLE 20
                  SETS OUT CELESTICA’S SOLE OBLIGATION AND LIABILITY, AND THE CUSTOMER’S
                  EXCLUSIVE REMEDIES, FOR CLAIMS BASED ON DEFECTS IN OR FAILURE OF
                  ANY
                  PRODUCT OR SERVICE OR THE SUBJECT MATTER OF ANY SERVICE AND REPLACES
                  ALL
                  OTHER WARRANTIES, REPRESENTATIONS AND CONDITIONS, EXPRESS OR IMPLIED,
                  INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES, REPRESENTATIONS
                  OR
                  CONDITIONS OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
                  

              

      

    

     

    
      	21.  	
              CUSTOMER
                WARRANTY

            

    

     

    
      	21.1  	
              The
                Customer warrants that the Customer Information, Consigned Materials
                and
                any other items or information supplied by the Customer are accurate
                and
                contain all items and information of the Customer necessary for Celestica
                to manufacture and deliver the Products and
                Services.

            

    

    

    
      	21.2  	
              Celestica
                will notify the Customer of any manufacturing problems which it encounters
                and believes are related to the Consigned Materials, Product design
                or any
                Customer Information. The parties will jointly determine whether
                such
                manufacturing problems are attributable to the Consigned Materials,
                Product design or any Customer Information. Where such problems are
                so
                attributable, the Customer will be responsible for all costs incurred
                by
                Celestica to correct such problems. Celestica will not implement
                any
                changes to the Consigned Materials, Product design or any Customer
                Information without the Customer’s prior approval. Where any such changes
                result in

            

    

    
      

      
        
          
          

        

        
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            29

          
            

          

        

        
          
          

        

         

      

      
        	  	
                the
                  delay of any scheduled delivery date for Product, Celestica will
                  have no
                  liability for such delay and Customer may not cancel any orders
                  for
                  Products affected thereby.

              

      

       

    

    
      	21.3  	
              The
                Customer warrants that all Tooling and Information is owned by them
                or is
                licensed to them and its license to Celestica to use this Tooling
                and
                Information is in good standing and includes all rights to
                sub-license.

            

    

     

    
      	22.  	
              INDEMNIFICATION

            

    

     

    
      	22.1  	
              Customer
                agrees to indemnify, defend and hold harmless Celestica from and
                against
                all third party claims, costs, damages, fines, losses and expenses
                (including reasonable attorney’s fees) to the extent that such claims,
                costs, damages, fines, losses and expenses result from: (i) death,
                personal injury or property damage arising from Customer’s negligent acts
                or omissions or willful misconduct; or, (ii) an intellectual property
                infringement claim arising from any specifications, software, information
                supplied or any instructions given to Celestica by or on behalf of
                the
                Customer provided that Celestica gives Customer prompt notice in
                writing
                of the claim, provides reasonable assistance and co-operation to
                Customer
                in defense of the claim and permits Customer to control the defense
                of the
                claim. Celestica may employ counsel, at its own expense, to assist
                in the
                defense of the claim. Celestica shall have no authority to settle
                any
                claim on behalf of the Customer. 

            

    

    

    
      	22.2  	
              Celestica
                agrees to indemnify, defend and hold harmless Customer from and against
                all third party claims, costs, damages, fines, losses and expenses
                (including reasonable attorney’s fees) to the extent that such claims,
                costs, damages, fines, losses and expenses result from: (i) death,
                personal injury or property damage arising from Celestica’s negligent acts
                or omissions or willful misconduct; or, (ii) an intellectual property
                infringement claim arising from Celestica proprietary manufacturing
                processes used for the Customer provided that Customer gives Celestica
                prompt notice in writing of the claim, provides reasonable assistance
                and
                co-operation to Celestica in defense of the claim and permits Celestica
                to
                control the defense of the claim. Customer may employ counsel, at
                its own
                expense, to assist in the defense of the claim. Customer shall have
                no
                authority to settle any claim on behalf of Celestica.
                

            

    

     

    
      	23.  	
              CUSTOMER
                PROPERTY

            

    

     

    
      	23.1  	
              All
                Customer Information, tooling and Consigned Materials may be used
                by
                Celestica as required by Celestica for the purposes of performing
                its
                obligations under this Agreement and any
                Orders.

            

    

    

    
      	23.2  	
              All
                Customer Information, tooling and Consigned Materials will remain
                the
                Customer's property and will be treated by Celestica with substantially
                the same care as it treats its own property of a similar nature.
                

            

    

    

    
      
        
        

      

      
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          29

        
          

        

      

      
        
        

      

       

    

    
      	23.3  	
              Except
                for the costs of routine maintenance, the costs of maintenance,
                calibration and repair of any Customer tooling shall at all times
                be the
                responsibility of the Customer.

            

    

    

    
      	23.4  	
              All
                Customer property (including tooling, Materials, and finished Product
                owned by Customer stored at Celestica prior to delivery) shall be
                held by
                Celestica at Celestica’s risk for loss or
                damage.

            

    

     

    
      	24.  	
              CONFIDENTIALITY

            

    

     

    
      	24.1  	
              The
                parties will comply with the provisions of the confidentiality agreement
                referenced as 14th
                January
                2005.

            

    

    

    
      	24.2  	
              Nothing
                in this Agreement gives either party a right to use the other party’s
                name, trade mark(s), trade name(s) or to refer to, or disclose, the
                existence of this Agreement or any Orders or any terms and conditions
                of
                this Agreement or any Orders, whether directly or indirectly in connection
                with any marketing or other activities without the other party’s prior
                written consent. Either party may, however, be permitted to respond
                generally to inquiries regarding its business provided that it will
                not
                disclose specific terms of the Agreement, except as may be required
                under
                applicable laws and regulations.

