SETTLEMENT AGREEMENT

        THIS SETTLEMENT AGREEMENT (this “Agreement”) is made and entered into as
of the 29th day of March, 2007 (the “Effective Date”) by and among Palomar
Medical Technologies, Inc., a Delaware corporation, with offices at 82 Cambridge
Street, Burlington, MA 01803 (“Palomar”), The General Hospital Corporation, a
Massachusetts corporation with offices at Fruit Street, Boston MA 02114
(“General”), and Alma Lasers, Inc., a Delaware corporation with offices at 485
Half Day Road #100, Buffalo Grove, IL 60089 (“Alma”). Each of Palomar, General,
and Alma is a “Party” and together they are the “Parties” hereunder.

        WHEREAS, Palomar, General and Alma are parties to a lawsuit captioned:
(i) “Palomar Medical Technologies, Inc. v. Alma Lasers, Inc.” Case No.
1:06-CV-11171, which is currently pending in the United States District Court
for the District of Massachusetts (the “Lawsuit”);

        WHEREAS, the Lawsuit generally concerns allegations of infringement and
invalidity of the Anderson Patents; and

        WHEREAS, Palomar and General on the one hand and Alma on the other hand
wish to settle and compromise the Lawsuit on the terms and conditions set forth
below;

        NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the Parties covenant and agree as follows:

1.     The Closing. A closing (the “Closing”) of the transactions contemplated
hereby shall be held simultaneously with the execution and delivery of this
Agreement. At the Closing and in partial consideration of the payment made by
Alma pursuant to Section 3(a), the following actions shall take place:

(a)     Alma and Alma Lasers, Ltd. on the one hand and Palomar on the other hand
shall execute and deliver to each other the “Patent License Agreement” in the
form attached hereto as Exhibit A;

(b)     Alma and Alma Lasers, Ltd. on the one hand and Palomar on the other hand
shall execute and deliver to each other the Trade Dress Settlement Agreement
(“TDS Agreement”) in the form attached hereto as Exhibit B;

(c)      Each of the Parties shall deliver to the other Parties executed
“Consent Judgment” described in Section 2, in the form attached hereto as
Exhibit C; and

(d)     Each of the Parties shall deliver to the other Parties executed
“Stipulated Dismissal With Prejudice” described in Section 2, in the form
attached hereto as Exhibit D.

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2.     Termination of the Lawsuit. The Parties shall execute, or cause their
attorneys of record in the Lawsuit to execute, the Consent Judgment, a copy of
which have been provided to the Parties and to their respective counsel. Within
two (2) business days of Alma’s payment in full to Palomar of the aggregate
amount due pursuant to Section 3(a) of this Agreement, the aggregate amount due
pursuant to Section 4.2 of the Patent License Agreement and the aggregate amount
due pursuant to Section 4(a) of the TDS Agreement, Palomar’s counsel shall file
such executed Consent Judgment with the District of Massachusetts. Upon the
entry of the Consent Judgment by the court, but not before, Palomar’s counsel
shall file such executed Stipulated Dismissal With Prejudice with the District
of Massachusetts. No other Party or their counsel shall file the Consent
Judgment or the Stipulation of Dismissal With Prejudice with any court. The
Parties shall perform all acts necessary to facilitate each appropriate court’s
prompt approval and entry of the Consent Judgment and Stipulated Dismissal With
Prejudice as orders of such court, including executing and filing with such
court any other appropriate documents. If for any reason an appropriate court
does not approve the Consent Judgment and Stipulated Dismissal With Prejudice
and enter the same as orders of such court, the Parties shall promptly confer in
good faith to use commercially reasonable efforts to modify the same or take
such other actions as are required to overcome such court’s objections and
effectuate such dismissal. The entry of the Consent Judgment and Stipulated
Dismissal With Prejudice as orders of the respective courts is an express
condition to the effectiveness of this Agreement, the Patent License Agreement
and the TDS Agreement, provided that, for clarity, Alma shall pay such two
aggregate amounts before Palomar’s counsel files the Consent Judgment.

