1.1                "Effective Date" means the date that this Agreement is executed by both parties.

1.2               "Carbon Cold Cathode" means a single field emission cold cathode device comprised of a carbon based emitting material deposited on a substrate, developed and produced by Seller.

1.3               "Carbon Cold Cathode Product" means any x-ray tube which incorporates or employs or is made with the benefit of a Carbon Cold Cathode in the Technical Field, and which Carbon Cold Cathode is supplied by Seller to Purchaser.

1.4               "Cold Cathode Technology" means certain proprietary technology and know-how and improvements and enhancements related to the manufacture and use of a Carbon Cold Cathode.               

1.5               "Territory" means the World.

1.6               "Technical Field" means instrumentation using x-ray sources for thickness gauging, radiography inspection and spectroscopy applications, where the Carbon Cold Cathodes replace the current technology that utilizes radioactive isotopes.

1.7               "Gross Selling Price" means at least the fair market value of the Carbon Cold Cathode Products, that is, the selling price which would result from an unaffiliated buyer in an arm's length sale of the substantially identical product in the same country, in the same quantity and at the same time subject to the same royalty.

1.8               "Sales Price" means the Gross Selling Price for the Carbon Cold Cathode Products, less accepted returns from customers, excise, sales or use taxes, customs duties and consulor fees, and transportation and insurance costs.

2.1                Terms

                     (a)               Purchaser shall use its best efforts to market Carbon Cold Cathode Products.

                     (b)               Carbon Cold Cathodes shall be purchased by Purchaser from Seller under purchase orders, which will be in writing and will contain quantity and delivery terms. Purchaser may cancel a purchase order by providing written notice to Seller at any time prior to the delivery date of the Carbon Cold Cathodes ordered within the purchase order. In the event Purchaser cancels a purchase order, Purchaser shall pay a cancellation fee equal to Seller's applicable engineering charges for manufacturing the Carbon Cold Cathodes for the canceled purchase order, but no more than the total price of the Carbon Cold Cathodes ordered by the purchase order. Additional or different preprinted terms of the purchase orders, acknowledgments, or confirmations, whether or not signed or accepted, will not supplement or supercede the terms of this Agreement unless solely agreed in a separate, signed amendment. Title and risk of loss or damage to the Carbon Cold Cathodes purchased under this Agreement shall pass to Purchaser upon shipment of the Carbon Cold Cathodes to Purchaser FOB Seller's plant or warehouse. The cost of packing, crating, freight and in-transit insurance incurred by Seller is an additional charge and will be added to the sales prices, reimbursed upon request, or paid by Purchaser directly.

                       (c)               For each purchase order issued by Purchaser to Seller for Carbon Cold Cathodes, the purchase price shall be in accordance with the following schedule:

                    Subject to Section 3.2, Purchaser shall purchase Carbon Cold Cathodes exclusively from Seller and shall not make any further purchases from a third party of products that are materially related to the Carbon Cold Cathodes or to the technology of the Carbon Cold Cathodes, except solely to the extent necessary for Purchaser to fulfill the obligation made, previous to the Effective Date, by Purchaser to East/West Technology Partners, Ltd. ("East/West") to purchase three hundred (300) cathodes of which twenty-five (25) cathodes have already been purchased by Purchaser. Purchaser is obligated to notify Seller in writing within three (3) days after Purchaser has either terminated or fulfilled such obligations to East/West.

                    At Seller's sole discretion, and upon thirty (30) days prior written notice from Seller to Purchaser, Seller may release Purchaser from the restriction set forth in Section 3.1. Sections 2.1(d), 2.4, 5.1, 7.1, 9.2, and Article IV shall not apply if Seller has released Purchaser from the restriction set forth in Section 3.1.

3.3              Limited Use of Carbon Cold Cathodes

                    Purchaser shall use the Carbon Cold Cathodes to manufacture, use, and sell, license or otherwise dispose of Carbon Cold Cathode Products for use only in the Technical Field. This Agreement shall not be construed to grant to Purchaser any license or any other rights in Seller's patents, trademarks, copyrights, trade secrets, proprietary technology or know-how, or any other intellectual property rights except as expressly stated herein.

                    Subject to Sections 2.4 and 3.2, Seller shall not license the technology of the Carbon Cold Cathodes to a third party for use in the Territory in the Technical Field.

                    Subject to Section 3.2, Seller warrants to Purchaser that the Carbon Cold Cathodes as delivered to Purchaser and when properly used for the purpose and in the manner specifically set forth in the Technical Field do not infringe any United States patent existing at the time of the Effective Date.

