Document:

Exhibit 10.5

RELIANT
TECHNOLOGIES, INC.

 

2007
EMPLOYEE STOCK PURCHASE PLAN

 

ADOPTED BY THE BOARD OF DIRECTORS: 
AUGUST 9, 2007

APPROVED BY THE STOCKHOLDERS: ________, 2007

1.             GENERAL.

(a)           The purpose of the Plan is to provide a
means by which Eligible Employees of the Company and certain designated Related
Corporations may be given an opportunity to purchase shares of Common
Stock.  The Plan is intended to permit
the Company to grant a series of Purchase Rights to Eligible Employees under an
Employee Stock Purchase Plan.

(b)           The Company, by means of the Plan, seeks
to retain the services of such Employees, to secure and retain the services of
new Employees and to provide incentives for such persons to exert maximum
efforts for the success of the Company and its Related Corporations.

2.             ADMINISTRATION.

(a)           The Board shall administer the Plan
unless and until the Board delegates administration of the Plan to a Committee
or Committees, as provided in Section 2(c).

(b)           The Board shall have the power, subject
to, and within the limitations of, the express provisions of the Plan:

(i)            To determine how and when Purchase Rights
to purchase shares of Common Stock shall be granted and the provisions of each
Offering of such Purchase Rights (which need not be identical).

(ii)           To designate from time to time which
Related Corporations of the Company shall be eligible to participate in the
Plan.

(iii)         To construe and interpret the Plan and
Purchase Rights, and to establish, amend and revoke rules and regulations for
its administration.  The Board, in the
exercise of this power, may correct any defect, omission or inconsistency in
the Plan, in a manner and to the extent it shall deem necessary or expedient to
make the Plan fully effective.

(iv)          To settle all controversies regarding the
Plan and Purchase Rights granted under it.

(v)            To suspend or terminate the Plan at any
time.  Suspension or termination of the
Plan shall not impair rights and obligations under any Purchase Right granted
while the Plan is in effect except with the written consent of the affected
Participant.

 

 

(vi)          To amend the Plan in any respect the
Board deems necessary or advisable. 
However, except as provided in Section 13(a) relating to Capitalization
Adjustments, stockholder approval shall be required for any amendment of the
Plan that either (i) materially increases the number of shares of Common Stock
available for issuance under the Plan, (ii) materially expands the class of
individuals eligible to become Participants and receive Purchase Rights under the
Plan, (iii) materially increases the benefits accruing to Participants under
the Plan or materially reduces the price at which shares of Common Stock may be
purchased under the Plan, (iv) materially extends the term of the Plan, or (v)
expands the types of awards available for issuance under the Plan, but in each
of (i) through (v) only to the extent required by applicable law or listing
requirements. Except as provided above, the rights and obligations under any
Purchase Rights granted before amendment of the Plan shall not be impaired by
any amendment of the Plan except: (i) with the consent of the person to whom
such Purchase Rights were granted, or (ii) as necessary to comply with any laws
or governmental regulations (including, without limitation, the provisions of
the Code and the regulations promulgated thereunder relating to Employee Stock
Purchase Plans).

(vii)         Generally, to exercise such powers and to
perform such acts as it deems necessary or expedient to promote the best
interests of the Company and its Related Corporations and to carry out the
intent that the Plan be treated as an Employee Stock Purchase Plan.

(viii)        To adopt such procedures and sub-plans as
are necessary or appropriate to permit participation in the Plan by Employees
who are foreign nationals or employed outside the United States.

(c)           The Board may delegate some or all of the
administration of the Plan to a Committee or Committees.  If administration is delegated to a
Committee, the Committee shall have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board that have been
delegated to the Committee, including the power to delegate to a subcommittee
any of the administrative powers the Committee is authorized to exercise (and
references in this Plan to the Board shall thereafter be to the Committee or
subcommittee), subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board.  The Board may retain the authority to
concurrently administer the Plan with the Committee and may, at any time,
revest in the Board some or all of the powers previously delegated.

(d)           All determinations, interpretations and
constructions made by the Board in good faith shall not be subject to review by
any person and shall be final, binding and conclusive on all persons.

3.             SHARES OF COMMON STOCK SUBJECT TO THE PLAN.

(a)           Subject to the provisions of Section 13(a)
relating to Capitalization Adjustments, the shares of Common Stock that may be
sold pursuant to Purchase Rights shall not exceed in the aggregate six hundred
thousand (600,000)(1) shares of Common Stock. 
In addition, the number of shares of Common Stock available for issuance
under the Plan shall automatically

(1) Pre-IPO, pre-split shares

 

 

 

 

 

increase on
January 1st of each year, commencing in 2008 and ending on (and including)
January 1, 2017, in an amount equal to the lesser of (i) two percent (2%) of
the total number of shares of Common Stock outstanding on December 31st of the
preceding calendar year, or (ii) one million, two hundred thousand (1,200,000)(2)
shares of Common Stock.  Notwithstanding
the foregoing, the Board may act prior to the first day of any calendar year,
to provide that there shall be no increase in the share reserve for such
calendar year or that the increase in the share reserve for such calendar year
shall be a lesser number of shares of Common Stock than would otherwise occur
pursuant to the preceding sentence.

(2) Pre-IPO, pre-split shares

 

(b)           If any Purchase Right granted under the
Plan shall for any reason terminate without having been exercised, the shares
of Common Stock not purchased under such Purchase Right shall again become
available for issuance under the Plan.

(c)           The stock purchasable under the Plan
shall be shares of authorized but unissued or reacquired Common Stock,
including shares repurchased by the Company on the open market.

4.             GRANT OF PURCHASE RIGHTS; OFFERING.

(a)           The Board may from time to time grant or
provide for the grant of Purchase Rights to purchase shares of Common Stock
under the Plan to Eligible Employees in an Offering (consisting of one or more
Purchase Periods) on an Offering Date or Offering Dates selected by the
Board.  Each Offering shall be in such
form and shall contain such terms and conditions as the Board shall deem
appropriate, which shall comply with the requirement of Section 423(b)(5) of
the Code that all Employees granted Purchase Rights shall have the same rights
and privileges.  The terms and conditions
of an Offering shall be incorporated by reference into the Plan and treated as
part of the Plan.  The provisions of
separate Offerings need not be identical, but each Offering shall include
(through incorporation of the provisions of this Plan by reference in the
document comprising the Offering or otherwise) the period during which the
Offering shall be effective, which period shall not exceed twenty-seven (27)
months beginning with the Offering Date, and the substance of the provisions
contained in Sections 5 through 8, inclusive.

