Document:

EXHIBIT 10.2

 

INTERCOMPANY LIQUIDITY
AGREEMENT

 

This
Intercompany Liquidity Agreement (“Agreement”) is among Allstate Insurance
Company (“AIC”), an Illinois domiciled property and casualty insurance company
and Allstate Life Insurance Company (“ALIC”), an Illinois domiciled life
insurance company.  To the extent and
only to the extent, a direct or indirect wholly-owned subsidiary of The
Allstate Corporation (each an “Allstate Affiliate”) is added to this agreement
pursuant to the terms of Sections 1 and 5 below and a signed Addendum
substantially in the form of Exhibit B, such Allstate Affiliate
shall become a party to this Agreement (each such properly added Allstate
Affiliate, together with AIC and ALIC, shall each be a “Party”).  As between AIC and ALIC, this Agreement shall
be effective on January 1, 2008.

 

The
purpose of this Agreement is to provide a mechanism under which short-term
advances of funds may be made between the Parties for liquidity and other
general corporate purposes.  This
Agreement does not establish a commitment to advance funds on the part of any
Party.  In consideration of the following
agreements and covenants and other good and valuable consideration, the receipt
and sufficiency of which are acknowledged, the Parties agree as follows:

 

1.               Roles of the Parties and
Limits on Outstanding Advances:

 

Subject to the terms and conditions of this
Agreement, from time to time during the term of this Agreement one or more
Parties may make and have outstanding advances to one or more of the other
Parties to this Agreement.  The term “Lender”
shall refer to a Party that is making or has made a currently outstanding
advance.  The term “Borrower” shall refer
to a Party that is receiving or has received a currently outstanding
advance.  From time to time in its
capacity as a Lender or a Borrower or both, a Party may have multiple advances
outstanding with one or more other Parties. 
However, at no time shall a Party, in its role as a Lender, have
advances outstanding to one or more Parties in an aggregate amount in excess of
its “Lender Maximum.”  In addition, at no
time shall a Party, in its role as a Borrower, have advances outstanding from
one or more Parties in an aggregate amount in excess of its “Borrower Maximum.”  In determining the amount of outstanding
advances with respect to a Party, the gross amount of outstanding advances will
be used, with no netting or offsetting permitted.  For AIC and ALIC these maximums shall be
equal to the following amounts:

 

	
   

  	
   

  	
  Lender Maximum

  	
   

  	
  Borrower Maximum

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AIC

  	
   

  	
  $

  	
  1,000,000,000

  	
   

  	
  $

  	
  1,000,000,000

  	
   

  
	
  ALIC

  	
   

  	
  $

  	
  1,000,000,000

  	
   

  	
  $

  	
  1,000,000,000

  	
   

  

 

The Lender Maximum and Borrower Maximum for any
Allstate Affiliate added as a Party shall be specified in the Addendum that
adds such Allstate Affiliate as a Party, subject to receipt of any required
regulatory approvals.

 

2.               Terms for Advances:

 

The terms of each advance shall be as agreed upon
between the Parties to such advance pursuant to an accepted borrowing request
as defined below, provided that the following shall apply to all advances:

 

a)              Each advance shall have a
specified maturity date that is less than or equal to 364 days from the date of
the advance.

 

b)             Advances shall be payable
upon demand prior to their maturity date if a written request is made 

 

 

by the Lender and delivered to the Borrower at least ten business days
prior to the date payment is demanded.

 

c)              At any time and from time to
time, the Borrower shall have the right to make one or more prepayments of the
outstanding principal balance of an advance without penalty and may designate
which advance is being prepaid if more than one advance is outstanding,
provided that any such repayment includes all accrued interest on the amount
prepaid as of the repayment date.

 

3.               Interest:

 

Each advance shall bear interest on the outstanding
principal amount thereof, for each day from and including the date such advance
is made to but not including the date repaid at a rate equal to the rate
established between the parties and specified in the accepted borrowing request
(as defined below) applicable to such advance, provided that such rate shall be
equal to or greater than the interest rate on 30-day commercial paper issued by
The Allstate Corporation on the date the advance is made.   The rate on each advance shall be adjusted
on the first day of each month thereafter, for so long as the advance remains
outstanding, to The Allstate Corporation’s then 30-day commercial paper rate
plus the spread agreed upon by the parties. 
Unless otherwise agreed to by the Parties in the accepted borrowing
request, such accrued interest shall be payable at the maturity of each such
advance.  In the event that a 30-day
commercial paper rate for The Allstate Corporation is not available, the
Parties shall agree on a comparable substitute or the advance shall be promptly
repaid.

 

4.               Procedure for Requesting an
Advance and Repayment of Advances:

 

Any Party may request an advance from any other
Party.  In no circumstance shall a Party
be obligated to make an advance under the terms of this Agreement.  The decision to make an advance shall be at
the sole discretion of the Party being asked to make the advance.

 

Upon the mutual agreement of the Parties to the
terms of an advance, the proposed Borrower shall submit a written borrowing request,
substantially in the form of Exhibit A, to the proposed
Lender.  The borrowing request shall
contain the terms agreed to, be signed by two Authorized Officers, as defined
below, of the Borrower and signed as accepted by two Authorized Officers of the
Lender, provided, however, that, if after making such an advance, a Party will
have more than $500,000,000 in outstanding advances either as a Lender or a
Borrower, then one of the two authorized officers signing the borrowing request
for such Party must be that Party’s Chief Financial Officer or President (or
officers holding substantially equivalent titles if that Party does not have a
Chief Financial Officer or President). 
No separate promissory note shall be required.  The date of the advance, amount, interest
rate and maturity date shall be recorded in the books and records of the Lender
and shall be prima facie evidence of the existence, amount and terms of the
advance, absent manifest error, provided the failure to so record or any error
therein shall not in any manner affect the obligation of a Borrower to repay an
advance in accordance with its terms as stated on the accepted borrowing
request and the terms of this Agreement. 
For purposes of this Agreement, the term “Authorized Officer”, with respect
to a Party, shall mean an officer of that Party holding one or more of the
following titles, or a substantially equivalent title if such Party does not
have an officer holding such title: 
Chairman of the Board, President, Chief Financial Officer, Controller,
Treasurer or Assistant Treasurer.

 

Each Party, to the extent it receives an advance as
a Borrower, hereby unconditionally promises to pay to its Lender the then
unpaid principal amount of each such advance together with all accrued interest
on such advance in the amounts, at the times and in the manner set forth in
this Agreement and the accepted borrowing request, and, in any event, by no
later than its maturity date as specified in the accepted borrowing request.

 

 

2

 

5.               Procedure for Adding
Additional Parties:

 

The Parties agree that additional Allstate
Affiliates may be added to this Agreement from time to time provided:

 

a)              an Addendum, substantially
in the form of Exhibit B, is signed by the Allstate Affiliate and
AIC on behalf of itself and the other Parties to this agreement after all
required corporate authorizations and regulatory approvals for such Allstate
Affiliate and AIC have been obtained;

 

b)             the Addendum specifies the
effective date of the Agreement for such Allstate Affiliate;

 

c)              the Addendum specifies the
Lender Maximum and Borrower Maximum, in accordance with Section 1 above,
for such Allstate Affiliate.

