FIFTH AMENDMENT
MGH AGT. NO. 2006A20842

        This is a Fifth Amendment to the License Agreement between and The
General Hospital Corporation, a not-for-profit corporation doing business as
Massachusetts General Hospital, having a principal place of business at Fruit
Street, Boston, Massachusetts 02114 (“General”) and Palomar Medical
Technologies, Inc., a Delaware corporation, having a principal place of business
at 82 Cambridge Street, Burlington, Massachusetts 01803 (“Palomar”)
(collectively, the “Parties”), dated August 18, 1995 (the “License Agreement”).

        WHEREAS, Paragraph 5.1(b)(ii) of the License Agreement provides that
Palomar and General are to negotiate in good faith a commercially reasonable
royalty to be paid by Palomar to General for Products sold for hair removal as
well as other uses;

        WHEREAS, Palomar has developed the NeoLux Pulsed-Light System and
associated hand pieces, EsteLux Pulsed-Light System and associated hand pieces,
the MediLux Pulsed-Light System and associated hand pieces and the StarLux
Pulsed-Light and Laser System and associated hand pieces for hair removal and
other applications, and the Parties have agreed to commercially reasonable
royalty rates to be paid by Palomar to General on Palomar’s sales of NeoLux,
EsteLux, MediLux and StarLux systems and the associated hand pieces under
Paragraph 5.1(b)(ii) of the License Agreement;

        For good and valuable consideration General and Palomar hereby agree to
amend the License Agreement as provided herein, effective March 1, 2006
(“Amendment Effective Date”). From and after the Amendment Effective Date, all
references in the License Agreement shall be deemed to be references to such
License Agreement as amended hereby.

Paragraph 5. ROYALTIES; LICENSE FEES
In Paragraph 5.1(b), replace in its entirety subparagraph (x), which was
introduced in the Fourth Amendment to the License Agreement effective June 1,
2000, with the following new subparagraph (x):

(x)

  (1) For each NeoLux base system and each EsteLux base system sold by PALOMAR
or its AFFILIATES, **;

  (2) For each MediLux base system sold by PALOMAR or its AFFILIATES, **;

**Omitted pursuant to request for confidential treatment by
Palomar Medical Technologies, Inc. and filed separately with the SEC.

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  (3) For each LuxY handpiece for use with a NeoLux, EsteLux, or MediLux base
system sold by PALOMAR or its AFFILIATES, **;

  (4) For each StarLux base system and LuxY handpiece for use with a StarLux
base system sold by PALOMAR or its AFFILIATES **; and

  (5) For each LuxR and LuxRs handpiece for use with a NeoLux, EsteLux, MediLux,
or StarLux base system sold by PALOMAR or its AFFILIATES, **.

        The royalty rates enumerated above in Paragraph 5.1(b), Subparagraph
(x)(1)-(5) shall apply in all cases so long as the manufacture, use, or sale of
the NeoLux, EsteLux, MediLux and StarLux systems and LuxY, LuxR and LuxRs hand
pieces is covered by a VALID CLAIM of any PATENT RIGHT or ADDITIONAL PATENT
RIGHT licensed exclusively in the LICENSE FIELD to Palomar in the country in
question.

        It is the intent of the Parties that upon executing this Fifth
Amendment, the royalty rates mutually agreed upon herein will be fixed for the
commercial life of the NeoLux, EsteLux, MediLux and StarLux systems and the
LuxY, Lux R and LuxRs hand pieces. The Parties further acknowledge that these
royalty rates will apply only within the LICENSE FIELD of “hair reduction and/or
hair removal,” as defined in the original License Agreement dated August 18,
1995.

        Terms not otherwise defined herein shall have the meaning given to them
in the License Agreement. Except as amended by the First, Second, Third and
Fourth Amendments, effective August 18, 1995, February 17, 1997, November 17,
1997, and June 1, 2000, respectively, and this Fifth Amendment, the License
Agreement shall remain in effect in accordance with its terms.

**Omitted pursuant to request for confidential treatment by
Palomar Medical Technologies, Inc. and filed separately with the SEC.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.

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Agreed to:   PALOMAR MEDICAL TECHNOLOGIES, INC.   By: /s/ Joseph P. Caruso   
Name: Joseph P. Caruso Title: CEO Date: 3/20/06 THE GENERAL HOSPITAL CORPORATION
  By: /s/ Frances Toneguzzo    Name: Frances Toneguzzo Ph.D. Title: Director,
Corporate Sponsored Research & Licensing Date: 3/13/06

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