Exhibit 10.7
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXCLUSIVE DISTRIBUTION AGREEMENT
(for the Cynergy Product Line)
THIS AGREEMENT is made by and between El. En. S.p.A., a company organized
under the laws of Italy whose address is Xxx Xxxxxxxxxx 00, 00000 Xxxxxxxxx,
Xxxxxxx, Xxxxx (hereafter referred to as "El En"), and Cynosure, Inc., a
Delaware corporation whose address is 00 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000
(hereinafter referred to as "Cynosure"). This Agreement shall be effective as of
January 1, 2005 (hereinafter the "Effective Date"). (Both El En and Cynosure are
sometimes collectively referred to as the "Parties", and each may be referred to
in the singular as a "Party".)
The Parties hereby agree to the following:
1. DEFINITIONS
The terms used in this Agreement shall have the following meaning:
1.1 "Territory" shall mean worldwide.
1.2 "Products" shall mean those El En products set forth in Exhibit A to
this Agreement. The term "Products" may be modified from time to time by written
agreement of the parties to include additional El En products.
1.3 "Affiliate" shall mean, with respect to either party, a corporation or
entity that directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with such party. El En and
Cynosure shall be deemed not to be Affiliates for purposes of this Agreement.
2. APPOINTMENT AND ACCEPTANCE
2.1 Subject to Cynosure's compliance with all the terms of this Agreement,
El En hereby appoints Cynosure as its distributor for marketing, sales and
delivery of the Products in the Territory as long as this Agreement remains in
full force and effect, and Cynosure accepts such appointment.
2.2 This appointment of Cynosure as El En's distributor for the Products
in the Territory is an exclusive appointment. During the term of this Agreement
and so long as Cynosure is not in default under this Agreement, El En shall not
appoint any other distributor for the Products in the Territory:
2.3 This appointment shall automatically terminate upon the expiration or
termination of this Agreement.
2.4 Cynosure shall have the right, without the prior written consent of El
En, to appoint sub-distributors or sub-dealers to sell the Products in the
Territory. Notwithstanding the foregoing, should El En reasonably object to any
such appointment, Cynosure shall refrain therefrom.
2.5 Neither this Agreement nor any right granted by this Agreement is a
property right. Except as provided in Section 2.4, neither this Agreement nor
any right or responsibility under this Agreement may be transferred, assigned,
delegated or sold by Cynosure or by operation of law.
2.6 No rights or licenses with respect to the Products are granted or
deemed granted under this Agreement or in connection herewith, other than those
rights expressly granted in this Agreement.
3 OBLIGATIONS OF EL EN
3.1 El En shall provide such marketing and other sales support to Cynosure
as the parties may agree from time to time Cynosure shall pay for all travel,
lodging, meals and related expenses incurred by El En in providing such support.
3.2 El En reserves the right in its sole discretion to discontinue the
sale or production of any Product. El En reserves the right in its sole
discretion to modify, alter, improve or change any Product. El En shall make
reasonable efforts to provide Cynosure with one year's prior written notice of
any decision to discontinue the sale or production of any Product and ninety
(90) days prior written notice of any decision to change any Product, but any
changes made for safety reasons or to accommodate regulatory requirements shall
be effective upon notice to Cynosure.
3.3 El En will provide annual training sessions (at locations to be
determined by El En) for Cynosure sales and service personnel at no cost to
Cynosure. Notwithstanding the foregoing, Cynosure shall be responsible for all
travel, lodging, meals and related expenses associated with attendance by its
personnel at these training sessions.
4. SALES TO CYNOSURE
4.1 Each order for the Products will be submitted by Cynosure on the
Purchase Order form set forth at Exhibit B to this Agreement (hereinafter the
"Purchase Order") and will be processed by El En in a timely fashion. Each
Purchase Order submitted by Cynosure shall specify the quantity of each Product
which Cynosure desires to purchase and the delivery date for such Product(s).
