**Exhibit 10.1**

 

**NOTE: CONFIDENTIAL TREATMENT HAS BEEN OBTAINED OR REQUESTED AS TO CERTAINPORTIONS OF THIS DOCUMENT.  WHENEVERCONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH OMISSIONS ARE DENOTED BY ANASTERISK), SUCH CONFIDENTIAL INFORMATION HAS BEEN SUBMITTED SEPARATELY TO THESECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIALTREATMENT.**

 

1/28/05

 

 

DISTRIBUTOR AGREEMENT

 

DANISH DERMATOLOGIC DEVELOPMENT

 

Territory: USA

 

----

 

 

TABLE OF CONTENTS

 
| *SECTION I:*   |                                                 |
|----------------|------------------------------------------------------|
|           | APPOINTMENT, TERRITORY, TERM AND SCOPE               |   |
|           |                                                 |   |
|           | A.                                                   | Appointment of Distributor |   |
|           | B.                                                   | Territory |   |
|           | C.                                                   | Term and Scope |   |
|           | D.                                                   | Previous Agreements |   |
|           |                                                 |   |   |
| *SECTION II:*  |                                                 |
|           | DISTRIBUTOR RESPONSIBILITIES                         |   |
|           |                                                 |   |
| *SECTION III:* |                                                 |
|           | PRINCIPAL’S RESPONSIBILITY                      |   |
|           |                                                 |   |
| *SECTION IV:*  |                                                 |
|           | TERMS AND CONDITIONS OF SALE AND PRODUCT  WARRANTIES |   |
|           |                                                 |   |
| *SECTION V:*   |                                                 |
|           | PRODUCT, PRICES AND PAYMENTS                         |   |
|           |                                                 |   |
| *SECTION VI:*  |                                                 |
|           | GENERAL CONDITIONS AND DISTRIBUTION                  |   |
|           |                                                 |   |
|           | A.                                                   | Principal Trade Names and Trademarks |   |
|           | B.                                                   | Product Changes |   |
|           | C.                                                   | Private Information |   |
|           | D.                                                   | Export Controls |   |
|           | E.                                                   | Relationship of Parties and Controlling  Laws |   |
|           | F.                                                   | Limitation of Liability |   |
|           | G.                                                   | Termination |   |
|           | H.                                                   | Renewal |   |
|           | I.                                                   | Failure to Enforce |   |
|           | J.                                                   | Notices |   |
|           | K.                                                   | Execution and Modification |   |

 

2

----

 

INTERNATIONAL DISTRIBUTOR AGREEMENT

FOR PRODUCTS OF DDD

 

SECTION I

APPOINTMENT, TERRITORY, TERM AND SCOPE

 

A.            Appointment of Distributor

 

DDD, Danish Dermatologic Development A/S, acorporation organized and existing under the laws of Denmark (hereinaftercalled “Principal”), having a principal place of business at Agern Alle 11,DK-2970 Hoersholm, Denmark, hereby appoints Candela Corporation, having itsprincipal office and place of business and situated at 530 Boston Post Road,Wayland, MA 01778-1886, USA , (hereinafter called the “Distributor”) anauthorized exclusive Distributor for the Principal’s Products (hereinaftercalled the “Products”) described in Appendix A. All other products of Principalnot described in Appendix A are not a part of this Agreement and may bedistributed by Principal in Territory by whatever means or manner Principal, inits sole discretion, considers in its best interest.

 

B.            Territory

 

The geographical area (hereinafter called the“Territory”) in which the Distributor is authorized to resell on an exclusivebasis is the USA.

 

C.            Term and Scope

 

This Agreement is effective from 28 January2005 to 31 January 2008, unless sooner terminated as hereafter provided. ThisAgreement consists of this document and attached Appendices and constitutes theagreement in its entirety.

 

D.            Previous Agreements

 

This agreement replaces all previousagreements and contracts between Distributor and Principal regarding the abovementioned Territory.

 

3

----

 

SECTION II

DISTRIBUTOR RESPONSIBILITIES

 

The Distributor hereby agrees to:

 

1.                                       Use commercially reasonable efforts to promote and sell Principal’sProducts (“Products”) in the Territory and to achieve the sales goal mutuallyagreed to in Appendix D.