            

    

     

    
      	25.  	
              FREEDOM
                OF ACTION

            

    

     

    
      	25.1  	
              Except
                as expressly provided pursuant to Article 24
                above, this Agreement shall not prevent Celestica or its Affiliates
                from
                marketing, acquiring, or developing materials, products or services
                which
                are similar or competitive to those of the Customer. Celestica may
                pursue
                activities independently with any third party, even if similar to
                the
                activities under this Agreement.

            

    

     

    
      	26.  	
              EXCLUSIONS
                AND LIMITATION OF LIABILITY 

            

    

     

    
      	26.1  	
              To
                the maximum extent permitted by law, under no circumstances will
                either
                party have any liability, whether in contract or for negligence or
                otherwise and whether related to any single event or series of connected
                events, and except for any obligation to pay amounts which are properly
                due and payable hereunder, for any of the
                following:

            

    

     

    
      	 	
              (a)

            	
              any
                liability in excess of:

            

    

     

    
      	 	
              i)

            	
              in
                the case of damage to or loss of tangible property, the value of
                such
                property; and

            

    

     

    
      	 	
              ii)

            	
              in
                any event, regarding any other liability, the total of the Prices
                (if any)
                paid by the Customer for the product(s) which is the subject of the
                claim
                or $500,000.00 (whichever is the
                lesser);

            

    

     

    
      
        
        

      

      
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          29

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (b)

            	
              any
                liability for any incidental, indirect, exemplary, punitive, special
                or
                consequential damages or any other damages, including without limitation,
                loss of business, loss of records or data, loss of use, loss of profits,
                revenue or anticipated savings or other economic loss whether or
                not a
                party was informed or was aware of the possibility of such loss;
                or

            

    

     

    
      	 	
              (c)

            	
              any
                third party claims, other than claims arising under Article 22,
                against the other party for any loss, damage, costs or
                expenses.

            

    

    

    
      	26.2  	
              Neither
                party may bring an action under this Agreement more than two (2)
                years
                after the cause of action arose or the party becoming aware of the
                existence thereof, whichever is
                later.

            

    

    

    
      	26.3  	
              The
                provisions of Article 26.1(a)(ii)
                does not apply to the liability of a Party hereunder arising under
                Article
                22
                or
                Article 24
                above to the extent that it relates to either Parties Pre-Existing
                IP and
                Innovations.

            

    

     

    
      	27.  	
              TERM
                AND TERMINATION

            

    

     

    
      	27.1  	
              This
                Agreement:

            

    

     

    
      	 	
              (a)

            	
              is
                effective from the Effective Date and continues for a period of three
                (3)
                years from the Effective Date unless and until terminated in accordance
                with this Article 27;
                and

            

    

     

    
      	 	
              (b)

            	
              will
                automatically renew for additional one (1) year terms after the expiration
                of the initial term unless either party receives from the other,
                at least
                six (6) months prior to the end of the initial term or any renewal
                term,
                written notice to terminate this Agreement at the end of the then
                current
                term. 

            

    

    

    
      	27.2  	
              Customer
                may terminate this Agreement by giving Celestica six (6) months prior
                written notice at any time. In the event of termination pursuant
                to this
                Article 27.2:

            

    

     

    
      	 	
              (a)  
                

            	
              termination
                of this Agreement will not prejudice accrued rights and liabilities
                (including payment of Prices for Product delivered) of either party;
                and
                

            

    

     

    
      	 	
              (b)  
                

            	
              on
                the termination or other discharge of this Agreement Celestica will,
                in so
                far as reasonably practicable following the Customer’s request, deliver up
                to the Customer at the Customer's expense and risk all Customer
                Information (for which, if applicable, Celestica has been paid in
                full) on
                an “as is” basis;

            

    

    
      	(c)  	
              the
                parties will mutually agree a transition plan and associated costs
                in the
                event the Customer’s written instructions issued with the notice of
                termination require variation from the provisions of this Article
                27
                with regard to (i) completion of any work in process; (ii) packaging
                and
                shipping of any completed Products and/or Consigned materials or
                partially
                completed products; 

            

    

    
       

      
        
          
          

        

        
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            29

          
            

          

        

        
          
          

        

      

       

      
        	(d)  	
                Celestica
                  will at Customers cost follow Customer’s reasonable instructions with
                  regard to packaging and shipping of all capital equipment, including
                  tooling, test equipment and the like, owned by Customer.
                  

              

      

    

    

    
      	27.3  	
              Either
                party may terminate any Order and/or this Agreement: 

            

    

     

    
      	 	
              (a)

            	
              if
                the other party commits a material breach of any of the terms of
                this
                Agreement and fails to remedy the breach within sixty (60) Days of
                written
                notice requiring it to do so; or 

            

    

     

    
      	 	
              (b)

            	
              immediately,
                if the other party becomes insolvent or is declared bankrupt, or
                if a
                receiver and manager, liquidator, trustee in bankruptcy or other
                officer
                with similar powers is appointed over all or a substantial part of
                the
                assets of that party, or if that party files a proposal or a notice
                of
                intention to make a proposal under the Bankruptcy and Insolvency
                Act or
                any similar law, or any equivalent event occurs under any relevant
                jurisdiction;

            

    

    

    and
      in
      any such case on termination under 27.3(a)
      or
      (b) above the terminating party shall have no further obligations to the other
      party except to make payment:

     

    
      	 	
              (c)
                

            	
              of
                Prices for Product delivered prior to the date of termination; and
                

            

    

     

    
      	 	
              (d)

            	
              for
                any Orders cancelled, in accordance with Article 10.2,

            

    

    

    less
      any
      amount owing to the terminating party.

