EXHIBIT 10.7


 










[ * ] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 


SUPPLY
AGREEMENT


 


THIS MASTER SUPPLY AGREEMENT is made effective as of December 31, 2003 (“Effective Date”) between IPG Photonics Corporation, a
Delaware corporation having offices at 50 Old Webster Road, Oxford,
Massachusetts, 01540 USA (“Supplier”) and
Reliant Technologies, Inc., a Delaware corporation having offices at 260
Sheridan Avenue, 3rd Floor, Palo Alto, California 94306 USA (“Customer”).


 


WHEREAS Supplier is a manufacturer and supplier of fiber lasers and Customer is
a developer and manufacturer of medical laser systems; and


 


WHEREAS Customer desires to order, purchase and take delivery of fiber lasers
from Supplier and Supplier desires to sell and deliver to Customer pulsed fiber
lasers.


 


ACCORDINGLY, Supplier and Customer agree as follows:


 


1.0          INTERPRETATION


 


1.1          Definitions.
In this Agreement, the below terms shall have
the following respective meanings:


 


(a)           “Delivery Date” means the delivery date, as
determined in accordance with this Agreement, for the Product to arrive at
Customer’s delivery location set forth the applicable Purchase Order (as later
defined).


 


(b)           “Dermatological Procedures” means
dermatological procedures requiring the photocoagulation or phototreatment of
soft tissue, [ * ].


 


(c)           “Effective Date” shall have the meaning set
forth in Exhibit A.


 


(d)           “Initial Term” shall have the meaning set
forth in Section 2.0.


 


(e)           “Products” shall mean any fiber lasers and
related accessories and optional equipment as set forth and described in
Exhibit A, as may be amended from time to time by the agreement of Supplier and
Customer, in writing.


 


(f)            “Purchase Order” means a purchase order
issued to Supplier by Customer, in written or electronic form, for the purchase
of Products pursuant to this Agreement, which states among other things the Product,
agreed upon unit price, unit quantities per Product, extended warranty,
requested delivery dates and Customer delivery location.


 


(g)           “Rolling Forecast” means a [ * ] written forecast of Customer’s anticipated
requirements for each Product.


 


(h)           “Specifications” means the specifications
for the Products described in Exhibit A, as may be amended from time to time [ * ].


 





















 


(i)            “Taxes” means any and all taxes and other
charges (exclusive of taxes on the net income of Supplier), howsoever
designated, levied or based on this Agreement or the Products delivered
hereunder, including without limitation all federal (Canadian or U.S.),
provincial, state and local sales, use and excise taxes, customs and duties,
licenses, fees, tariffs and other similar expenses, whether now or subsequently
in effect.


 


(j)            “Term” means the Initial Term.


 


1.2          Headings.
The division a this Agreement into Sections,
Subsections and Exhibits and the insertion of headings are for ease of
reference only and shall not affect its construction or interpretation.


 


2.0          TERM


 


This
Agreement shall commence as of the Effective Date and shall, unless otherwise
terminated in accordance with the terms and conditions of this Agreement,
remain in full force and effect for a period ending on December 31, 2004 (the “Initial Term”).


 


3.0          PURCHASES


 


3.1          Firm Order. During the Term, the Supplier shall sell and the Customer shall
purchase quantities of the Products that the Customer orders from time to time
under Section 4.0 hereof. Supplier grants the right to Customer to incorporate
the Products into Customer’s systems and to market, distribute, sell and lease
(directly or through Customer’s agents and distributors) such Customer systems
to its direct and indirect customers. This Agreement constitutes [ * ] purchase obligation of Customer for the Products in
the amounts and at the delivery times as set forth on Exhibit B attached hereto
[ * ] (the “Firm Order Amount”).


 


3.2          Forecasts.
During the [ * ]
during the Term, Customer shall provide Supplier a Rolling Forecast. A Rolling
Forecast is an estimate of projected Product requirements based on the
information then available to Customer. The Rolling Forecast shall not affect
Customer’s obligation to purchase the Firm Order Amount at the delivery dates
as set forth on Exhibit B.


 


4.0          PRODUCTS AND PURCHASE ORDERS


 


4.1          Products.
The parties shall seek to complete and
update, in writing, Exhibit A from time to time in respect of each Product,
for, without limitation, changes in the products, specifications, lead-time and
pricing. All modifications of Exhibit A (including the addition of new product)
shall be signed and dated by both parties and shall expressly refer to this
Section 4.1.


 


4.2          Issuance. Customer shall from time to time issue
Purchase Orders to Supplier in accordance with this Agreement. The Purchase
Order for the Firm Order Amount is set forth on Exhibit B.


 


4.3          Acceptance
Date.


 


4.3.1        Supplier
hereby accepts the Purchase Order for the Firm Order Amount set forth on
Exhibit B.


 


4.3.2        For
orders other than the Firm Order Amount, as soon as reasonably possible (and in
no event later than [ * ])
immediately following the receipt of each Purchase Order, Supplier shall accept
any Purchase Order having delivery dates consistent with the applicable
lead-time for such Product as set forth in Exhibit A or, in the case of Exhibit
A not being complete, as from time to 


 










[ * ] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 





















 


time provided by Supplier to Customer (collectively,
“Lead-Time”) and the delivery
dates set forth in such Purchase Order acceptance shall be deemed the Delivery
Dates for such Products.


