<PAGE>

                                                                    CONFIDENTIAL
                                                                       TREATMENT
                                                                         REQUEST

                                                                    Exhibit 10.2

                           EXCLUSIVE LICENSE AGREEMENT




                                     BETWEEN




                   THE REGENTS OF THE UNIVERSITY OF CALIFORNIA




                                       AND




                            CANDELA LASER CORPORATION




                                       FOR




                    DYNAMIC SKIN COOLING METHOD AND APPARATUS




                             U.C. CASE NO. 93-364-1






<PAGE>


                                       -i-

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                          PAGE

ARTICLE NO.       TITLE

<S>                                                                                         <C>
RECITALS.....................................................................................1
   1. DEFINITIONS............................................................................3
   2. LIFE OF PARENT EXCLUSIVE GRANT.........................................................5
   3. LICENSE ISSUE FEE......................................................................7
   4. ROYALTIES..............................................................................8
   5. DUE DILIGENCE.........................................................................11
   6. PROGRESS AND ROYALTY REPORTS..........................................................12
   7. BOOKS AND RECORDS.....................................................................14
   8. LIFE OF THE AGREEMENT.................................................................14
   9. TERMINATION BY THE REGENTS............................................................15
   10. TERMINATION BY LICENSEE..............................................................16
   11. DISPOSITION OF PATENT PRODUCTS ON HAND UPON TERMINATION..............................16
   12. USE OF NAMES AND TRADEMARKS..........................................................16
   13. LIMITED WARRANTY.....................................................................17
   14. PATENT PROSECUTION AND MAINTENANCE...................................................18
   15. PATENT MARKING.......................................................................21
   16. PATENT INFRINGEMENT..................................................................21
   17. INDEMNIFICATION......................................................................23
   18. NOTICES..............................................................................25
   19. ASSIGNABILITY........................................................................25
   20. LATE PAYMENTS........................................................................26
   21. WAIVER...............................................................................26
   22. FAILURE TO PERFORM...................................................................26
   23. FOREIGN GOVERNMENT APPROVAL OR REGISTRATION..........................................26
   24. EXPORT CONTROL LAWS..................................................................27
   25. FORCE MAJEURE........................................................................27
   26. CONFIDENTIALITY......................................................................27
   27. MISCELLANEOUS........................................................................29
</TABLE>


<PAGE>

U.C. Case No. 93-364-1
Draft date: 08/22/94
Revised: 12/19/94


                           EXCLUSIVE LICENSE AGREEMENT
                                       for
                    DYNAMIC SKIN COOLING METHOD AND APPARATUS



         THIS LICENSE AGREEMENT (the Agreement) is effective this 19th day of
December, 1994, by and between The Regents of the University of California (The
Regents), a California corporation, having its statewide administrative offices
at 300 Lakeside Drive, 22nd Floor, Oakland, California 94612-3550 and Candela
Laser Corporation (Licensee), a Delaware corporation, having a principal place
of business at 530 Boston Post Road, Wayland, MA 01778-1886.

                                    RECITALS

         WHEREAS, certain Inventions, characterized as "Method and Apparatus for
the Dynamic Cooling of Biological Tissue Treated via Thermal Mediated Surgery"
(Invention), were made at the University of California, Irvine, by Drs. J.
Stuart Nelson, Thomas E. Milner, and Lars 0. Svaasand, and are claimed in
Regents' Patent Rights defined below;

         WHEREAS, Licensee entered into a Non-Disclosure Agreement, having U.C.
Agreement Control No. 94-20-0029 and effective January 10, 1994, that allowed
Licensee to evaluate its interest in taking a license to the Invention;

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -2-


         WHEREAS, Licensee entered into a [CONFIDENTIAL TREATMENT REQUESTED]*,
having U.C. Agreement Control No. 94-30-0201 and [CONFIDENTIAL TREATMENT
REQUESTED]*, that allowed Licensee to [CONFIDENTIAL TREATMENT REQUESTED]* with
The Regents for [CONFIDENTIAL TREATMENT REQUESTED]* to the Invention;

         WHEREAS, the Invention was made under funding provided in part by the
U.S. Department of Health and Human Services (DHHS);

         WHEREAS, under 35 USC ss.ss.200-212, The Regents may elect to retain
title to any Invention (including the Invention) made by it under U.S.
Government funding;

         WHEREAS, if The Regents elects to retain title to the Invention, then
the law requires that The Regents grant to the U.S. Government a
nontransferable, paid-up, nonexclusive, irrevocable license to use the Invention
by or on behalf of the U.S. Government throughout the world;

         WHEREAS, The Regents elected on August 24, 1994, to retain title to the
Invention and granted the required licenses to the U.S. Government;

         WHEREAS, both parties recognize that royalties due under this Agreement
will be paid on pending patent applications and issued patents;

         WHEREAS, Licensee requested certain rights from The Regents to
commercialize the Invention; and 

         WHEREAS, The Regents responded to the Licensee's requests by granting
the following rights to Licensee so that the products and other benefits derived
from the Invention can be enjoyed by the general public. The parties agree as
follows:

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -3-

         The Parties agree as follows:


                                 1. DEFINITIONS

         As used in this Agreement, the following terms shall have the meaning
set forth below:

         1.1 "Regents' Patent Rights" means all U.S. patents and patent
applications and foreign patents and patent applications assigned to The Regents
and requested under Paragraph 14.4 herein, including any reissues, extensions,
substitutions, continuations, divisions and continuations-in-part (only to the
extent, however, that claims in the continuations-in-part are entitled to the
priority filing date of the parent patent application) based on and including
any subject matter claimed in or covered by any of the following: U.S. Patent
Application Serial Number 08/222,976 entitled "Apparatus and Method for Dynamic
Cooling of Biological Tissues for Thermal Mediated Surgery"; filed April 5,
1994; and assigned to The Regents.

         1.2 "Patent Products" means any kit, composition of matter, material,
or product whose manufacture, use, or sale in a particular country would
infringe, but for the license granted to Licensee pursuant to this Agreement, an
unexpired claim of a patent or pending claim of a patent application under
Regents' Patent Rights in that country in which such patent has issued or
application is pending; any kit, composition of matter, material, or product to
be used in a manner requiring the performance of the Patent Method; or any it,
composition of matter, material, or product produced by the Patent Method. This
definition of Patent Products also includes a service either used by Licensee or
provided by Licensee to its customers when such service requires the practice of
the Patent Method.

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -4-


         1.3 "Field of Use" means use only in conjunction with a laser that
Licensee has the legal right to manufacture, sell, or upgrade for use in
dermatology and plastic surgery procedures which do not involve the shrinking or
removal of collagen and not in conjunction with any other type laser.

         1,4. "Patent Method" means any process or method the use or practice of
which would constitute in a particular country, but for the license granted to
Licensee pursuant to this Agreement, an infringement of an unexpired claim of a
patent or pending claim of a patent application within Regents' Patent Rights in
that country in which the Patent Method is used or practiced.

         1.5 "Net Sales" means the gross invoice prices from the sale of Patent
Products by Licensee, an Affiliate, or a Joint Venture to independent third
parties for cash or other forms of consideration in accordance with Generally
Acceptable Accounting Principles limited to the following deductions (if not
already deducted from the gross invoice price and at rates customary within the
industry): (i) allowances (actually paid and limited to rejections, returns, and
prompt payment and volume discounts granted to customers of Patent Products,
whether in cash or Patent Products in lieu of cash), (ii) freight, transport
packing, insurance charges associated with transportation, and (iii) taxes,
tariff, or import/export duties based on sales when included in gross sales, but
not value-added taxes or taxes assessed on income derived from such sales. Where
Licensee distributes Patent Products for end use to itself, an Affiliate, or a
Joint Venture, then such distribution shall be considered a sale at list price
normally charged to independent third parties, and The

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -5-


Regents shall be entitled to collect a royalty on such sale in accordance with
Article 4 (ROYALTIES).

