-133-

                             SUBSCRIPTION AGREEMENT
                          (GFL Advantage Fund himited)

     THIS SUBSCRIPTION  AGREEMENT,  dated as of the date of acceptance set forth
below,  by  and  between  PALOMAR   MEDICAL   TECHNOLOGIES,   INC.,  a  Delaware
corporation,  with  headquarters  located  at 66  Cherry  Hill  Drive,  Beverly,
Massachusetts 01915 (the "Company"), and the undersigned (the "Buyer").

                              W I T N E S S E T H:

     WHEREAS,  the  Company  and the Buyer are  executing  and  delivering  this
Agreement in reliance upon the exemption from securities  registration  afforded
by Section 4(2) of the Securities Act of 1933, as amended (the "1933 Act"); and

     WHEREAS,  the Buyer wishes to  purchase,  upon the terms and subject to the
conditions of this Agreement, shares of non-voting,  convertible preferred stock
of the Company which will be  convertible  into shares o Common Stock,  $.O1 par
value (the  "Common  Stock"),  of the Company  upon the terms and subject to the
conditions  of such  preferred  stock,  and in  connection  therewith to receive
warrants to  purchase  shares of Common  Stock,  subject to  acceptance  of this
Agreement by the Company;

     NOW THEREFORE,  in  consideration  of the premises and the mutual covenants
contained  herein and other good and  valuable  consideration,  the  receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

     1. AGREEMENT TO SU3SCRIBE; PURCHASE PRICE; WARRANTS.

          a.  Subscrition.  The  undersigned  hereby agrees to purchase from the
     Company  the  number  of  shares  (the  "Preferred  Shares")  of  Series  E
     Convertible Preferred Stock, $.01 par value (the "Preferred Stock"), of the
     Company set forth on the signature page of this Agreement, having the terms
     and  conditions  as set forth in the form of  Certificate  of  Designations
     attached hereto as Annex I (the  "Certificate of Designations) at the price
     per share and for the aggregate  purchase  price set forth on the signature
     page of this Agreement. The purchase price for the Preferred Stock shall be
     payable in United States Dollars.  In addition to issuance of the Preferred
     Shares, the Company shall issue to the Buyer on the Closing Date (as herein
     defined)  warrants to purchase shares of Common Stock,  such warrants to be
     in the form  attached  hereto as Annex II (the  "Warrantsn).  The number of
     shares of Common Stock initially  purchasable upon exercise of the Warrants
     to be issued by the Buyer on the Closing Date shall be the uotient obtained
     by dividing  (1) the number of shares of Common Stock into which the number
     of Preferred  Shares to be issued to the Buyer on the Closing Date would be
     convertible on the Closing Date, if the Preferred  Shares were  convertible
     on the Closing Date, by (2) four (4). The shares of Common Stock

<PAGE>
                                     -134-

     issuable upon conversion of the Preferred  Shares are referred to herein as
     the "Conversion  Shares." The shares of Common Stock issuable upon exercise
     of the  Warrants  are  referred  to herein  as the  "Warrant  Shares."  The
     Conversion   Shares  and  the  Warrant   Shares  are   referred  to  herein
     collectively  as the "Common  Shares." The Common  Shares and the Preferred
     Shares are referred to herein  collectively as the "Shares." The Shares and
     the Warrants are referred to herein collectively as the "Securities."

          b. Form of  Payment.  The Buyer shall pay the  purchase  price for the
     Preferred  Shares by  delivering  good funds in United States ollars to the
     escrow agent identified in the Joint Escrow Instructions attached hereto as
     Annex  III (the  "Escrow  Agent").  Such  delivery  of funds  shall be made
     against  delivery  by the  Company of the  certificates  for the  Preferred
     Shares registered in the name of the Buyer.  Promptly  following payment by
     the  Buyer to the  Escrow  Agent  of the  purchase  price of the  Preferred
     Shares,  but in no event later than the  Closing  Date,  the Company  shall
     deliver  certificates for the Preferred  Shares,  registered in the name of
     the Buyer, to the Escrow Agent.  By signing this  Agreement,  the Buyer and
     the Company each agrees to all of the terms and  conditions of, and becomes
     a party to, the Joint Escrow Instructions attached hereto as Annex III, all
     of the provisions of which are incorporated  herein by this reference as if
     set forth in full.

          c. Method of Payment.  Payment of the purchase price for the Preferred
     Shares shall be made by wire transfer of funds to:

          Citibank, N.A.
          153 East 53rd Street
          New York, New York 10043

          ABA#021000089
          For Further Credit to A/C#37179446
          for credit to the account of Brian W. Pusch Attorney
          Escrow Account
          Reference:  GFL/Palomar

     Not later than 4:00 p.m., New York City time, on the date which is five New
     York Stock Exchange trading days after the Company shall have accepted this
     Agreement and returned a signed counterpart of this Agreement to the Buyer,
     the Buyer shall deposit with the Escrow Agent the aggregate  purchase price
     for the Preferred Shares.