    

    
      	27.4  	
              The
                terms of Article 10
                "Cancellation" will apply to any Orders cancelled as a result of
                termination pursuant to this Article 27and
                the terms of Article 19
                "Excess and/ or Obsolete Material" will apply to any Material rendered
                Excess or Obsolete by such
                cancellation.

            

    

    

    
      	27.5  	
              Celestica
                and Customer shall review the completion of all Orders placed and
                accepted
                prior to the termination of this Agreement in accordance with Customer’s
                instruction. Furthermore, unless otherwise agreed in writing between
                the
                parties, the terms of this Agreement will remain in effect during
                and
                after the initial term and will continue to govern any Orders issued
                by
                the Customer.

            

    

     

    
      	28.  	
              GENERAL

            

    

     

    
      	28.1  	
              Resale,
                import and export -
                The Customer will comply with all applicable laws and regulations
                and will
                obtain all necessary licenses and consents for the resale, import
                or
                export of Products and Consigned Materials under the laws and regulations
                of any relevant jurisdiction. Celestica will use commercially reasonable
                efforts to assist Customer at Customers cost where appropriate under
                this
                paragraph.

            

    

    

    
      	28.2  	
              Location
                Celestica
                may request Customer authorization to relocate the manufacturing
                site to
                another location at Celestica's cost and expense. Customer shall
                review
                the

            

    

     

    
      
        
        

      

      
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          of
          29

        
          

        

      

      
        
        

      

    

    
      

      
        	  	
                associated
                  impact on Customer requirements and shall accept such request,
                  subject to
                  no negative impact on the Customer.

              

      

       

    

    
      	28.3  	
              Effective
                terms and precedence - 

            

    

     

    
      	 	
              (a)

            	
              Together
                with Orders, the terms of this Agreement constitute the entire agreement
                between the parties in respect of the subject matter thereof and
                supersede
                and exclude all other representations, promises and proposals, whether
                oral or written. 

            

    

     

    
      	 	
              (b)

            	
              Any
                standard terms and conditions set out in any Customer Order form
                will be
                without effect.

            

    

     

    
      	 	
              (c)

            	
              Any
                rights or obligations under this Agreement which by their nature
                continue
                after termination will remain in effect until they are
                completed.

            

    

     

    
      	 	
              (d)

            	
              If
                there is any conflict or inconsistency between the terms of any Order
                or
                other documents and the terms of this Agreement then the terms of
                this
                Agreement will prevail over the Order or any other such
                document.

            

    

    

    
      	28.4  	
              Severability
                - If
                any provision or any part thereof contained in any Order or this
                Agreement
                is, for any reason, held to be invalid or unenforceable in any respect
                under the laws of any jurisdiction where enforcement is sought, such
                invalidity or unenforceability will not affect any other provision
                of such
                Order or this Agreement and such Order and this Agreement will be
                construed as if such invalid or unenforceable provision or part thereof
                had not been contained therein.

            

    

    

    
      	28.5  	
              Variations
                -
                No
                purported variation or amendment of this Agreement or any Order will
                be
                valid unless made or confirmed in writing by a duly authorised
                representative of each party.

            

    

    

    
      	28.6  	
              Notices
                -
                All notices must be in writing and sent by prepaid registered mail,
                by
                facsimile or by electronic mail or delivered personally to the parties
                at
                their respective addresses set out below or such other address as
                may be
                notified from time to time by the addressee to the other party. A
                notice
                shall be deemed to have been given on the date of receipt if sent
                by
                prepaid registered mail, on the date of transmission in the case
                of
                facsimile or electronic communication or on the date of delivery
                if it is
                delivered by hand.

            

    

    

    Notices
      delivered to Customer shall be delivered to:

    

    More
      Energy Limited

    2
      Yodfat
      Street

    Global
      Park

    PO
      Box
      1112

    Lod
      71291

    Israel

    

    Attention:
      Israel Fisher

    fax
      + 972
      (8) 9200024

    

    
      
        
        

      

      
        24
          of
          29

        
          

        

      

      
        
        

      

    

     

    Notices
      delivered to Celestica shall be delivered to:

    

    Celestica
      Limited

    Clock
      Tower

    Manor
      Lane

    Holmes
      Chapel

    Cheshire

    CW4
      8AB

    Attention:
      Contracts Department

    Fax:
      +44
      (0) 1477 536 202

    

    With
      a
      copy to:

    

    Celestica
      International Inc.

    1150
      Eglinton Avenue, East

    Toronto,
      Ontario

    M3C
      1H7

    Attention:
      Corporate Counsel

    fax:
      +1
      416 448 2817

    

    
      	28.7  	
              Waiver
                -
                The waiver of any term, condition or provision of this Agreement
                must be
                in writing and signed by an authorized representative of the waiving
                party, Any such waiver will not be construed as a waiver of any other
                term, condition or provision except as provided in writing, nor a
                waiver
                of any subsequent breach of the same term, condition or
                provision.