5.2              Novelty

                    Seller does not warrant the novelty of the Carbon Cold Cathodes or the Cold Cathode Technology.

5.3              Warranty Period

                    Seller warrants that the Carbon Cold Cathodes sold to Purchaser will be in good operating condition, free from defects in materials and workmanship, and will perform in material respects in accordance with the Specifications as set forth in Exhibit A for a period of six (6) months from delivery. The Parties shall agree on the scope of the Specifications at the time that a Carbon Cold Cathode Product is first ready for commercial production. If the Seller receives notice of such defects during the warranty period, Seller shall repair or replace the defective Carbon Cold Cathode at no additional charge. If Seller is unable, within a reasonable time, to repair or replace the Carbon Cold Cathode to a condition as warranted, Purchaser shall be entitled to a refund of the purchase price of the Carbon Cold Cathode paid to Seller upon return of the defective Carbon Cold Cathode to Seller.

5.4              Exclusions

                    Seller shall not be responsible for the obsolescence of the Carbon Cold Cathodes that may result from changes in Purchaser's requirements. Seller shall not be responsible for causes of action resulting from use of the Carbon Cold Cathodes other than as intended under the terms of this Agreement. Seller shall not replace a defective Carbon Cold Cathode as long as the defect is a result of mishandling, abuse, misuse or improper storage, installation, maintenance or operation.

5.5               Disclaimer

                    SUBJECT TO SECTION 5.3, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER DISCLAIMS ANY AND ALL PROMISES, REPRESENTATIONS, AND WARRANTIES WITH RESPECT TO THE CARBON COLD CATHODES INCLUDING THEIR CONDITION, THEIR CONFORMITY TO ANY REPRESENTATION OR DESCRIPTION, THE EXISTENCE OF ANY LATENT OR PATENT DEFECTS, ANY NEGLIGENCE, AND THEIR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE.

5.6              Cumulative Liability

                    EXCEPT FOR BREACH OF WARRANTY UNDER SECTION 5.1, IF APPLICABLE IN ACCORDANCE WITH SECTION 3.2, THE CUMULATIVE LIABILITY OF SELLER TO PURCHASER FOR ALL CLAIMS RELATING TO THE CARBON COLD CATHODE PRODUCTS AND THIS AGREEMENT, INCLUDING ANY CAUSE OF ACTION SOUNDING IN CONTRACT, TORT, OR STRICT LIABILITY, SHALL NOT EXCEED THE PURCHASE AMOUNTS RECEIVED BY SELLER FROM PURCHASER UP TO THE DATE OF LIABILITY. THIS LIMITATION OF LIABILITY IS INTENDED TO APPLY WITHOUT REGARD TO WHETHER OTHER PROVISIONS OF THIS AGREEMENT HAVE BEEN BREACHED OR HAVE PROVEN INEFFECTIVE.

                    IN NO EVENT SHALL SELLER BE LIABLE FOR ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT, OR SPECIAL DAMAGES, INCLUDING (WITHOUT LIMITATION) DAMAGES FOR LOSS OF REVENUE, COST OF CAPITAL, CLAIMS OF CUSTOMERS FOR SERVICE INTERRUPTIONS OR FAILURE OF SUPPLY.

7.1              Indemnification Related to Infringement

               Subject to Section 3.2, provided that (i) Seller is notified promptly in writing by Purchaser, (ii) Purchaser cooperates reasonably at Seller's expense, and (iii) Seller has sole control over the defense and settlement of such claims, then in the event of a claim for the violation of the warranty of noninfringement in Section 5.1 above, Seller shall settle or defend such claim or action and, if not settled, shall pay all finally awarded costs, fees (including legal fees) and damages. Seller shall have no liability under this Section 7.1 unless Purchaser gives written notice to Purchaser within thirty (30) days after Purchaser receives notice of the initiation of any applicable infringement claim which has been initiated against Purchaser and allows Seller to have sole control of the defense or settlement of the claim. Purchaser has the right to participate in the defense of any suit or proceeding provided that Purchaser shall be responsible for all of its own attorney's fees and related expenses. Seller shall not be responsible for any settlement made by Purchaser without Seller's prior written consent. If any applicable infringement claim is initiated, or in Seller's sole opinion is likely to be initiated, then Seller shall have the option, at its expense, to:

               a.               modify or replace all, or the infringing part, of the Carbon Cold Cathode so that it is no longer infringing, provided that the Carbon Cold Cathode functionally does not change in any material adverse respect; or

               b.               procure for Purchaser the right to continue using the infringing part of the Carbon Cold Cathode.

