1

PARTIES & EFFECTIVE DATE

2

PURPOSE

3

SCOPE OF AGREEMENT

4

PRODUCT DEVELOPMENT PHASE

4.1

Specifications . The specification entitled “Wideband LoJack Vehicle Location Unit,” Version 1.4 dated December 12, 2003, is the specification for the version of the Product intended to operate in countries with 25 kHz channel spacing (the “ Wideband VLU5 ” or “ VLU5 US ”). The specification entitled “Narrowband LoJack Vehicle Location Unit,” Version 1.30 dated December 5, 2003, is the specification for the version of the Product intended to operate in countries with 12.5 kHz channel spacing (the “ Narrowband VLU5 ” or “ VLU5 EU ”). Each of the Wideband VLU5, the Narrowband VLU5, and any subsequent version of the product set forth in accordance herewith, is sometimes referred to in this Agreement as a “ Model ” or collectively as “ Models ”. The Wideband VLU5 and the Narrowband VLU5 are sometimes referred to herein collectively as the “ Initial Models ”. Plextek will create and produce, at no additional cost to Customer, two variations of the Narrowband VLU5, one of which will operate at a frequency of ** MHz, and the other of which will operate at a frequency of ** MHz. Plextek will create and produce one variation of the Wideband VLU5, which will operate at a frequency of 173.075; provided , however , that Customer shall have the right to elect to have Plextek create a second variation of the Wideband VLU5, which will operate at multiple frequencies (the “ Multi-frequency Wideband Variant ”). If Customer makes such election, Plextek will bear the development costs associated with the creation of the Multi-frequency Wideband Variant.

4.2

Schedule and Development Expenses . Attached, as Exhibit B is the schedule for completion of Product Development for the Initial Models, and the agreed schedule of payments to be made by Customer to Plextek in respect of all services and activities associated with Product Development for the Initial Models. Plextek’s Product Development responsibilities shall include, without limitation, completion of the Initial Models in accordance with the Specifications within the agreed development schedule, all coordination with the approved contract manufacturer and preparation of the manufacturing line for volume production. All payments hereunder shall be denominated and paid in US Dollars.

4.3

Future Models . From time to time, the parties may desire to create additional Models, in which case the parties shall agree in a writing referencing this Agreement upon specifications and schedules for completion of Product Development for each new Model.

4.4

Specification Finalization. Customer shall determine within ninety (90) days of the Effective Date whether to include or exclude the following items from the specifications for the Models, and in the event any of such items are included, then the Maximum Price shall be increased by not more than the amount specified below for each such item, assuming an aggregate twelve-month unit volume for all Models of ** units:

5

PRODUCTION PHASE

5.1

After completion of Product Development for each Model, Plextek will manage the ongoing manufacture and supply of the Models for the Exclusive Supply Period (as defined below). The “ Exclusive Supply Period ” shall commence on the date of initial commercial production of the first Model (“ Production Inception ”) and shall expire on the ** anniversary of Production Inception; provided , however , that if Customer agrees to commence production of a new variant of one of the Models that delivers material cost savings to Customer and/or material improvements in functionality utilizing design improvements developed by Plextek (an “ Agreed Improved Design”), then the Exclusive Supply Period solely with respect to such Agreed Improved Design shall be ** years from the date production commences of such Agreed Improved Design.

5.2

Notwithstanding anything herein to the contrary, Customer shall not be restricted from having 3 ^rd parties manufacture and supply other Products without remuneration to Plextek, provided that, during the Exclusive Supply Period, such other Products are not derivatives of any Models designed by Plextek that are then subject to the restrictions of Section 5.1.

5.3

Customer agrees to purchase from Plextek, and Plextek agrees to sell to Customer, assembled Models in the quantities and at the prices herein set forth, subject to the terms of this Agreement. Customer agrees to purchase at least ** units (the “ Minimum Volume Commitment ”) in the aggregate of the Models within the first three years following Production Inception, subject to the terms and conditions of this Agreement.

5.4

Following termination of the Exclusive Supply Period for each Model or Agreed Improved Design, Customer shall have the right to engage the services of any party (including without limitation the contract manufacturer utilized by Plextek) to manufacture such Model or such Agreed Improved Design, as the case may be. If Customer elects to engage directly the services of the contract manufacturer then being utilized by Plextek to produce such Model or Agreed Improved Design (a “ Transitioned Model ”), then Customer shall pay Plextek a “ Transition Fee ” determined as follows:

5.5

Plextek shall select, subject to Customer’s final approval, the contract manufacturer for the Models to be produced pursuant to this Agreement.

5.6

Plextek shall share with Customer all information relating to the production, development, and supply of the Models. Without limiting the foregoing, Plextek shall provide Customer on a timely basis, during both the development phase and the production phase of the project, the complete bill of materials, schematics, gerber files, source code, object code, and manufacturing test code for each of the Models, together with all updates and revisions thereto, and complete cost information for all goods and services (comprising both the development phase and the Total Product Cost during the production phase), whether provided directly by Plextek or by subcontract or purchase.

5.7

Plextek shall use commercially reasonable efforts to continuously reduce the cost of the Models, while maintaining or exceeding Customer’s quality standards and specification requirements.

5.8

The parties shall constitute an Executive Steering Committee and an Operating Committee with representatives from Plextek, Customer and the contract manufacturer with responsibility to address and resolve all issues relating to development, manufacturing and supply matters. The Operating Committee shall have telephonic conference calls on a weekly basis and in-person meetings on at least a quarterly basis. The Executive Steering Committee shall convene at least quarterly to review progress of the Product Development process and the manufacturing and supply relationship. Plextek will ensure that Customer shall have direct access to the contract manufacturer (accompanied by a Plextek representative at Plextek’s option) in order to participate in the ongoing management of the production process and supply chain.

5.9

Without Customer’s prior written consent, (i) Plextek shall not produce for, or sell to, any third party any Products, and (ii) Plextek shall cause the contract manufacturer for the Models not to produce for, or sell to, any third party any Products; provided , however , that the provisions of this sentence shall not be deemed to restrict Plextek from selling Permitted Products (as defined below) to a governmental agency for national security or military purposes. A “ Permitted Product ” shall be a Product that is not a Model or a variation thereof. Except as provided in Section 5.4, Plextek shall not restrict the contract manufacturer for the Models (or any supplier) from contracting with, manufacturing for, or selling to, Customer.

6

UNIT PRICES

6.1

Attached, as Exhibit C is the schedule of pricing for each of the Initial Models. If Customer gives Plextek or the contract manufacturer permission to produce or sell Models to any third party, the number of units sold to such third party (i) shall be deemed included in the number of units purchased by Customer for purposes of determination of unit pricing on the volume variable pricing schedule set forth in Exhibit C hereto, and (ii) shall be deducted from the number of units with respect to which the Initial Unit Premium (as defined in Exhibit C ) shall be paid.

6.2

All pricing and payments hereunder shall be denominated and paid in US Dollars.

7

ORDER, PLANNING AND FORECAST PROCEDURE

7.1

Annual Plan . By September 30 ^th of each year, Customer will deliver to Plextek a three year plan with annualised volumes to include: (i) projected current year volumes by Model, (ii) projected next year volumes by Model and by quarter, and (iii) projected following year volumes by Model for the total year. Projected volumes will include a break-out of volumes by frequency variations within each Model.

7.2

Rolling Forecast . At the end of each calendar quarter Customer will deliver to Plextek a forecast by month, by model, for the succeeding 15 months (adding a new quarter). Customer and Plextek will develop with the contract manufacturer for the Models mutually agreeable forecasting and ordering procedures, it being understood that Customer’s and Plextek’s objective is to have such procedures be consistent with the following:

7.2.1

The first month of the succeeding quarter shall constitute a firm order for the specified quantities. The second month shall constitute a firm order, which may be adjusted for each Model up or down not more than 10% by Customer by written notice given during the first month; provided, however, that Plextek agrees to negotiate in good faith with prospective contract manufacturers to obtain additional flexibility with minimal impact to Customer’s total cost. The third month shall constitute a firm order, which may be adjusted up or down not more than 30% by Customer by written notice given during the first month, and not more than 20% by written notice given during the second month.

7.2.2

The forecast for the second quarter of each quarterly forecast may be revised up or down by not more than 50% from the forecast for that quarter set forth in the next prior quarterly forecast.

7.2.3

In each forecast, quarters 3, 4 & 5 are for planning purposes only.

