EXHIBIT 10(tt)


                           CERTIFICATE OF DESIGNATION

                                       OF

                       PALOMAR MEDICAL TECHNOLOGIES, INC.

                           CERTIFICATE OF DESIGNATION
                                       OF
                      SERIES F CONVERTIBLE PREFERRED STOCK

             (Pursuant to Section 151 of the General Corporation Law
                            of the State of Delaware)

                                     ------

                  Palomar  Medical  Technologies,  Inc., a Delaware  corporation
(the  "Corporation"),  in accordance  with the  provisions of Section 103 of the
General  Corporation  Law of the State of  Delaware  (the  "DGCL")  DOES  HEREBY
CERTIFY:

                  That pursuant to authority vested in the Board of Directors of
the  Corporation  by  the  Certificate  of  Incorporation,  as  amended,  of the
Corporation, the Board of Directors of the Corporation,  pursuant to a unanimous
written consent of Directors dated July 12, 1996, adopted a resolution providing
for the  creation of a series of the  Corporation's  Preferred  Stock,  $.01 par
value per share,  which series is  designated  "Series F  Convertible  Preferred
Stock", which resolution is as follows:

                  RESOLVED,  that  pursuant to authority  vested in the Board of
Directors of the  Corporation by the Certificate of  Incorporation,  as amended,
the Board of Directors  does hereby  provide for the creation of a series of the
Preferred  Stock,  $.01 par value per share  (hereafter  called  the  "Preferred
Stock"),  of the  Corporation,  and to the extent that the voting powers and the
designations, preferences and relative, participating, optional or other special
rights  thereof and the  qualifications,  limitations  or  restrictions  of such
rights have not been set forth in the Certificate of Incorporation,  as amended,
of the Corporation, does hereby fix the same as follows:








                      SERIES F CONVERTIBLE PREFERRED STOCK

                  SECTION 1.  DESIGNATION AND AMOUNT.  The shares of such series
shall be  designated as "Series F  Convertible  Preferred  Stock" (the "Series F
Convertible  Preferred Stock"), and the number of shares constituting the Series
F Convertible Preferred Stock shall be 6,000.

                  SECTION 2. STATED  CAPITAL.  The amount to be  represented  in
stated  capital  at all times for each share of Series F  Convertible  Preferred
Stock shall be the sum of (i) $60.00, (ii) to the extent legally available,  the
accrued but unpaid  dividends  on such share of Series F  Convertible  Preferred
Stock, and (iii) to be determined on at least a quarterly basis, an amount equal
to the accrued and unpaid  interest on dividends in arrears  through the date of
determination (as provided in Section 4).

                  SECTION 3.  RANK.  All Series F  Convertible  Preferred  Stock
shall rank (i) senior to the Common Stock, par value $.01 per share (the "Common
Stock"), of the Corporation, now or hereafter issued, as to payment of dividends
and distribution of assets upon liquidation,  dissolution,  or winding up of the
Corporation,  whether  voluntary or  involuntary,  and (ii) on a parity with the
Series A Convertible  Preferred  Stock,  $.01 par value per share,  the Series B
Convertible  Preferred Stock, $.01 par value per share, the Series C Convertible
Preferred Stock,  $.01 par value per share,  the Series D Convertible  Preferred
Stock, $.01 par value per share, the Series E Convertible  Preferred Stock, $.01
par value per share, the Series I Class A Preference Shares,  $.01 par value per
share, and the Series II Class A Preference Shares, $.01 par value per share, of
the  Corporation,  both as to payment of dividends  and as to  distributions  of
assets upon liquidation,  dissolution, or winding up of the Corporation, whether
voluntary or involuntary.

                  SECTION 4. DIVIDENDS AND DISTRIBUTIONS.  The holders of shares
of Series F Convertible Preferred Stock shall be entitled to receive,  when, as,
and if  declared by the Board of  Directors  of the  Corporation  (the "Board of
Directors"  or the "Board") out of funds  legally  available  for such  purpose,
dividends at the rate of 8% of the Per Share Price (as defined in Section 5) per
annum per share  during the first  twelve (12) months after the date of original
issuance,  6% of the Per Share Price per annum during the second  twelve  months
after the date of  original  issuance  and 4% of the Per  Share  Price per annum
thereafter,  and no more, which shall be fully cumulative,  shall accrue without
interest  from the date of  original  issuance  and  shall  be  payable  in cash
quarterly  on March  31,  June 30,  September  30 and  December  31 of each year
commencing  September  30,  1996  (except  that if any such date is a  Saturday,
Sunday,  or legal  holiday,  then such  dividend  shall be  payable  on the next
succeeding day that is not a Saturday,  Sunday,  or legal holiday) to holders of
record as they  appear  on the stock  books of the  Corporation  on such  record
dates,  not more than 20 nor less than 10 days  preceding  the payment dates for
such  dividends,  as shall be fixed by the Board.  The  amount of the  dividends
payable per share of Series F  Convertible  Preferred  Stock for each  quarterly
dividend  period  shall be computed by dividing  the annual  dividend  amount by
four. The amount of dividends  payable for the initial  dividend  period and any
period  shorter than a full quarterly  dividend  period shall be computed on the
basis of a 360-day year of twelve 30-day months. Dividends not paid on a payment
date,  whether or not such dividends  have been declared,  will bear interest at
the rate of 10% per annum until paid. No dividends or other distributions, other
than  dividends  payable solely in shares of Common Stock or other capital stock
of the  Corporation  ranking  junior as to dividends to the Series F


