CONFIDENTIAL
TREATMENT
REQUEST
Exhibit 10.1
EXCLUSIVE DISTRIBUTION AGREEMENT
Agreement made by CANDELA CORPORATION, a Delaware corporation with its principal
place of business at 000 Xxxxxx Xxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000
(hereinafter referred to as the "Candela") and Physicians Sales and Service,
with a principal place of business at 0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxxxxxxxxx,
XX 00000, (hereinafter referred to as "PSS").
WITNESSETH
WHEREAS, Candela develops and manufactures medical lasers and certain other
products described in Exhibit A (hereinafter referred to as the "Products'); and
WHEREAS, PSS desires to purchase and distribute the Products through its
marketing, selling, and support organization; and
WHEREAS, PSS and Candela desire to work together to the mutual benefit of both
parties;
NOW THEREFORE, in consideration of the premises and mutual covenants and
agreements contained herein, the parties agree as follows:
1. PRODUCTS. The technical definition of the Products are included in
Exhibit A.
2. EXCLUSIVITY.
2.1 PSS shall have the exclusive right commencing on the date of
signing this Agreement (the "Commencement Date") and ending on
the date of expiration or termination of this Agreement to sell
the Products in the territory (the "Territory") as defined in
Exhibit B attached hereto.
2.2 The exclusivity applies only when the Products are sold to be
used for aesthetic applications to all medical specialties
except dermatology, plastic surgery and otorhinolarygolgist
(ENT). PSS shall not directly or indirectly sell the Products or
knowingly have the reason to believe that the Products will be
resold to any other person with the view to re-sale to Candela
customers in dermatology, plastic surgery, and/or
otrhinolaryngology (ENT).
2.3 Candela shall have no restriction whatsoever to sell other
devices not included in Exhibit A in the Territory.
2.4 PSS shall not directly or indirectly sell the products outside
of the agreed Territory or knowingly have the reason to believe
that the products will be re-sold to any
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other person within the Territory with the view to re-sale outside of
the agreed Territory.
2.5 For the duration of this Agreement, PSS shall not be allowed to
market and sell competitive products based on similar laser
technology. PSS shall not be allowed to develop and product
competitive products based on similar laser technology for the
duration of this Agreement.
3. DISTRIBUTOR'S DUTIES.
PSS agrees at its expense:
3.1 To use all reasonable efforts through the use of its sales and
marketing organization to promote the sales of the Products.
3.2 To devote the time and effort to the promotion of the Products
reasonably required to realize the maximum sales of such
products.
3.3 To use reasonable efforts to report to Candela in a written form
defined in Exhibit C all customer complaints, errors, and
malfunctions.
3.4 To make a good faith effort to comply with all applicable
statutes, laws, ordinances, rules and regulations of any
governmental body having jurisdiction over the Territory, which
are applicable to its activities hereunder, except for the
United States FDA clearance, where Candela will obtain necessary
governmental approvals for sales of the Products.
3.5 To share with Candela all marketing and promotional material.
3.6 Provide Candela with quarterly forecasts for a six month period.
3.7 Provide Candela with a [CONFIDENTIAL TREATMENT REQUESTED]* for
any clean lead (a lead not currently active for the respective
product in the company data base) in the PSS market (as defined
in 2.2). A clean lead should have a scheduled appointment within
30 days.
4. MANUFACTURER'S DUTIES.
Candela agrees at its expense:
4.1 To manufacture and deliver the Products as specified in
Exhibit A to this Agreement and to make changes as reasonably
required in said Products and pricing so as to maintain the
competitive position of said products in the marketplace.
4.2 To ship the Products in suitable packaging that adequately
provides for the arrival of the Products to the destination
without any change.
*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
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4.3 To obtain the necessary United States FDA clearance for the
products.
4.4 To manufacture products in accordance with FDA GMP regulations.
4.5 To respond promptly to corrective action requests by PSS.
4.6 To the extent reasonably necessary to support PSS distribution
efforts, to maintain a suitable stock of products, consumables
and spare parts which would be required relating to submitted
forecasts.
4.7 To provide consumables according to the price lists.
4.8 To share with PSS all marketing and promotional material and
physician contacts which will help to sell the products in the
Territory.
4.9 Provide PSS with a [CONFIDENTIAL TREATMENT REQUESTED]* for any
clean lead (a lead not currently active for the respective
product in the company data base) in the Candela market (as
defined in 2.2).