         1.6 "Affiliate(s)" of Licensee means any entity which, directly or
indirectly, controls Licensee, is controlled by Licensee, or is under common
control with Licensee ("control" for these purposes being defined as the actual,
present capacity to elect a majority of the directors of such affiliate, or if
not, the capacity to elect the members that control fifty percent (50%) of the
outstanding stock or other voting rights entitled to elect directors) provided,
however, that in any country where the local law shall not permit foreign equity
participation of a majority, then an "Affiliate" shall include any company in
which Licensee shall own or control, directly or indirectly, the maximum
percentage of such outstanding stock or voting rights permitted by local law.
Each reference to Licensee herein shall be meant to include its Affiliates.

         1.7 "Joint Venture" means any separate entity established pursuant to
an agreement between a third party and Licensee to constitute a vehicle for a
joint venture, in which the separate entity manufactures, uses, purchases,
sells, or acquires Patent Products from Licensee. Each reference to Licensee
herein shall be meant to include its Joint Venture(s).

                        2. LIFE OF PARENT EXCLUSIVE GRANT

         2.1 Subject to the limitations set forth in this Agreement and subject
to the licenses granted to the U.S. Government as set forth in the Recitals
above, The Regents hereby grants to Licensee exclusive licenses under The
Regents' Patent Rights to make, 

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -6-


have made, use, and sell Patent Products and to practice the Patent Method in
the Field of Use.

         2.2 The licenses granted hereunder shall be subject to the overriding
obligations to the U.S. Government including those set forth in 35 U.S.C.
SS.SS.200-212 and applicable governmental implementing regulations.

         2.3 The licenses granted hereunder shall be limited to methods,
products, and services that are within the Field of Use. For other methods,
products, and services, Licensee has no license hereunder.

         2.4 The manufacture of Patent Products and the practice of the Patent
Method shall be subject to applicable government importation laws and
regulations of a particular country on Patent Products made outside said
particular country in which such Patent Products are used or sold.

         2.5      The Regents grants to Licensee no right to issue sublicenses.

         2.6 Because this Agreement grants the exclusive right to use or sell
the Patent Products in the United States, Licensee agrees that any Patent
Products embodying the Invention or produced through the use thereof will be
manufactured substantially in the United States.

         2.7 Nothing in this Agreement shall be deemed to limit The Regents'
right to publish any and all technical data resulting from any research
performed by The Regents relating to the Invention and to make and use the
Invention, Patent Product(s), Patent Method(s) and associated technology solely
for educational and research purposes and for purposes not covered by this
Agreement.


*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


<PAGE>
                                      -7-


                              3. LICENSE ISSUE FEE

         3.1 As consideration for all the rights and licenses granted to
Licensee, Licensee shall pay to The Regents a license issue fee of [CONFIDENTIAL
TREATMENT REQUESTED]*; Licensee shall donate to the Beckman Laser Institute at
Irvine, California, [CONFIDENTIAL TREATMENT REQUESTED]*. Licensee shall deliver
the [CONFIDENTIAL TREATMENT REQUESTED]* to The Regents together with two
executed originals of this Agreement. Licensee shall deliver the [CONFIDENTIAL
TREATMENT REQUESTED]*, to the Beckman Laser Institute on or before June 1, 1995.

         3.2 Licensee shall use its best efforts to replace the [CONFIDENTIAL
TREATMENT REQUESTED]*, referenced in Paragraph 3.1 above with a new
[CONFIDENTIAL TREATMENT REQUESTED]*, as soon as such a laser becomes available.

         3.3 Licensee shall also pay to The Regents a license maintenance fee of
[CONFIDENTIAL TREATMENT REQUESTED]* beginning on the one-year anniversary date
of the effective date of this Agreement and continuing annually on each
anniversary date of the effective date of this Agreement. The license
maintenance fee shall not be due and payable on any anniversary date of the
effective date of this Agreement if on said date Licensee is commercially
selling Product and paying an earned royalty to The Regents on the sales of that
Product.

         3.4 The fees set forth in Paragraphs 3.1 and 3.2 above are
non-refundable, non-creditable, and not an advance against royalties.

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -8-


                                  4. ROYALTIES

         4.1 As further consideration for all the rights and licenses granted to
Licensee, Licensee shall also pay to The Regents an earned royalty at the rate
of [CONFIDENTIAL TREATMENT REQUESTED]* based on the Net Sales of Patent
Products.

         4.2 Paragraphs 1.1, 1.2, and 1.3 define Regents' Patent Rights, Patent
Product and Patent Method so that royalties shall be payable on products and
methods covered by both pending patent applications and issued patents. Earned
royalties shall accrue in each country for the duration of Regents' Patent
Rights in that country and shall be payable to The Regents when Patent Products
are invoiced, or if not invoiced, when delivered to a third party or to itself,
an Affiliate, Joint Venture, or sublicensee in the case where such delivery of
the Patent Products to Licensee, an Affiliate, Joint Venture, or sublicensee is
intended for end use.

         4.3 Royalties accruing to The Regents shall be paid to The Regents
quarterly on or before the following dates of each calendar year:

                  February 28 for the calendar quarter ending December 31 
                  May 31 for the calendar quarter ending March 31 
                  August 31 for the calendar quarter ending June 30 
                  November 30 for the calendar quarter ending September 30

Each such payment will be for royalties which accrued up to Licensee's most
recently completed calendar quarter.

         4.4 Beginning in the year 1996, Licensee shall pay to The Regents a
minimum annual royalty as set forth below:

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -9-


                     1996 --[CONFIDENTIAL TREATMENT REQUESTED]* 
                     1997 --[CONFIDENTIAL TREATMENT REQUESTED]* 
                     1998 --[CONFIDENTIAL TREATMENT REQUESTED]*

In each succeeding calendar year after the year 1998, Licensee shall pay a
minimum annual royalty of [CONFIDENTIAL TREATMENT REQUESTED]* and thereafter for
the life of this Agreement. This minimum annual royalty shall be paid to The
Regents by February 28 of each year and shall be credited against the earned
royalty due and owing for the calendar year in which the minimum payment was
made.

         4.5 If Licensee fails to pay the minimum annual royalties according to
the schedule set forth in Paragraph 4.4, then The Regents may give written
notice of such default (Notice of Default) to Licensee. If Licensee should fail
to repair such default within sixty (60) days of the date of such notice takes
effect, The Regents shall have the right to terminate this Agreement and the
licenses herein by a second written notice (Notice of Termination) to Licensee.
If a Notice of Termination is sent to Licensee, this Agreement shall
automatically terminate on the date such notice takes effect.

         4.6 All monies due The Regents shall be payable in United States funds
collectible at par in San Francisco, California. When Patent Products are sold
for monies other than United States dollars, the earned royalties will first be
determined in the foreign currency of the country in which such Patent Products
were sold and then converted into equivalent United States funds. The exchange
rate will be that rate quoted in the Wall Street Journal on the last business
day of the reporting period.

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -10-


         4.7 Earned royalties paid to The Regents on sales of Patent Products
occurring in any country outside the United States shall not be reduced by any
taxes, fees, or other charges imposed by the government of such country, except
as provided by Paragraph 1.5 of this Agreement. Licensee shall also be
responsible for all bank transfer charges.

         4.8 Notwithstanding the provisions of Article 25 (FORCE MAJEURE), if at
any time legal restrictions prevent prompt remittance of part or all royalties
owed to The Regents by Licensee with respect to any country where a Patent
Product is sold or distributed, Licensee shall convert the amount owed to The
Regents into United States funds and shall pay The Regents directly from another
source of funds for the amount impounded.