(b)           If a Participant has more than one
Purchase Right outstanding under the Plan, unless he or she otherwise indicates
in agreements or notices delivered hereunder: (i) each agreement or notice
delivered by that Participant shall be deemed to apply to all of his or her
Purchase Rights under the Plan, and (ii) a Purchase Right with a lower exercise
price (or an earlier-granted Purchase Right, if different Purchase Rights have
identical exercise prices) shall be exercised to the fullest possible extent
before a Purchase Right with a higher exercise price (or a later-granted
Purchase Right if different Purchase Rights have identical exercise prices)
shall be exercised.

(c)           The Board shall have the discretion to
structure an Offering so that if the Fair Market Value of the shares of Common
Stock on the first day of a new Purchase Period within that Offering is less
than or equal to the Fair Market Value of the shares of Common Stock on the
Offering Date, then (i) that Offering shall terminate immediately, and (ii) the
Participants in

 

 

 

 

such terminated
Offering shall be automatically enrolled in a new Offering beginning on the
first day of such new Purchase Period.

5.             ELIGIBILITY.

(a)           Purchase Rights may be granted only to
Employees of the Company or, as the Board may designate as provided in Section 2(b),
to Employees of a Related Corporation. 
Except as provided in Section 5(b), an Employee shall not be eligible to
be granted Purchase Rights under the Plan unless, on the Offering Date, such
Employee has been in the employ of the Company or the Related Corporation, as
the case may be, for such continuous period preceding such Offering Date as the
Board may require, but in no event shall the required period of continuous
employment be greater than two (2) years. 
In addition, the Board may provide that no Employee shall be eligible to
be granted Purchase Rights under the Plan unless, on the Offering Date, such
Employee’s customary employment with the Company or the Related Corporation is
more than twenty (20) hours per week and more than five (5) months per calendar
year or such other criteria as the Board may determine consistent with Section
423 of the Code.

(b)           The Board may provide that each person
who, during the course of an Offering, first becomes an Eligible Employee
shall, on a date or dates specified in the Offering which coincides with the
day on which such person becomes an Eligible Employee or which occurs
thereafter, receive a Purchase Right under that Offering, which Purchase Right
shall thereafter be deemed to be a part of that Offering.  Such Purchase Right shall have the same
characteristics as any Purchase Rights originally granted under that Offering,
as described herein, except that:

(i)            the date on which such Purchase Right is
granted shall be the “Offering Date” of such Purchase Right for all purposes,
including determination of the exercise price of such Purchase Right;

(ii)           the period of the Offering with respect
to such Purchase Right shall begin on its Offering Date and end coincident with
the end of such Offering; and

(iii)         the Board may provide that if such person
first becomes an Eligible Employee within a specified period of time before the
end of the Offering, he or she shall not receive any Purchase Right under that
Offering.

(c)           No Employee shall be eligible for the
grant of any Purchase Rights under the Plan if, immediately after any such
Purchase Rights are granted, such Employee owns stock possessing five percent
(5%) or more of the total combined voting power or value of all classes of
stock of the Company or of any Related Corporation.  For purposes of this Section 5(c), the rules
of Section 424(d) of the Code shall apply in determining the stock ownership of
any Employee, and stock which such Employee may purchase under all outstanding
Purchase Rights and options shall be treated as stock owned by such Employee.

(d)           As specified by Section 423(b)(8) of the
Code, an Eligible Employee may be granted Purchase Rights under the Plan only
if such Purchase Rights, together with any other rights granted under all
Employee Stock Purchase Plans of the Company and any Related Corporations, do
not permit such Eligible Employee’s rights to purchase stock of the Company or
any Related Corporation to accrue at a rate which exceeds twenty five thousand
dollars

 

 

 

($25,000) of Fair
Market Value of such stock (determined at the time such rights are granted, and
which, with respect to the Plan, shall be determined as of their respective
Offering Dates) for each calendar year in which such rights are outstanding at
any time.

(e)           Officers of the Company and any
designated Related Corporation, if they are otherwise Eligible Employees, shall
be eligible to participate in Offerings under the Plan.  Notwithstanding the foregoing, the Board may
provide in an Offering that Employees who are highly compensated Employees
within the meaning of Section 423(b)(4)(D) of the Code shall not be eligible to
participate.

6.             PURCHASE RIGHTS; PURCHASE PRICE.

(a)           On each Offering Date, each Eligible
Employee, pursuant to an Offering made under the Plan, shall be granted a
Purchase Right to purchase up to that number of shares of Common Stock
purchasable either with a percentage or with a maximum dollar amount, as
designated by the Board, but in either case not exceeding fifteen percent (15%) of such Employee’s
earnings (as defined by the Board in each Offering) during the period that
begins on the Offering Date (or such later date as the Board determines for a
particular Offering) and ends on the date stated in the Offering, which date
shall be no later than the end of the Offering.

(b)           The Board shall establish one (1) or more
Purchase Dates during an Offering as of which Purchase Rights granted pursuant
to that Offering shall be exercised and purchases of shares of Common Stock
shall be carried out in accordance with such Offering.

(c)           In connection with each Offering made
under the Plan, the Board may specify a maximum number of shares of Common
Stock that may be purchased by any Participant on any Purchase Date during such
Offering.  In connection with each
Offering made under the Plan, the Board may specify a maximum aggregate number
of shares of Common Stock that may be purchased by all Participants pursuant to
such Offering.  In addition, in connection
with each Offering that contains more than one Purchase Date, the Board may
specify a maximum aggregate number of shares of Common Stock that may be
purchased by all Participants on any Purchase Date under the Offering.  If the aggregate purchase of shares of Common
Stock issuable upon exercise of Purchase Rights granted under the Offering
would exceed any such maximum aggregate number, then, in the absence of any
Board action otherwise, a pro rata allocation of the shares of Common Stock
available shall be made in as nearly a uniform manner as shall be practicable
and equitable.

