Exhibit 10.1

 

MANUFACTURING AGREEMENT

 

This MANUFACTURING AGREEMENT (this “Agreement”) is made this 16th day of
February, 2011 (the “Effective Date”) by and between TechniScan, Inc., a
Delaware corporation having offices at 3216 South Highland Dr., Suite 200, Salt
Lake City, Utah 84106 on behalf of itself and its affiliates (collectively,
“TechniScan”) and Womens3D, Inc., a Delaware corporation, having offices at 4917
S. Congress, Austin, Texas 78745 (“Womens3D” and TechniScan, each a “Party” and
collectively, the “Parties”).

BACKGROUND

 

WHEREAS, Womens3D is a medical device company engaged in a plan to provide
women’s health care practices with novel, automated ultrasound breast imaging
equipment and web-based 3D reconstruction and review services as an efficient,
painless, non-invasive, radiation-free alternative to mammography in diagnosing
breast abnormalities.

 

WHEREAS, TechniScan is a medical device company engaged in the development and
commercialization of automated ultrasound imaging systems and owns proprietary
information and technology related to the design, development, manufacture and
supply of certain hardware and software products.

 

WHEREAS, Womens3D, subject to the terms and conditions of the Agreement, the
Product Development Agreement dated January 11, 2011 by and between the Parties
(the “Product Development Agreement”) and the Trademark and Copyright License
Agreement dated February 16, 2011 by and between the Parties (the “Trademark
Agreement”), has the right to promote, market, sell and distribute the Products
(as defined in the Product Development Agreement) within the Territory (as
defined in the Product Development Agreement) for use within the Field of Use
(as defined in the Product Development Agreement), and Womens3D desires to
promote, market, sell, distribute and support the Products, all as more fully
set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual promises, conditions and
agreements set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby expressly acknowledged, the Parties
hereto agree as follows:

1.     Sale of Products in the Territory.

 

Defined Terms.  All capitalized terms not defined in this Agreement shall have
the meanings ascribed to them in the Product Development Agreement and/or
Trademark Agreement.  To the extent a capitalized term is defined in more than
one agreement, the applicable definition shall, for the purposes of interpreting
this Agreement, take priority in the following order: the definition in this
Agreement, then the definition in the Product Development Agreement and finally,
the definition in the Trademark Agreement.

Grant of Rights; Restrictions.

 

i.              Subject to the terms and conditions of this Agreement and during
the Term, TechniScan hereby grants Womens3D the non-exclusive right and license
to promote, market, distribute, offer to sell, sell and support the Products to
Customers in the Territory in the

 

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Field of Use.  Upon payment in full of the Initial Development Fee (as defined
in the Product Development Agreement), and so long as Womens3D has satisfied the
Sales Commitment for the applicable calendar year and is not in Breach of this
Agreement, the above license shall become royalty-free and exclusive during the
Term.

 

ii.             If this Agreement is terminated due to a Breach by TechniScan
and Womens3D has paid the Initial Development Fee, the license above shall
continue following the end of the Term and shall be exclusive for a period of
seven (7) years from the date of such termination.

 

iii.            If this Agreement is terminated by Womens3D for convenience, and
(A) Womens3D is not in Breach hereunder, (B) Womens3D has paid the Initial
Development Fee and (C) TechniScan has been offered a reasonable opportunity to
match the pricing (and any revised pricing on terms materially more favorable to
the manufacturer) of any replacement manufacturer of the Products, the
non-exclusive license above shall continue following the end of the Term.

 

iv.            If the Product Development Agreement is terminated due to a
Competitive Change in Control, then following the Term hereunder, the
non-exclusive license above shall continue following the end of the Term
provided that such license shall become exclusive at the time the Initial
Development Fee is paid, if it is paid within twelve (12) months after the
termination of the Product Development Agreement.

 

v.             For avoidance of doubt, (A) any references in this Agreement to
“exclusive” only refer to exclusivity with respect to Customers within the
Territory and Field of Use and (B) any licenses granted to Womens3D herein with
respect to the Products include the right to sublicense such rights as necessary
to accomplish such sale and support in the Territory and Field of Use, in
accordance with the terms of this Agreement and the Product Development
Agreement.

 

Appointment.  Subject to the terms and conditions of this Agreement, including
without limitation, the payment of the Prices and Womens3D’s compliance with the
Sales Commitment:

 

i.              Womens3D appoints TechniScan as the sole manufacturer and
supplier of the Product in accordance herewith.  Womens3D further acknowledges
and agrees that TechniScan shall be the exclusive manufacturer and supplier of
the Products; provided, however, after any termination of the Agreement, subject
to Section 1(b), Womens3D shall be entitled to manufacture the Products itself
or have the Products manufactured for Womens3D by a third party, and Womens3D
shall not promote, market, distribute, offer to sell or sell in or outside the
Territory any products of any party other than those provided by TechniScan
hereunder that enable a Person to compete with the Product(s) or the Product
Technology within the Field of Use during the Term of this Agreement.

 

ii.             Subject to the terms and conditions of this Agreement, and for
the avoidance of doubt, neither TechniScan nor any of TechniScan’s affiliates
shall, and TechniScan shall cause and obligate (and Womens3D shall be a
third-party beneficiary of this obligation and

 

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all associated agreements) TechniScan’s other customers, distributors and
partners to not:  (x) promote, market, offer to sell, sell or distribute (unless
being distributed from the Territory to outside of the Territory and outside the
Field of Use) the Products or the Product Technology within the Territory and
Field of Use during the Term and after the end of the Term from and after the
date Womens3D has paid or otherwise satisfied in full the Initial Development
Fee, the Minimum Initial Order and has paid for the Tooling and Set-Up Costs (as
defined below) and so long as Womens3D has a continuing exclusive license
pursuant to Sections 1(b)(ii) or 1(b)(iv) or (y) grant to any third party any
competing or similar rights to those in (x) during the same time periods set
forth in (x) within the Territory and Field of Use.

 

iii.            So long as Womens3D is granted the exclusive right to distribute
the Products to Customers in the Territory for use within the Field of Use
during the Term hereof and TechniScan is the sole manufacturer and supplier of
the Product (unless TechniScan is not the sole manufacturer and supplier of the
Product as a result of Womens3D’s Breach), Womens3D agrees that it shall not,
directly or indirectly, promote, market, distribute, sell or support in or
outside the Territory any products of any party other than those provided by
TechniScan hereunder that enable a Person to, directly or indirectly, use or
otherwise compete with the same Products provided for hereunder or any other
comparable products within or outside the Territory and the Field of Use as
defined herein, during the Term hereof.

 

(d)           Products.

 

i.              Documentation.  Womens3D will develop and publish appropriate
Documentation (as defined in the Specifications and Product Development
Agreement), such as but not limited to Product specification sheets, brochures
and sales presentations, owner’s manual (user guide) and such other standard
inserts thereto into the packaging of each unit of the Products.  Womens3D shall
prepare the contents of Product’s user manual(s), service manual(s) and end user
license agreement (collectively, “End User Agreements”) and shall ensure that
such End User Agreements are accurate.  TechniScan shall review and provide
timely comment(s) on any of the End User Agreements to enable Womens3D to comply
with its obligations under this subsection and shall be responsible for the
accuracy of and legal compliance (in the United States) of TechniScan’s comments
to any of End User Agreements.

 

ii.             Product Labeling.  Products supplied by TechniScan to Womens3D
may be private labeled as set forth in the Trademark Agreement, whereby
TechniScan will create final OEM Products that may contain Womens3D
nomenclature, logos, Product or company names. Appropriate Product naming and
stock number conventions will be provided by Womens3D as set forth in the
Trademark Agreement.  Logos and/or artwork required will be provided by Womens3D
in electronically readable format where applicable as set forth in the Trademark
Agreement.  Product packaging can contain Womens3D labeling or no labeling
(blank plain carton), as set forth in the Trademark Agreement.  If requested by
Womens3D, TechniScan will use an individual carton label that presents the
Womens3D supplied model and stock number and a machine readable bar code of the
Womens3D stock number, serial number (and quantity for master cartons).

