(Portions of this agreement have been omitted and marked confidential [*****] and filed separately with the

Securities Exchange Commission)

Distribution Agreement

THIS DISTRIBUTION AGREEMENT (hereinafter this Agreement) is made and entered into this 25th day of February, 2004 (the Effective Date), by and between HT Prostate Therapy Management Company, LLC, a Delaware Limited Liability Company (HT Prostate), and EDAP TMS S.A., a French socit anonyme (Parent Corporation), EDAP S.A., a French socit anonyme (HIFU Subsidiary) and Technomed Medical Systems S.A., a French socit anonyme (Manufacturing Subsidiary and, collectively with Parent Corporation and HIFU Subsidiary, EDAP).

WHEREAS, HT Prostate is a wholly owned subsidiary of HealthTronics Surgical Services, Inc., a Georgia corporation (HealthTronics). HealthTronics and HT Prostate have expertise in gaining United States Food and Drug Administration (FDA) approval for the marketing of medical devices in the United States. HT Prostate and HealthTronics also have expertise in the United States of America (the Territory) in distributing, and providing services for, such medical devices;

WHEREAS, EDAP desires to utilize the services of HT Prostate and HealthTronics to obtain FDA approval to market a medical device that utilizes High Intensity Focused Ultrasound (HIFU) to provide minimally invasive treatment of prostate cancer (such medical device, the Ablatherm); and

WHEREAS, EDAP recognizes the substantial cost and time involved in obtaining FDA approval and therefore desires to grant HT Prostate in accordance with the terms set forth in the Transaction Documents (as defined below) (i) the exclusive distribution rights to market the Ablatherm in the Territory and (ii) a warrant to purchase 1,000,000 ordinary shares of the Parent Corporation.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, HT Prostate and EDAP, intending to be legally bound, agree as follows:

Ablapak has the meaning assigned to such term in Section 3.1.

Ablatherm has the meaning assigned to such term in the recitals.

Ablatherm Related Devices has the meaning assigned to such term in Section 4.1.

Ablatherm Related Marks has the meaning assigned to such term in Section 8.1.

Agreement has the meaning assigned to such term in the preamble.

Approved Limited Use has the meaning assigned to such term in Section 5.1(c).

Base Year Price List has the meaning assigned to such term in Section 6.1(c).

Board of Directors Resolution has the meaning assigned to such term in Section 12.1(a).

Confidential Information has the meaning assigned to such term in Section 11.

Disclosing Party has the meaning assigned to such term in Section 11.

EDAP has the meaning assigned to such term in the preamble.

EDAP Indemnified Parties has the meaning assigned to such term in Section 10.2.

EDAP IP has the meaning assigned to such term in Section 8.3.

EDAP Party has the meaning assigned to such term in Section 2.1.

Effective Date has the meaning assigned to such term in the preamble.

Escrow Agent means Euro Emetteurs Finance S.A

Escrow Agreement means that certain Contrat de Service de Titres et de Sequestre, set forth as Exhibit D by and between Parent Corporation, HT Prostate and the Escrow Agent.

Exclusive Distribution Rights has the meaning assigned to such term in Section 4.1.

FDA has the meaning assigned to such term in the recitals.

First Renewal Term has the meaning assigned to such term in Section 9.1.

HealthTronics has the meaning assigned to such term in the recitals.

HIFU has the meaning assigned to such term in the recitals.

HIFU Subsidiary has the meaning assigned to such term in the preamble.

HT Prostate has the meaning assigned to such term in the preamble.

HT Prostate Corporate Headquarters has the meaning assigned to such term in Section 6.1(a).

HT Prostate Indemnified Parties has the meaning assigned to such term in Section 10.1.

Initial Term has the meaning assigned to such term in Section 9.1.

INSERM has the meaning assigned to such term in Section 5.

Losses means any and all liabilities, obligations, duties, demands, claims, actions, causes of action, assessments, losses, costs, damages, deficiencies, fines or expenses, including, interest, penalties, reasonable attorneys fees and all amounts paid in investigation, defense or settlement of any of the foregoing.

Manufacturing IP has the meaning assigned to such term in Section 5.

Manufacturing Subsidiary has the meaning assigned to such term in the preamble.

New Treatment has the meaning assigned to such term in Section 4.1(a).

Parent Corporation has the meaning assigned to such term in the preamble.

PMA has the meaning assigned to such term in Section 3.1.

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Products has the meaning assigned to such term in Section 3.1.

Product Liability Claim has the meaning assigned to such term in Section 10.3.

Receiving Party has the meaning assigned to such term in Section 11.

Rules has the meaning assigned to such term in Section 13.11(b).

Sample Devices has the meaning assigned to such term in Section 3.3.

Specifications has the meaning assigned to such term in Section 6.3.

Subsequent Renewal Term has the meaning assigned to such term in Section 9.1.

Trainers has the meaning assigned to such term in Section 3.5.

Training Program has the meaning assigned to such term in Section 6.3.

Transaction Documents means this Agreement and the Escrow Agreement.

Territory has the meaning assigned to such term in the recitals.

