This
Distribution Agreement (“AGREEMENT”), made this 11th
day of February 2008 by and between TECHNISCAN, INC., a Utah
corporation (hereinafter referred to as “SELLER”) and
ESAOTE S.p.A., a corporation organised and existing under the laws
of the Republic of Italy with its principal office at Via Siffredi
58, Genova, 16153 Italy (hereinafter referred to as
“DISTRIBUTOR”)
WHEREAS, SELLER is
engaged in the development of a device for the three dimensional
imaging of the whole breast using both reflection and transmission
ultrasound to create tomographic images of the female breast (the
“Products”).
WHEREAS, ESAOTE is
a leading player in the market of ultrasound systems and has
developed a proprietary technology for such systems.
WHEREAS, on the
date hereof SELLER and DISTRIBUTOR have entered into an original
equipment manufacturing and development agreement (the “
OEM Agreement ”) for the further development of the
Products that win provide for DISTRIBUTOR to provide certain
required components to be included in and integrated with the
Products.
WHEREAS, SELLER
expects that the Products shall be ready for sales by
January 31, 2009.
WHEREAS, SELLER
shall manufacture the Products and sell them in the US market and
other markets other than the Territory (as defined
below).
WHEREAS, SELLER
wishes to appoint DISTRIBUTOR to exclusively distribute the
Products in the Territory and DISTRIBUTOR is willing to accept such
appointment, on the terms and conditions set forth
herein.
WHEREAS, at
DISTRIBUTOR’S option, (i) SELLER will commit to
negotiate in good faith an agreement to market, sell, and
distribute certain products of DISTRIBUTOR into certain markets in
the United States and (ii) SELLER will commit to negotiate in
good faith an agreement to use ESAOTE’s existing distribution
organization in the US as a regional distributor of the
Company’s products into certain markets in the US.
NOW THEREFORE, the
Parties in consideration for the mutual premises contained herein
hereby agree as follows:
All capitalized
terms will have the meanings ascribed to such terms in this
Article 1 or as otherwise defined herein. Words importing the
singular shall include the plural and vice versa.
“ Adverse
Event ” means any adverse health event to which a Product
has or may have contributed. The term is generally limited to those
events that would be reportable to a Regulatory Authority,
e.g., Medical Device Reporting (MDR) to the FDA (U.S.)
or Vigilance Reporting to Competent Authorities (EU).
“
Agreement ” shall mean the present Distribution
Agreement and all its Annexes.
“ CE
Mark ” shall mean the European Union CE Mark as described
in EEC Medical Directive 93/42 of June 14, 1993.
“
Bankruptcy ” or “ Bankrupt ” shall
mean, with respect to either Party, if any of the following events
occurs: such Party (a) voluntarily becomes the subject of any
proceedings relating to its winding-up, liquidation, insolvency or
for the appointment of a receiver or similar officer for it,
(b) involuntarily becomes the subject of any proceedings
relating to its winding-up, liquidation, insolvency or for the
appointment of a receiver or similar officer for it, which is not
discharged in its favor with prejudice within ninety (90) days
thereafter; (c) makes an assignment for the benefit of all or
substantially all of its creditors, or enters into an agreement for
the extension or readjustment of all or substantially all of its
obligations; (d) has filed against it, a petition or other
document seeking relief under bankruptcy laws, which is not
discharged within ninety (90) days thereafter; or (e) a
temporary or permanent receiver or liquidator is appointed over a
Party or substantially all of such Party’s assets and such
appointment is not cancelled within ninety (90) days
thereafter.
“ Change
of Control ” for the purposes of this section for SELLER
shall mean (i) the consummation of the sale or disposition by
a party of all or substantial all of such party’s assets or
(ii) the consummation of a merger or consolidation of a party
with any other entity, other than a merger or consolidation which
would result in the voting securities of the party outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity or its patent) at least fifty percent (50%)
of the total voting power represented by the voting securities of
the party or such surviving entity or its parent outstanding
immediately after such merger or consolidation; and for the
purposes of this section for DISTRIBUTOR shall mean the above AND,
in addition, that such a change results in a stop of DISTRIBUTOR
supply and product development support under the OEM Agreement (for
example, a change in control resulting from a restructuring of
ownership that does not affect the OEM Agreement would NOT
constitute a Change of Control of DISTRIBUTOR.). Notwithstanding
the foregoing, a “ Change of Control ” does not
include any Change of Control that occurs as a result of the
initial public offering of the stock of either Party which
generates gross proceeds of at least $10 million.
- 2 -
“Effective Date” shall mean the date when
Product is ready for sale and the CE approval for sale of the
Products in the Territory has been obtained.
“ End
User ” shall mean any customer of Products in the
Territory.
“ Field
Action ” means any action by a Party that meets the
criteria of a “recall,” “correction,” or
“removal” as defined by applicable Regulatory
Law.
“ FDA
” shall mean the United States Food and Drug Administration
or any successor agency having the authority to grant Marketing
Approval in the United States.