3.     Legal Costs and Expenses.

(a)     As partial consideration hereunder, Alma shall pay to Palomar within
seven (7) days of the Effective Date (exclusive of any amounts due under the
Patent License Agreement and TDS Agreement) an amount equal to Two Hundred
Seventy Five Thousand Dollars (U.S. $275,000) to cover Palomar’s legal costs and
expenses related to the Lawsuit. The payment contemplated by this Section 3(a)
shall be made by wire transfer, without deduction for any taxes or other
charges, in U.S. dollars to the credit of:

                Palomar's account:

Bank Name: Banknorth Bank Address: 370 Main Street Worcester, MA 01608 Palomar
Medical Technologies, Inc. Account No. 8241022982 ABA No. 211370545

(b)     Patent License Agreement and TDS Agreement. As partial consideration for
their mutual obligations hereunder, Palomar and Alma (together with Alma Lasers,
Ltd.) have executed the Patent License Agreement and TDS Agreement.

4.     Releases and Indemnities.

(a)      Release of Palomar and General by Alma.

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(i)     Of Palomar. Each of Alma and all Alma Affiliates, together with (as
applicable) their respective officers, directors, employees, shareholders,
insurers, agents, trustees, attorneys, heirs, administrators, executors,
successors and assigns (collectively, “Alma Releasors”), does hereby, jointly
and severally, remise, release and forever discharge Palomar and all Palomar
Affiliates, together with (as applicable) all of their respective officers,
directors, employees, shareholders, insurers, licensees, sublicensees,
customers, agents, trustees, attorneys, parents, subsidiaries, successors and
assigns (collectively, the “Released Palomar Entities”), of and from any and all
actions, causes of action, claims, counterclaims, damages, debts, demands,
liabilities, costs, expenses, loss, liens and obligations of whatsoever name and
nature, including attorney and professional fees, whether at law or in equity
(hereinafter, “Claims”), in the Professional Field only, which the Alma
Releasors now have or ever had against the Released Palomar Entities, whether or
not the facts giving rise to such Claims are now known or unknown, from the
first day of the world to the Effective Date (but not thereafter), which Claims
are asserted or could have been asserted in the Lawsuit, and which further
involve and are limited to the Anderson Patents. It is the intention of the Alma
Releasors fully, finally and forever to release the Released Palomar Entities
from Claims released by this Section 4(a)(i). In furtherance of such intention,
this release shall be and remain in effect notwithstanding the discovery
subsequent to the Effective Date of any presently existing fact. Notwithstanding
the foregoing, it is expressly understood that this release does not release the
Released Palomar Entities or any of them from the obligations set forth in this
Agreement, the Exhibits hereto and the other documents delivered at the Closing
(including, with respect to Palomar and the Palomar Affiliates, the Patent
License Agreement and TDS Agreement).

(ii)     Of General. Each Alma Releasor does hereby, jointly and severally,
remise, release and forever discharge General, together with (as applicable) all
of its officers, directors, employees, shareholders, insurers, licensees,
sublicensees, customers, agents, trustees, attorneys, parents, subsidiaries,
successors and assigns (collectively, the “Released General Entities”), of and
from any and all Claims, in the Professional Field only, which the Alma
Releasors now have or ever had against the Released General Entities, whether or
not the facts giving rise to such Claims are now known or unknown, from the
first day of the world to the Effective Date (but not thereafter), which Claims
are asserted or could have been asserted in the Lawsuit, and which further
involve and are limited to the Anderson Patents. It is the intention of the Alma
Releasors fully, finally and forever to release the Released General Entities
from Claims released by this Section 4(a)(ii). In furtherance of such intention,
this release shall be and remain in effect notwithstanding the discovery
subsequent to the Effective Date of any presently existing fact. Notwithstanding
the foregoing, it is expressly understood that this release does not release the
Released General Entities or any of them from the obligations set forth in this
Agreement, the Exhibits hereto and the other documents delivered at the Closing.

(b)     Alma’s Representation, Warranty and Indemnity as to Released Matters.

(i)     To Palomar. Alma represents and warrants to Palomar that it has not
heretofore assigned, transferred or purported to assign or transfer, and that it
shall not hereafter assign or transfer or purport to assign or transfer, to any
person or entity any matter it has released in Section 4(a)(i) and it agrees to
indemnify and hold harmless the Released Palomar Entities from and against all
Claims based on, resulting from, in connection with, or arising out of, any such
assignment or transfer or purported or claimed assignment or transfer of any
such matter that it has released in Section 4(a)(i), in whole or in part.

(ii)     To General. Alma represents and warrants to General that it has not
heretofore assigned, transferred or purported to assign or transfer, and that it
shall not hereafter assign or transfer or purport to assign or transfer, to any
person or entity any matter it has released in Section 4(a)(ii) and it agrees to
indemnify and hold harmless the Released General Entities from and against all
Claims based on, resulting from, in connection with, or arising out of, any such
assignment or transfer or purported or claimed assignment or transfer of any
such matter that it has released in Section 4(a)(ii), in whole or in part.