 

2.                                       Not manufacture nor deal in any IPL products in the territory whichPrincipal may reasonably consider to be competitive with the Products duringthe term of this Agreement.

 

3.                                       Establish an organizational structure and method of operation whichPrincipal will accept as being adequate for the maintenance and furtherexpansion of its market position.

 

4.                                       Establish or sub-contract a service organization adequate andcompetent to furnish technical advice, service and service contracts

 

5.                                       Principal will place a consignment stock of spare parts atDistributor and the Distributor FSE’s trunk stock to adequately serviceProducts.  Parts used for repair ofout-of-warranty products will be invoiced by Principal. Distributor will shipback all defective in-warranty parts to Principal unless otherwise agreed on acase by case basis. Principal agrees to waive the requirement for returns forre-curring problems on non-refurb warranty parts. Distributor may return toPrincipal parts that have been purchased and replaced out of warranty.Distributor may purchase such repaired parts at reduced prices. Appendix F tothis agreement lists the critical parts to be returned to Prinicipal forrepair. The timing and minimum quantities of these parts that must be returnedmust be agreed to minimize shipping costs.

 

6.                                       Exhibit at and provide personnel for trade shows in the Territorythat relate to the Products. Trade shows exclusive to Territory are Distributorresponsibility.

 

7.                                       Use commercially reasonable efforts to:

 

a.                                       Maintain and repair, at competitive service rates charged to endusers, Products in the Territory (whether or not sold by Distributor), asrequested by such end users, and

 

b.                                      Generally provide adequate customer service to keep users ofProducts in the Territory satisfied.

 

8.                                       At Principal’s request, provide Principal a complete list of IPLproducts distributed by Distributor.

 

9.                                       Notify Principal promptly, if unable to perform maintenance orrepair service on any of Principal’s Products in the Territory.  Principal shall have have the right to carryout service if prior agreement is reached with Distributor and documented in

 

4

----

 

writing.**  **The services must be completedwhile in the company of Distributor’s service rep.

 

10.                                 Advise Principal of the end user on each order placed.

 

11.                                 Submit names of competitors’ customers as discovered.

 

12.                                 Maintain adequate technical level of personnel by attending, at Distributor’scost, product training sessions conducted by Principal. Minimum technicalpersonnel requirements are specified in Appendix C. Distributor shall completeand return to Principal every 90 days, a system generated summary installationreport from the Candela ISR system that lists every new system installed byDistributor.

 

13.                                 Distributor will submit to Principal changes in original advertisingand promotional material for review by Principal. Principal will furnish theoperators manual in English language.

 

14.                                 Distributor will not, without the prior written consent ofPrincipal, appoint a sub-distributor or service contractor.

 

15.                                 The Distributor shall not seek customers for the Products, norestablish any branch or maintain any distribution depot in relation to theProducts, outside the Territory. Furthermore, the Distributor is not allowed tooffer, sell or install products outside the Territory.

 

16.                                 Distributor will, at Principal ́s request, provide sales forecasts.(See Appendix D.)

 

5

----

 

SECTION III

PRINCIPAL’S RESPONSIBILITY

 

The Principal hereby agrees to:

 

1.                                       Use reasonable efforts to furnish to Distributor, on terms to beagreed upon by both parties, sales promotion materials such as catalogs,specification sheets, suggested price lists and demonstration software whichshall be used by Distributor only for purposes of this Agreement. All suchmaterials shall remain Principal’s property, unless otherwise agreed.

 

2.                                       Provide replacement spare parts for Principal’s Products at nocharge to Distributor in connection with any repair or maintenance serviceperformed by Distributor during the manufacturer’s warranty period.

 

3.                                       Not appoint any other Distributor in the Territory.

 

4.                                       For twelve (12) months from its date of installation byDistributor,  Principal warrants eachrespective product and all other parts (for example service spare parts)delivered by Principal to be free from defects. The installation date of record will be the quarterly ISR report fromthe distributor to the Principal.