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Convertible Preferred Stock (collectively,  the "Junior Dividend Stock"),  shall
be paid or set apart for payment on, and,  except for the use of Common Stock to
pay for the exercise price of stock options issued  pursuant to the stock option
plans of the Corporation and its subsidiaries, no purchase, redemption, or other
acquisition  shall be made by the  Corporation of, any shares of Junior Dividend
Stock  unless  and  until all  accrued  and  unpaid  dividends  on the  Series F
Convertible  Preferred  Stock and  interest on  dividends in arrears at the rate
specified herein shall have been paid or declared and set apart for payment.

                  If at any  time  any  dividend  on any  capital  stock  of the
Corporation ranking senior as to dividends to the Series F Convertible Preferred
Stock (the "Senior Dividend Stock") shall be in default, in whole or in part, no
dividend  shall be paid or  declared  and set apart for  payment on the Series F
Convertible  Preferred  Stock unless and until all accrued and unpaid  dividends
with respect to the Senior Dividend Stock,  including the full dividends for the
then current dividend period, shall have been paid or declared and set apart for
payment,  without interest. No dividends shall be paid or declared and set apart
for payment on any class or series or the  Corporation's  capital stock ranking,
as to dividends,  on a parity with the Series F Convertible Preferred Stock (the
"Parity  Dividend Stock") for any period unless all accrued but unpaid dividends
(and interest on dividends in arrears at the rate  specified  herein) have been,
or contemporaneously are, paid or declared and set apart for such payment on the
Series F Convertible Preferred Stock. No dividends shall be paid or declared and
set apart for payment on the Series F Convertible Preferred Stock for any period
unless all accrued but unpaid  dividends  have been, or  contemporaneously  are,
paid or declared and set apart for payment on the Parity  Dividend Stock for all
dividend  periods  terminating  on or prior to the date of  payment of such full
dividends.  When  dividends  are not paid in full upon the Series F  Convertible
Preferred Stock and the Parity  Dividend  Stock,  all dividends paid or declared
and set apart for payment upon shares of Series F  Convertible  Preferred  Stock
(and  interest on  dividends  in arrears at the rate  specified  herein) and the
Parity  Dividend  Stock shall be paid or declared  and set apart for payment pro
rata, so that the amount of dividends paid or declared and set apart for payment
per share on the Series F Convertible  Preferred  Stock and the Parity  Dividend
Stock  shall in all cases bear to each other the same  ratio  that  accrued  and
unpaid dividends per share on the shares of Series F Convertible Preferred Stock
and the Parity Dividend Stock bear to each other.

                  Any references to  "distribution"  contained in this Section 4
shall not be deemed to  include  any stock  dividend  or  distributions  made in
connection with any liquidation,  dissolution, or winding up of the Corporation,
whether voluntary or involuntary.

                  SECTION  5.  LIQUIDATION   PREFERENCE.   In  the  event  of  a
liquidation, dissolution, or winding up of the Corporation, whether voluntary or
involuntary,  the  holders  of Series F  Convertible  Preferred  Stock  shall be
entitled to receive out of the assets of the  Corporation,  whether  such assets
constitute  stated  capital  or surplus  of any  nature,  an amount per share of
Series F  Convertible  Preferred  Stock  equal  to the sum of (i) all  dividends
accrued and unpaid  thereon to the date of final  distribution  to such holders,
(ii)  accrued  and  unpaid  interest  on  dividends  in  arrears  to the date of
distribution,  and (iii) $1,000.00 (the "Per Share Price" and collectively  with
the  amounts   described  in  clauses  (i)  and  (ii)  above,  the  "Liquidation
Preference"),  and no more,  before  any  payment  shall  be made or any  assets
distributed  to the holders of Common  Stock or any other class or series of the
Corporation's  capital  stock  ranking  junior as to  liquidation  rights to the
Series F Convertible  Preferred  Stock  (collectively,