 


4.4          Delivery
Date.


 


4.4.1        The
Delivery Dates for the Firm Order Amount are set forth on Exhibit B.


 


4.4.2        For
orders other than the Firm Order Amount, [ * ] but
subject to Sections 4.4.2.1 and 4.4.2.2 below, Supplier shall accept such Purchase
Order and use commercially reasonable efforts to provide delivery dates for
Products ordered thereunder:


 


4.4.2.1     Supplier
shall be required to supply the quantity specified in a Purchase Order if the
quantity shall be not greater than the Upside Maximum set forth on Exhibit A [ * ].


 


4.4.2.2     For
all orders in excess of the Upside Maximum set forth on Exhibit A, Supplier
shall not be required to supply a quantity specified in a Purchase Order if
such Purchase Order requests a delivery of a quantity [ * ]
of the amounts for Products in the most recent Rolling Forecast delivered in
the prior month. To the extent that Supplier does not provide delivery dates
for orders [ * ], Supplier shall use
commercially reasonable efforts to provide Customer with delivery dates for
such excess Product as soon thereafter as reasonably possible. In each case,
the delivery dates provided by Supplier shall be deemed the Delivery Dates for
such Products, unless Customer rejects same by written notice thereof on or
before [ * ] following Supplier’s provision of
such Delivery Dates, in which case the parties shall acting reasonably and in
good faith promptly negotiate mutually acceptable Delivery Dates. Thereafter,
and to the extent that Supplier and Customer do not agree upon mutually
acceptable Delivery Dates, either party may, by providing written notice to the
other party, forthwith terminate the applicable Purchase Order with respect to
Product for which there is no Delivery Date.


 


4.5          Changes. Except as otherwise provided for in this
Agreement, Customer shall not cancel or terminate [ * ]
a Purchase Order, or applicable Delivery Dates thereunder, in whole or in part,
without the prior written consent of Supplier.


 


4.6          Cancellation
and Cancellation Costs.


 


4.6.1        Customer
may not cancel any one or more Purchase Orders until [ * ].


 


4.6.2        Except
as otherwise provided in Section 4.6.1 above:


 


4.6.2.1     Customer
may cancel a Purchase Order, in whole or part and without cost or penalty, by
providing notice to Supplier prior to the applicable Delivery Date. [ * ].


 


4.6.2.2     In
the event that Customer provides Supplier with a notice of cancellation more
than [ * ] prior to the applicable Delivery
Date, Customer shall pay or reimburse Supplier for the reasonable costs
incurred by Supplier relating to such canceled Product at the time of
cancellation, including without limitation with respect to work in process and
raw materials, to the extent that Supplier cannot (using reasonable efforts)
mitigate such costs within [ * ] of such
cancellation.


 


4.6.2.3     This
shall be Supplier’s sole and exclusive remedy and Customer’s sole and exclusive
liability/obligation to Supplier for any cancellation under this Section 4.6.2 by


 










[ * ] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 





















 


Customer.


 


4.7          Rescheduling.


 


4.7.1        [ * ]


 


4.7.2        Except
as otherwise provided in Section 4.7,1 above, Customer may reschedule the
Delivery Dates, at no cost or penalty [ * ], up to a
maximum of [ * ], provided that Customer
provides Supplier with at [ * ] notice in
advance of a Delivery Date for a Product.


 


5.0          PRICES
FOR PRODUCTS


 


5.1          Prices for Products. Customer shall pay the applicable price for
each Product as set forth in U.S. dollars in Exhibit A (or if not set forth in
Exhibit A, as otherwise agreed in writing by the parties) and as may be amended
from time to time by Supplier and Customer in accordance with this Agreement.
All prices are [ * ], exclusive of Taxes,
transportation, insurance and brokerage fees.


 


5.2          Taxes. Customer shall pay all Taxes and shall
promptly reimburse Supplier for any Taxes that Supplier pays directly to any
taxing authority. Supplier’s invoices to Customer are payable in full without
deduction for any Taxes, including without limitation withholding taxes.


 


5.3          Invoicing And Payment. Supplier may issue an invoice as soon as
the time of Product shipment from Supplier’s relevant facility, and Customer
shall pay such invoice within thirty (30) calendar days thereof. If at any time
Customer is delinquent in the payment of any invoice or is otherwise in breach
of this Agreement, Supplier may[ * ]. All payments
not received when due shall be subject to an additional interest charge of [ * ], or such lower interest rate as may be otherwise
permitted at law, of the unpaid amount until the date of payment, without
prejudice to any other rights, remedies or recourses which Supplier may have
under this Agreement, at law or in equity. The right of Supplier to any payment
provided for under this Agreement shall not be subject to any abatement,
reduction, set off, defense, counterclaim or recoupment of any amount due or
alleged to be due by reason of any past, present or future claims of Customer.


 


6.0          QUALITY,
INSPECTION AND WARRANTY 


 


Supplier shall maintain an
objective quality program for all Products supplied pursuant to this Agreement.
Customer shall have the right to inspect, at a mutually agreed time, at
Supplier’s plant and nonproprietary testing areas for the Products during the
Term, provided that such inspection is reasonable and directly relevant to this
Agreement, including without limitation to ensure Supplier’s compliance with
the specified and applicable quality requirements. Supplier shall provide
access for Customer to Supplier’s facilities and services [ * ].


 


7.0          PRODUCT DELIVERY


 


7.1          Delivery
Date. Except as provided for in this Agreement, in
Schedule B or otherwise mutually agreed upon by the parties, in writing,
Supplier shall use commercially reasonable efforts to ship Products on the
applicable Delivery Date.


 


7.2          Delay
in Shipment Supplier shall use
commercially reasonable efforts to notify Customer in a timely manner of any
delay in Delivery Dates, stating the reasons for the delay. Supplier shall use
commercially reasonable efforts to minimize delays in Delivery Dates and, upon
occurrence of any such delay, shall use commercially reasonable efforts to
remedy same in a timely manner.