         4.9 In the event that any patent or any claim thereof included within
the Regents' Patent Rights shall be hold invalid in a final decision by a court
of competent jurisdiction and last resort and from which no appeal has or can be
taken, all obligation to pay royalties based on such patent or claim or any
claim patentability indistinct therefrom shall cease as of the date of such
final decision. Licensee shall not, however, be relieved from paying any
royalties that accrued before such decision or that are based on another patent
or claim that has not expired or that is not involved in such decision.

         4.10 No royalties shall be collected or paid hereunder to The Regents
on Patent Products sold to the account of the U.S. Government. Licensee and its
sublicensee shall reduce the amount charged for Patent Products distributed to
the United States Government by an amount equal to the royalty for such Patent
Products otherwise due The Regents as provided herein.

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -11-


                                5. DUE DILIGENCE

         5.1 Licensee, upon execution of this Agreement, shall diligently
proceed with the development, manufacture and sale of Patent Products and
[CONFIDENTIAL TREATMENT REQUESTED]* after execution of this Agreement and
[CONFIDENTIAL TREATMENT REQUESTED]* to meet the [CONFIDENTIAL TREATMENT
REQUESTED]*.

         5.2 Licensee shall be entitled to exercise prudent and reasonable
business judgment in the manner in which it meets its due diligence obligations
hereunder. In no case, however, shall Licensee be relieved of its obligations to
meet the due diligence provisions of this Article 5 (DUE DILIGENCE).

         5.3 Licensee shall endeavor to obtain all necessary governmental
approvals in each country for the manufacture, use and sale of Patent Products.

         5.4      If Licensee is unable to perform any of the following:

                  (5.4a)   spend an aggregate of not less, than [CONFIDENTIAL
                           TREATMENT REQUESTED]* for the development of Patent
                           Products [CONFIDENTIAL TREATMENT REQUESTED]* of this
                           Agreement;

                  (5.4b)   submit a 510(k) Premarket Approval Application or its
                           equivalent covering a Patent Product to the United
                           States Food and Drug Administration [CONFIDENTIAL
                           TREATMENT REQUESTED]* the effective date of this
                           Agreement;

                  (5.4c)   market such Patent Product in the United States
                           [CONFIDENTIAL TREATMENT REQUESTED]* after approval to
                           market such Patent Product is issued by the United
                           States Food and Drug Administration; and

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -12-


                  (5.4d)   [CONFIDENTIAL TREATMENT REQUESTED]* for Patent
                           Products [CONFIDENTIAL TREATMENT REQUESTED]* at any
                           time during the exclusive period of this Agreement:

then The Regents shall have the right and option to terminate this Agreement or
reduce Licensee's exclusive licenses to non-exclusive licenses in accordance
with Paragraph 5.6 hereof. The exercise of this right and option by The Regents
supersedes the rights granted in Article 2 (LIFE OF PATENT EXCLUSIVE GRANT).

         5.5 To exercise either the right to terminate this Agreement or reduce
Licensee's exclusive licenses to non-exclusive licenses for lack of diligence
required in this Article 5 (DUE DILIGENCE), The Regents must give Licensee
written notice of the deficiency. Licensee thereafter [CONFIDENTIAL TREATMENT
REQUESTED]* to cure the deficiency. If The Regents has not received written
tangible evidence that the deficiency has been cured by the end of [CONFIDENTIAL
TREATMENT REQUESTED]*, then The Regents may, at its option, terminate this
Agreement or reduce Licensee's exclusive licenses to non-exclusive licenses by
giving written notice to Licensee. These notices shall be subject to Article 18
(NOTICES).

                         6. PROGRESS AND ROYALTY REPORTS

         6.1 Beginning February 28, 1995, and semi-annually thereafter, Licensee
shall submit to The Regents a progress report covering Licensee's activities
related to the development and testing of all Patent Products and the obtaining
of the governmental approvals necessary for marketing. These progress reports
shall be provided to The Regents to cover the progress of the research and
development of the Patent Products until their first commercial sale in the
United States.

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -13-


         6.2 The progress reports submitted under Paragraph 6.1 shall include,
but not be limited to, the following topics so that The Regents may be able to
determine the progress of the development of Patent Products and may also be
able to determine whether or not Licensee has met its diligence obligations set
forth in Article 5 (DUE DILIGENCE) above: 

         -        summary of work completed
         -        key scientific discoveries
         -        summary of work in progress
         -        current schedule of anticipated events or milestones
         -        market plans for introduction of Patent Products,
         -        a summary of resources (dollar value) spent in the reporting
                  period, and
         -        activities of sublicenses, if any.


         6.3 Licensee also agrees to report to The Regents in its immediately
subsequent progress and royalty report the date of first commercial sale of a
Patent Product(s) in each country.

         6.4 After the first commercial sale of a Patent Product, Licensee will
provide The Regents with quarterly royalty reports to The Regents on or before
each February 28, May 31, August 31 and November 30 of each year. Each such
royalty report will cover Licensee's most recently completed calendar quarter
(October through December, January through March, April through June, and July
through September) and will show:

                  (6.4a)   the gross sales and Net Sales of Patent Products sold
                           by Licensee and reported to Licensee as sold by its
                           sublicenses during the most recently completed
                           calendar quarter;

                  (6.4b)   the number of Patent Products sold or distributed by
                           Licensee and reported to Licensee as sold or
                           distributed by its sublicensees;

                  (6.4c)   the royalties, in U.S. dollars, payable hereunder 
                           with respect to Net Sales; and

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -14-


                  (6.4d) the exchange rates used , if any.

         6.5 If no sales of Patent Products have been made during any reporting
period after the first commercial sale of a Patent Product, then a statement to
this effect is required.

         6.6 The Regents shall provide Drs. J. Stuart Nelson, Thomas E. Milner,
and/or Lars 0. Svaasand with a copy of each progress report submitted by
Licensee. Prior to exercising its right to terminate this Agreement and the
licenses herein pursuant to Article 9, The Regents shall consult with the
aforementioned Drs. Nelson, Milner, and/or Svaasand.

                              7. BOOKS AND RECORDS

         7.1 Licensee shall keep books and records accurately showing all Patent
Products manufactured, used, and/or sold under the terms of this Agreement. Such
books and records shall be preserved for [CONFIDENTIAL TREATMENT REQUESTED]*
from the date of the royalty payment to which they pertain and shall be open to
inspection by representatives or agents of The Regents at reasonable times.

         7.2 The fees and expenses of The Regents' representatives performing
such an examination shall be borne by The Regents. However, if an error in
royalties of more than [CONFIDENTIAL TREATMENT REQUESTED]* of the total
royalties due for any year is discovered, then the fees and expenses of these
representatives shall be borne by Licensee.

                            8. LIFE OF THE AGREEMENT

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -15-


         8.1 Unless otherwise terminated by operation of law or by acts of the
parties in accordance with the terms of this Agreement, this Agreement shall be
in force from the effective date recited on page one and shall remain in effect
for the life of the last-to-expire patent licensed under this Agreement, or
until the last patent application licensed under this Agreement is abandoned.

         8.2 Any termination of this Agreement shall not affect the rights and
obligations set forth in the following Articles:

                  Article 7                 Books and Records
                  Article 11                Disposition of Patent Products on 
                                            Hand Upon Termination
                  Article 12                Use of Names and Trademarks
                  Paragraph 14.6            Patent Prosecution and Maintenance
                  Article 17                Indemnification
                  Article 22                Failure to Perform
                  Article 25                Confidentiality


                          9. TERMINATION BY THE REGENTS

         9.1 If Licensee should violate or fail to perform any term or covenant
of this Agreement, then The Regents, may give written notice of such default
(Notice of Default) to Licensee. If Licenses should fall to repair such default
within [CONFIDENTIAL TREATMENT REQUESTED]* of the date of such notice takes
effect, The Regents shall have the right to terminate this Agreement and the
licenses herein by a second written notice (Notice of Termination) to Licensee.
If a Notice of Termination is sent to Licensee, this Agreement shall
automatically terminate on the date such notice takes effect. Such termination
shall not relieve Licensee of its obligation to pay any royalty or license fees

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -16-


owing at the time of such termination and shall not impair any accrued right of
The Regents. These notices shall be subject to Article 18 (NOTICES).

