EXHIBIT 10(uu)


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                          SECURITIES PURCHASE AGREEMENT

      THIS AGREEMENT is by and between Palomar Medical  Technologies,  Inc. (the
"Company"),  a  Delaware  corporation  with an office at 66 Cherry  Hill  Drive,
Beverly,  Massachusetts  01915 U.S.A.,  and The Travelers  Insurance  Company, a
Connecticut corporation (the "Purchaser").

      IN CONSIDERATION  of the mutual covenants  contained in this Agreement and
good and valuable consideration,  the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:

      SECTION 1.  Authorization  of Shares.  The Company has  authorized (a) the
sale of 6,000  shares  (the  "Shares")  of a series of the  Company's  Preferred
Stock,  par value $.01 per share,  designated  "Series F  Convertible  Preferred
Stock" and (b) a warrant  (the  "Warrant"  and,  together  with the Shares,  the
"Securities") to purchase 500,000 shares (the "Warrant Shares") of the Company's
Common Stock, $.01 par value (the "Common Stock").

      SECTION 2. Agreement to Sell and Purchase the  Securities.  At the Closing
(as defined  below,  the Company will sell to the  Purchaser,  and the Purchaser
will buy from the Company, upon the terms and conditions  hereinafter set forth,
the  Securities  for an aggregate  purchase  price of $6,000,000  (the "Purchase
Price").

     SECTION 3. Payment of Purchase  Price.  On or prior to the Closing Date, as
defined below,  the Purchaser will deliver to the Company the full amount of the
Purchase Price by check or wire transfer.

      SECTION 4. The Closing. The consummation of the transactions  contemplated
by this  Agreement  (the  "Closing")  shall occur on July --, 1996 (the "Closing
Date")  or at  such  other  time as  shall  be  agreed  by the  Company  and the
Purchaser.  At the Closing,  the Company  shall  deliver to the Purchaser one or
more certificates for the Securities  registered in the name of the Purchaser or
its nominee.

     SECTION 5.  Representations,  Warranties and Covenants of the Company.  The
Company hereby  represents and warrants to, and covenants with, the Purchaser as
follows:

      SECTION 5.1. Organization. The Company is duly organized, validly existing
and in good  standing  under the laws of the State of Delaware.  The Company has
full power and  authority to own and operate its  properties  and to conduct its
business as currently  conducted  and is  registered or qualified to do business
and is in good standing in each jurisdiction in which it owns or leases property
or  transacts  business  and where the failure to be so  qualified  would have a
material adverse effect upon the business,  financial  condition,  properties or
operations of the Company.

      SECTION 5.2. Due  Authorization.  The Company has all requisite  power and
authority to execute,  deliver and perform its obligations  under this Agreement
and the Warrant,  and this





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Agreement  and the Warrant have been duly  authorized  and validly  executed and
delivered  by the Company and  constitute  valid and binding  agreements  of the
Company  enforceable  against the Company in accordance with their terms, except
as  enforceability  may  be  limited  by  applicable   bankruptcy,   insolvency,
reorganization,  moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

      SECTION  5.3.  Non-Contravention.  The  execution  and  delivery  of  this
Agreement and the Warrant, the issuance and sale of the Securities to be sold by
the Company  hereunder,  and the consummation of the  transactions  contemplated
hereby will not conflict with or constitute a violation of, or default (with the
passage of time or  otherwise)  under,  any material  agreement or instrument to
which  the  Company  is a party or by which  it is bound or the  Certificate  of
Incorporation  (the  "Charter")  or the By-Laws of the Company nor result in the
creation or imposition of any lien,  encumbrance,  claim,  security  interest or
restriction  whatsoever  upon any of the  material  properties  or assets of the
Company or an acceleration of indebtedness pursuant to any obligation, agreement
or  condition  contained  in any  material  bond,  debenture,  note or any other
evidence of indebtedness or any material indenture,  mortgage,  deed of trust or
any other  agreement or  instrument  to which the Company is a party or by which
the Company is bound or to which any of the property or assets of the Company is
subject, nor conflict with, or result in a violation of, any law, administrative
regulation,  ordinance or order of any court or governmental agency, arbitration
panel  or  authority   applicable   to  the  Company.   No  consent,   approval,
authorization or other order of, or registration,  qualification or filing with,
any regulatory body,  administrative  agency, or other  governmental body in the
United  States,  other than with respect to "blue sky" laws, is required for the
valid  issuance and sale of the Securities to be sold pursuant to this Agreement
(other than such as have been made or obtained).