 

iii.            Product Certifications.  The Parties shall work together in
accordance with the Product Development Agreement to provide and obtain all
applicable UL

 

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(Underwriters Laboratory) file submission(s) or other applicable United States
certification documentation for the purposes of Womens3D gaining appropriate
status for each of the respective Product(s).  To the extent Womens3D desires
other certifications for the Products, in Womens3D’s sole discretion, Womens3D
may proceed with gaining such other certification at Womens3D’s sole cost and
expense to the extent such costs and expenses are not otherwise provided for
herein or in the Product Development Agreement.

 

e)             Forecasting and Orders.

 

i.              Within thirty (30) days following completion of Product Testing
and Product Approvals under the terms of the Product Development Schedule as
provided for in the Product Development Agreement, Womens3D shall provide
TechniScan with a rolling forecast of its estimated purchases of Products that
Womens3D intends to or will (as applicable) order from TechniScan over the
following twelve (12) months.  The last nine (9) months of any forecast shall be
prepared in good faith but shall constitute non-binding estimates and not
legally binding commitments of Womens3D, but the first three (3) months of each
forecast shall constitute a binding commitment of Womens3D to purchase, in
accordance herewith, the amount of Products set forth in such forecast for such
period and a binding obligation by TechniScan to supply Products timely and in
accordance with this Agreement and the forecast.  Womens3D’s order(s) hereunder
shall cumulatively be for no less than $1,500,000 to be paid to TechniScan
(which amount shall be fully credited towards satisfaction of the Initial
Development Fee) within twelve (12) months following FDA approval (the “Minimum
Initial Order”).

 

ii.             Any orders Womens3D places with TechniScan shall be placed by
sending written purchase orders to TechniScan by facsimile, electronic mail or
other similar transmission and/or mailed via US Postal Service or airmail
carrier.  Orders shall be issued at least one hundred twenty (120) calendar days
prior to the requested delivery date.  A purchase order submitted by Womens3D in
accordance with this Section 1(e) and confirmed by TechniScan as set forth in
the next sentence shall constitute a firm commitment by Womens3D to purchase,
and TechniScan to manufacture, deliver and sell to Womens3D, the Products
specified in the purchase order.  After receipt of a purchase order, TechniScan
shall use commercially reasonable efforts to issue an order acknowledgement
within five (5) business days, specifically making reference to Womens3D’s
purchase order confirming the purchase order or advising Womens3D in writing
that the purchase order is rejected by TechniScan.  Each purchase order shall
include or state (i) the purchase order number, (ii) the quantity of units of
each Product or part thereof (by part number), (iii) the price of each item
ordered, (iv) the requested delivery date and delivery address, (v) the billing
address (which shall be Womens3D, Inc., 4917 S. Congress, Austin, Texas 78745),
and (vi) the signature of (and the date of signing by) Womens3D’s authorized
purchasing agent.  Notwithstanding anything to the contrary herein, TechniScan
shall be under no obligation to fulfill any purchase orders unless and until
TechniScan has sent an acknowledgement of order to Womens3D; provided that if an
order is within 50 % of the number of Products contained in the last non-binding
forecast for such period, including any other purchase orders submitted by
Womens3D during such period, TechniScan shall be deemed to have accepted such
order no less than 15 business days after receipt of such purchase order.

 

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(f)            Delivery Terms.  TechniScan shall arrange for shipment of the
Products to a facility designated by Womens3D in accordance with the terms of
this Agreement.  Delivery shall occur upon making the Products available for the
carrier FOB at Womens3D’s designated facility (“Delivery”) on the date specified
in the acknowledgement of order or otherwise agreed to by the Parties.  If no
specific carrier or transportation method is specified by Womens3D, delivery
shall be made FOB to Womens3D’s designated facility by reliable means in the
reasonable discretion of TechniScan, with a national carrier, at Womens3D’s sole
cost and risk.  The method of shipment and routing from TechniScan’s designated
facility shall be as specified by Womens3D.  If no location is specified by
Womens3D for shipment of the Product, the Product shall be shipped to Womens3D’s
address noted on the Order.  All claims for Product shortages or damages, or for
incorrect charges, must be presented to TechniScan within thirty (30) days after
the date the Product is Delivered; otherwise, the Product shall be deemed
accepted.  TechniScan shall be entitled to deliver Product(s) in installments. 
Such partial shipments shall not relieve TechniScan from its obligation to
deliver all Products under an accepted purchase order.

 

(g)           Risk of Loss and Title.

 

i.              Risk of loss to the Products shall pass to Womens3D upon the
earlier to occur of Delivery or payment for of the Product by Womens3D.

 

ii.             Title to the Product (but, for the avoidance of doubt, not title
to the Product Technology (as defined below) or Software embedded in the
Product) shall only pass to Womens3D upon Womens3D having paid to TechniScan all
sums (including any default interest and/or any applicable taxes or duties) due
to TechniScan with respect to such Product under this Agreement.  Womens3D
hereby agrees that until Womens3D’s title is perfected: (i) TechniScan shall
retain a perfected purchase money security interest in and to all Products and
all proceeds from such Products including, without limitation, accounts
receivable related to the Products (collectively, the “Collateral”) to secure
payment of all amounts due under this Agreement; (ii) Womens3D shall possess
title as a fiduciary agent and bailee of TechniScan; (iii) Womens3D’s failure to
pay all amounts hereunder in full when and as due (after all applicable grace
periods have expired) shall constitute a default hereof and shall give
TechniScan all rights of a secured party under the Uniform Commercial Code and
all other applicable law; and (iv) if Womens3D fails to pay any amount when due,
TechniScan shall have the right to enter Womens3D’s premises to recover,
repossess and remove all or any part of the Collateral from Womens3D.  Any
recovery, repossession or removal of Product shall be at Womens3D’s expense and
shall be without prejudice to any other remedy of TechniScan hereunder, at law
or in equity.  Womens3D agrees, from time to time, to take any act and execute
and deliver any document (including, without limitation, financing statements)
reasonably required by TechniScan to transfer, create, perfect, preserve,
protect and enforce this security interest and hereby authorizes TechniScan to
file financing statements pursuant to the Uniform Commercial Code in order to
perfect this security interest.

 

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(h)           Payment; Pricing.

 

i.              The prices for the Final Products (the “Prices”) shall be as set
forth on Exhibit A.

 

ii.             The payment terms of this Agreement shall be net thirty (30)
days from the date of Delivery.  If Womens3D does not pay within such time
period, TechniScan may charge interest to Womens3D on any outstanding amount for
the relevant purchase order at the lesser of the rate of twelve percent (12%)
per annum or the maximum legal limit from the due date until satisfied in full,
and such interest shall accrue after as well as before any judgment.

 

iii.            Womens3D shall be responsible for the payment of any and all
national, state and local sales, use, excise, personal property or other taxes
or duties imposed in connection with Womens3D’s promotion, marketing,
distribution, sale and/or support of the Products to Customers within the
Territory.

 

(i)            Sales Commitment.  Except as set forth in the Product Development
Agreement, the rights granted under Sections 1(a) and 1(b) of this Agreement for
exclusive distribution of Products in the Territory are granted based on
Womens3D’s commitment to purchase no less than ten million dollars
($10,000,000.00) of Products during the thirty-six (36) month period commencing
upon FDA approval (the “Sales Commitment”).  Further, subject to the issuance of
a binding purchase order and forecasts in accordance with Section 1(e), Womens3D
shall have the right to purchase up to thirty (30) units of TechniScan
Pre-Existing Equipment at TechniScan’s then current list price, which units
shall count towards the $10,000,000.00 of Products to be purchased under the
Sales Commitment.

 

(j)            Independent Contractors.  Nothing in this Agreement shall create
or be deemed to create a partnership or joint venture or the relationship of
principal and agent between the Parties.

 

(k)           Software.