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(c)     Release of Alma by Palomar and General.

(i)     By Palomar. Each of Palomar and all Palomar Affiliates, together with
(as applicable) their respective officers, directors, employees, shareholders,
insurers, agents, trustees, attorneys, heirs, administrators, executors,
successors and assigns (collectively, “Palomar Releasors”), does hereby, jointly
and severally, remise, release and forever discharge Alma and all Alma
Affiliates, together with (as applicable) their officers, directors, employees,
shareholders, insurers, licensees, sublicensees, customers, agents, trustees,
attorneys, parents, subsidiaries, successors and assigns (collectively,
the “Released Alma Entities”), of and from any and all Claims, in the
Professional Field only, which the Palomar Releasors now have or ever had
against the Released Alma Entities, whether or not the facts giving rise to such
Claims are now known or unknown, from the first day of the world to the
Effective Date (but not thereafter), which Claims are asserted or could have
been asserted in the Lawsuit, and which further involve and are limited to the
Anderson Patents. It is the intention of the Palomar Releasors fully, finally
and forever to release the Released Alma Entities from Claims released by this
Section 4(c)(i). In furtherance of such intention, this release shall be and
remain in effect notwithstanding the discovery subsequent to the Effective Date
of any presently existing fact.

(ii)     By General. General, together with (as applicable) its respective
officers, directors, employees, shareholders, insurers, agents, trustees,
attorneys, heirs, administrators, executors, successors and assigns
(collectively, “General Releasors”), does hereby, jointly and severally, remise,
release and forever discharge the Released Alma Entities, of and from any and
all Claims, in the Professional Field only, which the General Releasors now have
or ever had against the Released Alma Entities, whether or not the facts giving
rise to such Claims are now known or unknown, from the first day of the world to
the Effective Date (but not thereafter), which Claims are asserted or could have
been asserted in the Lawsuit, and which further involve and are limited to the
Anderson Patents. It is the intention of the General Releasors fully, finally
and forever to release the Released Alma Entities from Claims released by this
Section 4(c)(ii). In furtherance of such intention, this release shall be and
remain in effect notwithstanding the discovery subsequent to the Effective Date
of any presently existing fact.

(iii)     Miscellaneous. Notwithstanding the foregoing in Section 4(c)(i)
and 4(c)(ii), it is expressly understood that the releases by Palomar Releasors
and General Releasors contained in this Agreement do not release the Released
Alma Entities or any of them from the obligations set forth in this Agreement,
the Exhibits hereto and the other documents delivered at the Closing (including
the Patent License Agreement and TDS Agreement, or the obligation to pay any
amounts under the terms of Section 3 hereof, Section 4.2 of the Patent License
Agreement or Section 4.4 of the Patent License Agreement (with respect to Sales
of Licensed Products by Alma and Alma Affiliates occurring on or after the
Effective Date) each of which may be audited pursuant to those Sections and
Section 4.10 of the Patent License Agreement, or Sections 4(a)(i) and 4(b)(i) of
the TDS Agreement, which may be audited pursuant to Sections 4(a)(iii) and
4(b)(iii), respectively, of the TDS Agreement). For the avoidance of doubt,
Alma’s obligation to pay to Palomar patent royalties due on Sales of Licensed
Products occurring on or after the Effective Date pursuant to the terms of the
Patent License Agreement shall apply on and after Effective Date,
notwithstanding any release contained herein.

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(d)     Palomar’s and General’s Representation, Warranty and Indemnity as to
Released Matters. Each of Palomar and General represents and warrants to Alma
that it has not heretofore assigned, transferred or purported to assign or
transfer, and shall not hereafter assign or transfer or purport to assign or
transfer, to any person or entity any matter it has released in Section 4(c) and
agrees to indemnify and hold harmless the Released Alma Entities from and
against all Claims based on, resulting from, in connection with, or arising out
of, any such assignment or transfer or purported or claimed assignment or
transfer of any such matter that it has released hereunder, in whole or in part.
Nothing in this Section 4(d) shall preclude General from granting any licenses
under the Anderson Patents to another party or parties if the MGH Agreement is
terminated for any reason prior to the expiration of all the Valid Claims of the
Anderson Patents.