 

During the warranty period specified above,in-warranty defective product(s) listed in Appendix F will be returned toPrincipal ́s facility with transportation charges paid by Distributor. Itemsunder warranty will be repaired or replaced at no cost to Distributor.Transportation charges for repaired or replacement items that are returned toDistributor will be paid by Principal.

 

6

----

 

SECTION IV

TERMS AND CONDITIONS OF SALE AND PRODUCTWARRANTIES

 

A.                                   All orders placed by Distributor hereunder shall be in writing, andshall be subject to approval and acceptance in writing by Principal within 24hours of receipt.

 

B.                                     All sales by Principal to Distributor hereunder shall be subject tothe provisions of this Agreement and to the provisions of the applicable “ProductWarranties” attached (Appendix E) hereto and made a part hereof, and anysubsequent modification of said Product Warranties provided, however, that suchmodifications shall not be inconsistent with the other provisions of thisAgreement, and shall be effective only upon thirty (30) days’ notice toDistributor; and any provisions of any purchase order placed by the Distributorwhich is inconsistent hereafter shall be null and void unless accepted by thePrincipal in writing.

 

C.            Deliveryterms from Principal to Distributor are Ex Works (FOB Plant).

 

7

----

 

SECTION V

PRODUCT, PRICES AND PAYMENTS

 

A.                                   Except as otherwise agreed to by the parties in writing, the priceto Distributor for all Principal’s Products, spare parts and installationequipment sold by Principal to Distributor hereunder shall be as described inAppendices A and B attached hereto and made part hereof. Principal shallprovide Distributor six (6) months advance notice of any change in list pricesand shall honor old prices for orders already placed up to sixty (60) days fromsuch notice.

 

For any Products, spare parts or installationequipment ordered by Distributor, Distributor shall make payment to Principalin EURO by means of wire transfer 68 days from the invoice date.

 

8

----

 

SECTION VI

GENERAL CONDITIONS AND DISTRIBUTION

 

A.            PrincipalTrade Names and Trademarks

 

The Distributor acknowledges that the wordsEllipse and  DDD are the dominantfeatures of the trade names of the Principal and that the marks Ellipse and DDD(“the Trademarks”) are the Principal trademarks for the Products manufacturedand/or sold by the Principal. The Distributor acknowledges that the Trademarksare owned exclusively by Principal. Distributor agrees that it will not, in anymanner, use the word DDD, or any imitation or variant thereof, as a part of theDistributor’s trade name, company or firm name, nor will it grant such use toany subsidiary or affiliate or to dealers, if any, appointed by theDistributor. The Distributor shall use the Trademarks on or in relation to theProducts, but shall ensure that each reference to, and use of any of, theTrademarks by it is in the manner from time to time approved in writing by thePrincipal and, where required by the Principal, is accompanied by anacknowledgement in a form approved by the Principal that the Trademarks aretrademarks of the Principal.

 

The Distributor shall not:

 

1.                                       Alter, remove, tamper with or obscure any trademarks, numbers, orany other means of identification used on or in relation to the Products.

 

2.                                       Use any of the Trademarks in any way which might prejudice theirdistinctiveness or validity or the goodwill of the Principal in them.

 

3.                                       Use any trademark other than the Trademarks in relation to theProducts or spare parts for the products without obtaining the Principal’sprior written consent, or

 

4.                                       Use any marks in the Territory which so resemble any of theTrademarks as to be likely to cause confusion in the marketplace.

 

5.                                       Market the Ellipse systems under any other Principal name thanDanish Dermatologic Development A/S (DDD).

 

Except for the right to use the Trademarksexpressly granted under this clause, the Distributor acknowledges that it shallnot acquire any rights in respect to the Trademarks and that all and any rightsand goodwill which accrue in the Territory arising out of the use of theTrademarks shall vest in the Principal.

 

The Distributor shall, at the request of thePrincipal:

 

1.                                       Execute such registered user agreements or licenses in respect ofthe use of the Trademark in the Territory as the Principal may reasonablyrequire.