      SECTION 5.4. Capitalization.  The authorized and outstanding capital stock
of the  Company  and rights to acquire  capital  stock of the Company are as set
forth on Exhibit A hereto.  Except as set forth above,  there are no outstanding
shares of, or rights to acquire  shares of,  capital  stock of the Company.  The
Shares have been duly  authorized,  and when  issued and paid for in  accordance
with  the  terms of this  Agreement,  will be  validly  issued,  fully  paid and
nonassessable. The shares of Common Stock issuable upon conversion of the Shares
(the  "Conversion  Shares")  have been duly  authorized,  and when  issued  upon
conversion in accordance  with the terms thereof will be validly  issued,  fully
paid and nonassessable.  The Warrant Shares have been duly authorized,  and when
issued and paid for in accordance  with the terms of the Warrant will be validly
issued, fully paid and nonassessable.

      SECTION 5.5. Legal Proceedings. Except as disclosed in the SEC Filings (as
defined below),  there is no material legal or governmental  proceeding  pending
or, to the  knowledge of the Company,  threatened or  contemplated  to which the
Company is or may be a party or of which the business or property of the Company
is or may be subject.

      SECTION 5.6. No  Violations.  Except as disclosed in the SEC Filings,  the
Company is not in violation of its Charter or By-Laws,  in violation of any law,
administrative  regulation,



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ordinance or order of any court or  governmental  agency,  arbitration  panel or
authority  applicable to the Company,  which  violation,  individually or in the
aggregate,  would have a material  adverse  effect on the  business or financial
condition  of  the  Company,  or in  default  in  any  material  respect  in the
performance  of any  obligation,  agreement or condition  contained in any bond,
debenture,  note  or any  other  evidence  of  indebtedness  in  any  indenture,
mortgage,  deed of trust or any  other  agreement  or  instrument  to which  the
Company is a party or by which the  Company is bound or by which the  properties
of the Company are bound or affected,  and there exists no condition which, with
the passage of time or the giving of notice or both, would constitute a material
default under any such document or instrument or result in the imposition of any
material penalty or the acceleration of any indebtedness.

      SECTION 5.7.  Governmental  Permits,  Etc.  Except as disclosed in the SEC
Filings, the Company has all necessary  franchises,  licenses,  certificates and
other  authorizations  from any foreign,  federal,  state or local government or
governmental  agency,  department,  or body that are currently necessary for the
operation of the business of the Company as currently conducted,  the absence of
which would have a material  adverse effect on the business or operations of the
Company.

      SECTION 5.8. Financial Statements. Except as disclosed in the SEC Filings,
the financial  statements of the Company and the related notes  contained in the
Company's  Annual  Report on Form 10-KSB for the fiscal year ended  December 31,
1995 and its  Quarterly  Report on Form 10-QSB for the  quarter  ended March 31,
1996,  present  fairly the  financial  position  of the  Company as of the dates
indicated  therein and its results of operations  and cash flows for the periods
therein specified.  Such financial statements (including the related notes) have
been  prepared in  accordance  with  generally  accepted  accounting  principles
applied on a consistent basis  throughout the periods therein  specified and are
true, correct and complete in all respects.

      SECTION 5.9. No Material  Adverse  Change.  Except as disclosed in the SEC
Filings,  since  March 31,  1996,  the  Company has not  incurred  any  material
liabilities or  obligations,  direct or  contingent,  other than in the ordinary
course of business,  and there has not been any material  adverse  change in its
business, financial condition or results of operations.