     2.  BUYER  REPRESENTATIONS,   WARRANTIES,   ETC.;  ACCESS  TO  INFORMATION;
         INDEPENDENT INVESTIGATION.

     The Buyer  represents  and warrants to, and covenants and agrees with,  the
Company as follows:

<PAGE>
                                     -135-

          a. The Buyer is purchasing  the Preferred  Shares and the Warrants for
     its own account for investment  only and not with a view towards the public
     sale or distribution thereof;

          b. The Buyer is an  "accredited  investor  as that term is  defined in
     Rule 501 of the General Rules and Regulations  under the 1933 Act by reason
     of Rule 501(a)(3);

          c. All  subsequent  offers  and sales of the  Securities  by the Buyer
     shall be made pursuant to registration of the Securities  being offered and
     sold under the 1933 Act or pursuant to an exemption from registration;

          d. The Buyer  understands  that the Preferred  Shares and the Warrants
     are being offered and sold, and the Common Shares are being offered,  to it
     in reliance on specific  exemptions from the  registration  requirements of
     United  States  federal and state  securities  laws and that the Company is
     relying upon the truth and accuracy  of, and the Buyer's  compliance  with,
     the   representations,    warranties,   agreements,   acknowledgments   and
     understandings  of the  Buyer set forth  herein in order to  determine  the
     availability of such exemptions and the eligibility of the Buyer to acquire
     the Preferred Shares and the Warrants and to receive an offer of the Common
     Shares;

          e. The Buyer and its advisors,  if any, have been  furnished  with all
     materials relating to the business,  finances and operations of the Company
     and materials  relating to the offer and sale of the  Preferred  Shares and
     the Warrants and the offer of the Common  Shares which have been  requested
     by the Buyer.  The Buyer and its  advisors,  if any, have been afforded the
     opportunity to ask questions of the Company and have received  complete and
     satisfactory answers to any such inquiries. Without limiting the generality
     of the foregoing, the Buyer has had the opportunity to obtain and to review
     the  Company's  (1) Annual Report on Form 10- KSB for the fiscal year ended
     December 31, 1995 and (2) the Company's  definitive Proxy Statement for its
     1995 Annual  Meeting of  StockhoIders,  in each case as filed with the SEC.
     The Buyer  understands  that its  investment in the Shares  involves a high
     degree of risk;

          f. The Buyer understands that no United States federal or state agency
     or any other  government or  governmental  agency has passed on or made any
     recommendation or endorsement of the Securities; and

          g. This Agreement has been duly and validly  authorized,  executed and
     delivered  on behalf of the Buyer and is a valid and binding  agreement  of
     the  Buyer  enforceable  in  accordance  with  its  terms,  subject  as  to
     enforceability   to  general   principles  of  equity  and  to  bankruptcy,
     insolvency,  moratorium and other similar laws affecting the enforcement of
     creditors rights generally.

<PAGE>
                                     -136-

     3. COMPANY REPRESENTATIONS, ETC.

     The Company represents and warrants to the Buyer that:

          a. Concerning the Securities. The Securities have been duly authorized
     and the Preferred Shares,  when issued and paid for in accordance with this
     Agreement,  and the Common  Shares,  when  issued  upon  conversion  of the
     Preferred  Shares or eercise of the  Warrants,  as the case may be, will be
     duly and validly issued, fully paid and non-assessable and will not subject
     the holder  thereof to personal  liability  by reason of being such holder.
     There are no preemptive right,s of any stockholder of the Company, as such,
     to acquire any of the Securities. The Common Stock is listed for trading on
     the Nasdaq  SmallCap  Market  ("Nasdaq") and (1) the Company and the Common
     Stock meet the criteria for  continued  listing and trading on Nasdaq;  (2)
     the Company has not been  notified  since  January 1, 1994 by the  National
     Association of Securities Dealers, Inc. of any failure or potential failure
     to meet the criteria for continued listing and trading on Nasdaq and (3) no
     suspension of trading in the Common Stock is in effect.

