<PAGE>
                                      291

     THIS EMPLOYMENT  AGREEMENT (this  "Agreement")  made as of January 1, 1997,
(the "Executive"),

                       W I T N E S S E T H    T H A T:

     WHEREAS,  the Company desires to employ  Executive as its President for the
period and upon and subject to the terms herein provided; and

     WHEREAS,  the Company desires to be assured that Executive will not compete
with the Company for the period and within the  geographical  areas  hereinafter
specified; and

     WHEREAS,  Executive  is willing to agree to be  employed by the Company for
the period and upon and subject to the terms herein provided; and

     WHEREAS,   Executive  does  not  desire  to  work  for  the  Company  in  a
positionlower than that of President and is willing to agree not to compete with
theCompany;  NOW,  THEREFORE,  in  consideration  of the  premises,  the parties
heretocovenant   and  agree  as   follows:   

     Section 1. Term of Employment;  Compensation.  The Company agrees  toemploy
Executive  from the date  hereof  until  December  31, 1999 (the  "Term")  asits
President,  with the responsibilities normally associated with such position(the
"Executive Position"). The Company will pay Executive for his servicesduring the
term of his employment hereunder at an annual rate of Two HundredFifty  Thousand
Dollars  ($250,000),  subject to a 10% increase per year,  payablein arrears, in
equal  installments,  in accordance  with standard  Company  practice,but in any
event not less often than monthly,  subject only to such payroll  andwithholding
deductions as are required by law.

     Section   2.   Office   and   Duties.   Executive   shall  have  the  usual
duties,responsibilities   and  authority  (the  "Executive's  Authority")  of  a
President,  andshall report to the Board of Directors of the Company,  and shall
perform suchspecific other tasks,  consistent with his position as President, as
may  fromtime to time be assigned  to him by the Board of  Directors.  Executive
shalldevote  substantially  all of his business time,  labor,  skill,  undivided
attentionand best ability to the performance of his duties hereunder.  Executive
may not,without  Executive's  consent, be required to perform Executive's duties
at anylocation  that is more than fifty (50) miles from the Company's  principal
officein  Beverly,  Massachusetts,  except  that  Executive  agrees that he will
travel  towhatever  extent  is  reasonably  necessary  in  the  conduct  of  the
Company'sbusiness.

     Section  3.  Expenses.   Executive  shall  be  entitled  to   reimbursement
forexpenses   incurred  by  him  in  connection  with  the  performance  of  his
dutieshereunder  upon  receipt of  vouchers  therefor  in  accordance  with such
procedures as the Company has heretofore or may hereafter establish.

     Section 4. Vacation During Employment.  Executive shall be entitled to such
reasonable vacations as may be allowed by the Company in accordance  withgeneral
practices  to be  established,  but in any  event  not less  than four (4) weeks
during each twelve (12) month period.

<PAGE>
                                      292


     Section  5.  Additional  Benefits.  The  Company  shall make  available  to
Executive  at  least  those   perquisites   presently   granted  to   Executive.
Nothingherein   contained  shall  preclude  Executive,   to  the  extent  he  is
otherwiseeligible,  from  participation in all group insurance programs or other
fringe  benefit  plans which the Company may  hereafter in its sole and absolute
discretion  make  available  generally to its  employees,  but the Company shall
notbe required to establish or maintain any such program or plan.

     Section 6.  Termination by the Company.  The Company shall have the rightto
terminate  Executive's  employment at any time for "Cause".  For purposes ofthis
Agreement,  "Cause"  shall mean (a)  termination  by action of a majority  ofthe
members of the  Company's  Board of Directors,  acting on the written  opinionof
counsel,   because  of  Executive's  willful  and  continued  refusal,   without
propercause,  to perform substantially  Executive's duties under this Agreement;
or  (b)the  conviction  of  Executive  of  a  felony  or  an  act  of  fraud  or
embezzlementagainst  the  Company  or  any  of its  divisions,  subsidiaries  of
affiliates  (whichthrough  lapse of time or otherwise is not subject to appeal).
Such  terminationshall  be effected by written notice  thereof,  personally hand
delivered by theCompany to Executive, and, except as hereinafter provided, shall
be effective asof the thirtieth (30th) calendar day after such notice; provided,
however,  thatif  within such thirty (30)  calendar day period  Executive  shall
cease  Executive'srefusal and shall use Executive's best efforts to perform such
obligations, thetermination shall not be effective.