                                       3





the "Junior  Liquidation  Stock");  provided,  however,  that such rights  shall
accrue to the holders of Series F Convertible  Preferred Stock only in the event
that the  Corporation's  payments with respect to the liquidation  preference of
the holders of capital stock of the Corporation ranking senior as to liquidation
rights to the Series F  Convertible  Preferred  Stock (the  "Senior  Liquidation
Stock")  are  fully  met.  After  the  liquidation  preferences  of  the  Senior
Liquidation Stock are fully met, the entire assets of the Corporation  available
for distribution shall be distributed  ratably among the holders of the Series F
Convertible  Preferred Stock and any other class or series of the  Corporation's
capital  stock  having  parity  as to  liquidation  rights  with  the  Series  F
Convertible  Preferred Stock (the "Parity  Liquidation  Stock") in proportion to
the respective  preferential  amounts to which each is entitled (but only to the
extent of such preferential  amounts).  After payment in full of the liquidation
price of the shares of the Series F Convertible  Preferred  Stock and the Parity
Liquidation  Stock,  the  holders of such  shares  shall not be  entitled to any
further participation in any distribution of assets by the Corporation.  Neither
a consolidation or merger of the Corporation with another corporation nor a sale
or transfer of all or part of the Corporation's assets for cash, securities,  or
other property in and of itself will be considered a  liquidation,  dissolution,
or winding up of the Corporation.

                  SECTION  6. NO  MANDATORY  REDEMPTION.  The shares of Series F
Convertible  Preferred Stock shall not be subject to mandatory redemption by the
Corporation.

                  SECTION 7. NO SINKING FUND. The shares of Series F Convertible
Preferred Stock shall not be subject to the operation of a purchase, retirement,
or sinking fund.

                  SECTION 8. OPTIONAL REDEMPTION.  So long as the Corporation is
in compliance in all material  respects with its  obligations  to the holders of
shares of Series F Convertible  Preferred Stock, the Corporation  shall have the
right,  exercisable on not less than 10 days or more than 30 days written notice
to the holders of record of the shares of Series F Convertible  Preferred  Stock
to be  redeemed,  at any time  after the  sooner to occur of (i) three (3) years
after the date of  original  issuance or (ii) such time as the closing bid price
of the Common  Stock shall  exceed  $16.80 per share (the  "Alternative  Minimum
Redemption  Price") for 60 or more  consecutive  trading days (provided that for
purposes of this clause  (ii),  the closing bid price of the Common  Stock shall
exceed 16.80 on the day that the shares of Series F Convertible  Preferred Stock
are called for  redemption)  to redeem all of the shares or any part thereof not
less than 1,000 shares (or such lesser  number of shares of Series F Convertible
Preferred  Stock as shall  remain  outstanding  at the time of  exercise of such
redemption  right) of Series F Convertible  Preferred  Stock in accordance  with
this Section 8; provided that (i) the  Corporation  shall not exercise its right
to  redeem  shares  of  Series  F  Convertible  Preferred  Stock  prior  to  the
Registration Effective Date (as hereinafter defined) and (ii) if within five (5)
days of receipt of a Notice of Redemption (as hereinafter defined) Travelers (as
hereinafter  defined)  shall notify the  Corporation  in writing that  Travelers
cannot  exercise  its right of  conversion  by reason  of the  operation  of the
proviso to the first sentence of Section 9(a) the Notice of Redemption shall not
be effective as to any shares of Series F Preferred Stock owned by Travelers and
the such shares  shall no longer be entitled  to the accrual and  cumulation  of
dividends under Section 4. The  Alternative  Minimum  Redemption  Price shall be
subject  to  equitable   adjustments   for  stock   splits,   stock   dividends,
combinations,  recapitalizations,  reclassifications  and  similar  events.  Any
notice of  redemption  (a "Notice of  Redemption")  under this Section  shall be
delivered to the holders of the shares of Series F Convertible  Preferred  Stock
at their  addresses  appearing  on the  records  of the  Corporation;  provided,


                                       4




however,  that any  failure or defect in the giving of notice to any such holder
shall not affect the validity of notice to or the redemption of shares of Series
F  Convertible  Preferred  Stock of any other  holder.  Any Notice of Redemption
shall state (1) that the  Corporation is exercising its right to redeem all or a
portion  of the  outstanding  shares of  Series F  Convertible  Preferred  Stock
pursuant  to this  Section 8, (2) the  number of shares of Series F  Convertible
Preferred Stock held by such holder which are to be redeemed, (3) the Redemption
Price (as hereinafter defined) per share of Series F Convertible Preferred Stock
to be redeemed,  determined in accordance  with this Section and (4) the date of
redemption of such shares of Series F Convertible Preferred Stock, determined in
accordance with this Section (the  "Redemption  Date").  On the Redemption Date,
the  Corporation  shall  make  payment  in  immediately  available  funds of the
applicable Redemption Price (as hereinafter defined) to each holder of shares of
Series F Convertible Preferred Stock to be redeemed to or upon the order of such
holder as  specified by such holder in writing to the  Corporation  at least one
business day prior to the  Redemption  Date.  If the  Corporation  exercises its
right  to  redeem  all or a  portion  of the  outstanding  shares  of  Series  F
Convertible  Preferred Stock, the Corporation  shall make payment to the holders
of the shares of Series F Convertible  Preferred Stock to be redeemed in respect
of each  share of Series F  Convertible  Preferred  Stock to be  redeemed  of an
amount equal to the amount of the  Liquidation  Preference  determined as of the
applicable  Redemption Date (the  "Redemption  Price").  Upon redemption of less
than all of the shares of Series F Convertible  Preferred  Stock  evidenced by a
particular certificate, promptly, but in no event later than three business days
after surrender of such  certificate to the Corporation,  the Corporation  shall
issue a replacement certificate for the shares of Series F Convertible Preferred
Stock which have not been  redeemed.  Only whole shares of Series F  Convertible
Preferred  Stock may be  redeemed.  If the  Corporation  exercises  its right to
redeem less than all outstanding shares of Series F Convertible Preferred Stock,
then such redemption  shall be made, as nearly as practical,  pro rata among the
holders of record of the Series F Convertible  Preferred Stock.  Notwithstanding
any other provision of this  Certificate of  Designations,  no share of Series F
Convertible  Preferred  Stock as to which the holder has  exercised the right of
conversion pursuant to Section 9 hereof may be redeemed by the Corporation on or
after the date of exercise of such conversion right.