            

    

    

    
      	28.8  	
              Force
                majeure -
                Neither party will be liable for any delay in performing or for failing
                to
                perform obligations (other than payment obligations) resulting from
                acts
                of God; inclement weather; fire; explosions; floods; strikes; work
                stoppages; slow-downs or other industrial disputes; accidents; riots
                or
                civil disturbances; acts of government; inability to obtain any necessary
                license or consent; delays by suppliers or Material shortages or
                from any
                cause whatsoever beyond its reasonable
                control.

            

    

    

    
      	28.9  	
              Assignment
                - 

            

    

     

    
      	 	
              (a)

            	
              Neither
                party may assign this Agreement or any Order or any part thereof
                without
                the written consent of the other party, such consent not to be
                unreasonably withheld. 

            

    

     

    
      	 	
              (b)

            	
              The
                expressions "Celestica" and the "Customer" include their respective
                successors and permitted assigns where the context
                admits.

            

    

    

    
      	28.10  	
              Relationship
                of the parties -
                The relationship of Celestica and Customer as established under this
                Agreement and any Order(s) will be and at all times remain one of
                independent contractors, and neither party will at any time nor in
                any way
                represent itself as being a dealer, agent or other representative
                of the
                other party or as

            

    

     

    
      
        
        

      

      
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          29

        
          

        

      

      
        
        

      

    

    
      

      
        	  	
                having
                  authority to assume or create obligations or otherwise act in any
                  manner
                  on behalf of the other party.

              

      

       

    

    
      	28.11  	
              Headings
                -
                The headings in this Agreement are inserted for convenience only
                and do
                not constitute a part of any agreement nor are they to be referred
                to in
                its interpretation.

            

    

    

    
      	28.12  	
              Governing
                law -
                This Agreement and all transactions under it will be governed by
                the laws
                of the State of New York, USA exclusive of any provisions of the
                United
                Nations Convention on the International Sale of Goods and without
                regard
                to principles of conflict of laws. The parties submit to the non-exclusive
                jurisdiction of the courts of New York, USA. The parties hereto expressly
                waive any right they may have to a jury trial and agree that any
                proceedings under this Agreement shall be tried by a judge without
                a
                jury.

            

    

     

    Agreed
      to by the duly authorized representatives of the parties as of the date first
      set forth above:

    

    MORE
      ENERGY LIMITED:

    

    
      	
              Signed
                by: /s/ Gennadi Finkelshtein  

            	Signed by: /s/ Israel Fisher  
	
              Name:
                Gennadi Finkelshtein 

            	Name: Israel Fisher  
	
              Title:
                General Manager 

            	Title: Senior Vice President
              Finance  
	
              Date:
                28th Sept. 05 

            	Date: 28th Sept. 05  

    

    

    CELESTICA
      IRELAND LIMITED:

    

    Signed
      by: /s/ Kevin Walsh 

    Name:
      Kevin Walsh 

    Title:
      V.P. AMS 

    Date:
      28th Sept 05 

    

    
      
        
        

      

      
        26
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    SCHEDULE
      1

     

    PRODUCTS
      AND SPECIFICATION 

    

    

    
      
        
        

      

      
        27
          of
          29

        
          

        

      

      
        
        

      

    

    

     

    SCHEDULE
      2

     

    CONSIGNED
      MATERIALS AND SPECIFICATIONS

    

    

    

    
      
        
        

      

      
        28
          of
          29

        
          

        

      

      
        
        

      

    

    

     

    SCHEDULE
      3

     

    PRICES

    
       

      
        MORE
          ENERGY - FUEL CELL

         

        28th
          September 2005

         

        ASSUMPTIONS

         

        Prices
          are guideline prices only and are not considered a quote

         

        
          	1.	
                  Currency

                

        

         

        Prices
          are stated in US Dollars for comparison. Celestica reserve the right to
          quote in
          Euro. Average August exchange
          rates have been used in the above pricing 

         

        1 Euro is equal to 1.24 USDollars

         

        1
          US Dollar is equal to 0.8065 Euros

         

        
          	2.	
                  Cost
                    Basis

                

        

         

        Costs
          are
          estimated based on information available and reviewed with More Energy
          on 23
          August 2005

         

        
          	3.	
                  Space
                    

                

        

         

        Space
          Cost is based on current drawings of proposed lines

         

        
          	4.	
                  Direct
                    Labour/Machine usage

                

        

         

        Direct
          labour is based on a 24 x 7 work pattern of lines over 4 shifts.

         

        Numbers
          of direct employees are based on current drawings of proposed
          lines.

         

        
          
            	5.	
                    Facility
                      Running Costs

                  

          

        

         

        Based
          on
          allocation of square footage and current drawings.

         

        
          	6.	
                  Materials

                

        

         

        Materials
          are estimated costs based on information available on 28 September 2005.
          These
          costs will change based on product design and consigned versus turnkey
          split.
          Celestica and customer to agree on which materials are consigned versus
          turnkey.

         

        
          
             

          

          
             

            
              

            

          

          
             

          

           

        

        
          	7.	
                  Margins

                

        

         

        Margins
          percentages over the various cost headings are as follows:

         

        Consigned Material 0%

        Turnkey Material 6.5%

        Value Add 15%

        Margin
          percentage is defined as margin divided by revenue.

