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                         REGISTRATION RIGHTS AGREEMENT

     THIS  REGISTRATION  RIGHTS  AGREEMENT,  dated as of April  17,  1996  (this
"Agreement"),  is made by and between  PALOMAR  MEDICAL  TECHNOLOGIES,  INC.,  a
Delaware corporation (the "Company"), and the person named on the signature page
hereto (the "Initial Investor").

                              W I T N E S S E T H:

     WHEREAS, in connection with the Subscription  Agreement,  dated as of April
12,  1996,  between the Initial  Investor  and the  Company  (the  "Subscription
Agreement"),  the  Company  has  agreed,  upon  the  terms  and  subject  to the
conditions  of the  Subscription  Agreement,  to issue  and sell to the  Initial
Investor an aggregate  of 10,000  shares (the  "Preferred  Shares") of preferred
stock of the Company as provided in the Subscription Agreement,  which shares of
Preferred Stock are convertible into shares (the "Conversion  Shares") of Common
Stock,  $.01 par  value  per share  (the  "Common  Stock"),  and  warrants  (the
"Warrants")  to purchase  shares (the  "Warrant  Shares" and,  together with the
Conversion Shares, the "Shares") of Common Stock; and

     WHEREAS,  to induce  the  Initial  Investor  to  execute  and  deliver  the
Subscription  Agreement,  the Company has agreed to provide certain registration
rights  under  the  Securities  Act of  1933,  as  amended,  and the  rules  and
regulations  thereunder,  or any similar  successor statute  (collectively,  the
"Securities  Act"),  and applicable  state  securities  laws with respect to the
Shares;

     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  Company  and the  Initial
Investor hereby agree as follows:

     1. DEFINITIONS.

          (a) As used in this  Agreement,  the  following  terms  shall have the
following meanings:

               (i) "Investor"  means the Initial  Investor and any transferee or
assignee  who agrees to become  bound by the  provisions  of this  Agreement  in
accordance with Section 9 hereof.

               (ii)  "register,"  "registered,"  and  "registration"  refer to a
registration  effected  by  preparing  and filing a  Registration  Statement  or
Statements in compliance  with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering  securities on a
continuous  basis ("Rule 415"), and the declaration or ordering of 

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effectiveness of such Registration Statement by the United States Securities and
Exchange Commission (the "SEC").

               (iii) "Registrable Securities" means the Shares and any shares of
Common  Stock  issued  by the  Company  to any  Investor  as a  dividend  on the
Preferred Shares.

               (iv) "Registration  Statement" means a registration  statement of
the Company under the Securities Act.

          (b) As used in this  Agreement,  the term  Investor  includes (i) each
Investor (as defined  above) and (ii) each person who is a permitted  transferee
or  assignee  of the  Registrable  Securities  pursuant  to  Section  9 of  this
Agreement.

          (c)  Capitalized  terms used herein and not otherwise  defined  herein
shall have the respective meanings set forth in the Subscription Agreement.

     2. REGISTRATION.

          (a) MANDATORY REGISTRATION. The Company shall prepare, and on or prior
to the  date  which  is 15  days  after  the  date  of  the  closing  under  the
Subscription  Agreement (the "Closing  Date"),  file with the SEC a Registration
Statement  covering at least  1,950,000  shares of Common  Stock as  Registrable
Securities,  and which  Registration  Statement  shall state that, in accordance
with Rule 416 under the Securities Act, such Registration  Statement also covers
such  indeterminate  number of  additional  shares of Common Stock as may become
issuable upon conversion of the Preferred Shares and exercise of the Warrants to
prevent  dilution  resulting  from  stock  splits,  stock  dividends  or similar
transactions  or by reason of changes in the  conversion  price of the Preferred
Shares and the exercise price of the Warrants in accordance  with the respective
terms thereof.  If at any time the number of shares included in the Registration
Statement required to be filed as provided in the first sentence of this Section
2(a)  shall  not be  sufficient  to cover the  number of shares of Common  Stock
issuable  on  conversion  in full of the  unconverted  Preferred  Shares and the
unexercised  Warrants,  then promptly,  but in no event later than 15 days after
such  insufficiency  shall  occur,  the  Company  shall  file  with  the  SEC an
additional  Registration Statement on Form S-3 or other applicable form covering
such  number of shares of Common  Stock as shall be  sufficient  to permit  such
conversion and exercise.  For all purposes of this Agreement (other than Section
2(c) hereof) such  additional  Registration  Statement shall be deemed to be the
Registration  Statement  required to be filed by the Company pursuant to Section
2(a) of this  Agreement,  and the Company and the Investors  shall have the same
rights and  obligations  (other than  Section  2(c) hereof) with respect to such
additional Registration Statement as they shall have with respect to the 

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initial  Registration  Statement required to be filed by the Company pursuant to
this Section 2(a).

          (b) If any offering pursuant to a Registration  Statement  pursuant to
Section 2(a) hereof involves an underwritten  offering, the Investors who hold a
majority in interest of the Registrable  Securities subject to such underwritten
offering  shall have the right to select  one legal  counsel  and an  investment
banker or bankers  and manager or managers to  administer  the  offering,  which
investment  banker  or  bankers  or  manager  or  managers  shall be  reasonably
satisfactory to the Company.  The Investors who hold the Registrable  Securities
to be included in such  underwriting  shall pay all  underwriting  discounts and
commissions and other fees and expenses of such investment banker or bankers and
manager or managers so selected in accordance with this Section 2(b) (other than
fees and expenses  relating to  registration  of  Registrable  Securities  under
federal or state  securities  laws, which are payable by the Company pursuant to
Section 5 hereof) with respect to their Registrable  Securities and the fees and
expenses of such legal counsel so selected by the Investors.

          (c)  ADJUSTMENT IN CONVERSION  PRICE.  If the  Registration  Statement
covering the Registrable Securities required to be filed by the Company pursuant
to Section 2(a) hereof is not  effective  within 90 days after the Closing Date,
then the conversion  price of the Preferred Shares shall be adjusted as provided
in the Certificate of Designations for the Preferred Shares.