(d)           The purchase price of shares of Common
Stock acquired pursuant to Purchase Rights shall be not less than the lesser
of:

(i)            an amount equal to eighty-five percent
(85%) of the Fair Market Value of the shares of Common Stock on the Offering
Date; or

(ii)           an amount equal to eighty-five percent
(85%) of the Fair Market Value of the shares of Common Stock on the applicable
Purchase Date.

 

 

7.             PARTICIPATION;
WITHDRAWAL; TERMINATION.

(a)           A Participant may elect to authorize
payroll deductions pursuant to an Offering under the Plan by completing and
delivering to the Company, within the time specified in the Offering, an
enrollment form (in such form as the Company may provide). Each such enrollment
form shall authorize an amount of Contributions expressed as a percentage of
the submitting Participant’s earnings (as defined in each Offering) during the
Offering (not to exceed the maximum percentage specified by the Board). Each
Participant’s Contributions shall be credited to a bookkeeping account for such
Participant under the Plan and shall be deposited with the general funds of the
Company except where applicable law requires that Contributions be deposited
with a third party. To the extent provided in the Offering, a Participant may
begin such Contributions after the beginning of the Offering.  To the extent provided in the Offering, a
Participant may thereafter reduce (including to zero) or increase his or her
Contributions.  To the extent
specifically provided in the Offering, in addition to making Contributions by
payroll deductions, a Participant may make Contributions through the payment by
cash or check prior to each Purchase Date of the Offering.

(b)           During an Offering, a Participant may
cease making Contributions and withdraw from the Offering by delivering to the
Company a notice of withdrawal in such form as the Company may provide.  Such withdrawal may be elected at any time prior
to the end of the Offering, except as provided otherwise in the Offering.  Upon such withdrawal from the Offering by a
Participant, the Company shall distribute to such Participant all of his or her
accumulated Contributions (reduced to the extent, if any, such Contributions
have been used to acquire shares of Common Stock for the Participant) under the
Offering, and such Participant’s Purchase Right in that Offering shall
thereupon terminate.  A Participant’s
withdrawal from an Offering shall have no effect upon such Participant’s
eligibility to participate in any other Offerings under the Plan, but such
Participant shall be required to deliver a new enrollment form in order to
participate in subsequent Offerings.

(c)           Purchase Rights granted pursuant to any
Offering under the Plan shall terminate immediately upon a Participant ceasing
to be an Employee for any reason or for no reason (subject to any
post-employment participation period required by law) or other lack of
eligibility. The Company shall distribute to such terminated or otherwise ineligible
Employee all of his or her accumulated Contributions (reduced to the extent, if
any, such Contributions have been used to acquire shares of Common Stock for
the terminated or otherwise ineligible Employee) under the Offering.

(d)           Purchase Rights shall not be transferable
by a Participant except by will, the laws of descent and distribution, or by a
beneficiary designation as provided in Section 12.  During a Participant’s lifetime, Purchase
Rights shall be exercisable only by such Participant.

(e)           Unless otherwise specified in an
Offering, the Company shall have no obligation to pay interest on
Contributions.

 

 

8.             EXERCISE OF
PURCHASE RIGHTS.

(a)           On each Purchase Date during an Offering,
each Participant’s accumulated Contributions shall be applied to the purchase
of shares of Common Stock up to the maximum number of shares of Common Stock
permitted pursuant to the terms of the Plan and the applicable Offering, at the
purchase price specified in the Offering. 
No fractional shares shall be issued upon the exercise of Purchase
Rights unless specifically provided for in the Offering.

(b)           If any amount of accumulated
Contributions remains in a Participant’s account after the purchase of shares
of Common Stock and such remaining amount is less than the amount required to
purchase one share of Common Stock on the final Purchase Date of an Offering,
then such remaining amount shall be held in such Participant’s account for the
purchase of shares of Common Stock under the next Offering under the Plan, unless
such Participant withdraws from such next Offering, as provided in Section 7(b),
or is not eligible to participate in such Offering, as provided in Section 5,
in which case such amount shall be distributed to such Participant after the
final Purchase Date, without interest. 
If the amount of Contributions remaining in a Participant’s account
after the purchase of shares of Common Stock is at least equal to the amount
required to purchase one (1) whole share of Common Stock on the final Purchase
Date of the Offering, then such remaining amount shall be distributed in full
to such Participant at the end of the Offering without interest.

(c)           No Purchase Rights may be exercised to
any extent unless the shares of Common Stock to be issued upon such exercise under
the Plan are covered by an effective registration statement pursuant to the
Securities Act and the Plan is in material compliance with all applicable
federal, state, foreign and other securities and other laws applicable to the
Plan.  If on a Purchase Date during any
Offering hereunder the shares of Common Stock are not so registered or the Plan
is not in such compliance, no Purchase Rights or any Offering shall be
exercised on such Purchase Date, and the Purchase Date shall be delayed until
the shares of Common Stock are subject to such an effective registration
statement and the Plan is in such compliance, except that the Purchase Date
shall not be delayed more than twelve (12) months and the Purchase Date shall
in no event be more than twenty-seven (27) months from the Offering Date.  If, on the Purchase Date under any Offering
hereunder, as delayed to the maximum extent permissible, the shares of Common
Stock are not registered and the Plan is not in such compliance, no Purchase
Rights or any Offering shall be exercised and all Contributions accumulated
during the Offering (reduced to the extent, if any, such Contributions have
been used to acquire shares of Common Stock) shall be distributed to the
Participants without interest.

9.             COVENANTS OF THE COMPANY.

The Company shall seek to
obtain from each federal, state, foreign or other regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of Common Stock upon exercise of the Purchase Rights.  If, after commercially reasonable efforts,
the Company is unable to obtain from any such regulatory commission or agency
the authority that counsel for the Company deems necessary for the lawful
issuance and sale of Common Stock under the Plan, the Company shall be relieved
from any liability for failure to issue and sell Common Stock upon exercise of
such Purchase Rights unless and until such authority is obtained.

 

 

10.          USE
OF PROCEEDS FROM SALES OF COMMON STOCK.

Proceeds from the sale of
shares of Common Stock pursuant to Purchase Rights shall constitute general
funds of the Company.