      SECTION 5.10.  Additional  Information.  The Company has filed in a timely
manner all documents  that the Company was required to file under the Securities
Exchange  Act of 1934,  as amended  (the  "Exchange  Act")  during the 12 months
preceding the date of this Agreement. The following documents (collectively, the
"SEC Filings")  complied in all material  respects with the  requirements of the
Exchange Act or the Securities Act of 1933 (the  "Securities  Act"), as the case
may be, as of their  respective  filing or effective  dates, and the information
contained  therein was true and correct in all material  respects as of the date
or effective date of such documents,  and each of the following  documents as of
the date thereof did not contain an untrue  statement of a material fact or omit
to state a material fact required to be stated  therein or necessary to make the
statements  therein,  in light of the circumstances  under which they were made,
not misleading:

              (a)    The Company's  Annual Report on Form 10-K SB for the fiscal
                     year ended December 31, 1995, its Quarterly  Report on Form
                     10-Q SB for the quarter


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                     ended  March  31,  1996,  and its Proxy  Statement  for the
                     Annual Meeting of Stockholders held on June 15, 1995;

              (b)    all other documents,  if any, filed by the Company with the
                     Securities and Exchange  Commission (the "SEC") since March
                     31,  1996pursuant  to  the  reporting  requirements  of the
                     Exchange Act; and

              (c)    the  Company's  Registration  Statements  on Form S-3 (Nos.
                     33-87650,   333-000140,   33-97760,   33-99792,   33-99794,
                     333-001070, 333-003424, 333-005781 and 333-007097).

      SECTION 5.11.  Intellectual Property. The Company has the right to use all
intellectual  property  (the  "Intellectual  Property")  now  used  by it in its
business.  The Company owns all right,  title and interest in and to, all of the
intellectual  property it owns, free and clear of any liens or encumbrances.  In
any case in which the Company  does not own the  Intellectual  Property,  it has
good and valid  licenses  for the same  which are in full force and  effect.  No
claims  have been  asserted  with  respect  to the use of any such  Intellectual
Property or challenging or questioning the validity or effectiveness of any such
license or agreement.

      SECTION  5.12.  Listing.  The Company shall use its best efforts to comply
with all requirements of the National  Association of Securities  Dealers,  Inc.
(the  "NASD")  with respect to the issuance of the Shares and the listing of the
Shares,  the Conversion  Shares and the Warrant  Shares on the Nasdaq  Small-Cap
Market.

      SECTION 6.     Representations, Warranties and Covenants of the Purchaser.

                     (a) The Purchaser represents and warrants to, and covenants
with, the Company,  as of the date hereof and as of the Closing Date,  that: (i)
the Purchaser is an "accredited investor" as defined in Rule 501 of Regulation D
promulgated  under the  Securities  Act;  (ii) the  Purchaser is  acquiring  the
Securities for its own account for  investment and with no present  intention of
distributing  any of such Shares other than to any  affiliate of the  Purchaser;
(iii) the Purchaser will not, directly or indirectly,  voluntarily  offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase
or  otherwise  acquire  or take a pledge  of) any of the  Securities,  except in
compliance  with the  Securities Act and the rules and  regulations  promulgated
thereunder;  (iv) the  Purchaser  has received  and  reviewed  copies of the SEC
Filings,  (v) the  Purchaser is an  "institutional  buyer" within the meaning of
Section  36b-21(b)(8)  of the  Connecticut  Uniform  Securities  Act,  (vi)  the
Purchaser has had an opportunity  to ask questions and receive  answers from the
management of the Company  regarding the Company,  its business and the offering
of the Securities;  and (vii) the Purchaser has, in connection with its decision
to purchase Shares,  relied solely upon the documents  described in Section 5.10
and the representations and warranties of the Company contained herein.

                     (b)  The  Purchaser  agrees  not to  make  any  sale of the
Securities  except  pursuant to an effective  registration  statement  under the
Securities Act or an exemption from the registration requirements thereof.


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                     (c) The Purchaser  further  represents and warrants to, and
covenants  with,  the Company  that (i) the  Purchaser  has full  right,  power,
authority  and  capacity  to enter into this  Agreement  and to  consummate  the
transactions contemplated hereby and has taken all necessary action to authorize
the execution,  delivery and  performance of this  Agreement,  and (ii) upon the
execution and delivery of this  Agreement,  this  Agreement  shall  constitute a
valid and binding obligation of the Purchaser enforceable in accordance with its
terms,  except  as  enforceability  may be  limited  by  applicable  bankruptcy,
insolvency, reorganization,  moratorium or similar laws affecting creditors' and
contracting  parties'  rights  generally  and  except as  enforceability  may be
subject  to  general   principles   of  equity   (regardless   of  whether  such
enforceability is considered in a proceeding in equity or at law).