          (d)  PIGGY-BACK  REGISTRATIONS.  If at  any  time  the  Company  shall
determine to prepare and file with the SEC a Registration  Statement relating to
an offering  for its own account or the account of others  under the  Securities
Act of any of its equity securities, other than on Form S-4 or Form S-8 or their
then equivalents relating to equity securities to be issued solely in connection
with any acquisition of any entity or business or equity securities  issuable in
connection with stock option or other employee  benefit plans, the Company shall
send to each Investor, who is entitled to registration rights under this Section
2(a) written notice of such  determination and, if within twenty (20) days after
receipt of such notice,  such Investor shall so request in writing,  the Company
shall include in such Registration  Statement all or any part of the Registrable
Securities  such  Investor  requests  to  be  registered,  except  that  if,  in
connection with any underwritten  public offering for the account of the Company
the managing  underwriter(s)  thereof shall impose a limitation on the number of
shares of Common  Stock  which may be  included  in the  Registration  Statement
because,  in such  underwriter(s)'  judgment,  such  limitation  is necessary to
effect an orderly  public  distribution,  then the Company shall be obligated to
include  in  such  Registration  Statement  only  such  limited  portion  of the
Registrable  Securities  with  respect  to 

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                                     -147-

which  such  Investor  has  requested  inclusion  hereunder.  Any  exclusion  of
Registrable  Securities  shall be made pro rata among the  Investors  seeking to
include  Registrable  Securities,  in  proportion  to the number of  Registrable
Securities sought to be included by such Investors;  provided, however, that the
Company  shall not exclude  any  Registrable  Securities  unless the Company has
first excluded all outstanding  securities the holders of which are not entitled
by right to inclusion of securities in such Registration Statement; and provided
further,  however,  that,  after  giving  effect  to the  immediately  preceding
proviso,  any exclusion of  Registrable  Securities  shall be made pro rata with
holders of other  securities  having the right to include such securities in the
Registration Statement. No right to registration of Registrable Securities under
this Section 2(d) shall be construed to limit any  registration  required  under
Section 2(a) hereof.  The obligations of the Company under this Section 2(d) may
be waived by  Investors  holding  a  majority  in  interest  of the  Registrable
Securities and shall expire after the Company has afforded the  opportunity  for
the  Investors to exercise  registration  rights under this Section 2(d) for two
registrations;  provided,  however,  that any  Investor  who shall  have had any
Registrable  Securities  excluded from any Registration  Statement in accordance
with  this  Section  2(d)  shall  be  entitled  to  include  in  an   additional
Registration  Statement  filed by the  Company  the  Registrable  Securities  so
excluded.  Notwithstanding  any  other  provision  of  this  Agreement,  if  the
Registration  Statement  required to be filed  pursuant to Section  2(a) of this
Agreement  shall  have been  ordered  effective  by the SEC and  thereafter  the
Company shall have complied in all material  respects with its obligations under
this Agreement in respect of such Registration Statement, then the Company shall
not be obligated  to register any  Registrable  Securities  on any  Registration
Statement referred to in this Section 2(d).

          (e) ELIGIBILITY FOR FORM S-3. The Company represents and warrants that
it meets the  requirements  for the use of Form S-3 for registration of the sale
by the Initial  Investor and any Investor of the Registrable  Securities and the
Company shall file all reports  required to be filed by the Company with the SEC
in a timely manner so as to maintain such eligibility for the use of Form S-3.

     3.  OBLIGATIONS OF THE COMPANY.  In connection with the registration of the
Registrable Securities, the Company shall:

          (a) use its best efforts to cause each Registration Statement relating
to  Registrable  Securities to become  effective as soon as possible  after such
Registration  Statement  is  filed  with the  SEC,  and  keep  the  Registration
Statement  effective pursuant to Rule 415 at all times until the later of (1) in
the case of any Regitrable Securities,  the earlier of (i) such date as is three
years after the date such  Registration  Statement is 

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                                     -148-

first  ordered  effective by the SEC and (ii) the date on which all  Registrable
Securities  have been sold by the  Investors  under  circumstances  in which the
buyers may resell the  Registrable  Securities  without  registration  under the
Securities Act and, (2) in the case of Registrable  Securities  that are Warrant
Shares,  the  later of (i) the date  which is three  years  after  the date such
Registration  Statement if first  ordered  effective by the SEC (but in no event
later than the date on which all Registrable  Securities that are Warrant Shares
have been sold by the  Investors  under  circumstances  in which the  buyers may
resell the Registrable  Securities that are Warrant Sahres without  registration
under the Securities Act), in case the Warrants have been exercised in full on a
net  exercise  basis and (ii) the date  which is three  years  after the  latest
exercise of the  Warrants for cash (but in no event later than the date on which
all  Registrable  Securities  that are  Warrant  Shares  have  been  sold by the
Investors  under  circumstances  in which the buyers may resell the  Registrable
Securities  that are Warrant  Sahres without  registration  under the Securities
Act) (the  "Termination  Date"),  which  Registration  Statement  (including any
amendments or supplements thereto and prospectuses  contained therein) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein,  or necessary to make the statements  therein, in
light of the circumstances in which they were made, not misleading;

          (b)  prepare  and  file  with  the  SEC  such  amendments   (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus  used  in  connection  with  the  Registration  Statement  as  may be
necessary to keep the  Registration  Statement  effective at all times until the
Termination  Date,  and,  during such period,  comply with the provisions of the
Securities Act with respect to the disposition of all Registrable  Securities of
the Company covered by the Registration Statement until such time as all of such
Registrable  Securities  have been disposed of in  accordance  with the intended
methods of  disposition  by the  seller or  sellers  thereof as set forth in the
Registration Statement;

          (c) furnish to each Investor whose Registrable Securities are included
in the Registration Statement and its legal counsel, (1) promptly after the same
is  prepared  and  publicly  distributed,  filed with the SEC or received by the
Company, one copy of the Registration  Statement and any amendment thereto, each
preliminary  prospectus and prospectus and each amendment or supplement thereto,
each  letter  written by or on behalf of the  Company to the SEC or the staff of
the SEC and each  item of  correspondence  from the SEC or the  staff of the SEC
relating to such  Registration  Statement (other than any portion of any thereof
which  contains  information  for  which the  Company  has  sought  confidential
treatment)  and  (2)  such  number  of  copies  of  a  prospectus,  including  a
preliminary  prospectus,  and all  amendments and  supplements  thereto and such
other documents,  as 

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                                     -149-

such Investor may reasonably  request in order to facilitate the  disposition of
the Registrable Securities owned by such Investor;