 

i.              TechniScan shall own all right, title and interest in and to the
Product Technology and the TechniScan Software and all Intellectual Property
Rights therein.  Subject to the terms and conditions of this Agreement, the
Product Development Agreement and the Trademark Agreement, TechniScan grants to
Womens3D as from the date of Delivery of the Product, a royalty-free, perpetual
right and license to deliver to the Customer Products purchased from TechniScan
hereunder and in favor of the Customer the right and license to use
(royalty-free and perpetually) the Product Technology and TechniScan Software as
a component part of and in conjunction with the Product and the Customer’s use
thereof in the Territory and Field of Use.

 

ii.             Womens3D acknowledges and agrees that it shall obtain the proper
rights and licenses to Third Party Software (as defined in the Product
Development Agreement) as is required in connection with Womens3D’s promoting,
marketing, selling, distributing and supporting its Customers’ use of the
Products, provided that TechniScan discloses timely and fully to Womens3D the
existence of all such Third Party Software and provides Womens3D with all
relevant information it has about such rights and licenses.

 

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iii.            Womens3D shall at all times refrain from and shall not, except
as expressly permitted in this Agreement, the Product Development Agreement, the
Trademark Agreement, and/or other written agreement(s) between the Parties: 
(A) have any right to sublicense, assign or otherwise transfer any of the rights
or licenses granted in this Agreement; and (B) (1) extract and/or remove the
Software (as defined in the Product Development Agreement) from the manner in
which it is supplied by TechniScan, or (2) reverse engineer, decompile and/or
disassemble the Software, the Product Technology or the Products.

 

(l)            Documentation.  Subject to the Product Development Agreement and
the Trademark Agreement, Womens3D shall have the exclusive right and license to
use, review, copy and distribute the Specifications and the Documentation in the
Territory and in the Field of Use provided with the Products and Womens3D shall
exclusively own all right, title and interest in and to any Womens3D Trademarks
and copyrighted works contained in the Documentation, as set forth in the
Trademark Agreement.

 

2.             Duties of TechniScan.  TechniScan agrees to the following
responsibilities during the Term:

 

a)             TechniScan will not take any action or enter into any agreements
or licenses that will or do conflict with, limit, prohibit, or interfere with
TechniScan’s ability to comply with and perform timely and fully all of its
obligations under this Agreement and the Product Development Agreement, and,
subject to the terms of this Agreement, TechniScan will not grant further
licenses or rights to any other party in and to the Product, the Software, the
Intellectual Property Rights or the Product Technology within the Field of Use.

 

b)            TechniScan shall, during the Term hereof, give Womens3D monthly
reports regarding the steps TechniScan is taking to repair and prevent the
failures of the Products reported to TechniScan through Womens3D by Customers or
any other third parties.

 

3.             Duties of Womens3D.  Womens3D agrees to the following
responsibilities during the Term:

 

a)             Womens3D shall not make any change or modification to any
Products unless TechniScan approves such change or modification, which changes
or modifications will be subject to TechniScan’s sole reasonable discretion (and
Womens3D shall be responsible for the costs of any such change or modification,
which, for the avoidance of doubt, shall be credited against the Initial
Development Fee).

 

b)            Womens3D shall be solely responsible for invoicing and collecting
all sums due in connection with sales of Products by Womens3D.

 

c)             All expenses incurred by Womens3D with respect to the promotion,
demonstration, marketing, distribution or sale or lease of the Products to
Customers within the Territory shall be borne solely by Womens3D.

 

d)            Womens3D shall deliver together with the Products at least one
(1) copy of the relevant Documentation.

 

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e)             Womens3D shall provide all Product support, maintenance and
repair services (outside of any warranty repairs, services, support or
consideration to be made or provided by TechniScan pursuant to Section 6,
including, without limitation, those services to be mutually agreed upon by the
Parties within a reasonable time following execution of this Agreement and to be
set forth on Exhibit B.

 

f)             Womens3D shall provide TechniScan with all information that is in
its possession and control that may enable TechniScan to solve any technical or
quality problem relating to the Products manufactured by TechniScan, if any.

 

g)            Womens3D shall give TechniScan quarterly reports regarding the
failures of the Products reported by Customers or any other third parties.

 

h)            Womens3D shall attend to and bear the costs and expenses for all
registrations required and specific to Womens3D in order for Womens3D to sell
the Products pursuant to any approvals of any applicable regulatory or other
applicable authorities in the Territory should registration be or become
necessary under any law or regulation in effect from time to time in any part of
the Territory, with any such expenses related to laws or regulations in the
United States being credited in full against the Initial Development Fee. 
TechniScan shall provide assistance therewith, including taking such steps and
executing such documents, as may be reasonably requested by Womens3D in
connection herewith.

 

i)              Womens3D shall obtain, or shall assist TechniScan in obtaining,
approvals for the Products from any applicable regulatory authority in the
Territory, including, for example, to secure a UL (Underwriter Laboratories)
mark for the Products, as contemplated by the Product Development Agreement. 
Womens3D shall be responsible for and pay for all such fees and costs required
to complete such regulatory tests, if any.  Womens3D shall also be responsible
for the Products complying with all applicable laws of the United States and any
other state or country in which the Products are sold, offered for sale, used or
imported, subject to the provisions of Section 6 of the Product Development
Agreement.

 

j)              Womens3D shall sell the Products in the same condition in which
they were received, without removing or altering the trademarks or their serial
numbers, as applicable, and Womens3D shall be entitled to label or tag the
Products as required under the laws or regulations in effect from time to time
in the Territory, all in accordance with the Trademark Agreement, or to make
such other modifications as mutually agreed upon by the Parties.

 

k)             Womens3D may use TechniScan’s name, logo and other trademarks in
connection with promoting, marketing, distributing and selling of the Products
to Customers within the Territory in accordance with applicable trademark law
and the Trademark Agreement.

 

l)              Womens3D shall satisfy the Sales Commitment provided for in
Section 1(i).

 

m)            Womens3D shall use commercially reasonable efforts to market the
Products to Customers in the Territory within the Field of Use.

 

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n)            Womens3D shall make no representations, guarantees or warranties
about the Products, unless such representations, guarantees or warranties are
consistent with TechniScan’s own representation, guarantees or warranties about
the Products as set forth in the Product Development Agreement or are otherwise
specifically authorized in writing by TechniScan or as otherwise provided by
TechniScan in the TechniScan documentation and literature provided and/or
otherwise approved by TechniScan in connection with the Products.

 

4.             Additional Duties.

 

a)             Womens3D and TechniScan shall each take reasonable actions
necessary to prevent unauthorized persons or entities from copying, marketing,
selling, distributing, disassembling or reverse engineering the Products or the
Software embedded therein including, but not limited to, (A) by way of ensuring
End User Agreements are in place with each Customer, which license agreement
shall contain restrictions on Software use and other terms as required by
Womens3D, (B) by not, and requiring agreements from its Customers to agree not
to, remove the copyright and other proprietary rights notices from the Product,
Software or Documentation, and (C) by taking reasonable actions to enforce their
respective Intellectual Property Rights.

 

b)            Womens3D and TechniScan shall promptly report to each other any
suspected or actual problems with the Products and any claim received from any
governmental or regulatory body or agency or from any Customers regarding the
Products.

 

c)             Each Party shall, to the extent applicable hereto, use
commercially reasonable efforts to keep the other Party informed of laws and
regulations relating to the importation and sale of the Products into and within
the Territory of which such Party is aware.

 

5.             Term and Termination of Agreement.

 

a)             Term.  The initial term of this Agreement shall commence as of
the Effective Date and shall, unless terminated earlier as set forth below in
this Section 5, continue for a period of five (5) years following the first
purchase order for the Product by Womens3D (other than purchases of
Prototype(s) as described in the Product Development Agreement) (the “Initial
Term”).  Upon expiration of the Initial Term of this Agreement, this Agreement
shall automatically renew for successive one (1) year terms (each a “Renewal
Term”) (the Initial Term, together with any Renewal Term, is herein referred to
as the “Term”) unless either Party provides written notice to the other of its
intention to not renew at least one hundred twenty (120) days prior to the end
of the then current Term.  Notwithstanding the foregoing, (i) this Agreement may
be terminated at any time upon the mutual written consent of the Parties and
(ii) Womens3D may terminate this Agreement at any time upon ninety (90) days
written notice once it has paid in full the Early Termination Fee (as defined
below) to TechniScan.