11.          RIGHTS
AS A STOCKHOLDER.

A Participant shall not
be deemed to be the holder of, or to have any of the rights of a holder with
respect to, shares of Common Stock subject to Purchase Rights unless and until
the Participant’s shares of Common Stock acquired upon exercise of Purchase
Rights are recorded in the books of the Company (or its transfer agent).

12.          DESIGNATION
OF BENEFICIARY.

(a)           A Participant may file a written
designation of a beneficiary who is to receive any shares of Common Stock
and/or cash, if any, from the Participant’s account under the Plan in the event
of such Participant’s death subsequent to the end of an Offering but prior to
delivery to the Participant of such shares of Common Stock or cash.  In addition, a Participant may file a written
designation of a beneficiary who is to receive any cash from the Participant’s
account under the Plan in the event of such Participant’s death during an
Offering.  Any such designation shall be
on a form provided by or otherwise acceptable to the Company.

(b)           The Participant may change such
designation of beneficiary at any time by written notice to the Company.  In the event of the death of a Participant
and in the absence of a beneficiary validly designated under the Plan who is
living at the time of such Participant’s death, the Company shall deliver such
shares of Common Stock and/or cash to the executor or administrator of the
estate of the Participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its sole
discretion, may deliver such shares of Common Stock and/or cash to the spouse
or to any one or more dependents or relatives of the Participant, or if no
spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.

13.          ADJUSTMENTS
UPON CHANGES IN COMMON STOCK; CORPORATE TRANSACTIONS.

(a)           If any change is made in, or other events
occur with respect to, the Common Stock subject to the Plan or subject to any
Purchase Right after the effective date of the Plan set forth in Section 16
without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by
the Company (each a “Capitalization
Adjustment”)), the Board shall appropriately adjust: (i) the
class(es) and maximum number of securities subject to the Plan pursuant to
Section 3(a), (ii) the class(es) and maximum number of securities by which the
share reserve is to increase automatically each year pursuant to Section 3(a),
(iii) the class(es) and number of securities subject to outstanding Purchase
Rights, and (iv) the class(es) and number of securities imposed by purchase
limits under each ongoing Offering.  The
Board shall make such adjustments, and its determination shall be final,
binding and conclusive.  (Notwithstanding
the 

 

 

 

foregoing, the
conversion of any convertible securities of the Company shall not be treated as
a transaction “without receipt of consideration” by the Company.)

(b)           In the event of a Corporate Transaction,
then: (i) any surviving corporation or acquiring corporation (or the surviving
or acquiring corporation’s parent company) may assume or continue Purchase
Rights outstanding under the Plan or may substitute similar rights (including a
right to acquire the same consideration paid to the stockholders in the
Corporate Transaction) for those outstanding under the Plan, or (ii) if any
surviving or acquiring corporation (or its parent company)  does not assume or continue such Purchase
Rights or does not substitute similar rights for Purchase Rights outstanding
under the Plan, then the Participants’ accumulated Contributions shall be used
to purchase shares of Common Stock within ten (10) business days prior to the
Corporate Transaction under any ongoing Offerings, and the Participants’
Purchase Rights under the ongoing Offerings shall terminate immediately after
such purchase.

14.          AMENDMENT OF THE
PLAN.

(a)           The Board at any time, and from time to
time, may amend the Plan.  However,
except as provided in Section 13(a) relating to Capitalization Adjustments and
except as to amendments solely to benefit the administration of the Plan, to
take account of a change in legislation or to obtain or maintain favorable tax,
exchange control or regulatory treatment for Participants or the Company or any
Related Corporation, no amendment shall be effective unless approved by the
stockholders of the Company to the extent stockholder approval is necessary for
the Plan to satisfy the requirements of Section 423 of the Code or other
applicable laws or regulations.

(b)           It is expressly contemplated that the
Board may amend the Plan in any respect the Board deems necessary or advisable
to provide Employees with the maximum benefits provided or to be provided under
the provisions of the Code and the regulations promulgated thereunder relating
to Employee Stock Purchase Plans and/or to bring the Plan and/or Purchase
Rights into compliance therewith.

(c)           The rights and obligations under any
Purchase Rights granted before amendment of the Plan shall not be impaired by
any amendment of the Plan except: (i) with the consent of the person to whom
such Purchase Rights were granted, or (ii) as necessary to comply with any laws
or governmental regulations (including, without limitation, the provisions of
the Code and the regulations promulgated thereunder relating to Employee Stock
Purchase Plans).

15.          TERMINATION
OR SUSPENSION OF THE PLAN.

(a)           The Board may suspend or terminate the
Plan at any time.  Unless sooner
terminated, the Plan shall terminate at the time that all of the shares of
Common Stock reserved for issuance under the Plan, as increased and/or adjusted
from time to time, have been issued under the terms of the Plan.  No Purchase Rights may be granted under the
Plan while the Plan is suspended or after it is terminated.

(b)           Any benefits, privileges, entitlements
and obligations under any Purchase Rights while the Plan is in effect shall not
be impaired by suspension or termination of the Plan except

 

 

 

(i) as expressly
provided in the Plan or with the consent of the person to whom such Purchase
Rights were granted, (ii) as necessary to comply with any laws, regulations or
listing requirements, or (iii) as necessary to ensure that the Plan and/or
Purchase Rights comply with the requirements of Section 423 of the Code.  Notwithstanding the foregoing, if the Company’s
accountants advise the Company that the accounting treatment of purchases under
the Plan will change or has changed in a manner that the Company determines is
detrimental to its best interests, then the Company may, in its discretion,
take any or all of the following actions: (i) terminate each Offering hereunder
that is then ongoing as of the next Purchase Date (after the purchase of Common
Stock on such Purchase Date) under such Offering; (ii) set a new Purchase Date
for each ongoing Offering and terminate such Offerings after the purchase of
Common Stock on such Purchase Date; (iii) amend the Plan and the ongoing
Offering so that such Offering will no longer have an accounting treatment that
is detrimental to the Company’s best interests and (iv) terminate each ongoing
Offering and refund any Contributions (reduced to the extent, if any, such
Contributions have been used to acquire shares of Common Stock) without
interest to the participants.