         

        
          	8.	
                  Freight
                    Out

                

        

         

        Freight
          Out has been excluded from the cost model

         

        
          	9.	
                  Equipment

                

        

         

        All
          customer dedicated equipment is assumed to be consigned by More
          Energy

         

        
          	10.	
                  Manufacturing
                    Scope

                

        

         

        Scope
          of
          manufacturing includes the following:

         

        Fuel
          component manufacture/formulation

        Fuel
          Cell
          assemby and packaging

         

        
          
             

          

          
             

            
              

            

          

          
             

          

           

        

      

      
              

      
        
          FUEL
            CELL MODEL, YEARLY COSTS

        

        
           

          
            	 	
                    DOLLARS

                  	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	
                     

                  	
                     

                  	
                     

                  	
                    Qty/Mth
                      Millions

                  	
                    #
                      of Shifts

                  	 	
                    Qty/Mth
                      Millions

                  	
                    #
                      of Shifts

                  	 	
                    Qty/Mth
                      Millions

                  	
                    #
                      of Shifts

                  	 	
                    Qty/Mth
                      Millions

                  	
                    #
                      of Shifts

                  	 
	 	
                     

                  	 	 	
                    *

                  	
                    *

                  	 	
                    *

                  	
                    *

                  	 	
                    *

                  	
                    *

                  	 	
                    *

                  	
                    *

                  	 
	 	
                     

                  	 	 	
                    LEAD
                      

                    TIME

                  	
                    *

                  	 	
                    LEAD
                      

                    TIME

                  	
                    *

                  	 	
                    LEAD
                      

                    TIME

                  	
                    *

                  	 	
                    LEAD
                      

                    TIME

                  	
                    *

                  	 
	 	
                     

                  	 	 	
                     

                  	
                     

                  	 	
                     

                  	
                     

                  	 	
                     

                  	
                     

                  	 	
                     

                  	
                     

                  	 
	 	
                     

                  	
                     

                  	
                     

                  	
                    1
                      Lines

                  	
                     

                  	 	
                    1
                      Lines

                  	
                     

                  	 	
                    1
                      Lines

                  	
                     

                  	 	
                    1
                      Lines

                  	
                     

                  	 
	 	
                     

                  	 	 	
                    #
                      of 

                    Emps

                  	
                    Cost
                      $

                  	 	
                    #
                      of 

                    Emps

                  	
                    Cost
                      $

                  	 	
                    #
                      of 

                    Emps

                  	
                    Cost
                      $

                  	 	
                    #
                      of 

                    Emps

                  	
                    Cost
                      $

                  	 
	 	
                    Cumulative
                      Costs

                  	 	
                    PER
                      

                    YEAR
                      

                  	
                    Purch.
                      

                    Line

                  	
                    *

                  	 	
                    Purch.
                      

                    Line

                  	
                    *

                  	 	
                    Purch.
                      

                    Line

                  	
                    *

                  	 	
                    Purch.
                      

                    Line

                  	
                    *

                  	 
	 	
                    MATERIAL

                  	 	 	
                     

                  	
                     

                  	 	
                     

                  	
                     

                  	 	
                     

                  	
                     

                  	 	
                     

                  	
                     

                  	 
	 	
                    *

                  	 	
                    *

                  	
                     

                  	
                    *

                  	 	
                     

                  	
                    *

                  	 	
                     

                  	
                    *

                  	 	
                     

                  	
                    *

                  	 
	 	
                    *

                  	 	
                    *

                  	
                     

                  	
                    *

                  	 	
                     

                  	
                    *

                  	 	
                     

                  	
                    *

                  	 	
                     

                  	
                    *

                  	 
	 	
                    *

                  	 	
                     

                  	
                     

                  	
                    *

                  	 	
                     

                  	
                    *

                  	 	
                     

                  	
                    *

                  	 	
                     

                  	
                    *

                  	 
	 	
                    Total
                      Material

                  	 	 	
                     

                  	
                    *

                  	 	
                     

                  	
                    *

                  	 	
                     

                  	
                    *

                  	 	
                     

                  	
                    *

                  	 
	 	
                     

                  	 	 	
                     

                  	
                     

                  	 	
                     

                  	
                     

                  	 	
                     

                  	
                     

                  	 	
                     

                  	
                     

                  	 
	 	
                    DIRECT

                  	 	 	
                     

                  	
                     

                  	 	
                     

                  	
                     

                  	 	
                     

                  	
                     

                  	 	
                     

                  	
                     

                  	 
	 	
                    *

                  	
                     

                  	
                    *

                  	
                    *

                  	
                    *

                  	 	
                    *

                  	
                    *

                  	 	
                    *

                  	
                    *

                  	 	
                    *

                  	
                    *

                  	 
	 	
                    *

                  	 	
                    *

                  	
                    *

                  	
                    *

                  	 	
                    *

                  	
                    *

                  	 	
                    *

                  	
                    *

                  	 	
                    *

                  	
                    *
                      

                  	 
	 	
                    *

                  	 	
                    *

                  	
                    *

                  	
                    *

                  	 	
                    *

                  	
                    *

                  	 	
                    *

                  	
                    *

                  	 	
                    *

                  	
                    *
                      

                  	 
	 	
                    *

                  	
                    *

                  	
                    *

                  	
                    *

                  	 	
                    *

                  	
                    *

                  	 	
                    *

                  	
                    *

                  	 	
                    *

                  	
                    *
                      

                  	 
	 	
                    *

                  	
                    *

                  	
                    *

                  	
                    *

                  	 	
                    *

                  	
                    *

                  	 	
                    *

                  	
                    *
                      

                  	 	
                    *

                  	
                    *
                      

                  	 
	 	
                    Labour
                      (Direct)