     Section 7.  Termination  by Death.  In the event  Executive dies during the
Term,   Executive's  employment  shall  terminate  (effective  on  the  date  of
Executive's death) and the provisions of Section 10 shall be applicable.

     Section 8. Termination by Disability. In the event that Executive suffers a
disability which prevents  Executive from substantially  performing  Executive's
duties under this  Agreement  for a period of at least one  hundredeighty  (180)
consecutive or nonconsecutive  calendar days within any three hundred sixty-five
(365)  calendar  day period,  the Company  shall have the right,  after such one
hundred eighty (180) calendar day period has elapsed,  to terminate  Executive's
employment  hereunder upon thirty (30) calendar days written notice to Executive
and the provisions of Section 10 shall beapplicable.

     Section 9. Termination by Executive. Notwithstanding any otherprovisions of
this Agreement,  Executive may terminate Executive's employmenteither (i) in the
event of a "Change in Control" or (ii) by written  noticeserved upon the Company
within  thirty  (30)  calendar  days after  Executive  hasknowledge  of an event
constituting "Good Reason."

     For  purposes  of this  Agreement,  the  term  "Change  in  Control"  shall
meaneither  (i)  that,  after  the  date  hereof,   any  person  (an  "Acquiring
Person"),together  with its  affiliates and associates (as defined in Rule 12b-2
under  theSecurities  Exchange Act of 1934, or any successor rule thereto) shall
become  thebeneficial  owner (as defined in Rule 13d-3 under the  Securities and
ExchangeAct), including by merger or otherwise, of more than fifty percent (50%)
of thetotal  voting  power of all classes of voting stock of the Company or (ii)
thatone or more Acquiring  Persons has succeeded as the result of or in response
toactual or threatened  election  contests,  whether by settlement or otherwise,
inhaving  elected to the Board of Directors of the Company,  whether at one time
oron a  cumulative  basis,  a sufficient  number of its  nominees to  constitute
(x)more  than  thirty  percent  (30%)  of the  members  of the  Company's  Board
ofDirectors,  rounded  down  to the  nearest  whole  number,  if the  number  of
directorson the Company's Board is eight or less, or (y) more than forty percent
(40%) ofthe  members of the Company's  Board,  rounded down to the nearest whole
number, if the number of directors on the Company's Board is nine or more.

     For purposes of this Agreement, the term "Good Reason" shall mean:
<PAGE>
                                      293


          (i) any action by the Company  which  results in a  diminution  in the
     Executive Position or in the Executive's Authority; (ii) any failure by the
     Company to timely pay the amounts or provide the benefits described in this
     Agreement,  other than an isolated  failure not  occurring in bad faith and
     which is remedied promptly after receipt of written notice thereof given by
     Executive; or

          (iii) a material  breach by the  Company of any of the  provisions  of
     this Agreement which failure or breach shall have continued for thirty (30)
     days after  written  notice from  Executive to the Company  specifying  the
     nature of such failure or breach; or

          (iv) any action by the Company  that would  result in a  violation  of
     Section 2.

     Section 10. Effect of Termination. (a) For Cause; Without Good Reasonand No
Change in Control;  and Death. In the event of termination of thisAgreement  (i)
by the Company for Cause,  (ii) by the Executive  without Good Reason or with no
Change in Control or (iii) by reason of the death of  theExecutive,  the Company
shall pay Executive (or Executive's  beneficiary in the event of the Executive's
death) any base salary or other  compensation  earned(and  a pro rata portion of
the bonus  payable with respect to the year in which  termination  occurred) but
not paid to Executive prior to the effective date ofsuch termination and, in the
case of  termination  by reason  of  death,  the  Companyshall  pay  Executive's
beneficiary (i) the base salary that Executive would  haveearned for a period of
twelve  (12)  months  following  his death,  plus (ii) a prorata  portion of any
bonuses or other incentive  compensation  that Executive  wouldhave earned if he
had been employed for the full fiscal year in which he  diedpayable  at the time
of payment of similar bonuses made to other Executives ofthe Company, plus (iii)
any death benefits that Executive is entitled to underthe  Company's policies in
effect on Executive's date of death.