 

2.                                      At principal’s expense, take such steps as the Principal mayreasonably require to assist in maintaining the validity and enforceability ofthe Trademarks in the territory. The Distributor shall promptly and fullynotify the Principal of any actual

 

9

----

 

infringement in the Territory or anyintellectual property of the Principal which comes to the Distributor’s notice,and of any claim by any third party that the sale of Products in the Territorymay infringe the rights of any other person; and the Distributor shall, at therequest and expense of the Principal, do all such things as may be reasonablyrequired to assist the Principal in taking or resisting any proceedings inrelation to such an infringement or claim.

 

B.            Product Changes

 

The Principal reserves the right from time totime in its absolute discretion, without thereby incurring any liability to theDistributor with respect to any purchase order theretofore transmitted orplaced by the Distributor or otherwise, to discontinue or to limit itsproduction of any Product(s) of model(s) thereof, to terminate or to limitdeliveries of any such Product(s) or model(s), the production of which is sodiscontinued or limited, to alter the design or construction of any suchProduct(s) or model(s).

 

C.            Private Information

 

The Distributor shall keep confidential,during the term of this Agreement and for three years thereafter, all tradesecrets and proprietary, and confidential information pertaining to Product(s)furnished to it by the Principal and shall return all copies of all documentscontaining this information to the Principal on expiration or termination ofthis Agreement. The provisions of this clause shall not apply to anyinformation which was or becomes known to the public or which is contained inany printed publications made available to customers.

 

D.            Export Controls

 

The Principal’s obligation hereunder shall beat all times subject to the export administration and control laws andregulations of the Danish Government, and any amendment thereof. TheDistributor agrees that, with respect to the resale or any other disposition ofproducts and any printed commercial and technical data and information suppliedby the Principal, the Distributor shall, where necessary, comply fully with theexport administration and control laws and regulations of Denmark, and anyamendments of such laws and regulations, to the extent those laws andregulations apply in and/or are not in conflict with the laws and regulationsof the Territory.

 

E.             RegulatoryCompliance and Approvals

 

The parties hereto agree that it will be theresponsibility of the Principal to obtain and maintain required FDA clearances.It is the responsibility of the Distributor to obtain  other local regulatory approvals and requiredregistrations with respect to the sale of Products in Territory. Distributorwill be responsible for filling out and sending standard forms needed for CEcompliance to Principal. Principal agrees to provide such information andassistance as is reasonable and necessary, including forms to be used forreporting.

 

Principal sells the Products to Distributorunder the assumption that Distributor adheres to relevant legislation,  rules and regulations for the sale and useof  the Products in the Territory.

 

10

----

 

Distributor agrees to defend and holdPrincipal harmless from and against any and all claims, liabilities, penalties,damages, demands and expenses which may arise because the Products have beensold to and used by persons who may not use the Products, according to relevantlegislation, rules and regulations in the Territory.

 

F.             Relationshipof Parties and Controlling Laws

 

1.                                       This Agreement is non-assignable. The Distributor is an independentcontractor to the Principal. It is understood that the Distributor and/or itsagents, subsidiaries, affiliates and employees are in no way the legalrepresentative, agent or employees of the Principal for any purposes whatsoeverand the Distributor shall not hold them out as such, and they shall have noright or authority to assume or create, in writing, or otherwise, anyobligation of any kind, expressed or implied, in the name of or on behalf ofthe Principal. The Principal reserves the right to determine in its solediscretion the acceptability of any order or contract provision proposed by theDistributor.

 

2.                                       Any dispute arising out of or in connection with this contract,including any question regarding its existence, validity, or termination, shallbe referred to and finally resolved by arbitration under the Rules of theLondon Court of International Arbitration, which Rules are deemed to beincorporated by reference into this clause. The tribunal shall consist of threearbitrators. The place of arbitration shall be London, England. The language ofthe arbitration shall be the English language. The result of the arbitrationand the award shall be final and binding on all parties and each agrees not toseek judicial review or bring suit except for the purpose of enforcement of thearbitration award. The prevailing party in any arbitration proceeding broughtby one party against the other shall be entitled, in addition to any otherrights and remedies it may have, to reimbursement for its expenses, includingarbitration fees and reasonable attorney’s fees.