Warrant Exercise Milestone has the meaning assigned to such term in Section 12.1(b).

Warrants has the meaning assigned to such term in Section 12.1(a).

(a) Each EDAP Party is a socit anonyme duly organized and validly existing under the laws of the Republic of France, with power and authority (corporate and other) to conduct its business, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it conducts any business so as to require such qualification, except where the failure to be so qualified would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on HT Prostate.

(b) Each EDAP Party has the corporate power and authority to execute and deliver each Transaction Document to which it is a party and to perform its obligations thereunder, and the Transaction Documents to which each EDAP Party is a party have been duly and validly authorized by such EDAP Party, and have

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been duly and validly executed and delivered by such EDAP Party and, assuming due authorization, execution and delivery by the other parties thereto, are valid and binding obligations of such EDAP Party, enforceable against such EDAP Party in accordance with their terms.

(c) The execution, delivery and performance by each EDAP Party of the Transaction Documents to which it is a party will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any agreement or instrument to which such EDAP Party is a party or by which such EDAP Party or any material portion of its properties or assets is bound, or result in any violation of any statute or any order, rule or regulation of any governmental authority having jurisdiction over such EDAP Party, except, in each case, as would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on HT Prostate, nor will such action result in any violation of the provisions of the statuts, corporate charter, by-laws or other constituent document of such EDAP Party.

(d) HIFU Subsidiary is the owner of the Ablatherm Related Marks and all goodwill associated therewith and has the right and ability to grant the trademark license granted in Section 8.1. To the knowledge of HIFU Subsidiary, the use of the Ablatherm Related Marks in accordance with the terms hereof does not infringe any United States intellectual property rights of any third party.

(e) Subject, in each case, to the rights and interests held by INSERM, EDAP owns all rights in and to the Products, is the exclusive owner of all intellectual property rights associated with the Products, and has the right to license the Products to HT Prostate in accordance with the terms of this Agreement. To the knowledge of EDAP, the use of the Products in accordance with the specification for such Products, a copy of which is attached as Schedule B, does not infringe upon the intellectual property rights of any third party. EDAP is not aware of any invention, device or equipment that is owned, operated or marketed by any third party which infringes upon EDAPs intellectual property rights in and to the Products.

(a) HT Prostate is a limited liability company duly organized and validly existing under the laws of the State of Delaware, with power and authority (corporate and other) to conduct its business, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it conducts any business so as to require such qualification, except where the failure to be so qualified would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on any EDAP Party.

(b) HT Prostate has the corporate power and authority to execute and deliver each Transaction Document to which it is a party and to perform its obligations thereunder, and the Transaction Documents to which HT Prostate is a party have been duly and validly authorized by HT Prostate, and have been duly and validly executed and delivered by HT Prostate and, assuming due authorization, execution and delivery by the other parties thereto, are valid and binding obligations of HT Prostate, enforceable against HT Prostate in accordance with their terms.

(c) The execution, delivery and performance by HT Prostate of the Transaction Documents to which it is a party will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any agreement or instrument to which HT Prostate is a party or by which HT Prostate or any material portion of its properties or assets is bound, or result in any violation of any statute or any order, rule or regulation of any governmental authority having jurisdiction over HT Prostate, except, in each case, as would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on any EDAP Party, nor will such action result in any violation of the provisions of the corporate charter, by-laws or other constituent document of HT Prostate.

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(b) On a twice-yearly basis, HT Prostate shall provide EDAP with a written update regarding HT Prostates progress in obtaining a PMA for the Products and, as applicable, any Ablatherm Related Device. Such updates shall include details regarding the clinical trials (including patient enrollment numbers) and all submissions to, and correspondence with, the FDA during such period. In addition, prior to making any submission to the FDA regarding the Products or any Ablatherm Related Device, HT Prostate shall (i) provide EDAP copies of any such proposed submission materials and (ii) reasonably consider any comments or proposed changes EDAP may make with respect to such submission materials.

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(b) Promptly following any transfer of the PMA to EDAP as described in paragraph (a) of this Section 3.8, HT Prostate shall provide to EDAP all supportive materials and data substantiating representations made to the FDA or any other U.S. governmental authority in its filings therewith in relation to the Products and any Ablatherm Related Device, including any and all testing data in the possession, or under the control, of HT Prostate or HealthTronics, whether or not submitted to the FDA or any other U.S. governmental authority.

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Treatment) then EDAP shall offer HT Prostate the right to obtain the PMA and to act as the exclusive distributor for such New Treatment on terms (including timing, price and quantity) reasonably negotiated by EDAP and HT Prostate. If EDAP and HT Prostate fail to negotiate the terms of such agreement within 90 days, EDAP shall be free to itself, or through any third party of its choosing, obtain a PMA for, and distribute such New Treatment in the Territory; provided that EDAP shall not permit a third party to obtain such PMA or distribute such New Treatment in the Territory except on terms substantially equivalent to the terms initially offered to HT Prostate.

