Exhibit 10.23

 

CytoSorbents Exclusive Distribution Agreement EU

 

Confidential treatment has been requested with respect to portions of this
agreement as indicated by “[***]” and such confidential portions have been
deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Distribution Agreement

 

between

 

CytoSorbents Europe GmbH, a corporation having its offices at Bölschestraße 116,
12587 Berlin, Germany, existing under the laws of Germany

 

(hereinafter referred to as " the Company")

 

and

 

AFERETICA s.r.l., a corporation having its offices at Via Spartaco 10, 40138
Bologna, Italy, existing under the laws of Italy, Europe.

 

(hereinafter referred to as "Distributor").

 

The Company and Distributor hereinafter collectively referred to as "Parties"

 

 

CytoSorbents Exclusive Distribution Agreement EU

 

Confidential treatment has been requested with respect to portions of this
agreement as indicated by “[***]” and such confidential portions have been
deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

Table of Contents

 

Preamble 4     1. Appointment, Products and Territory 4       2. Order Process,
Prices and Payment 6       3. Stock 8       4. Packaging and Labelling 9      
5. Product Registration 9       6. Other Obligations of Distributor 9       7.
The Company's Obligations 9       8. Relationship of the Parties 10       9.
Best Efforts 11       10. Reporting 12       11. Field Assistance 13       12.
Trademarks, Service Marks and Trade Names; Promotion on Internet 13       13.
Covenant Not To Compete 14       14. Product Warranty 14       15. Limitations
on Liability 15       16. Indemnification 16       17. Force Majeure 17

 

  Page 2 of 32

CytoSorbents Exclusive Distribution Agreement EU

 

Confidential treatment has been requested with respect to portions of this
agreement as indicated by “[***]” and such confidential portions have been
deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

18. Confidentiality 18       19. Publicity 19       20. Term and Termination 19
      21. Selling Off of Inventory 21       22. Notices 21       23.
Modification 22       24. Assignment 23       25. Waiver 23       26. Validity
23       27. Governing Law 23       28. Jurisdiction 24       29. Entire
Agreement 24       30. No Rights by Implication 24       31. Compliance With
Laws 24       32. Severability 24

  

  Page 3 of 32

CytoSorbents Exclusive Distribution Agreement EU

 

Confidential treatment has been requested with respect to portions of this
agreement as indicated by “[***]” and such confidential portions have been
deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

Preamble

 

WHEREAS, CytoSorbents Europe GmbH, (“the Company”) a 100% subsidiary of
CytoSorbents Corp., USA (an American corporation) which manufactures “CytoSorb
cytokine adsorbers” introducing its CytoSorb therapy to intensive care markets
and coordinates commercialization and market development,

 

WHEREAS, Aferetica s.r.l. (“Distributor”) is a Bologna, Italy, based trading
company and distributor, specialized in marketing of highly sophisticated
medical products and devices, especially extracorporeal therapies to the
critical care, cardiac surgery and liver disease markets,

 

WHEREAS, the Company desires to appoint Distributor as its exclusive distributor
of the Product in

 

·Italy

 

·San Marino and

 

·the Vatican

 

(the “Territory”) and Distributor desires to import, promote, distribute and
sell the Product in the Territory,

 

NOW, THEREFORE, In consideration of the mutual covenants and conditions herein
contained, and intending to be legally bound hereby, the parties mutually agree
as follows:

 

1.Appointment, Products and Territory

 

1.1The Company hereby appoints Distributor on an exclusive basis as its
distributor for the sale of the products listed in Annex 1 (hereinafter the
"Products") during the term of this Agreement.

 

  Page 4 of 32

CytoSorbents Exclusive Distribution Agreement EU

 

Confidential treatment has been requested with respect to portions of this
agreement as indicated by “[***]” and such confidential portions have been
deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

1.2Fields of application and medical speciality covered by Distributor
(hereinafter the "Application Fields") include all CRRT, dialysis and
hemoperfusion machine run treatments in:

 

·Intensive Care Medicine and Emergency Medicine (including burn, trauma and
medical units)

 

·Post-surgical care in general

 

·Post-cardio/thoracic -surgical care

 

·Nephrology

 

·Gastroenterology

 

·Toxicology

 

1.3Fields of application and medical speciality covered by Distributor do not
include:

 

·Intraoperative treatments run in a cardio-pulmonary bypass (on heart-lung-
machines)

 

1.4Distributor shall not, without the prior written consent of the Company sell,
market or distribute any version of any of the Products other than the version
the Company shall designate from time to time as its most current version.

 

1.5Distributor shall use all commercially reasonable efforts to promote and sell
the Products to the maximum number of customers in the Territory and Application
Fields.

 

1.6The Company is appointing Distributor hereunder with respect to the resale of
Products to any purchasers whose principal place of business is located in the
Territory and Application Fields.

 

1.7Distributor shall not engage in any advertising or promotional activities
relating to the Products directed primarily to customers outside the Territory
and Application Fields without prior written consent of the Company. Distributor
shall provide to the Company any and all statements (for advertising or other
purpose) related to therapeutic or other claims it may make related to Products
for written approval by the Company prior to use.

 

  Page 5 of 32

CytoSorbents Exclusive Distribution Agreement EU

 

Confidential treatment has been requested with respect to portions of this
agreement as indicated by “[***]” and such confidential portions have been
deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

1.8Distributor shall not actively solicit orders from any prospective purchaser
outside the Territory and Application Fields.

