all of the issued and outstanding shares of common stock of TechniScan Utah (other than dissenting shares, if any) were cancelled and each share of common stock of TechniScan Utah was converted into and exchanged for the right to receive one validly issued, fully paid and nonassessable share of common stock in the Company

EX-10.11 21 g20786exv10w11.htm EX-10.11 exv10w11
Exhibit 10.11
EUROPEAN MARKET DEVELOPMENT AGREEMENT
between
Esaote S.p.A., a company organized under the laws of the Republic of Italy and with registered seat in Genova, Italy (hereinafter referred to as “Esaote”)
— of the one party —
and
TechniScan, Inc., a Utah corporation (hereinafter referred to as “TechniScan”)
— of the other party —
     Esaote and TechniScan are hereinafter referred to individually as a “Party” and collectively as the “Parties”
Recitals
WHEREAS, Esaote is a leading player in the market of ultrasound systems and has developed a proprietary technology for such systems;
WHEREAS, Esaote manufactures and sells, inter alia, ultrasound systems for the examination of the breast;
WHEREAS, TechniScan has developed a prototype 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;
WHEREAS, on 20th November 2007 the Parties executed a term sheet setting forth inter alia, the basic principles of their possible co-operation in the field of ultrasound systems for breast examination (hereinafter referred to as the “Term Sheet”);
WHEREAS, TechniScan and Esaote on 11th February 2008 have consolidated their relationship through (i) the acquisition by Esaote of an equity ownership interest in TechniScan pursuant to a Stock Purchase Agreement (the “Stock Purchase Agreement” or the “SPA”), (ii) through the execution of an original equipment manufacturing and engineering support agreement (the “OEM Agreement”) for the development of a regulatory approved and usable three dimensional imaging system of the whole breast using both reflection and transmission ultrasound to create tomographic images of the female breast and (iii) through the execution of an exclusive license and distribution Agreement under which Esaote will distribute the Products (the “Distribution Agreement”);
WHEREAS, Esaote and TechniScan have been cooperating effectively to develop the Products and a prototype version of the Product is now installed in Esaote;

 


 

WHEREAS, TechniScan has not obtained the FDA approval on the Product defined as the milestone for the Second Closing (as detailed in the SPA) and has redefined its strategy and planning for FDA approvals;
WHEREAS, TechniScan and Esaote have reached a common understanding in how to redefine the Product strategy and they agree that it is worthwhile to focalize better the European market, therefore the activities to obtain the CE mark for the Product and to start the marketing activities in Europe;
WHEREAS, both TechniScan and Esaote are willing to integrate the existing Agreements entering in this European Market Development Agreement (“the EU Agreement”);
NOW, THEREFORE, the Parties enter into this EU Agreement as follows:
    Without prejudice to what is provided for in this EU Agreement, all terms and conditions of the previous Agreements shall remain in full force and effect.
 
    Terms which are defined in the previous Agreements shall have the same meanings when used in this EU Agreement, unless a different definition is given herein.
 
    TechniScan will provide (including the system already shipped to Esaote) a total of five Product to Esaote to be used in the CE marking activities and in order to establish clinical reference sites in Europe:
 
    - 1 prototype to be used in Esaote to support the development (already at Esaote)
 
    - 1 prototype to be used for CE marking activities (by the end of October 08)
 
    - 3 low rate initial production (LRIP) units to be used to establish clinical reference sites in Europe (as soon as possible and not later than April 09 for the first, May 09 for the second and June 09 for the third system).
 
      These systems will be provided by TechniScan at cost for a total of six hundreds thousands dollars (600,000US$).
 
      These five systems include the development system as per the OEM Agreement, article 9, provision (c), and the system defined in the Distribution Agreement ANNEX D.

Payment terms are:
 
    - three hundreds thousands dollars (300.000 US$) at the order;
 
    - two hundreds thousands dollars (200.000 US$) at the receipt of the second prototype;
 
    - one hundred thousands dollars (100.000 US$) at the receipt by Esaote of the last system.
    ANNEX 1 here attached is the new strategy and development plan of the Product and is here attached as integration of ANNEX 2 of the OEM Agreement.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed in duplicate by their authorized officers on the dates and the places mentioned below:

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Genova, October 28th 2008       October 17th 2008    
Esaote S.p.A.       TechniScan, Inc.    
 