                     (d) The Purchaser represents that it understands and agrees
that, until  registered under the Securities Act or transferred  pursuant to the
provisions of Rule 144 promulgated  thereunder,  all certificates evidencing the
Securities,  the Warrant Shares and the Conversion Shares,  whether upon initial
issuance or upon any transfer thereof, shall bear a legend,  prominently stamped
or printed therein, reading substantially as follows:

       "The securities  represented by this certificate have not been registered
       under the  Securities  Act of 1933 or the  securities  laws of any state.
       These  securities  have been acquired for  investment and not with a view
       toward  distribution  or resale.  Such  securities may not be offered for
       sale, sold, delivered after sale, transferred, pledged or hypothecated in
       the  absence  of  an  effective   registration  statement  covering  such
       securities under the Act and any applicable state securities laws, unless
       the holder shall have obtained an opinion of counsel  satisfactory to the
       corporation that such registration is not required."

      SECTION  7.  Survival  of  Representations,   Warranties  and  Agreements.
Notwithstanding  any  investigation  made by any  party  to this  Agreement  all
covenants,  agreements,  representations  and warranties made by the Company and
the Purchaser herein shall survive the execution of this Agreement, the delivery
to the Purchaser of the Securities being purchased and payment therefor.

      SECTION 8. Registration Statement. On the earlier to occur of (a) the next
filing by the Company of a registration  statement on Form S-3 providing for the
resale of its  securities  by  security  holders of the  Company or (b) 120 days
after the date  hereof and,  in any event,  subject to the receipt of  necessary
information  from the Purchaser,  the Company shall file with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3 (the
"Registration  Statement"),   which  may  include  other  selling  stockholders,
providing  for the resale of the Warrant  Shares and the shares of Common  Stock
issuable upon conversion of the Shares (collectively,  the "Registrable Shares")
by the Purchaser from time to time in accordance with Rule 415 promulgated under
the Securities  Act of 1933, as amended.  The Company shall use its best efforts
to cause the  Registration  Statement to become  effective within 180 days after
the  date  hereof  and the  Company  shall  use its  best  efforts  to keep  the
Registration  Statement 


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effective until the earlier of (a) the time all the Registrable Shares have been
sold  pursuant  to the  Registration  Statement  or (b)  the  expiration  of the
Warrant. The Company shall furnish to the Purchaser such number of copies of the
prospectus  contained  in the  Registration  Statement  as the  Purchaser  shall
reasonably require to facilitate the public sale of the Registrable Shares.

      SECTION  9.  Lockup  Agreements  with  Underwriters.  In the  event  of an
underwritten public offering of the Company's  securities,  the Purchaser agrees
to enter into an agreement with the Underwriter or Underwriters'  Representative
for such offering  restricting  the sale,  transfer or other  disposition of the
Securities, the Warrant Shares and the Conversion Shares to the extent that such
agreement  is required to be  executed  by members of senior  management  of the
Company.

      SECTION 10. Legal Fees. The Company agrees to pay the reasonable  fees and
expenses of the Purchaser's  counsel in connection with the purchase and sale of
the Securities up to a maximum of $5,000.

      SECTION 11. Conditions to Closing.

                     (a) The  obligations  of the  Purchaser to  consummate  the
transactions  contemplated  hereby shall be subject to the  satisfaction  by the
Company of each of the following  conditions on or before the Closing Date,  any
one or more of which may be waived by the Purchaser:

                             (i)  The  representations  and  warranties  of  the
Company set forth in this  Agreement  delivered to the Purchaser by or on behalf
of the Company shall be true and correct as if made on the Closing Date.

                             (ii)  Each  of  the   covenants,   agreements   and
conditions  to be  performed  and  satisfied  by the  Company  pursuant  to this
Agreement at or prior to Closing shall have been duly performed and satisfied.