(e)     Full Settlement. The Parties understand and agree that this Agreement
and the attached Exhibits as executed and delivered at the Closing are intended
to settle all disputes (in existence from the first day of the world to the
Effective Date (but not thereafter)) between Palomar and General on the one hand
and Alma on the other hand based on or related in any way to the Lawsuit and all
the other matters released by this Section 4, and which further involve and are
limited to the Anderson Patents, and shall be effective as a full and final
accord and satisfaction and release of all such matters.

5.    Representations and Warranties; Disclaimers.

(a)     Representations and Warranties by the Parties. Each Party represents and
warrants to the other Parties as of the Effective Date:

(i)      that it is an entity duly organized, validly existing and in good
standing under the laws of the state of its organization, and has full corporate
power and authority and the legal right to own and operate its property and
assets and to carry on its business as it is now being conducted and as it is
contemplated to be conducted by this Agreement;

(ii)      that it has the authority to (i) enter into this Agreement,
(ii) extend the releases and rights granted to the other Parties under this
Agreement, and (iii) undertake and fully perform its obligations under this
Agreement;

(iii)      that this Agreement has been duly executed and delivered by it and is
a binding obligation of it, enforceable in accordance with its terms, subject,
as to enforcement of remedies, to applicable bankruptcy, insolvency, moratorium,
reorganization and similar laws affecting creditors’ rights generally, and to
general equitable principles;

(iv)      its execution, delivery, granting of releases and rights and
performance of its obligations under this Agreement does not and will not, with
or without the passage of time or the giving of notice or both, conflict with or
result in any breach of any of the terms, conditions or provisions of, or
constitute a default (or give rise to any right of termination, cancellation or
acceleration) under any agreement or other document or instrument to which it is
a party; and

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(v)      all necessary consents, approvals and authorizations of all regulatory
and governmental authorities and other third parties (including, in the case of
Alma, any Alma Affiliates and, in the case of Palomar, any Palomar Affiliates)
required to be obtained by it in connection with the execution and delivery of
this Agreement and the performance of its obligations hereunder have been
obtained.

(b)     Disclaimer. EXCEPT AS EXPRESSLY PROVIDED HEREIN, NONE OF THE PARTIES
MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND HEREUNDER, WHETHER EXPRESS
OR IMPLIED, AND EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES, WHETHER EXPRESS OR
IMPLIED, INCLUDING ALL WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, TITLE AND NONINFRINGEMENT. TO THE EXTENT THIS PROVISION CONFLICTS IN
ANY WAY WITH THE TERMS AND CONDITIONS OF THE MGH AGREEMENT, THE MGH AGREEMENT
SHALL CONTROL.

(c)     No Consequentials. IN NO EVENT SHALL ANY PARTY BE LIABLE TO ANY OTHER
HEREUNDER FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL
DAMAGES, WHETHER BASED ON BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE),
PRODUCT LIABILITY, OR OTHERWISE, AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGE. TO THE EXTENT THIS PROVISION CONFLICTS IN ANY
WAY WITH THE TERMS AND CONDITIONS OF THE MGH AGREEMENT, THE MGH AGREEMENT SHALL
CONTROL.

6.     Miscellaneous.

(a)     Entire Agreement; Counterparts; Stipulated Dismissal. This Agreement
(including the Exhibits) constitutes the entire agreement between Palomar and
MGH on the one hand and Alma on the other hand relating to the subject matter
hereof and supersedes all previous agreements, practices or courses of dealings
between the Parties, whether written or oral, relating to the subject matter
hereof, provided that that certain Rule 408 – Confidentiality Agreement, dated
as of February 14, 2006, between Palomar and Alma shall terminate as of the
Effective Date as to any disclosures occurring after the Effective Date, but
shall remain in full force and effect with respect to all applicable disclosures
occurring and rights and obligations accruing prior to the Effective Date. This
Agreement may be executed in counterparts with the same force and effect as if
each of the signatories had executed the same instrument.

(b)     Other Parties. This Agreement shall be binding upon, and inure to the
benefit of, the legal representatives, successors and permitted assigns of the
Parties. There shall be no Third Party beneficiaries, either express or implied,
to this Agreement, provided that Section 4 is intended to benefit, in addition
to the Parties, the other Released Palomar Entities, Released General Entities
and Released Alma Entities as if they were Parties hereto.