 










[ * ] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 





















 


7.3          Shipping.
All shipments are [ * ].
Supplier may ship partial orders provided Supplier notifies Customer prior to
shipment. Customer shall specify the carrier or means of transportation or
routing on the Purchase Order. In the event that Customer fails to specify
shipping instructions on the Purchase Order, Supplier shall select the best
available carrier on a commercially reasonable basis.


 


7.4          Packaging.
Supplier shall package all Product in
accordance with Supplier’s then current packaging practices and suitable for
shipment under normal circumstances without damage.


 


7.5          Title.
Title to Product shall pass to Customer upon
Supplier’s tender of the relevant Product to the shipping carrier at Supplier’s
facility. Customer hereby grants to, and Supplier reserves, a purchase money
security interest in each Product purchased hereunder, and in any proceeds
thereof, for the amount of the purchase price of such Product. Such security
interest shall automatically be released upon full payment for the Products in
question.


 


8.0          WARRANTIES


 


8.1          Product Warranty. Notwithstanding any provision to the
contrary other than Sections 9.2 and 9.3, Supplier’s sole and exclusive
obligation to the Customer for any Product made by Supplier and sold hereunder is to repair returned Product
or provide a replacement Product [ * ] for any
Product which has been returned to Supplier under the RMA procedure set forth
in Section 8.2 and which is defective in workmanship, material or not in
compliance with the applicable Specifications and has in fact failed under
normal use on or before the expiration of the warranty period set forth on
Exhibit A. All Product, which are identified as experimental Products,
prototypes or Products used in field trials, are not warranted and are provided
to Customer on an “as is” basis. Only parts purchased from third parties at the
express direction of Customer carry only the original manufacturer’s warranty
to the extent applicable to Customer otherwise, all parts shall have the same
warranty at the Product. Supplier shall only accept for repair, replacement or
credit under warranty Products made by third parties, if expressly authorized
to do so by the relevant third party. Any Product repaired or replaced under
warranty is only warranted for the period of time remaining in the original
warranty for the Product. The warranty excludes and does not cover [ * ] Products and parts thereof which have been tampered
with, opened, disassembled, or modified by persons other than IPG personnel or
damage arising from misuse or neglect, damage from accident, use in
applications which exceeds the specifications or ratings, use outside of
environmental specifications for the Product, use with buyer software or
interfacing, improper installation, site preparation or maintenance, or use
other than in accordance with the information and precautions contained in the
operating manual. Any driver software provided by or through Supplier is
provided “as is” with no warranties whatsoever, whether express or implied. IPG
does not warrant that the functions contained in the software will meet the
user’s requirements or that the operation of the equipment or driver software
will be uninterrupted or error free. Customer must claim under the warranty in
writing not later than [ * ] after the
claimed defect is discovered. The Customer must make all claims under this
warranty and no claim shall be accepted from any third party.


 


8.2          Return Material
Authorization. Except
as otherwise provided in this Agreement, Supplier’s then current RMA procedure
shall apply to Supplier’s repair or replacement of both in-warranty and out-of-warranty
Products. Supplier shall only accept returns of Product for which an approved
RMA number has been issued by Supplier and which are accompanied by an itemized
statement of defects. Such Products shall be returned prepaid and insured to
Supplier at the address stipulated by Supplier. All Products which have been
returned to Supplier with an RMA number, but to which the warranty in Section
8.1 does not apply, shall be subject to Supplier’s standard examination charge
in effect at the time, which shall be invoiced by Supplier and paid by Customer
in accordance with this Agreement. All Products returned to Supplier without an
RMA number or which are not accompanied by an itemized statement of defects,
may be returned to Customer, at Customer’s expense, and Supplier shall have no 


 










[ * ] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 





















 


obligation
to evaluate such Products.


 


8.3          DISCLAIMER OF
WARRANTIES. SUBJECT
TO SECTIONS 9.2 AND 9.3, THE WARRANTY SET FORTH IN SECTION 8.1 AND THE
OBLIGATIONS AND LIABILITIES OF SUPPLIER
THEREUNDER ARE ACCEPTED BY CUSTOMER TO BE EXCLUSIVE AND IN LIEU OF, AND
CUSTOMER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER REMEDIES, WARRANTIES,
GUARANTEES, OBLIGATIONS, REPRESENTATIONS OR LIABILITIES, EXPRESS OR IMPLIED, OF
SUPPLIER WITH RESPECT TO EACH PRODUCT OR PART THEREOF, PRODUCT DOCUMENTATION OR
SERVICE DELIVERED OR PROVIDED UNDER THIS AGREEMENT, WHETHER ARISING IN FACT, IN
LAW, IN CONTRACT (INCLUDING FUNDAMENTAL BREACH), IN TORT (INCLUDING
NEGLIGENCE), OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY,
CONDITION OR REPRESENTATION (A) OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, SATISFACTORY QUALITY, OR ARISING FROM COURSE OF PERFORMANCE, DEALING,
USAGE OR TRADE PRACTICE; (B) THAT THE PRODUCTS BE FREE FROM INFRINGEMENT OF
RIGHTS OF THIRD PARTIES; OR (C) THAT THE OPERATION OF ANY SOFTWARE DELIVERED HEREUNDER WILL BE
UNINTERRUPTED OR ERROR FREE. THIS SECTION AND THE LIMITATIONS SET FORTH HEREIN,
SHALL APPLY IRRESPECTIVE OF THE NATURE OF THE CAUSE OF ACTION, DEMAND OR CLAIM,
INCLUDING BUT NOT LIMITED TO, BREACH OF CONTRACT, NEGLIGENCE, TORT OR ANY OTHER
LEGAL THEORY, AND SHALL SURVIVE A FUNDAMENTAL BREACH OR BREACHES AND/OR FAILURE
OF THE ESSENTIAL PURPOSE OF THE AGREEMENT OR OF ANY REMEDY CONTAINED HEREIN.