The express terms of this Agreement, including the Purchase Order, supersede any
contrary provisions in any purchase order, agreement or other document used by
Cynosure. Contracts for the sale of the Product by Cynosure to its customers
shall automatically incorporate, to the extent applicable, the terms and
conditions of this Agreement, including the Purchase Order. El En will accept or
reject the Purchase Order in writing within ten (10) working days of El En's
receipt of the Purchase Order from Cynosure. Any failure on the part of El En to
acknowledge a Purchase Order within such ten (10) working day period shall be
deemed to be a rejection of such Purchase Order.
4.2 Cynosure's orders for the Products shall not be binding on El En
until
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accepted by El En and may be canceled by Cynosure only until that time. Orders
shall be deemed accepted by El En when Cynosure is so notified in writing by El
En. In the event of a shortage of any Product, El En will make reasonable
efforts to allocate such Product among its distributors and sales
representatives in a fair and equitable manner, but El En shall have no
liability to Cynosure whatsoever as the result of its inability to meet
Cynosure's orders for such Product or any allocation made by El En among its
distributors and sales representatives.
4.3 The prices applicable to the Products are set forth in Exhibit C to
this Agreement. The price applicable to each Product may be changed by El En
only upon reasonable notice (not less than thirty (30) days) to Cynosure. Any
change in the price of a Product will not apply to any orders for such Product
from Cynosure accepted in writing by El En prior to the effective date of such
change. All amounts under this Agreement shall be calculated and paid in U.S.
Dollars.
4.4 Cynosure will deliver to El En, not later than the first day of each
March, June, September and December in each year during the term of this
Agreement, a forecast of Cynosure's anticipated requirements for each Product
during the following calendar quarter, specifying quantities and shipment dates
therefore. The forecast shall not be binding upon Cynosure. Upon acceptance in
writing of such forecast by El En, El En shall make reasonable commercial
efforts to maintain sufficient inventory to fill Cynosure's requirements based
on such forecasts. Product shall, however, only be shipped against purchase
orders accepted by El En.
4.5 Cynosure shall examine each shipment of the Products to determine
whether any item or items included in the shipment are in short supply,
defective or damaged. Within five (5) business days of receipt of the shipment,
Cynosure shall notify El En in writing of any shortages, defects or damage which
Cynosure claims existed at the time of delivery and are not a result of
shipping. Within twenty (20) days of receipt of such notice, El En will
investigate the claim of shortage, defects or damage, and inform Cynosure of its
findings. If El En determines that a shortage, defect or damages existed at the
time of delivery and was not a result of shipping, El En will promptly deliver
replacement Product to Cynosure. Unless notice is given as provided in this
Section 4.5, Cynosure shall be deemed to have accepted each shipment of the
Products and to have waived all claims for shortages, defects or damage.
5. DISTRIBUTORSHIP OPERATIONS
5.1 Cynosure agrees to use best efforts to sell the Products in the
Territory and to promote, through Cynosure's own advertising and sales
promotion activities, the purchase and use of the Products by customers located
in the Territory. Cynosure agrees to establish a sales program for the Products
that will include the following responsibilities:
5.1.1 Cynosure shall maintain one or more sales offices in the
Territory and shall use best efforts and devote such time as necessary to sell
and promote the sale of the
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Products in the Territory. Cynosure shall solely determine its hours of
operation, its staffing for its offices, its employment policies and benefits
and where and when to make sales calls.
5.1.2 Cynosure shall ensure that all personnel whom Cynosure assigns
to sell the Products are adequately trained on the Product to provide a
satisfactory level of sales service to customers and provide effective sales
presentations and training in the use of the Products to customers.
5.3 As security for the payment by Cynosure of the purchase price for
Products ordered under this Agreement, Cynosure hereby grants to El En a
purchase money security interest in all Products sold or delivered by El En to
Cynosure or to third parties on Cynosure's behalf, whether presently or
after-acquired, in any and all purchase contracts for Products entered into
between Cynosure and a customer, in any and all payments for Products due and
payable from Cynosure's customers, and in any and all proceeds from the sale or
delivery of such Products collected by Cynosure. Cynosure agrees to execute all
necessary documents and financing statements requested by El En in order to
perfect and enforce such security interest.