          (d) use reasonable efforts to (i) register and qualify the Registrable
Securities covered by the Registration  Statement under such other securities or
blue sky laws of such  jurisdictions  as the  Investors  who hold a majority  in
interest of the Registrable  Securities being offered reasonably  request,  (ii)
prepare   and   file  in  those   jurisdictions   such   amendments   (including
post-effective   amendments)   and   supplements  to  such   registrations   and
qualifications as may be necessary to maintain the effectiveness  thereof at all
times  until the  Termination  Date,  (iii)  take such  other  actions as may be
necessary to maintain such  registrations  and  qualifications  in effect at all
times  until the  Termination  Date and (iv) take all other  actions  reasonably
necessary or advisable to qualify the  Registrable  Securities  for sale in such
jurisdictions;  provided,  however,  that the  Company  shall not be required in
connection  therewith or as a condition thereto to (I) qualify to do business in
any  jurisdiction  where it would not  otherwise  be required to qualify but for
this  Section  3(d),  (II)  subject  itself  to  general  taxation  in any  such
jurisdiction,  (III)  file a general  consent  to service of process in any such
jurisdiction, (IV) provide any undertakings that cause more than nominal expense
or burden to the Company or (V) make any change in its charter or by-laws, which
in each case the Board of Directors of the Company  determines to be contrary to
the best interests of the Company and its stockholders;

          (e) in the event  Investors  who hold a majority  in  interest  of the
Registrable Securities being offered in the offering select underwriters for the
offering,   enter  into  and  perform  its  obligations  under  an  underwriting
agreement, in usual and customary form, including, without limitation, customary
indemnification  and  contribution  obligations,  with the  underwriters of such
offering;

          (f) (i) as promptly as practicable after becoming aware of such event,
notify  each  Investor  of the  happening  of any event of which the Company has
knowledge,  as a result of which the  prospectus  included  in the  Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material  fact  required to be stated  therein or  necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading,  and use its best efforts promptly to prepare a supplement
or amendment to the  Registration  Statement to correct such untrue statement or
omission,  and deliver such number of copies of such  supplement or amendment to
each Investor as such Investor may reasonably request.

               (ii)  If at the  time  the  Company  notifies  the  Investors  as
contemplated by Section  3(f)(i):  (1) the  Registration  Statement  required by
Section  2(a) of this  Agreement  shall  have  

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                                     -150-

been effective for at least 90 consecutive  days and (2) the Company shall be in
compliance in all material  respects with its obligations  under this Agreement,
the terms of the  Preferred  Shares and the Warrants and such event relates to a
prospective  development of the Company,  then the Company shall not be required
to make such  amendment  or  supplement  prior to five days after  such  notice;
provided,  however,  that the  Company  may not  invoke the  provisions  of this
Section  3(f)(ii) until at least 50 days after the Company shall have previously
invoked such provisions.

               (iii)  If at the time  the  Company  notifies  the  Investors  as
contemplated by Section  3(f)(i):  (1) the  Registration  Statement  required by
Section 2(a) of this  Agreement  shall not have been  effective  for at least 90
consecutive  days and (2) the Company  shall be in  compliance  in all  material
respects with its obligations  under this Agreement,  the terms of the Preferred
Shares and the Warrants and such event relates to a prospective  development  of
the Company,  then the Company  shall not be required to make such  amendment or
supplement prior to ten trading days after such notice; provided,  however, that
the Company may not invoke the  provisions  of this Section  3(f)(iii)  until at
least 30 days after the end of the most recent  period  during which the Company
shall have previously  invoked such provisions;  and provided further,  however,
that any period  during  which the Company has  invoked the  provisions  of this
Section 3(f)(iii) shall, regardless of when such period actually shall occur, be
treated  as if it were a period  subsequent  to 90 days after the  Closing  Date
during  which  the  Registration  Statement  had not  become  effective  for the
purposes  of  Section  9 of the  Certificate  of  Designations  relating  to the
Preferred  Shares  (the  "Certificate  of  Designations")   and  the  Conversion
Percentage  (as defined in the  Certificate of  Designations)  applicable to the
Preferred  Shares  shall be adjusted as provided in such Section 9 in respect of
the period  during which the Company has invoked the  provisions of this Section
3(f)(iii).  In lieu of any such  adjustment of the Conversion  Percentage (as so
defined)  applicable to the Preferred Shares,  the Company shall have the right,
exercisable by notice to the Initial  Investor given not later than the date the
Company gives notice as contemplated by Section 3(f)(i), to make payments to the
Initial  Investor in U.S.  dollars in such amounts and at such times as shall be
determined  pursuant  to this  Section  3(f)(iii).  The amount to be paid by the
Company to the Initial  Investor  shall be paid at the rate of two percent  (2%)
per 30-day period of the aggregate  purchase price paid by the Initial  Investor
for the  Preferred  Shares  purchased  by the Initial  Investor  pursuant to the
Subscription  Agreement for each period during  which,  in accordance  with this
Section  3(f)(iii),  the  Registration  Statement is unavailable  for use by the
Investors.  Such amount  shall be paid by the Company in  immediately  available
funds within three business days after each such period.

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                                     -151-

          (g) as promptly as  practicable  after  becoming  aware of such event,
notify each  Investor who holds  Registrable  Securities  being sold (or, in the
event of an underwritten offering, the managing underwriters) of the issuance by
the  SEC  of  any  stop  order  or  other  suspension  of  effectiveness  of the
Registration Statement at the earliest possible time;

          (h)   permit  a  single   firm  of  counsel   designated   as  selling
stockholders'  counsel by the  Investors  who hold a majority in interest of the
Registrable  Securities being sold to review the Registration  Statement and all
amendments and  supplements  thereto a reasonable  period of time prior to their
filing  with the SEC,  and shall not file any  document  in a form to which such
counsel reasonably objects;

          (i)  make  generally  available  to its  security  holders  as soon as
practical,  but not later  than  ninety  (90) days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 under the Securities Act) covering a twelve-month  period beginning not
later than the first day of the  Company's  fiscal  quarter next  following  the
effective date of the Registration Statement;

          (j) at the request of the Investors who hold a majority in interest of
the  Registrable  Securities  being sold,  furnish on the date that  Registrable
Securities  are  delivered to an  underwriter  for sale in  connection  with the
Registration  Statement  (i) a  letter,  dated  such  date,  from the  Company's
independent certified public accountants in form and substance as is customarily
given  by  independent  certified  public  accountants  to  underwriters  in  an
underwritten  public  offering,  addressed  to the  underwriters;  and  (ii)  an
opinion,  dated such date, from counsel representing the Company for purposes of
such Registration Statement, in form and substance as is customarily given in an
underwritten public offering, addressed to the underwriters and the Investors;