                  SECTION 9. CONVERSION.

                  (a) Conversion at Option of Holder.  The holders of the Series
F Convertible Preferred Stock may, upon surrender of the certificates  therefor,
convert any or all of their shares of Series F Convertible  Preferred Stock into
fully paid and  nonassessable  shares of Common Stock and such other  securities
and property as  hereinafter  provided.  Commencing on the date which is 20 days
after the Registration  Effective Date (as hereinafter  defined) and at any time
thereafter,  each share of Series F Convertible Preferred Stock initially may be
converted  at the  office of any  transfer  agent for the  Series F  Convertible
Preferred  Stock,  if any, the office of any transfer agent for the Common Stock
or at such  other  office or  offices,  if any,  as the Board of  Directors  may
designate,  into whole shares of Common Stock at the rate equal to the number of
fully  paid and  nonassessable  shares of Common  Stock  (calculated  as to each
conversion to the nearest 1/100th of a share) determined by dividing (y) the sum
of  (i)  the  Conversion  Amount,  (ii)  accrued  but  unpaid  dividends  to the
Conversion  Date,  and (iii)  accrued but unpaid  interest on the  dividends  in
arrears  to the  Conversion  Date by (z) 80% of the daily  mean  average  of the
Closing  Price  of  the  Common  Stock  on  the  ten  consecutive  trading  days
immediately  preceding  the  Conversion  Date (but in no event  shall the amount
determined pursuant to


                                       5





this clause (z) be less than $10.00 (subject to equitable  adjustments for stock
splits, stock dividends, combinations, recapitalizations,  reclassifications and
similar events) regardless of the actual amount otherwise determined pursuant to
this clause (z)) or more than $16.00 (subject to equitable adjustments for stock
splits, stock dividends, combinations, recapitalizations,  reclassifications and
similar events) regardless of the actual amount otherwise determined pursuant to
this clause (z), in each case subject to adjustment as hereinafter provided (the
"Conversion Rate"); provided, however, that The Travelers Life Insurance Company
("Travelers")  and any  Travelers  Person  (as  defined  herein)  shall  only be
entitled to convert any shares of Series F Convertible Preferred Stock from time
to time to the extent that Travelers or such Travelers Person will, through such
conversion,  obtain  that  number of shares of  Common  Stock  (the  "Conversion
Shares")  that,  together  with shares of Common  Stock  directly or  indirectly
beneficially  owned  by  Travelers,  its  subsidiaries  and  affiliated  persons
including  persons  serving as exclusive full time advisors of Travelers (each a
"Travelers Person" and, collectively,  "Travelers Persons"), would not result in
direct and indirect  beneficial  ownership by all  Travelers  Persons that would
exceed  10%  of the  outstanding  shares  of  Common  Stock,  as  calculated  in
accordance  with Rule  16a-1(a)(1).  For purposes of  calculating  the number of
Conversion  Shares,  Travelers shall be entitled to use the  outstanding  number
contained in the Company's most recent Quarterly Report on Form 10-QSB or Annual
Report on Form  10-KSB  in  accordance  with  Rule  13D-1(e).  For  purposes  of
determining  the number of Conversion  Shares,  the Company shall be entitled to
rely,   and  shall  be  fully   protected  in  relying,   on  any  statement  or
representation  made by Travelers to the Company  without any  obligation on the
part of the  Company to make any  inquiry  or  investigation  or to examine  its
records or the  records of any  transfer  agent for the Common  Stock to confirm
such calculation. The "Conversion Price" shall be equal to the Conversion Amount
divided by the Conversion Rate.