6. ADDITIONAL CYNOSURE OBLIGATIONS
6.1 Cynosure shall promptly report to El En all complaints and product
problems communicated by customers with respect to the Products. Cynosure shall
be responsible for providing El En with a written report of all Product
complaints and problems. Cynosure shall assist El En in complying with the then
current Medical Device Reporting/Adverse Event/Product Problem Regulations
promulgated and amended by the U.S. Food and Drug Administration ("FDA"). To the
extent applicable to relationships of this nature and required by applicable
law, Cynosure shall be responsible for maintaining traceability of all Products
purchased and resold by Cynosure.
6.2 Cynosure shall make no warranties or representations, whether oral or
written, with respect to the Products, including without limitation, sales
literature, without the prior written consent of El En. Cynosure shall
accurately and completely represent the Products, and promote the Products in a
manner consistent with its labeling, FDA cleared or approved indications, and
FDA regulations.
6.3 Cynosure shall, at its sole expense, comply with all the laws and
regulations applicable to its operations and to its performance of its
obligations under this Agreement.
6.4 Except as provided in this Section 6.4, El En does not grant to
Cynosure any license or rights to any intellectual property of El En. El En
hereby grants Cynosure the non-exclusive and non-transferable right to display
trade names and trademarks associated with the Products in the Territory solely
in connection with the performance of its obligations under this Agreement. Upon
termination of this Agreement, Cynosure shall terminate all use of such trade
names and trademarks. Cynosure shall not, directly or indirectly, infringe or
contest the validity of or the title to any patents, copyrights, trademarks or
trade names owned by El En or under which El En is licensed, or otherwise
4
impair the interests of El En in such intellectual property.
6.5 Cynosure will conduct all of its business in its own name and in a
manner consistent with its obligations under this Agreement. Cynosure will be
solely responsible for the payment of all the expenses of its office and
activities and will be solely responsible for the acts and expenses of its
employees and independent contractors, if any. Neither Cynosure nor any of its
employees or consultants shall be considered to be employees of El En for any
purpose whatsoever, including, without limitation, social security, unemployment
compensation, workers' compensation, income tax withholding, or any other such
taxes or obligations. Cynosure understands and agrees that it is solely
responsible for payment of all such taxes and obligations.
6.6 Nothing in this Agreement shall be construed to constitute either
party as a partner, employee, franchisee, or agent of the other party, nor shall
either party have any authority to bind the other in any respect. Neither party
has the power to make contracts in the name of the other or to incur any
liabilities whatsoever in the name of the other. Each party shall remain an
independent contractor responsible only for its own actions. Neither party nor
any of their respective employees or consultants shall be entitled to
participate in any plans, arrangements, or distributions of the other party
under any pension, stock, bonus, profit sharing, medical plan, or any other
benefit plans offered or provided to the employees or consultants of the other
party.
6.7 Each party represents and warrants to the other party that its
execution of this Agreement and performance of its obligations under this
Agreement do not and will not contravene, violate or constitute a breach of, any
law, rule, regulation or the provisions of any court order or contractual
agreement or other obligation to which it is a party or by which it is bound.
6.8 Each party represents and warrants to the other party that it shall
not disclose, use, have used, make available to or transfer to the other party
any information, including without limitation, any data, concepts, formula or
trade secrets, which is proprietary or confidential to a third party.
6.9 At all times during the term of this Agreement or any renewal thereof,
Cynosure shall refrain from promoting or selling any competitive product that
has substantially the same specifications as the Products or is substantially
similar to any Product, except this provision shall not prevent Cynosure from
continuing to sell its existing product line or any product introduced by
Cynosure as a successor to any existing product.
7. TERM AND TERMINATION
7.1 This Agreement is effective on the Effective Date and shall continue
in force for a period of seven years unless sooner terminated as herein
provided. This Agreement shall be automatically renewed for additional terms of
one year each unless either party shall have given notice of termination to the
other party not less than one year prior to the
5
expiration of the initial term or an renewal term.