          (k) make  available for  inspection by any Investor,  any  underwriter
participating in any disposition pursuant to the Registration Statement, and any
attorney, accountant or other agent retained by any such Investor or underwriter
(collectively,  the  "Inspectors"),  all pertinent  financial and other records,
pertinent corporate documents and properties of the Company  (collectively,  the
"Records"),  as shall be  reasonably  necessary  to  enable  each  Inspector  to
exercise its due diligence  responsibility,  and cause the  Company's  officers,
directors  and  employees  to supply all  information  which any  Inspector  may
reasonably request for purposes of such due diligence;  provided,  however, that
each  Inspector  shall  hold in  confidence  and shall  not make any  disclosure
(except to an  Investor)  of any Record or other  information  which the Company
determines  in good faith to be  confidential,  and of which  determination  the
Inspectors  are so  notified,  unless  (i) the  disclosure  of such  Records  is
necessary  to avoid or correct a  misstatement  or omission in any  

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Registration Statement,  (ii) the release of such Records is ordered pursuant to
a  subpoena  or  other  order  from a court  or  government  body  of  competent
jurisdiction  or (iii) the  information  in such Records has been made generally
available  to the public  other than by  disclosure  in violation of this or any
other agreement.  The Company shall not be required to disclose any confidential
information  in such Records to any  Inspector  until and unless such  Inspector
shall  have  entered  into  confidentiality  agreements  (in form and  substance
satisfactory   to  the  Company)   with  the  Company   with  respect   thereto,
substantially  in the form of this Section 3(k).  Each  Investor  agrees that it
shall,  upon learning that disclosure of such Records is sought in or by a court
or  governmental  body of competent  jurisdiction  or through other means,  give
prompt notice to the Company and allow the Company, at its expense, to undertake
appropriate  action to prevent  disclosure  of, or to obtain a protective  order
for, the Records deemed  confidential.  The Company shall hold in confidence and
shall not make any disclosure of information  concerning an Investor provided to
the  Company  pursuant  to Section  4(e) hereof  unless (i)  disclosure  of such
information is necessary to comply with federal or state  securities  laws, (ii)
the  disclosure  of  such  information  is  necessary  to  avoid  or  correct  a
misstatement  or omission in any  Registration  Statement,  (iii) the release of
such  information is ordered  pursuant to a subpoena or other order from a court
or governmental body of competent jurisdiction or (iv) such information has been
made generally  available to the public other than by disclosure in violation of
this or any other  agreement.  The Company  agrees that it shall,  upon learning
that disclosure of such information  concerning an Investor is sought in or by a
court or  governmental  body of competent  jurisdiction  or through other means,
give prompt notice to such Investor,  at its expense,  to undertake  appropriate
action to prevent  disclosure  of, or to obtain a  protective  order  for,  such
information;

          (l) use its best  efforts  either  to (i)  cause  all the  Registrable
Securities  covered  by the  Registration  Statement  to be listed on a national
securities exchange and on each additional national securities exchange on which
securities of the same class or series issued by the Company are then listed, if
any, if the listing of such  Registrable  Securities is then permitted under the
rules  of  such  exchange  or (ii)  secure  designation  of all the  Registrable
Securities  covered by the Registration  Statement as a National  Association of
Securities  Dealers  Automated  Quotations  System  ("NASDAQ")  "national market
system  security"  within  the  meaning  of Rule  11Aa2-1  of the SEC  under the
Securities  Exchange  Act of 1934,  as amended  (the  "Exchange  Act"),  and the
quotation of the Registrable Securities on the NASDAQ National Market System or,
if,  despite the Company's  best efforts to satisfy the preceding  clause (i) or
(ii),  the Company is  unsuccessful  in satisfying  the preceding  clause (i) or
(ii),  to  secure   listing  on  a  national   securities   exchange  or  NASDAQ
authorization  and  quotation  for  such  Registrable  Securities  and,  without
limiting the  generality  of 

<PAGE>
                                     -153-

the  foregoing,  to arrange for at least two market  makers to register with the
National  Association of Securities Dealers,  Inc. ("NASD") as such with respect
to such Registrable Securities;

          (m)  provide a  transfer  agent and  registrar,  which may be a single
entity, for the Registrable  Securities not later than the effective date of the
Registration Statement;

          (n) cooperate with the Investors who hold Registrable Securities being
offered and the managing underwriter or underwriters,  if any, to facilitate the
timely  preparation  and delivery of  certificates  (not bearing any restrictive
legends)  representing  Registrable  Securities  to be offered  pursuant  to the
Registration  Statement and enable such certificates to be in such denominations
or amounts as the case may be, as the managing  underwriter or underwriters,  if
any, or the Investors may reasonably request and registered in such names as the
managing underwriter or underwriters, if any, or the Investors may request; and,
within  three  business  days  after a  Registration  Statement  which  includes
Registrable  Securities  is ordered  effective  by the SEC,  the  Company  shall
deliver,  and shall cause legal counsel  selected by the Company to deliver,  to
the transfer agent for the Registrable  Securities (with copies to the Investors
whose  Registrable  Securities are included in such  Registration  Statement) an
instruction  in the form  attached  hereto  as  EXHIBIT 1  (without  substantive
additions thereto) and an opinion of such counsel in the form attached hereto as
EXHIBIT 2 (without substantive additions thereto); and

          (o) take all  other  reasonable  actions  necessary  to  expedite  and
facilitate disposition by the Investor of the Registrable Securities pursuant to
the Registration Statement.