         Notwithstanding  any other  provision of this Section,  the Corporation
shall not be required to permit a conversion  of shares of Series F  Convertible
Preferred Stock on any Conversion Date unless the aggregate  number of shares of
Series F  Convertible  Preferred  Stock to be  converted  by all holders on such
Conversion  Date is 1,000  shares (or such  lesser  number of shares of Series F
Convertible  Preferred Stock as shall remain outstanding at the time of exercise
of such conversion right).

                  (b) Certain Definitions.

                  As used  herein,  the  "Closing  Price" of any security on any
date  shall  mean the  closing  bid price of such  security  on such date on the
principal securities exchange on which such security is traded.


                                       6





                  As used herein,  the  "Conversion  Amount"  initially shall be
equal to $1,000, subject to adjustment as hereinafter provided.

                  As used herein, "Conversion Date" shall mean the date on which
the notice of conversion is actually  received by the Corporation,  in case of a
conversion at the option of the holder pursuant to Section 9(a).

                  As used herein, "Registration Effective Date" shall mean, with
respect to any share of Series F Convertible  Preferred Stock, the date on which
the Registration  Statement required to be filed by the Corporation  pursuant to
Section 8 of the Securities  Purchase  Agreement,  dated as of July 12, 1996, by
and  between  the  Corporation  and The  Travelers  Insurance  Company  is first
declared effective by the Securities and Exchange Commission.

                  (c) Other Provisions. Notwithstanding anything in this Section
9 to the contrary,  no change in the  Conversion  Amount shall  actually be made
until the  cumulative  effect of the  adjustments  called for by this  Section 9
since the date of the last  change in the  Conversion  Amount  would  change the
Conversion  Amount by more than 1%.  However,  once the cumulative  effect would
result in such a change,  then the Conversion  Rate shall actually be changed to
reflect all  adjustments  called for by this Section 9 and not previously  made.
Notwithstanding  anything in this Section 9, no change in the Conversion  Amount
shall be made that would result in a Conversion Price of less than the par value
of the Common Stock into which shares of Series F  Convertible  Preferred  Stock
are at the time convertible.

                  The holders of shares of Series F Convertible  Preferred Stock
at the close of business on the record date for any dividend  payment to holders
of Series F  Convertible  Preferred  Stock  shall be  entitled  to  receive  the
dividend  payable on such  shares on the  corresponding  dividend  payment  date
notwithstanding  the conversion  thereof after such dividend payment record date
or the  Corporation's  default in payment of the dividend  due on such  dividend
payment date; provided,  however,  that shares of Series F Convertible Preferred
Stock surrendered for conversion during the period between the close of business
on any record  date for a dividend  payment  and the  opening of business on the
corresponding  dividend payment date must be accompanied by payment of an amount
equal to the dividend  payable on such shares on such  dividend  payment date. A
holder of shares of Series F Convertible  Preferred Stock on a record date for a
dividend  payment  who (or whose  transferee)  tenders  any of such  shares  for
conversion  into shares of Common Stock on or after such  dividend  payment date
will receive the dividend  payable by the Corporation on such shares of Series F
Convertible  Preferred  Stock on such date, and the  converting  holder need not
include  payment  of the amount of such  dividend  upon  surrender  of shares of
Series F Convertible  Preferred Stock for conversion.  Except as provided above,
no  adjustment  shall be made in respect of cash  dividends  on Common  Stock or
Series F Convertible  Preferred Stock that may be accrued and unpaid at the date
of surrender for conversion.

                  The right of the  holders  of Series F  Convertible  Preferred
Stock  to  convert  their  shares  shall  be  exercised  by  delivering  to  the
Corporation or its agent, as provided above, a written notice, duly signed by or
on behalf of the holder,  stating  the number of shares of Series F  Convertible
Preferred  Stock  to be  converted.  Promptly,  but in no  event  later  than 10
business  days after  delivery  of


                                       7





a notice of  conversion,  such holder  shall  surrender  for such purpose to the
Corporation or its agent, as provided above, certificates representing shares to
be converted,  duly endorsed in blank or  accompanied  by proper  instruments of
transfer. If such holder shall fail to deliver certificates  representing shares
to be converted in such form on or prior to such tenth business day, such notice
of  conversion   shall  not  be  effective,   unless  otherwise  agreed  by  the
Corporation,  but such failure shall not affect such  holder's  right to convert
such shares at a date after the date such notice of  conversion  was given.  The
Corporation shall not, however,  be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery upon conversion of
shares of Common Stock or other securities or property in a name other than that
of the holder of the shares of the Series F  Convertible  Preferred  Stock being
converted,  and the  Corporation  shall not be  required to issue or deliver any
such  shares or other  securities  or  property  unless  and until the person or
persons  requesting the issuance  thereof shall have paid to the Corporation the
amount of any such tax or shall  have  established  to the  satisfaction  of the
Corporation that such tax has been paid.