                           10. TERMINATION BY LICENSEE

         10.1 Licensee shall have the right at any time to terminate this
Agreement in whole or as to any portion of Regents' Patent Rights by giving
notice in writing to The Regents. Such Notice of Termination shall be subject to
Article 18 (NOTICES) and termination of this Agreement shall be effective
[CONFIDENTIAL TREATMENT REQUESTED]* from the effective date of such notice.

         10.2 Any termination pursuant to the above paragraph shall not relieve
Licensee of any obligation or liability accrued hereunder prior to such
termination or rescind anything done by Licensee or any payments made to The
Regents hereunder prior to the time such termination becomes effective, and such
termination shall not affect in any manner any rights of The Regents arising
under this Agreement prior to such termination.

           11. DISPOSITION OF PATENT PRODUCTS ON HAND UPON TERMINATION

         11.1 Upon termination of this Agreement, Licensee shall have the
privilege of disposing of all previously made or partially made Patent Products,
but no more, within a period of [CONFIDENTIAL TREATMENT REQUESTED]*, provided,
however, that the sale of such Patent Products shall be subject to the terms of
this Agreement including, but not limited to the payment of royalties on the Net
Sales of Patent Products at the rates and at the times provided herein and the
rendering of reports in connection therewith.

                         12. USE OF NAMES AND TRADEMARKS

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -17-


         12.1 Nothing contained in this Agreement shall be construed as
conferring any right to use in advertising, publicity, or other promotional
activities any name, trade name, trademark, or other designation of either party
hereto by the other (including contraction, abbreviation or simulation of any of
the foregoing). Unless required by law, the use by Licensee of the name, "The
Regents of the University of California" or the name of any campus of the
University of California is expressly prohibited.

         12.2 It is understood that The Regents shall be free to release to the
inventors and senior administrative officials employed by The Regents the terms
and conditions of this Agreement upon their request. If such release is made,
The Regents shall request that such terms and conditions not be disclosed to
others. It is further understood that should a third party inquire whether a
license to Regents' Patent Rights is available, The Regents may disclose the
existence of this Agreement and the Extent of the grant in Article 2 to such
third party, but shall not disclose the name of Licensee, except where The
Regents is required to release such information under either the California
Public Records Act or other applicable law.

                              13. LIMITED WARRANTY

         13.1 The Regents warrants to Licensee that it has the lawful right to
grant this license.

         13.2 This license and the associated Invention are provided WITHOUT
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER
WARRANTY, EXPRESSED OR IMPLIED. THE REGENTS MAKES NO REPRESENTATION OR WARRANTY
THAT THE PATENT 

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -18-


PRODUCTS OR PATENT METHOD WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY
RIGHT.

         13.3 IN NO EVENT WILL THE REGENTS BE LIABLE FOR ANY INCIDENTAL, SPECIAL
OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE OR THE USE OF
THE INVENTION, PATENT METHOD, OR PATENT PRODUCTS.

         13.4 Nothing in this Agreement shall be construed as:

                  (13.4a)           a warranty or representation by The Regents 
                                    as to the validity, enforceability, or scope
                                    of any Regents' Patent Rights; or

                  (13.4b)           a warranty or representation that anything
                                    made, used, sold or otherwise disposed of
                                    under any license granted in this Agreement
                                    is or will be free from infringement of
                                    patents of third parties; or

                  (13.4c)           an obligation to bring or prosecute actions
                                    or suits against third parties for patent
                                    infringement except as provided in 
                                    Article 17; or

                  (13.4d)           conferring by implication, estoppel or
                                    otherwise any license or rights under any
                                    patents of The Regents other than Regents'
                                    Patent Rights as defined herein, regardless
                                    of whether such patents are dominant or
                                    subordinate to Regent's Patent Rights; or

                  (13.4e)           an obligation to furnish any know-how not 
                                    provided in Regents' Patent Rights.

                     14. PATENT PROSECUTION AND MAINTENANCE

         14.1 The Regents shall diligently prosecute and maintain the United
States and foreign patents comprising Regents' Patent Rights using counsel of
its choice. The Regents shall promptly provide Licensee with copies of all
relevant documentation so that

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -19-


Licensee may be currently and promptly informed and apprised of the continuing
prosecution, and may comment upon such documentation sufficiently in advance of
any initial deadline for filing a response, provided, however, that if Licensee
has not commented upon such documentation prior to the initial deadline for
filing a response with the relevant government patent office or The Regents must
act to preserve Regent's Patent Rights, The Regents shall be free to respond
appropriately without consideration of Licensee's comments, if any. Both parties
hereto agree to keep this documentation in confidence in accordance with the
provisions of Article 26 (CONFIDENTIALITY) herein, The Regents' counsel Will
take instructions only from The Regents.

         14.2 The Regents shall use all reasonable efforts to amend any patent
application to include claims requested by Licensee and required to protect the
Patent Products contemplated to be sold or Patent Method to be practiced under
this Agreement.

         14.3 The Regents and Licensee shall cooperate in applying for an
extension of the term of any patent included within Regents' Patent Rights, If
appropriate, under the Drug Price Competition and Patent Term Restoration Act of
1984, Licensee shall prepare all such documents, and The Regents agrees to
execute such documents and to take such additional action as Licensee may
reasonably request in connection therewith.

         14.4 The Regents shall, at the request of Licensee, file, prosecute and
maintain patent applications and patents covered by Regents' Patent Rights in
foreign countries if available. Licensee must notify The Regents within seven
(7) months of the filing of the corresponding United States application of its
decision to request The Regents to file foreign counterpart patent applications.
This notice concerning foreign filing shall be in 

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


<PAGE>
                                      -20-


writing and must identify the countries desired. The absence of such a notice
from Licensee to The Regents within the seven (7) month period shall be
considered an election by Licensee not to request The Regents to secure foreign
patent rights on behalf of Licensee. The Regents shall have the right to file
patent applications at its own expense in any country Licensee has not included
in its list of desired countries, and such applications and resultant patents,
if any, shall not be included in the licenses granted under this Agreement.

         14.5 All past, present and future costs of preparing, filing,
prosecuting and maintaining all United States and foreign patent applications
and all costs and fees relating to the preparation and filing of patents covered
by Regents' Patent Rights in Paragraph 1.1 shall be borne by Licensee. This
includes patent preparation and prosecution costs for this Invention incurred by
The Regents prior to the execution of this Agreement; such costs will be due
upon execution of this Agreement; and shall be payable at the time that the
Licensee Issue Fee is payable. The costs of all interferences and oppositions
shall be considered prosecution expenses and also shall be borne by Licensee.
Licensee shall reimburse The Regents for all assessed costs and charges within
[CONFIDENTIAL TREATMENT REQUESTED]* following receipt of a proper itemized
invoice from The Regents for same. The costs and charges assessed to Licensee
pursuant to this paragraph shall not exceed [CONFIDENTIAL TREATMENT REQUESTED]*
per patent application.

         14.6 Licensee's obligation to underwrite and to pay patent filing costs
and related costs, prosecution and maintenance costs shall continue until three
(3) months after receipt 

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


<PAGE>
                                      -21-


by either party of a Notice of Termination. But Licensee may with respect to any
particular patent application or patent terminate its obligations with the
patent application or patent in any or all designated countries upon three (3)
months written notice to The Regents. The Regents will use its best efforts to
curtail the associated patent costs after such a notice is received from
Licensee. The Regents may continue prosecution and/or maintenance of such
application(s) or patent(s) at its sole discretion and expense, provided,
however, that Licensee shall have no further right or licenses thereunder.