 

Principal stipulates and represents that, toits knowledge and information, this Agreement is in compliance with all lawsand regulations of Denmark.  Distributorstipulates and represents that, to its knowledge and information, thisAgreement is in compliance with all laws and regulations of the USA. In theevent any clause or any part of any clause contained in this Agreement shall bedetermined to be invalid or unenforceable, but which clause or part of the clausewould be valid if it were modified in some way, the parties shall agree to suchreasonable modification as may be necessary to make it valid and effective.

 

The governing law of this contract shall bethe substantive law (both statutory law and common law, but without regard toprinciples of conflicts of law) of the United Kingdom.

 

G.            Limitationof Liability & Product Liability

 

In no event shall the Principal be liable toDistributor for consequential or special damages, and the Principal’s liabilityto Distributor on any claim, whether in contract tort (including negligence andstrict liability) or otherwise (including indirect or incidental), for any lossor damage arising out of, connected with, or resulting from this Agreement,

 

11

----

 

shall in no case exceed the price allocableto the Product(s), or parts thereof, to which the claim relates.

 

The limitationof liability described above does not apply if a product liabilityclaim for damages is lodged by a third party against one of the parties of thisAgreement.

 

If such a claim isinstituted by a third party, the parties of this Agreement shall in good faith:

 

•        investigate or research the causes of the accidents,occurrences, injuries or losses affecting any person or property as a result ofthe manner in which the Products are designed, manufactured, treated,fabricated, constructed, packaged, delivered, sold or used, and use its besteffort to correct or eliminate such causes within a reasonable period;

 

•            provide the accusedparty reasonable assistance which is necessary for the accused party’s defenseto such claim, suit or action in relation to the Products sold by Principal toDistributor.

 

•            discuss and agree onthe continuation or discontinuation of the sales and marketing of the Productin the Territory.

 

If one of the partiesincurs liability towards any third party for damages, to body or property, theliability between Principal and Distributor shall be settled by arbitration inaccordance with Section VI, Article F of the Distribution Agreement.

 

Subject to the articlesand limitations set out in this section G, the Principal shall be liable forsuch product liability to the extent that it is proven that the loss, death orinjury is caused by failure or negligence committed by the Principal.

 

The Principal will not be responsible forindemnifying the Distributor to the extent that product liability arises out offailure or negligence committed by the Distributor.

 

The Distributor will not be responsible forindemnifying the Principal to the extent that product liability arises out offailure or negligence committed by the Prinicpal.

 

The parties shall obtain and maintain, attheir own expense, product liability insurance to cover any and all losses,damages, liabilities, penalties, claims, demands, suits or actions, and relatedcosts and expenses of any kind for injury to body or property, suffered by anyperson or entity, arising out of the Products.

 

Principal cannot takeany responsibility for the safe and efficient function of the product(s) if theservice of the products have been performed by use of spare parts orrefurbishments not provided by Principal – or if the service has been performedby personnel who has not been trained by Principal.

 

12

----

 

H.            Patent Infringement Claims

 

*

 

To the best knowledgeof the Parties, none of the intellectual property rights related to theproducts infringe any third party rights. However neither of the Parties make any warranty or representation tothat effect.

 

Should a patentinfringement claim be lodged against one or both of the Parties to thisAgreement, the Parties agree to:

 

•        Immediately inform theother Party of such claim

•        In good faith discuss continuingor stopping marketing and sales of the Product in the Territory

•        In good faith discussobtaining a patent license agreement for the Product in the Territory

*•**       *Principal will pay thelegal costs of such possible litigation and consequently Principal has thefinal say with respect to the response to such possible patent infringement claims.

 

*

 

As it relates topatent infringements claims, it is agreed that neither party will indemnify theother.

 

I.              Termination

 

1.                                       After the initial 36 months of this Agreement, either party shallhave the right to terminate the Agreement for any reason by giving six monthswritten notice.

 

2.                                       Either party shall have the right to terminate this Agreementimmediately in the event that the other fails to cure a material breach of anyof the terms or conditions of this Agreement to the satisfaction of the firstparty within 30 days after service of written notice regarding remedy of thatbreach.