 

6.               Term and Termination:

 

This Agreement shall remain in effect for one year
from the date first specified above and shall be automatically renewed for
subsequent one-year terms unless sooner terminated by the Parties.  Any one Party may cancel its participation in
this Agreement provided it is not a Party to any outstanding advances, either
as a Lender or a Borrower, by giving written notice to AIC.  This Agreement shall terminate automatically
as to any Party immediately upon such Party ceasing to be a direct or indirect
wholly-owned subsidiary of The Allstate Corporation, in which case any
outstanding advances involving such Party, shall immediately become due and
payable.

 

7.               Miscellaneous Provisions:

 

a)              This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Illinois.

 

b)             This Agreement may be
amended or modified only by written agreement executed by the Parties to be
bound by such amendment.  An amendment to
increase or decrease a Party’s Lender Maximum or Borrower Maximum need only be
signed by such Party provided all required corporate authorizations and
regulatory approvals have been received. 
In the event that a Party, in its role as a Lender, amends this
Agreement to reduce its Lender Maximum and the aggregate amount of its advances
outstanding to all other Parties exceeds such reduced Lender Maximum, Lender
shall promptly demand payment of such excess from such Borrowers as it selects
and such excess shall be payable within ten business days of the delivery of
such written demand. In the event that a Party, in its role as a Borrower,
amends this Agreement to reduce its Borrower Maximum and the aggregate amount
of its advances outstanding from all other Parties exceeds such reduced
Borrower Maximum, Borrower shall repay an amount of advances equal to such
excess within ten business days of such reduction.  In determining the amount of outstanding
advances with respect to a Party, the gross amount of outstanding advances will
be used, with no netting or offsetting permitted.

 

c)              No Party hereto shall assign
this Agreement or any rights or obligations hereunder without the prior written
consent of the other Parties affected and any such attempted assignment without
such prior written consent shall be void.

 

d)             If any part of this
Agreement shall be held invalid, illegal or unenforceable, the remaining parts
of the Agreement shall not be affected and shall continue with full force and
effect.

 

 

3

 

e)              The descriptive headings of
the various sections or parts of this Agreement are for convenience only and
shall not affect the meaning or construction of any of the provision hereof.

 

f)                This Agreement constitutes
the entire agreement between the Parties hereto with respect to the subject
matter hereof.  There are no
understandings between the Parties other than as expressed in this Agreement.

 

g)             This Agreement is solely for
the benefit of the Parties hereto.

 

h)             The terms of this agreement
shall be subject to, and shall in no way supersede, the provisions of the NAIC
Accounting Practices and Procedures Manual.

 

IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement.

 

	
  Allstate Insurance Company

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Samuel H. Pilch

  	
   

  	
  By:

  	
  /s/
  Steven C. Verney

  
	
  Name:

  	
  Samuel
  H. Pilch

  	
   

  	
  Name:

  	
  Steven
  C. Verney

  
	
  Title:

  	
  Group
  Vice President and Controller

  	
   

  	
  Title:

  	
  Vice
  President and Treasurer

  
	
   

  	
   

  	
   

  
	
  Allstate Life Insurance Company

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  James E. Hohmann

  	
   

  	
  By:

  	
  /s/
  John C. Pintozzi

  
	
  Name:

  	
  James
  E. Hohmann

  	
   

  	
  Name:

  	
  John
  C. Pintozzi

  
	
  Title:

  	
  President
  and Chief Executive Officer

  	
   

  	
  Title:

  	
  Senior
  Vice President and Chief Financial Officer

  

 

 

4

 

Exhibit A

 

INTERCOMPANY LIQUIDITY AGREEMENT

 

BORROWING REQUEST

 

[Request
Date]

 

[Lender]

Attention:  Treasurer

 

Re:  Request for Advance

 

Reference
is made to the Intercompany Liquidity Agreement (“Agreement”), dated January 1,
2008, among Allstate Insurance Company, Allstate Life Insurance Company and
each such additional direct or indirect wholly-owned subsidiary of The Allstate
Corporation as may have entered into the Agreement pursuant to the terms of the
Agreement.

 

Pursuant
to the Agreement and subject to the additional terms contained therein,
[Borrower] requests an advance of funds from [Lender] with the following terms:

 

Date of advance:

Principal amount:

Maturity date:

Initial interest rate
(including spread, if any, of       basis points
above the current interest rate on 30-day commercial paper issued by The
Allstate Corporation):

Interest rate payment
schedule if other than as specified in the Agreement:

Additional terms if other
than as specified in the Agreement:

 

The
advance of funds will be governed by the terms and conditions of the Agreement
and this accepted borrowing request in all respects.

 

[Borrower]

 

 

	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
									

 

 

 Agreed and Accepted:

 

[Lender]

 

 

	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
										

 

 

5

 

Exhibit B

 

INTERCOMPANY LIQUIDITY AGREEMENT

 

ADDENDUM TO ADD ALLSTATE
AFFILIATES

 

Reference
is made to the Intercompany Liquidity Agreement (“Agreement”), dated January 1,
2008, among Allstate Insurance Company, Allstate Life Insurance Company and
each such additional direct or indirect wholly-owned subsidiary of The Allstate
Corporation (each an “Allstate Affiliate” and, together with AIC and ALIC, each
a “Party”) as may have entered into the Agreement pursuant to the terms of the
Agreement.

 

Pursuant
to its status as a direct or indirect wholly-owned subsidiary of The Allstate
Corporation,
                                                                        
(the “New Party”) has requested that it be added as a Party to the
Agreement.  By executing this Addendum,
the New Party agrees to be bound by all the terms and conditions of the
Agreement.  Its status thereunder shall
not be inconsistent with the status of the other Parties to the Agreement.

 

The
New Party shall become a Party to the Agreement effective as of
                [Date]            
with the following Lender Maximum and Borrower Maximum, as such term are
defined in the Agreement:

 

	
  Lender
  Maximum

  	
  $

  	
   

  
	
  Borrower
  Maximum

  	
  $

  	
   

  

 

[NEW
PARTY]

 

	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
										

 

 

Agreed
and Accepted:

 

Allstate
Insurance Company acknowledges that the New Party shall become a Party to the
Agreement on the effective date listed above, subject to all of the terms and
conditions of the Agreement as if an original Party thereto, and, pursuant to Section 5
of the Agreement, Allstate Insurance Company executes this Addendum on its behalf
and on behalf of all of the other Parties to the Agreement.

 

ALLSTATE
INSURANCE COMPANY

 

	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
										

 

 

6Exhibit 10.14

 

Candela
Corporation

 

Executive Employment,
Non-competition and Non-disclosure Agreement

 

THIS
EMPLOYMENT, NONCOMPETITION AND NONDISCLOSURE AGREEMENT (this “Employment
Agreement”), effective as of
[              ,2007]
(the “Effective Date”) is made by and between Candela Corporation, a
Delaware corporation (the “Company”), and
[                        ]
(the “Executive”).  The Company
and the Executive are sometimes referred to, individually, as a “Party”
or, collectively, as the “Parties.”

 

BACKGROUND

 

The Executive is employed by the Company. The Company
desires to maintain the employment of the Executive, and the Executive wishes
to remain employed by the Company, upon the terms and conditions hereinafter
set forth.

 

The Executive acknowledges that in the course of
rendering services to the Company, he may have and will in the future become
acquainted, with information about the business and financial affairs of the
Company, and may have contributed or may in the future contribute to such information.
The Executive recognizes that in order to protect the legitimate interests of
the Company it is necessary for the Company to protect all such information by
keeping it secret or confidential.