16.          EFFECTIVE
DATE OF PLAN.

The Plan shall become
effective on the IPO Date, but no Purchase Rights shall be exercised unless and
until the Plan has been approved by the stockholders of the Company, which
approval shall be within twelve (12) months before or after the date the Plan
is adopted by the Board.

17.          MISCELLANEOUS
PROVISIONS.

(a)           The Plan and Offering do not constitute
an employment contract.  Nothing in the
Plan or in the Offering shall in any way alter the at will nature of a
Participant’s employment or  be deemed to
create in any way whatsoever any obligation on the part of any Participant to
continue in the employ of the Company or a Related Corporation, or on the part
of the Company or a Related Corporation to continue the employment of a
Participant.

(b)           The provisions of the Plan shall be
governed by the laws of the State of Delaware
without resort to that state’s conflicts of laws rules.

18.          DEFINITIONS.

As used in the Plan, the
following definitions shall apply to the capitalized terms indicated below:

(a)           “Board”  means
the Board of Directors of the Company.

(b)           “Capitalization Adjustment”
means any change that is made in, or other events that occur with respect to,
the Common Stock subject to the Plan or subject to any Purchase Right after the
Effective Date without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by
the Company).  Notwithstanding the foregoing,
the conversion of any 

 

 

 

convertible
securities of the Company shall not be treated as a transaction “without the
receipt of consideration” by the Company.

(c)           “Code”  means
the Internal Revenue Code of 1986, as amended.

(d)           “Committee”  means a committee of one (1) or more members of the
Board to whom authority has been delegated by the Board in accordance with
Section 2(c).

(e)           “Common Stock” means the common stock of the Company.

(f)            “Company” means Reliant Technologies, Inc., a Delaware corporation.

(g)           “Contributions” means the payroll deductions and other additional
payments specifically provided for in the Offering, that a Participant
contributes to fund the exercise of a Purchase Right. A Participant may make
additional payments into his or her account, if specifically provided for in
the Offering, and then only if the Participant has not already had the maximum
permitted amount withheld during the Offering through payroll deductions.

(h)           “Corporate Transaction” means the occurrence, in a single transaction or in a
series of related transactions, of any one or more of the following events:

(i)            the consummation of a sale  or other disposition of all or substantially all, as
determined by the Board in its sole discretion, of the consolidated assets of
the Company and its Subsidiaries;

(ii)           the consummation of a sale or other
disposition of at least ninety percent
(90%) of the outstanding securities of
the Company;

(iii)         the consummation of a merger,
consolidation or similar transaction following which the Company is not the
surviving corporation; or

(iv)          the consummation of a merger,
consolidation or similar transaction following which the Company is the
surviving corporation but the shares of Common Stock outstanding immediately
preceding the merger, consolidation or similar transaction are converted or
exchanged by virtue of the merger, consolidation or similar transaction into
other property, whether in the form of securities, cash or otherwise.

(i)            “Director”  means a member of the Board.

(j)            “Eligible Employee”  means an Employee who meets the requirements set forth
in the Offering for eligibility to participate in the Offering, provided that
such Employee also meets the requirements for eligibility to participate set
forth in the Plan.

(k)           “Employee”  means any person, including Officers and Directors,
who is employed for purposes of Section 423(b)(4) of the Code by the Company or
a Related Corporation.  However, service
solely as a Director, or payment of a fee for such services, shall not cause a
Director to be considered an “Employee” for purposes of the Plan.

 

 

(l)            “Employee Stock Purchase Plan”  means a plan that grants Purchase Rights intended to
be options issued under an “employee stock purchase plan,” as that term is
defined in Section 423(b) of the Code.

(m)          “Exchange Act”  means the Securities Exchange Act of 1934, as amended.

(n)           “Fair Market Value”
means, as of any date, the value of the Common Stock determined as follows:

(i)            If the Common Stock is listed on any
established stock exchange including the Nasdaq Global Select Market or the
Nasdaq Global Market, the Fair Market Value of a share of Common Stock shall be
the closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange (or the exchange or market with the
greatest volume of trading in the Common Stock) on the date of determination,
as reported in The Wall Street Journal
or such other source as the Board deems reliable.

(ii)           If the Common Stock is listed or traded
on the Nasdaq Capital Market, the Fair Market Value of a share of Common Stock
shall be the mean between the bid and asked prices for the Common Stock on the
date of determination, as reported in The
Wall Street Journal or such other source as the Board deems
reliable.  Unless otherwise provided by
the Board, if there is no closing sales price (or closing bid if no sales were
reported) for the Common Stock on the date of determination, then the Fair
Market Value shall be the mean between the bid and asked prices for the Common
Stock on the last preceding date for which such quotation exists.

(iii)         In the absence of such markets for the
Common Stock, the Fair Market Value shall be determined by the Board in good
faith

(o)           “IPO Date”  means the date of the underwriting agreement between
the Company and the underwriter(s) managing the initial public offering of the
Common Stock, pursuant to which the Common Stock is priced for the initial
public offering.

(p)           “Offering”  means the grant of Purchase Rights to purchase shares
of Common Stock under the Plan to Eligible Employees.

(q)           “Offering Date” means a date selected by the Board for an Offering to
commence.

(r)           “Officer” means  a person who
is an officer of the Company within the meaning of Section 16 of the Exchange
Act and the rules and regulations promulgated thereunder.

(s)           “Participant”  means an Eligible Employee who holds an outstanding
Purchase Right granted pursuant to the Plan.

(t)            “Plan”  means
this Reliant Technologies, Inc. 2007 Employee Stock Purchase Plan.

 

 

(u)           “Purchase Date”  means one or more dates during an Offering established
by the Board on which Purchase Rights shall be exercised and as of which
purchases of shares of Common Stock shall be carried out in accordance with
such Offering.

(v)            “Purchase Period” means a period of time specified within an Offering
beginning on the Offering Date or on the next day following a Purchase Date
within an Offering and ending on a Purchase Date.  An Offering may consist of one or more Purchase
Periods.

(w)           “Purchase Right”  means an option to purchase shares of Common Stock
granted pursuant to the Plan.

(x)           “Related Corporation”  means any “parent corporation” or “subsidiary
corporation” of the Company whether now or subsequently established, as those
terms are defined in Sections 424(e) and (f), respectively, of the Code.