                  The Corporation (and any successor corporation) shall take all
action  necessary  so that a number  of shares of the  authorized  but  unissued
Common  Stock  (or  common  stock  in the  case  of any  successor  corporation)
sufficient to provide for the  conversion of the Series F Convertible  Preferred
Stock outstanding upon the basis hereinbefore provided are at all times reserved
by the Corporation (or any successor corporation),  free from preemptive rights,
for such conversion, subject to the provisions of the next succeeding paragraph.
If the Corporation  shall issue any securities or make any change in its capital
structure  which  would  change the number of shares of Common  Stock into which
each share of the Series F Convertible  Preferred  Stock shall be convertible as
herein  provided,  the  Corporation  shall at the same  time  also  make  proper
provision so that  thereafter  there shall be a  sufficient  number of shares of
Common  Stock  authorized  and  reserved,   free  from  preemptive  rights,  for
conversion of the  outstanding  Series F Convertible  Preferred Stock on the new
basis.  If at any time the number of  authorized  but unissued  shares of Common
Stock shall not be sufficient to effect the conversion of all of the outstanding
shares of Series F Convertible  Preferred Stock, the Corporation  promptly shall
seek such corporate  action as may, in the opinion of its counsel,  be necessary
to increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purpose.

                  In case of any consolidation or merger of the Corporation with
any other corporation (other than a wholly-owned  subsidiary of the Corporation)
in which the  Corporation  is not the surviving  corporation,  or in case of any
sale or transfer of all or  substantially  all of the assets of the Corporation,
or in the case of any share  exchange  pursuant to which all of the  outstanding
shares of Common Stock are  converted  into other  securities  or property,  the
Corporation shall make appropriate  provision or cause appropriate  provision to
be made so that each holder of shares of Series F  Convertible  Preferred  Stock
then  outstanding  shall have the right  thereafter  to convert  such  shares of
Series F Convertible Preferred Stock into the kind and amount of shares of stock
and other securities and property  receivable upon such  consolidation,  merger,
sale, transfer,  or share exchange by a holder of the number of shares of Common
Stock into which such shares of Series F Convertible  Preferred Stock could have
been converted  immediately  prior to the effective date of such  consolidation,
merger,  sale,  transfer,  or share  exchange.  If, in connection  with any such
consolidation,  merger, sale, transfer, or share exchange, each holder of shares
of Common  Stock is entitled to elect to receive  either  securities,  cash,  or
other assets upon completion of such transaction,  the Corporation shall provide
or cause to be provided to each holder of Series F Convertible  Preferred  Stock
the right to elect the 


                                       8




securities,  cash, or other assets into which the Series F Convertible Preferred
Stock held by such holder  shall be  convertible  after  completion  of any such
transaction on the same terms and subject to the same  conditions  applicable to
holders of the Common Stock (including,  without limitation, notice of the right
to elect,  limitations  on the period in which such election  shall be made, and
the effect of failing to  exercise  the  election).  The  Corporation  shall not
effect any such  transaction  unless the  provisions of this paragraph have been
complied  with.  The  above  provisions  shall  similarly  apply  to  successive
consolidations, mergers, sales, transfers, or share exchanges.

                  Upon surrender of certificates representing shares of Series F
Convertible  Preferred  Stock for conversion,  the  Corporation  shall issue and
deliver to such person  certificates  for the Common  Stock  issuable  upon such
conversion  within  three  business  days  after such  surrender  and the person
converting  shall be deemed to be the  holder  of  record  of the  Common  Stock
issuable  upon such  conversion,  and all  rights  with  respect  to the  shares
surrendered  shall  forthwith  terminate  except the right to receive the Common
Stock or other securities, cash, or other assets as herein provided.

                  No  fractional  shares of Common  Stock  shall be issued  upon
conversion of Series F Convertible  Preferred Stock but, in lieu of any fraction
of a share of Common  Stock which would  otherwise be issuable in respect of the
aggregate  number of such shares  surrendered  for conversion at one time by the
same holder,  the  Corporation at its option (a) may pay in cash an amount equal
to the product of (i) the daily mean average of the Closing  Price of a share of
Common Stock on the ten consecutive  trading days before the Conversion Date and
(ii) such  fraction  of a share or (b) may issue an  additional  share of Common
Stock.

                  The  "Closing  Price" for each day shall be the closing  price
regular  way on such day as reported  on the New York Stock  Exchange  Composite
Tape,  or, if the  Common  Stock is not  listed or  admitted  to trading on such
Exchange, on the principal national securities exchange on which Common Stock is
listed or admitted  to trading,  or, if not listed or admitted to trading on any
national  securities  exchange,  the closing bid price as reported on the Nasdaq
Stock Market (or, if not so reported,  the closing  price),  or, if not admitted
for  quotation on the Nasdaq Stock  Market,  the average of the high bid and low
asked prices on such day as recorded by the National  Association  of Securities
Dealers,  Inc. through the National  Association of Securities Dealers Automated
Quotations  System  ("NASDAQ"),  or if the National  Association  of  Securities
Dealers,  Inc.  through  NASDAQ shall not have reported any bid and asked prices
for the Common  Stock on such day,  the average of the bid and asked  prices for
such day as furnished by any New York Stock  Exchange  member firm selected from
time to time by the Corporation for such purposes,  or, if no such bid and asked
prices can be obtained from any such firm, the fair market value of one share of
Common Stock on such day as  determined in good faith by the Board of Directors.
Such determination by the Board of Directors shall be conclusive.