                  	 	 	
                    *

                  	
                    *
                      

                  	 	
                    *

                  	
                    *

                  	 	
                    *

                  	
                    *

                  	 	
                    *

                  	
                    *

                  	 
	 	
                     

                  	 	 	
                     

                  	
                     

                  	 	
                     

                  	
                     

                  	 	
                     

                  	
                     

                  	 	
                     

                  	
                     

                  	 
	 	
                    Indirect
                      Cost

                  	 	 	
                     

                  	
                     

                  	 	
                     

                  	
                     

                  	 	
                     

                  	
                     

                  	 	
                     

                  	
                     

                  	 

             

            
              
                 

              

              
                 

                
                  

                

              

              
                 

              

            

             

            
              	 	
                      *

                    	 	
                      *

                    	
                      *

                    	
                      *
                        

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *
                        

                    	 
	 	
                      *

                    	 	
                      *

                    	
                      *

                    	
                      *
                        

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 
	 	
                      *

                    	 	
                      *

                    	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *
                        

                    	 	
                      *

                    	
                      *
                        

                    	 	
                      *

                    	
                      *
                        

                    	 
	 	
                      *

                    	 	
                      *

                    	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 
	 	
                      *

                    	 	
                      *

                    	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 
	 	
                      *

                    	
                      *

                    	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 
	 	
                      *

                    	 	
                      *

                    	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 
	 	
                      *

                    	
                      *

                    	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 
	 	
                      *

                    	
                      *

                    	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 
	 	
                      *

                    	
                      *

                    	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 
	 	
                      *

                    	 	
                      *
                        

                    	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 
	 	
                      *

                    	 	
                      *

                    	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 
	 	
                      *

                    	 	
                      *

                    	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 
	 	
                      *

                    	 	
                      *

                    	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 
	 	
                      *

                    	
                      *

                    	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 
	 	
                      Total
                        Indirect labour

                    	 	
                       

                    	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 
	 	
                      *

                    	 	 	
                       

                    	
                       

                    	 	
                       

                    	
                       

                    	 	
                       

                    	
                       

                    	 	
                       

                    	
                       

                    	 
	 	
                      *

                    	 	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 
	 	
                       

                    	 	 	
                       

                    	
                       

                    	 	
                       

                    	
                       

                    	 	
                       

                    	
                       

                    	 	
                       

                    	
                       

                    	 
	 	
                      TOTAL
                        LABOUR

                    	 	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 
	 	
                       

                    	
                       

                    	 	
                       

                    	
                       

                    	 	
                       

                    	
                       

                    	 	
                       

                    	
                       

                    	 	
                       

                    	
                       

                    	 
	 	
                      Operating
                        Costs

                    	 	 	
                       

                    	
                       

                    	 	
                       

                    	
                       

                    	 	
                       

                    	
                       

                    	 	
                       

                    	
                       

                    	 
	 	
                      *

                    	 	
                      *

                    	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 
	 	
                      *

                    	 	
                      *

                    	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 
	 	
                      *

                    	 	
                      *

                    	
                       

                    	
                      *

                    	 	
                       

                    	
                       

                    	 	
                       

                    	
                       

                    	 	
                       

                    	
                       

                    	 
	 	
                      *

                    	 	
                      *

                    	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 
	 	
                      *

                    	 	
                      *

                    	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 
	 	
                      *

                    	 	
                      *

                    	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 
	 	
                      *

                    	 	
                      *

                    	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 
	 	
                      *

                    	 	
                      *

                    	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 
	 	
                      *

                    	
                      *

                    	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 
	 	
                      *

                    	 	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 
	 	
                      *

                    	 	
                      *

                    	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 	
                      *

                    	
                      *

                    	 
	 	
                      *

                    	
                       

                    	
                      *

                    	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 	
                       

                    	
                      *

                    	 

               

              
                
                   

                

                
                   

                  
                    

                  

                

                
                   

                

              

               

              
                	 	
                         

                      	 	 	
                         

                      	
                         

                      	 	
                         

                      	
                         

                      	 	
                         

                      	
                         

                      	 	
                         

                      	
                         

                      	 
	 	
                        Total
                          Operatiing costs

                      	 	 	
                         

                      	
                        *

                      	 	
                         

                      	
                        *

                      	 	
                         

                      	
                        *

                      	 	
                         

                      	
                        *

                      	 
	 	
                         

                      	 	 	
                         

                      	
                         

                      	 	
                         

                      	
                         

                      	 	
                         

                      	
                         

                      	 	
                         

                      	
                         

                      	 
	 	
                        TOTAL
                          COST OF MANUFACTURING SERVICE 

                      	
                         

                      	
                        *

                      	 	
                         

                      	
                        *

                      	 	
                         

                      	
                        *

                      	 	
                         

                      	
                        *

                      
	 	
                        MARK
                          UP ON MANUFACTURING SERVICE

                      	
                         

                      	
                        *

                      	 	
                         

                      	
                        *

                      	 	
                         

                      	
                        *

                      	 	
                         

                      	
                        *

                      
	 	
                        MARK
                          UP ON MATERIAL

                      	 	
                         

                      	
                        *

                      	 	
                         

                      	
                        *

                      	 	
                         

                      	
                        *

                      	 	
                         

                      	
                        *

                      	 
	 	
                        DEPRECIATION
                          COST

                      	 	 	
                         

                      	
                        -
                          

                      	 	
                         

                      	
                        -
                          

                      	 	
                         

                      	
                        -
                          

                      	 	
                         

                      	
                        -
                          

                      	 
	 	
                        TOTAL
                          MARGIN

                      	 	 	
                         