4.10 Candela will train the designated PSS personnel at mutually
agreed upon times.
5. PRICING.
All prices shall be quoted by Candela on a "F.O.B. Wayland,
Massachusetts" basis and shall include the cost of packaging. The price
of laser systems is included in this Agreement as Exhibit E. Further,
Candela will provide PSS with notice of any price increase ninety (90)
days prior to the effective date of said increase.
6. PAYMENT TERMS.
[CONFIDENTIAL TREATMENT REQUESTED]*
7. ORDER PLACEMENT.
PSS shall place written purchase orders for systems, 30 days in advance
of the required delivery date for the Product.
8. RISK OF LOSS.
All risk of loss to the Products shipped shall pass to PSS upon
delivery to the carrier at the F.O.B. points. Candela shall not be
liable to PSS or anyone claiming through PSS for any loss due to
circumstances, including without limitation, delays in delivery caused
by other parties, force majeure, or any other event beyond its
reasonable control.
*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
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9. TERMINATION.
a. This Agreement has a three-year from its effective date but
shall be sooner terminable in accordance with the provisions
of this Section. At the satisfactory completion of each year,
there will be one year added to this contract.
b. Either party has the right to terminate this Agreement on the
other party's "Event of default" upon written notice of said
Event. The following are "Events of default" under this
Agreement:
(i) the failure to make any payment of principal or
interest hereunder within ten (10) days of notification
of default and intention to terminate;
(ii) the failure to perform any of a party's obligations
under this Agreement, which failure is not cured within
thirty (30) days of the other party's written notice to
this effect;
(iii) the falsity, in any material respect, of any warranty,
representation, or statement made or furnished to a
party by the other party and called for by this
Agreement;
(iv) the inability to pay its business debts as due;
(v) the making of any assignment of its property for the
benefit of creditors;
(vi) the application for the appointment of a trustee or
receiver of any parts of its assets, or the
commencement of any proceedings under any bankruptcy,
reorganization, arrangement, insolvency, readjustment
of debt, dissolution, or other liquidation law of any
jurisdiction.
(vii) the application or commencement of any proceedings as
enumerated in Section 9(b)(vi) above, against any
party, and such party, and such party indicates its
approval, consent or acquiescence, or the entering of
any order appointing such trustees or receiver or
adjudicating such party bankrupt or insolvent, or the
approval of the petition in any such proceedings, and
such order remains in effect for sixty (60) days;
(viii) the entering of any order in any proceedings against
any party decreeing the dissolution or division of said
party of its assets, and such order remains in effect
for sixty (60) days, or any material part of said
party's assets or property become subject to liens,
security interests, or encumbrances; and
(ix) a material part of any party's operations shall cease
for a period of thirty (30) days, other than temporary
cessation's, which, if continued, would have a material
adverse effect of said party's operations or financial
condition.
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c. Either party has the right to cure an Event of Default within
sixty (60) days of notification
d. This agreement may be terminated by either party when no Event
of Default has occurred upon six (6) months written notice.
10. WARRANTY.
Candela warrants to the original purchaser that the new hardware
system, excluding instrument, accessories and consumable products, will
be free from defect in material and/or workmanship for one (10) days or
the appropriate number of pulses, from the date of installation. For
used, demonstration, or refurbished hardware systems, the terms of
warranty shall be specified on Candela's quotation. If the customer
schedules or delays Candela installation more than 60 days after
shipment, warranty begins on the 31st day after shipment. If Candela
receives notice of defects during the warranty period, Candela will, at
its option, either repair or replace the hardware components that prove
to be defective. The customer must notify Candela of any defect within
seven (7) business days faster the defect first comes to the customer's
attention.
Any replacement products shall be at Candela's option, be new or
remanufactured products, and are warranted for the remainder or the
original warranty or thirty (30) days, whichever is longer. This
warranty is not transferable and is subject to limitations. Please
request the Candela Corporation Limited Warranty for details.
Under no circumstances shall Candela be liable for any special,
incidental, or consequential damages based upon breach of warranty,
breach of contract, negligence, strict liability or any other legal
theory. Such uncovered damages include, but are not limited to; loss of
profits, loss or revenue, loss of use of the hardware system or any
associated equipment, costs of capital, cost of substitute or
replacement equipment, facilities or services, down time, purchaser's
time, the claims or third parties including customers, and damages to
any real or personal property.