         14.7 Licensee shall have a continuing responsibility to keep The
Regents informed of its large/small entity status (as defined by the United
States Patent and Trademark Office) of itself and its sublicensees.

                               15. PATENT MARKING

         15.1 Licensee shall mark all Patent Products made, used or sold under
the terms of this Agreement, or their containers, in accordance with the
applicable patent marking laws.

         15.2 Licensee furthermore shall conspicuously place on all Patent
Products made, used, or sold under the terms of this Agreement and in the manual
for such Patent Products the following statement: "The skin cooling apparatus of
this device is licensed for use in dermatology and plastic surgery procedures
which do not involve the shrinking or removal of collagen."

                             16. PATENT INFRINGEMENT

         16.1 In the event that Licensee shall learn of the substantial
infringement of any patent licensed under this Agreement, Licensee shall call
The Regents' attention thereto in 

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


<PAGE>
                                      -22-


writing and shall provide The Regents with reasonable evidence of such
infringement. Both parties to this Agreement agree that during the period and in
a jurisdiction where Licensee has exclusive rights under this Agreement, neither
will notify a third party of the infringement of any of Regents' Patent Rights
without first obtaining consent of the other party, which consent shall not be
unreasonably denied. Both parties shall use their best efforts in cooperation
with each other to terminate such infringement without litigation.

         16.2 Licensee may request that The Regents take legal action against
the infringement of Regents' Patent Rights. Such request shall be made in
writing and shall include reasonable evidence of such infringement and damages
to Licensee. If the infringing activity has not been abated within [CONFIDENTIAL
TREATMENT REQUESTED]* following the effective date of such request, The Regents
shall have the right to elect to:

                  (16.2a)           commence suit on its own account; or
                  (16.2b)           refuse to participate in such suit,

and The Regents shall give notice of its election in writing to Licensee by the
end of the [CONFIDENTIAL TREATMENT REQUESTED]* after receiving notice of such
request from Licensee. Licensee may thereafter bring suit for patent
infringement if and only if The Regents elects not to commence suit and if the
infringement occurred during the period and in a jurisdiction where Licensee had
exclusive rights under this Agreement. However, in the event Licensee elects to
bring suit in accordance with this paragraph, The Regents may thereafter join
such suit at its own expense. In the event The Regents elect to join such suit,
The Regents shall pay [CONFIDENTIAL TREATMENT 

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


<PAGE>
                                      -23-


REQUESTED]* of the past costs incurred by Licensee in conjunction with the
infringement suit.

         16.3 Such legal action as is decided upon shall be at the expense of
the party on account of whom suit is brought and all recoveries recovered
thereby shall belong to such party, provided, however, that legal action brought
jointly by The Regents and Licensee and fully participated in by both shall be
at the joint expense of the parties and all recoveries shall be allocated in the
following order: (i) to each party reimbursement in equal amounts of costs and
fees of outside attorneys and other related expenses to the extent each party
paid for such costs, fees, and expenses until all such costs, fees, and expenses
are consumed for each party; and (ii) any remaining amount shared jointly by
them in proportion to the share of expense paid by each party.

         16.4 Each party agrees to cooperate with the other in litigation
proceedings instituted hereunder, but at the expense of the party on account of
whom suit is brought. Such litigation shall be controlled by the party bringing
the suit, except that The Regents may be represented by counsel of its choice in
any suit brought by Licensee.

                               17. INDEMNIFICATION

         17.1 Licensee agrees to (and requires its sublicensees to) indemnify,
hold harmless and defend The Regents, its officers, employees, and agents; the
sponsors of the research that led to the Invention; the inventors of any
Invention covered by patents or patent applications in Regents' Patent Rights
(including the Patent Products and Patent Method contemplated thereunder) and
their employers against any and all claims, suits, losses, damage, costs, fees,
and expenses resulting from or arising out of exercise of this 

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


<PAGE>
                                      -24-


license or any sublicense. This indemnification will include, but will not be
limited to, any product liability.

         17.2 Licensee, at its sole cost and expense, shall insure its
activities in connection with the work under this Agreement and obtain, keep in
force and maintain insurance as follows (or an equivalent program of self
insurance)
                  Comprehensive or Commercial Form General Liability Insurance
                  (contractual liability included) with limits as follows:

                   (a)   Each Occurrence                [CONFIDENTIAL TREATMENT 
                                                        REQUESTED]*

                   (b)   Products/Completed
                         Operations Aggregate           [CONFIDENTIAL TREATMENT 
                                                        REQUESTED]*

                   (c)   Personal and Advertising
                         Injury                         [CONFIDENTIAL TREATMENT 
                                                        REQUESTED]*

                   (d)   General Aggregate
                         (commercial form only)         [CONFIDENTIAL TREATMENT 
                                                        REQUESTED]*

         It should be expressly understood, however, that the coverages and
limits referred to under the above shall not in any way limit the liability of
Licensee. Licensee shall furnish The Regents with certificates of insurance
evidencing compliance with all requirements. Such certificates shall:

         (a)      Provide for thirty (30) day advance written notice to The
                  Regents of any modification.

         (b)      Indicate that The Regents has been endorsed as an additional
                  insured under the coverages referred to under the above.

         (c)      Include a provision that the coverages will be primary and
                  will not participate with nor will be excess over any valid
                  and collectable insurance or program of self-insurance carried
                  or maintained by The Regents.

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -25-


         17.3 The Regents shall promptly notify Licensee in writing of any claim
or suit brought against The Regents in respect of which The Regents intends to
invoke the provisions of this Article 17 (INDEMNIFICATION). Licensee will keep
The Regents informed on a current basis of its defense of any claims pursuant to
this Article 17 (INDEMNIFICATION).

                                   18. NOTICES

         18.1 Any notice or payment required to be given to either party shall
be deemed to have been properly given and to be effective (a) an the date of
delivery if delivered in person or (b) five (5) days after mailing if mailed by
first-class certified mail, postage paid, to the respective addresses given
below, or to such other address as it shall designate by written notice given to
the other party.

   In the case of Licensee:       Candela Laser Corporation
                                  530 Boston Post Road
                                  Wayland, MA 01778-1886
                                  Attention:  Mr. Gerard E. Puorro

   In the case of The Regents     THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
                                  1320 Harbor Bay Parkway, Suite 150
                                  Alameda, California 94502
                                  Attention:   DIRECTOR; Office of Technology 

                                  Transfer
                                  Referring to: U.C Case No. 93-364-1


                                19. ASSIGNABILITY

         19.1 This Agreement is binding upon and shall inure to the benefit of
The Regents, its successors and assigns, but shall be personal to Licensee and
assignable by 

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


<PAGE>
                                      -26-


Licensee only with the written consent of The Regents, which
consent shall not be unreasonably withheld.

                                20. LATE PAYMENTS

         20.1 In the event royalty payments or fees or patent prosecution costs
are not received by The Regents when due, Licensee shall pay to The Regents
interest charges at a rate of [CONFIDENTIAL TREATMENT REQUESTED]* simple
interest per annum. Such interest shall be calculated from the date payment was
due until actually received by The Regents. Acceptance by The Regents of any
late payment interest from Licensee under this Paragraph 20.1 shall in no way
affect the provision of Article 21 (WAIVER) herein.

                                   21. WAIVER

         21.1 It is agreed that no waiver by either party hereto of any breach
or default of any of the covenants or agreements herein set forth shall be
deemed a waiver as to any subsequent and/or similar breach or default.

                             22. FAILURE TO PERFORM

         22.1 In the event of a failure of performance due under the terms of
this Agreement and if it becomes necessary for either party to undertake legal
action against the other on account thereof, then the prevailing party shall be
entitled to reasonable attorney's fees in addition to costs and necessary
disbursements.