     4. OBLIGATIONS OF THE INVESTORS. In connection with the registration of the
Registrable Securities, the Investors shall have the following obligations:

          (a) It  shall  be a  condition  precedent  to the  obligations  of the
Company to complete the registration  pursuant to this Agreement with respect to
the  Registrable  Securities of a particular  Investor that such Investor  shall
furnish to the  Company  such  information  regarding  itself,  the  Registrable
Securities  held by it and the intended method of disposition of the Registrable
Securities held by it as shall be reasonably required to effect the registration
of such  Registrable  Securities  and shall execute such documents in connection
with such registration as the Company may reasonably request. Promptly after the
Company  furnishes  to an  Investor  a draft of the  Registration  Statement  as
contemplated  by Section 3(h),  such Investor  shall  complete and submit to the
Company an Investor Questionnaire in the form attached hereto as EXHIBIT 3. Each
Investor  will  notify  the  Company  promptly  of any  material  change  

<PAGE>
                                     -154-

in the  information  provided  by such  Investor in its  Investor  Questionnaire
(other than a change in beneficial  ownership of securities as a result of sales
of  Registrable  Securities  pursuant to such  Registration  Statement).  If the
Company  shall have  furnished  such draft of the  Registration  Statement to an
Investor and, at least one (1) business day prior to the filing date the Company
has  not   received   the   Investor   Questionnaire   from  such   Investor  (a
"Non-Responsive Investor"), then the Company may file the Registration Statement
without including Registrable Securities of such Non-Responsive Investor;

          (b) Each Investor by such  Investor's  acceptance  of the  Registrable
Securities  agrees to cooperate with the Company as reasonably  requested by the
Company  in  connection  with the  preparation  and  filing of the  Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such  Investor's  election  to  exclude  all  of  such  Investor's   Registrable
Securities from the Registration Statement;

          (c) In the event  Investors  holding a  majority  in  interest  of the
Registrable  Securities being registered  determine to engage the services of an
underwriter,  each  Investor  agrees to enter into and perform  such  Investor's
obligations  under an  underwriting  agreement,  in usual  and  customary  form,
including,  without  limitation,   customary  indemnification  and  contribution
obligations,  with the managing underwriter of such offering and take such other
actions as are  reasonably  required  in order to  expedite  or  facilitate  the
disposition of the Registrable Securities, unless such Investor has notified the
Company in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from the Registration Statement;

          (d) Each  Investor  agrees  that,  upon receipt of any notice from the
Company of the  happening of any event of the kind  described in Section 3(f) or
3(g),  such Investor will  immediately  discontinue  disposition  of Registrable
Securities  pursuant to the  Registration  Statement  covering such  Registrable
Securities  until such Investor's  receipt of the copies of the  supplemented or
amended  prospectus  contemplated by Section 3(f) or 3(g) and, if so directed by
the Company,  such Investor  shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a  certificate  of  destruction)
all  copies in such  Investor's  possession,  of the  prospectus  covering  such
Registrable Securities current at the time of receipt of such notice;

          (e) No  Investor  may  participate  in any  underwritten  registration
hereunder  unless such Investor (i) agrees to sell such  Investor's  Registrable
Securities on the basis provided in any  underwriting  arrangements  approved by
the Investors entitled  hereunder to approve such  arrangements,  (ii) completes
and executes all questionnaires,  powers of attorney, indemnities,  underwriting
agreements  and  other  documents  reasonably  required  

<PAGE>
                                     -155-

under the terms of such  underwriting  arrangements  and (iii) agrees to pay its
pro rata share of all underwriting  discounts and commissions and other fees and
expenses of investment  bankers and any manager or managers of such underwriting
and  legal  expenses  of  the  underwriters   applicable  with  respect  to  its
Registrable  Securities,  in each case to the extent not  payable by the Company
pursuant to the terms of this Agreement; and

          (f) Each  Investor  whose  Registrable  Securities  are  included in a
Registration  Statement understands that the Securities Act may require delivery
of a prospectus relating thereto in connection with any sale thereof pursuant to
such Registration Statement and each such Investor shall use its reasonable best
efforts to comply with the applicable  prospectus  delivery  requirements of the
Securities Act in connection with any such sale.

     5.  EXPENSES  OF  REGISTRATION.   All  expenses,  other  than  underwriting
discounts and commissions and other fees and expenses of investment  bankers and
other than brokerage  commissions,  incurred in connection  with  registrations,
filings or qualifications pursuant to Section 3, including,  without limitation,
all registration,  listing and qualifications fees, printers and accounting fees
and the fees and  disbursements  of counsel for the  Company and the  Investors,
shall be borne by the Company; provided,  however, that the Investors shall bear
the fees and  out-of-pocket  expenses of the one legal  counsel  selected by the
Investors pursuant to Section 2(c) hereof.

     6. INDEMNIFICATION. In the event any Registrable Securities are included in
a Registration Statement under this Agreement:

          (a) To the extent  permitted by law, the Company  will  indemnify  and
hold  harmless  each  Investor  who  holds  such  Registrable  Securities,   the
directors,  if any, of such  Investor,  the officers,  if any, of such Investor,
each  person,  if any,  who  controls  any  Investor  within the  meaning of the
Securities  Act  or  the  Exchange  Act,  any  underwriter  (as  defined  in the
Securities Act) for the Investors,  the directors,  if any, of such  underwriter
and the  officers,  if any, of such  underwriter,  and each person,  if any, who
controls any such  underwriter  within the meaning of the  Securities Act or the
Exchange  Act (each,  an  "Indemnified  Person"),  against any  losses,  claims,
damages, expenses or liabilities (joint or several) (collectively,  "Claims") to
which any of them may become subject under the Securities  Act, the Exchange Act
or  otherwise,  insofar as such  Claims  (or  actions  or  proceedings,  whether
commenced or threatened,  in respect thereof) arise out of or are based upon any
of the  following  statements,  omissions  or  violations  in  the  Registration
Statement,  or any post-effective  amendment thereof, or any prospectus included
therein: (i) any untrue statement or alleged untrue statement of a material fact
contained in 