 

1.9If Distributor receives any order from a prospective purchaser outside the
Territory or Application Fields, Distributor shall immediately refer that order
to the Company. Distributor shall not accept any such orders. Distributor may
not deliver or tender (or cause to be delivered or tendered) any Product outside
of the Territory and Application Fields.

 

1.10Distributor shall refrain from establishing or maintaining any branch,
warehouse or distribution facility for the Products outside of the Territory.

 

1.11The Company reserves the right, in at any time upon [***] ([***]) days'
prior written notice to Distributor, and with the agreement of Distributor to
expand or reduce in any manner the Products which are covered by this Agreement.
The Company also reserves the right, in its sole discretion, at any time upon
[***] ([***]) days' prior written notice to Distributor, to expand or reduce in
any manner the Territory and the Application Fields, as defined in this
Agreement.

 

2.Order Process, Prices and Payment

 

2.1On the Effective Date, Distributor shall provide to the Company a forecast
for the next [***] of Distributor's anticipated requirements of the Products and
indicating the desired delivery dates. Distributor shall update this forecast on
a rolling basis within [***] ([***]) business days after the beginning of each
new calendar quarter.

 

2.2Distributor shall thereafter [***] place firm orders with the Company at
least [***] ([***]) days before the requested delivery dates.

 

2.3Unless the Company has an important reason to refuse an order from
Distributor, the Company shall accept orders from Distributor which are in
compliance with the provisions of this Agreement, in particular, but not limited
to, with the forecast pursuant to Section 10.

  Page 6 of 32

CytoSorbents Exclusive Distribution Agreement EU

 

Confidential treatment has been requested with respect to portions of this
agreement as indicated by “[***]” and such confidential portions have been
deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

2.4The purchase prices for the Products shall be as set forth in Annex 2 as
amended from time to time.

 

2.5If a purchase order is accepted in accordance with clause 2.3 above, the
prices for Products covered by such purchase order shall be the Company's net
distributor prices [***] or at the designated Company logistic facility in
Europe, which are in effect on the date of the Company's acceptance. The Company
may from time to time change those prices, such change being effective
immediately upon Distributor's receipt of notice thereof; provided, however,
that no price change shall affect purchase orders offered by Distributor and
accepted by the Company prior to the date such price change becomes effective.

 

2.6In case of purchase orders with an order amount of less than [***] EUR, the
Company shall be entitled to charge an additional handling fee of [***] EUR per
purchase order. The forgoing does not apply to purchase orders related to spare
parts for the Products.

 

2.7Distributor shall be free to establish its own pricing for Products sold to
its customers. Net end customer ASP (Average Selling Price) should not be below
[***] EUR.

 

2.8The ultimate shipment of orders to Distributor shall be subject to the right
and ability of the Company to make such sales and obtain required licenses and
permits, under all decrees, statutes, rules and regulations and agencies or
instrumentalities thereof presently in effect or which may be in effect
hereafter.

 

2.9Payment by Distributor shall be made within [***] days of shipment of the
ordered Products or within [***] days to be entitled for [***], unless the
Company agrees in writing to other terms.

 

2.10All payments should be made in EUROs against stated payment terms.

 

2.11If the Distributor fails to pay the price for any Products on the due date
the Company shall be entitled (without prejudice to any other right or remedy it
may have) to:

 

  Page 7 of 32

CytoSorbents Exclusive Distribution Agreement EU

 

Confidential treatment has been requested with respect to portions of this
agreement as indicated by “[***]” and such confidential portions have been
deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

2.11.1Cancel or suspend any further delivery to the Distributor under any order;

 

2.11.2Sell or otherwise dispose of any Products which are the subject of any
order by the Distributor, whether or not appropriated thereto, and apply the
proceeds of sale to any overdue payment; and

 

2.11.3Take such other action as may be necessary to ensure the continuing supply
of Products to customers in the Territory.

 

2.11.4Should payment not be received within [***] days of the agreed payment
date, then this non-payment will be classified as an breach of the Agreement by
the Distributor.

3.Stock

 

3.1Distributor shall always keep a sufficient stock of the Products in order to
be able fulfill purchase orders from customer within 2 business days from
receipt of such purchase orders. Sufficient stock is defined as [***] boxes of
12 adsorbers or [***]% of the annual projected sales (see section 9). Unexpected
mass orders are not subject to this provision.

 

3.2Distributor shall always store the Products consistent with product labelling
and in accordance with the highest healthcare industry practices and product
labelling in order to prevent deterioration of the Products. Upon request of the
Company, Distributor shall destroy, return to the Company or make such other
disposition as the Company shall direct of any portion of the Products
determined by the Company to be out-dated or otherwise to require such
disposition. In the event of such return or destruction, the Company shall
either replace the Products or reimburse Distributor in an amount equal to the
price paid by Distributor to the Company for the Products. The Company shall
have no liability for material that has less than [***] shelf life as the result
of Distributor`s inventory management practices.

 

  Page 8 of 32

CytoSorbents Exclusive Distribution Agreement EU

 

Confidential treatment has been requested with respect to portions of this
agreement as indicated by “[***]” and such confidential portions have been
deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

4.Packaging and Labelling

 

Distributor shall not package or label the Products and shall not alter any
Products or any package or label used in connection with any Products, except as
specifically authorized in writing by the Company. Distributor shall always
comply in all respects with the packaging and labelling instructions of the
Company. If the labelling and or packaging do not comply with in-country
requirements, Distributor shall promptly inform the Company. Distributor and the
Company shall work together to find a solution to correct any discrepancies in
labelling or packaging as required by National law and implement a solution as
jointly agreed upon.