                      	
                        *

                      	 	
                         

                      	
                        *

                      	 	
                         

                      	
                        *

                      	 	
                         

                      	
                        *

                      	 
	 	
                        TOTAL
                          PRICE

                      	 	 	
                         

                      	
                        *

                      	 	
                         

                      	
                        *

                      	 	
                         

                      	
                        *

                      	 	
                         

                      	
                        *

                      	 
	 	
                         

                      	
                         

                      	
                         

                      	
                         

                      	
                         

                      	 	
                         

                      	
                         

                      	 	
                         

                      	
                         

                      	 	
                         

                      	
                         

                      	 
	 	
                        Cost
                          per Unit 

                      	
                         

                      	
                         

                      	
                         

                      	
                        *

                      	 	
                         

                      	
                        *

                      	 	
                         

                      	
                        *

                      	 	
                         

                      	
                        *
                          

                      	 

              

            

          

        

        __________

        * [Subject
          to a request for confidential treatment; separately filed with the
          Commission]

         

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    
       

      
        	
                Component

                 

              	
                Qty.

                 

              	
                Who
                  buys?

                 

              	
                Sourced
                  from

                 

              	
                Quote
                  status

                 

              	
                Current
                  

                price
                  [€] 

                each

              	
                Total
                  Price

                 

              	
                Comments

                 

              
	
                *

                 

              	
                *

                 

              	
                *

                 

              	
                *

                 

              	
                *

                 

              	
                *

                 

              	
                *

                 

              	
                *

                 

              
	
                *

                 

              	
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                  Component

                   

                	
                  Qty.

                   

                	
                  Who
                    buys?

                   

                	
                  Sourced
                    from

                   

                	
                  Quote
                    status

                   

                	
                  Current
                    

                  price
                    [€] 

                  each

                	
                  Total
                    Price

                   

                	
                  Comments

                

        

        
          	
                  *

                   

                	
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                  *

                   

                	
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                  Total
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                    Component

                     

                  	
                    Qty.

                     

                  	
                    Who
                      buys?

                     

                  	
                    Sourced
                      from

                     

                  	
                    Quote
                      status

                     

                  	
                    Current
                      

                    price
                      [€] 

                    each

                  	
                    Total
                      Price

                     

                  	
                    Comments

                  

          

          
            	
                    *

                     

                  	
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                    *

                     

                  	
                     

                     

                  	
                    *

                     

                  	
                     

                     

                  
	
                     

                     

                  	
                     

                     

                  	
                     

                     

                  	
                     

                     

                  	
                     

                     

                  	
                     

                     

                  	
                     

                     

                  	
                     

                     

                  
	
                    * 

                     

                    *

                     

                  

          

        

      

      __________

      * [Subject
        to a request for confidential treatment; separately filed with the
        Commission]

       

       

    

    
      
        
        

      

      
        
           

        

        
          

        

      

      
        
        

      

    

     

    

      GUARANTY

       

      THIS
        GUARANTY is made and entered into to be effective as of 27th
        September 2005, by Medis Technologies Ltd. ("Guarantor"), in favor of Celestica
        Ireland Limited
        and its parent and affiliated companies
        (collectively, "Celestica").

       

      In
        consideration of Celestica granting credit to More Energy Limited,
        and
        their
        successors and assigns (each of which is hereinafter referred to as a
“Customer”), and for other good and valuable consideration, the receipt and
        adequacy of which are hereby specifically acknowledged by Guarantor, the
        parties
        hereto agree as follows:

       

      1.    Guaranty.
        Guarantor hereby unconditionally and irrevocably guarantees to Celestica
        the
        prompt payment, when due, of all of Celestica 's charges for the account
        of a
        Customer, of whatever nature, for or in connection with goods and/or services
        sold and delivered on or after the effective date of this Guaranty arising
        under
        the Agreement for Manufacture between More Energy Ltd., an affiliate of
        Guarantor, and Celestica dated September 2005 (the "Obligations"), until
        this
        Guaranty is terminated in accordance with its terms. Guarantor acknowledges
        that
        this is a continuing guaranty, which shall remain in force until terminated
        by
        Guarantor by written notice to Celestica or until it automatically terminates
        upon the termination of the aforesaid Agreement of Manufacture, provided
        that
        any such termination shall not effect this guaranty with respect to Obligations
        incurred by a Customer on or before the effective date of such Termination.
        This
        Guaranty shall extend to each and every extension or renewal of any Obligation.
        Nothing
        contained herein will provide Celestica with any more rights against the
        Guarantor than it has against the Customer.

       

      2.    Waivers.
        Guarantor has entered into this Guaranty based solely upon its independent
        investigation of a Customer's financial condition and Guarantor assumes full
        responsibility for obtaining any further information with respect to a Customer
        or the conduct of its business. Guarantor waives all rights and defenses
        arising
        out of an election of remedies by Celestica, even though that election of
        remedies, such as a nonjudicial foreclosure with respect to security for
        an
        Obligation, may destroy the Guarantor’s rights of subrogation and reimbursement
        against the Customer by operation of applicable law. Guarantor authorizes
        Celestica, without notice or demand and without affecting Guarantor's liability
        hereunder or on the Obligations, from time to time to: (i) renew, modify
        or
        extend the time for performance of the Obligations, (ii) take and hold security
        for the payment of the Obligations and exchange, enforce, waive and release
        such
        security, and (iii) release or substitute a Customer or any endorsers or
        guarantors of the Obligations or any part thereof, or any other parties thereto.
        For clarity sake, it is agreed that the purpose of this Guarantee is to cause
        Guarantor to honor the Obligations as if the aforesaid Agreement of Manufacture
        were signed directly by Guarantor and accordingly the only defenses available
        to
        Guarantor hereunder are those that are available to a Customer under the
        aforesaid Agreement of Manufacture. 