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(c)     No Agency or Joint Venture Relationship. Nothing contained herein shall
be deemed to create any association, partnership, joint venture or relationship
of principal, agent, master or servant between the Parties hereto or, in the
case of Palomar, any Palomar Affiliates, or, in the case of Alma, any Alma
Affiliates, or to provide any Party with the right, power or authority to incur
any obligation or make any representations, warranties or guarantees on behalf
of any other Party.

(d)     Retained Rights. Except as provided in Section 4.7 of the Patent License
Agreement, the Parties retain their rights to petition an appropriate court
regarding any breach or violation of the terms or conditions of this Agreement,
a Consent Judgment or the Patent License Agreement or TDS Agreement.

(e)     Severability. If any term, covenant or condition of this Agreement or
the application thereof to any Party or circumstance shall, to any extent, be
held to be invalid or unenforceable by a court of competent jurisdiction, then
(i) the remainder of this Agreement, or the application of such term, covenant
or condition to Parties or circumstances other than those that were held invalid
or unenforceable, shall not be affected thereby and each term, covenant or
condition of this Agreement shall be valid and be enforced to the fullest extent
permitted by law; and (ii) the Parties hereto covenant and agree to renegotiate
any such invalid or unenforceable term, covenant or application thereof in good
faith in order to provide a reasonably acceptable alternative to the term,
covenant or condition of this Agreement or the application thereof that is
invalid or unenforceable, it being the intent of the Parties that the basic
purposes of this Agreement are to be effectuated.

(f)     Waivers; Amendments; Supplements. No waiver by any Party of a breach of
any covenant or condition of this Agreement by another Party shall be construed
to be a waiver of any succeeding breach of the same or any other covenant or
condition. Except as otherwise expressly provided herein, this Agreement or any
Exhibit hereunder may not be changed or amended except by a writing expressly
referring to this Agreement signed by all the Parties.

(g)     Section 1542 of the California Civil Code. The Parties waive all rights
they may have under Section 1542 of the California Civil Code, and acknowledge
that subject to the terms herein, the releases granted by the Parties extend to
all claims expressly released by Section 4(a) and 4(c), whether such claims are
known or unknown. The Parties are fully informed of the provisions of Section
1542, which provides that:

  “A general release does not extend to claims which the creditor does not know
or suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.”

(h)     Publicity and Disclosure of Terms of this Agreement and the Patent
License Agreement and TDS Agreement. The Parties acknowledge that the initial
public announcements of the execution of this Agreement and the Patent License
Agreement and TDS Agreement shall be in the forms of press releases attached
hereto as Exhibit E (Palomar’s press release) and Exhibit F (Alma’s press
release). The foregoing does not constitute Palomar’s approval of Alma’s press
release or Alma’s approval of Palomar’s press release. The Parties also agree
that Palomar and Alma will file a copy of this Agreement, the Patent License
Agreement, the TDS Agreement, the Consent Judgment and the Stipulated Dismissal
With Prejudice (in each case without redaction) with the United States
Securities and Exchange Commission and other similar or comparable governmental
bodies, authorities or agencies, if necessary.

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(i)     Jurisdiction. Subject to and without limiting Section 4.7 of the Patent
License Agreement, the Parties hereby irrevocably consent to the exclusive
jurisdiction and venue of any state or federal court sitting in the Commonwealth
of Massachusetts, over any action or proceeding arising out of or relating to
this Agreement or any agreement or document delivered in connection herewith or
therewith, and agree that all claims in respect of such action or proceeding may
be heard and determined in such state or federal court. Each of the Parties
consents to the jurisdiction of such court or courts for such actions or
proceedings and agrees that the service upon it of a summons and complaint by
certified mail return receipt requested shall be sufficient for such court or
courts to exercise personal jurisdiction over the Parties for such actions or
proceedings. The Parties waive any objection to any action or proceeding
relating to this Agreement in any state or federal court sitting in the
Commonwealth of Massachusetts, on the basis of forum non conveniens, lack of
personal jurisdiction or otherwise. Notwithstanding the foregoing, if any action
or proceeding may not be brought in any such court because all such courts lack
subject matter jurisdiction, the Parties may bring such action or proceeding in
a court of appropriate jurisdiction.

(j)     Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the substantive laws of the Commonwealth of
Massachusetts, without regard to its principles of conflicts of laws; provided
that any dispute relating to the scope, validity, enforceability, infringement
or misuse of any Patent shall be governed by, and construed and enforced in
accordance with, the substantive laws of the jurisdiction in which such Patent
originates.