     (b) Without Cause; For Good Reason. In the event of (i) termination  ofthis
Agreement  by the  Company  other than for Cause,  or (ii)  termination  of this
within thirty (30) days after  termination  under this Section 10(b), the sum of
(A) the  amount  described  in  Section  10(a)  of this  Agreement  (other  than
thepayments  to be paid in case of  termination  by  death),  and (B) the amount
equal to four times (4x) the  Executive's  annual  base  salary in effect at the
time of  termination  under this Section  10(b),  and the Company shall continue
during  the Term all of the  benefits  and  perquisites  set forth in Section 5,
notwithstanding the fact that Executive may no longer be an employee eligible to
participate  in one or more of the  employee  benefit  plans  maintained  by the
Company.

     (c) Change in Control  (other than an Approved  Change in Control).  In the
event of termination  of this  Agreement by the Company or Executive  within one
(1) year after a Change in Control  (other than an Approved  Change in Control),
the Company shall pay  Executive,  in a lump sum payment within thirty (30) days
after  termination under this Section 10(c), the sum of (A) the amount described
in Section 10(a) of this  Agreement  (other than the payments to be made in case
of  termination  by  death),  and (B) the  amount  equal  to  eight  (8x)  times
Executive's Annual Compensation,  and the Company shall continue during the Term
all of the benefits and perquisites set forth in Section 5,  notwithstanding the
fact that Executive may no longer be an employee  eligible to participate in one
or more of the employee benefit plans maintained by the Company.

     For purposes of this Agreement, the term "Approved Change in Control" shall
mean a Change of Control that has occurred with the prior approval of a majority
of the Continuing
<PAGE>
                                      294


Directors and the term "Continuing  Director" shall mean any member of the Board
of  Directors  of the  Company  who is not an  Acquiring  Person or a nominee or
representative  of an  Acquiring  Person or of any  affiliate or associate of an
Acquiring Person and any successor to a Continuing  Director who was recommended
for  election or elected to succeed a  Continuing  Director by a majority of the
Continuing Directors then on the Board of Directors of theCompany.

     For purposes of this Section 10(c) of this  Agreement the  term"Executive's
Annual  Compensation" shall mean (i) the sum of (A) the  Executive'sbase  salary
set forth in Section 1 and (B) any bonus  compensation to  whichExecutive  would
have been entitled if Executive  continued to be employed underthis Agreement to
the  end of  1996,  provided  that  if the  Executive's  base  salaryor  bonuses
compensation  is  increased  after  1996 the term shall  mean the  higherof  the
Executive  annual salary  immediately  prior to such change or the sum of(a) the
base salary in effect at the time of termination  and (b) any  bonuscompensation
to which  Executive  would have been  entitled if Executive  hadcontinued  to be
employed  under this  Agreement to the end of the Company's  fiscalyear in which
his employment terminated.

     (d) With Good Reason  following an Approved Change in Control.  In theevent
of  termination  of this  Agreement by Executive  with Good Reason within one(1)
year after an Approved Change in Control,  the Company shall pay  Executive,in a
lump sum payment  within thirty (30) days after  termination  under  thisSection
10(c),  the sum of (A) the amount  described in Section  10(a) of  thisAgreement
(other than the payments to be made in case of  termination  by  death),(B)  the
amount equal to eight (8x) times the sum of (i) Executive's annual basesalary in
effect  at the time of  termination,  and (ii) any  bonus  compensation  towhich
Executive would have been entitled if Executive had remained as anemployee under
this  Agreement to the end of the Company's  fiscal year in whichhis  employment
terminated,  and the Company shall  continue  during the Term all ofthe benefits
and perquisites set forth in Section 5,  notwithstanding  the factthat Executive
may no  longer be an  employee  eligible  to  participate  in one  ormore of the
employee benefit plans maintained by the Company.

     (e)  Disability.  In the event of termination of this Agreement by reasonof
disability, the Company shall continue to pay Executive's base salary at thetime
of such termination for the remainder of the Term,  reduced by the maximumamount
of salary which may be insured under the Company's Long Term  DisabilityPlan  at
the time of disability.