7.2              Exclusion for Unauthorized Actions

              Seller shall have no liability under any provision of this Agreement with respect to any performance problem, claim of infringement, or other matter to the extent that such problem, claim, or other matter is caused by or substantially contributed to by any unauthorized or improper use or modification of the Carbon Cold Cathode outside of the scope of the Specifications or any breach of this Agreement by Purchaser.

              For purposes of this Agreement, "Confidential Information" shall mean any information (1) related to (a) technical information, including, but not limited to, specifications, processes, know-how, trade secrets, and product plans, (b) quality information, including, but not limited to, quality assurance data, plans, and processes, and business information, including, but not limited to, forecasts, cost information, and client lists, as well as any other information labeled "Confidential" or provided to the receiving party with reference to this Agreement, and (2) which is disclosed on tangible media conspicuously identified as "confidential," or if orally disclosed or disclosed by demonstration or observation (other than data disclosed on a tangible media), which is identified as "confidential" at the time of disclosure and is confirmed as such, in writing, within 30 days thereafter. Confidential Information also includes the Cold Cathode Technology.

               Each party acknowledges that it is to be given access to Confidential Information. For a period of ten (10) years from the date of disclosure of any Confidential Information, the party who has received Confidential Information from the other disclosing party (the Receiving Party) agrees that:

               a.             it will not disclose the Confidential Information received hereunder to any third party;

               b.              it will not copy or modify the Confidential Information, or any copy, adaptation, transcription, or merger portion thereof, except as expressly authorized by the disclosing party;

               c.              it will not use for its benefit, or the benefit of any third party, any of the Confidential Information, except as set forth in this Agreement or any other agreement between the parties;

              d.              it will not compete with the disclosing party in connection with any of the Confidential Information, except as set forth in this Agreement or any other agreement between the parties.

8.3             Exceptions

             The receiving party's obligation to hold the Confidential Information disclosed to the receiving party in confidence will not apply to information:

             a.              which the receiving party can show was in the public knowledge or literature at the time of disclosure hereunder, or

             b.              which the receiving party can show was already in the receiving party's possession at the time of disclosure hereunder without obligation of confidentiality, or

             c.              subsequent to its disclosure hereunder and without fault of the receiving party becomes part of the public knowledge, or

            d.              is disclosed to the receiving party by a third party without obligation of confidentiality, the third party having legal right to do so.

             Nothing in this Article VIII shall restrict either party's obligations to disclose the terms of this Agreement as may be required by law or as may be ordered by a court of competent jurisdiction or other governmental or quasi-governmental authority.

             For purposes of this Section, specific disclosures made hereunder shall not be deemed to be within the above exceptions merely because they are embraced by general disclosures in the public knowledge or literature or in the receiving party's possession, and any combination of features disclosed hereunder shall not be deemed within the above exceptions merely because individual features are in the public knowledge or literature or in the receiving party's possession.

8.4             Notification

             The receiving party will immediately notify the disclosing party upon discovery of any unauthorized use or disclosure of the disclosing party's Confidential Information, or any breach of this Article by the receiving party, and the receiving party will cooperate with the disclosing party in every reasonable way to aid the disclosing party to regain possession of the Confidential Information and prevent its further unauthorized use or disclosure.

             The receiving party agrees to restrict disclosure of the disclosing party's Confidential Information to only those of the receiving party's employees who have a need to know such information to carry out the purposes of this Agreement.

8.6             Unauthorized Disclosure or Use

             The receiving party acknowledges that all Confidential Information is solely owned by the disclosing party and that the unauthorized disclosure or use of such Confidential Information would cause irreparable harm and significant injury, the degree of which may be difficult to ascertain. Accordingly, the receiving party agrees that the disclosing party will have the right to obtain an immediate injunction enjoining any breach of this Section, as well as a right to pursue any and all other rights and remedies available at law or equity for such a breach.

             Purchaser shall keep true and accurate records, files and books of account containing all the data reasonably required for the full computation and verification of the quantity of Carbon Cold Cathode Products sold or licensed to any party, including any third party, by Purchaser. Following seven days prior written notice to Purchaser, any certified accountant appointed by Seller shall be given access to such records, files and books during usual business hours; provided, however, that such inspection shall be at Seller's expense but shall not occur more often than once every six (6) months. If the audit results indicate that Purchaser has underpaid Seller by ten percent (10%) or more in royalty fees under this Agreement, then Purchaser shall remit to Seller the amount underpaid plus the cost of the examination and audit that led to the discovery that Purchaser had underpaid Seller within ten (10) business days of receiving the results of the audit. If the audit results indicate that Purchaser has underpaid Seller by ten percent (10%) or more in royalty fees under this Agreement, the amount underpaid shall be subject to a two percent (2%) per month late payment charge or such lesser maximum amount as may be allowed under Texas law.