(k)     Further Actions. Each Party agrees to execute, acknowledge and deliver
such further instruments, and to do all such other acts, as may be necessary or
appropriate in order to carry out the purposes and intent of this Agreement.

(l)     Parties Advised by Counsel. This Agreement has been negotiated between
unrelated Parties who are sophisticated and knowledgeable in the matters
contained in this Agreement and who have acted in their own self interest. In
addition, each Party has been represented by legal counsel. This Agreement shall
not be interpreted or construed against any Party to this Agreement because that
Party or any attorney or representative for that Party drafted or participated
in the drafting of this Agreement.

(m)     Notices. All notices, demands, requests, approvals, consents or other
communications to be given or delivered under this Agreement shall be in writing
and shall be deemed to have been given: (i) when delivered in person or by
courier or confirmed facsimile; (ii) upon confirmation of receipt when sent by
certified mail, return receipt requested; or (iii) upon receipt when sent by
reputable private international courier with established tracking capability
(such as DHL, FedEx, or UPS), postage pre-paid, and addressed as set forth as
the case may be, to the noticed Party at the address set forth below, or such
other address as a Party may specify by written notice to the other.

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Notices shall be sent to Palomar at: Palomar Medical Technologies 82 Cambridge
Street Burlington, MA 01803 Attention: CEO Facsimile: (781) 993-2377

with a required copy to: Palomar Medical Technologies 82 Cambridge Street
Burlington, MA 01803 Attention: General Counsel Facsimile: (781) 993-2377

and a further required copy to: Goodwin Procter LLP Exchange Place 53 State
Street Boston, MA 02109 Attention: Kingsley Taft, Esq. Facsimile: (617) 523-1231

and to General at: Corporate Sponsored Research and Licensing Massachusetts
General Hospital 13th St. BLVD., BLDG. 149 Suite 5036 Charlestown, MA 02129
Attention: Frances Toneguzzo, Ph. D. Facsimile: (617) 726-8608

with a required copy to: Office of the General Counsel Partners HealthCare
System, Inc. 50 Staniford St., Suite 1000 Charlestown, MA 02129 Boston, MA 02114
Attention: Paul G. Cushing, Esq. Facsimile: (617) 726-1665

and to Alma at: Alma Lasers, Inc. 485 Half Day Road #100 Buffalo Grove, IL 60089
Attention: Howard Kelly Facsimile: 224-377-2050

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(n)     Captions, Section Headings. As used in this Agreement, “including” means
“including but not limited to”, and “herein”, “hereof”, and “hereunder” refer to
this Agreement as a whole. The Section headings used herein are for reference
and convenience only, and shall not enter into the interpretation of this
Agreement. Unless otherwise expressly provided herein, any reference to a number
of “days” hereunder shall refer to calendar days. References to Sections include
subsections, which are part of the related Section (e.g., a section numbered
“Section 4(a)” would be part of “Section 4", and references to “Section 5(a)”
would also refer to material contained in the subsection described as
“Section 5(a)(ii)”).

(o)     Capitalized Terms. Capitalized terms used but not defined herein shall
have the meaning ascribed to them in the Patent License Agreement.

(p)     Mistakes of Fact or Law. Mistakes of fact or law shall not constitute
grounds for modification, avoidance or rescission of the terms of this
Agreement.

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        IN WITNESS WHEREOF, the Parties hereto, intending to be legally bound
hereby, have each caused its duly authorized representative to execute and
deliver this Agreement under seal as of the Effective Date.

PALOMAR MEDICAL TECHNOLOGIES, INC.   By:/s/ Joseph P.
Caruso                                      Name: Joseph P. Caruso     Title:
CEO     Date:

THE GENERAL HOSPITAL CORPORATION   By:/s/ Frances Toneguzzo, Ph.
D.                             Name: Frances Toneguzzo, Ph. D.     Title:
Director, Corporate Sponsored Research & Licensing     Date:

ALMA LASERS, INC.   By:/s/ Howard Kelly                                     
    Name: Howard Kelly     Title: CEO     Date:

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EXHIBIT A
PATENT LICENSE AGREEMENT

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EXHIBIT B
TDS AGREEMENT

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EXHIBIT C
CONSENT JUDGMENT

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EXHIBIT D
STIPULATED DISMISSAL WITH PREJUDICE

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EXHIBIT E
PALOMAR PRESS RELEASE

NEWS RELEASE for April 2, 2007 at 8:30 AM EST

Kayla Castle Investor Relations Manager Palomar Medical Technologies, Inc.
781-993-2411 ir@palomarmedical.com