 

5.Product Registration

 

5.1Distributor shall, if necessary, register the Products with the appropriate
governmental agency but shall not, without written permission from the Company
undertake any such Product registration in its own name, provided that aforesaid
comply with the technical and legal requirements in-country. The Company shall
assist in obtaining such registrations and give Distributor power of attorney
for purposes of registration.

 

5.2Upon expiration of this Agreement Distributor shall transfer any and all
registrations, import licenses, permits or certificates for the Products to the
Company.

 

6.Other Obligations of Distributor

 

6.1Distributor shall translate, if necessary, at its own expense, all user and
technical manuals and advertising and marketing information into the languages
of its customers and provide the Company with advance copies of all such
materials for approval by the Company. Distributor shall assign all copyrights
in such translations to the Company. Distributor shall have a non-exclusive
right to use such translations during the term of this Agreement in connection
with its activities pursuant to this Agreement.    

7.The Company's Obligations

 

7.1The Company shall provide Distributor, without charge, with such marketing
and technical assistance and Product samples, as the Company may in its
discretion consider necessary to assist with the promotion of the Products. The
Company will provide to Distributor on a one-time basis [***] cases [***]
devices free of charge for marketing purposes.

 

  Page 9 of 32

CytoSorbents Exclusive Distribution Agreement EU

 

Confidential treatment has been requested with respect to portions of this
agreement as indicated by “[***]” and such confidential portions have been
deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

7.2The Company shall provide initial training to Distributor's personnel in
connection with the marketing, sale, installation and support of the Products.
The Company will not charge Distributor for such training. The Company and
Distributor shall jointly agree on the details of the training.

 

7.3The Company shall designate support personnel to assist Distributor's support
personnel in providing support services; provided, however, that the Company's
personnel shall spend no more than an aggregate of [***] hours per calendar
month of their time in providing such assistance, and shall not be required to
provide such support in the Territory.

 

8.Relationship of the Parties

 

8.1Distributor shall be considered to be an independent contractor. The
relationship between the Company and Distributor shall not be construed to be
that of employer and employee or to constitute a partnership, joint venture or
agency of any kind.

 

8.2Distributor shall not enter into any contracts or commitments in the name of,
or on behalf of, the Company, and shall have no authority to bind the Company in
any respect whatsoever. The Company shall have no right to enter into any
contracts or commitments in the name of, or on behalf of, Distributor, or to
bind Distributor in any respect whatsoever.

 

8.3In addition, Distributor shall not obligate or purport to obligate the
Company by issuing or making any affirmations, representations, warranties or
guaranties with respect to the Products to any third party. Distributor shall
not be entitled to issue or make any affirmations, representations, warranties
or guarantees with respect to the Products to any third beyond those provided by
the Company.

 

8.4The Company warrants the Products as defined in the “Instructions For Use”
(IFU) and Product Warranty (Annex 6).

 

  Page 10 of 32

CytoSorbents Exclusive Distribution Agreement EU

 

Confidential treatment has been requested with respect to portions of this
agreement as indicated by “[***]” and such confidential portions have been
deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

8.5Both parties have to agree about terms and conditions of possible upcoming
tenders in writing. Distributor will inform the Company about the announced
tenders for the products from Annex A. Distributor will provide the company
crucial data about the tender specifications and requirements to assure the
successful participation and eventual tender contract. The company will do the
best to ensure that the Distributor can fulfil the tender.

 

9.Best Efforts

 

9.1Distributor shall purchase a sufficient amount of Products from the Company
so as to meet or exceed the minimum purchase requirements set forth below.

 

Calendar
Year   Minimum Purchase Requirements       Initial order   [***] boxes of 12
adsorbers ([***] adsorbers)       Year 1   [***] adsorbers (initial order
included)       Year 2   [***] adsorbers       Year 3   [***] adsorbers

 

Distributor strives to place roughly equal purchase orders per quarter over the
year.

 

9.2Failure to meet such minimum requirements shall constitute a material breach
of this Agreement for the purposes of Clause 20 hereof; provided, however, that
in lieu of terminating this Agreement pursuant to Clause 20 based on such
breach, the Company may instead elect in its sole discretion to change the
exclusive rights granted to Distributor under Clause 1 hereof to non-exclusive
rights, in which case the Company shall then have the right to appoint
additional non-exclusive distributors in the Territory and the right to sell the
Products itself in the Territory, either directly (including without limitation
with the assistance of sales representatives) or through one or more of its
affiliates. Notwithstanding anything contained in this provision to the contrary
unless there are extenuating circumstances.

 

  Page 11 of 32

CytoSorbents Exclusive Distribution Agreement EU

 

Confidential treatment has been requested with respect to portions of this
agreement as indicated by “[***]” and such confidential portions have been
deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

10.Reporting

 

10.1Distributor shall provide the Company with written short quarterly reports,
which shall include summarized reports (number of customers, new customers
etc.), activities, business trends, and market forecasts.

 

10.2In particular, but not limited to, Distributor shall provide the following
information:

 

10.2.1Technical information: Distributor shall forward promptly to the Company
all technical questions with respect to the Products, which it may receive from
the Territory and complaints, related to technical or medical issues.