     Section  11.  Excise  Taxes.   In  the  event  that  Executive  shall  have
imposedupon him the tax which is imposed by Section 4999 of the Internal Revenue
Codeof 1986, as amended (the "Code"), or by any successor  provision,  by reason
ofany payment or benefit  which  Executive  has received  under this  Agreement,
theCompany shall pay as additional  compensation to Executive an amount equal to
theamount of the tax imposed by Code Section 4999 (the "Special Tax Payment") as
aresult of the receipt of such  payment,  or benefit;  provided that the Special
TaxPayment  shall not be increased to account for excise or other tax imposed as
aresult of the making of the Special Tax Payment.

     Section 12. Acceleration and Expiration of Options.  Any options orwarrants
to purchase capital stock of the Company (collectively, the "Options")granted by
the  Company  to  Executive  that have not yet  become  exercisable  shallbecome
exercisable  upon the  earliest  to occur of (a) the  termination  ofExecutive's
employment as a result of Executive's death or disability; (b) thetermination by
Executive with Good Reason;  or (c) the  termination by Executive after a Change
in Control  (other  than an Approved  Change in  Control).  Notwithstanding  the
foregoing,  all Options,  whether currently exercisable or not, shall expire and
cease to be exercisable as follows:

     (a) if the Company terminates Executive's employment for Cause, immediately
upon the effective date of such termination;


<PAGE>
                                      295


     (b) if Executive  terminates  Executive's  employment with the Companyother
than for Good Reason, a Change in Control, death, or disability,immediately upon
the effective date of such termination;

     (c) if Executive  terminates  Executive's  employment with the Company with
Good  Reason or after a Change in  Control  (other  than an  Approved  Change in
Control),  ninety (90) days after the effective date of such termination (but in
no event  later than the date the Term would  expire  without  giving  effect to
anyautomatic renewal.

     (d) if Executive dies while employed by the Company, six (6) calendarmonths
after  Executive's  death  (but in no event  later  than the date the  Termwould
expire without giving effect to any automatic renewal); and

     (e) if Executive's  employment is terminated as a result of  disability,six
(6) calendar months after the effective date of such termination (but in noevent
later than the date the Term would expire without giving effect to  anyautomatic
renewal.

     Section 13. No Mitigation; No Offset. Executive shall be under noobligation
to  mitigate  damages  or the  amount  of any  payment  provided  for  underthis
Agreement by seeking other employment or otherwise,  and there shall be nooffset
against amounts due Executive under this Agreement on account of anyremuneration
attributable to any subsequent employment that Executive mayobtain.

     Section  14.  Disclosure  and  Assignment  of  Intellectual  Property.  (a)
Executive  agrees that the Company,  and its successors and assignsshall own all
right,  title  and  interest   throughout  the  world  in  and  to  allresearch,
information,   inventions,   designs,   procedures,    developments,discoveries,
improvements,  patents and  applications  therefor,  trademarks  andapplications
therefor,  copyrights and applications therefor, trade secrets,drawings,  plans,
systems,  methods,  specifications,  and  all  other  manufacturing,engineering,
technical,   research  and  development   data  and  know-how   (hereinsometimes
"Intellectual Property") made, conceived, developed and/or acquired byhim solely
or jointly with others during the period of his  employment  with  theCompany or
within  one year  thereafter,  which  relate  to the  manufacture,production  or
processing of any products  developed or sold by the Company  duringthe  term of
this Agreement or which are within the scope of or usable  inconnection with the
Company's  business  as it may,  from  time to time,  hereafterbe  conducted  or
proposed to be conducted, whether or not made during my regularworking hours and
whether or not made on the Company's premises.