7.2 Either party may terminate this Agreement in the event (a) the other
party commits a material breach of this Agreement, which breach remains uncured
for a period of thirty (30) days following written notice of such material
breach; or (b) the other party becomes insolvent, fails generally to pay its
debts as they become due, makes an assignment for the benefit of creditors, is
the subject of any voluntary or involuntary case commenced under the federal
bankruptcy laws, as now constituted or hereafter amended (which, in the case of
involuntary bankruptcy, is not dismissed within ninety (90) days), or of any
other proceeding under other applicable laws of any jurisdiction regarding
bankruptcy, insolvency, reorganization, adjustment of debt or other forms of
relief for debtors, has a receiver, trustee, liquidator, assignee, custodian or
similar official appointed for it or for any substantial part of its property,
or is the subject of any dissolution or liquidation proceeding. Without limiting
the generality of the foregoing, failure by Cynosure to make any payment due to
El En under this Agreement, subject to applicable cure periods set forth in this
Section 7.2, shall constitute a material breach for purposes hereof and shall
attribute to El En at its sole option, the right to revoke the exclusivity of
Cynosure's rights within the Territory or to terminate this Agreement.
7.3 After termination or expiration of this Agreement, any amounts owed by
one party to the other for transactions occurring during the term of the
Agreement shall be paid in accordance with this Agreement. El En shall have no
obligation to Cynosure for any sales or other activities of Cynosure after
termination or expiration of this Agreement, unless expressly agreed in writing
signed by both parties.
7.4 After termination or expiration of this Agreement, each Party shall
promptly return to the other Party all copies of confidential and/or proprietary
information previously disclosed by the other Party, and Cynosure shall remove
and not thereafter use any advertisements, brochures and other items in its
possession or under its control, that contain El En's trademarks and/or service
marks, and shall return to El En any and all property of El En in Cynosure's
possession, including, without limitation, all spare parts, products and
technical documentation owned by El En. All rights and licenses granted to
Cynosure under this Agreement shall terminate and revert back to El En.
7.5 The following provisions of this Agreement shall survive the
termination or expiration of this Agreement: Sections 6.4, 6.5, 7.3, 7.4, 8, 9,
11, 15 and 16.
8. CONFIDENTIALITY
With respect to any information disclosed by either Party to the other
Party, which information is identified by the disclosing Party as confidential
or proprietary at the time of disclosure, the receiving Party will treat such
information as strictly confidential, and use the same degree of care to protect
such information as it as the receiving Party uses to protect its own highest
level confidential information, which shall not be less than due care. All
customer lists, customer files, market and sales data, discounting and pricing
data, competitive analyses, market potential information and Product information
shall be deemed
6
confidential and proprietary. Each Party agrees not to use for its own benefit,
nor to disclose to third parties, any such information received from the other
Party during the term of this Agreement or thereafter. These restrictions shall
not apply to information that (a) was in the possession of the receiving prior
to its disclosure by the disclosing Party; (b) at the time of disclosure is in
the public domain, or which later becomes part of the public domain through no
breach of the terms of this Agreement; or (c) was received by the receiving
Party from a source other than the disclosing Party, who did not acquire such
information directly or indirectly from the disclosing Party.
9 FORCE MAJEURE
Neither party shall not be liable in any manner for failure or delay to
fulfill all or part of this Agreement as the result of any act of God,
governmental orders or restriction, war, threat of war, warlike conditions, acts
of terror, hostilities, sanctions, mobilization, blockade, embargo, detention,
revolution, riot, looting, strike, lockout, labor action, accident, or any other
causes or circumstances beyond the such party's reasonable control. Upon the
occurrence of a force majeure event, the party suffering such event shall
immediately provide written notice to the other party of the existence and
details of such force majeure event and its anticipated duration.
10. WAIVER OF BREACH
Failure of either party to require performance of any term of this
Agreement or the waiver by either party of any default under this Agreement
shall not be deemed a waiver of any subsequent default nor of the provision of
this Agreement allegedly breached as a result of such default.
11. GOVERNING LAWS
This Agreement shall be governed by and construed in accordance with the
laws of the Republic of Italy , without reference to its principles of conflicts
of laws.
12. ASSIGNMENT
This Agreement shall not be assignable by either Party hereto without the
prior written consent of the nonassigning Party, except that either party may
assign this Agreement in connection with a sale or transfer of all or
substantially all of its business or assets.
13. NO CHANGES OF AGREEMENT VALID
No modification of this Agreement shall be valid or binding upon either
Party without its written consent.