 

10.2.2Product complaints: Distributor shall report any and all information about
Product related complaints directly to the Company using the product complaint
reporting form (Annex 3).

 

10.2.3Pharmacovigilance: Distributor shall appoint a qualified person for
pharmacovigilance and implement a vigilance system for the Product as it is
necessary for medical devices.

 

10.2.4Marketing and sales data: Distributor shall complete and return the
marketing and sales data reporting form (Annex 4) within [***] from the
Effective Date.

 

10.2.5Traceability of batch numbers: In order to fulfil the GMP standard,
Distributor shall ensure that all Products delivered by Distributor to its
customers can be identified on a batch number and serial number basis.

 

10.2.6Customers’ data: Distributor is under no obligation whatsoever to provide
information to the Company concerning Distributor's customer contact data and
details.

 

  Page 12 of 32

CytoSorbents Exclusive Distribution Agreement EU

 

Confidential treatment has been requested with respect to portions of this
agreement as indicated by “[***]” and such confidential portions have been
deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

11.Field Assistance

 

The Company shall provide, in its discretion, appropriate field technical
assistance to Distributor and Distributor's customers.

 

12.Trademarks, Service Marks and Trade Names; Promotion on Internet

 

12.1Right to Use. Distributor may use the Company' trademarks, trade names and
service marks listed in Annex 5 (hereinafter referred to as the "Trademarks") on
a non- exclusive basis in the Territory and for the Application Fields only for
the duration of this Agreement and solely for display or advertising purposes in
connection with selling and distributing the Products in accordance with this
Agreement. Distributor shall not at any time do or permit any act to be done
which may in any way damage or impair the rights of the Company in the
Trademarks.

 

12.2Quality Control: In order to comply with the Company's quality control
standards, Distributor shall: (i) use the Trademarks in compliance with all
relevant laws and regulations; (ii) accord the Company the right to inspect
during normal business hours, with reasonable advance notice, Distributor's
facilities used in connection with efforts to sell the Products in order to
confirm that Distributor's use of such Trademarks is in compliance with this
Section; and (iii) not modify any of the Trademarks in any way and not use any
of the Trademarks on or in connection with any goods or services other than the
Products.

 

12.3Distributor shall follow the Company’s instructions with respect to each of
the following: (i) use of any information about the Company or the Products
available on the Internet; (ii) linking of any site on the Internet to any site
on the Internet established, operated or sponsored by the Company; and (iii) use
of any of the Trademarks on any site on the Internet. Distributor acknowledges
that it shall cease the activities described in (i), (ii) and/or (iii) above
within reasonable time, if so instructed by the Company. In no event shall
Distributor establish, operate, sponsor or contribute content to any site on the
Internet which incorporates the Company's domain name@ as its URL address or any
part of such address. Distributor shall discuss in advance with the Company the
use of the Company's company name, product name or any Trademark held by the
Company in any promotional material.

 

  Page 13 of 32

CytoSorbents Exclusive Distribution Agreement EU

 

Confidential treatment has been requested with respect to portions of this
agreement as indicated by “[***]” and such confidential portions have been
deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

13.Covenant Not To Compete

 

13.1During the term of this Agreement, Distributor shall not market and or sell
directly or indirectly assist third parties to market or sell products in the
Territory, which are competitive with the Products. This provision shall not
cover the products distributed or sold by Distributor before signing this
Agreement as listed in Annex 7 and approved in writing by the Company.

 

13.2Distributor agrees to review future product offerings from other suppliers
for the treatment of conditions mediated by the inflammatory response and/or
used in extracorporeal therapy with the Company at least 3 months before
introduction. The Distributor agrees not to sell new product offering related to
extracorporeal treatment of inflammatory conditions without the Company’s
approval.

 

14.Product Warranty

 

14.1The Company's warranties to users with respect to the Products are set out
in Annex 6

 

hereto.

 

14.2Under no circumstances shall the warranties set forth in Annex 6 apply to
any Product which has been used with unapproved assemblies or sub-assemblies or
to any Product which has been customized or modified, damaged or misused.
Notwithstanding any other provision in this Agreement, the Company shall not be
held responsible for any damage which may result from a defective part except
for the replacement of such part as set forth in Annex 6.

 

14.3In case of product recalls or defective Products, the Company costs will be
limited to either provide a credit for the defective product or replace it
directly. Credit or replacement for recalled product will apply to product in
Distributors possession. In the case of defective product, the Company will
evaluate complaint samples and determine if the product is defective and provide
credit or replacement. In the case of a recalled Product, the Company at its
discretion may request the Product be shipped back to the US at the Company
expense. Distributor at its expense will be responsible for recalling and
recovering Product involved in a recall.

  Page 14 of 32

CytoSorbents Exclusive Distribution Agreement EU

 

Confidential treatment has been requested with respect to portions of this
agreement as indicated by “[***]” and such confidential portions have been
deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

14.4The provisions of the foregoing warranties and the warranties contained
elsewhere in this Agreement are in lieu of any other warranty, whether express
or implied, written or oral (including any warranty of merchantability or
fitness for particular purpose).

 

15.Limitations on Liability

 

15.1The Company's liability to Distributor arising out of the manufacture, sale
or supplying of the products or their use or disposition, whether based upon
warranty, contract, tort or otherwise, shall not exceed the actual net purchase
price as paid by Distributor for the Product(s). Distributor’s sole remedy
hereunder shall be replacement of any defective Product(s) by the Company or a
credit against future purchases, as Distributor shall select.