     (b) Executive agrees that any such Intellectual Property  shallconstitute a
work made for hire  under the  copyright  laws of the United  Statesand,  to the
extent any such  Intellectual  Property shall be determined not to bea work made
for hire, Executive hereby assigns, and, to the extent any suchassignment cannot
be made at the present time,  Executive hereby agrees  toassign,  to the Company
all of my right,  title and interest  throughout  the  world,including,  without
limitation, copyright, patent and trade secret rights, in andto the Intellectual
Property,  together with Executive's  right to file for and/orown wholly without
restriction  United States and foreign patents,  trademarks  andcopyrights  with
respect  thereto.   Executive   specifically  agrees  and  acknowledgesthat  the
foregoing assignment covers all results, outputs and products of hiswork for the
Company prior to the date hereof, whether as an employee or as aconsultant,  and
all related copyrights,  patents and other proprietary  rights,and that all such
results,  outputs and products shall be Intellectual  Propertyhereunder  and the
sole property of the Company hereafter.
<PAGE>
                                      296


     (c) Executive agrees to execute all appropriate patent applicationssecuring
all United States and foreign patents on all  Intellectual  Property,  andto do,
execute and deliver any and all acts and  instruments  that may  benecessary  or
proper  to vest all  Intellectual  Property  in the  Company  or  itsnominee  or
designee  and to enable the Company,  or its nominee or  designee,  toobtain all
such patents;  and Executive  agrees to render to the Company,  or itsnominee or
designee,  all such assistance as it may require in the  prosecution  ofall such
patent applications and applications for the re-issue of such patents,and in the
prosecution or defense of all interferences which may be  declaredinvolving  any
of said patent  applications or patents,  but the expense of allsuch assignments
and patent applications, or all other proceedings referred toherein above, shall
be borne by the  Company.  Executive  shall be  entitled  to fairand  reasonable
compensation  for any such assistance  requested by the Company orits nominee or
designee and furnished by him after the termination of hisemployment.  Executive
shall make and maintain adequate and current  writtenrecords of all Intellectual
Property, and Executive shall disclose  allIntellectual Property promptly, fully
and in writing to the Company immediatelyupon development of the same and at any
time upon request.

     Section 15. Confidentiality.  Executive shall not, either during the period
of his  employment  with the Company or  thereafter,  reveal or  disclose  toany
person  outside the Company or use for his own  benefit,  without the  Company's
specific written  authorization,  whether by private  communication or by public
address  or  publication  or  otherwise,   any  Confidential   Information,   as
hereinafter defined. The term "Confidential Information" as used throughout this
Agreement shall mean all trade secrets,  proprietary  information and other data
or information (and any tangible  evidence,  record or representation  thereof),
whether  prepared,  conceived  or  developed  by an  employee  of the Company or
received by the Company from an outside  source,  which is in the  possession of
the Company  (whether  or not the  property  of the  Company),  which in any way
relates to the present or future business of the Company, which is maintained in
confidence by the Company, or which might permit the Company or its customers to
obtain a competitive  advantage over  competitors who do not have access to such
trade  secrets,  proprietary  information,  or other  data or  information.  All
originals  and copies of any of the  foregoing,  relating to the business of the
Company,  however  and  whenever  produced,  shall be the sole  property  of the
Company,  not to be removed from the premises or custody of the Company  without
in each  instance  first  obtaining  written  consent  or  authorization  of the
Company. Upon the termination of Executive's employment in any manner or for any
reason,  Executive shall promptly  surrender to the Company all copies of any of
the foregoing,  together with any other documents,  materials, data, information
and  equipment  belonging  to or relating to the  Company's  business and in his
possession,  custody or control,  and Executive  shall not thereafter  retain or
deliver to any other  person,  any of the foregoing or any summary or memorandum
thereof.

     Section 16. Restriction.  The Company has invested and may in the future be
required  to  invest  substantial  sums of money,  directly  or  indirectly,  to
continue and expand the business  heretofore  conducted by it and in  connection
therewith,   and  as   Executive   recognizes   that   the   Company   would  be
substantiallyinjured  by Executive  disclosing to others,  or by Executive using
for his  ownbenefit,  any  Intellectual  Property  or any of the other  types of
informationreferred  to in Section  15 as  Confidential  Information,  Executive
agrees  thatduring  the  period  of his  employment  hereunder  and for a period
endingtwenty-four (24) months after the term of this Agreement:

     (a) Neither he nor any member of his family will be interested,  directlyor
indirectly, as an investor in any other business or enterprise similar tothat of
the  Company  or  in  competition  with  the  Company  (except  as  an  investor
insecurities  listed on a national  securities  exchange or actively traded over
thecounter; and
<PAGE>
                                      297


     (b) He will not, directly or indirectly, for his own account or asemployee,
officer, director, partner, joint venturer or otherwise, engage withinthe United
States or Canada, in any phase of the business of  manufacturing,distributing or
selling of lasers for use in medical or cosmetic procedures.