                   
By:
  /s/ Fabrizio Landi       By:   /s/ David Robinson    
 
 
 
         
 
   
Name:
  Fabrizio Landi       Name:   David Robinson    
Title:
  Managing Director and General Manager       Title:   President & CEO    

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ANNEX 1
TechniScan Prototype Characteristics and Plan
Systems characteristics
                             
N.   Function   Rev 0   Rev 1   Rev 2   Rev 3   Rev 4
1.  
Acquisition Speed in minutes
  45   45   20   8-10   8-10
2.  
Tomographic reflection images
  Yes   Yes   Yes   Yes   Yes
3.  
Tomographic reflection images (speed
corrected)
No   Yes   Yes   Yes   Yes
4.  
Transmission Imaging Speed of sound
  No   Yes   Yes   Yes   Yes
5.  
Transmission imaging Attenuation
  No   Yes   Yes   Yes   Yes
6.  
Transmission Processing Time in minutes
  N/A   < 20   < 20   < 20   < 10
7.  
Reflection Processing Time in minutes
  Offline   < 20   < 20   < 5   < 5
8.  
UI for automated acquisition
  Yes   Yes   Yes   Yes   Yes
9.  
Imaging presentation on workstation —
Transmission 
No   DICOM   DICOM   DICOM   DICOM
10.  
Imaging presentation on workstation —
Reflection 
No   DICOM   DICOM   DICOM   DICOM
11.  
Expanded Exam/archive management
  No   No   No   Some   Yes
12.  
Chest wall imaging —
Reflection
  Yes   Yes   Yes   Yes   Yes
13.  
Chest wall imaging —
Transmission
  No   No   No   No   No
14.  
UI handheld probe and biopsy
  No   No   No   Some   Yes
15.  
Final UI and keyboard layout
  No   No   No   Some   Yes
Configuration definition
         
    Definition   Date
Rev 0
  Prototype at the stage when it will be installed to Italy   Late July
 
       
Rev 1
  Prototype at the stage when it will be upgraded in Italy and installed at Orange County, (Clinical proof of concept) reduced scan time   Early September
 
       
Rev 2
  Prototype to continue clinical proof of concept (Upgrade: Italy and Orange County)   Late September
 
       
Rev 3
  Prototype to perform full clinical validation of automated scan   Early January
 
       
Rev 4
  LRIP Verified and Validated System final configuration (Hardware and Software)   Early May
Glossary:
Tomographic reflection images : images produced compounding reflection acquisitions
LRIP low initial rate production = pre-series 7 Units
Esaote 1 = First prototype in Europe
Esaote 2 = Second prototype in Europe
TMS # = Prototype in USA

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Main Milestones
             
Activities   Prototype, Revision   Date   Notes
First prototype in Italy
  Esaote 1, Rev 0   Late July 08   Shipped
 
          7/11/08
Start clinical evaluation USA (O.C.)
  TMS #, Rev 1   September 08    
 
           
Clinical evaluation samples in Europe
  Esaote 1, Rev 1   Early October 08   Uses first proto
system
 
           
CE measurements start
  TMS #, Rev 1   Early October 08    
 
           
Analysis first clinical results Europe
      Mid November 08   RSNA?
 
           
Analysis first clinical results USA
      Early October 08    
 
           
Second sample in Italy
  Esaote 2, Rev 2   Early October 08   Second
system
 
           
Clinical Test Protocol for Europe
Start clinical protocol CE
      Mid October 08    
 
           
Clinical Test Protocol for USA
Start clinical protocol FDA
  TMS #, Rev 2   Early October 08    
 
           
Upgrade Rev. 3 (Full speed, some hand held probe)
  TMS# — Esaote 1,2   Mid January 09    
 
           
MKT Plan in European Countries and necessary investment
MKT Plan in USA
      End January 09   Robinson to work with Esaote
 
           
Go-No-Go Review (launch purchasing
order for LRIP)
      November 08   Upon Payment
 
           
LRIP assembly
      March 09   Orders placed upon
2nd payment
 
           
Upgrade Rev. 4 (Final release)
  TMS# — Esaote 1,2 — LRIP   Early April 09    
 
           
LRIP Release
      Mid May 09   Upon Payment
 
           
CE mark submission
      Mid September 08    
 
           
CE expected approval
      End May 09    
 
           
FDA meeting
      End September 08   Verify plan after
FDA meeting
 
           
FDA submission
      November 08    
 
           
FDA clearance
      May 09    
 
           
Start marketing activities in Europe
(installing/selling demo units)
      End May 09    

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Activities   Prototype, Revision   Date   Notes
Start marketing activities in USA
(installing/selling demo units)
      End May 09    
 
           
Launch purchasing order for Production
      Mid April 09    
 
           
Product’ s general availability
      Late August 09    

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