 

To evidence the understanding and agreement of the Company
and the Executive with regard to various aspects of the Executive’s continuing
employment and post-employment benefits, the Executive and the Company evidence
their various agreements in this Employment Agreement.

 

IN
CONSIDERATION of the premises, the mutual covenants and conditions set forth
herein, for the Company continuing to employ the Executive, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

 

1.     EMPLOYMENT

 

1.1.    Employment
at Will.  The Company hereby
offers the Executive, and Executive hereby accepts, employment or continued
employment as [Position] (the “Position”)
of the Company upon the terms and conditions hereinafter set forth herein.  Employment by the Company is terminable at
any time, for any reason, at the will of either the Executive or the
Company.  Executive understands and
acknowledges that he serves in such Position under the direct or indirect
direction of the Chief Executive Officer and President (the “CEO”) of the
Company, and his service may be terminated in the sole discretion of the
CEO.  No statement of policy or
procedure, whether written or oral, or set forth in any manual or guide, shall
be deemed or construed to be a promise by the Company to continue employment of
the Executive for any definite term, nor shall any such statement, policy or
procedure require the Company to follow any special procedure, such as
progressive discipline, before terminating employment.

 

1.2.    Exclusive Employment.  The Executive shall devote his full-time
efforts during normal business hours, and as otherwise reasonably required, to
fulfill Executive’s employment responsibilities, exclusively for the benefit of
the Company as required hereunder, and shall perform no services for, and shall
not become employed or engaged by, any other person, firm or entity while
employed by the Company. The foregoing shall not prevent Executive from (i) serving
on corporate, civic or charitable boards or committees; (ii) delivering
lectures or fulfilling speaking engagements; and/or (iii) managing
personal investments, so long as such activities do not interfere with the
performance of Executive’s responsibilities under this Employment Agreement.

 

1.3.    Duties.  The Executive’s duties and responsibilities
shall be as assigned by the CEO of the 

 

1

 

Company in his
discretion but shall be consistent with Executive’s position.  At all times the CEO shall be subject to the
direction and control of the Board of Directors of the Company, and the
Executive shall be subject to the direction and control of the CEO.

 

2.     COMPENSATION

 

During
the Term (as defined in Section 13.1 hereof), as compensation to
the Executive for all of the services to be provided by the Executive to the
Company, the Company agrees to pay, and the Executive agrees to and does
accept, the payments set forth below in this Section 2, unless
otherwise agreed to by the Company and the Executive:

 

2.1.    Salary.  For so long as the Executive shall remain
employed by the Company in the present Position during or after the Term, he
shall be entitled to receive an annual salary of [    Insert Salary    ]
($                  )
(“Salary”).  Salary shall be paid,
in arrears, on such legal basis as the Company shall generally follow from time
to time, net of all taxes and other legally required or mutually agreed
withholdings.  Salary may be modified
from time to time by the CEO without formal amendment to this Employment
Agreement.  In this regard, the Executive
hereby authorizes the Company to withhold from salary payments any amounts owed
to the Company by Executive hereunder or any other amounts as may be agreed to
subsequently, including, but not limited to, overpayments and 401k
contributions.

 

2.2.    Benefits.  The Executive shall be entitled to the
benefits, such as health insurance, dental insurance, life insurance, long-term
care, vacation, paid and unpaid leave as the Company may from time to time
offer to employees generally as a standard benefit, and shall be entitled to
such additional benefits as are offered to other senior officers by the Company
at the same general level of responsibility and title as the Executive.  Benefits are subject to change at any time
with such notice to employees as may be required by applicable employee benefit
plans and laws governing them.  No
special or different terms shall apply to Executive unless set forth in writing
and signed by an authorized executive officer of the Company.

 

2.3.    Cash Bonuses.  The Executive may or may not receive a bonus
in respect of any fiscal year depending on the parameters set by the CEO and
approved by the Compensation Committee of the Board of Directors, based upon
the performance, respectively, of the Executive and/or the Company, and the
achievement of targets established in such bonus plan.  If the bonus plan for a particular year is
premised solely upon the performance of the Company (rather than either
specific metrics for an officer, or such officer-specific metrics and
performance of the Company together), then the CEO may recommend, and in such
case the Board of Directors or Compensation Committee thereof shall consider,
approval of bonus arrangements outside of the bonus plan for an individual
Executive based upon the Executive’s performance evaluation.  Nothing herein shall be deemed to compel the
CEO or the Board of Directors or Compensation Committee thereof to establish a
bonus pool for any particular period, nor shall the Executive be deemed to be entitled
to any bonus irrespective of the achievement of various targets contained in a
formal bonus program approved as aforesaid, provided, however, if
the Board of Directors or Compensation Committee has approved your eligibility
to participate in a bonus pool, your targets have been identified and approved,
the time period for the achievement of your targets has been completed, and you
have achieved one or more targets that were to give rise to specified amounts
of bonus, then, in such case, you shall be entitled to receive your bonus in
respect of that bonus period.

 

2.4.    Equity
Awards.  Subject to the
approval of the Board of Directors, or the Compensation Committee thereof, the
Executive shall be entitled to receive options to purchase common stock of the
Company, Stock Appreciation Rights, shares of restricted stock, or such other
equity grants as may be determined by the Board of Directors, or Compensation
Committee thereof, in its or their sole and complete discretion.

 

2.5.    Review of
Salary and Bonus. 
Salary and bonus potential shall be reviewed at least annually by the
CEO.

 

2.6.    Supplemental
Retirement Plan. 
Executive will be eligible to participate in any supplemental retirement
plan, if adopted by the Company upon the standard terms that may be offered to
other executives of the same or similar level of the Company.

 

2

 

2.7.    Company Car.  The Employee will be entitled to the use of a
Company car, leased by the Company, in a price range determined by the CEO from
time to time.  In the event the
Employee’s employment is terminated at any time by the Company, for reasons
other than for Cause, the Company will continue to make two full monthly
payments on the lease.

 

2.8.    No Assurances.  The Executive acknowledges that there can be
no assurance that the performance of the Company will be sufficient to achieve
the conditions prerequisite to the payment of any of the bonus compensation
provided for above, nor can there be any assurance at any time with respect to
the value of any of the equity compensation provided for above, including
without limitation, at the time of any exercise of stock options, Stock
Appreciation Rights, or similar equity instruments.

 

3.     INTELLECTUAL
PROPERTY PROTECTION

 

For purposes of this
Employment Agreement, the following terms shall have the meanings assigned to
them below:

 

3.1.    Definitions:

 

3.1.1.  Confidential
Information: 
The term “Confidential Information” shall mean any trade secret,
proprietary or confidential information concerning the organization, personnel,
business or finances of the Company, or of any third party which the Company is
under an obligation to keep confidential, and that is maintained by the Company
as confidential.  Such Confidential
Information shall include, but is not limited to, trade secrets, proprietary or
confidential information respecting existing 
and future products and services, designs, methods, formulas, drafts of
publications, research, know-how, techniques, systems, databases, processes,
software programs or code, developments or experimental work, works of
authorship, customer and prospect lists and/or customer information and related
information, business plans, marketing plans, price lists, financial
information, sales techniques, projects, the Company’s salary and/or pay rates,
other Company personnel information, and all other plans and proposals.  Failure to mark any of the Confidential
Information as confidential shall not affect its status as part of the
Confidential Information covered under the terms of this Employment Agreement.