                     (b)  The  obligations  of the  Company  to  consummate  the
transactions  contemplated  hereby shall be subject to the  satisfaction  by the
Purchaser of each of the following conditions on or before the Closing Date, any
one or more of which may be waived by the Company:

                             (i)  The  representations  and  warranties  of  the
Purchaser  set forth in this  Agreement  shall be true and correct as if made on
the Closing Date.

                             (ii)  Each  of  the   covenants,   agreements   and
conditions  to be  performed  and  satisfied by the  Purchaser  pursuant to this
Agreement at or prior to Closing shall have been duly performed and satisfied.

                             (iii) The  Purchaser  shall have paid the  Purchase
Price in accordance with Section 3.


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     SECTION 12. No Brokers.  The parties hereto hereby represent that there are
no  brokers  or  finders   entitled  to  compensation  in  connection  with  the
transactions contemplated hereby.

      SECTION  13.   Notices.   All  notices,   requests,   consents  and  other
communications  hereunder  shall be in writing,  shall be mailed by  first-class
registered or certified mail, postage prepaid, and shall be deemed given when so
mailed:

                     (a)    if to the Company to:

                                    Palomar Medical Technologies, Inc.
                                    66 Cherry Hill Drive
                                    Beverly, MA  01915
                                    Attention: Chief Executive Officer

                     (b) if to the Purchaser, at its address as set forth at the
end of this  Agreement,  or at such other  address or addresses as may have been
furnished to the Company in writing.

      SECTION 14. Termination. Either party to this Agreement may terminate this
Agreement upon written notice to the other at any time prior to the Closing.

      SECTION  15.  Changes.  Any  term  of the  Agreements  may be  amended  or
compliance  therewith  waived  with the  written  consent of the Company and the
holders of a majority of the Shares purchased pursuant to the Agreements.

      SECTION  16.  Headings.  The  headings  of the  various  sections  of this
Agreement have been inserted for  convenience of reference only and shall not be
deemed to be part of this Agreement.

      SECTION 17.  Severability.  If any provision  contained in this  Agreement
shall be  invalid,  illegal  or  unenforceable  in any  respect,  the  validity,
legality and enforceability of the remaining  provisions  contained herein shall
not in any way be affected or impaired thereby.

      SECTION  18.  Governing  Law.  This  Agreement  shall be  governed  by and
construed  in  accordance  with  the  internal  laws  of  the   Commonwealth  of
Massachusetts and United States federal law.

      SECTION  19.   Counterparts.   This  Agreement  may  be  executed  in  two
counterparts,  each of which shall  constitute  an original,  but both of which,
when taken  together,  shall  constitute  but one  instrument,  and shall become
effective  when one or more  counterparts  have been signed by each party hereto
and delivered to the other parties.


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      IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this  Securities
Purchase Agreement to be executed by their duly authorized representatives as of
the following date.

Dated: July __, 1996                       PALOMAR MEDICAL TECHNOLOGIES, INC.


                                           By: /s/ Steven Georgiev
                                              ----------------------------
                                                Title: Chairman & CEO

           [Purchaser Signature Page Continues on the Following Page]



                                                                  Execution copy



                   PURCHASER SIGNATURE PAGE AND QUESTIONNAIRE

      The  undersigned   Purchaser  hereby  executes  the  Securities   Purchase
Agreement with Palomar  Medical  Technologies,  Inc. (the  "Company") and hereby
authorizes  this signature page to be attached to a counterpart of such document
executed by a duly authorized officer of the Company.

                                                THE TRAVELERS INSURANCE COMPANY


                                                By: /s/ Craig H. Farnsworth
                                                   -------------------------
                                                Title: 2nd Vice President
Name in which Securities are to be                     ---------------------
registered:                                     TRAL & Co.

Address of registered holder:                   One Tower Square
                                                Hartford, Connecticut  06183

Social Security or Tax ID Number:               06-0546090

Contact name and telephone number               Edward F. Hinchliffe, III
regarding settlement and                        ______________________________
registration:                                   Name

                                                (203) 277-6113
                                                ______________________________
                                                Telephone Number





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