                                       9






                  The  Conversion  Amount  shall be  adjusted  from time to time
under  certain  circumstances,  subject  to the  provisions  of the first  three
sentences of the first paragraph of this Section 9(c), as follows:

                  (i) In case the Corporation  shall issue rights or warrants to
all holders of the Common  Stock  entitling  such  holders to  subscribe  for or
purchase  Common Stock on the record date referred to below at a price per share
less  than the  average  daily  Closing  Prices  of the  Common  Stock on the 30
consecutive  business  days  commencing  45 business days before the record date
(the "Current  Market Price"),  then in each such case the Conversion  Amount in
effect on such record date shall be adjusted in accordance with the formula

         C1 = C x     O + N
                      -----    
                 O  + N x P
                      -----      
                        M

where

         C1     = the adjusted Conversion Amount
         C      = the current Conversion Amount
         O      = the number of shares of Common Stock outstanding on the record
                   date.
         N      = the  number  of  additional  shares of Common  Stock  issuable
                   pursuant to the exercise of such rights or warrants.
         P      = the  offering  price per share of the additional shares (which
                   amount shall include amounts  received by the  Corporation in
                   respect of the issuance  and the  exercise  of such rights or
                   warrants).
         M      = the Current  Market  Price  per  share of Common  Stock on the
                   record date.

Such adjustment shall become effective immediately after the record date for the
determination  of stockholders  entitled to receive such rights or warrants.  If
any or all such  rights or  warrants  are not so  issued or expire or  terminate
before being exercised, the Conversion Amount then in effect shall be readjusted
appropriately.

                  (ii) In case the Corporation  shall, by dividend or otherwise,
distribute to all holders of its Junior Stock (as hereinafter defined) evidences
of its indebtedness or assets (including securities,  but excluding any warrants
or subscription rights referred to in subparagraph (i) above and any dividend or
distribution paid in cash out of the retained earnings of the Corporation), then
in each such case the  Conversion  Amount  then in effect  shall be  adjusted in
accordance with the formula

         C1 = C x    M
                   ---- 
                   M - F

where

         C1     = the adjusted Conversion Amount
         C      = the current Conversion Amount


                                       10





         M      = the  Current  Market  Price  per share of Common  Stock on the
                   record date mentioned  below.
         F      = the  aggregate  amount of such cash  dividend  and/or the fair
                   market  value on the record date of the assets or  securities
                   to be  distributed  divided by the number of shares of Common
                   Stock  outstanding on the record date. The Board of Directors
                   shall determine such fair market value,  which  determination
                   shall be conclusive.

Such adjustment shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution.
For purposes of this subparagraph  (ii),  "Junior Stock" shall include any class
of capital  stock  ranking  junior as to  dividends or upon  liquidation  to the
Series F Convertible Preferred Stock.

                  (iii) All calculations  hereunder shall be made to the nearest
cent or to the nearest 1/100 of a share, as the case may be.

                  (iv) If at any time as a result of an adjustment made pursuant
to the  fifth  paragraph  of this  Section  9(c),  the  holder  of any  Series F
Convertible  Preferred Stock thereafter  surrendered for conversion shall become
entitled to receive  securities,  cash, or assets other than Common  Stock,  the
number or amount of such  securities or property so receivable  upon  conversion
shall be  subject  to  adjustment  from time to time in a manner and on terms as
nearly  equivalent as practicable  to the provisions  with respect to the Common
Stock contained in subparagraphs (i) to (iii) above.

                  Except  as  otherwise  provided  above in this  Section  9, no
adjustment in the  Conversion  Amount shall be made in respect of any conversion
for share distributions or dividends theretofore declared and paid or payable on
the Common Stock.

                  Whenever  the   Conversion   Amount  is   adjusted,   (i)  the
Corporation  shall  send to  each  transfer  agent,  if any,  for the  Series  F
Convertible  Preferred  Stock  and  the  Common  Stock,  and  to  the  principal
securities exchange,  if any, on which the Series F Convertible  Preferred Stock
and the Common  Stock is  traded,  or the  Nasdaq  Stock  Market if the Series F
Convertible  Preferred  Stock or the Common  Stock is  admitted  for a quotation
thereon,  a statement  signed by the Chairman of the Board, the President or any
Vice-President  of the  Corporation  and by its  Treasurer  or its  Secretary or
Assistant  Secretary  stating  the  adjusted  Conversion  Amount  determined  as
provided  in this  Section 9, and any  adjustment  so  evidenced,  given in good
faith,  shall be binding upon all stockholders and upon the Corporation and (ii)
the  Corporation  will give  notice by mail to the holders of record of Series F
Convertible Preferred Stock, which notice shall be made within 45 days after the
effective  date of such  adjustment  and  shall  state  the  adjustment  and the
Conversion Amount.  Notwithstanding the foregoing notice provisions,  failure by
the  Corporation to give such notice or a defect in such notice shall not affect
the binding nature of such corporate action of the Corporation.