 


8.4          LIMITATION OF LIABILITY.
EXCEPT
FOR DAMAGES OR LIABILITY ARISING FROM A BREACH OF SECTION 13.6 (CONFIDENTIAL
INFORMATION), SUPPLIER SHALL NOT BE LIABLE TO CUSTOMER, OR ANY THIRD PARTY, FOR
ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, EXEMPLARY OR INDIRECT COSTS OR DAMAGES,
INCLUDING WITHOUT LIMITATION, LITIGATION COSTS, INSTALLATION AND REMOVAL COSTS,
LOSS OF DATA, PRODUCTION, SAVINGS OR PROFIT OR ANY OTHER COMMERCIAL OR ECONOMIC
LOSS OF ANY KIND (INCLUDING WITHOUT LIMITATION BUSINESS INTERRUPTION OR LOSS OF
BUSINESS) ARISING FROM ANY CAUSE WHATSOEVER, REGARDLESS OF THE FORM OF ACTION,
INCLUDING WITHOUT LIMITATION IN CONTRACT (INCLUDING FUNDAMENTAL BREACH), TORT
(INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE, EVEN IF ADVISED OF THE
POSSIBILITY OF SUCH COSTS OR DAMAGES OR SAME WERE REASONABLY FORESEEABLE OR
EVEN IF SUCH COSTS OR DAMAGES ARE ALLEGED TO ARISE FROM NEGLIGENT ACTS,
OMISSIONS, OR CONDUCT OF SUPPLIER OR ITS DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, REPRESENTATIVES OR SUBCONTRACTORS. EXCEPT FOR DAMAGES FROM A BREACH OF
SECTION 13.6 (CONFIDENTIAL INFORMATION), IN NO EVENT SHALL SUPPLIER’S TOTAL
CUMULATIVE LIABILITY (WHICH FOR GREATER CERTAINTY IS NOT ON A PER INCIDENT
BASIS) TO CUSTOMER IN CONTRACT (INCLUDING FUNDAMENTAL BREACH), TORT (INCLUDING
NEGLIGENCE) OR OTHERWISE EXCEED THE AMOUNT PAID BY SELLER
FOR PRODUCTS FROM WHICH SUCH LIABILITY AROSE DURING THE [ * ]
IMMEDIATELY PRECEDING THE DATE OF THE MOST RECENT CLAIM. FOR THE PURPOSES OF THIS SECTION,
CUSTOMER INCLUDES CUSTOMER’S DIRECTORS, OFFICERS, EMPLOYEEES, AGENTS,
REPRESENTATIVES AND SUBCONTRACTORS. THIS SECTION AND THE LIMITATIONS SET FORTH
HEREIN, SHALL APPLY IRRESPECTIVE OF THE NATURE OF THE CAUSE OF ACTION, DEMAND
OR CLAIM, INCLUDING BUT NOT LIMITED TO, BREACH OF CONTRACT, NEGLIGENCE, TORT OR
ANY OTHER LEGAL THEORY, AND SHALL SURVIVE A FUNDAMENTAL BREACH OR BREACHES
AND/OR FAILURE OF THE ESSENTIAL PURPOSE OF THE AGREEMENT OR OF ANY REMEDY
CONTAINED HEREIN.


 


9.0          INTELLECTUAL
PROPERTY AND INDEMNITIES


 










[ * ] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 





















 


9.1          Intellectual Property
Rights. Unless otherwise provided for in this
Agreement, nothing in this Agreement shall be construed as a sale, transfer or
assignment of the respective intellectual property rights of the parties
hereto, including without limitation any patent, copyright, trade secrets,
trademarks or trade names, of Supplier or Customer whatsoever, including
without limitation with respect to the Products, Specifications, the Customer’s
system or related information and documentation. All right, title and interest
in and to any inventions, discoveries, improvements, methods, ideas, computer
and other apparatus programs and related documentation, other works of
authorship fixed in any tangible medium of expression, mask works, or other
forms of intellectual property, whether or not subject to statutory protection,
which are made, created, developed, written, conceived or first reduced to
practice by Supplier solely, jointly or on its behalf, in the course of,
arising out of, or as a result of work performed hereunder, and any related tooling, set-up, fitting-up and
preparation, shall belong to and be the sole and exclusive property of
Supplier. Customer retains all right, title and interest in and to art
inventions, discoveries, improvements, methods, ideas, computer and other
apparatus programs and related documentation, other works of authorship fixed
in any tangible medium of expression, mask works, or other forms of
intellectual property, whether or not subject to statutory protection, which
are made, created, developed, written, conceived or first reduced to practice
by Customer solely, jointly or on its behalf, in the course of, arising out of,
or as a result of work relating to Customer’s system (excluding the Product),
and any related tooling, set-up, fitting-up and preparation (excluding the
Product). Customer shall retain all proprietary marks, legends and patent and
copyright notices that appear on the Products, parts and documentation
delivered to Customer by Supplier. Customer shall not modify, disassemble or reverse
engineer the Products, parts or any component thereof.