 

Distributor shall have [***] ([***]) days from receipt of any Product(s) from
the Company to require replacement of said Product if defective. Thereafter
replacement shall be at the sole discretion of the Company. Any request for
replacement shall be made in writing.

 

15.2In no event shall the Company be liable to Distributor or any other person
or entity for special, incidental or consequential damages (including, but not
limited to, loss of profits, loss of data or loss of use damages) arising out of
the manufacture, sale or supplying of the Products, even if the Company has been
advised of the possibility of such damages or losses.

 

Section 15.1 and Section 15.2 shall neither apply to damages caused by intent or
gross negligence of the Company.

 

  Page 15 of 32

CytoSorbents Exclusive Distribution Agreement EU

 

Confidential treatment has been requested with respect to portions of this
agreement as indicated by “[***]” and such confidential portions have been
deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

16.Indemnifications

 

16.1Indemnification of the Company

 

Distributor hereby agrees to indemnify, defend and hold harmless the Company,
its affiliates and all officers, directors, employees and agents thereof from
all liabilities, claims, damages, losses, costs, expenses, demands, suits and
actions (including without limitation attorneys' fees, expenses and settlement
costs) (collectively, "Damages") arising from any wilful act or negligence of
Distributor whether related to damage or injury to property or to persons, and
whether arising from (i) its marketing or sales activities, (ii) its receipt,
storage, and/or transportation, of the Product(s), (iii) any representations or
warranties of Distributor regarding the Product(s) not authorized by the Company
hereunder, failure to comply with the Company’ instructions or recommendations
set forth in the Product label and/or the Instructions For Use, (v) any failure
of Distributor to comply with the relevant UK law, rules, and regulations, or
(vi) otherwise.

 

16.2Indemnification of Distributor

 

The Company hereby agrees to indemnify, defend and hold harmless Distributor,
its affiliates and all officers, directors, employees and agents thereof from
all Damages arising out of:

 

(i)The Company's failure to comply with relevant laws and regulations after
receiving proper notice of same from Distributor as required herein; and (ii)
Distributor's reselling of the Products infringing on the intellectual property
rights of third parties or constituting a misappropriation of any third party's
trade secrets;

 

  Page 16 of 32

CytoSorbents Exclusive Distribution Agreement EU

 

Confidential treatment has been requested with respect to portions of this
agreement as indicated by “[***]” and such confidential portions have been
deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

16.3In the event that any Product is held in a suit or proceeding to infringe
any intellectual property rights of a third party and the use or reselling of
such Product is enjoined, or the Company reasonably believes that it is likely
to be found to infringe or likely to be enjoined, then the Company shall, at its
sole cost and expense, either (1) procure for Distributor the right to continue
reselling such Product; or (2) modify such Product so that it becomes
non-infringing. If neither (1) nor (2) is practicable, then the Company may, in
its sole discretion, remove such Product from this Agreement upon repurchasing
Distributor's inventory of such Product which are saleable and in the original
packages and unaltered from their original form and design, subject to the
Company' inspection, test, and acceptance. Any such repurchase of Distributor's
inventory of Products shall be at the price paid to the Company' at the time of
the original purchase. Such repurchased inventory shall be shipped by
Distributor freight prepaid, according to the Company' instructions. The Company
shall pay Distributor for such repurchased Products within thirty (30) days
after the Company receives those Products in one of its facilities.

 

16.3.1The Company shall have no obligation for any claim of infringement arising
from: (1) any combination of Products with products not supplied or approved in
writing by the Company, where such infringement would not have occurred but for
such combination; (2) the adaptation or modification of Products, where such
infringement would not have occurred but for such adaptation or modification;
(3) the use of a Product in an application for which it was not designed or
intended, where such infringement would not have occurred but for such use; or
(4) a claim based on intellectual property rights owned by the Company or any of
its Affiliates.

 

17.Force Majeure

 

17.1Neither the Company nor Distributor shall be liable in damages, or shall be
subject to termination of this Agreement by the other party, for any delay or
default in performing any obligation hereunder if that delay or default is due
to any cause beyond the reasonable control and without fault or negligence of
that party; provided that, in order to excuse its delay or default hereunder, a
party shall notify the other of the occurrence or the cause, specifying the
nature and particulars thereof and the expected duration thereof; and provided,
further, that within fifteen (15) calendar days after the termination of such
occurrence or cause, such party shall give notice to the other party specifying
the date of termination thereof. All obligations of both parties shall return to
being in full force and effect upon the termination of such occurrence or cause
(including without limitation any payments which became due and payable
hereunder prior to the termination of such occurrence or cause). If a Force
Majeure continues for more than 6 months either party may terminate this
Agreement.

 

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agreement as indicated by “[***]” and such confidential portions have been
deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

17.2For the purposes of this Section 17, a "cause beyond the reasonable control"
of a party shall include, without limiting the generality of the phrase, any act
of God, act of any government or other authority or statutory undertaking,
industrial dispute, fire, explosion, accident, power failure, flood, riot or war
(declared or undeclared).