 

3.                                       Either party shall have the right to terminate this Agreementimmediately, at any time, by notice to the other, in the event of insolvency orbankruptcy or the like of the other party, without the need to resort to formallegal proceedings.

 

4.                                       Either party shall have the right to terminate upon 90 days’ advancewritten notice if there occurs a material change in legal or beneficialownership, control or management of the other party, including acquisition ormerger by the other party. For purposes of this Agreement, a change in majorityshare ownership or control shall be deemed material.

Principal shall also have the option toterminate the Agreement with ninety (90) days’ advance written notice toDistributor if a third party obtains control of more than 50% of the shares ofPrincipal.

 

5.                                       Failure of the Distributor to meet mutually agreed upon sales goalsshall provide Principal with the option to terminate the Agreement with ninety(90) days’ notice. Sales goals for this Agreement are described in Appendix D,attached hereto and

 

13

----

 

made part hereof, and shall be established onan annual basis thereafter upon renewal, if any, of this Agreement.

 

6.                                       Upon Termination of this Agreement for any cause:

 

a.                                       Distributor shall immediately cease to use Principal’s name and logoor the trade names in connection with its business;

 

b.                                      Distributor shall not be entitled to any separation compensation.

 

7.                                       Termination of this Agreement shall not relieve Distributor from anyobligations to pay sums due Principal and vice versa.

 

8.                                       Distributor agrees that it shall not be entitled to any payments fordevelopment of clientele distribution/service network, loss of anticipatedprofit nor any associated business costs.

 

9.                                       Upon termination by either party, all sales and service records andliterature, customer lists, and unpaid demonstration equipment and, at the solediscretion of Principal, Products which have not been paid for in full, shallbe turned over to the Principal free of charge. Principal will designatedisposition of its property and assume responsibility for transportationcharges.

 

10.                                 Upon termination by either party, Principal is obliged to repurchasefrom Distributor Products owned by Distributor and used by Distributor fordemonstration purposes. The repurchase price is as follows: less than 6 monthsold: 100% of purchase price; 6-12 months: 75%; 12-18 months: 50%; 18-24 months:25%; more than 24 months: Free of charge.

 

11.                                In the event Distributor is unable to perform service to thesatisfaction of     customers as reportedto Principal, Principal reserves the right to cancel service responsibility ofthis Agreement. Such cancellation would result in change in distribution netprices to reflect distribution responsibilities limited to sales andapplication support.

 

12.                                Upon termination of this Agreement, by either party, Distributor andPrincipal agrees to find solutions, acceptable to the customers, for continuedservice and maintenance of the products sold and installed by Distributor inthe Territory. Principal is committed to take over the service and maintenanceresponsibility in the Territory. Distributor is committed to provide Principalwith complete service records, including list of customers, no later than oneweek after termination.

 

13.                                Conditions beyond control of parties. Neither party to the Agreementshall be held liable for failure to comply with any of the terms of thisAgreement when such failure has been caused solely by fire, labor dispute,strike, war, insurrection, government restrictions, force majeure, or act ofGod beyond the control and without fault on the part of the party involved,provided such party uses due diligence to remedy such default.

 

14

----

 

J.             Renewal

 

Prior to ninety (90) days from expiration ofthe Agreement, a renewal of this Agreement shall be negotiated, includingdefining mutually acceptable sales goals for the new period of the Agreement.

 

K.            Failure to Enforce

 

The failure of either party to enforce at anytime, or for any period of time, the provisions hereof in accordance with itsterms shall not be construed to be a waiver of such provision or of the rightsof such party thereafter to enforce each and every such provision.

 

L.             Notices

 

Except as provided in Paragraph G of thisSection VI, notices between parties shall be in the English language and shallbe deemed to be validly given if transmitted by telegraph, telex, facsimile,electronic mail or in writing to the other party at the address indicated inSection I of this Agreement and after confirmation of the receipt thereof bythe other party. Notwithstanding the foregoing, confirmation is not a necessaryrequirement for the validity of notice, if such notice or other communicationwere sent by registered mail. Either party may change its address by givingnotice thereof to the other party. Nothing in this paragraph shall be deemed tomodify in any way the notice requirements set forth in Paragraph G of thisSection VI.