                 23. FOREIGN GOVERNMENT APPROVAL OR REGISTRATION

         23.1 If this Agreement or any associated transaction is required by the
law of any nation to be either approved or registered with any governmental
agency, Licensee shall 

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


<PAGE>
                                      -27-


assume all legal obligations to do so and the costs in connection therewith will
be assumed by Licensee.

                             24. EXPORT CONTROL LAWS

         24.1 Licensee shall observe all applicable United States and foreign
laws with respect to the transfer of Patent Products and related technical data
to foreign countries, including, without limitation, the International Traffic
in Arms Regulations (ITAR) and the Export Administration Regulations.

                                25. FORCE MAJEURE

         25.1 The parties to this Agreement shall be excused from any
performance required hereunder if such performance is rendered impossible or
unfeasible due to any acts of God, catastrophes or other minor events beyond
their reasonable control, including, without limitation, war, riot, and
insurrection laws, proclamations, edicts, ordinances or regulations; strikes,
lock-outs or other serious labor disputes; and floods, fires, explosions, or
other natural disasters. When such events have abated, the parties' respective
obligations hereunder shall resume.

                               26. CONFIDENTIALITY

         26.1 Licensee and The Regents respectively shall treat and maintain the
other party's proprietary business, patent prosecution, software, engineering
drawings, process and technical information, and other proprietary information
(hereinafter referred to as "Proprietary Information") in confidence using at
least the same degree of care as that party uses to protect its own proprietary
information of a like nature for a period from the date of disclosure until five
(5) years after the date of termination of this Agreement, 

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


<PAGE>
                                      -28-


provided that all Proprietary Information shall be labeled or marked
confidential or as otherwise similarly appropriate by the disclosing party, or
if the Proprietary Information is orally disclosed, it shall be reduced to
writing or some other physically tangible form, marked and labeled as set forth
above by the disclosing party and delivered to the receiving party within thirty
(30) days of the oral disclosure as a record of the disclosure and the
confidential nature thereof. Notwithstanding the foregoing, Licensee and, the
Regents may use and disclose Proprietary Information to its employees, agents,
consultants, contractors, and sublicensees, or as is deemed necessary by
Licensee or The Regents to market and sell Patent Products, and for any purpose
set forth or relating to this Agreement, provided that any such parties are
bound by a like duty of confidentiality.

         (26.1a)           Nothing contained herein shall in any way restrict or
                           impair the right of Licensee or The Regents to use,
                           disclose or otherwise deal with any Proprietary
                           Information:

                           (i)      that recipient can demonstrate by written
                                    records was previously known to it; or

                           (ii)     that is now, or becomes, in the future,
                                    public knowledge other than through acts or
                                    omissions of recipient; or

                           (iii)    that is lawfully obtained without
                                    restrictions by recipient from sources
                                    independent of the disclosing party; or

                           (iv)     that is required to be disclosed to a
                                    governmental entity or agency in connection
                                    with seeking any governmental or regulatory
                                    approval, or pursuant to the lawful
                                    requirement or request of a governmental
                                    entity or agency; or

                           (v)      that is furnished to a third party by the
                                    recipient with similar confidentiality
                                    restrictions imposed on such third party, as
                                    evidenced in writing; or

                           (vi)     that The Regents is required to disclose
                                    pursuant to the California Public Records
                                    Act or other applicable law.

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -29-


         26.2 Upon termination of this Agreement, Licensee and The Regents agree
to destroy or return to the disclosing party Proprietary Information received
from the other in its possession within fifteen (15) days following the
effective date of termination. Licensee and The Regents agree to provide each
other, within thirty (30) days following termination, with a written notice that
Proprietary Information has been returned or destroyed. Each party may, however,
retain one copy of Proprietary Information for archival purposes in non-working
files.

                                27. MISCELLANEOUS

         27.1 The headings of the several sections are inserted for convenience
of reference only and are not intended to be a part of or to affect the meaning
or interpretation of this Agreement.

         27.2 This Agreement will not be binding upon the parties until it has
been signed below on behalf of each party, in which event, it shall be effective
as of the date recited on page one.

         27.3 No amendment or modification hereof shall be valid or binding upon
the parties unless made in writing and signed on behalf of each party.

         27.4 This Agreement embodies the entire understanding of the parties
and shall supersede all previous communications, representations or
understandings, either oral or written, between the parties relating to the
subject matter hereof. The Non-Disclosure Agreement specified in the Recitals in
this Agreement is hereby terminated. The Letter of Intent specified in the
Recitals in this Agreement is hereby terminated.

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -30-


         27.5 In case any of the provisions contained in this Agreement shall be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions hereof, but
this Agreement shall be construed as if such invalid or illegal or unenforceable
provisions had never been contained herein.

         IN WITNESS WHEREOF, both The Regents and Licensee have executed this
Agreement, in duplicate originals, by their respective officers hereunto duly
authorized, on the day and year hereinafter written.

CANDELA LASER CORPORATION:                     THE REGENTS OF THE 
                                               UNIVERSITY OF CALIFORNIA:


By:                                            By:
   -------------------------------                ------------------------------
                  (signature)

Name:                                          Name:  Terence A. Feuerborn
     -----------------------------
                  (please print)

Title:                                         Title:  Director, Office of 
     -----------------------------
                                               Technology Transfer

Date:                                          Date:
   -------------------------------                ------------------------------

                           Approved as to legal form:

                        --------------------------------
                                 Edwin H. Baker
                           Associate Resident Counsel
                          Office of Technology Transfer
                            University of California

                        Date:
                             --------------------------

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


<PAGE>
                                      -31-



*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


<PAGE>



                                 AMENDMENT NO. 1
                                       TO
                                LICENSE AGREEMENT



         This Amendment No. 1 (the "Amendment"), dated as of September 30, 1998,
(the "Effective Date") is made by and between The Regents of the University of
California ("The Regents"), a California corporation, having its statewide
administrative offices at 1111 Franklin Street, 12th Floor, Oakland, CA
94607-5200 and Candela Corporation (the "Licensee"), a Delaware corporation,
having a principal place of business at 530 Boston Post Road, Wayland, MA
01778-1886.

         WHEREAS, the parties entered into an Exclusive License Agreement
("Agreement") effective as of December 19, 1994 to provide the Licensee with
rights to certain Inventions, defined in The Regents' Patent Rights as set forth
therein; and

         WHEREAS, the Licensee and The Regents desire to resolve the lawsuit,
Civil Action No. 97-11577, currently pending between them.

         NOW, THEREFORE, the parties for good and valuable consideration,
receipt and sufficiency of which is hereby acknowledged, agree to amend such
Agreement in order to facilitate cooperative licensing of The Regents' Patent
Rights to third parties as follows:

         1. By deleting Section 1.3 as currently written and substituting the
following:

                  1.3 "Gross Revenue" means all revenue, receipts, and monies or
         other forms of consideration actually received by The Regents or the
         Licensee from (1) any third-party Further Licenses granted by The
         Regents or (2) any third-party sublicenses granted by the Licensee.

         2. By adding Section 1.8:

                  1.8 "Further Licenses" means any licenses under The Regents
         Patent Rights granted by The Regents to any third-party pursuant to
         Sections 2.8 and 5.5.

         3 By deleting Section 2.1 as currently written and substituting the
following:

                  2.1 Subject to the limitations set forth in this Agreement,
         and subject to the license granted to the U.S. Government as set forth
         in the Recitals above, The Regents hereby grants to the Licensee an
         exclusive license under the Regents' Patent Rights to make, have made,
         use, sell, offer for sale, and import Patent Products and to practice
         the Patent Method. However, the exclusive license granted herein is
         subject to The Regents' right to grant Further Licenses as provided in
         Sections 2.8 and 5.5.