<PAGE>
                                     -156-

the  Registration  Statement  or any  post-effective  amendment  thereof  or the
omission or alleged  omission to state  therein a material  fact  required to be
stated therein or necessary to make the statements therein not misleading,  (ii)
any untrue statement or alleged untrue statement of a material fact contained in
any  preliminary  prospectus  if  used  prior  to the  effective  date  of  such
Registration  Statement,  or  contained in the final  prospectus  (as amended or
supplemented,  if the Company files any amendment thereof or supplement  thereto
with the SEC) or the omission or alleged  omission to state therein any material
fact  necessary  to  make  the  statements   made  therein,   in  light  of  the
circumstances  under which the  statements  therein were made, not misleading or
(iii) any violation or alleged  violation by the Company of the Securities  Act,
the Exchange Act, any state  securities law or any rule or regulation  under the
Securities Act, the Exchange Act or any state securities law (the matters in the
foregoing clauses (i) through (iii) being, collectively,  "Violations"). Subject
to the  restrictions  set forth in  Section  6(d) with  respect to the number of
legal  counsel,  the  Company  shall  reimburse  the  Investors  and  each  such
underwriter  or controlling  person,  promptly as such expenses are incurred and
are due and payable, for any legal fees or other reasonable expenses incurred by
them  in   connection   with   investigating   or  defending   any  such  Claim.
Notwithstanding  anything to the contrary contained herein, the  indemnification
agreement contained in this Section 6(a): (I) shall not apply to a Claim arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information  furnished in writing to the Company by any Indemnified  Person
or underwriter for such Indemnified  Person expressly for use in connection with
the preparation of the Registration  Statement or any such amendment  thereof or
supplement  thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(c) hereof; (II) with respect to any preliminary prospectus
shall not inure to the benefit of any such person from whom the person asserting
any such Claim purchased the Registrable Securities that are the subject thereof
(or  to the  benefit  of any  person  controlling  such  person)  if the  untrue
statement or omission of material fact contained in the  preliminary  prospectus
was  corrected  in the  prospectus,  as then  amended or  supplemented,  if such
prospectus  was timely made  available  by the Company  pursuant to Section 3(c)
hereof;  and (III) shall not apply to amounts paid in settlement of any Claim if
such  settlement is effected  without the prior written  consent of the Company,
which consent shall not be unreasonably withheld. Such indemnity shall remain in
full force and effect  regardless of any  investigation  made by or on behalf of
the  Indemnified  Person  and shall  survive  the  transfer  of the  Registrable
Securities by the Investors pursuant to Section 9.

          (b) In connection with any Registration Statement in which an Investor
is participating,  each such Investor agrees to indemnify and hold harmless,  to
the same extent and in the same manner set forth in Section  6(a),  the Company,
each  of its  directors,  each  of  its  officers  who  signs  the  Registration

<PAGE>
                                     -157-

Statement,  each person,  if any, who controls the Company within the meaning of
the  Securities  Act  or  the  Exchange  Act,  any  underwriter  and  any  other
stockholder selling securities pursuant to the Registration  Statement or any of
its  directors  or  officers  or any person who  controls  such  stockholder  or
underwriter  within  the  meaning  of the  Securities  Act or the  Exchange  Act
(collectively and together with an Indemnified Person, an "Indemnified  Party"),
against any Claim to which any of them may become subject,  under the Securities
Act, the Exchange  Act or  otherwise,  insofar as such Claim arises out of or is
based upon any  Violation,  in each case to the extent  (and only to the extent)
that such  Violation  occurs in reliance  upon and in  conformity  with  written
information  furnished  to the  Company by such  Investor  expressly  for use in
connection with such  Registration  Statement;  and such Investor will reimburse
any legal or other  expenses  reasonably  incurred  by them in  connection  with
investigating or defending any such Claim; provided, however, that the indemnity
agreement  contained  in this  Section  6(b) shall not apply to amounts  paid in
settlement of any Claim if such settlement is effected without the prior written
consent of such  Investor,  which  consent shall not be  unreasonably  withheld;
provided, further, however, that the Investor shall be liable under this Section
6(b) for only that amount of a Claim as does not exceed the  amount,  if any, by
which  (1)  the net  proceeds  to  such  Investor  as a  result  of the  sale of
Registrable  Securities  pursuant to such Registration  Statement exceed (2) the
purchase price paid by such Investor for the Registrable Securities sold by such
Investor pursuant to such Registration Statement. Such indemnity shall remain in
full force and effect  regardless of any  investigation  made by or on behalf of
such  Indemnified  Party and  shall  survive  the  transfer  of the  Registrable
Securities by the Investors pursuant to Section 9.  Notwithstanding  anything to
the contrary contained herein, the  indemnification  agreement contained in this
Section 6(b) with respect to any preliminary  prospectus  shall not inure to the
benefit of any Indemnified Party if the untrue statement or omission of material
fact contained in the preliminary  prospectus was corrected on a timely basis in
the prospectus, as then amended or supplemented.

          (c)  The  Company  shall  be  entitled  to  receive  indemnities  from
underwriters,  selling brokers,  dealer managers and similar securities industry
professionals participating in any distribution,  to the same extent as provided
above,  with respect to information such persons so furnished in writing by such
persons expressly for inclusion in the Registration Statement.

          (d) Promptly  after receipt by an  Indemnified  Person or  Indemnified
Party  under  this  Section  6 of  notice  of the  commencement  of  any  action
(including any  governmental  action),  such  Indemnified  Person or Indemnified
Party shall, if a Claim in respect  thereof is to made against any  indemnifying
party under this Section 6, deliver to the  indemnifying  party a written 

<PAGE>
                                     -158-

notice of the  commencement  thereof and the  indemnifying  party shall have the
right to participate in, and, to the extent the  indemnifying  party so desires,
jointly with any other indemnifying  party similarly noticed,  to assume control
of the defense thereof with counsel  mutually  satisfactory to the  indemnifying
parties;  provided,  however,  that an Indemnified  Person or Indemnified  Party
shall have the right to retain its own counsel, with the fees and expenses to be
paid by the  indemnifying  party,  if,  in the  reasonable  opinion  of  counsel
retained by the indemnifying  party, the  representation  by such counsel of the
Indemnified  Person or  Indemnified  Party and the  indemnifying  party would be
inappropriate  due to actual  or  potential  differing  interests  between  such
Indemnified  Person or Indemnified Party and any other party represented by such
counsel in such  proceeding.  The Company shall pay for only one separate  legal
counsel for the Investors; such legal counsel shall be selected by the Investors
holding a majority  in interest of the  Registrable  Securities  included in the
Registration  Statement  to which the Claim  relates.  The  failure  to  deliver
written  notice  to the  indemnifying  party  within  a  reasonable  time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified  Person or Indemnified  Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action. The indemnification required by this Section 6 shall be made
by  periodic   payments  of  the  amount   thereof  during  the  course  of  the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.

     7. CONTRIBUTION. To the extent any indemnification by an indemnifying party
is  prohibited  or limited by law,  the  indemnifying  party  agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable  under  Section  6 to the  fullest  extent  permitted  by law;  provided,
however,  that (a) no contribution shall be made under  circumstances  where the
maker would not have been liable for  indemnification  under the fault standards
set  forth in  Section  6, (b) no  seller of  Registrable  Securities  guilty of
fraudulent  misrepresentation  (within  the  meaning  of  Section  11(f)  of the
Securities Act) shall be entitled to contribution from any seller of Registrable
Securities  who was not  guilty  of such  fraudulent  misrepresentation  and (c)
contribution by any seller of Registrable  Securities shall be limited in amount
to the net amount of  proceeds  received  by such  seller  from the sale of such
Registrable Securities.