 

b)            Breach Definition.  Subject to the terms and conditions of
Section 9 below, (i) if the other Party becomes insolvent or subject to a
petition in bankruptcy filed by or against it or is placed under control of a
receiver, liquidator or committee of creditors; provided such proceeding or
petition is not dismissed or vacated within ninety (90) days; (ii) if either
Party does not pay any amounts due hereunder when due or does not timely Deliver
Product, and such

 

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non-payment or non-Delivery is not cured within thirty (30) days after receipt
of written notice of such payment default; or (iii) if the other Party breaches
its duties and obligations under the terms of this Agreement or is in breach or
default of any representation, warranty, covenant, agreement or other obligation
hereunder, which breach or default is incapable of cure, or if capable of being
cured, has not been cured within sixty (60) days after receipt of written notice
from the non-defaulting Party or within such additional period of time as the
non-defaulting Party may authorize in writing; each shall constitute a
“Breach(ing)” of this Agreement.

 

c)             Consequences.  Except as otherwise provided for in Section 9
below, in the event of a Breach of this Agreement, the non-Breaching Party may,
at its option, terminate this Agreement in writing at such time and for ninety
(90) days thereafter (or for such longer period as the Breach continues after
such ninety day period) without any further obligation or liability hereunder,
except as and subject to satisfaction of:  any payment or Product delivery
obligation in accordance with the terms hereof at the time of such termination;
any obligation either of the Parties may have under Sections 2 and 7 in this
Agreement; and to the Parties’ rights and obligations set forth in the Product
Development Agreement and the Trademark Agreement, which obligations shall
survive any such termination as set forth herein and therein.  The non-Breaching
Party shall also have the right to pursue any and all rights it may have against
the Breaching Party now or hereafter under the law or equity, including without
limitation (a) the right to obtain injunctive relief to prevent the other Party
from Breaching its obligations under this Agreement or to compel the other Party
to perform its obligations under this Agreement, (b) to collect damages, and
(c) the right to reasonable attorneys’ and other third party fees.  The Parties
hereby agree that the termination or expiration of this Agreement shall not:
(i) release either Party, or its successors or assigns, from any claim of the
other Party accrued hereunder prior to the effective date of such termination or
expiration; or (ii) affect the rights or enforceability of any obligations of
either Party, or its successors or assigns, under any provisions that survive
termination or expiration of this Agreement.  If this Agreement is terminated
other than because either the Term hereof has expired or because of Breach of
TechniScan, the amount owing by Womens3D to TechniScan shall be the lesser of
the amount of:  (x) the Tooling and Set-Up Costs which Womens3D has not
reimbursed or paid to TechniScan or a third party, or (y) the amount not yet
paid to date to satisfy the $1.5 million required to be paid for the Minimum
Initial Order.  As used herein, “Tooling and Set-Up Costs” means the following
costs and expenses incurred by TechniScan in connection with the development,
testing or manufacture of the Products to the extent not included in the Initial
Development Fee: (x) the actual out-of-pocket cost of all tools, fixtures,
moulds, materials, cases and other tooling items acquired by TechniScan not
otherwise paid for or reimbursed by Womens3D, (y) all direct labor and overhead
costs for such direct labor at the DCAA Rates (z) and all other out-of-pocket
costs and expenses incurred by TechniScan in connection with the development,
testing or manufacture of the Products not otherwise paid for or reimbursed by
Womens3D.

 

d)            Change of Control.  This Agreement also may be terminated by
Womens3D immediately at such time and any time thereafter during the Term hereof
following a Change of Control of TechniScan.

 

e)             Termination for Competitive Pricing.  Womens3D may also terminate
this Agreement with ninety (90) days prior written notice if Womens3D reasonably
determines that it

 

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can manufacture the Product or have the Product manufactured and delivered to
Womens3D in substantially the same quality for a price that is at least twenty
percent (20%) below the as-delivered price Womens3D is then paying TechniScan
for the Product so long as Womens3D takes Delivery of any binding purchase
orders issued hereunder (including, without limitation, the Minimum Initial
Order).

 

f)             Effect of Termination.  Upon the termination or expiration of the
Term of this Agreement, all open purchase orders between Womens3D and TechniScan
as of the date of such termination shall be fulfilled by the Parties fully in
accordance with the terms and conditions of this Agreement, notwithstanding
termination hereof, as if this Agreement remained in full force and effect;
provided that if this Agreement is terminated by TechniScan due to a Breach by
Womens3D, TechniScan may, but shall not be required to, fulfill any open
purchase orders.  Thereafter, Section 1(b) (relating solely to licenses that
survive the end of the Term), Section 1(g) (relating to risk of loss and title),
Section 1(h) (relating to payment), Section 5(c) (relating to the consequences
of termination), Section 6 (relating to warranty and remedy), Section 7
(relating to indemnification), Section 13 (limitation of liability), Section 14
(confidentiality), Section 15 (notices), Section 27 (governing law), Section 28
(dispute resolution) and any other provisions that by their nature are intended
to continue beyond the termination or expiration of this Agreement shall
survive.

 

6.             Representations, Warranties and Covenants.

 

a)             Mutual Representations and Warranties.  Each Party represents and
warrants to the other Party that: (i) it has full power and authority to enter
into this Agreement and to carry out its obligations hereunder, except as such
may be limited by bankruptcy, insolvency, fraudulent conveyance or other similar
laws affecting the enforcement of creditors’ rights generally and further
subject to general principles of equity and public policy (ii) this Agreement
constitutes its valid and binding obligation, enforceable against it in
accordance with its terms; (iii) its execution, delivery and performance of this
Agreement will not result in a breach of any material agreement by which such
Party may be bound, and will not result in the breach of any obligation of
confidentiality or nondisclosure by which such Party may be bound; and (iv) it
is in compliance with and will comply with all existing applicable laws,
statutes, rules, regulations, ordinances, directives and orders, with respect to
its rights and obligations under this Agreement and the transactions
contemplated hereby and it has no knowledge of any applicable laws, statutes,
rules, regulations, ordinances, directives and orders that would be violated by
either Party entering into this Agreement or the transactions contemplated
hereby.

b)            TechniScan’s Representations and Warranties.  TechniScan warrants
that (x) all units of Product and Product Technology delivered hereunder shall
conform in all material respects to the applicable Specifications (y) all units
of TechniScan Pre-Existing Equipment shall conform in all material respects to
TechniScan’s applicable specifications for such units and each shall be free
from defects in design, materials and workmanship.  The hardware warranty period
for defects shall extend for a period of fifteen (15) months after date of
Delivery or twelve (12) months after the date of first installation, whichever
is sooner; the TechniScan Software shall conform in all material respects to the
applicable specifications for a period of fifteen (15) months after date of
Delivery or twelve (12) months after the date of first installation, whichever
is sooner.  To the extent spare parts are purchased, the hardware warranty
period for defects for

 

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such spare parts shall extend for a period of fifteen (15) months after date of
Delivery or twelve (12) months after the date of first installation, whichever
is sooner.  The above warranties shall also apply to all repaired and replaced
Products and Product Technology until the later of:  (i) the end of the warranty
period; or (ii) six (6) months after the date of such repair or replacement, as
applicable.  Costs of transportation associated with the shipment of Products or
Product Technology or spare parts/exchange goods and replaced parts for repair
or replacement under this warranty will be borne by Womens3D and TechniScan
shall bear the costs of transportation associated with the shipment of the
defective products/spare parts to Womens3D or its designated Customer.  The
warranty does not extend to any units of Product or Product Technology or spare
parts/exchange goods and replaced parts that have been subjected to misuse,
neglect, incorrect wiring or servicing, improper installation or any other
material alteration without TechniScan’s consent.