(y)           “Securities Act”  means the Securities Act of 1933, as amended.

(z)           “Trading Day”  means any day on which the exchange(s) or market(s) on
which shares of Common Stock are listed, including the Nasdaq Global Select
Market, the Nasdaq Global Market, or the Nasdaq Capital Market, is open for
trading.

 

RELIANT TECHNOLOGIES, INC.

2007 EMPLOYEE STOCK PURCHASE PLAN

OFFERING DOCUMENT

ADOPTED BY THE BOARD OF
DIRECTORS: AUGUST 9, 2007

In this document, capitalized terms not otherwise defined shall have
the same definitions of such terms as in the Reliant Technologies, Inc. 2007 Employee Stock Purchase Plan.

1.             GRANT;
OFFERING DATE.

(a)           The Board hereby authorizes a series of
Offerings pursuant to the terms of this Offering document.

(b)           The first Offering hereunder (the “Initial Offering”)
shall begin on the date the Common Stock is first offered to the public under a
registration statement declared effective under the Securities Act and shall
end on November 15, 2008, unless terminated earlier as provided below.  The Initial Offering shall consist of two (2)
Purchase Periods, with the first Purchase Period ending on May 15, 2008.

(c)           After the Initial Offering commences, an
Offering shall begin on November 16th each year beginning in 2008 over the term
of the Plan and shall be approximately six (6) months in duration.  Each Offering shall consist of two (2)
Purchase Period approximately six (6) months in length ending on or about May
15 and November 15 each year.  Except as
provided below, a Purchase Date is the last day of a Purchase Period or of an
Offering.

(d)           Notwithstanding the foregoing: (i) if any
Offering Date falls on a day that is not a Trading Day, then such Offering Date
shall instead fall on the next subsequent Trading Day, and (ii) if any Purchase
Date falls on a day that is not a Trading Day, then such Purchase Date shall
instead fall on the immediately preceding Trading Day.

(e)           Prior to the commencement of any
Offering, the Board may change any or all terms of such Offering and any
subsequent Offerings.  The granting of
Purchase Rights pursuant to each Offering hereunder shall occur on each
respective Offering Date unless prior to such date (i) the Board determines
that such Offering shall not occur, or (ii) no shares of Common Stock
remain available for issuance under the Plan in connection with the Offering.

(f)            If the Company’s accountants advise the
Company that the accounting treatment of purchases under the Plan is such that
the Company determines is detrimental to its best interests, then the Board
may, in its sole discretion, terminate each Offering hereunder that is then
ongoing as of the next Purchase Date (after the purchase of stock on such
Purchase Date) under such Offering.

 

 

2.             ELIGIBLE
EMPLOYEES.

(a)           Each Eligible Employee, who has been an
Employee for a continuous period of at least five (5) days ending on the
Offering Date of an Offering hereunder and is either (i) an employee of the
Company; (ii) an employee of a Related Corporation incorporated in the United
States; or (iii) an employee of a Related Corporation that is not incorporated
in the United States, provided that the Board has designated the employees of
such Related Corporation as eligible to participate in the Offering, shall be granted
a Purchase Right on the Offering Date of such Offering.

(b)           Each person who, during the course of the
first Purchase Period under the Offering, first becomes an Eligible Employee
shall, on the first day of the second Purchase Period, receive a Purchase Right
under that Offering, which Purchase Right shall thereafter be deemed to be a
part of that Offering, provided, however, that such Eligible Employee submits
the necessary enrollment paperwork required by the Company on or before such
date.  Such Purchase Right shall have the
same characteristics as any Purchase Rights originally granted under that
Offering, as described herein, except that:

(i)            the date on which such Purchase Right is
granted shall be the “Offering Date” of such Purchase Right for all purposes,
including determination of the exercise price of such Purchase Right; and

(ii)           the period of the Offering with respect
to such Purchase Right shall begin on its Offering Date and end coincident with
the end of such Offering.

(c)           Notwithstanding the foregoing, the
following Employees shall not be Eligible Employees or be granted
Purchase Rights under an Offering:

(i)            Employees whose customary employment is
twenty (20) hours per week or less or five (5) months per calendar year or
less;

(ii)           five percent (5%) stockholders (including
ownership through unexercised and/or unvested stock options) as described in
Section 6(c) of the Plan; or

(iii)         Employees in jurisdictions outside of the
United States if, as of the Offering Date of the Offering, the grant of such
Purchase Rights would not be in compliance with the applicable laws of any
jurisdiction in which the Employee resides or is employed.

3.             PURCHASE
RIGHTS.

(a)           Subject to the limitations herein and in
the Plan, a Participant’s Purchase Right shall permit the purchase of the
number of shares of Common Stock purchasable with up to fifteen percent (15%) of such Participant’s Earnings paid during
the period of such Offering beginning immediately after such Participant first
commences participation; provided, however,
that no Participant may have more than fifteen
percent (15%) of such Participant’s Earnings applied to purchase shares
of Common Stock under all ongoing Offerings under the Plan and all other plans
of the Company and Related Corporations that are intended to qualify as
Employee Stock Purchase Plans.

 

 

(b)           For Offerings hereunder, “Earnings” means the
base compensation paid to a Participant, including all salary, wages (including
amounts elected to be deferred by such Participant, that would otherwise have
been paid, under any cash or deferred arrangement or other deferred
compensation program established by the Company or a Related Corporation), but
excluding all overtime pay, commissions, bonuses, and other remuneration paid
directly to such Participant, profit sharing, the cost of employee benefits
paid for by the Company or a Related Corporation, education or tuition
reimbursements, imputed income arising under any Company or Related Corporation
group insurance or benefit program, traveling expenses, business and moving
expense reimbursements, income received in connection with stock options,
contributions made by the Company or a Related Corporation under any employee
benefit plan, and similar items of compensation.