 

18.Confidentiality

 

18.1The Party receiving Proprietary Information (as defined below) agrees and
acknowledges that the disclosing Party has a proprietary interest in any
information provided to the receiving Party, whether in connection with this
Agreement or otherwise, whether in written, oral or visual form, which is (i) a
trade secret, confidential or proprietary information, (ii) not publicly known,
and (iii) annotated by a legend, stamp or other written identification as
confidential or proprietary information, or if disclosed orally or visually, is
followed by a written statement within thirty (30) days after its disclosure
that it is confidential or proprietary (hereinafter referred to as "Proprietary
Information"). The receiving Party shall disclose the Proprietary Information
only to those of its agents and employees to whom it is necessary in order
properly to carry out their duties as limited by the terms and conditions
hereof. Both during and after the term of this Agreement, all disclosures by the
receiving Party to its agents and employees shall be held in strict confidence
by such agents and employees. During the term and for a period of ten (10) years
after the expiration of this Agreement, the receiving Party, its agents and
employees shall not use the Proprietary Information for any purpose other than
in connection with the sale and distribution of the Products in the Territory
pursuant to this Agreement. The receiving Party shall, at its expense, return to
the disclosing Party the Proprietary Information as soon as practicable after
the termination or expiration of this Agreement. All such Proprietary
Information shall remain the exclusive property of the disclosing Party during
the term of this Agreement and thereafter. This Section shall also apply to any
consultants or subcontractors that the receiving Party may engage in connection
with its obligations under this Agreement.

 

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deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

18.2Notwithstanding anything contained in this Agreement to the contrary, the
receiving Party shall not be liable for a disclosure of the Proprietary
Information, if the information so disclosed: (i) was in the public domain at
the time of disclosure without breach of this Agreement; or (ii) was known to or
contained in the records of the receiving Party from a source other than the
disclosing Party at the time of disclosure by the disclosing Party to the
receiving Party and can be so demonstrated; or (iii) was independently developed
and is so demonstrated by tangible historical evidence promptly upon receipt of
the documentation and technology by the receiving Party; or (iv) becomes known
to the receiving Party from a source other than the disclosing Party without
breach of this Agreement by the receiving Party and can be so demonstrated; or
(v) must be disclosed pursuant to a contract or subcontract with a governmental
agency in order to obtain/retain a procurement contract; or (vi) was disclosed
pursuant to court order or as otherwise compelled by law.

 

19.Publicity

 

Distributor agrees that any publicity or advertising, which shall be released by
it, in which the Company is identified in connection with the Products shall be
in accordance with the terms of this Agreement and with any information or data,
which the Company has furnished in connection with this Agreement. Copies of all
such publicity and advertising shall be sent to the Company prior to use and the
Company shall respond within a commercially reasonable time. Any publicity or
advertising shall only start after announcing this agreement in a common press
release.

 

20.Term and Termination

 

20.1The term of this Agreement shall begin on the date that the Company accepts
and signs this Agreement such date being referred to as the "Effective Date").
The term of this Agreement shall expire on 31 December 2017, unless terminated
earlier pursuant to the provisions of this Section. The term of this Agreement
shall be extended for one additional period of 12 months upon mutual agreement
to continue. At the end of such 12 months period, this Agreement shall be
extended for another additional 12 months period upon mutual agreement to
continue.

 

20.2Upon the occurrence of a material breach or default as to any obligation
hereunder by either party and the failure of the breaching party to promptly
pursue (within thirty (30) days after receiving written notice thereof from the
non-breaching party) a reasonable remedy designed to cure (in the reasonable
judgment of the non-breaching party) such material breach or default, this
Agreement may be terminated by the non- breaching party by giving written notice
of termination to the breaching party, such termination being immediately
effective upon the giving of such notice of termination.

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deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

20.3Upon the filing of a petition in bankruptcy, insolvency or reorganization
against or by either party, or either party becoming subject to a composition
for creditors, whether by law or agreement, or either party going into
receivership or otherwise becoming insolvent (such party hereinafter referred to
as the "insolvent party"), this Agreement may be terminated by the other party
by giving written notice of termination to the insolvent party, such termination
immediately effective upon the giving of such notice of termination.

 

20.4Upon the occurrence of a change in control or management or operating
personnel of either party (the "changed party"), which has, or in the reasonable
opinion of the other party could have, a material adverse effect on the
business, prospects or operations of such changed party and the failure of such
changed party to promptly pursue (within 90 days after receiving written notice
thereof from the other party) a remedy designed to cure (in the sole judgment of
the other party) the other party's objections to such change, this Agreement may
be terminated by the other party by giving written notice of termination to the
changed party, such termination being immediately effective upon the giving of
such notice of termination.

 

20.5In the event of a termination pursuant to any of subsections 20.2, 20.5 or
20.6 above or upon expiration of this Agreement pursuant to either of
subsections 20.2 or 20.3 above, the Company shall not have any obligation to
Distributor, or to any employee of Distributor, for compensation or for damages
of any kind, whether on account of the loss by Distributor or such employee of
present or prospective sales, investments, compensation or goodwill.
Distributor, for itself and on behalf of each of its employees, hereby waives
any rights, which may be granted, to it or them under the laws and regulations
of the Territory or otherwise which are not granted to it or them by this
Agreement. Distributor hereby indemnifies and holds the Company harmless from
and against any and all claims, costs, damages and liabilities whatsoever
asserted by any employee, agent or representative of Distributor under any
applicable termination, labour, social security or other similar laws or
regulations.