THE WARRANTY STATED ABOVE IS THE ONLY WARRANTY APPLICABLE TO THIS
PRODUCT. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED (INCLUDING ALL
IMPLIED WARRANTIES OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE), ARE HEREBY DISCLAIMED. NO ORAL OR WRITTEN INFORMATION OR
ADVICE GIVEN BY CANDELA CORPORATION, ITS AGENTS OR EMPLOYEES SHALL
CREATE A WARRANTY OR IN ANY WAY INCREASE THE SCOPE OF THIS WARRANTY.
11. PROPRIETARY RIGHTS.
Except as otherwise provided by this Agreement does not grant to the
PSS any manufacturing rights, license rights, or the right to use any
patent of Candela. PSS recognizes the exclusive proprietary rights of
Candela in and to its Products, patents, trademarks, and the trade
names, and shall use commercially reasonable efforts to protect
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such proprietary rights. It is agreed that all activities of PSS with
respect to proprietary information, patents, and copyrights are for the
benefit of Candela. PSS shall cooperate with Candela to take such
action as Candela may consider necessary to protect any trademark or
trade names in any manner without prior written approval of Candela.
Upon any expiration or termination of this Agreement, PSS shall take
all action necessary to perfect, including by transfer or assignment to
Candela or its nominee, any right, title, or interest in or to any of
the trademarks or trade names of Candela. Nothing contained in this
Agreement shall be construed as conveying to PSS any right, title, or
interest in or to any trademarks or trade names of Candela other than
an express right to a permissive use therefore in connection with the
sale of the Products hereunder. PSS shall notify Candela within a
reasonable time of any infringement of Candela's patents, copyrights,
trademarks, or trade names relating to products that come to PSS
attention, and shall assist Candela in such actions as Candela may
elect to take relating thereto.
12. BRAND NAME.
All marketing materials and promotional campaigns shall be prepared by
PSS in a manner to equivalently reflect Candela as the manufacturer and
PSS as the distributor.
13. CONFIDENTIALITY.
13.1 During the term of this Agreement, except as otherwise provided in
this section, PSS and Candela agree to take all steps reasonably
necessary to safeguard the secrecy and confidentiality of all
confidential or proprietary information. All written confidential
information produced by either party shall clearly be marked
"CONFIDENTIAL" or "PROPRIETARY" on each page containing confidential
information. Neither party may use the confidential information to the
detriment of the other party.
13.2 The obligation of confidentiality imposed by the foregoing section
shall not apply to information which is:
a) in the public domain at the time of such disclosure or
development or subsequently comes into the public domain by
publication or otherwise except by breach of this Agreement; or
b) received by PSS or Candela from a third party not under any
confidentiality obligation to PSS or Candela; or
c) in PSS or Candela's possession prior to disclosure by the
disclosing party, as shown by clear and convincing proof; or
d) required to be disclosed by operation of law; or
e) subsequently developed completely independent from this
Agreement.
The requirement of this section shall survive termination or expiration
of this Agreement.
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14. REPRESENTATIONS.
Each of the parties hereto warrants and represents to the other that it
has the authority, corporate and otherwise, to enter into this
Agreement and to perform in accordance with the terms hereof. PSS
agrees not to make any representations concerning products of Candela,
except as authorized herein or otherwise in writing by Candela, or to
engage in unfair trade practices or activities as prohibited by the
law. PSS agrees to defend, hold harmless and indemnify the Company with
respects to any loss suffered by Candela resulting from any such
prescribed activities.
15. LEGAL RELATIONSHIP.
PSS is and shall at times remain an independent contractor with respect
to Candela. Candela is and shall at time remain an independent
contractor which respect to PSS. PSS shall buy and sell the Products in
its own name and for its own account. PSS has no right or authority to
assume or create any obligations of any kind or to make any
representations and warranties, whether expressed or implied, on behalf
of Candela, or to bind Candela in any respect whatsoever. Candela has
no right or authority to assume or create any obligations of any kind
or to make any representations and warranties, whether expressed or
implied, on behalf of PSS, or to bind PSS in any respect whatsoever.
Neither party may act in the name or on behalf or the other party.
16. APPLICABLE LAW.
This Agreement and all transactions between Candela and PSS shall be
governed by the laws of the Commonwealth of Massachusetts.
17. ARBITRATION.
Any controversy, dispute, or claim arising out of or relating to this
Agreement or the breach thereof, if not earlier resolved by the parties
hereto, shall be settled by arbitration in accordance with the rules
then in force of the American Arbitration Association. This Agreement
to arbitrate shall be enforceable and judgment upon any award rendered
by all or a majority of the arbitrators may be entered in any court
having jurisdiction. The arbitration shall be held in the Commonwealth
of Massachusetts, United States of America.