 


9.2          Intellectual
Property Indemnity. Supplier agrees to
defend or settle, at its sole option, and shall reimburse Customer for all
costs and damages assessed by final judgment against Customer, and any
reasonable expenses (including legal expenses), incurred at the written request
of Supplier directly resulting from any third party claim alleging that any
Products or the use, operation, sale or offer for sale thereof, infringe upon,
misappropriate or violate any third party’s intellectual property rights
(including without limitation patents or copyrights) in the United States.
Customer shall have no authority to settle any claim on behalf of Supplier.
Customer agrees to defend or settle, at its sole option, and shall reimburse
Supplier for all costs and damages assessed by final judgment against Supplier,
and any reasonable expenses (including legal expenses), incurred at the written
request of Customer directly resulting from any third party claim alleging that
the use, operation, sale or offer for sale thereof, infringe upon,
misappropriate or violate any third party’s intellectual property rights
(including without limitation patents or copyrights) in member countries of the
EU and the United States, provided any such infringement, misappropriation or
violation does not exist in the Supplier’s Product but for the combination with
parts, equipment, software or devices added to the Product not supplied by
Supplier.


 


In the event of such a claim of infringement of
third party, Supplier shall have the right to discontinue further deliveries of
the Product and shall use commercially reasonable efforts, at its expense, to:
(a) obtain necessary rights required to permit the sale or use of the Products by
Customer and its customers; or (b) modify or replace such Products to make them
non-infringing (and extend this indemnity thereto), provided that any such
replacement or modified Products comply with the applicable Specifications. In
the event Supplier is unable to achieve either of the options set forth above
within a reasonable period of time or, in the reasonable opinion of Supplier,
Supplier is unlikely to achieve such options within a reasonable period of
time, Supplier shall have the right to immediately terminate Supplier’s
obligations to Customer under this Agreement with respect to the particular
Product and promptly refund to Customer the invoiced purchase price.


 


9.3          Indemnification Procedures. Supplier’s
obligations specified in this Section shall be conditional on and subject to
Customer notifying Supplier promptly in writing of the claim and giving
Supplier full authority, information and assistance for the defense and
settlement thereof. Supplier shall have no 


 










[ * ] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 





















 


liability for,
and Customer shall indemnify Supplier against, any claim based upon: (a) the
combination, operation, or use of any Product supplied hereunder with
equipment, devices, or software not supplied by Supplier; (b) alteration or
modification of any Product supplied hereunder; or (c) Supplier’s compliance
with Customer’s designs, specifications or instructions [ * ].
Notwithstanding any other provisions hereof, Supplier shall not be liable for
any claim based on Customer’s use of the Products as shipped after Supplier has
informed Customer of modifications or changes in the Products required to avoid
such claims and offered to implement those modifications or changes, if such
claim would have been avoided by implementation of Supplier’s suggestions.


 


10.0        PRODUCT
CHANGES AND DISCONTINUATION


 


10.1        Customer Changes. In the event Customer desires an
engineering change for any of the Products, Customer may submit such proposed
engineering change to Supplier. Supplier and Customer acting reasonably and in
good faith shall negotiate whether such change shall be made and if so, shall
work with each other on the implementation of such change. Customer
acknowledges that such changes may result in additional non-recurring
engineering charges for Customer and may alter the price of the Products, in
which case, this Agreement shall be amended, in writing, to reflect same.


 


10.2        Supplier Permitted
Changes. Supplier
may at any time make any changes, improvements, additions or enhancements to
the Products that do not materially affect the form, fit or function of a
Product (“Permitted Change”) [ * ].
Permitted changes shall be made at no additional charge to Customer.


 


10.3        Supplier Material
Changes. In  the event that Supplier at any time makes
any changes, improvements, additions or enhancements to the Products that
materially affect the form, fit or function of a Product (“Material
Change”),  Supplier
shall provide [ * ] prior written notice to
Customer of such Material Change, outlining the nature of the Material Change
and any applicable non-recurring costs or impact on Delivery Dates or Product
pricing. Customer shall approve or reject a Material Change within [ * ] from receipt of Supplier’s notice, failing which the
Material Change shall be deemed accepted by Customer. In the event of
acceptance of any such Material Change, this Agreement shall be amended, in
writing, to reflect any applicable non-recurring engineering costs or impact on
Delivery Dates or Product pricing.


 


10.4        Rejection of Material
Changes. In
the event Customer rejects any Material Change, Supplier shall continue to
supply unchanged Product in accordance with Section 10.7, in which case the
date of Customer’s rejection of such Material Change shall be deemed the date
on which (i) a Supplier notice of discontinuation for the relevant Product shall
be deemed to be provided to Customer and (ii) the Discontinuance Period shall
be deemed to commence.


 


10.5        Required Changes. Notwithstanding any other term or
condition in this Section 10.0, in the event that any changes, improvements,
additions or enhancements of a Product, including Material Changes, are
required by any law or governmental regulation or requirement or interpretation
thereof by any governmental agency having jurisdiction or is required, in the
discretion of Supplier acting reasonably and in good faith, to address Product
legal compliance, safety, liability or performance (“Required Change”),  Supplier shall provide [ * ] prior written notice (or such shorter period of notice
as may be reasonable in the circumstances) to Customer of such Required Change,
outlining the nature of the Required Change and any applicable non-recurring
costs or impact on Delivery Dates or Product pricing. Customer shall approve or
reject a Required Change within [ * ] from
receipt of Supplier’s notice, failing which the Required Change shall be deemed
accepted by Customer. In the event of acceptance of any such Required Change,
this Agreement shall be amended, in writing, to reflect any applicable
non-recurring engineering costs or impact on Delivery Dates or Product pricing.
In no event 


 










[ * ] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 





















 


shall
Supplier be required to manufacture, supply or sell a Product to which a
Required Change is applicable.


