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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