(c)           Notwithstanding the foregoing, the
maximum number of shares of Common Stock that a Participant may purchase on any
Purchase Date in an Offering shall be such number of shares as has a Fair
Market Value (determined as of the Offering Date for such Offering) equal to
(x) $25,000 multiplied by the number of calendar years in which the Purchase
Right under such Offering has been outstanding at any time, minus (y) the Fair
Market Value of any other shares of Common Stock (determined as of the relevant
Offering Date with respect to such shares) that, for purposes of the limitation
of Section 423(b)(8) of the Code, are attributed to any of such calendar years
in which the Purchase Right is outstanding. The amount in clause (y) of the
previous sentence shall be determined in accordance with regulations applicable
under Section 423(b)(8) of the Code based on (i) the number of shares
previously purchased with respect to such calendar years pursuant to such
Offering or any other Offering under the Plan, or pursuant to any other Company
or Related Corporation plans intended to qualify as Employee Stock Purchase
Plans, and (ii) the number of shares subject to other Purchase Rights
outstanding on the Offering Date for such Offering pursuant to the Plan or any
other such Company or Related Corporation Employee Stock Purchase Plan.

(d)           The maximum aggregate number of shares of
Common Stock available to be purchased by all Participants under an Offering
shall be the number of shares of Common Stock remaining available under the
Plan on the Offering Date.  If the
aggregate purchase of shares of Common Stock upon exercise of Purchase Rights
granted under the Offering would exceed the maximum aggregate number of shares
available, the Board shall make a uniform and equitable allocation of the shares
available.  Any Contributions not applied
to the purchase of available shares of Common Stock shall be refunded to the
Participants without interest.

(e)           Notwithstanding the foregoing, the
maximum number of shares of Common Stock that may be purchased on any single
Purchase Date by any one Eligible Employee under all ongoing Offerings shall
not exceed 1,250 shares.  In addition,
the maximum number of shares of Common Stock that may be purchased on any
single Purchase Date by all Eligible Employees under all ongoing Offerings
shall not exceed 750,000(3) shares.  If
the aggregate number of shares of Common Stock to be purchased upon the
exercise of all outstanding Purchase Rights on a single Purchase Date would
exceed such aggregate limit, the Board shall make a uniform and equitable
allocation of the shares available.  Any
Contributions not applied to the purchase of available shares of Common Stock
shall be refunded to the Participants without interest.

(3) Pre-IPO, pre-split shares

 

 

4.             PURCHASE
PRICE.

The purchase price of
shares of Common Stock under the Offering shall be the lesser of: (i)
eighty-five percent (85%) of the Fair Market Value of such shares of Common
Stock on the Offering Date, or (ii) eighty-five percent (85%) of the Fair
Market Value of such shares of Common Stock on the applicable Purchase
Date.  For the Initial Offering, the Fair
Market Value of the shares of Common Stock at the time when the Offering
commences shall be the price per share at which shares are first sold to the
public in the Company’s initial public offering as specified in the final
prospectus for that initial public offering.

5.             PARTICIPATION.

(a)           An Eligible Employee may elect to
participate in an Offering on the Offering Date. An Eligible Employee may
enroll in only one Offering at a time. 
An Eligible Employee shall elect his or her payroll deduction percentage
on such enrollment form as the Company provides. The completed enrollment form
must be delivered to the Company at least five (5) days prior to the date participation
is to be effective, unless a later time for filing the enrollment form is set
by the Company for all Eligible Employees with respect to a given Offering.
Payroll deduction percentages must be expressed in whole percentages of
Earnings, with a minimum percentage of one percent (1%) and a maximum
percentage of fifteen percent (15%).  Except as provided in Section 5(e), a
Participant may participate only by way of payroll deductions.

(b)           A Participant may not increase his or her
participation level during a Purchase Period but may increase his or her participation level for a subsequent Purchase
Period.  In addition, a
Participant may decrease (including a decrease to zero percent (0%)) his or her
participation level no more than twice during a Purchase Period (and the second decrease in participation level
must be to zero percent (0%)). Any such change in participation level shall be
made by delivering a notice to the Company or a designated Related Corporation
in such form as the Company provides prior to the ten (10) day period (or such
shorter period of time as determined by the Company and communicated to
Participants) immediately preceding the payroll date for which it is to be
effective.  A Participant may increase his or her participation level
effective in a subsequent Purchase Period. 
Any Participant who has not increased his or her payroll deduction level
from zero percent (0%) to at least one percent (1%) by the time proscribed
before the start of a new Offering shall be deemed to have withdrawn from the
Plan effective as of the Offering Date of that new Offering.

(c)           A Participant may withdraw from an
Offering and receive a refund of his or her Contributions (reduced to the
extent, if any, such Contributions have been used to acquire shares of Common
Stock for the Participant on any prior Purchase Date) without interest, at any
time prior to the end of the Offering, excluding only each ten (10) day period
immediately preceding a Purchase Date (or such shorter period of time
determined by the Company and communicated to Participants), by delivering a
withdrawal notice to the Company or a designated Related Corporation in such
form as the Company provides.  A
Participant who has withdrawn from an Offering shall not again participate in
such Offering, but may participate in subsequent Offerings under the Plan in
accordance with the terms of the Plan and the terms of such subsequent
Offerings.

 

 

(d)           Notwithstanding the foregoing or any
other provision of this Offering document or of the Plan to the contrary,
neither the enrollment of any Eligible Employee in the Plan nor any forms
relating to participation in the Plan shall be given effect until such time as
a registration statement covering the shares reserved under the Plan that are
subject to the Offering has been filed by the Company and has become effective.

(e)           If the provisions of Section 5(d) are
applicable, the Company shall establish such procedures as will enable the
purposes of the Plan to be satisfied while complying with applicable securities
laws.  Such procedures may include, for
example, allowing Participants to participate other than by means of payroll
deduction and/or allowing Participants to increase their level of participation
during a Purchase Period.  Except as
otherwise provided by the Company pursuant to the preceding sentence, for the
Initial Offering ending November 15, 2008, no payroll deductions shall be
required from the Eligible Employee until such time as the Eligible Employee
affirmatively elects to commence such payroll deductions following the Eligible
Employee’s receipt of the Securities Act prospectus for the Plan.  Each Eligible Employee shall automatically be
enrolled in the Initial Offering with a contribution rate equal to fifteen percent (15%) of Earnings and
will have a limited opportunity to make all or part of the contributions in a
lump sum payment prior to the end of the Purchase Period for the Initial
Offering rather than through payroll deductions.  To the extent that the Eligible Employee’s
payroll deductions for such initial Purchase Period are less than fifteen percent (15%) of Earnings paid
to the Eligible Employee during the Initial Offering, the Eligible Employee may
make an additional cash payment at any time on or prior to the ten (10) day period
immediately preceding the end of the Purchase Period for the Initial Offering
in order to fund the purchase of shares of Common Stock purchased on behalf of
the Eligible Employee on such initial Purchase Date.