          b. Subscription  Agreement;  Resistration  Right Agreement;  Warrants.
     This Agreement,  the Registration  Rights  Agreement,  the form of which is
     attached hereto as Annex IV (the "Registration Rights Agreement"),  and the
     Warrants  have  been  duly and  validly  authorized  by the  Company,  this
     Agreement has been duly executed and delivered on behalf of the Company and
     this Agreement is and the  Registration  Rights Agreement and the Warrants,
     when  executed  and  delivered  by the  Company,  will be valid and binding
     agreements of the Company  enforceable in accordance with their  respective
     terms,  subject as to enforceability to general principles of equity and to
     bankruptcy,  insolvency,  moratorium  and other similar laws  affecting the
     enforcement of creditors' rights generally.

          c.  Non-contraention.  The execution and delivery of this Agreement by
     the Company  and the  consummation  by the  Company of the  issuance of the
     Shares and the Warrants  and the other  transactions  contemplated  by this
     Agreement, the Registration Rights Agreement, the Warrants and the terms of
     the Preferred Stock do not and will not conflict with or result in a breach
     by the  Company  of any of the  terms or  provisions  of, or  constitute  a
     default under,  the certificate of incorporation or by-laws of the Company,
     or any indenture,  mortgage,  deed of trust or other material  agreement or
     instrument  to which  the  Company  is a party or by which it or any of its
     properties or assets are bound,  or any applicable  law, rule or regulation
     or any  applicable  decree,  judgment or order of any court,  United States
     federal  or  state   regulatory  body,   administrative   agency  or  other
     governmental  body  having  jurisdiction  over  the  Company  or any of its
     properties or assets.

          d.  Approvals.  No  authorization,  approval  or consent of any court,
     governmental body, regulatory agency, self-

<PAGE>
                                     -137-

     regulatory organization, or stock exchange or market or the stockholders of
     the Company is required to be obtained by the Company for the  issuance and
     sale of the Shares and the Warrants as contemplated by this Agreement,  the
     terms of the Preferred Stoc and the Warrants.

          e. Information  Proided.  The information  provided by or on behalf of
     the Company to the Buyer and referred to in Section 2(e) of this  Agreement
     does not contain any untrue  statement of a material  fact or omit to state
     any material fact necessary in order to make the statements therein, in the
     light of the circumstance under which they are made, not misleading.

          f. Absence of Certain Change.  Since December 31, 1995, there has been
     no material  adverse  change and no  material  adverse  development  in the
     business,   properties,   operations,   financial  condition,   results  of
     operations  or  prospects  of  the  Company,  except  as  disclosed  in the
     documents referred to in Section 2(e) hereof.

          g.  Absence  of  Litigation.  There is no  action,  suit,  proceeding,
     inquiry  or  investigation  before or by any  court,  public  board or body
     pending or, to the  knowledge  of the  Company or any of its  subsidiaries,
     threatened  against or  affecting  the Company or any of its  subsidiaries,
     wherein an  unfavorable  decision,  ruling or finding would have a material
     adverse effect on the properties, business, condition (financial or other),
     results of  operations  or  prospects  of the Company and its  subsidiaries
     taken as a whole or the transactions  contemplated by this Agreement or any
     of the documents  contemplated  hereby or which would adversely  affect the
     validity or  enforceability  of, or the authority or ability of the Company
     to perform  its  obligations  under,  this  Agreement  or any of such other
     documents.

     4. CERTAIN COVENANTS AND ACRNOWLEDGMENTS.

          a.  Transfer  RestrictionS.   The  Buyer  acknowledges  that  (1)  the
     Preferred  Shares  and the  Warrants  have  not  been  and  are  not  being
     registered  under the provisions of the 1933 Act and, except as provided in
     the Registration Rights Agreement,  the Common Shares have not been and are
     not being registered under the 1933 Act, and may not be transferred  unless
     (A) subsequently registered thereunder or () the Buyer shall have delivered
     to the  Company an opinion of  counsel,  reasonably  satisfactory  in form,
     scope and  substance  to the  Company,  to the effect that the Shares to be
     sold or  transferred  may be sold or  transferred  pursuant to an exemption
     from such registration;  (2) any sale of the Shares or the Warrants made in
     reliance  on Rule 144  promulgated  under  the 1933 Act may be made only in
     accordance  with the  terms of said Rule and  further,  if said Rule is not
     applicable,  any resale of such Shares or Warrants under  circumstances  in
     which the  seller,  or the  person  through  whom the sale is made,  may be
     deemed to be an  underwriter,  as that  term is used in the 1933  Act,  may
     require compliance with some other exemption under the 1933 Act or the