     (c)  Executive  shall  not  solicit,  induce,  attempt  to  hire,  or  hire
anyemployee  of the Company (or any other  person who may have been  employed by
theCompany  during the term of his  employment  with the Company),  or assist in
suchhiring by any other person or business entity or encourage any such employee
toterminate his or her employment with the Company.

     Executive  and the Company  are of the belief that the period of time,  the
geographic  area and the range of  activities  limited  by this  Section  16 are
reasonable,  in view of the  nature  of the  business  in which the  Company  is
engaged  and  proposes  to  engage,   the  state  of  its  product   development
andExecutive's knowledge of this business.  However, if such period, or range of
activities  area should be adjudged  unreasonable  in any  judicial  proceeding,
thenthe  period of time  shall be reduced  by such  number of months,  such area
shall  bereduced by elimination of such portion of such area,  and/or such range
ofactivities  shall  be  reduced  by  elimination  of  such  activities,  as are
deemedunreasonable,  so that  this  covenant  may be  enforced  in such area and
during suchperiod of time as is adjudged to be reasonable.

     Section 17. Notices. All notices and other communications hereundershall be
in writing  and shall be deemed to have been given when  delivered  or three (3)
days  after  mailing  if mailed by  first-class,  registered  or  certifiedmail,
postage  prepaid,  addressed (a) if to Executive,  at the address set forthbelow
his name on the signature page hereof, or to such other person(s)  oraddress(es)
as Executive  shall have  furnished to the Company in writing;  and (b)if to the
Company,  at 66 Cherry Hill Drive,  Beverly,  MA 01915, Attn: Mr.  JosephCaruso,
with a copy to Foley, Hoag & Eliot, One Post Office Square, Boston,Massachusetts
02109, Attn: David A. Broadwin, Esq. or to such other person(s) oraddress(es) as
the Company shall have furnished to Executive in writing.

     Section  18.  Assignability.  In  the  event  that  the  Company  shall  be
mergedwith, or consolidated into, any other corporation, or in the event that it
shallsell and transfer  substantially all of its assets to another  corporation,
theterms  of this  Agreement  shall  inure to the benefit of, and be assumed by,
thecorporation  resulting  from  such  merger  or  consolidation,  or  to  which
theCompany's  assets shall be sold and  transferred.  This  Agreement  shall not
beassignable  by  Executive,  but it shall be binding  upon,  and shall inure to
thebenefit of, his heirs, executors, administrators and legal representatives.

     Section 19. Entire Agreement.  This Agreement contains the  entireagreement
between the Company and Executive with respect to the subject  matterhereof  and
there have been no oral or other agreements of any kind whatsoever asa condition
precedent or inducement to the signing of this Agreement orotherwise  concerning
this Agreement or the subject matter hereof.

     Section 20. Expenses.  Each party shall pay its own expenses incident tothe
performance or enforcement of this Agreement,  including all fees andexpenses of
its  counsel for all  activities  of such  counsel  undertaken  pursuantto  this
Agreement, except as otherwise herein specifically provided.

     Section  21.  Equitable  Relief.   Executive  recognizes  and  agrees  that
theCompany's  remedy at law for any breach of the  provisions of Sections 14, 15
or16  hereof  would  be  inadequate,  and he  agrees  that  for  breach  of such
provisions,the  Company  shall,  in  addition  to such other  remedies as may be
available to itat law or in equity or as provided in this Agreement, be entitled
to injunctive relief and to enforce its rights by an action for specific

<PAGE>
                                      298


performance  to the extent  permitted  by law.  Should  Executive  engage in any
activities  prohibited by this  Agreement,  he agrees to pay over to the Company
all  compensation,remunerations  or moneys or property  of any sort  received in
connection  with  suchactivities;  such  payment  shall not impair any rights or
remedies of the Company or obligations  or  liabilities of Executive  which such
parties may have under this Agreement or applicable law.