(b) EDAP agrees that it will not, directly or indirectly, sell, distribute, or offer treatment with, the Ablatherm or any Ablatherm Related Device, in the Territory, other than pursuant to this Agreement. EDAP shall include in its contracts for sale of the Ablatherm or any Ablatherm Related Device for which HT Prostate has Exclusive Distribution Rights in accordance with this Section 4 outside the Territory limitations prohibiting resale or shipment by the purchaser of such Ablatherms or such Ablatherm Related Devices into the Territory (and requiring any such subsequent purchaser to include such contractual limitations upon its resale or shipment of the Ablatherm or other such devices); provided, that such provisions are legally enforceable in the relevant jurisdictions in the reasonable judgment of EDAP. EDAP will use commercially reasonable efforts to monitor and enforce such contractual restrictions for sales outside the Territory.

(c) HT Prostate agrees that it will not, directly or indirectly, sell, distribute, or offer treatment with, the Ablatherm or any Ablatherm Related Device, outside the Territory. HT Prostate shall include in its contracts for sale of the Ablatherm or any Ablatherm Related Devices in the Territory limitations prohibiting resale or shipment by the purchaser of such Ablatherms or Ablatherm Related Devices outside the Territory (and requiring any such subsequent purchaser to include such contractual limitations upon its resale or shipment of the Ablatherm or other such devices); provided, that such provisions are legally enforceable in the relevant jurisdictions in the reasonable judgment of HT Prostate. HT Prostate will use commercially reasonable efforts to monitor and enforce such contractual restrictions for sales in the Territory.

(d) EDAP will refer all inquiries for purchase or use of the Products or Ablatherm Related Devices in the Territory to HT Prostate. HT Prostate will refer all inquiries for purchase or use of the Products or Ablatherm Related Devices outside the Territory to EDAP.

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(b) Following delivery of any such manufacturing rights request, if EDAP:

(i) consents to such request; or

(ii) otherwise remains unable or unwilling to manufacture and deliver any such device (or related consumable), as evidenced by EDAPs failure to make available for delivery to HT Prostate any such device or consumable (other than any such failure caused by any of the factors described in Section 13.1) for a period exceeding (A) 180 days following such request if EDAP is unable to manufacture and deliver any such device or consumable due to regulatory or legal constraints or (B) 90 days following such manufacturing rights request in other circumstances,

then EDAP shall comply with such manufacturing rights request as set forth in paragraph (c) of this Section 5.

(c) EDAP shall grant to HT Prostate an exclusive, royalty-free, non-transferable, non-sublicensable, non-assignable license to EDAPs patents and know-how (including technical drawings), in each case, that directly relate to the manufacture of such device or consumable solely as and to the extent necessary to enable HT Prostate to manufacture and distribute such device or consumable in the Territory (the Approved Limited Use) for a period of ten (10) years from the date granted (such patents and know-how, the Manufacturing IP); provided, that in the case of any such patents which EDAP jointly owns with the Institut National de la Sant et de Recherche Mdicale (INSERM), EDAP shall use commercially reasonable efforts to itself license or to cause INSERM to license such patents to HT Prostate. From and after the date HT Prostate is granted any such license, HT Prostate shall be liable for any royalty or other amounts owing to INSERM (including amounts owed by EDAP as a result of the grant of such license to HT Prostate), if any, in connection with the use of any such patent by HT Prostate. EDAP shall use commercially reasonable efforts to provide HT Prostate access to such accessories, disposables or service parts necessary in order to maintain or use any such devices which EDAP is no longer willing to manufacture or is unable to manufacture on the terms provided herein at such cost as is mutually agreeable to the parties at such time. Upon such grant, EDAP, with the cooperation and assistance of HT Prostate and at HT Prostates sole expense, shall use commercially reasonable efforts to prepare and record the license as it pertains to patents before the National Patent Registry in France and before the European Patent Office.

(b) EDAP shall supply Ablapaks used by the Ablatherm or any consumable required for use with any Ablatherm Related Device as distributed pursuant to the terms of this Agreement to HT Prostate at a price of ********** per unit due 30 days after receipt of such consumable by HT Prostate at the HT Prostate Corporate Headquarters. However, EDAP agrees to renegotiate the price of the Ablapak if HT Prostate is not able, after diligent efforts, to secure at least a *********** margin on the resale or use of the Ablapak.

(c) EDAP shall supply to HT Prostate all repair parts and supplies for the Ablatherm or any Ablatherm Related Device at the US dollar equivalent price of the prices listed in EDAPs 2004 Ablatherm Distributors Price List (Base Year Price List), a copy of which is attached as Schedule C. EDAP agrees that the prices listed in the Base Year Price List shall not increase until one year following receipt of PMA for the Products. Thereafter, EDAP further agrees that the prices in the Base Year Price List shall not increase by more than ****** for a period of 10 years; provided, that EDAP shall use reasonable efforts to pass along any cost savings it realizes on such parts and supplies to HT Prostate.

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(d) EDAP will deliver ordered Products Ex-Works, as defined in Incoterms 2000 (published by the International Chamber of Commerce) by placing the Products at the disposal of HT Prostate at EDAPs manufacturing facility in Lyon, France on the specified delivery date.

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