                  Whenever  the  Corporation  shall  propose  to take any of the
actions   specified  in  the  fifth   paragraph  of  this  Section  9(c)  or  in
subparagraphs  (i) or (ii) of the ninth  paragraph  of this  Section  9(c) which
would result in any adjustment in the Conversion Amount under this Section 9(c),
the Corporation  shall cause a notice to be mailed at least 30 days prior to the
date on which the books of the Corporation  will close or on which a record will
be taken for such action,  to the holders of record 


                                       11





of the  outstanding  Series F  Convertible  Preferred  Stock on the date of such
notice.  Such  notice  shall  specify  the  action  proposed  to be taken by the
Corporation and the date as of which holders of record of the Common Stock shall
participate  in any such  actions or be entitled to exchange  their Common Stock
for securities or other property, as the case may be. Failure by the Corporation
to mail the notice or any defect in such notice shall not affect the validity of
the transaction.

                  Notwithstanding  any other  provision  of this  Section  9, no
adjustment in the Conversion Amount need be made (a) for a transaction  referred
to in  subparagraphs  (i) or (ii) of the ninth paragraph of this Section 9(c) if
holders  of  Series F  Convertible  Preferred  Stock are to  participate  in the
transaction  or  distribution  on a basis  and with  notice  that  the  Board of
Directors  determines  to be fair to the  holders  of the  Series F  Convertible
Preferred  Stock and  appropriate  in light of the basis on which holders of the
Common Stock or, in the case of a transaction  referred to in said  subparagraph
(ii),  holders of Junior Stock participate in the transaction;  (b) for sales of
Common Stock  pursuant to a plan for  reinvestment  of dividends  and  interest,
provided that the purchase  price in any such sale is at least equal to the fair
market  value of the Common Stock at the time of such  purchase,  or pursuant to
any plan adopted by the Corporation for the benefit of its employees, directors,
or  consultants;  or (c) after the Series F Convertible  Preferred Stock becomes
convertible into cash (no interest shall accrue on the cash).

                  SECTION 10.  VOTING  RIGHTS.  Except as otherwise  required by
law,  shares of Series F  Convertible  Preferred  Stock shall not be entitled to
vote on any matter.

                  The  affirmative  vote or consent of the holders of a majority
of the outstanding  shares of the Series F Convertible  Preferred Stock,  voting
separately as a class,  will be required for (1) any amendment,  alteration,  or
repeal,  whether by merger or consolidation or otherwise,  of the  Corporation's
Certificate of Incorporation if the amendment,  alteration, or repeal materially
and adversely affects the powers, preferences, or special rights of the Series F
Convertible  Preferred  Stock,  or (2) the  creation  and issuance of any Senior
Dividend Stock or Senior Liquidation Stock; provided, however, that any increase
in the  authorized  preferred  stock  of the  Corporation  or the  creation  and
issuance of any stock which is both Junior Dividend Stock and Junior Liquidation
Stock or any other capital stock of the Corporation ranking on a parity with the
Series F Convertible  Preferred  Stock shall be deemed not to affect  materially
and adversely such powers, preferences, or special rights.

                  SECTION  11.   OUTSTANDING   SHARES.   For  purposes  of  this
Certificate of Designations,  all shares of Series F Convertible Preferred Stock
shall  be  deemed   outstanding  except  (i)  from  the  date  of  surrender  of
certificates  representing  shares of Series F Convertible  Preferred  Stock for
conversion into Common Stock, all shares of Series F Convertible Preferred Stock
converted into Common Stock; and (ii) from the date of registration of transfer,
all  shares  of  Series F  Convertible  Preferred  Stock  held of  record by the
Corporation  or  any  subsidiary  or  Affiliate  (as  defined   herein)  of  the
Corporation.  For the purposes of this Certificate of Designations,  "Affiliate"
means any person  directly or indirectly  controlling  or controlled by or under
direct or indirect common control with the  Corporation.  "Control" is the power
to direct the  management  and policies of a person,  directly or through one or
more  intermediaries,  whether  through the ownership of voting  securities,  by
contract, or otherwise.


                                       12





         IN WITNESS WHEREOF,  Palomar Medical Technologies,  Inc. has caused its
corporate seal to be hereunto affixed and this certificate to be signed by David
A. Broadwin, its Assistant Secretary, this 12th day of July, 1996.



                                           By /s/ Dave A. Broadwin
                                              ----------------------------
                                                   David A. Broadwin
                                                  Assistant Secretary




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