     8.  REPORTS  UNDER  EXCHANGE  ACT.  With a view to making  available to the
Investors the benefits of Rule 144  promulgated  under the Securities Act or any
other  similar  rule or  regulation  of the SEC that may at any time  permit the
Investors to sell  securities of the Company to the public without  registration
("Rule 144"), the Company agrees to:

<PAGE>
                                     -159-

          (a) make and keep  public  information  available,  as those terms are
understood and defined in Rule 144;

          (b)  file  with the SEC in a  timely  manner  all  reports  and  other
documents required of the Company under the Securities Act and the Exchange Act;
and

          (c) furnish to each Investor so long as such Investor owns Registrable
Securities,  promptly upon request,  (i) a written statement by the Company that
it has complied with the reporting  requirements of Rule 144, the Securities Act
and the Exchange Act, (ii) a copy of the most recent annual or quarterly  report
of the Company and such other  reports and documents so filed by the Company and
(iii)  such  other  information  as may be  reasonably  requested  to permit the
Investors to sell such securities pursuant to Rule 144 without registration.

     9. ASSIGNMENT OF THE  REGISTRATION  RIGHTS.  The rights to have the Company
register   Registrable   Securities   pursuant  to  this   Agreement   shall  be
automatically  assigned by the Investors to  transferees  or assignees of all or
any  portion of such  securities  which was issued upon  conversion  of at least
1,000 Preferred Shares, or any transferee of any portion of the Preferred Shares
which is at least 1,000 Preferred Shares, or any combination  thereof,  only if:
(a) the  Investor  agrees in writing with the  transferee  or assignee to assign
such rights,  and a copy of such  agreement is furnished to the Company within a
reasonable time after such  assignment,  (b) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (i) the
name and address of such  transferee  or assignee and (ii) the  securities  with
respect to which such registration rights are being transferred or assigned, (c)
immediately  following  such transfer or assignment  the further  disposition of
such securities by the transferee or assignee is restricted under the Securities
Act and  applicable  state  securities  laws,  and (d) at or before the time the
Company received the written notice  contemplated by clause (b) of this sentence
the transferee or assignee agrees in writing with the Company to be bound by all
of the provisions contained herein.

     10. AMENDMENT OF REGISTRATION  RIGHTS.  Any provision of this Agreement may
be amended and the observance  thereof may be waived  (either  generally or in a
particular  instance and either  retroactively or prospectively),  only with the
written  consent of the Company and Investors who hold a majority in interest of
the Registrable Securities.  Any amendment or waiver effected in accordance with
this Section 10 shall be binding upon each Investor and the Company.

     11. MISCELLANEOUS.

          (a) A  person  or  entity  is  deemed  to be a holder  of  Registrable
Securities  whenever  such  person or entity  owns of  

<PAGE>
                                     -160-

record  such  Registrable  Securities.   If  the  Company  receives  conflicting
instructions,  notices or elections  from two or more  persons or entities  with
respect to the same Registrable Securities, the Company shall act upon the basis
of instructions,  notice or election  received from the registered owner of such
Registrable Securities.

          (b) Notices  required or permitted to be given  hereunder  shall be in
writing and shall be deemed to be sufficiently  given when personally  delivered
(by hand, by courier,  by telephone line facsimile  transmission or other means)
or sent by certified mail, return receipt requested, properly addressed and with
proper postage pre-paid (i) if to the Company, at Palomar Medical  Technologies,
Inc.,  66 Cherry Hill Drive,  Beverly,  Massachusetts  01915,  Attention:  Chief
Financial  Officer,  (ii) if to the Initial  Investor,  at the address set forth
under its name in the Subscription Agreement and (iii) if to any other Investor,
at such address as such Investor  shall have provided in writing to the Company,
or at such  other  address  as each such  party  furnishes  by  notice  given in
accordance  with this Section  11(b),  and shall be effective,  when  personally
delivered,  upon receipt and,  when so sent by certified  mail,  four days after
deposit with the United States Postal Service.

          (c)  Failure of any party to exercise  any right or remedy  under this
Agreement or otherwise,  or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

          (d) This  Agreement  shall be enforced,  governed by and  construed in
accordance  with the laws of the  Commonwealth  of  Massachusetts  applicable to
agreements  made and to be performed  entirely  within such State.  In the event
that any  provision  of this  Agreement  is invalid or  unenforceable  under any
applicable  statute  or  rule  of law,  then  such  provision  shall  be  deemed
inoperative  to the extent that it may  conflict  therewith  and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof which
may prove invalid or  unenforceable  under any law shall not affect the validity
or enforceability of any other provision hereof.

          (e) This Agreement  constitutes the entire agreement among the parties
hereto with respect to the subject  matter  hereof.  There are no  restrictions,
promises, warranties or undertakings,  other than those set forth or referred to
herein. This Agreement  supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof.

          (f) Subject to the  requirements  of Section 9 hereof,  this Agreement
shall inure to the benefit of and be binding upon the  successors and assigns of
each of the parties hereto.

<PAGE>
                                     -161-

          (g) All pronouns and any  variations  thereof refer to the  masculine,
feminine or neuter, singular or plural, as the context may require.

          (h) The headings in this  Agreement are for  convenience  of reference
only and shall not limit or otherwise affect the meaning hereof.

          (i) The  Company  acknowledges  that any  failure  by the  Company  to
perform its obligations under this Agreement, including, without limitation, the
Company's obligations under Section 3(n), or any delay in such performance could
result in both direct and consequential damages to the Investors and the Company
agrees that,  in addition to any other  liability the Company may have by reason
of any such  failure or delay,  the  Company  shall be liable for all direct and
consequential damages caused by any such failure or delay.

          (j) This Agreement may be executed in two or more  counterparts,  each
of which shall be deemed an original but all of which shall  constitute  one and
the same agreement.  This Agreement,  once executed by a party, may be delivered
to the other party hereto by telephone line facsimile  transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.

<PAGE>
                                     -162-

     IN WITNESS  WHEREOF,  the parties  have caused  this  Agreement  to be duly
executed by their  respective  officers  thereunto duly authorized as of day and
year first above written.

                                     PALOMAR MEDICAL TECHNOLOGIES, INC.