 

c)             Warranty Breach.  Subject to Sections 6(d), (e), (f) and
(g) hereof, in the event of any Breach by TechniScan of the warranties specified
in Section 6(b) above, Womens3D’s sole and exclusive remedy and TechniScan’s
entire liability, will be for TechniScan to:  (i) in respect of a Breach of
Section 6(b) relating to hardware, at Womens3D’s discretion, repair and/or
replace such hardware component of the Product in question within a reasonable
time (save that if Womens3D seeks repair or replacement of Products under this
Section 6(c)(i) but TechniScan no longer manufactures that Product, TechniScan
shall be entitled to replace the Products with products of equivalent standard,
quality and functionality in TechniScan’s reasonable opinion or (at its
discretion) refund to the customer, or if Womens3D requests, to Womens3D the
applicable then current market price for such equivalent replacement; (ii) in
respect of a Breach of Section 6(b) relating to TechniScan Software, at
TechniScan’s discretion, correct any errors with the TechniScan Software within
a reasonable time or, replace the Product or refund the applicable then current
market price for the Product(s) in question to Womens3D, provided always that
such error is reproducible and is not due to Womens3D’s or its Customer’s
incorrect use of the TechniScan Software or other Software.

 

d)            No Liability.  Subject to Section 6 of the Product Development
Agreement, the Parties hereby agree that the foregoing warranties shall not
apply and TechniScan shall be under no liability in respect of any defect,
non-conformity, infringement or Breach to the extent (but only to the extent)
caused by or arising from: (i) interference, tampering, modification, alteration
or any other work performed on the Product by anyone other than a Person
authorized by TechniScan in writing; (ii) misuse, willful damage, abnormal
business conditions, failure to follow TechniScan’s written instructions or
negligence; (iii) accidental damage or any other damage not consistent with
normal wear and tear; (iv) any software downloaded to the Product (other than
the Product Software); (v) combination of the Products with any other products,
processes, design elements, materials or anything else not supplied by,
recommended in writing by, or approved by TechniScan; (vi) components provided
to or consigned with TechniScan by Womens3D; (vii) future changes to the
Specifications required by Womens3D, which TechniScan objects to and which
TechniScan further advises Womens3D in writing may cause such defect,
non-conformity, infringement or Breach to occur; (viii) compliance by TechniScan
with any material requirements or instructions specified or given by Womens3D in
writing to TechniScan that are not otherwise agreed to by TechniScan; or
(ix) any drawing, design or specification or components supplied by a third

 

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party; provided that TechniScan will pass through to Womens3D to the extent
permitted any applicable warranties or support that TechniScan receives from its
third party licensors, if any.

 

e)             Procedure for Warranty Qualification.  TechniScan shall not be
liable for a Breach of the warranties set out in Section 6(b) unless and until
TechniScan is given a reasonable opportunity after receiving the written notice
of examining such Products and Womens3D (if asked to do so by TechniScan, at
TechniScan’s sole cost and expense) returns such Products to TechniScan’s
designated place of business for the examination to take place there.

 

f)             Out-of-Warranty Repair Services.  After the expiration of each
Product’s respective warranty period (as provided above), TechniScan shall
provide, if requested and paid for by Womens3D, out-of-warranty repairs for
Products returned by Womens3D (on a time and materials basis) or in accordance
with such other terms to be mutually agreed upon by the Parties at least six
(6) months prior to the end of such warranty period.

 

g)            No Implied Warranties.  EXCEPT AS ARE EXPRESSLY PROVIDED IN THIS
AGREEMENT, THE PRODUCT DEVELOPMENT AGREEMENT, AND/OR THE TRADEMARK AGREEMENT,
THERE ARE NO CONDITIONS, WARRANTIES OR OTHER TERMS, EXPRESSED OR
IMPLIED, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER KIND WHATSOEVER, THAT ARE
BINDING ON TECHNISCAN AND WOMENS3D HAS NOT RELIED ON ANY SUCH TERMS EXCEPT AS
SPECIFICALLY STATED IN THIS AGREEMENT, THE PRODUCT DEVELOPMENT AGREEMENT, AND/OR
THE TRADEMARK AGREEMENT.  ANY CONDITION, WARRANTY OR OTHER TERM CONCERNING THE
PRODUCTS WHICH MAY OTHERWISE BE IMPLIED INTO OR INCORPORATED WITHIN THIS
AGREEMENT, WHETHER BY STATUTE, COMMON LAW OR OTHERWISE, IS HEREBY EXPRESSLY
EXCLUDED TO THE FULLEST EXTENT PERMITTED BY LAW.

 

h)            Each Party shall maintain at its own expense in full force and
effect products liability insurance policy with a responsible insurance carrier
with coverage of at least One Million Dollars (US $1,000,000.00) per occurrence
and Two Million Dollars (US $2,000,000.00) in the aggregate that lists the other
Party as an additional insured, except that Womens3D shall have no obligation to
obtain such insurance until the earlier of when it places with a Customer a
Prototype or a Product.  This insurance shall be for the benefit of TechniScan
and Womens3D and shall provide for at least ten (10) days prior written notice
to TechniScan and Womens3D of the cancellation or any substantial modification
of the policy.

 

i)              Each Party shall, from time to time, upon reasonable request by
the other Party, promptly furnish or cause to be furnished to the other Party
evidence in form and substance satisfactory to the requesting Party of the
maintenance of the insurance required by Section 6(h) above, including, but not
limited to, originals or copies of policies,

 

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certificates of insurance (with applicable riders and endorsements) and proof of
premium payments.

 

7.             Indemnification.

 

a)             Indemnification by TechniScan.  TechniScan agrees to indemnify
and hold harmless Womens3D and its employees, officers and directors, agents and
attorneys (the “Womens3D Indemnified Parties”) from and against any and all
obligations, fines, penalties, judgments, direct costs, expenses and/or any
other liabilities to third parties (including, but not limited to, costs of
investigation and defense, court costs and reasonable attorneys’ and other third
party fees) (collectively, “Claims”) resulting from or arising out of (i) any
Breach by TechniScan of this Agreement or the Trademark Agreement; (ii) any
claim by a Customer arising out of any of TechniScan’s warranties with respect
to the Product; (iii) any claim that any Software component solely developed by
TechniScan, any Product component solely developed by TechniScan, and/or any
Product Technology component solely developed by TechniScan infringes any
registered United States Intellectual Property Right  of any Person; (iv) any
claim of trademark infringement related to the use of the TechniScan Trademarks
for the Products, as permitted by the Trademark Agreement; (vi) any claim of
copyright infringement related to any TechniScan copyrighted works, as permitted
by the Trademark Agreement; (vii) any claim that any use of any of the
TechniScan Trademarks (as defined in the Trademark Agreement) or any component
or aspect thereof infringes upon or otherwise misappropriates the trademark,
copyright or other Intellectual Property Rights of a third party and (viii) any
failure on the part of TechniScan to pay any taxes, duties or assessments due by
TechniScan hereunder or on the sale or lease of the Products.  In the event of
an allegation of infringement:  (A) Womens3D shall promptly after learning of
any such infringement notify TechniScan, in writing, of any allegation of
infringement; (B) Womens3D shall make no admissions, compromises or settlements
without the consent, in writing, of TechniScan, which consent shall not be
unreasonably withheld; (C) except as provided below, Womens3D shall allow
TechniScan or its authorized representative, at TechniScan’s sole cost and
expense, to conduct and/or settle all negotiations and litigation and shall give
TechniScan all reasonable assistance at TechniScan’s expense; provided, however,
that TechniScan shall not settle any claim that would constitute an admission of
liability of Womens3D or require additional cost, expense, obligation or payment
by Womens3D or restrict, burden or limit Womens3D’s business, including the sale
of its Product, without the consent of Womens3D, which consent shall not be
unreasonably withheld; and (D) Womens3D shall have the right to appear in any
such legal proceeding and to participate in any settlement discussions with
counsel of its own choosing, the fees and expenses of such representation to be
paid by Womens3D unless Womens3D reasonably determines there is a conflict of
interest precluding joint representation of Womens3D and TechniScan with regard
to such Claim in which case TechniScan shall pay for the fees and expenses of
Womens3D’s legal counsel if such counsel was approved by TechniScan (which
approval shall not be unreasonably withheld).

 

b)            Notwithstanding anything herein to the contrary, TechniScan shall
not be liable for (A) any claim that the Third Party Software or Womens3D
Software infringes the Intellectual Property Rights of any Person or (B) any
claim by any Person that the Product or TechniScan Software infringes the
Intellectual Property Rights of any Person if such claim arises out of or
results from (1) the use of the Software, the Product, and/or the Product
Technology

 

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with any technology provided by Womens3D or its subdistributors, subcontractors,
Customers or others if TechniScan did not supply, approve, or recommend that
technology; (2) any modification, changes or additions to the Software, the
Product, and/or the Product Technology by Womens3D or third parties if
TechniScan did not suggest, approve, or recommend the modification, change, or
addition in question; (3) any software added or downloaded to the Software, the
Product, and/or the Product Technology if TechniScan did not suggest, approve,
or recommend the addition or download in question; (4) TechniScan’s compliance
with the design, plans or specifications furnished by or on behalf of Womens3D
or its subdistributors, subcontractors or Customers not approved by TechniScan
prior to such compliance; (5) TechniScan’s compliance with the Specifications
that posed a material infringement risk of which an officer of Womens3D had
actual knowledge as shown in its contemporaneous records that it failed to
communicate to TechniScan and/or as otherwise developed jointly by Womens3D with
TechniScan (unless an officer of TechniScan had actual knowledge as shown in its
contemporaneous records of a material infringement risk posed by such joint
development that it failed to communicate to Womens3D); (6) any use of the
Software, the Product, and/or the Product Technology not in accordance with the
applicable Documentation or in a manner not contemplated or for which the
Software, the Product, and/or the Product Technology were not designed if
TechniScan did not specifically approve, or recommend such use in writing; or
(7) any tampering with the Software, the Product, and/or the Product Technology
of which Womens3D was aware but failed to report to TechniScan.

 

c)             Without limiting the indemnity obligation in Section 7(a), if all
or any part of the Software, the Product, and/or the Product Technology,
becomes, or in TechniScan’s opinion is likely to become, the subject of a claim,
suit, action, threat, allegation or proceeding described in Section 7(a)(i) or
is or likely to be enjoined from use, TechniScan may, at its sole option and
expense, either: (A) procure in favor of Womens3D the right to use the allegedly
infringing material or Products as contemplated in this Agreement; or (B) modify
the Specifications or the Products, or the infringing part or parts thereof, as
applicable, so that it is non-infringing without materially affecting its
quality, performance, functionality, or replace same with a substitute of equal
quality, performance and functionality; or (C) if neither of the foregoing is
commercially practicable, Womens3D shall return the allegedly infringing Product
to TechniScan, and TechniScan will refund Womens3D all sums paid by Womens3D
(including at the sole option of Womens3D the repayment by TechniScan to
Womens3D of the Initial Development Fee provided that in the event that Womens3D
elects to require repayment of all amounts it has paid of the Initial
Development Fee, then all licenses granted hereby to the parties shall terminate
as of the date Womens3D receives all such amounts) for the allegedly infringing
Product.

 

d)            Indemnification by Womens3D.  Womens3D agrees to indemnify and
hold TechniScan and its employees, officers and directors, agents and attorneys
(collectively, the “TechniScan Indemnitees”) harmless from and against any and
all Claims resulting from or arising out of (i) any Breach by Womens3D of this
Agreement or the Trademark Agreement; (ii) any claim by a third party arising
out of any of Womens3D’s warranties, promoting, marketing, offering for sale,
selling, distributing, servicing or supporting the Products or the services, or
Womens3D’s business; (iii) any statement, claim, representation, or warranty
made by Womens3D, any of its employees, or any of its agents

 

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about the Products and/or TechniScan that is materially inconsistent with the
Collateral Materials; (iv) any claim that any Software component solely
developed by Womens3D, any Product component solely developed by Womens3D,
and/or any Product Technology component solely developed by Womens3D infringes
any registered or unregistered United States Intellectual Property Right  of any
Person; (v) any claim of infringement due solely to:  any Product labeling for
which Womens3D was exclusively responsible, Womens3D Pre-Existing Technology, or
Womens3D Software; (vi) any claim of trademark infringement related to the use
of the Womens3D Trademarks for the Products as permitted by the Trademark
Agreement; (vii) any claim of copyright infringement related to any Womens3D
copyrighted works as permitted by the Trademark Agreement; (vii) any claim that
any use of any of the Womens3D Trademarks (as defined in the Trademark
Agreement) or any component or aspect thereof infringes upon or otherwise
misappropriates the trademark, copyright or other Intellectual Property Rights
of a third party and (viii) any failure on the part of Womens3D to pay any
taxes, duties or assessments due by Womens3D hereunder or on the sale or lease
of the Products.  In the event of a claim for indemnification, (A) TechniScan
shall promptly notify Womens3D, in writing, of the claim for indemnification;
(B) TechniScan shall make no admissions, compromises or settlements without the
consent, in writing, of Womens3D, which consent shall not be unreasonably
withheld; (C) TechniScan shall allow Womens3D or its authorized representative,
at Womens3D’s cost and expense, to conduct and/or settle all negotiations and
litigation and shall give Womens3D all reasonable assistance at Womens3D’s
expense; provided, however, that Womens3D shall not settle any claim that would
constitute an admission of liability of TechniScan or require additional cost or
expense or payment by TechniScan or restrict, burden or limit TechniScan’s
business, including the manufacture of the Product, without the consent of
TechniScan, which consent shall not be unreasonably withheld; and (D) TechniScan
shall have the right to appear in any such legal proceeding and to participate
in any settlement discussions with counsel of its own choosing, the fees and
expenses of such representation to be paid by TechniScan unless TechniScan
reasonably determines there is a conflict of interest precluding joint
representation of Womens3D and TechniScan with regard to such Claim in which
case Womens3D shall pay for the fees and expenses of TechniScan’s legal counsel
if such counsel was approved by Womens3D (which approval shall not be
unreasonably withheld).

 

e)             Notwithstanding anything herein to the contrary, Womens3D shall
not be liable for (A) any claim that the Third Party Software or TechniScan
Software infringes the Intellectual Property Rights of any Person or (B) any
claim by any Person that any Software component solely developed by Womens3D,
any Product component solely developed by Womens3D, and/or any Product
Technology component solely developed by Womens3D infringes the Intellectual
Property Right s of any Person if such claim relates to or results from (1) the
use of the Software, the Product, and/or the Product Technology with any
technology provided by TechniScan or its subdistributors, subcontractors,
Customers or others if Womens3D did not supply, approve, or recommend that
technology; (2) any modification, changes or additions to the Software, the
Product, and/or the Product Technology by TechniScan or third parties if
Womens3D did not suggest, approve, or recommend the modification, change, or
addition in question; (3) any software added or downloaded to the Software, the
Product, and/or the Product Technology if Womens3D did not suggest, approve, or
recommend the addition or download in question; (4) Womens3D’s compliance with
the design, plans or specifications furnished by or on behalf of TechniScan or
its subdistributors, subcontractors

 

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or Customers not approved by Womens3D prior to such compliance; (5) any use of
the Software, the Product, and/or the Product Technology not in accordance with
the applicable Documentation or in a manner not contemplated or for which the
Software, the Product, and/or the Product Technology were not designed if
Womens3D did not specifically approve, or recommend such use in writing; or
(6) any tampering with the Software, the Product, and/or the Product Technology
of which TechniScan was aware but failed to report to Womens3D.

 

f)             Joint Defense.  With respect to any Claims that any technology
the Parties developed jointly infringes any Intellectual Property Rights and,
for the avoidance of doubt, such Claims are not covered by the provisions of
Sections 7(a) or (d), the Parties agree that they will together share equally in
the defense and cost of such Claims jointly selecting the legal counsel to
represent them including splitting the costs for reasonable attorney’s fees and
other costs and expenses in connection with the defense of such Claims.  For the
avoidance of doubt, such costs shall be split equally regardless of whether one
Party has lost or abandoned such Party’s rights in the Joint IP (whether under
Section 2.7(d) of the Product Development Agreement or otherwise).