7
14. OTHER AGREEMENTS
All prior oral or written agreements or understandings between the Parties
with respect to the subject matter of this Agreement are hereby terminated,
except for those agreements or understandings which, by their nature, are
intended to survive termination.
15. NOTICES
All notices pertaining to this Agreement shall be confirmed in writing,
and shall be delivered to the Party concerned, by registered or certified mail,
or by recognized overnight air courier service, to the address first set forth
above. Either Party may change its address for notice by written notice to the
other Party. Notice is deemed effective upon mailing or upon delivery to a
recognized international air courier service.
16. DISPUTE RESOLUTION
The parties agree that any and all disputes regarding the interpretation
or application of this agreement (Including any schedule or exhibit hereof)
shall be submitted to the exclusive jurisdiction of the tribunal of Milan,
Italy.
17. COUNTERPARTS/ENTIRE AGREEMENT
This Agreement may be executed in duplicate and when so executed, each
executed copy shall be deemed an original. All Exhibits referenced in this
Agreement are deemed incorporated by reference.
18. CAPTIONS
The captions in this Agreement have been inserted for convenience of
reference only, are not to be considered a part of this Agreement, and shall in
no way modify or restrict any of the terms or provisions of this Agreement.
IN WITNESS WHEREOF, the Parties have hereto caused this Agreement to be
executed by their duly authorized representatives, on the day and year first
above written.
EL.EN. S.p.A. CYNOSURE, INC.
By: /s/ XXXXXX XXXXXXXX BY: /s/ XXXXXXX X. XXXXX
----------------------- -----------------------
Name: Xxxxxx Xxxxxxxx Name: Xxxxxxx X. Xxxxx
Title: Consigliere Delegato Title: CFO
8
Exhibit A
List of Products
The Cynergy Product Line
9
Exhibit B
Form of Purchase Order
Purchase Order No.
Date:
TO: FROM:
El. En. S.p.A. Cynosure, Inc.
[insert address] 00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Tel: Tel:
Fax: Fax:
PRODUCT(S) ORDERED:
QUANTITY:
REQUESTED DELIVERY DATE(S):
DELIVERY LOCATION:
TOTAL PURCHASE PRICE: $
-----------
Standard Conditions of Purchase are attached and are made part of this Purchase
Order.
Cynosure, Inc.
By:
----------------------
Name:
Title:
10
STANDARD CONDITIONS OF PURCHASE
These conditions apply to the attached Purchase Order.
FORMATION OF CONTRACT
The Purchase Order is an offer by you to purchase from El. En. S.p.A. the
Product(s) described in the Purchase Order. By submitting the Purchase Order to
us, you agree to purchase the Product(s) on the terms and conditions specified
in the Purchase Order and these Standard Conditions of Purchase. We accept your
offer by the signature of a duly authorized officer of El. En. S.p.A..
The Purchase Order and these Standard Conditions of Purchase (together with the
Distribution Agreement dated as of January 1, 2005 (the Distribution Agreement))
are intended to be the complete and exclusive statement of the terms of the
contract between us. Please understand that our acceptance of your offer is
expressly made conditional on your assent to all of our terms. No prior
proposals, statements, course of dealing or usage of the trade will be part of
the contract.
After the contract has been formed, it may be modified only by written document
signed by our respective authorized representatives. No order accepted by us may
be terminated, canceled, modified or assigned by you without our prior written
permission.
PRICE AND TAXES
The price you will pay is stated in the Purchase Order. The price includes the
Product(s) described in the Purchase Order, standard packaging and shipping. You
shall be responsible for all taxes (including without limitation any sales use,
excise or similar tax), custom fees and duties, VAT and other related
governmental fees and costs, transportation to the site specified in the
Purchase Order, special packaging and insurance. Any applicable taxes will be
added to the price, unless we receive a tax exemption certificate from you which
is acceptable to the taxing authorities.
PAYMENT
The payment terms are as follows: Net 30 days from shipment. Past due balances
are subject to a service charge up to the maximum amount permitted by applicable
law. If any payment depends on an event which is delayed for a reason for which
you are responsible, you will make the payment when the event was first
scheduled to occur.