 


10.6        Rejection of Required
Changes.
In the event Customer rejects any Required Change referred to in Section 10.5,
this Agreement shall be terminated with respect to the applicable Product and
amended, in writing, to delete such Product from Exhibit A. Thereafter,
Supplier shall have no further obligation to supply or sell such Product to Customer and Customer
shall have no further obligation to take delivery of or purchase such Product.


 


10.7        Product Discontinuation. In the event Supplier intends to
discontinue the manufacture and sale of any Product, Supplier shall give [ * ] prior written notice to Customer. At any time during
such [ * ] (the “Discontinuance Period”), Customer may place a last time
Purchase Order for Product, provided the requested delivery dates are in
compliance with the applicable Product Lead-Time and the last requested
delivery date for such Product is not more than [ * ]
after the end of such Discontinuance Period.


 


11.0        TERMINATION


 


11.1        Rights of Termination. Upon the occurrence of any of the following
events, a party may forthwith terminate this Agreement:


 


(a)                                                                                  the other party materially breaches or
defaults any of its material obligations, duties or responsibilities hereunder
(including, in the case of Customer, a failure to pay any amount owing when
due), which breach or default has not been remedied within thirty (30) calendar
days (or fifteen (15) calendar days, in the case of Customer’s failure to pay)
after written notice is given by the party not in default, specifying the
breach or default; or


 


(b)                                                                                 the other party makes an assignment for the
benefit of creditors or admits in writing its inability to pay its debts or the
other party has reasonable evidence that it generally does not pay its debts as
they become due; or


 


(c)                                                                                  a receiver or trustee is appointed for the
other party or for substantially all of such party’s assets; or


 


(d)                                                                                 proceedings or action under any law relating
to bankruptcy, insolvency or the reorganization or relief of debtors are
instituted by or against the other party.


 


11.2        Termination Costs. In the event of termination of this
Agreement by Supplier pursuant to Section 11.1, [ * ].
Notwithstanding any other term or condition of this Agreement, the foregoing
amounts shall be due and payable by Customer immediately upon receipt of the
applicable Supplier invoice. In the event of termination of this Agreement by
Customer pursuant to Section 11.1, Supplier’s liability to Customer shall not,
in any case, exceed [ * ] of the
Purchase Price for the number of units of Product subject to accepted orders
which have not been shipped to Customer (notwithstanding anything to the
contrary in Section 8.4 hereof).


 


12.0        DELAYS IN
PERFORMANCE 


 


12.1        Excusable Delay. In the event of a delay on the part of
Supplier in the performance of any of its obligations or responsibilities under
the terms and conditions of this Agreement due directly or indirectly to
unforeseen circumstances or a cause which is beyond the reasonable control or
without the fault or negligence of Supplier (an “Excusable Delay”), Supplier
shall not be liable for, nor be deemed to be in 


 










[ * ] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 





















 


default
under or breach of this Agreement on account of such delay and the time fixed
or required for the performance of any such obligation or responsibility shall
be extended for a period equal to the period during which any such delay
persists. Excusable Delay shall be deemed to include, without limitation,
delays occasioned by the following causes:


 


(a)                                  force majeure or acts of God;


(b)                                 war, warlike operations, act of the enemy,
armed aggression, civil commotion, insurrection, riot, embargo or national
threat levels affecting international cargo shipments;


(c)                                  fire, explosion, earthquake, lightning,
flood, draught, windstorm or other action of the elements or other catastrophic
or serious accidents;


(d)                                 epidemic or quarantine restrictions;


(e)                                  any legislation, act, order, directive or
regulation of any governmental or other duly constituted authority;


(f)                                    strikes, lock-out, walk-out, and/or other
labor troubles causing cessation, slow-down or interruption of work;


(g)                                 a Required Change; or


(h)                                 any default in or breach of this Agreement by
Customer or any delay of Customer in the performance of its obligations or
responsibilities under the terms and conditions of this Agreement.


 


12.2        Indefinite Delay and
Termination. If
Customer reasonably concludes, based on its reasonable appraisal of the facts
and normal scheduling procedures, that due to an Excusable Delay delivery of
any Product will be delayed for more than [ * ] after the
applicable Delivery Date or any revised date agreed to by the parties, in
writing, then Customer may then terminate this Agreement, in writing, including
any Purchase Orders, with respect to the affected Product by giving written
notice to Supplier.


 


If, due
to an Excusable Delay, delivery of any Product is delayed for more than [ * ] after the applicable Delivery Date, Customer may
terminate this Agreement, including any Purchase Orders, with respect to the
affected Product by giving written notice to Supplier within [ * ] after the expiration of such [ * ]
period If, due to an Excusable Delay, delivery of any Product is delayed for
more than [ * ] after the applicable Delivery
Date, Supplier may terminate this Agreement, including any Purchase Orders,
with respect to the affected Product by giving written notice to Customer
within [ * ] after the expiration of such [ * ] period.


 


13.0        GENERAL


 


13.1        Export Restrictions. Customer shall not transmit, export or
re-export, directly or indirectly, separately or as part of any system, the
Products or any technical data (including processes and services) received from
Supplier, without first obtaining any license required by the applicable
government, including without limitation, the United States Government and/or
any other applicable competent authority. Customer also certifies that none of
the products or technical data supplied by Supplier under this Agreement shall
be sold or otherwise transferred to, or made available for use by or for, any
entity that is engaged in the design, development, production or use of
nuclear, biological or chemical weapons or missile technology.
Customer shall indemnify and hold Supplier harmless for any violation or alleged
violation by Customer of the foregoing.