 

3.1.2.  Developments:  The term “Developments” shall mean any
invention, modification, discovery, design, development, improvement, process,
software program, work of authorship, documentation, formula, data, technique,
know-how, trade secret or intellectual property right whatsoever or any
interest therein (whether or not patentable or registrable under copyright,
trademark or similar statutes, including, but not limited to, the Semiconductor
Chip Protection Act, or subject to analogous protection).

 

3.2.    Disclosure
of Developments

 

3.2.1.  The
Executive agrees that he will communicate in writing to the Board of Directors
of the Company, or such officer or individual as the Board of Directors of the
Company may from time to time designate, a full and complete disclosure of any
and all Developments, research and other information, discoveries and
improvements made, developed, conceived and/or reduced to practice by the
Executive, alone, or jointly with others during a one (1) year period
following the termination of my employment or other association with the
Company, if such Developments, research, discoveries or improvements relate to
the business of the Company.

 

3.2.2.  The business
of the Company includes any technical or business interest that has been worked
on by the Company in the past, or in which there is work in progress at the
Company during the period of Executive’s employment with the Company.  The business interests of the Company include
Company operations or activities in the planning stages.

 

3.2.3.  Executive’s
Works.  The Executive
hereby represents and warrants that the Executive has fully disclosed to the
Company and attached hereto a description of any Developments which, prior to
his employment with the Company, the 

 

3

 

Executive conceived of or developed, wholly or
in part, but which has not been published or filed with the United States
Patent or Copyright Offices, and any such Developments which, following his
employment with the Company, he believes he retains some individual rights to
same.

 

3.3.    Assignment
of Developments

 

3.3.1.  If at any
time or times during the Executive’s employment or other association with the
Company, the Executive shall (either alone or with others) make, conceive,
create, discover, invent or reduce to practice any Development that (i) relates
to the business of the Company or any of the products or services being
developed, manufactured or sold by the Company or which may be used in relation
therewith; or (ii) results from tasks assigned to Executive by the
Company; or (iii) results from the use of premises or personal property
(whether tangible or intangible) owned, leased or contracted for by the
Company, then all such Developments and the benefits thereof are and shall
immediately become the sole and absolute property of the Company and its
assigns, as works made for hire or otherwise. 
The Executive shall promptly disclose to the Company (or any persons
designated by it) each such Development. 
The Executive hereby assigns to the Company all rights (including, but
not limited to, rights to inventions, patentable subject matter, copyrights and
trademarks) that the Executive may have or may acquire in the Developments and
all benefits and/or rights resulting therefrom to the Company and its assigns
without further compensation and shall communicate, without cost or delay, and
without disclosing to others the same, all available information relating
thereto (with all necessary plans and models) to the Company.

 

3.3.2.  The
Executive will assist, upon request, in locating writings and other physical
evidence of the making of his Developments and provide unrecorded information
relating to them, and give testimony in any proceeding in which any of the
Executive’s Developments or any application or patent directed thereto may be
involved, provided that if Executive is no longer employed by the Company,
reasonable compensation shall be paid for such services.  Notwithstanding the foregoing, no obligation
is imposed on the Company to remunerate at a higher rate for the giving of
testimony than the rate established by law for the compensation of witnesses in
the court or tribunal where the testimony is taken.  To the extent feasible, the Company will use
its best efforts to request such assistance at times and places as will least
interfere with any other employment of the Executive.

 

3.3.3.  The
Executive will promptly disclose to the Company all material which the
Executive produces, composes or writes, individually or in collaboration with
others, which arises out of work delegated to the Executive by the
Company.  The Executive agrees that all
such material constitutes a work for hire, and at the expense of the Company,
the Executive hereby assigns to the Company all his interest in such
copyrightable material and will sign all papers and do all other acts necessary
to assist the Company to obtain copyrights on such material in any and all
countries.

 

3.3.4.  Any
Development relating to the Company’s business made by Executive within one (1) year
following the termination of his employment (and which is required to be
disclosed in accordance with Section 3.2 above) shall be presumed to be
owned by the Company.

 

3.3.5.  The Executive
understands and acknowledges that this Article 3 does not apply to an
invention for which no equipment, supplies, facilities and/or trade secret
information of the Company was used and which was developed entirely on the
Executive’s own time, unless the invention relates directly to the business of
the Company, or to the Company’s actual or demonstrably anticipated research or
development, or the invention results from any work performed by the Executive
for the Company.

 

3.4.    Non-Disclosure:

 

3.4.1.  The
Executive recognizes that he has been exposed, prior to the date of this
Agreement, and hereafter will be exposed to the Company’s Confidential
Information.  The Executive agrees that
he will not, at any time, whether during or after the termination of Executive’s
employment, without first obtaining the written approval of the Board of
Directors of the 

 

4

 

Company, or of such officer or individual as the
Board of Directors of the Company may from time to time designate, divulge,
reveal, publish, transfer or disclose to any person or entity outside of the
Company, whether by private communications or by public address or publication,
or otherwise, any Confidential Information, except to the extent that such disclosure
is necessary to perform the Executive’s duties and fulfill his responsibilities
as an employee of the Company.  All
original and copies of any Confidential Information or other written materials
relating to the business of the Company, however and whenever produced, shall
be the sole property of the Company, not to be removed from the premises or
custody of the Company unless necessary to fulfill the essential functions of
the Executive’s job responsibilities.

 

3.4.2.  The
Executive shall keep confidential all matters entrusted to the Executive and
shall not use or attempt to use any Confidential Information, including
confidential information related to third parties which the Company is
obligated to maintain as confidential, except as may be required in the
ordinary course of performing Executive’s duties as an employee of the Company,
nor shall Executive use any Confidential Information in any manner which may
injure or cause loss or may be calculated to injure or cause loss to the
Company, whether directly or indirectly.

 

3.5.    Works and
Interests of Others. 
The Executive hereby represents and warrants that employment by the
Company will not violate any agreement or promise of the Executive to any other
person, and that the Executive will not use any property or Confidential
Information of others in his work for the Company.

 

4.     RECORDS AND
TANGIBLE MATERIALS

 

All notes, data, tapes, reference materials, sketches,
drawings, memoranda and records in any way relating to any of the information
referred to in Section 3, and hereof (including, without
limitation, any Confidential 
Information) or otherwise prepared by Executive in the course of his
employment, and all copies thereof, shall belong exclusively to the Company,
and the Executive agrees to deliver to the Company on request all copies of
such materials in his possession or then under his control. In the absence of
such a request, Executive shall deliver such items to the Company upon the
termination for any reason of the Executive’s employment with the Company.

 

5.     PROTECTION OF INFORMATION
AND GOODWILL

 

5.1.    Nature of Business.  The Executive and the Company recognize that
the Executive will acquire knowledge as a result of working for the Company,
especially in his Position, and that such knowledge will include not only
general knowledge about the Company’s industry, but specific knowledge of the
Company’s business, secrets, products and customers, including Confidential
Information.  The Executive and the
Company recognize that upon termination of employment by the Company, the
Executive could use such specific knowledge and information to the detriment of
the Company by disclosing it to competitors, customers and prospects, and using
it to obtain or win business. The Executive and the Company recognize that
proof of such disclosure would be difficult, yet the harm caused thereby could
be significant to the Company. 
Therefore, the Executive and the Company are willing to agree that
Confidential Information will be disclosed to the Executive, and, to protect
the Company, its relationship with its customers, its competitive position, and
its goodwill, the Executive will not engage in a competitive venture for a
twelve (12) month period after employment by the Company, as specified below.

 

5.2.    The Executive agrees while in
the employ of the Company and for one (1) year thereafter (the
“Prohibition Period”), regardless of the reasons for the Executive’s
termination, he will not directly or indirectly, do any of the following:

 

5.2.1.  Accept
employment with a company that competes with the Company in the cosmetic and
aesthetic/medical laser and light based system market, or engage in competitive
activities related thereto, including any business engaged in the business of
developing, producing, marketing or selling products or services of the type
under development, developed, produced, marketed or sold by the Company while
the Executive was employed by the Company.

 

5

 

5.2.2.  Without
limiting or narrowing the foregoing restriction, accept employment with and/or
enter into a competitive relationship with the following list of competitors
and/or any affiliated companies of such competitors also engaged in competition
with the Company:  Aesthera Alderm, Alma
Lasers, CoolTouch, Cutera, Cynosure, DDD, HOYA, ComBio, Laserscope, Lumenis,
Palomar Medical Technologies, Radiancy, Reliant, Rhytec, Sciton, Syneron and
Thermage.

 

5.2.3.  The
Executive agrees that this Section 5 shall be treated as a separate and
independent clause, and the unenforceability of any provision of it shall in no
way impair the enforceability of any of the other clauses of this
Agreement.  Moreover, if any portion of Section 5
shall for any reason be held to excessively broad as to the scope, activity,
subject or otherwise, so as to be unenforceable by law, it shall be construed
by the appropriate judicial body by limiting or reducing it, so as to be
enforceable to the maximum extent compatible with the applicable law as it
shall then appear.

 

5.2.4.  Irreparable
Harm.  Executive and the
Company acknowledge that a breach of this Section 5.2 will cause
irreparable harm to the Company.

 

5.2.5.  Geographical
Limitations. 
The Executive’s obligations under this Section 5 shall
extend to all geographical areas in which the Company, or any of its related
companies, is offering its products and services, either directly or indirectly
through licenses or otherwise, during the Prohibition Period.

 

5.2.6.  Non-Solicitation.  The Executive further agrees that for a
period of twelve (12) months  from
the date of termination of his employment, he will not, on behalf of himself or
any person or entity, (i) compete for, or engage in competitive
solicitation of, any customer or account of the Company which was contacted,
solicited or served by the Company while the Executive was employed by the
Company, or any person or entity that he has, during the twelve (12) months
immediately preceding such termination, solicited or serviced on behalf of the
Company or that has been so solicited or serviced, during such period, by any
person under the Executive’s supervision, or (ii) attempt to hire or
engage any individual who was an employee of the Company at any time during the
twelve (12) months immediately prior to such termination.

 

THE
EMPLOYEE REPRESENTS AND WARRANTS THAT THE KNOWLEDGE, SKILLS AND ABILITIES HE
POSSESSES ARE SUFFICIENT TO PERMIT HIM, IN THE EVENT OF TERMINATION OF HIS
EMPLOYMENT HEREUNDER FOR ANY REASON, TO EARN A LIVELIHOOD SATISFACTORY TO HIM
WITHOUT VIOLATING ANY PROVISION OF SECTION 5 HEREOF.

 

6.     INJUNCTIVE RELIEF

 

The
Executive understands and agrees that the Company will probably suffer
irreparable harm if Proprietary Information is disclosed, or Section 5
is breached in any other respect, and that monetary damages will be inadequate
to compensate the Company for such breach. 
Accordingly, the Executive agrees that, in the event of a breach or
threatened breach by the Executive of any of the provisions of this Employment
Agreement, the Company, in addition to and not in limitation of any other
rights, remedies or damages available to the Company at law or in equity, will
be entitled to, and Executive hereby consents to, a permanent injunction in
order to prevent or to restrain any such breach by the Executive, or by the
Executive’s partners, agents, representatives, servants, employers, employees
and/or any and all persons directly or indirectly acting for or with him.

 

7.     ACCOUNTING FOR PROFITS

 

The
Executive covenants and agrees that, if he shall violate any of his covenants
or agreements under this Employment Agreement, the Company shall be entitled to
an accounting and repayment of all profits, compensation, commissions,
remunerations or benefits which the Executive directly or indirectly has
realized and/or may realize as a result of, growing out of or in connection
with any such violation; such remedy shall be in addition to and not in
limitation of any 

 

6

 

injunctive
relief or other rights or remedies to which the Company is or may be entitled at
law, in equity or under this Employment Agreement.

 

8.     REASONABLENESS OF
RESTRICTIONS

 

The Executive has carefully read and considered the
provisions of Sections 1 through 7 hereof and, having done so,
agrees that the restrictions set forth therein are fair and reasonable and are
reasonably required for the protection of the interests of the Company, its
officers, directors, stockholders and employees.

 

9.     SUCCESSORS AND ASSIGNS

 

This
Employment Agreement shall inure to the benefit of, be binding upon, and be
enforceable by the Executive, his personal or legal representative or
representatives, executors, administrators, successors, heirs, testate or
intestate distributees, devisees and legatees and this Employment Agreement
shall inure to the benefit of and be binding upon the Company and its
successors and assigns.  The term “Company”
as used herein shall include such successors and assigns and also shall include
any corporation which is at any time the parent or a subsidiary of the Company,
or any corporation or entity which is an affiliate of the Company by virtue of
common (although not identical) ownership, and for which the Executive is
providing services in any form during his employment with the Company or any
such other corporation or entity.  The
term successors and assigns as used herein shall include a corporation or other
entity acquiring all or substantially all of the assets and business of the
Company (including this Employment Agreement) whether by operation of law or
otherwise.  If the Executive should die
while any amount would still be payable to the Executive or his family
hereunder if the Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the executors, personal representatives or administrators of the
Executive’s estate.

 

10.   AGREEMENT TO BE BINDING ON
SUCCESSOR

 

The Company shall require
any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the
business or assets of the Company (the “Acquisition”), as a
condition precedent to the Acquisition, to expressly assume and
agree  in writing, with a copy to the Executive, to perform this
Agreement in the same manner and to the same extent as the Company would be
required to perform this Agreement as if no such succession had taken
place.  The Executive acknowledges and agrees, and the Company
acknowledges and agrees, that, without limitation to any other provision
of this Agreement which is also “material”, this provision is a
material term of this Agreement and an important clause
benefiting the Executive, to assure the Executive that the obligation of
the Company to provide the Executive with the existing benefits made
available under this Agreement is adhered to by any successor to the
Company, and the provision also benefits the Company in that the assurance to
you afforded by this provision is an important retention incentive to have the
Executive remain in the employment of the Company.

 

11.   NOTICES

 

Any
notice required or permitted by this Employment Agreement shall be given by
registered or certified mail, return receipt requested, addressed to the
Company at its then principal office, or to the Executive at his then current
address set forth in the payroll records of the Company, or to either party
hereto at such other address or addresses as he or it may from time to time
specify for the purpose in a notice similarly given.