18. BINDING AGREEMENT.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective affiliates, subsidiaries,
successors. Any assignment of this Agreement of the rights hereunder by
one party without prior written consent of the other party shall be
void.
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19. MISCELLANEOUS.
This Agreement constitutes the entire understanding of the parties,
superseding any and all previous understandings, contracts, and
agreements, written and oral, and this Agreement may only be waived,
modified or amended in writing signed by the party against whom
enforcement of the waiver, modification, or amendment is sought. The
failure of either party to enforce any condition or part of this
Agreement shall not be considered as a waiver of that condition. If any
part of this Agreement shall be held invalid by the law, it is the
intent of the parties that the remainder of the Agreement will not be
effected thereby but that a clause will be substituted therefore, which
could be as similar as possible in economic and business objective to
such part but which shall be valid, legal, and enforceable.
20. NOTICES.
Unless otherwise specified herein, all notices under this Agreement
shall be in writing, and shall be effective when sent by Certified
Mail, postage prepaid, to the address of the parties as stated on the
first page of this Agreement. Each party may change his address
pursuant to written notice of the other party.
21. EXECUTION OF COUNTERPARTS.
This Agreement may be executed in counterpart, each of which shall be
deemed an original, and this Agreement shall constitute a binding
agreement between Candela and PSS when a counterpart or counterparts
(whether the same or separate) shall have been executed and delivered
by or on behalf of each of the parties.
IN WITNESS WHEREOF, the parties hereto have cause this Agreement to be duly
executed by their duly authorized representatives on the dates indicated below,
it being understood that this Agreement shall be effective as of the latest
date.
WITNESS: CANDELA CORPORATION (CANDELA)
BY: BY:
---------------------------- ---------------------------------------
Xxxxxx X. Xxxxxx
President and Chief Executive Officer
DATE: DATE:
-------------------------- -------------------------------------
WITNESS: PSS
------------------------- --------------------------------------
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BY: BY:
---------------------------- ---------------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President
DATE: DATE:
-------------------------- -------------------------------------
LIST OF EXHIBITS
A - Products
B - Territory
C - Customer Complaint Handling Policy
D - No Exhibit
E - Price List
"EXHIBIT A"
PRODUCTS
ScleroPlus
Dynamic Cooling Device
GentleLase
DCD Canisters
"EXHIBIT X"
XXXXXXXXX
The following areas constitute the "Territory"
United State office base Medical Specialties with the exception of:
Dermatology
Plastic Surgery
ENT
DCD Canisters can be sold to all specialties including Dermatology, Plastic
Surgery, and ENT.
"EXHIBIT C"
Customer Complaint Handling Policy
(Attached)
"EXHIBIT D"
INTENTIONALLY LEFT BLANK
"EXHIBIT E"
PRICE LIST
The annual transfer price from Candela to PSS (US Dollars) will be as follows:
PRODUCT US LIST PRICE UNITS 1-50 51-100 101+
GentleLASE [CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL
TREATMENT REQUESTED]* TREATMENT TREATMENT TREATMENT
REQUESTED]* REQUESTED]* REQUESTED]*
ScleroPLUS US LIST PRICE UNITS [CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL
TREATMENT TREATMENT TREATMENT
REQUESTED]* REQUESTED]* REQUESTED]*
[CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL
TREATMENT REQUESTED]* TREATMENT TREATMENT TREATMENT
REQUESTED]* REQUESTED]* REQUESTED]*
DCD US LIST PRICE UNITS [CONFIDENTIAL [CONFIDENTIAL
TREATMENT TREATMENT
REQUESTED]* REQUESTED]*
[CONFIDENTIAL [CONFIDENTIAL [CONFIDENTIAL
TREATMENT REQUESTED]* TREATMENT TREATMENT
REQUESTED]* REQUESTED]*
CRYOGEN US LIST PRICE UNITS [CONFIDENTIAL
TREATMENT
REQUESTED]*
CANISTERS [CONFIDENTIAL [CONFIDENTIAL
TREATMENT REQUESTED]* TREATMENT
REQUESTED]*
[CONFIDENTIAL TREATMENT REQUESTED]*
*CONFIDENTIAL TREATMENT REQUESTED INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