 

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deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

20.6Termination of this Agreement shall not affect the obligation of Distributor
to pay the Company all amounts owing or to become owing as a result of Products
tendered or delivered to Distributor on or before the date of such termination,
as well as interest thereon to the extent any such amounts are paid after the
date they became or will become due pursuant to this Agreement.

 

20.7In case of termination of the agreement, Company will provide Products to
Distributor to fulfill the tenders signed before termination. Distributor will
provide to Company official documents related to all tenders. Distributor will
inform Company during the duration of this agreement about tenders, which exceed
quantities of 200 pieces immediately after signature.

 

21.Selling Off of Inventory

 

Distributor shall have the right to sell off its remaining inventory of Products
for a period of [***] ([***]) months after expiration of this Agreement
("Sell-Off-Period"); provided, however, that Distributor shall comply with all
terms and conditions of this Agreement restricting such reselling activities in
effect immediately prior to such termination or expiration. In case the Company
terminated the Agreement, the Company shall neither directly nor indirectly sell
the Products in the Territory during the Sell-Off-Period

 

22.Notices

 

22.1All notices given under this Agreement shall be in writing and shall be
addressed to the parties at their respective addresses set forth below:

 

22.1.1If to Distributor:

 

Contact person: [***]

Title: [***] 

 

Address:

Via Spartaco 10

40138 Bologna

Italy

 

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deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

Phone: +390587489723

Fax:+390587489808

URL: www.aferetica.com

Email: [***]

 

22.1.2If to the Company:

 

Contact person: Dr. Christian Steiner

Title: Managing Director 

CytoSorbents Europe GmbH, Bölschestraße 116, 12587 Berlin,

Germany 

 

Fax: +49-30-654.99.146

 

22.2Either party may change its address or its contact information for purposes
of this Agreement by giving the other party written notice or by email its new
address or contact information. Any such notice if given or made by registered
or recorded delivery international air mail letter shall be deemed to have been
received on the earlier of the date actually received and the date fifteen (15)
calendar days after the same was posted (and in proving such it shall be
sufficient to prove that the envelope containing the same was properly addressed
and posted as aforesaid) and if given or made by telecopy transmission shall be
deemed to have been received at the time of dispatch, unless such date of deemed
receipt is not a Business Day, in which case the date of deemed receipt shall be
the next such succeeding Business Day.

 

23.Modification

 

No modification or change may be made in this Agreement, including any
modification or change to this Section 23, except by written instrument duly
signed by Distributor and by a duly authorized representative of the Company.

 

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agreement as indicated by “[***]” and such confidential portions have been
deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

24.Assignment

 

This Agreement and the rights and obligations hereunder may not be assigned,
delegated or transferred by either party without the prior written consent of
the other party. This Agreement shall inure to the benefit of the permitted
successors and assigns of the Company.

 

25.Waiver

 

25.1None of the conditions or provisions of this Agreement shall be held to have
been waived by any act or knowledge on the part of either party, except by an
instrument in writing signed by a duly authorized officer or representative of
such party.

 

25.2Further, the waiver by either party of any right hereunder or the failure to
enforce at any time any of the provisions of this Agreement, or any rights with
respect thereto, shall not be deemed to be a waiver of any other rights
hereunder or any breach or failure of performance of the other party.

 

26.Validity

 

26.1The Company warrants that this Agreement is lawful and may be performed in
accordance with its terms under all laws in force in the Federal Republic of
Germany at the time of execution of this Agreement.

 

26.2Distributor warrants that this Agreement is lawful and may be performed in
accordance with its terms under all laws in force in the countries comprising
the Territory. The Company and Distributor each covenant and warrant that they
will advise each other of any changes in their respective laws of which they
become aware if such changes might or will impair the validity of all or any
part of this Agreement.

 

27.Governing Law

 

This Agreement and all rights and obligations thereunder shall be exclusively
governed and exclusively construed in accordance with the laws of the Federal
Republic of Germany under explicit exclusion of the United Nations Convention on
Contracts for the International Sale of Goods (CISG).

 

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agreement as indicated by “[***]” and such confidential portions have been
deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

28.Jurisdiction

 

Any and all disputes, claims or litigation arising from or related in any way to
this Agreement, including its formation, shall be exclusively submitted to and
resolved by the courts of Berlin, Germany.

 

29.Entire Agreement

 

This Agreement supersedes and cancels any previous agreements or understandings,
whether oral, written or implied, heretofore in effect and sets forth the entire

agreement between the Company and Distributor with respect to the subject matter
hereof.

 

30.No Rights by Implication

 

No rights or licenses with respect to the Products or the Trademarks are granted
or deemed granted hereunder or in connection herewith, other than those rights
expressly granted in this Agreement.

 

31.Compliance With Laws

 

Each of Distributor and the Company covenants that all of its activities under
or pursuant to this Agreement shall comply with all applicable laws, rules and
regulations. In particular, but without limitation, Distributor shall be
responsible for obtaining all licenses, permits and approvals which are
necessary or advisable for sales of the Products in the Territory and for the
performance of its duties hereunder.

 

32.Severability

 

If any provision of this Agreement is declared invalid or unenforceable by a
court having competent jurisdiction, it is mutually agreed that this Agreement
shall endure except for the part declared invalid or unenforceable by order of
such court. The parties shall consult and use their best efforts to agree upon a
valid and enforceable provision, which shall be a reasonable substitute for such
invalid or unenforceable provision in light of the intent of this Agreement.