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -2-


         4. By deleting Section 2.3 in its entirety.

         5. By deleting Section 2.5 as currently written and substituting the
following:

                  2.5 The Regents grants to the Licensee the first right to
         issue sublicenses to third parties to make, use, sell, offer for sale,
         and import Patent Products and to practice the Patent Method, subject
         to the provisions of Sections 2.8, 4.1, and 5.5 of this Agreement. The
         Licensee shall negotiate in good faith and shall make commercially
         reasonable efforts to conclude sublicensing agreements with such
         interested third parties. The Licensee, however, has no obligation to
         pursue [CONFIDENTIAL TREATMENT REQUESTED]*, due to [CONFIDENTIAL
         TREATMENT REQUESTED]* between the Licensee and [CONFIDENTIAL TREATMENT
         REQUESTED]*.

                           The Regents shall direct any third party expressing
         an interest in obtaining license rights under the Regents' Patent
         Rights to contact the Licensee. The Regents shall notify the Licensee
         and the interested party in writing [CONFIDENTIAL TREATMENT REQUESTED]*
         received by The Regents' licensing professional responsible for
         administration of the Agreement. The Regents shall provide the name and
         contact person of such a third party in the written notice to the
         Licensee with that third party's permission, and the Licensee hereby
         gives The Regents permission to inform such third party of the
         Licensee's name. Except with the Licensee's prior written consent, The
         Regents shall [CONFIDENTIAL TREATMENT REQUESTED]* regarding licensing
         or Further Licensing the Patent Product with such third party
         [CONFIDENTIAL TREATMENT REQUESTED]* of the inquiry to the Licensee by
         The Regents. The Licensee shall notify The Regents in writing
         [CONFIDENTIAL TREATMENT REQUESTED]* the Licensee receives that were not
         referred to the Licensee by The Regents.

         6. By inserting Section 2.8 as follows:

         Any sublicense executed by the Licensee or Further License executed by
         The Regents for The Regents' Patent Rights shall contain at least the
         following: (1) a [CONFIDENTIAL TREATMENT REQUESTED]* of not less than
         [CONFIDENTIAL TREATMENT REQUESTED]*; (2) a [CONFIDENTIAL TREATMENT
         REQUESTED]* of at least [CONFIDENTIAL TREATMENT REQUESTED]* and (3) a
         [CONFIDENTIAL TREATMENT REQUESTED]* of at least [CONFIDENTIAL TREATMENT
         REQUESTED]*.

         To the extent applicable, such sublicense or Further License shall
         include all of the rights of, and obligations due to, The Regents (and,
         if applicable, the United States government) that are contained in this
         Agreement, including but not limited to the following: (1) the third
         party shall provide progress and royalty reports The 

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


<PAGE>
                                      -3-


         Regents and the Licensee (Article 6); (2) the third party shall
         accurately maintain books and records, which The Regents and the
         Licensee shall retain the right to inspect (Article 7); (3) the third
         party shall comply with all applicable patent marking laws, In
         addition, the third party shall insure its activities and agree to
         indemnify The Regents and the Licensee (Article 17).

         7. By deleting the following from Section 3.1:

                  A) Lines 4-6: ; and the Licensee [CONFIDENTIAL TREATMENT
         REQUESTED]* under this Agreement.

         8. By deleting Section 3.2 as currently written and substituting the
following:

                  The Licensee shall provide title to the [CONFIDENTIAL
         TREATMENT REQUESTED]*, previously delivered to the Beckman Laser
         Institute and, [CONFIDENTIAL TREATMENT REQUESTED]* from the Effective
         Date of this Amendment, shall deliver and install a [CONFIDENTIAL
         TREATMENT REQUEST]* designed for use as an attachment to the
         [CONFIDENTIAL TREATMENT REQUESTED]*. As further consideration,
         [CONFIDENTIAL TREATMENT REQUESTED]* from the Effective Date of this
         Amendment, the Licensee shall deliver possession of, and title to, a
         [CONFIDENTIAL TREATMENT REQUESTED]* with an installed [CONFIDENTIAL
         TREATMENT REQUESTED]* to the Beckman Laser Institute. The Regents agree
         that Beckman Laser Institute shall [CONFIDENTIAL TREATMENT REQUESTED]*
         for the [CONFIDENTIAL TREATMENT REQUESTED]* and the [CONFIDENTIAL
         TREATMENT REQUESTED]*, and shall [CONFIDENTIAL TREATMENT REQUESTED]*
         for the [CONFIDENTIAL TREATMENT REQUESTED]* from the License, for a
         duration agreed upon between Candela and the Beckman Laser Institute.
         The Regents agree that Beckman Laser Institute shall be responsible for
         maintenance of the [CONFIDENTIAL TREATMENT REQUESTED]* beyond the
         Licensee's one-year warranty. The pricing of the [CONFIDENTIAL
         TREATMENT REQUESTED]* shall be deemed to have the monetary value that
         the Licensee provides its most favored customers. In addition, The
         Regents agree that the Beckman Laser Institute shall dedicate the
         Licensee to the highest level of [CONFIDENTIAL TREATMENT REQUESTED]*
         for a [CONFIDENTIAL TREATMENT REQUESTED]*.

         9. By adding the following sentence at the end of Section 4.1:

                  In addition, The Regents shall receive [CONFIDENTIAL TREATMENT
         REQUESTED]* of Gross Revenue actually remitted as a result of the
         Licensee's sublicensing of The Regents' Patent Rights, and the Licensee
         shall receive [CONFIDENTIAL TREATMENT REQUESTED]* of Gross Revenue
         actually 

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


<PAGE>
                                      -4-


         remitted as a result of The Regents' Further Licensing of The Regents'
         Patent Rights. In cases where the Licensee sublicenses The Regents'
         Patent Rights, each sublicensee shall make all sublicensing royalty
         payments directly to the Licensee on a quarterly basis. The Licensee
         shall then, [CONFIDENTIAL TREATMENT REQUESTED]*, remit the appropriate
         payment to The Regents. In such cases, the Licensee shall not be held
         responsible or accountable for any sublicensee's failure to make
         royalty payments. In cases where The Regents Further Licenses its
         Patent Rights, each Further Licensee shall make all royalty payments to
         The Regents on a quarterly basis. The Regents shall then, [CONFIDENTIAL
         TREATMENT REQUESTED]*, remit the appropriate payment to the Licensee.
         In such cases, The Regents shall not be responsible or accountable for
         any Further Licensee's failure to make royalty payments.

                  Notwithstanding any provision of the amended Agreement to the
         contrary, as consideration for the [CONFIDENTIAL TREATMENT REQUESTED]*,
         which the Licensee shall provide to The Regents pursuant to amended
         Section 3.2, the Licensee shall have no payment obligation or liability
         for [CONFIDENTIAL TREATMENT REQUESTED]* of any royalties [CONFIDENTIAL
         TREATMENT REQUESTED]* to the Effective Date of this Amendment.
         Notwithstanding the previous paragraph, with respect to the remaining
         [CONFIDENTIAL TREATMENT REQUESTED]* of royalties [CONFIDENTIAL
         TREATMENT REQUESTED]* to the Effective Date of this Amendment, Candela
         shall pay such royalties from any and all [CONFIDENTIAL TREATMENT
         REQUESTED]* received by Candela from [CONFIDENTIAL TREATMENT
         REQUESTED]* have been paid.

         10. By deleting the last sentence of Section 4.5 and substituting the
following:

                  Subject to the provisions and restrictions of Section 10A
         governing dispute resolution, if a Notice of Termination is sent to the
         Licensee, this agreement shall automatically terminate on the date such
         notice takes effect.