     Section  22.  Waivers and  Further  Agreements.  Any waiver of any terms or
conditions of this  Agreement  shall not operate as a waiver of any other breach
of such  terms or  conditions  or any  other  term or  condition,  nor shall any
failure to enforce any provision hereof operate as a waiver of such provision or
of any other provision hereof;  provided,  however, that no such written waiver,
unless it, by its own  terms,  explicitly  provides  to the  contrary,  shall be
construed to effect a  continuing  waiver of the  provision  being waived and no
such waiver in any instance  shall  constitute a waiver in any other instance or
for any other  purpose  or  impair  the  right of the  party  against  whom such
waiveris  claimed in all other  instances  or for all other  purposes to require
full  compliance  with such  provision.  Each of the  parties  hereto  agrees to
execute all such further  instruments and documents and to take all such further
action as the other  party may  reasonably  require in order to  effectuate  the
terms and purposes of this Agreement.

     Section 23.  Amendments.  This Agreement may not be amended,  nor shall any
waiver,  change,  modification,  consent or discharge  be effected  except by an
instrument  in  writing  executed  by or on  behalf of the  party  against  whom
enforcement of any waiver, change, modification, consent or discharge is sought.

     Section 24. Severability.  If any provision of this Agreement shall be held
or deemed to be, or shall in fact be, invalid,  inoperative or  unenforceable as
applied to any particular case in any jurisdiction or  jurisdictions,  or in all
jurisdictions or in all cases,  because of the conflicting of any provision with
any  constitution  or statute or rule of public  policy or for any other reason,
such  circumstance  shall not have the  effect of  rendering  the  provision  or
provisions  in question,  invalid,  inoperative  or  unenforceable  in any other
jurisdiction  or in any other case or  circumstance  or of  rendering  any other
provision or provisions herein contained  invalid,  inoperative or unenforceable
to the extent that such other provisions are not themselves actually in conflict
with such  constitution,  statute or rule of public  policy,  but this Agreement
shall be reformed  and  construed  in any such  jurisdiction  or case as if such
invalid,  inoperative or unenforceable provision had never been contained herein
and such provision reformed so that it would be valid, operative and enforceable
to the maximum extent permitted in such jurisdiction or in such case.

        Section 25. Counterparts.  This Agreement may be executed in two or more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together  shall  constitute  one and the same  instrument,  and in  pleading  or
proving any  provision of this  Agreement,  it shall not be necessary to produce
more than one of such counterparts.

        Section 26. Section Headings.  The headings  contained in this Agreement
are for  reference  purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

        Section 27. General Provisions.

        (a) Executive  further agrees that his obligations under Sections 14, 15
and 16 of this Agreement shall be binding upon him  irrespective of the duration
of his  employment  by  the  Company,  the  reasons  for  any  cessation  of his
employment by the Company,  or the amount of his  compensation and shall survive
the termination of this Agreement  (whether such  termination is by the Company,
by Executive, upon expiration of this Agreement or otherwise).
<PAGE>
                                      299


        (b) Executive  represents and warrants to the Company that he is not now
under any  obligations  to any  person,  firm or  corporation,  and has no other
interest  which is  inconsistent  or in conflict with this  Agreement,  or which
would prevent, limit or impair, in any way, the performance by him of any of the
covenants or his duties in his said employment.

        Section 28.  Gender.  Whenever  used herein,  the singular  number shall
include the plural,  the plural shall include the  singular,  and the use of any
gender shall include all genders.

        Section  29.  Governing  Law.  This  Agreement  shall be governed by and
construed and enforced in accordance  with the law (other than the law governing
conflict of law questions) of the Commonwealth of Massachusetts.

        IN WITNESS  WHEREOF,  the parties have executed or caused to be executed
this Agreement as of the date first above written.

                                              PALOMAR MEDICAL TECHNOLOGIES, INC.



                                              By:            /s/
                                                    --------------------------- 
                                              Name:     Steven Georgiev
                                              Title:    Chief Executive Officer

     BY PLACING MY SIGNATURE  HEREUNDER,  I ACKNOWLEDGE  THAT I HAVE READ ALLTHE
PROVISIONS OF THIS AGREEMENT AND THAT I AGREE TO ALL OF ITS TERMS.



                                              EXECUTIVE:


                                                       /s/
                                              ----------------------------------
                                              Michael Smotrich

                                              Notice Address:
                                              ----------------------------------
                                              ----------------------------------
                                              ----------------------------------