6.             PURCHASES.

Subject to the
limitations contained herein, on each Purchase Date, each Participant’s
Contributions (without any increase for interest) shall be applied to the
purchase of whole shares, up to the maximum number of shares permitted under
the Plan and the Offering.

7.             NOTICES
AND AGREEMENTS.

Any notices or agreements
provided for in an Offering or the Plan shall be given in writing, in a form
provided by the Company (including documents delivered in electronic form, if
authorized by the Committee), and unless specifically provided for in the Plan
or this Offering, shall be deemed effectively given upon receipt or, in the
case of notices and agreements delivered by the Company, five (5) days
after deposit in the United States mail, postage prepaid.

8.             EXERCISE
CONTINGENT ON STOCKHOLDER APPROVAL.

The Purchase Rights
granted under an Offering are subject to the approval of the Plan by the
stockholders of the Company as required for the Plan to obtain treatment as an
Employee Stock Purchase Plan.

 

 

9.             OFFERING
SUBJECT TO PLAN.

Each Offering is subject
to all the provisions of the Plan, and the provisions of the Plan are hereby
made a part of the Offering.  The
Offering is further subject to all interpretations, amendments, rules and
regulations which may from time to time be promulgated and adopted pursuant to
the Plan.  In the event of any conflict
between the provisions of an Offering and those of the Plan (including
interpretations, amendments, rules and regulations which may from time to time
be promulgated and adopted pursuant to the Plan), the provisions of the Plan
shall control.

*  * 
*  *EXHIBIT 10.7

 

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

 

SUPPLY
AGREEMENT

 

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

 

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

 

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

 

ACCORDINGLY, Supplier and Customer agree as follows:

 

1.0          INTERPRETATION

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

(j)            “Term” means the Initial Term.

 

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

 

2.0          TERM

 

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

 

3.0          PURCHASES

 

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

 

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

 

4.0          PRODUCTS AND PURCHASE ORDERS

 

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

 

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

 

4.3          Acceptance
Date.

 

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

 

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

 

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

 

 

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

 

4.4          Delivery
Date.

 

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

 

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

 

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

 

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

 

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

 

4.6          Cancellation
and Cancellation Costs.

 

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

 

4.6.2        Except
as otherwise provided in Section 4.6.1 above:

 

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

 

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

 

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

 

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

 

 

Customer.

 

4.7          Rescheduling.

 

4.7.1        [ * ]

 

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

 

5.0          PRICES
FOR PRODUCTS

 

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

 

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

 

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

 

6.0          QUALITY,
INSPECTION AND WARRANTY 

 

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

 

7.0          PRODUCT DELIVERY

 

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

 

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

 

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

 

 

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

 

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

 

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

 

8.0          WARRANTIES

 

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

 

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

 

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

 

 

obligation
to evaluate such Products.

 

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

 

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

 

9.0          INTELLECTUAL
PROPERTY AND INDEMNITIES

 

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

 

 

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

 

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

 

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

 

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

 

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

 

 

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

 

10.0        PRODUCT
CHANGES AND DISCONTINUATION

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

11.0        TERMINATION

 

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

 

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

 

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

 

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

 

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

 

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

 

12.0        DELAYS IN
PERFORMANCE 

 

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

 

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

 

 

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

 

(a)                                  force majeure or acts of God;

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

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

(d)                                 epidemic or quarantine restrictions;

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

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

(g)                                 a Required Change; or

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

 

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

 

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

 

13.0        GENERAL

 

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

 

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

 

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

 

 

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

 

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

 

(a)                                  Personally delivered to the other party; or

 

(b)                                 Sent by prepaid
overnight courier; or

 

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

 

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

 

If to IPG
Photonics Corporation:

To:                                                                              [ * ]

IPG Photonics Corporation

50 Old Webster Road

Oxford, MA 01540

Fax: [ * ]

 

If to
Customer:

To:                                                                              [ * ]

Reliant Technologies, Inc.

260 Sheridan Avenue, 3rd Floor

Palo
Alto, CA 94306 USA

Fax: [ * ]

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

	
  IPG
  PHOTONICS CORPORATION

  	
   

  	
  RELIANT
  TECHNOLOGIES, INC.

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Denis
  Gapontsev

  	
   

  	
   

  	
  By: 

  	
  /s/ Len
  DeBenedictis

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:
  Denis Gapontsev

  	
   

  	
  Name: Len
  DeBenedictis

  
	
   

  	
   

  	
   

  
	
  Title:
  Vice President

  	
   

  	
  Title:
  President and CTO

  
	
   

  	
   

  	
   

  
	
  Date:
  December 31, 2003

  	
   

  	
  Date:
  December 31, 2003

  
							

 

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

 

 

EXHIBIT A

 

PRODUCT
SCHEDULE

 

	
  1.  Product Name (Product Class)/Description

  	
   

  	
  [ * ]

  
	
   

  	
   

  	
   

  
	
  2.  Customer Part No.

  	
   

  	
  {Insert Customer Part No.}

  
	
   

  	
   

  	
   

  
	
  3.  Supplier Part No.

  	
   

  	
  [ * ]

  
	
   

  	
   

  	
   

  
	
  4.  Product Specification

  	
   

  	
  See attached specifications

  
	
   

  	
   

  	
   

  
	
  5.  Lead-Time

  	
   

  	
  [
  * ].

  
	
   

  	
   

  	
   

  
	
  6.  Unit Price ($U.S.)

  	
   

  	
  [ * ].

  

  [ * ].

  

  [ * ] warranty: [ * ].

  

  [ * ] Warranty:[ * ].

  
	
   

  	
   

  	
   

  
	
  7.  Unique Provisions

  	
   

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

  

  Upside Maximum: [ *
  ].

  

  Exclusivity: [ * ].

  

  Minimum Purchases. [
  * ].

  

  Extension of Term: [
  * ].

  

  Strategic Relationship. [ * ].

  

 

[ * ]

 

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

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