       

      3.    Bankruptcy
        Not Discharge.
        Notwithstanding anything to the contrary herein contained, this Guaranty
        shall
        continue to be effective or be reinstated, as the case may be, if at any
        time
        payment, or any part thereof, of any or all of the Obligations is rescinded
        or
        must otherwise be restored or returned by Celestica upon the insolvency,
        bankruptcy or reorganization of a Customer or Guarantor, or if Celestica
        elects
        to return such payment or any part thereof in its sole and absolute discretion,
        all as though such payment had not been made though due. Notwithstanding
        any
        modification, discharge or extension of the Obligations or any amendment,
        modification, stay or cure of Celestica’s rights which may occur in any
        bankruptcy or reorganization case or proceeding concerning a Customer, whether
        permanent or temporary, and whether or not assented to by Celestica, Guarantor
        hereby agrees that it shall be obligated hereunder to pay the Obligations
        and
        discharge its other obligations in accordance with 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      the
        terms
        of this Guaranty in effect on the date hereof. Guarantor understands and
        acknowledges that by virtue of this Guaranty, it has specifically assumed
        any
        and all risks of a bankruptcy or reorganization case or proceeding with respect
        to a Customer. As an example and not in any way of limitation, a subsequent
        modification of the Obligations in any reorganization case concerning a Customer
        shall not affect the obligation of Guarantor to pay the Obligations in
        accordance with their terms, as such may have been modified with the consent
        of
        Celestica prior to the commencement of any bankruptcy case.

       

      4.    Guarantor's
        Understandings With Respect to Waivers.
        Guarantor warrants and agrees that each of the waivers set forth above is
        made
        with Guarantor's full knowledge of its significance and
        consequences.

       

      5.    Miscellaneous.
        If any
        of the provisions of this Guaranty shall be held invalid or unenforceable,
        this
        Guaranty shall be construed as if not containing those provisions and the
        rights
        and obligations of the parties hereto shall be construed and enforced
        accordingly. This Guaranty shall be construed in accordance with and governed
        by
        the laws of
        New
        York, USA. The
        parties submit to the non-exclusive jurisdiction of the courts of New York,
        USA.
        Headings in this Guaranty are for convenience only and are not be construed
        as a
        part of this Guaranty or in any way amplifying or limiting the provisions
        hereof. Where the context so requires, the singular shall include the plural
        and
        the plural shall include the singular. To be effective, any notice by Guarantor
        to Celestica hereunder must be in writing, sent by certified mail, postage
        prepaid, by
        facsimile or by electronic mail or delivered personally
        to the
        following address or to such other address as Celestica may designate by
        written
        notice to Guarantor from time to time, and such notice shall be deemed effective
        on
        the
        date of receipt if sent by prepaid registered mail, on the date of transmission
        in the case of facsimile or electronic communication or on the date of delivery
        if delivered by hand:

      

      Celestica
        Inc.

      1150
        Eglinton Avenue East

      Toronto,
        Ontario

      Canada

      M3C
        1H7

      

      Attention:
        Corporate Counsel    fax:+1
        416 448 2817

       

      

       

      IN
        WITNESS WHEREOF, the Guarantor has executed this Guaranty as the date first
        written above.

       

      Medis
        Technologies Limited

       

      Signature: 
        /s/ Robert K.Lifton 
        
          

        

      Print
        Name: Robert K.Lifton 

      
        
          

        

      

      Title:           Chairman
        and CEOWWW.EXFILE.COM, INC. -- 13929 -- MEDIS TECHNOLOGIES LTD. -- EXHIBIT 10.3 TO FORM 10-Q

    EXHIBIT
      10.3

    
 

    AMENDMENT
      #2

    TO
      

    PROMISSORY
      NOTE

     

    AMENDMENT
      #2, dated as of September 30, 2005, between Michelle Rush (“Borrower”),
      and Medis
      Technologies Ltd., a Delaware corporation (“Lender”).

     

    WHEREAS,
      Borrower has heretofore delivered to Lender a Promissory Note, dated as of
      April
      25, 2005 (the “Note”);
      and

     

    WHEREAS,
      such Note was amended by the Borrower and Lender in an amendment dated as of
      May
      9, 2005, and

     

    WHEREAS,
      Borrower and Lender desire to further amend the Note as hereinafter set
      forth.

     

    NOW,
      THEREFORE, the
      parties agree as follows:

     

    1.    The
      Note
      is hereby amended to change the maturity date from September 30, 2005 to
      November 30, 2005.

     

    2.    Except
      as
      expressly amended hereby and in the amendment dated May 9, 2005, the Note shall
      remain in full force and effect.

     

    IN
      WITNESS WHEREOF, Borrower
      and Lender have executed this Amendment #2 as of the date hereinabove set
      forth.

     

    
      	 	 	 
	 	MICHELLE
              RUSH, Borrower
	 
 	 
 	 
 
	 	By:  	/s/ Michelle
              Rush
	 	
              

            
	 	 

    

     

    
      	 	 	 
	 	MEDIS
              TECHNOLOGIES LTD., Lender
	 
 	 
 	 
 
	 	By:  	/s/
              Howard Weingrow

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