 


13.2        Compliance. Customer acknowledges that the Product is a
Class IV laser system and the light emitted from the Product is invisible and
harmful to the human eye. Proper laser safety eyewear must be worn. The Product
is specifically designed to be an OEM laser device for incorporation into
equipment produced by Customer. As such, the Product does not meet the full
requirements for a stand-alone laser 


 










[ * ] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 





















 


system as defined in 21 CFR
1040.10 under the Radiation Control for Health and Safety Act of 1968. Customer
acknowledges and agrees that Supplier does not comply with the regulations
applicable to medical devices, including but not limited to current Good
Manufacturing Practices. Customer agrees to meet all of the applicable
regulatory requirements for the full laser system and laser products it
manufactures. Customer shall indemnify and hold Supplier harmless for any
violation or alleged violation by Customer of the applicable regulations.
Customer shall not remove required warning and other Product labels put on by
Supplier.


 


13.3        Notices. Any notice, demand or other communication
required or permitted to be given pursuant to this Agreement by either party
shall be in writing and shall be either:


 


(a)                                  Personally delivered to the other party; or


 


(b)                                 Sent by prepaid
overnight courier; or


 


(c)                                  Sent by facsimile transmission or similar
method of recorded communication, charges prepaid, confirmed by prepaid
overnight courier.


 


Any notice, demand or
other communication given in accordance with subparagraphs (a), (b) and (c)
above shall be delivered or sent to the intended recipient at its address
below:


 


If to IPG
Photonics Corporation:


	
  To:

  	
  Bill Shiner

  
	
   

  	
  IPG Photonics Corporation

  	
   

  
	
   

  	
  50 Old Webster Road

  	
   

  
	
   

  	
  Oxford, MA 01540

  	
   

  
	
   

  	
  Fax: 508-373-1103

  	
   

  
	
   

  	
   

  	
   

  
	
  If to Customer:

  	
   

  	
   

  
	
  To:

  	
  Len De Benedictis

  
	
   

  	
  Reliant Technologies, Inc.

  
	
   

  	
  260 Sheridan Avenue, 3rd Floor

  
	
   

  	
  Palo Alto, CA 94306 USA

  
	
   

  	
  Fax: 650-473-0357

  



 


Any party may from time to
time change its address by written notice to the other party given in
accordance with the provisions hereof. Any notice, demand or other
communication delivered in accordance with paragraph (a) or (b) above shall be
deemed to have been received on the day of its delivery and if sent in
accordance with paragraph (c) above, it shall be deemed to have been received
on the first business day following the date of its transmission by facsimile
or similar method of recorded communication (confirmation copy by registered or
certified mail).


 


13.4        Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard
to the provisions thereof relating to conflicts of laws or without regard to
the United Nations Convention on Contracts for the International Sale of Goods.
Supplier and Customer hereby irrevocably and unconditionally submit to the
courts of the State of New  York
and all courts competent to hear appeal therefrom.


 


13.5        Severability. If any term or provision of this
Agreement is found by a court of competent jurisdiction to be invalid, illegal
or otherwise unenforceable, the same shall not affect the other terms or
provisions hereof or the whole of this Agreement, but such term or provision
shall be deemed modified to


 










[ * ] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 





















 


the
extent necessary in the court’s opinion to render such term or provision
enforceable, and the rights and obligations of the parties shall be construed
and enforced accordingly, preserving to the fullest permissible extent the
intent and agreements of the parties herein set forth.


 


13.6        Confidential
Information. The
terms and provisions of the Confidentiality and Non-Disclosure Agreement,
between Customer and Supplier, dated September 4, 2003 (the “NDA”) are incorporated herein by reference. The parties
hereby agree that the terms and conditions of the NDA continue to apply and
extend to all confidential information (as that term is defined in the NDA)
exchanged between the parties in connection with this Agreement. This Section,
and the terms and conditions of the NDA, shall survive the expiration or
earlier termination of this Agreement.


 


13.7        Independent Contractors.
The
relationship of the parties hereto is that of independent contractors. Under no
circumstances shall any employees of one party be deemed to be the employees of
the other for any purpose. Each party shall pay all wages, salaries, and other
amounts due its respective employees relative to this Agreement and shall be
responsible for all obligations respecting them relating to income tax
withholdings, unemployment insurance premiums, workers’ compensation, health
care and pension plan contributions and other similar responsibilities. Neither
party has the right nor authority to assume nor to create any obligation or
responsibility on behalf of the other party, except as may from time to time be
provided by written instrument signed by both parties. Nothing contained herein
shall be construed as creating an agency or joint venture, consortium or
partnership between the parties.


 


13.8        Survival. The parties agree that the respective
rights, obligations and duties under Section 1.0 (Interpretation), Section 5.1
and 5.2 (Prices for Products and Taxes), Section 6.0 (Invoicing and Payment),
Section 8.0 (Warranties), Section 9.0 (Intellectual Property and Indemnities),
Section 11.2 (Termination Costs), Sections 13.1 to 13.12 (General) and Exhibit
A and Exhibit B and any outstanding payment obligations of Customer, shall
survive expiration or earlier termination of this Agreement


 