7.2.4

In the event specialized inventory is required to build inventory for Model variants that are designed to operate in countries where a small quantity of Models generally are sold each year, then Customer agrees to reimburse Plextek (at cost) for any excess component or material inventory purchased for such small volume variants due to bulk purchasing requirements. Inventory reconciliation shall be made every six months during the term. Notwithstanding the foregoing, Customer’s reimbursement obligation shall not accrue so long as there is an ongoing forecast of unit purchases for such small volume variants.

7.2.5

Plextek shall be required to accept and deliver orders consistent with this Section 7.2; provided that if Plextek determines in good faith that compliance with this obligation would result in Plextek being unable to continue to perform its obligations under this Agreement without jeopardizing its ability to operate as a going concern, then the parties agree to use good faith efforts to negotiate a mutually acceptable resolution, such resolution potentially including without limitation Plextek relinquishing its remaining obligations to Customer at a price (if any) to be determined based on the circumstances and in exchange for transferring to Customer all Plextek’s rights and responsibilities under this Agreement and under any associated supply agreement with the contract manufacturer.

7.3

Conference Calls . There shall be a weekly conference call to finalize weekly shipping information, and to give insight into future periods in accordance with the above schedule.

7.4

Purchase Orders . Customer will issue a blanket purchase order in November of each year for the ensuing year. The blanket purchase order shall be amended periodically to reflect orders becoming firm and changes in quantities pursuant to Section 7.2, and for other changes agreed by the parties. Only written or secure electronically dispatched purchase orders issued by Customer shall be valid. Verbal orders, additions or

7.5

Inventory . Plextek shall maintain a piece part inventory to support Model mix and frequency shifts to accommodate short term shifts in demand in accordance with the discretion provided for in Section 7.2. Availability of materials to support production will be maintained at an agreed upon level, and reviewed monthly. The parties agree to negotiate in good faith on a case-by-case basis, any fluctuations within lead times that may become necessary.

7.6

Approved Vendor List . Plextek shall maintain an approved vendor list for all components used in the production of Models for Customer, subject to review and approval by Customer.

7.7

Production Procedures . Production of Models shall include procedures for supplying secret codes, serializing, packaging, and labelling as specified by Customer.

7.8

Disaster Recovery . Prior to Production Inception, Plextek will develop a disaster recovery program to allow recovery (at its or the contract manufacturer’s expense) of 30% of production beginning on the 31 ^st day following the occurrence of the disaster, and 100% of production beginning on the 71 ^st day following the occurrence of the disaster, which program will be approved by Customer, such approval not to be unreasonably withheld or delayed. In order for Plextek to meet the required recovery standard of 30% of production within 30 days, Customer may be required to maintain an inventory of long lead-time components with the contract manufacturer. The parties anticipate that the aggregate dollar value of such long lead-time components will be in the range of ** to ** .

7.9

Contingency for 2 ^nd Source for Manufacturing , Plextek will develop and maintain a business relationship with at least one alternative contract manufacturer which could be used to produce Models promptly following any force majeure event involving the then current contract manufacturer, or any failure of the then current contract manufacturer to perform as agreed.

7.10

Service Level Commitments . Plextek and Customer will jointly develop appropriate service level commitments relating to such matters as delivery schedules, quality standards, process controls, invoice accuracy, and forecast accuracy.

7.11

Information Requirements . Prior to Initial Production, Plextek, Customer and the then current contract manufacturer will develop appropriate information reporting requirements covering such matters as advance shipping notices, production schedules, inventories, production yields, and in-transit materials.

7.12

Quality and Reliability Standards . Plextek shall build, and shall cause its contract manufacture to build, all Models utilizing professional workmanship and quality standards consistent with the standards maintained by experienced high quality electronics manufacturers of similar products.

8

PAYMENT

8.1

Unless agreed otherwise, payment of all valid invoices rendered under this Agreement for goods sold to Customer shall be made in US Dollars within 30 days from the later of (i) receipt of invoice at Customer’s accounts payable department, and (ii) receipt of goods at the destination designated by Customer (the later of such dates being referred to as the “ Receipt Date ”). Invoices not paid by the Receipt Date plus 45 days will accrue interest from the date due until paid at the rate of one percent (1%) per month (12% per annum). All invoices shall include detail regarding amounts payable to the contract manufacturer and amounts payable to Plextek. Customer shall pay Plextek and the contract manufacture for the respective amounts