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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 Via Baldanzese 17,
50041 Calenzano,
Firenze, Italy (hereafter referred to as "El En"), and Cynosure,
Inc., a
Delaware corporation whose address is 10 Elizabeth Drive,
Chelmsford, MA 01824
(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.
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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
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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 expens
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