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



                                     INITIAL INVESTOR:

                                     NAME:  GFL ADVANTAGE FUND LIMITED


                                     By:                      /s/
                                        ----------------------------------------
                                     Name:  A/P. de Groot
                                     Title: President

<PAGE>
                                     -163-

                                    EXHIBIT 1
                                       TO
                                  REGISTRATION
                                RIGHTS AGREEMENT

                              [Company Letterhead]

                                                          [Date]

[Name and address of Transfer Agent]


Ladies and Gentlemen:

     This letter shall serve as our irrevocable  authorization  and direction to
you (1) to transfer or  re-register  the  certificates  for the shares of Common
Stock,  $.01 par  value per share  (the  "Common  Stock"),  of  Palomar  Medical
Technologies,  Inc., a Delaware  corporation  (the  "Company"),  represented  by
certificate number _______ for _______ shares (the "Outstanding  Common Shares")
of Common Stock  presently  registered  in the name of [Name of  Investor]  upon
surrender of such  certificate to you,  notwithstanding  the legend appearing on
such  certificate  and (2) to issue shares (the  "Conversion  Common Shares") of
Common  Stock to or upon the order of the holders of record from time to time of
shares (the "Preferred  Shares") of Series E Convertible  Preferred Stock,  $.01
par value per share,  of the Company  upon  surrender to you for  conversion  of
certificates  for  Preferred  Shares and a properly  completed and duly executed
Notice  of  Conversion  in  the  form   enclosed   herewith.   The  transfer  or
re-registration  of certificates for the Outstanding Common Shares by you should
be made at such time as you are  requested to do so by the record  holder of the
Outstanding  Common  Shares.  The  certificate  issued  upon  such  transfer  or
re-registration  should be registered in such name as requested by the holder of
record of the  certificate  surrendered  to you and  should  not bear any legend
which  would  restrict  the  transfer  of the  shares  represented  thereby.  In
addition,  you are  hereby  directed  to remove  any  stop-transfer  instruction
relating to the  Outstanding  Common  Shares.  Certificates  for the  Conversion
Common Shares should not bear any  restrictive  legend and should not be subject
to any stop-transfer restriction.

     Contemporaneously  with  the  delivery  of  this  letter,  the  Company  is
delivering to you an opinion of Foley,  Hoag & Eliot as to  registration  of the
resale of the Outstanding  Common Shares and the Conversion  Common Shares under
the Securities Act of 1933, as amended.

<PAGE>
                                      164

     Should you have any questions concerning this matter, please contact me.



                                             Very truly yours,

                                             PALOMAR MEDICAL TECHNOLOGIES, INC.



                                             By:
                                                  ------------------------------
                                             Name:
                                             Title:

Enclosure
cc:      [Name of Investor]


<PAGE>
                                      165

                                    EXHIBIT 2
                                       TO
                                  REGISTRATION
                                RIGHTS AGREEMENT

                                                    [Date]


[Name and address
of transfer agent]


                       PALOMAR MEDICAL TECHNOLOGIES, INC.
                             SHARES OF COMMON STOCK

Ladies and Gentlemen:

     We  are  counsel  to  Palomar  Medical   Technologies,   Inc.,  a  Delaware
corporation  (the  "Company"),  and we understand  that [Name of Investor]  (the
"Holder") has purchased from the Company an aggregate of shares (the  "Preferred
Shares") of the Company's Series E Convertible  Preferred Stock,  $.01 par value
per share,  represented by Certificate Nos. , and , respectively.  The Preferred
Shares were purchased by the Holder pursuant to a Subscription Agreement,  dated
as of , 1996, between the Holder and the Company (the "Subscription Agreement").
Pursuant to a  Registration  Rights  Agreement,  dated as of November  __, 1995,
between the Company and the Holder (the "Registration Rights Agreement") entered
into in  connection  with the  purchase  by the Holder of the  Preferred  Shares
pursuant to the  Subscription  Agreement,  the  Company  agreed with the Holder,
among other  things,  to register  for resale by the Holder  shares (the "Common
Shares") of Common  Stock,  $.01 par value (the "Common  Stock"),  issuable upon
conversion of the Preferred  Shares under the Securities Act of 1933, as amended
(the  "Securities  Act"),  upon the terms  provided in the  Registration  Rights
Agreement.  In  connection  with the exercise by the Holder of its  registration
rights under the Registration Rights Agreement, on __________,  1996 the Company
filed a  Registration  Statement on Form S- (File No. 333- ) (the  "Registration
Statement") with the Securities and Exchange  Commission (the "SEC") relating to
the Common Shares,  which names the Holder as a selling stockholder  thereunder.
[If notice from SEC is available: The Company has received a notice from the SEC
that the  Registration  Statement  has been declared  effective.  A copy of such
notice is attached hereto.]

     Based on the  foregoing,  we are of the opinion that the Common Shares have
been registered under the Securities Act.

<PAGE>
                                      166

     This   opinion  has  been   furnished  to  you  in   connection   with  the
above-referenced transaction and may not be used for any other purpose or by any
other  person.  We assume no  responsibility  to inform you of events or changes
occurring after the date hereof.

                  [Other appropriate language to be included.]

                                             Very truly yours,



                                             -----------------------------------

cc:      [Name of Investor]

<PAGE>
                                      167

                                   EXHIBIT 3
                                       TO
                                  REGISTRATION
                                RIGHTS AGREEMENT

                             INVESTOR QUESTIONNAIRE

     Reference is made to the Registration  Rights Agreement,  dated as of April
__,  1996  (the  "Agreement").   In  connection  with  the  preparation  of  the
registration statement which is the subject of the Agreement,  please provide us
with the following information:

     1.  Pursuant  to the  "Selling  Shareholder"  section  of the  Registration
Statement,  please state your organization's name exactly as it should appear in
the Registration  Statement and provide the following  information,  as of April
__, 1996:

               ---------------------
                  [name]


                       (1)                                      (2)
                                                       Number of shares, if any,
               Number of shares which                  which will be
               are being included in                   owned after completion
               the Registration Statement              of sale of shares
                                                       included in
                                                       Registration Statement

     2. Have you or your organization had any position, office or other material
relationship  within the past three  years  with the  Company or its  affiliates
other  than  as  disclosed  in the  Prospectus  included  in  this  Registration
Statement?

                      ----                               ----
                       Yes                                No

     If yes, please indicate the nature of any such relationships below:

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                                             [NAME OF INVESTOR]


                                             By:
                                             Name:
                                             Title: