<PAGE>

                                                                    CONFIDENTIAL
                                                                       TREATMENT
                                                                         REQUEST

                                                                    Exhibit 10.1


                        EXCLUSIVE DISTRIBUTION AGREEMENT


Agreement made by CANDELA CORPORATION, a Delaware corporation with its principal
place of business at 530 Boston Post Road, Wayland, Massachusetts 01778
(hereinafter referred to as the "Candela") and Physicians Sales and Service,
with a principal place of business at 4345 Southpoint Boulevard, Jacksonville,
FL 32216, (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

<PAGE>


                                       -2-

         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.

<PAGE>

                                      -3-

         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.

<PAGE>


                                       -4-

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.

<PAGE>

                                      -5-

         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

<PAGE>


                                       -6-

         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.


<PAGE>

                                      -9-

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.

<PAGE>

                                      -9-


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:
   ----------------------------          ---------------------------------------
                                           Gerard E. Puorro
                                           President and Chief Executive Officer

DATE:                                 DATE:
     --------------------------            -------------------------------------


WITNESS:                              PSS
      -------------------------           --------------------------------------

<PAGE>

                                      -9-


BY:                                   BY:
   ----------------------------          ---------------------------------------
                                           Douglas J. Harper
                                           Senior Vice President

DATE:                                 DATE:
     --------------------------           -------------------------------------


<PAGE>



                                LIST OF EXHIBITS


                                  A - Products

                                  B - Territory

                     C - Customer Complaint Handling Policy

                                 D - No Exhibit

                                 E - Price List


<PAGE>



                                   "EXHIBIT A"


                                    PRODUCTS


                                   ScleroPlus
                             Dynamic Cooling Device
                                   GentleLase
                                  DCD Canisters



<PAGE>


                                   "EXHIBIT B"


                                    TERRITORY



                 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.



<PAGE>


                                   "EXHIBIT C"


                       Customer Complaint Handling Policy

                                   (Attached)



<PAGE>


                                   "EXHIBIT D"


                            INTENTIONALLY LEFT BLANK





<PAGE>



                                   "EXHIBIT E"


                                   PRICE LIST


The annual transfer price from Candela to PSS (US Dollars) will be as follows:

<TABLE>
<CAPTION>
PRODUCT              US LIST PRICE           UNITS        1-50                 51-100                101+
<S>                  <C>                    <C>           <C>                  <C>                   <C>   
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]*
</TABLE>

[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.