ALMA ADMITS INFRINGEMENT AND VALIDITY OF PALOMAR PATENTS
AND AGREES TO CHANGE TRADE DRESS
Alma to pay 11.0% for past patent and trade dress infringement

        BURLINGTON, MA (April 2, 2007) … Palomar Medical Technologies Inc
(Nasdaq:PMTI) announced today the resolution of its on-going patent infringement
and trade dress infringement lawsuit against Alma Lasers, Inc. Palomar accused
Alma’s Harmony, Soprano, Soprano XL and Sonata Systems of infringing U.S. Patent
Nos. 5,735,844 and 5,595,568 (the “Patents”). Palomar has an exclusive license
to these patents from the General Hospital Corporation in Boston, Massachusetts.
Palomar also accused Alma’s Harmony System of infringing the distinctive trade
dress of Palomar’s StarLux System.

        Alma has admitted to the infringement, validity and enforceability of
the Patents and has agreed not to challenge them in the future. Alma has also
agreed to change the trade dress of the Harmony and Aria Systems within the next
six to nine months.

        Alma will pay Palomar a 9.5% patent royalty plus interest on prior sales
of their laser and lamp based hair removal systems beginning with their initial
sales in 2003 and a 1.5% trade dress fee plus interest on prior sales of their
Harmony and Aria systems. Those amounts will be determined based on an audit by
an independent auditor that will be conducted over the next few months, and
Palomar will recognize those amounts only after they are determined as part of
that audit. In addition, Alma will pay Palomar for its legal costs incurred
during the lawsuit. From March 28, 2007 through December 31, 2007, Alma will pay
Palomar an 8.5% patent royalty and, beginning on January 1, 2008, Alma will pay
Palomar a 7.5% patent royalty on future sales of current and any new light-based
hair removal systems. The terms are in accordance with Palomar’s standard
license terms including combination systems that include multiple light sources
for hair removal and other applications.

        Patricia Davis, Senior Vice President and General Counsel of Palomar,
commented “The resolution of this lawsuit against Alma as well as the resolution
last spring of the lawsuits against Cutera demonstrate the strength of Palomar’s
patent portfolio. As in the past, when forced to litigate, we will seek higher
royalties than when competitors take a license on a voluntary basis. As we
announced on November 7, 2006, our license agreement with Cynosure was on more
favorable terms simply because we were not forced to sue Cynosure prior to
executing the license. We have notified our unlicensed competitors that for now
Palomar remains willing to offer licenses. Our willingness and the rates of such
licenses, however, may change as competitors continue to wait for us to sue them
for patent infringement.”

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        Joseph P. Caruso, President and Chief Executive Officer of Palomar,
commented, “This favorable resolution with Alma so early in this litigation
further substantiates the strength of these patents. Palomar pioneered the
cosmetic light based industry with the first high-powered light-based hair
removal system in 1997. Since then, this industry has become one of the
fastest-growing segments in the medical industry with hair removal procedures
being the most popular cosmetic light-based procedure performed today. Many
companies have taken advantage of this high growth by offering products covered
by patents controlled by Palomar, and we intend to continue to enforce our
intellectual property. This strategy provides significant financial benefit to
Palomar and its shareholders.”

        Mr. Caruso continued, “We were also able to force Alma to change the
look of their products on a worldwide basis. Over the past few years the market
has confused their products with ours and Alma has been able to sell their
product based on the reputation of Palomar. Our sales and marketing group will
now be free to address the growing market for light-based aesthetic products
without this confusion.”

        Under Palomar’s license agreement with the General Hospital Corporation,
Palomar will pay to the General Hospital Corporation 40% of all payments from
Alma excluding Palomar’s legal costs and the trade dress fees.

        For more information, please see the Settlement Agreement, the
Non-Exclusive Patent License Agreement, the Trade Dress Settlement Agreement,
the Consent Judgments and Stipulations of Dismissal filed as Exhibits 10.1,
10.2, 10.3, 10.4 and 10.5 to a Current Report on Form 8-K filed today.