“
Marketing Approval ” means, with respect to any
country or jurisdiction, the act of the applicable Regulatory
Authority that is necessary under applicable Regulatory Laws for
the manufacture, marketing and sale of a product in that country or
jurisdiction, and satisfaction of all applicable regulatory and
notification requirements and, to the extent applicable, the grant
of Pricing Approval.
“
Party ” means Each of ESAOTE S.p.A. and TECHNISCAN,
INC.
“
Products ” shall mean any product having a two
and three dimensional imaging system of the whole breast
using both reflection and transmission ultrasound to create
tomographic images of the breast, including those listed in Annex A
hereto. Without limitation, the term Products includes any new
version of or replacements to the Products, and all updates,
upgrades, and improvements thereof.
“
Purchase Orders ” shall have the meaning set forth in
Article 4.1 of the Agreement.
“
Regulatory Authority ” means, with respect to any
country or jurisdiction, any Governmental Authority involved in
granting Marketing Approval or Pricing Approval or in administering
Regulatory Laws in that country or jurisdiction, including the FDA
in the United States.
“
Regulatory Laws ” means all Applicable Laws governing
(i) the import, export, design, testing, investigation,
manufacture, sterilization, storage, distribution, marketing or
sale of a product, (ii) establishing recordkeeping or
reporting obligations for Third-Party Complaints or Adverse Events,
(iii) Field Actions or (iv) similar regulatory
matters.
“ Sales
Literature ” shall mean SELLER’s marketing and
sales brochures, promotional materials, and other sales support
publications pertaining to the Products.
“
Specifications ” means the Technical and operational
capabilities of the Products as provided in the Sales Literature,
operating manuals or documentation for the Products.
“
Term ” shall have the meaning set forth in
Article 16.1 of the Agreement.
“
Territory ” shall mean the territory of each of the
countries of the European Union, Switzerland, Norway, Ukraine and
the CIS (Russian Federation of related countries).
- 3 -
2.1 SELLER
hereby grants DISTRIBUTOR an exclusive right and license to:
(i) promote, market, sell and distribute the Products to End
Users in the Territory during the Term directly and through its
dealer and distribution channels; (ii) use the Products as
reasonably required in connection with such marketing and
distribution, including without limitation as necessary to provide
service in connection with such Products; (iii) sublicense End
Users to use the Products; (iv) translate, modify, and copy,
in whole or in part, and distribute any of SELLER’s Sales
Literarure or other marketing documentation pertaining to the
Products at no additional charge and (v) such other rights and
license as may be reasonably required in connection with the
foregoing, including a license to SELLER’s patents,
copyrights, trademarks, trade secrets and other intellectual
property rights related to the Products, as specified in the OEM
Agreement. SELLER shall not directly or indirectly sell or permit
the promotion, marketing, sale or distribution of Products in the
Territory except as provided in this Agreement.
2.2 DISTRIBUTOR
shall undertake at its own expense to (a) use commercially
reasonable efforts to promote the distribution of Products in the
Territory and maintain an office and an adequate marketing
organization for such activities; (b) maintain close liaison
with the End Users and advise SELLER of any requirements expressed
by End Users in a timely manner. DISTRIBUTOR shall have the right
to affix DISTRIBUTOR’s own label or marking on the Products;
provided such label is not larger than the label of SELLER and does
not indicate DISTRIBUTOR as the manufacturer of the entire
Product.
2.3 SELLER
shall, where reasonably requested by DISTRIBUTOR, be available and
provide at its own cost technical support to DISTRIBUTOR in its
marketing and sales activities, road shows, exhibitions, press
reporting and interviews. All other marketing activities expenses
shall be borne by DISTRIBUTOR. SELLER shall perform at its own cost
(for its employees and expenses) two initial instruction programs
to DISTRIBUTOR’s sales organizations in the
Territory.
2.4 If SELLER
develops any new products during the Term of the Agreement, SELLER
shall (i) provide DISTRIBUTOR with advance written notice of
such new products; and (ii) offer Distributor a right to first
negotiate to be the exclusive distributor of such new products in
the Territory, before offering such new products for sale to any
other customer or distributor in the Territory. If the Distributor
elects to distribute such new products, it shall give Seller a
written notice within fifteen (15) days from receipt of the
notice of new products and the Parties agree to enter into
negotiations of such distribution arrangements within the following
thirty (30) days. If the Parties do not reach the Agreement
within such term of thirty (30) days then SELLER, shall be
tree to offer the right to distribute the new products to any third
parties at no better terms and conditions than the terms offered to
DISTRIBUTOR.
- 4 -
3.1 DISTRIBUTOR
will submit purchase orders (“ Purchase Orders
”) for the Products and any requested spare parts for the
Products to SELLER DISTRIBUTOR shall submit a Purchase Order in
hard copy form or as an electronic message which complies with the
requirements of the Agreement. The Purchase Orders shall include
the following
 |