<PAGE>
                                     -138-

     rules and  regulations of the SEC  thereunder;  and (3) neither the Company
     nor any other person is under any  obligation to register the Shares (other
     than pursuant to the Registration  Rights  Agreement) or the Warrants under
     the 1933 Act or to comply with the terms and  conditions  of any  exemption
     thereunder.

          b.  Restrictive  Legend.  The Buyer  acknowledges  and agrees that the
     certificates for the Preferred Shares,  the Warrants,  and, until such time
     as the Shares have been  registered  under the 1933 Act as  contemplated by
     the Registration Rights Agreement,  the certificates for the Common Shares,
     may bear a restrictive  legend in  substantially  the following form (and a
     stop-transfer  order may be placed against transfer of the certificates for
     the Shares):

               The  securities  represented  by this  certificate  have not been
               registered  under the  Securities  Act of 1933,  as amended.  The
               securities have been acquired for investment and may not be sold,
               transferred   or  assigned   in  the  absence  of  an   effective
               registration  statement for the  securities  under the Securities
               Act  of  1933,  as  amended,   or  an  opinion  of  counsel  that
               registration is not required under said Act.

          c. Registration  Rights  Agreement.  The parties hereto agree to enter
     into the  Registration  Rights  Agreement,  in the form attached  hereto as
     Annex IV, on or before the Closing Date.

          d.  Authorization  for  Trading;  Reporting  Statu.  On or before  the
     Closing  Date,  the Company  shall cause the Common Shares to be authorized
     for trading on Nasdaq.  So long as the Buyer  beneficially  owns any of the
     Preferred Shares, the Warrants or the Common Shares, the Company shall file
     all reports  required to be filed with the SEC pursuant to Section 13 or 15
     (d) of the Securities Exchange Act of 1934, as amended (the "1934 Act), and
     the Company shall not  terminate  its status as an issuer  required to file
     reports  under  the  1934  Act  even  if the  1934  Act or  the  rules  and
     regulations thereunder would permit such termination.

          e. Use of Proceeds. The Company will use the proceeds from the sale of
     the Preferred  Shares and the Warrants for the Company's  internal  working
     capital  purposes,  mergers  and  acquisitions,   investments  and  general
     corporate purposes.

          f. Blue Sky Laws.  On or before the Closing  Date,  the Company  shall
     take  such  action  as shall be  necessary  to  qualify,  or to  obtain  an
     exemption for, the Preferred  Shares and the Warrants for sale to the Buyer
     pursuant to this  Agreement  and the Common Shares for sale to the Buyer on
     conversion  of the Preferred  Shares and on exercise of the Warrants  under
     such of the  securities or "blue sky' laws of  jurisdictions  in the United
     States  as  shall be  applicable  to the sale of the  Shares  to the  Buyer
     pursuant  to this  Agreement.  The  Company  shall  furnish  copies  of all
     filings, applications, orders and grants or

<PAGE>
                                     -139-

     confirmations of exemptions relating to s.uch securities or "blue sky" laws
     on or prior to the Closing Date.

          g. Certain  Exen-e-.  Whether or not any closing  occurs,  the Company
     shall pay or reimburse the Buyer for all reasonable legal fees and expenses
     of counsel to the Buyer for the preparation and negotiation of, and closing
     under,  this Agreement (but not to exceed $15,000).  The obligations of the
     Company  under the  provisions of this Section 4(g) shall be in addition to
     the  obligation of the Company for expenses under the  Registration  Rights
     Agreement.