         11. By adding the following after "Agreement" at the end of Section
(5.4d):

                  or [CONFIDENTIAL TREATMENT REQUESTED]* a sublicense agreement
         to the extent required by Section 5.5;

         12. By replacing Section 5.5 with the following:

                  5.5 If the Licensee is [CONFIDENTIAL TREATMENT REQUESTED]*, as
         evidenced by written correspondence:

                           (5.5a) within [CONFIDENTIAL TREATMENT REQUESTED]* of
         receipt of written notice of a [CONFIDENTIAL 

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


<PAGE>
                                      -5-


         TREATMENT REQUESTED]* an interest in [CONFIDENTIAL TREATMENT
         REQUESTED]* to such [CONFIDENTIAL TREATMENT REQUESTED]* on sublicensing
         Regents' Patent Rights;

                           (5.5b) within [CONFIDENTIAL TREATMENT REQUESTED]* of
         receipt of written notice of a [CONFIDENTIAL TREATMENT REQUESTED]* an
         interest in [CONFIDENTIAL TREATMENT REQUESTED]* a term sheet that
         [CONFIDENTIAL TREATMENT REQUESTED]* of the sublicense (e.g.,
         field-of-use, extent of exclusivity, financial and business terms) to
         the third party;

                           (5.5c) within [CONFIDENTIAL TREATMENT REQUESTED]* of
         receipt of written notice of a [CONFIDENTIAL TREATMENT REQUESTED]* an
         interest in [CONFIDENTIAL TREATMENT REQUESTED]* a [CONFIDENTIAL
         TREATMENT REQUESTED]* to the third party; and

                           (5.5d) within [CONFIDENTIAL TREATMENT REQUESTED]* of
         receipt of written notice of a [CONFIDENTIAL TREATMENT REQUESTED]* an
         interest in [CONFIDENTIAL TREATMENT REQUESTED]* sublicense agreement;

         then the Regents shall have the [CONFIDENTIAL TREATMENT REQUESTED]* a
         Further License to that party at the minimum terms specified in
         Paragraph 2.8 by giving written notice to the Licensee that the
         [CONFIDENTIAL TREATMENT REQUESTED]* to that party has terminated. Prior
         to The Regents giving notice, the Licensee may submit a written request
         for an [CONFIDENTIAL TREATMENT REQUESTED]* to The Regents to
         [CONFIDENTIAL TREATMENT REQUESTED]* 5.5a-d, such [CONFIDENTIAL
         TREATMENT REQUESTED]* shall not be unreasonably withheld by The
         Regents.

         13. By inserting Section 5.6 as follows:

                  If the Licensee [CONFIDENTIAL TREATMENT REQUESTED]* to meet
         the Due Diligence requirements set forth in Section 5.4, The Regents
         shall have the right to terminate this Agreement or reduce the
         Licensee's exclusive license to a non-exclusive license. To exercise
         this right, The Regents shall give the Licensee written notice of the
         default pursuant to Section 9.1, the Licensee thereafter shall have
         [CONFIDENTIAL TREATMENT REQUESTED]* to cure the deficiency. If The
         Regents has received written evidence that the deficiency has been 
         cured before the end of the [CONFIDENTIAL TREATMENT REQUESTED]*, then
         The Regents shall provide the Licensee with written notice that the 
         deficiency has been cured. If The Regents has not received written 

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


<PAGE>
                                      -6-


         evidence that the deficiency has been cured by the end of the 
         [CONFIDENTIAL TREATMENT REQUESTED]*, then the Regents may, subject to 
         the provisions of Section 10A, terminate this Agreement or reduce the 
         Licensee's exclusive license to a non-exclusive license by giving 
         written notice to the Licensee. Such notice shall be subject to 
         Section 18 (Notices).

         14. By inserting Section 6.7 as follows:

                  On or before the dates set forth in Section 6.4, the Licensee
         and The Regents shall each provide the other with a quarterly report
         stating any royalties that the party has received from the
         sublicensing/Further Licensing of The Regents' Patent Rights. Each
         royalty report shall cover the party's most recently completed calendar
         quarter. This reporting obligation shall commence at the time either
         party enters into a sublicensing or Further Licensing agreement for The
         Regents' Patent Rights. Thereafter, if no sublicensing or Further
         Licensing royalties are received by the Licensee or The Regents,
         respectively, a statement to this effect is required in lieu of a
         royalty report.

         15. By adding the following Section after Section 10:

                             10A. DISPUTE RESOLUTION

                  At the written request of either party, any controversy or
         claim arising out of or relating to this Agreement, excluding Article
         12 (Use of Names and Trademarks), Article 13 (Limited Warranty),
         Article 16 (Patent Infringement), and Article 17 (Indemnification),
         shall be settled by binding arbitration, the hearing of which will be
         commenced within 90 days of the written request in accordance with the
         then-current Patent Arbitration Rules of the American Arbitration
         Association. The parties shall use a single, mutually acceptable
         arbitrator in any arbitration contemplated under this Section.
         Arbitration arising out of this amended Agreement shall take place in
         the state in which the original respondent in any such arbitration has
         its principal place of business.

         16. By inserting Section 13.5 as follows:

                  Except as otherwise provided in Section 3.2, the Licensee will
         provide to the Beckman Laser Institute the equipment described in
         Section 3.2 above without warranty of merchantability or fitness for a
         particular purpose or any other warranty, expressed or implied.

         17. By deleting Section 15.2.

         18. By inserting in Section 18 the following after "Attention: Mr.
Gerard E. Puorro":

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

<PAGE>
                                      -7-


                  with a copy to:
                  Testa, Hurwitz & Thibeault, LLP
                  High Street Tower
                  125 High Street
                  Boston, MA  02110
                  Attention:  Scott A. Birnbaum, Esq.

         19. By inserting the following after the last sentence in Section 20.1:

                  In the event that The Regents fails to remit Further Licensing
         royalty payments to the Licensee when due, The Regents shall pay to the
         Licensee interest charges at a rate of [CONFIDENTIAL TREATMENT
         REQUESTED]* simple interest per annum. Such interest shall be
         calculated from the date payment was due until actually received by the
         Licensee. Acceptance by the Licensee of any late payment interest from
         The Regents under this Section shall in no way affect the provision of
         Article 21 (WAIVER) herein.

         20. By inserting the following section after Section 26:

                              26A. NONDISPARAGEMENT

                  The Licensee and the Office of Technology Transfer and UCI's
         Office of Technology Alliances agree not to unreasonably portray the
         other party or the other party's products in a negative light and not
         to make any disparaging, false or misleading statement concerning the
         other party or the other party's products.

         21. By inserting Section 27.5 as follows:

                  27.5 The Regents hereby designates Associate Director of the
         Office of Technology Transfer Valentin Fikovsky, or another employee of
         the same or higher grade, as the individual responsible for conducting
         all further communications with the Licensee. The Licensee designates
         its President and Chief Executive Officer, Gerard E. Puorro, as the
         individual responsible for conducting all further communications with
         The Regents. Either party may designate additional employees to dispose
         of routine administrative matters arising under this Agreement.

         22. By inserting Section 27.6 as follows:

                  27.6 Upon execution of this Amendment by The Regents and the
         Licensee, the parties shall instruct their respective counsel to file
         promptly with the Court a joint stipulation of dismissal with prejudice
         in Civil Action No. 97-11577. In addition, the parties release each
         other from all claims which have been, or could have been, raised in
         Civil Action No. 97-11577.

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.


<PAGE>
                                      -8-


         IN WITNESS WHEREOF, The Regents and the Licensee have executed this
Amendment, in duplicate originals, by their respective officers hereunto duly
authorized, on the day and year first hereinafter written.


CANDELA LASER CORPORATION                 THE REGENTS OF THE 
                                          UNIVERSITY OF CALIFORNIA


By:                                       By:
   -------------------------------           --------------------------------

Name:  Gerard E. Puorro                   Name:  Terence A. Feuerborn

Title:  President and CEO                 Title: Director
                                                 Office of Technology Transfer

Date:                                     Date:
   -------------------------------           --------------------------------


                           Approved as to legal form:

                        --------------------------------
                             E. Martin Simpson, Jr.
                               University Counsel
                          Office of the General Counsel
                            University of California

                        Date: 
                              ---------------------------

*[CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED AND
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406
PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.