 

12.   ENFORCEABILITY AND SCOPE

 

If any
provision of this Employment Agreement is subsequently determined by a court of
competent jurisdiction to be void or unenforceable for any reason, that
provision shall be deemed stricken and the remainder of the Employment
Agreement shall not be affected thereby and shall be binding upon the parties
hereto insofar as it remains a workable instrument to accomplish the intent and
purposes of the parties. The parties shall negotiate the severed provision to
bring the same within the applicable legal requirements to the extent possible.
Executive agrees to take any 

 

7

 

and
all actions, including without limitation, execution and delivery of any and
all instruments and documents necessary or advisable to complete, perfect,
evidence or otherwise confirm any of the matters set forth herein.

 

13.   TERM AND OTHER CONDITIONS

 

13.1.  Term.  This Employment Agreement shall take effect
as of the Effective Date and shall remain in full force and effect through December 31,
2009,  and unless notice of termination is provided by one Party to the
other Party within 60 days in advance of each June 30 thereafter, this
Employment Agreement shall be deemed to be renewed for another one-year period
without any action on the part of the parties (the “Term”), or until the
Executive’s employment by the Company terminates, or until superseded by
another written employment agreement based upon good and proper consideration
and executed by the Executive and the Company, whichever first occurs.  Notwithstanding the foregoing, in the event
of the termination of this Employment Agreement by reason of the termination of
the Executive’s employment, those provisions hereof which by their terms extend
in accordance with such terms, such as, without limitation, the provisions of Section 7,
shall survive.  No amendment or
modification of the terms and conditions hereof shall be effective unless set
forth in a written document signed by the Executive and the Company, except for
the year-to-year extension hereof by non-objecting Parties provided for above.

 

13.2.  Termination of Employment.

 

13.2.1.     Voluntary
Resignation or Discharge For Cause. 
In the event that either (i) the Executive resigns his employment
during the Term of this Employment Agreement for any reason other than
Involuntary Termination (as defined below) (and not due to the Executive’s
death or Disability), or (ii) the Company discharges the Executive during
the term of this Employment Agreement for Cause (as hereinafter defined):

 

a)             any stock options or
other equity awards previously granted or hereafter granted pursuant to the
terms of this Employment Agreement shall continue to be bound by the terms
thereof.;

 

b)            the Company will pay the Executive:  (i) his base salary then in effect
through the day of his termination of employment; (ii) any accrued but
unused vacation pay; (iii) any reimbursement of business expenses and
other amounts earned, accrued or owing, but not yet paid, or to be reimbursed
under Sections 2.1, 2.2, or 2.3;
and (iv) any other payments and benefits required by law (together the
“Accrued Obligations”); and

 

c)             Executive shall not receive the Severance
Payment (as defined below).

 

For the purposes of this Employment Agreement,
“Involuntary Termination” means the Executive’s voluntary resignation from his
employment, within sixty (60) days following (i) any material diminution
in the Executive’s authority, duties or responsibilities; provided, however,
that a change in job position (including a change in title) shall not be deemed
a “material diminution” unless Executive’s new authority, duties or
responsibilities are substantially reduced from the prior authority, duties or
responsibilities, (ii) any material diminution of the Executive’s base
compensation, other than an across-the-board reduction in the base compensation
of the Company’s officers and senior management employees necessitated by the
business or financial condition of the Company, and that does not adversely
affect the Executive to a greater extent than other such persons, or (iii) a
material change in the geographic location at which the Executive must perform
his duties which is more than 50 miles from the current location, and (iv) a
material breach by the Company of the terms of this Agreement; provided that
the Executive’s termination of employment shall not be deemed to be an
Involuntary Termination unless the Company shall have been provided with
advance notice of the termination and a period of not less than 30 days to cure
the event or condition described in (i), (ii), (iii) or (iv), and shall
have either failed to so cure the event or waived its right to cure the event.

 

For the purposes of this Employment Agreement, “for
Cause” shall mean (i) the Executive’s abject failure to work cooperatively
with the Company’s other officers and 

 

8

 

senior employees, as determined in good faith by the
CEO, following reasonable notice and opportunity to cure; (ii) the Executive’s
gross negligence or willful misconduct in performing any action, or not
performing any action, that has had or could have, alone or in the aggregate, a
material negative impact on the Company; (iii) the Executive’s theft,
dishonesty, willful misconduct, breach of fiduciary duty for personal profit,
or falsification of any Company documents or records; (iv) the Executive’s
unauthorized use, misappropriation, destruction or diversion of any material
asset or corporate opportunity of the Company (including, without limitation,
the Executive’s improper use or disclosure of the Company’s confidential or
proprietary information or his failure to abide by Company policies relating to
confidentiality); (v) any intentional act by the Executive which has a
material detrimental effect on the Company’s reputation or business; (vi) any
material breach by the Executive of this Agreement and any other agreement
between the Company and Executive, including without limitation, the Company’s
Executive Non-Disclosure and Assignment Agreement, which breach is not cured
within fifteen (15) days after Executive receives notice from the Company
specifying such breach; (vii) the Executive’s conviction (including any
plea of guilty or nolo contendere)
of any criminal act involving fraud, dishonesty, misappropriation or moral
turpitude, or which impairs the Employee’s ability to perform his duties with
the Company.

 

For purposes of this Employment Agreement,
“Disability” means the Executive’s absence from the full-time performance of
the Executive’s duties with the Company for 180 consecutive calendar days as a
result of incapacity due to mental or physical illness which is determined to
be total and permanent by a physician selected by the Company or its insurers
and acceptable to the Executive or the Executive’s legal representative.

 

13.2.2  Discharge Without Cause or
Involuntary Termination.  In the
event the Company discharges Executive during the Term of this Employment
Agreement without Cause (as defined below) (and not due to the Executive’s
death or Disability) or the Executive resigns for Involuntary Termination (as
defined above), then:

 

a)             any stock options or
other equity awards previously granted or hereafter granted pursuant to this
Employment Agreement shall continue to be bound by the terms thereof.  The Board of Directors retains its authority,
in its sole discretion, to extend the exercise period of any equity instrument
granted to the Executive, or to accelerate the vesting of any such
instrument.  If such instrument was originally awarded in the form of an
Incentive Stock Option, such adjustments would cause such option to become a
non-qualified option;

 

b)            the
Company shall pay Executive the Accrued Obligations;

 

c)             subject to Sections
12.3 and Sections 12.4, the Executive shall be entitled to receive his Salary
for a one-year period, payable in regular monthly installments for a period of
twelve (12) months following such date and if the Executive chooses to elect
health and dental insurance continuation in accordance with the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Company will pay the
entire premium payments for his health and dental insurance coverage under
COBRA for a period of twelve (12) months (collectively the “Severance Payment”);

 

d)            the Company shall
continue to make available to the Executive, and to make payments on, one
leased vehicle, for an additional two full monthly payments from and after his
Termination Date; and

 

e)             the Company shall
provide outplacement services through one or more of the Executive’s choosing
up to an aggregate of $10,000, with such services to extend until the earlier
of (i) 12 months following the termination of Executive’s employment, or (ii) the
day the Executive secures full time employment.

 

Discharge “without Cause”
shall mean any discharge that is not for Cause.