             Quarterly, within thirty (30) days after the first days of January, April, July, and October of each year during the continuance of this Agreement, Purchaser shall render written reports stating in each such report the quantities of all Carbon Cold Cathode Products sold or licensed during the proceeding three calendar months, except that the first such report shall cover only the portion of the quarter between the Effective Date of this Agreement and the end of the quarter. Each such report shall be accompanied by remittance in full covering the royalties shown to be due Seller. Royalties paid on Carbon Cold Cathode Products that are returned by customers may be credited against future royalty payments, provided royalties are paid on any such returned Carbon Cold Cathode Products that are later sold or licensed. No royalties may be paid on Carbon Cold Cathode Products furnished to customers without charge to replace returned Carbon Cold Cathode Products on which royalties have been paid, provided no credit is taken against royalty payments for such returned Carbon Cold Cathode Products.

9.3             Terminal Report

             If this Agreement is for any reason terminated before all payments herein provided for have been made, Purchaser shall immediately submit a terminal report and pay to Seller any remaining unpaid balance even though the due date as provided in Section 2.1 has not been reached.

10.1             Termination

             This Agreement may be terminated by either party upon the occurrence of the following events:

             a.              Purchaser fails to pay Seller within ten (10) days after Seller makes written demand for any past-due amount payable under this Agreement (including interest thereon) that is not the subject of a good faith dispute as to which the Purchaser has given written notice to Seller explaining its position in reasonable detail.

             b.              Either party breaches, in any material respect, its obligations hereunder and the breaching party fails to cure such breach within a thirty (30) day period immediately following such breach.

             c.              Infringement claim initiated or likely to be initiated as set forth in Section 7.1.

             Either party shall provide thirty (30) days written notice of termination in which the notice shall identify and describe the basis for such termination.

10.3             Survival

             Articles I, VI, VIII, and XI and Sections 2.2, 2.3, 2.5, 5.2, 5.4, 5.5, 5.6, 7.2, 9.1, and 10.3 shall survive termination of this Agreement.

             This Agreement shall be governed by and construed in accordance with the laws of the state of Texas, without reference to conflict of law principles.

             Exclusive jurisdiction and venue for all disputes arising under this Agreement shall be with the state or federal courts located in Travis County, Texas, and the parties expressly submit themselves to the personal jurisdiction of such courts.

11.3              Severability

             If any provision of this Agreement shall be held illegal, invalid or unenforceable by a court of competent jurisdiction, that provision shall be deleted and the remainder of this Agreement shall remain in full force and effect.

             This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and merges all prior discussions between them.

11.5             Alteration

             A provision of this Agreement may be altered only by a writing signed by authorized persons of both Parties.

             All notices and communications to be given by each party to the other shall be in writing and addressed respectively to the parties at the following addresses:

             Nothing in this Agreement shall be construed to constitute or appoint either party as the agent, partner or representative of the other party for any purpose whatsoever, or to grant to either party any rights or authority to assume or create any obligation or responsibility, express or implied, for or on behalf of or in the name of the other, or to bind the other in any way or manner whatsoever.

             The headings in this Agreement are for purposes of convenience and reference only and are not intended to affect the meaning or interpretation of this Agreement.

              This Agreement may be executed in duplicate and either copy or both copies are considered originals.

              This Agreement shall be interpreted as written and negotiated jointly by the parties. It shall not be strictly construed against either party, regardless of the actual drafter of the Agreement.

             If Seller is unable to perform its obligations under this Agreement due to circumstances beyond its reasonable control (including without limitation, acts of nature, acts of government, labor disputes, delays in transportation, and delays in delivery or inability to deliver by Seller's suppliers), such obligations shall be suspended so long as those circumstances persist, provided that Seller notifies Purchaser promptly of the delay and its causes and uses commercially reasonable efforts to recommence performance without delay.

             Purchaser shall comply with all relevant U.S. export laws and regulations and will obtain all required export licenses prior to exporting or re-exporting Carbon Cold Cathode Products. Seller does not represent to Purchaser that an export license shall not be required nor that, if required, it shall be issued. Purchaser assumes all responsibility for its exports or re-exports of Carbon Cold Cathode Products.

                       This Agreement may not be assigned by Purchaser without the prior written consent of Seller.