13.9        Dispute Resolution. In the event of any dispute, claim,
question, or disagreement arising from or relating to this Agreement or the
breach thereof, the parties hereto shall use their best efforts to settle the
dispute, claim, question, or disagreement. To this effect, the parties shall
involve executives not involved with administration of this Agreement and
internal counsel and shall consult and negotiate with each other in good faith
and, recognizing their mutual interests, attempt to reach a just and equitable
solution satisfactory to both parties. If they do not reach such solution
within a period of [ * ] of
written notice referencing this paragraph, then, upon notice by either party to
the other, all disputes, claims, questions, or differences shall be submitted
to non-binding mediation under its administered by the American Arbitration
Association (“AAA”) under its
Commercial Mediation Rules before resorting to arbitration, litigation, or some
other dispute resolution procedure. The parties shall mediate the dispute
within a period of [ * ] of
selection of one impartial mediator selected in accordance with the applicable
AAA rules. If the parties are not able to resolve all disputes through
negotiation then mediation, all remaining controversies or claims arising out
of or relating to this Agreement, or the breach thereof, shall be settled by
arbitration administered by the AAA in accordance
with its Commercial Arbitration Rules, and judgment on the award rendered by
the arbitrator(s) may be entered in any court having jurisdiction thereof.
Three arbitrators shall be selected in accordance with the rules of the AAA,
and the location of the arbitration shall be New York, New York.


 


13.10      Assignment. This Agreement shall be binding on and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. Neither party may assign this Agreement or any of their
rights or obligations hereunder to a third party without the express prior
written consent of the other party, which consent shall not be unreasonably
withheld or delayed; provided that Supplier as the right to assign this
Agreement in whole or in part at any time and without the other party’s consent
to any corporate parent, or to any present or future affiliate or subsidiary of
Supplier, provided that the Supplier 


 










[ * ] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 





















 


shall
remain liable for full performance under this Agreement and the assignee
expressly agrees in writing with the Customer to perform the obligations of the
Supplier; and provided further that, without notice to or consent of Customer,
Supplier may at any time assign any payment to be made to Supplier hereunder.
Any purported assignment contrary to this agreement shall be null and void.


 


13.11      Entire Agreement. This Agreement and its Exhibits express
the entire understanding and agreement for both Supplier and Customer with
respect to the subject matter covered by this Agreement and supersedes any and
all previous agreements, except any existing non-disclosure agreement between
both parties, with reference to the subject matter contained in this Agreement.
All terms and conditions on any Purchase Orders and all provisions on Supplier’s
documents delivered in response to a Purchase Order shall be deemed deleted and
superceded by the terms and conditions of this Agreement, except for
information provided for administrative purposes only such as Purchase Order
number, Product identifier, quantity, pricing, shipping dates, shipping
instructions and delivery location.


 


13.12      Amendment and Waiver. No amendment or waiver of this Agreement
shall be binding unless executed in writing by both parties. No waiver of any
of the provisions of this Agreement shall, constitute a waiver of any other
provision (whether or not similar) nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided.


 


13.13      Counterparts. This Agreement may be executed in any
number of counterparts, including by facsimile, with the same effect as if
Supplier and Customer had each signed the same document. All counterparts shall
be construed together and shall constitute one and the same original Agreement.


 


13.14      Representations and
Warranties. Each of Supplier
and Customer hereby represents and warrants that the execution, delivery or
performance of this Agreement shall not violate or conflict with any other
agreement to which it is a party.


 


IN WITNESS
HEREOF, Supplier and
Customer have executed this Agreement in duplicate originals by their duly
authorized officials.


 


	
  IPG
  PHOTONICS CORPORATION

  	
   

  	
  RELIANT
  TECHNOLOGIES, INC.

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Denis
  Gapontsev

  	
   

  	
   

  	
  By: 

  	
  /s/ Len
  DeBenedictis

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:
  Denis Gapontsev

  	
   

  	
  Name: Len
  DeBenedictis

  
	
   

  	
   

  	
   

  
	
  Title:
  Vice President

  	
   

  	
  Title:
  President and CTO

  
	
   

  	
   

  	
   

  
	
  Date:
  December 31, 2003

  	
   

  	
  Date:
  December 31, 2003

  
							



 










[ * ] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 





















 


EXHIBIT A


 


PRODUCT
SCHEDULE


 


	
  1.  Product Name (Product Class)/Description

  	
   

  	
  [ * ]

  
	
   

  	
   

  	
   

  
	
  2.  Customer Part No.

  	
   

  	
  {Insert Customer Part No.}

  
	
   

  	
   

  	
   

  
	
  3.  Supplier Part No.

  	
   

  	
  [ * ]

  
	
   

  	
   

  	
   

  
	
  4.  Product Specification

  	
   

  	
  See attached specifications

  
	
   

  	
   

  	
   

  
	
  5.  Lead-Time

  	
   

  	
  [
  * ].

  
	
   

  	
   

  	
   

  
	
  6.  Unit Price ($U.S.)

  	
   

  	
  [ * ].

  

  [ * ].

  

  [ * ] warranty: [ * ].

  

  [ * ] Warranty:[ * ].

  
	
   

  	
   

  	
   

  
	
  7.  Unique Provisions

  	
   

  	
  Effective
  Date: The Effective date shall be the date on
  which Customer and Supplier shall have signed the Agreement [ * ].

  

  Upside Maximum: [ *
  ].

  

  Exclusivity: [ * ]  Supplier hereby grants to Customer
  manufacturing exclusivity for fiber lasers  [ * ]  solely for Dermatological Procedures in
  the United States for the Term; [ *
  ].

   

  If Customer shall default in such purchase and
  payment obligations set forth under on  [ *
  ] or [ * ], and
  such default continues for a period of  [ * ], the exclusivity obligations of Supplier shall forever terminate.

  

  Minimum Purchases. [
  * ].

  

  Extension of Term: [
  * ].

  

  Strategic Relationship. [ * ].

  



 


[ * ]


 










[ * ] = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.