 

g)            Mitigation.  As a condition to the indemnity obligations in
Sections 7(a) and (d) above, the indemnified Party shall make timely and
commercially reasonable efforts to mitigate the Claim in good faith cooperation
with the indemnifying Party. The failure of the indemnified Party to timely
mitigate shall not affect rights to indemnification, except (and then only to
the extent) that the indemnifying Party demonstrates actual damage caused by
such failure. AN INDEMNIFIED PARTY SHALL NOT BE ENTITLED TO ANY DOUBLE RECOVERY
FOR THE SAME CLAIM BY ASSERTING SEPARATE INDEMNIFICATION CLAIMS PURSUANT TO THIS
AGREEMENT, THE PRODUCT DEVELOPMENT AGREEMENT, THE TRADEMARK AGREEMENT, AND/OR
THE SUBSCRIPTION AGREEMENT.

 

h)            Exclusive Infringement Remedy.  Section 6 of the Product
Development Agreement and this Section 7 states the entire liability (without
duplication) of the Parties in respect of the infringement of the Intellectual
Property Rights of any Person.

 

8.             Product Improvements and Modifications.  If during the Term
TechniScan wishes to make any improvements or modifications to any of the
Products not otherwise authorized pursuant to the terms and conditions of the
Product Development Agreement, TechniScan shall disclose in reasonable detail
(including specifications therefor) to Womens3D all such requested improvements
or modifications and Womens3D may in its sole discretion accept or reject any
such requested improvements or modifications.

 

9.             Force Majeure.  Neither Party shall be responsible for failure to
perform its respective obligations hereunder due to Force Majeure events (as
defined in the Product Development Agreement).  Any interruption of business
caused by such Force Majeure event shall not, however, invalidate this Agreement
or the Parties’ respective obligations with respect to any order for or delivery
of the Product, and, upon removal of the cause of the interruption, the
obligation to make deliveries of and to purchase Product as before shall be
reinstated (unless such interruption continues for more than three months).  For
the avoidance of doubt, neither

 

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Party shall be liable for delays to the extent that such delays are attributable
to the other Party or its Customer’s failure to meet any deliverable that may be
required hereunder.

 

10.           Export Controls.  This Agreement, and any technical information
provided under this Agreement, may be subject to restrictions concerning the
export of products or technical information from the United States that may be
imposed by the United States Government.  Accordingly, each Party agrees that it
will not export, directly or indirectly, any technical information acquired
under this Agreement or any products utilizing any such technical information to
any country for which the United States Government or any agency thereof at the
time of export requires any export license or other governmental approval,
without first obtaining the written consent to do so from the Department of
Commerce or other agency of the United States Government when required by an
applicable statute or regulation.

 

11.           Nonsolicitation of Personnel.  Without the prior written consent
of the other Party, from the Effective Date and for a period of one (1) year
after the date of expiration or termination of this Agreement, neither Party
shall directly or indirectly, alone or in conjunction with any other Party, or
in any capacity whatsoever induce, solicit, recruit, hire or otherwise attempt
to induce solicit, recruit, hire or offer to hire and/or employ any employee,
consultant, independent contractor or other personnel of the other Party or to
terminate, alter or lessen such Party’s affiliation with such other Party and/or
its affiliates or to violate the terms of any agreement or understanding between
such other Party and a third party customer, supplier, lender or other Party. 
The placement of employment advertisements not specifically targeting (by name,
location, or otherwise) the other Party or its employees, consultant,
independent contractors or other personnel (by name, location, or otherwise) and
the recruiting or hiring of any individual who responds to such advertisements
shall not be deemed a breach of this Section 11.

 

12.           Cumulative Rights and Remedies.  All rights and remedies conferred
upon or, reserved to the Parties in this Agreement shall be cumulative and
concurrent and shall be in addition to all other rights and remedies available
to such Parties at law or in equity or otherwise.  Such rights and remedies are
not intended to be exclusive of any other rights or remedies and the exercise by
any Party of any right or remedy herein provided shall be without prejudice to
the exercise of any other right or remedy by such Party provided herein or
available at law or in equity.

 

13.           Limitation of Liability.

 

a)             NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT EXCEPT
FOR CLAIMS OF INFRINGEMENT UNDER SECTION 7, IN NO EVENT, EXCEPT IN THE EVENT OF
FRAUD OR WILLFUL MISCONDUCT, SHALL EITHER PARTY BE LIABLE FOR ANY INCIDENTAL,
PUNITIVE OR CONSEQUENTIAL DAMAGES, OR FOR ANY LOST PROFITS OR LOSS OF REVENUE
WHETHER FORESEEABLE OR NOT, EVEN IF THAT PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, ARISING FROM THIS AGREEMENT OR OCCASIONED BY ANY
BREACH OF ANY OBLIGATION UNDER THIS AGREEMENT.

 

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b)            SUBJECT TO SECTION 13(a), THE MAXIMUM AGGREGATE LIABILITY BY A
PARTY TO THE OTHER PARTY FOR ANY AND ALL CLAIMS MADE UNDER THIS AGREEMENT SHALL
BE LIMITED TO THE AGGREGATE AMOUNT OF THE GREATER OF $1,500,000 OR THE FEES PAID
AND PAYABLE BY WOMENS3D AT THE TIME THE LIABILITY IS INCURRED.

 

14.           Confidentiality.

 

a)             Each Party agrees to treat as confidential and proprietary, and
shall not, except as permitted by the terms of this Agreement, at any time for
any reason whatsoever disclose to any third party or make use of, or permit to
be made use of, any information relating to the technology, technical processes,
business affairs or finances, trade secrets or other confidential information of
the other (the “Confidential Information”); provided, however, that such
obligation shall not apply to information of a Party that:

 

i.              becomes generally known to the public, either before or after
the date of its disclosure to the receiving Party, through no fault or omission
on the part of the receiving Party;

 

ii.             is lawfully disclosed to the receiving Party, either before or
after the date of its disclosure to the receiving Party, by an independent third
party rightfully in possession of such Confidential Information;

 

iii.            is lawfully in the possession of the receiving Party at the time
of its disclosure, as evidenced by the prior written records of such receiving
Party;

 

iv.            is required to be disclosed by the receiving Party pursuant to
any applicable law or court or administrative order, provided the receiving
Party provides the other Party with advance notice of such disclosure and an
opportunity for the other Party to seek a protective order or such other
appropriate remedy prior to such disclosure; or

 

v.             is making a disclosure as is required by the applicable rules of
any stock exchange or applicable securities laws.

 

b)            All Confidential Information disclosed under this Agreement, the
Product Development Agreement, the Trademark Agreement and/or the Subscription
Agreement shall remain confidential unless and until one of the exceptions in
Section 14(a)(i)-(a)(v) applies.

 

c)             The Parties each agree that Confidential Information may be
disclosed in connection with the obligations to be performed by a Party
hereunder on a “need-to-know” basis to its employees, authorized agents,
authorized subcontractors, legal counsel, accountants, banks and other financing
sources and their professional advisors under an obligation of confidentiality
no less stringent than those contained herein; provided that such recipient is
not a direct or indirect competitor of the Party whose Confidential Information
is to be disclosed.

 

15.           Notices.  Any notice required or authorized by this Agreement to
be given by either Party to the other shall be sent either by FedEx (or other
reputable overnight courier), personal delivery or by facsimile transmission to
the other Party at the address or (as appropriate)

 

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facsimile number and marked for the attention of such Person as specified in
this Section 15.  Any notice sent by courier under this Section 15 that is not
returned to the sender as being undelivered shall be deemed to have been duly
served on the third Business Day following mailing.  Any notice sent by
facsimile transmission under this Section 15 shall be deemed to have been duly
served on the date of transmission, provided that the sender has received
written confirmation of successful transmission.  The respective addresses and
facsimile numbers of the Parties for the service of any notice under Section 15
shall be:

 

For Notices delivered to TechniScan:

 

TechniScan, Inc.