 

9

 

13.2.3  Death or Disability.  In the event the Executive’s employment with
the Company terminates due to Executive’s death or Disability:

 

a)             any stock options or
other equity awards previously granted or hereafter granted pursuant to this
Employment Agreement shall continue to be bound by the terms thereof;

 

b)            the Company shall pay
the Executive the Accrued Obligations in a lump sum in cash within 30 days
after the date of termination; and

 

c)             neither the Executive
nor the heirs, legatees, executors, permitted assigns, or legal representatives
of the Executive shall receive the Severance Payment.

 

13.3        Satisfaction of Claims.

 

The
Executive acknowledges that any of the foregoing payments in Section 13.2 shall satisfy any and all claims of any kind and
nature, including without limitation claims for compensation to which he may be
entitled in the event the Company terminates the Executive’s employment other
than for Cause, and agrees to execute and deliver a full and complete release
of claims substantially in the form of Exhibit A or Exhibit B
hereto, as applicable, simultaneously with the receipt of any such payments,
and as a condition precedent to the rights to receive any such payments.

 

13.4        Section 409A.

 

It is the intent of the parties hereto that all
severance payments and benefits provided pursuant to this Employment Agreement
qualify as short-term deferrals, as defined in Treasury Regulation
§1.409A-1(a)(4), separation pay due to an involuntary separation from service
under Treasury Regulation §1.409A-1(b)(9)(iii), reimbursement of medical
benefits under Treasury Regulation §1.409A-1(b)(9)(v)(B), and/or limited
payments, as defined in Treasury Regulation §1.409A-1(b)(9)(v)(D).  If (a) it is determined that any
payments or benefits provided pursuant to this Employment Agreement that are
paid upon “separation from service” (as that term is used in Section 409A
of the Internal Revenue Code of 1986, as amended, and any related regulations
or other applicable guidance promulgated thereunder (collectively, “Section 409A”))
constitute deferred compensation for purposes of Section 409A (after
taking into account the exceptions listed in the prior sentence and/or any
other applicable exceptions) and (b) the Executive is a “specified
employee” (as that term is used in Section 409A) on the date on which the
separation from service occurs, such payments or benefits (or portions thereof)
that constitute deferred compensation and that are to be paid or provided
during the six (6) month period following the Executive’s separation from
service shall not be paid or provided until the first business day after the
date that is six (6) months following the Executive’s separation from
service or, if the Executive dies during such six (6) month period, on the
first business day after the date of the Executive’s death.  The payment that is made pursuant to the
prior sentence shall include the cumulative amount of any amounts that could
not be paid during the six (6) month period.  All other payments or benefits under this
Employment Agreement shall be paid or provided in accordance with the
applicable provision of this Employment Agreement.  Each installment payment under this
Employment Agreement shall be treated as a separate payment as defined under
Treasury Regulation §1.409A-2(b)(2).  For
all purposes under this Employment Agreement, references to termination of the
Executive’s employment and similar terms shall be interpreted to mean
“separation from service,” as that term is used in Section 409A, and the
Executive’s employment shall not be deemed to have terminated for purposes of
this Section 12 unless and until a separation from service shall
have occurred for purposes of Section 409A.

 

14.           GOVERNING
LAW AND FORUM

 

The
Executive and the Company agree that this Employment Agreement shall be
governed by and construed in accordance with the internal laws of the
Commonwealth of Massachusetts, and any legal proceeding regarding the
interpretation or enforcement of this Employment Agreement shall be instituted
in a court of competent jurisdiction located within Commonwealth of
Massachusetts.

 

10

 

15.           CONTROLLING AGREEMENT

 

THE
EXECUTIVE AND THE COMPANY HAVE PREVIOUSLY SIGNED ONE OR MORE AGREEMENTS CONTAINING, WITHOUT
LIMITATION, NON-DISCLOSURE OBLIGATIONS, AND ASSIGNMENT OF INVENTIONS
OBLIGATIONS ON THE PART OF THE EXECUTIVE. 
THE EXECUTIVE AGREES THAT ALL SUCH UNDERTAKINGS FOR PERIODS PRIOR TO THE
DATE OF THIS AGREEMENT SHALL CONTINUE TO BE IN FULL FORCE AND EFFECT.

 

NOTWITHSTANDING
ANY OTHER PROVISIONS OF ANY OTHER AGREEMENT OR DOCUMENT TO THE CONTRARY, IN THE
EVENT OF ANY CONFLICT OR APPARENT CONFLICT BETWEEN THIS EMPLOYMENT AGREEMENT
AND THE TERMS AND CONDITIONS OF SUCH DOCUMENT OR AGREEMENT, INCLUDING BUT NOT
LIMITED TO ANY DOCUMENTATION PERTAINING TO STOCK OPTION GRANTS, STOCK
APPRECIATION RIGHTS, RESTRICTED SHARE ISSUES OR OTHER EQUITY INSTRUMENTS
GRANTED TO THE EXECUTIVE, THE TERMS AND CONDITIONS OF THIS EMPLOYMENT AGREEMENT
SHALL CONTROL AND SUCH OTHER AGREEMENTS OR DOCUMENTS SHALL NOT IMPOSE ANY
GREATER LIMITATIONS UPON OR CONDITIONS UPON THE VESTING, RECEIPT OR SALE OF
SUCH EQUITY INTERESTS THAN ARE CONTAINED IN THIS EMPLOYMENT AGREEMENT.

 

16.           ENTIRE AGREEMENT

 

Except
for any written agreements entered into between the Company and the Executive
prior to the date hereof, pertaining to any of the matters in Sections 4, 5 or
6 of this Agreement, which written agreements shall survive the execution of
this Employment Agreement, this instrument contains the entire agreement of the
parties relating to the subject matter hereof, and it supersedes any prior or
contemporaneous oral or written understandings of any kind or nature; provided,
however, that this Agreement shall not affect the Executive’s rights under the
Candela Corporation Senior Officer Executive Retention Agreement dated [        ], 2007, as may be amended from time to
time (the “Retention Agreement”). 
Notwithstanding the foregoing, in no event shall the Executive be
entitled to receive severance payments or benefits under this Agreement if he
is entitled to receive severance payments or benefits under the Retention
Agreement. Executive represents that he is not relying on any agreement,
representation or warranty pertaining to the subject matter hereof that is not
expressly set forth herein.  The waiver
or breach of any term or condition of this Employment Agreement shall not be
deemed to constitute a waiver of any subsequent breach of the same or any other
term or condition.

 

17.           ARBITRATION

 

Any
dispute between the Company and the Executive arising out of or in any manner
connected with employment or employment practices, including but not limited to
claims of discrimination of any kind and wrongful discharge, under state,
federal or local law, shall be submitted to binding arbitration in accordance
with the rules of the American Arbitration Association, to be conducted in
Boston, Massachusetts.

 

THE UNDERSIGNED EXECUTIVE HEREBY REPRESENTS
THAT I UNDERSTAND THAT THIS EMPLOYMENT AGREEMENT CONTAINS AN AGREEMENT TO
ARBITRATE.  AFTER SIGNING THIS DOCUMENT,
I UNDERSTAND THAT I WILL NOT BE ABLE TO BRING A LAWSUIT CONCERNING ANY DISPUTE
THAT MAY ARISE THAT IS COVERED BY THE ARBITRATION AGREEMENT, UNLESS IT
INVOLVES A QUESTION OF CONSTITUTIONAL OR CIVIL RIGHTS.  INSTEAD, I AGREE TO SUBMIT ANY SUCH DISPUTE
TO AN IMPARTIAL ARBITRATOR.