About Palomar Medical Technologies, Inc:Palomar is a leading researcher and
developer of light-based systems for cosmetic treatments. Palomar pioneered the
optical hair removal field, when, in 1997, it introduced the first high-powered
laser hair removal system. Since then, many of the major advances in light-based
hair removal have been based on Palomar technology. On December 8, 2006, Palomar
became the first company to receive a 510(k) over-the-counter (OTC) clearance
from the United States Food and Drug Administration (FDA) for a new, patented,
home use, light-based hair removal device. OTC clearance allows the product to
be marketed and sold directly to consumers without a prescription. There are now
millions of light-based cosmetic procedures performed around the world every
year in physician offices, clinics, spas and salons. Palomar is testing many new
and exciting applications to further advance the hair removal market and other
cosmetic applications. Palomar is focused on developing proprietary light- based
technology for introduction to the mass markets. Palomar has an agreement with
The Gillette Company to develop and potentially commercialize a patented
home-use, light-based hair removal device for women. Palomar also has an
agreement with Johnson & Johnson Consumer Companies to develop and potentially
commercialize home-use, light-based devices for reducing or reshaping body fat
including cellulite, reducing the appearance of skin aging, and reducing or
preventing acne.

For more information on Palomar and its products, visit Palomar’s website at
www.palomarmedical.com. To continue receiving the most up-to-date information
and latest news on Palomar as it happens, sign up to receive automatic e-mail
alerts by going to the Investor Relations’ section of the website.

With the exception of the historical information contained in this release, the
matters described herein contain forward-looking statements, including but not
limited to statements relating to new markets, future royalty amounts due from
third parties, development and introduction of new products, and financial and
operating projections. These forward-looking statements are neither promises nor
guarantees, but involve risk and uncertainties that may individually or mutually
impact the matters herein, and cause actual results, events and performance to
differ materially from such forward-looking statements. These risk factors
include, but are not limited to, results of future operations, technological
difficulties in developing or introducing new products, the results of future
research, lack of product demand and market acceptance for current and future
products, the effect of economic conditions, challenges in managing joint
ventures and research with third parties and government contracts, the impact of
competitive products and pricing, governmental regulations with respect to
medical devices, including whether FDA clearance will be obtained for future
products and additional applications, the results of litigation, difficulties in
collecting royalties, potential infringement of third-party intellectual
property rights, factors affecting the Company’s future income and resulting
ability to utilize its NOLs, and/or other factors, which are detailed from time
to time in the Company’s SEC reports, including the report on Form 10-K for the
year ended December 31, 2006 and the Company’s quarterly reports on Form 10-Q.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company undertakes no
obligation to release publicly the result of any revisions to these
forward-looking statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.

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EXHIBIT F
ALMA PRESS RELEASE

ALMA LASERS AND PALOMAR MEDICAL TECHNOLOGIES SETTLE INFRINGEMENT LAWSUIT

Buffalo Grove, Illinois, April 2, 2007—Howard Kelly, Chief Executive Officer of
Alma Lasers, announced today that Alma Lasers, Ltd. and Palomar Medical
Technologies, Inc. have settled their civil action filed in the United States
District Court for the District of Massachusetts. The suit involves certain US
hair removal patents owned by Massachusetts General Hospital and licensed
exclusively to Palomar.

Under the settlement agreement, Alma Lasers obtains a non-exclusive license to
utilize the patented technology in its product line. “With the best interests of
Alma Lasers’ customers in mind, we decided to enter into a licensing agreement
with Palomar.” explained Mr. Kelly. Through the settlement, Alma Lasers has
avoided a potentially long and expensive legal battle.

In practical terms, the settlement means Alma Lasers can continue its strategy
of innovation through technology without interruption. “Because we’ve removed
these patent issues with Palomar,” said Mr. Kelly, “the leadership and product
development teams at Alma Lasers will be able to focus solely on achieving our
core vision—to be a global leader in providing technology-based solutions to the
aesthetic marketplace.”

ABOUT ALMA LASERS, LTD.

Alma Lasers, Ltd. is a global developer, manufacturer and seller of laser,
light-based and radiofrequency devices for aesthetic and medical applications.
Since 1980, the founders of Alma Lasers have been at the forefront of innovative
laser, light-based and RF medical technology. Their technical expertise and
in-depth understanding of practitioners’ needs led to the development of Alma
Lasers’ multi-technology/multi-application systems. Alma Lasers’ mission is to
provide modular, cost-effective and high performance designs that enable medical
practitioners to confidently offer safe, effective and profitable aesthetic
treatments to their patients. More information about Alma Lasers can be found at
www.almalasers.com.

CONTACT:

Yariv Matzliach, Executive Vice President, Global Marketing
Tel: 1-866-414-2562
Yarivm@almalasers.com

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LIBC/2903958.6

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