 

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deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

IN WITNESS WHEREOF, the parties hereto have signed this Agreement.

 

CytoSorbents Europe GmbH:         By: /s/ Dr. Christian Steiner                
  Name: Dr. Christian Steiner         Title: Managing Director         Aferetica
s.r.l.:         By: /s/ Mauro Atti         Name: Mauro Atti         Title:
amministratore unico  

  

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deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Annex 1

 

List of Products 

 

Order Number   Article   Units per box           30-0011   CytoSorb®  Adsorber
300ml   12           30-0021   CytoSorb®  Adsorber 300ml   6          
1500-0100-11   CytoSorb®  Adapter 1   6           1500-0200-11  
CytoSorb®  Adapter 2   6           1500-0300-11   CytoSorb®  Adapter 3   6      
    1500-1100-11   CytoSorb®  PRIMING Adapter 1   6           1500-1200-11  
CytoSorb®  PRIMING Adapter 2   6           30-0041   CytoSorb® Holder   1

 

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deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Annex 2

 

Product Prices 

 

Order Number   Article   Units per box   Price per unit               30-0011  
CytoSorb®  Adsorber 300ml   12   [***] EUR*               30-0021  
CytoSorb®  Adsorber 300ml   6   [***] EUR*               1500-0100-11  
CytoSorb®  Adapter 1   6   [***] EUR               1500-0200-11  
CytoSorb®  Adapter 2   6   [***] EUR               1500-0300-11  
CytoSorb®  Adapter 3   6   [***] EUR               1500-1100-11  
CytoSorb®  PRIMING Adapter 1   6   [***] EUR               1500-1200-11  
CytoSorb®  PRIMING Adapter 2   6   [***] EUR               30-0041   CytoSorb®
Holder   1   [***] EUR

 

2 boxes of 6 adsorbers are equivalent to 1 box of 12 adsorbers.

 

* Adsorber price is reduced to [***] EUR for all orders above [***] adsorbers
per year.

 

(If a purchase order is accepted in accordance with clause 2.3 above, the prices
for Products covered by such purchase order shall be the Company's net
distributor prices [***], which are in effect on the date of the Company's
acceptance. The Company may from time to time change those prices, such change
being effective immediately upon Distributor's receipt of notice thereof;
provided, however, that no price change shall affect purchase orders offered by
Distributor and accepted by the Company prior to the date such price change
becomes effective.)

 

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deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

   

Annex 3

 

Products Complaints Reporting Form The Company’s SOP - 02-028

 

CytoSorbents Distributor Complaint Handling Procedure

 

Distributor should complete those items highlighted in yellow and return to
CytoSorbents by one of the following Methods:

 

1.Email: regulatory@cytosorbents.com

2.FAX to DE +49 (0)30 30 654 99 146 or US +01-732-329-8650

 

ATTENTION  [image_001.gif]

  

Reportable Events Timeline: 24 Hour Reportable and 5 Day Reportable

 

24 Hour Reportable Event

Serious Public Health Threat – Any event that results in imminent risk of death,
serious deterioration in state of health (life-threatening illness, permanent
impairment of a body function or permanent damage to a body structure, a
condition necessitating medical or surgical intervention to prevent the
previously listed conditions, fetal distress, fetal death, or any congenital
abnormality or birth defects) or serious illness that requires prompt remedial
action.

·Immediately, but not later than 24 hours after awareness of the threat. Contact
should be via email to regulatory@cytosorbents.com and fax to CytoSorbents DE
+49 (0)30 30 654 99 146.

 

5 Day Reportable Event

Any malfunction or deterioration in the characteristics and/or performance of a
device, as well as any inadequacy in the labeling or the instructions for use
which, directly or indirectly, might lead to or might have led to the death of a
patient, or USER or of other persons or to a serious deterioration in their
state of health.

 

All complaints must be reported as soon as possible to CytoSorbents!!! Patient
injury or death thought to be associated with the device must be dealt with
promptly. Please collect the information regarding circumstances surrounding the
death and device association with the incident.

 

Complaint Handling Form

 

Complaint Reference Number: CRN -      - Type of Complaint:   ¨ Clinical   ¨
Functional   ¨ Other:    Complaint Received By: Date:

Complaint Received From: (Name, Title (if applicable) and Address)

 

 

 

 

Complaint Reported By:   ¨ Physician  ¨ Patient   ¨ Customer   ¨ Other: Mode of
Communication of Complaint:   ¨ Phone   ¨ Facsimile   ¨ Letter   ¨ Other: Device
Name:

Lot and Serial Number (if applicable):

 

Device License Number (if applicable):

NA

Quantity Delivered: Quantity Defective: Quantity Returned:

Date of Receipt:

 

Received By:

Comments: Complaint:      

 

 

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deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Annex 4

 

Marketing and Sales Data Reporting Form

 

Will be filled in quarterly

 

 [image_003.jpg]

 

 

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deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Annex 5

 

List of Trademarks

 

CytoSorb®

 

CytoSorbents®

 

HemoDefend®

 

DrugSorb®

 

ContrastSorb®

 

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deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

Annex 6

 

Company’s Warranties to Users

 

Attached:

 

·Label

 

·Instructions for Use (IFU)

  

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deleted and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

  

Annex 7

 

List of possibly competitive products marketed by the Distributor before this
Agreement, which are approved by the Company

 

Competitive products:

 

 

 

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