 

3216 South Highland Dr.

 

Suite 200, Salt Lake City

 

Utah 84106

 

Attn:  Dave Robinson

 

Tel:  801-994-2965

 

Fax:  801-747-1099

 

with a copy to:

 

Greenberg Traurig, P.A.

 

5100 Town Center Circle

 

Suite 400

 

Boca Raton, FL  33486

 

Attn:  Jeffery A. Bahnsen, Esq.

 

Tel:  561-955-7650

 

Fax:  561-338-7099

 

For Notices delivered to Womens3D:

 

Womens3D, Inc.

 

4917 S. Congress

 

Austin, Texas 78745

 

Attn:  Martin Sieckmann

 

Tel:  713-446-5896

 

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with a copy to:

 

Fulbright & Jaworski L.L.P.

 

600 Congress Ave., Suite 2400

 

Austin, TX 78701

 

Attn:  Darrell Windham, Esq.

 

Tel: 512-536-5263

 

Fax: 512-536-4598

 

The address for service of the Parties and/or the facsimile number to which
notices must be sent may be changed at any time upon notice being given by
either Party to the other, in accordance with the terms of this Section 15.

 

16.           Modification.  This Agreement may not be modified, changed or
supplemented, nor may any obligations hereunder be waived, except by written
instrument signed by the Party to be charged or by its agent duly authorized or
as otherwise expressly permitted herein.

 

17.           Counterparts; Facsimile.  This Agreement may be executed in one or
more original or facsimile counterparts, each of which will be deemed an
original and all of which together will constitute one and the same instrument.

 

18.           Entire Agreement.  This Agreement and all exhibits and schedules
attached hereto supersede all prior discussions, negotiations and agreements
between Womens3D and TechniScan; provided that the Product Development
Agreement, the Trademark Agreement and the Subscription Agreement are not
affected by this Section 18 and shall remain in full force and effect in
accordance with their respective terms.  In the event of any conflict between
the provisions of this Agreement and the provisions of the Product Development
Agreement, the provisions of the Product Development Agreement shall prevail
over the provisions of this Agreement.  In the event of any conflict between the
provisions of this Agreement and the provisions of the Trademark Agreement, the
Trademark Agreement shall control with respect to obtaining, maintaining, and/or
enforcing trademark and copyright rights, and the ownership of same, however
this Agreement shall prevail over the Trademark Agreement with respect to all
other issues.  No course of dealing or performance or usage of trade not
specifically set forth in this Agreement shall be admissible to explain, modify
or contradict this Agreement.  No amendment or modification of the terms of this
Agreement shall be effective, unless set forth in writing, stating with
specificity the particular amendment or modification to be made and signed by
the Parties hereto.

 

19.           Headings.  The titles of the Sections and subsections are for
convenience only and are not in any way intended to limit or amplify the terms
or conditions of this Agreement.

 

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20.           Severability.  If any provision or provisions hereof shall be
contrary to any law or regulation of any state or country in which the Products
are sold, or if any part or portions hereof shall be determined to be invalid or
unenforceable in whole or in part, neither the validity of the remaining part of
such term nor the validity of any other term of this Agreement shall in any way
be affected thereby.

 

21.           Binding Effect.  All terms of this Agreement shall be binding upon
and inure to the benefit of the Parties hereto and their respective legal
representatives, successors and assigns.

 

22.           Waiver of Breach or Violation Not Deemed Continuing.  The waiver
by either Party of any provision of this Agreement shall not operate as, or be
construed to be, a waiver of any subsequent Breach hereof.

 

23.           Assignment.  Subject to the limitations and exceptions on Change
of Control as set forth in Section 5(d), this Agreement shall be binding on and
shall inure to the benefit of any and all successors and permitted assigns of
the Parties.  Any purported assignment by either Party not in compliance with
the provisions of this Agreement shall be null and void and of no force and
effect.  Nothing herein shall prohibit either Party from utilizing
subcontractors or other sub-manufacturers in connection with its obligations
hereunder.

 

24.           Documents.  Each Party hereto agrees to execute and, if necessary,
to file with the appropriate governmental entities, such documents, and take
such further action, as the other Party hereto shall reasonably request in order
to carry out the purposes of this Agreement.

 

25.           Interpretation.  This Agreement has been fully reviewed and
negotiated by the Parties hereto and their respective counsel.  Accordingly, in
interpreting this Agreement, no weight or consideration shall be given based
upon which Party or its counsel drafted the provision being interpreted.

 

26.           Expenses. Except as otherwise set forth herein, each Party shall
bear its own fees and costs in connection with the negotiation of this
Agreement.

 

27.           Governing Law; Jurisdiction.  This Agreement, the transactions
covered hereby, and all purchase orders submitted pursuant hereto shall be
governed by and construed in accordance with the laws of the State of Delaware
without application to any of its principles on conflicts of laws.

 

28.           Dispute Resolution and Arbitration.

 

i.              Notwithstanding the foregoing, nothing in this Section shall be
deemed to prohibit either Party from seeking injunctive or other equitable
relief in any court of competent jurisdiction.

 

ii.             Arbitration Procedures.

 

(i)            Selection of Arbitrator.  If a dispute is not resolved to the
mutual satisfaction of TechniScan and Womens3D, each in their respective sole
discretion, such dispute shall be submitted (by notice from either Party to the
other Party) to binding arbitration

 

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in Denver, Colorado, before one arbitrator in accordance with the Commercial
Arbitration Rules of the American Arbitration Association (the “Arbitration
Rules”) in effect on the date that notice of such dispute was originally given. 
Unless otherwise mutually agreed to in advance, the arbitrator shall be selected
from a panel of qualified arbitrators in accordance with the procedures of the
Arbitration Rules.

 

(ii)           Hearing Procedures.  Once appointed, the arbitrator shall
designate a time and place for a pre-hearing status conference not more than
sixty (60) days from the date of appointment, and shall appoint a time and place
for a final hearing not more than ninety (90) days from the date of the status
conference.  The final hearing shall conclude no later than ninety (90) days
after its commencement.  The Party that demands arbitration of the unresolved
dispute or disagreement shall specify in writing the matter to be submitted to
arbitration.  The arbitrator shall render a written decision setting forth an
award and stating with reasonable detail the reasons for the decision reached. 
Any cash component of the award shall be payable in United States dollars
through a bank in the United States.  Each Party shall bear its own cost of
preparing for and presenting its case; and the cost of arbitration, including
the fees, and expenses of the arbitrator will be shared equally by TechniScan
and Womens3D.

 

(iii)          Enforcement.  The arbitration award shall be final and binding
upon the Parties and may be confirmed by the judgment of any court having
appropriate jurisdiction.  Notwithstanding the above, each Party shall have the
right to seek injunctive relief in any court having appropriate jurisdiction to
enforce its rights under this Agreement with respect to a Breach under Sections
1(b), 1(c), 1(l), 11 and 14.

 

[signature page follows]

 

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the Effective Date.

 

WOMENS3D, INC.

TECHNISCAN, INC.

 

 

By:

/s/ Scott Sanders

 

By:

/s/ Dave Robinson

 

 

Name: Scott Sanders

Name: Dave Robinson

 

 

Title: President

Title: President

 

[signature page to Manufacturing Agreement]

 

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EXHIBIT A

 

PRODUCTS and PRICES

 

Pricing.  The prices for the Final Products (the “Prices”) including the Product
Technology shall be equal to TechniScan’s cost plus a mark-up of forty percent
(40%) of TechniScan’s gross margin plus the cost of insurance, sales tax,
freight, tariffs, duties and all other similar charges directly attributed to
the manufacture and delivery of the Products.  The Prices are calculated and
shall be denominated in and payable in United States dollars.  Prices shall
include final testing, packaging, insurance, freight, taxes, duties, tariffs and
similar charges.

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EXHIBIT B

 

SUPPORT, MAINTENANCE AND REPAIR SERVICES

 

[To be agreed by the parties and attached]

 

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