 

M.           Execution and Modification

 

This Agreement contains the entire and onlyAgreement between the parties respecting sale to and the purchase, distributionand servicing by the Distributor of any product(s), and any representations,terms or conditions relating thereto or in connection therewith notincorporated herein shall not be binding upon either party.

 

 
| Danish Dermatologic Development A/S |                                            | Candela Corporation, Inc. |
|-------------------------------------|-------------------------------------------------|---------------------------|
|                                |                                            |                      |
| By:                                 |                                            |                      |   | By: |   |   |
|                                | (Authorized Signature)                          |                      |   | (Authorized Signature) |   |
|                                |                                            |                      |
| Title:                              | Sales Director                                  |                      |   | Title: | President & CEO |   |
|                                |                                            |                      |
| Printed Name:                       |  Gunnar Hallsson                           |                      |   | Printed Name: | Gerard Puorro |   |
| Date:                               |      January 28,  2005 |                      |   | Date: |      January 28,  2005 |   |
|                                     |                                                 |                           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

15

----

 

Appendices to this Agreement:

 

A: Description of Products and TransferPrices to Distributor

B: Accessories, Service Spare Parts andRefurbishment

C: Minimum Technical Personnel Requirements

D: Sales Goals Mutually Agreed

E: Product Warranties

F: Spare Parts 

 

16

----

 

**Appendix A: Description ofProducts and Transfer price to Distributor:**

 

## *****

 
| **Qty** | ** ** | **Description** | ** ** | **EURO** | ** ** |
|---------|------------|-----------------|------------|----------|------------|
| *       |       | *               |       | *        |       |
| *       |       | *               |       | *        |       |
| *       |       | *               |       | *        |       |
| *       |       | *               |       | *        |       |

 

The transfer price, * Euro, is based on aUSD/Euro exchange rate of 1,3. As long as the exchange rate remains in the 1,2– 1,4 range the transfer price remains unchanged. If the exchange rate movesoutside the above band, the following transfer price adjustment, based on 50/50“pain/gain share”, will apply (also beyond the lower and upper limit examplesgiven in the table below):

 
| **Rate**  | ** ** | **TP €** | ** ** | **TP US $equiv.** | ** ** |
|-----------|------------|---------------|------------|-------------------|------------|
| 1,00-1,04 |       |          | *          |              | *          |   |
| 1,05-1,09 |       |          | *          |              | *          |   |
| 1,10-1,14 |       |          | *          |              | *          |   |
| 1,15-1,19 |       |          | *          |              | *          |   |
| 1,20      |       |          | *          |              | *          |   |
| 1,25      |       |          | *          |              | *          |   |
| 1,30      |       |          | *          |              | *          |   |
| 1,35      |       |          | *          |              | *          |   |
| 1,40      |       |          | *          |              | *          |   |
| 1,41-1,45 |       |          | *          |              | *          |   |
| 1,46-1,50 |       |          | *          |              | *          |   |
| 1,51-1,55 |       |          | *          |              | *          |   |
| 1,56-1,60 |       |          | *          |              | *          |   |

 

All systems will be invoiced @ * Euro. At theend of each calendar quarter the average USD/Euro exchange rate for the quarteris calculated based on http://www.x-rates.com. If the average rate was outsidethe 1,20-1,40 band the appropriate adjustment is applied to all system invoicesfor the quarter. Principal issues a credit note to Distributor if the rate was1,41 or more. If the rate was 1,19 or less Principal invoices Distributor forthe difference.

 

**Options to ***

 
| **Qty** | ** ** | **Description** | ** ** | **EURO** | ** ** |
|---------|------------|-----------------|------------|----------|------------|
| *       |       | *               |       | *        |       |
| *       |       | *               |       | *        |       |

 

17

----

 

**Appendix B: Accessories, ServiceSpare Parts and Refurbishment.**

 

The warranty for the system is only valid ifspare parts, accessories and consumables used are original parts andconsumables delivered from DDD.