11
DELIVERY
Delivery dates are approximate. We will not be not responsible for any delay in
performance or delivery which is due to unforeseen circumstances, or to causes
beyond our reasonable control, including, without limitation, strike, lockout,
riot, war, act of God, or compliance with any governmental law, regulation or
order (including U.S. Export regulations), or any delay in vendors supplying
materials and equipment. If such a delay occurs, we may extend the performance
or delivery date for a period of time equal to the delay.
TRANSPORTATION, TITLE AND RISK OF LOSS
Except as otherwise provided below, all shipments are Ex Works Calenzano, our
manufacturing facility in Italy. You are be responsible for all transportation
and insurance. Title and risk of loss or damage to the equipment shall pass upon
delivery to the shipper. For equipment shipped outside the United States and its
possessions, title and risk of loss or damage shall pass to you when the
Product(s) arrives at the country of destination, notwithstanding any shipment
terms to the contrary.
ACCEPTANCE OF PRODUCT
You shall be responsible for examining each shipment of Product(s) to determine
whether any item or items included in the shipment are in short supply,
defective or damaged. Within five (5) business days of receipt of the shipment,
you shall notify us in writing of any shortages, defects or damage which you
claim existed at the time of delivery and are not a result of shipping. Within
twenty (20) days of receipt of such notice, we will investigate the claim of
shortage, defects or damage, and inform you of our findings. If we determine
that a shortage, defect or damages existed at the time of delivery and was not a
result of shipping, we will promptly deliver replacement Product(s) to you.
Unless notice is given as provided in this paragraph, you shall be deemed to
have accepted each shipment of Product(s) and to have waived all claims for
shortages, defects or damage.
LIMITED WARRANTY
We warrant that each Product sold by us will not infringe any patents, trade
secrets, trademarks, or other intellectual property rights of any third party,
and that the Product, when delivered to you, shall be free from defects in
materials and workmanship for a period of 360 days after receipt of the Product
We makes no warranty (express, implied or statutory) for any Product that are
modified or subjected to unusual physical stress, misuse, improper storage or
handling, or used in any manner or medical procedure for which the Product(s)
are not indicated. We shall promptly replace any Product that fails to meet this
limited warranty at the time of delivery. This constitutes our sole liability to
end users for breach of the foregoing warranty.
12
EXCLUSIVITY AND DISCLAIMER
THE LIMITED WARRANTY IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, EXPRESSED
OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY IMPLIED WARRANTY
ARISING OUT OF A COURSE OF DEALING OR OF PERFORMANCE, CUSTOM OR USAGE IN THE
TRADE. YOUR EXCLUSIVE REMEDY FOR A DEFECT IN ANY PRODUCT SHALL BE THAT STATED IN
THE LIMITED WARRANTY.
LIMITATION OF LIABILITY
Our responsibility for any claims, damages, losses or liabilities arising out of
or related to our performance under the Purchase Order shall not exceed the
aggregate consideration paid to us pursuant to the Purchase Order. In addition,
in no event shall we be liable to you, your employees or agents or to any other
third party for any indirect, special, exemplary, incidental or consequential
damages, including but not limited to damages resulting from loss of use, loss
of data, loss of profits or any harm or damage to persons or property arising
out of or in connection with the Purchase Order or any equipment, materials or
services provided under the Purchase Order.
GENERAL MATTERS
ASSIGNMENT. Any assignment of the Purchase Order or these Standard Conditions of
Purchase will be void without the other party's prior written consent, which
will not be unreasonably withheld.
VALIDITY. If any provision of the Purchase Order or these Standard Conditions of
Purchase is found invalid, the remaining portion will be effective.
GOVERNING LAW. The Purchase Order and these Standard Conditions of Purchase are
to be interpreted in accordance with, and its administration and performance
governed by, the laws of the Republic of Italy without reference to its
principles of conflicts of law.
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Exhibit C
Product Pricing
Base Unit US $ [**]
UPL handpiece US $ [**]
The price for each Product is set forth below. Such price does not include the
taxes and other amounts specified in the form of Purchase Order. The price may
be adjusted from time to time by El En as set forth in Section 4.3 of this
Agreement.
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