     5. TRANSFER AGENT INSTRUCTIONS; CONVERSION PROCEDURE.

          a. Transfer Agent Instruction-. Promptly following the delivery by the
     Buyer  of  the  aggregate  purchase  price  for  the  Preferred  Shares  in
     accordance  with  Section  l(c)  hereof,  and prior to the Closing Date the
     Company will irrevocably  instruct its transfer agent to issue certificates
     for the Common  Shares from time to time upon  conversion  of the Preferred
     Shares and exercise of the Warrants in such amounts as specified  from time
     to time to the transfer agent in the Conversion Certiicates  surrendered in
     connection  with such  conversions  and referred to in Section 5(b) of this
     Agreement or in the  subscription  forms  attached to the Warrants,  as the
     case may be, such certificates to bear the restrictive  legend specified in
     Section 4(b) of this Agreement  prior to  registration of the Common Shares
     under the 1933 Act,  registered in the name of the Buyer or its nominee and
     in such  denominations to be specified by the Buyer in connection with each
     conversion of Preferred Shares or exercise of Warrants, as the case may be.
     The  Company  warrants  that no  instruction  other than such  instructions
     referred to in this Section 5 and stop transfer instructions to give effect
     to Section 4(a) hereof prior to registration of the Common Shares under the
     1933 Act will be given by the  Company to the  transfer  agent and that the
     Common  Shares  shall  otherwise  be freely  transferable  on the books and
     records of the  Company as and to the extent  provided  in this  Agreement.
     Nothing  in  this  Section  5(a)  shall  affect  in  any  way  the  Buyer's
     obligations  and agreement to comply with all  applicable  securities  laws
     upon  resale of the  Shares.  If the Buyer  provides  the  Company  with an
     opinion of counsel reasonably  satisfactory in form, scope and substance to
     the  Company  that  registration  of a  resale  by the  Buyer of any of the
     Securities  in  accordance  with  clause  (l)(B)  of  Section  4(a) of this
     Agreement  is not  required  under the 1933 Act  (which  opinion  expressly
     states  that it may be  relied  upon by the  Company  and  its  counsel  in
     delivering instructions to the Company's transfer agent), the Company shall
     permit  the  transfer  of such  Securities  and,  in the case of the Common
     Shares,  promptly,  but in no event later than three days after  receipt of
     such opinion,  instruct the Company's  transfer  agent to issue one or more
     share  certificates in such name and in such  denominations as specified by
     the Buyer.  The  provisions  of  Section  3(n) of the  Registration  Rights
     Agreement  shall supersede this Section 5(a) once said Section 3(n) becomes
     applicable.

<PAGE>
                                     -140-

          b. Converion Procedure.  In connection with the exercise of conversion
     rights relating to the Preferred Shares, if the Common Shares issuable upon
     conversion of Preferred  Shares have not been registered under the 1933 Act
     prior  to such  conversion,  the  Buyer  or any  subsequent  holder  of the
     Preferred Shares shall, in addition to any other requirement imposed by the
     terms  of  the  Preferred  Shares  as  set  forth  in  the  Certificate  of
     Designation,  complete,  sign  and  furnish  to the  Company  a  conversion
     certificate in the form attached hereto as Annex V.

     6. STOCK DEIVERY INSTRUCTIONS.

     The  certificates  for the Preferred Shares and Warrants shall be delivered
by the Company to the Escrow Agent pursuant to Section l(b) hereof on a delivery
against payment basis at the closing.

     7. CLOSING DATE.

     The date and time of the  issuance  and sale of the  Preferred  Shares  and
issuance of the Warrants (the "Closing Date") shall be 12:00 noon, New York City
time, on the date which is three New York Stock Exchange  trading days after the
date on which the Buyer  has  deposited  the  purchase  price for the  Preferred
Shares with the Escrow Agent in  accordance  with  Section l(c) hereof,  or such
other  mutually  agreed to time.  The closing shall occur on the Closing Date at
the offices of the Escrow Agent.

     8. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL AND ISSUE.

     The Buyer understands that the Company's  obligations to sell the Preferred
Shares  and issue  the  Warrants  to the Buyer  pursuant  to this  Agreement  is
conditioned upon:

          a. The receipt and  acceptance  by the  Company of this  Agreement  as
     evidenced by execution of this  Agreement by the Company and delivery of an
     executed counterpart of this Agreement to the Buyer or its legal counsel;

          b.  Delivery by the Buyer to the Escrow Agent of good funds as payment
     in full of an amount equal to the purchase  price for the Preferred  Shares
     in accordance with Section l(c) hereof; and

          c.  The  accuracy  on the  Closing  Date  of the  representations  and
     warranties  of the  Buyer  contained  in this  Agreement  as if made on the
     Closing Date and the performance by the Buyer on or before the Closing Date
     of all covenants and agreements of the Buyer required to be performed on or
     before such Closing Date.

<PAGE>
                                     -141-

     9. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.