 

Prices of Accessories, Consumables and SpareParts are according to current pricelist.

 

**Refurbishment of applicators:**

 

The Applicator is not covered by a warranty. The light source and filterin the applicator are consumables that wear down during use (depending on thesettings) and have a limited lifetime. Therefore the applicator needs to berefurbished. Refurbishments are charged as follows:

 

*

 

When an applicator is returned forrefurbishment, it must be accompanied by a written order stating the applicatorserial number. A floppy disc containing the number of shots released by theapplicator must be enclosed with the order. If the diskette is not enclosed,the refurbishment will be charged at EURO * transfer price.

 

The Parties agree that refurbishments will beperformed by Distributor soonest possible. Principal will supply, at cost plusa * handling fee, all tools and instruments required for performing saidrefurbishments. Distributor will send technical personnel for training atPrincipal’s facilities.

 

Distributor will purchase allconsumables/parts needed for the refurbishments from Principal as per Principal’sdistributor price list.

 

18

----

 

**Appendix C: Minimum TechnicalPersonnel Requirements.**

 

Distributor must have technical personnelemployed - alternatively have external engineers contractually engaged - toperform systems installation, post installation training, software upgrades andfield service on the products.

 

Systems installation, post installationtraining, software upgrades and field service on the products can only beperformed by Technical Personal trained by DDD or duly authorized trainers fromCandela’s Tech Support group.

 

The number of technically skilled personsavailable must at all times be sufficient to respond to customer requests forsupport and / or service as well as any problem affecting safety of use nolater than 24 hours after a customer call. In case of injuries and / oroperational problems affecting safety, which have caused or could have causedinjury, Distributor must notify DDD within 24 hours. The reporting must beaccording to the PMS and Vigilance requirements specified in the CouncilDirective 93/42/EEC of 14 June 1993 concerning medical devices. For this reportingthe distributor must use the DDD Customer Complaint Report and the DDD InitialIncident Report procedures. DDD will train Distributor and provide theseprocedures during service training sessions. Distributor must be able to offerservice contracts to the customers.

 

The technical personnel must attend servicetraining sessions scheduled by Principal - typically once per year or dulyauthorized trainers from Candela’s Tech Support group.   In addition Distributor can requestunscheduled training sessions for personnel at Principal ́s site which will becarried out at Principal ́s sole discretion. Travel costs are borne byDistributor while accommodation and meal costs are borne by Principal.

 

The Distributor Technical Personnel will needthe following basic skills / education:

 

•             Thorough understanding of analog and digital electronic hardware.

•             Software expertise - at minimum on PC software “super user” level.

•             Ability to understand, read and communicate in English language.

•             Based on the above basic skills and after having participated inservice training classes the technical personnel must be capable of identifyingand correcting system failures on a module level.

 

Neither sales staff nor technical staffs fromthe Distributor are allowed to take responsibility for patient treatments andno modifications to the product hardware or software must be made withoutwritten consent from Principal.

 

19

----

 

**Appendix D: Sales Goals mutuallyagreed to.**

 

*

 

**Appendix E: Product Warranties**

 

For twelve (12) months from its date ofinstallation by Distributor, Principal warrants each respective product and allother parts (for example service spare parts) delivered by Principal to be freefrom defects in manufacture, performance, material and workmanship.

 

The warranty is only valid if the productshave been transported, installed, handled, operated, maintained and servicedaccording to the instructions and the operators and service manuals provided byPrincipal.

 

The twelve months warranty does not coverwear of the Applicators. The light source and the filters in the Applicatorsare consumables which are known to have a limited lifetime which depends onenergy levels and pulse times selected for the individual treatment options.

 

The warranties described above are only validif spare parts and consumables which may have been used before the end of thewarranty period are original parts and consumables delivered from Principal.

 

Distributor will provide quarterly summary installationreport with serial number and installation date.

 

Terms and conditions for credit relating torepair products under this warranty is given in Section II, 5 of thisagreement.

 

**Appendix F: Spare Parts**

 

(to be specified).

 

20

----