 

[The rest
of this page intentionally left blank.]

 

11

 

Form of Release of Claims

(Exhibit A: For Residents of
States Other than California)

 

In consideration for receiving benefits
pursuant to your Employment, Noncompetition and Nondisclosure Agreement dated
[                          ] between you
and Candela Corporation. (the “Company”) (the “Agreement”), you, on behalf of
yourself and your representatives, agents, estate, heirs, successors and
assigns, agree to and do hereby forever waive, release and discharge the
Company, and each of its affiliated or related entities, parents, subsidiaries,
predecessors, successors, assigns, divisions, owners, stockholders, partners,
directors, officers, attorneys, insurers, benefit plans, employees and agents,
whether previously or hereinafter affiliated in any manner, as well as all
persons or entities acting by, through, or in concert with any of them
(collectively, the “Released Parties”), from any and all claims (other than
“Excluded Claims” as hereinafter defined), debts, contracts, obligations,
promises, controversies, agreements, liabilities, demands, wage claims,
expenses, charges of discrimination, harassment or retaliation, disputes,
agreements, damages, attorneys’ fees, or complaints of any nature whatsoever,
whether or not now known, suspected, claimed, matured or unmatured, existing or
contingent, from the beginning of time until the moment you have signed this
Agreement, against the Released Parties (whether directly or indirectly), or
any of them, by reason of any act, event or omission concerning any matter,
cause or thing, including, without limiting the generality of the foregoing,
any claims related to or arising out of (i) your employment  or its termination, (ii) any contract or
agreement (express or implied) between you and any of the Released Parties, (iii) any
tort or tort-type claim, (iv) any federal, state or governmental
constitution, statute, regulation or ordinance, including but not limited to
the U.S. Constitution; Title VII of the Civil Rights Act of 1964, as
amended; the Civil Rights Act of 1991; the Age Discrimination in Employment Act
of 1967, as amended (including the Older Workers Benefit Protection Act); the
Equal Pay Act of 1963, as amended; the Americans With Disabilities Act of 1990;
the Family and Medical Leave Act of 1993; the Worker Adjustment Retraining and
Notification Act; the Employee Retirement Income Security Act of 1974; the Fair
Labor Standards Act; any applicable Executive Order Programs; any similar state
or local statutes or laws; and any other federal, state, or local civil or
human rights law, (v) any public policy, contract or tort law, or under
common law, (vi) any policies, practices or procedures of the Company, (vii) any
claim for wrongful discharge, breach of contract, infliction of emotional distress,
defamation, (vii) any claim for costs, fees, or other expenses, including
attorneys’ fees incurred in these matters, (viii) any impairment of your
ability to obtain subsequent employment, and (ix) any permanent or
temporary disability or loss of future earnings.  It is acknowledged that you may be entitled
to satisfaction by the Company of claims you may presently have, or may in the
future have, for indemnification arising out of the performance of your duties
as an officer of the Company, pursuant to the terms of the Company’s charter,
or its By-laws, or pursuant to the provisions of one or more directors’ and
officers’ (D&O) insurance (D&O) policies.  Any such claim brought by you shall be
considered an Excluded Claim, but it shall not be presumed that any such claim
is valid on its face.

 

For the purpose of implementing a full and complete release and
discharge of the Released Parties, you expressly acknowledge that this
Agreement is intended to include and does include in its effect, without limitation,
all claims which you do not know or suspect to exist in your favor against the
Released Parties, or any of them, at the moment of execution hereof, and that
this Agreement expressly contemplates the extinguishment of all such claims.

 

12

 

Form of Release of Claims

(Exhibit B: For California
Residents)

 

In consideration for receiving benefits
pursuant to your Employment, Noncompetition and Nondisclosure Agreement dated
[                          ] between you
and Candela Corporation. (the “Company”) (the “Agreement”), you, on behalf of
yourself and your representatives, agents, estate, heirs, successors and
assigns, agree to and do hereby forever waive, release and discharge the
Company, and each of its affiliated or related entities, parents, subsidiaries,
predecessors, successors, assigns, divisions, owners, stockholders, partners,
directors, officers, attorneys, insurers, benefit plans, employees and agents,
whether previously or hereinafter affiliated in any manner, as well as all
persons or entities acting by, through, or in concert with any of them
(collectively, the “Released Parties”), from any and all claims other than “
Excluded Claims” as herinafter defined, debts, contracts, obligations, promises,
controversies, agreements, liabilities, demands, wage claims, expenses, charges
of discrimination, harassment or retaliation, disputes, agreements, damages,
attorneys’ fees, or complaints of any nature whatsoever, whether or not now
known, suspected, claimed, matured or unmatured, existing or contingent, from
the beginning of time until the moment you have signed this Agreement, against
the Released Parties (whether directly or indirectly), or any of them, by
reason of any act, event or omission concerning any matter, cause or thing,
including, without limiting the generality of the foregoing, any claims related
to or arising out of (i) your employment 
or its termination, (ii) any contract or agreement (express or
implied) between you and any of the Released Parties, (iii) any tort or
tort-type claim, (iv) any federal, state or governmental constitution,
statute, regulation or ordinance, including but not limited to the U.S.
Constitution; Title VII of the Civil Rights Act of 1964, as amended; the
Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as
amended (including the Older Workers Benefit Protection Act); the Equal Pay Act
of 1963, as amended; the Americans With Disabilities Act of 1990; the Family
and Medical Leave Act of 1993; the Worker Adjustment Retraining and
Notification Act; the Employee Retirement Income Security Act of 1974; the Fair
Labor Standards Act; any applicable Executive Order Programs; any similar state
or local statutes or laws; and any other federal, state, or local civil or
human rights law, (v) any public policy, contract or tort law, or under
common law, (vi) any policies, practices or procedures of the Company, (vii) any
claim for wrongful discharge, breach of contract, infliction of emotional
distress, defamation, (vii) any claim for costs, fees, or other expenses,
including attorneys’ fees incurred in these matters, (viii) any impairment
of your ability to obtain subsequent employment, and (ix) any permanent or
temporary disability or loss of future earnings. .  It is acknowledged that you may be entitled
to satisfaction by the Company of claims you may presently have, or may in the
future have, for indemnification arising out of the performance of your duties
as an officer of the Company, pursuant to the terms of the Company’s charter,
or its By-laws, or pursuant to the provisions of one or more directors’ and
officers’ (D&O) insurance (D&O) policies.  Any such claim brought by you shall be
considered an Excluded Claim, but it shall not be presumed that any such claim
is valid on its face.

 

This Agreement includes a waiver of any
rights you may have under Section 1542 of the California Civil Code, or
any other similar state statutes or laws, regarding the waiver of unknown
claims.

 

Section 1542 states:

 

“A GENERAL RELEASE DOES
NOT EXTEND TO CLAIMS WHICH THE EMPLOYEE DOES NOT KNOW OR SUSPECT TO EXIST IN
HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE EMPLOYER.”

 

Not withstanding the provisions of Section 1542, or any similar
state statutes or laws, and for the purpose of implementing a full and complete
release and discharge of the Released Parties, you expressly acknowledge that
this Agreement is intended to include and does include in its effect, without
limitation, all claims which you do not know or suspect to exist in your favor
against the Released Parties, or any of them, at the moment  of execution hereof, and that this Agreement
expressly contemplates the extinguishment of all such claims.

 

13

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