     The  Company  understands  that the  Buyer's  obligation  to  purchase  the
Preferred Shares and acquire the Warrants is conditioned upon:

          a. Delivery by the Company to the Escrow Agent of the certificates for
     the Preferred Shares and the Warrants in accordance with this Agreement;

          b.  The  accuracy  on the  Closing  Date  of the  representations  and
     warranties  of the Company  contained  in this  Agreement as if made on the
     Closing  Date and the  performance  by the Company on or before the Closing
     Date  of all  covenants  and  agreements  of  the  Company  required  to be
     performed on or before such Closing Date; and

          c.  Receipt by the Buyer on the Closing  Date of an opinion of counsel
     for the  Company,  dated the Closing  Date,  in form,  scope and  substance
     reasonably  satisfactory  to the Buyer, to the effect set forth in Annex VI
     attached hereto.

     10. GOVERNING LAW;  MISCELLANEOUS.  This Agreement shall be governed by and
interpreted in accordance with the laws of the Commonwealth of Massachusetts.  A
facsimile  transmission  of this signed  Agreement shall be legal and binding on
all parties  hereto.  The  headings of this  Agreement  are for  convenience  of
reference  and shall not form part of, or affect  the  interpretation  of,  this
Agreement.  If any provision of this Agreement shall be invalid or unenforceable
in any jurisdiction,  such invalidity or  unenforceability  shall not affect the
validity or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other  jurisdiction.  This Agreement may
be amended only by an  instrument  in writing  signed by the party to be charged
with enforcement.  Any notices required or permitted to be given under the terms
of this  Agreement  shall be sent by mail or delivered  personally  (which shall
include  telephone  line  facsimile  transmission)  or by  courier  and shall be
effective five days after being placed in the mail, if mailed,  or upon receipt,
if delivered personally or by courier, in each case addressed to a party at such
party's address shown in the introductory  paragraph or on the signature page of
this Agreement (facsimile number  508-921-5801,  in the case of the Company, and
703-834-6627,  in the case of the Buyer) or such other  address as a party shall
have  provided by notice to the other party in  accordance  with this  provision
and, in the case of notice to the Company,  with a copy to Foley,  Hoag & Eliot,
One Post Office Square, Boston,  Massachusetts 02109, Attention: David Broadwin,
Esq.  (facsimile number  617-832-7000)  and, in the case of notice to the Buyer,
with a copy to Law  Offices  of Brian W Pusch,  Penthouse  Suite,  29 West  57th
Street,  New York, New York 10019  (facsimile  number  212-980-7055).  The Buyer
shall have the right to assign it rights and  obligations  under this  Agreement
with  respect to the purchase of all or any portion of the  Preferred  Shares to
another

<PAGE>
                                     -142-

investment fund, provided such assignee,  by written instrument duly executed by
such assignee,  assumes all  obligations of the Buyer  hereunder with respect to
the  purchase of the portion of the  Preferred  Shares so assigned and makes the
same  representations and -warranties with respect thereto as the Buyer makes in
this   Agreement,   whereupon  the  Buyer  shall  be  relieved  of  any  further
obligations,  responsibilities  and liabilities  with respect to the purchase of
all or the portion of the Preferred Shares so assigned.  In the case of any such
assignment,  the  Company  shall  agree in writing  with such  assignee  to make
available to such  assignee the benefits of the  Registration  Rights  Agreement
with respect to the Common Shares issuable on conversion of the Preferred Shares
with respect to which the purchase under this Agreement has been so assigned.

<PAGE>
                                     -143-

     IN WITNESS  WHEREOF,  this Agreemetn has been duly executed by the Buyer or
one of its officers  thereunto duly  authorized as of the date set forth below 

NUMBER OF SHARES              10,000

PRICE PER SHARE:              $1,000.00

AGGREGATE PURCHASE PRICE      $10,000,000.00

NAME OF BUYER:                GFL ADVANTAGE FUND LIMITED


SIGNATURE:          /S/
          ---------------------------
          A.P. de Groot
Title:    President
Date:     April 12, 1996

Address:  c/o CITCO
          Kaya Flamboyan 9
          Curacao, Netherlands Antilles

     This Agreement has been accepted as of the date set forth below

          PALOMAR MEDICAL TECHNOLOGIES, INC.



          By:            /s/
               -------------------------------
               Steven Georgiev
Title:         Chairman and Chief Executive Officer
Date:          4/12/96