GUARANTY  AGREEMENT  dated  as  of  November  16,  1998  from  A.  Neil
Pappalardo,  of  ________,  MA (the  "Guarantor")  to Fleet  National  Bank (the
"Bank").

                                   WITNESSETH:

         WHEREAS,  pursuant to a letter  agreement  of even date  herewith  (the
"Loan  Agreement")  between the Bank and Palomar Medical  Technologies,  Inc., a
Delaware  corporation  (the  "Borrower"),  the Bank is  establishing a revolving
credit  facility for the Borrower on the terms and conditions set forth therein;
and

         WHEREAS,  it is a  condition  precedent  to the making of loans and the
issuance of letters of credit by the Bank  pursuant to the Loan  Agreement  that
the Guarantor shall have executed and delivered this Agreement to the Bank; and

         WHEREAS,  the  establishment  of a revolving  credit  facility for, the
making of loans to, and the  issuance  of letters of credit for the  account of,
the Borrower  pursuant to the Loan  Agreement  are and will be beneficial to the
Guarantor  inasmuch as the  Guarantor  is an investor  in the  Borrower  and has
received and expects to receive  certain fees from the Borrower and,  therefore,
has a direct ownership and economic interest in the Borrower;

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency  of which are hereby  acknowledged,  the Guarantor  hereby agrees as
follows:

                                    ARTICLE I

                               CERTAIN DEFINITIONS

         Section 1.01.  Defined Terms. As used in this Agreement,  the following
terms shall have the meanings set out respectively after each:

         "Agreement" - This Guaranty Agreement, as same may be from time to time
amended.

         "Event of Default" - As defined in Section 5.01 below.

         "Guaranteed  Obligations"  - Any and all  indebtedness,  liabilities or
obligations  of the  Borrower,  whether  joint or several,  direct or  indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
to or for the benefit of the Bank, including,  without limitation,  those now or
hereafter arising under any Loan Document.

         "Guaranty" - The guaranty of the Guarantor set forth in Article II.

         "Loan Documents" - The Loan Agreement, the Revolving Note and any other
instrument,  document or other  agreement  relating to  extension  of  financial
accommodations  or other banking  services  between the Borrower and the Bank or
made by the Borrower in favor of the Bank, all whether now existing or hereafter
entered into or delivered.


<PAGE>



         "Person" - As defined in the Loan Agreement.

         "Prime Rate" - As defined in the Loan Agreement.

         "Revolving Loans" - As defined in the Loan Agreement.

         "Revolving Note" - As defined in the Loan Agreement.

         Section 1.02. Use of Defined Terms. Any defined term used in the plural
preceded by the definite  article shall be taken to encompass all members of the
relevant class. Any defined term used in the singular preceded by "any" shall be
taken  to  indicate   any  number  of  the  members  of  the   relevant   class.

                                   ARTICLE II

                                    GUARANTY

         Section 2.01.  Guaranty.  In  consideration of the Bank making loans to
the Borrower pursuant to the Loan Agreement,  the Guarantor hereby guaranties to
the Bank the due and punctual  payment and  performance of all of the Guaranteed
Obligations,  as and when the same  shall  become  due and  payable,  whether on
demand or at  maturity,  by  declaration  or  otherwise,  according to the terms
thereof,  and all losses,  costs,  expenses and reasonable  attorneys'  fees and
disbursements  incurred  by  reason of a  default  under any of said  Guaranteed
Obligations.  In case of failure by the  Borrower  punctually  to pay any of the
Guaranteed  Obligations,  the  Guarantor  unconditionally  agrees to cause  such
payment to be made punctually as and when the same shall become due and payable,
whether at maturity or by declaration or otherwise,  and as if such payment were
made by the Borrower. This Guaranty is an absolute, unconditional, unlimited and
continuing  guaranty of the full and  punctual  payment and  performance  by the
Borrower of the Guaranteed  Obligations  and not merely of their  collectibility
and is in no way conditioned upon any requirement that the Bank first collect or
attempt to collect the Guaranteed  Obligations  or any portion  thereof from the
Borrower or from any other guarantor of any of same or resort to any security or
other means of obtaining payment of any of the Guaranteed  Obligations which the
Bank now has or may acquire after the date hereof, or upon any other contingency
whatsoever.  Upon and during th  continuance of any Event of Default (as defined
herein), all liabilities and obligations of the Guarantor to the Bank, hereunder
or otherwise, shall, at the option of the Bank, become forthwith due and payable
to the Bank  without  further  demand or notice of any nature,  all of which are
expressly  waived by the Guarantor.  Payments by the Guarantor  hereunder may be
required by the Bank on any number of occasions.

         Section  2.02.  Guarantor's  Further  Agreements  to Pay. The Guarantor
further agrees,  as principal  obligor and not as guarantor,  to pay to the Bank
forthwith  upon  demand,  in  lawful  currency  of the  United  States  in funds
immediately available to the Bank, all costs and expenses (including court costs
and reasonable  attorneys' fees and  disbursements)  incurred or expended by 

<PAGE>

the Bank in connection with this Guaranty and the enforcement  hereof,  together
with interest on any sum now or hereafter  payable by the  Guarantor  under this
Agreement,  such  interest  to accrue from the date of any demand for payment of
such sum to the date of payment.  Such  interest will be payable at the rate set
forth in Section 6.04 below.

         Section 2.03.  Bank's  Freedom to Deal with Borrower and Other Parties.
The Bank shall be at liberty,  without  giving notice to or obtaining the assent
of the Guarantor and without relieving the Guarantor of any liability hereunder,
to deal with the Borrower and with each other party who now is or after the date
hereof  becomes  liable in any manner for any of the  Guaranteed  Obligations in
such  manner as the Bank in its sole  discretion  deems  fit.  The Bank has full
authority in its sole discretio to do any or all of the following  things,  none
of which shall  discharge or affect the  Guarantor's  liability  hereunder:  (i)
extend  credit,  make loans and afford  other  financial  accommodations  to the
Borrower  at such  times,  in such  amounts  and on such  terms  as the Bank may
approve;  (ii) modify, amend, vary the terms and grant extensions or renewals of
any  present  or  future  indebtedness  or of  all  or  any  of  the  Guaranteed
Obligations  or any  instrument  relating  to or  securing  same,  and,  without
limitation,  this Guaranty shall survive  payment of the Revolving  Note;  (iii)
grant  time,  waivers  and other  indulgences  in  respect  thereto;  (iv) vary,
exchange,  release or discharge,  wholly or partially,  or delay or abstain from
perfecting  and  enforcing  any security or guaranty or other means of obtaining
payment of any of the Guaranteed  Obligations which the Bank now has or acquires
after the date hereof;  (v) take or omit to take any of the actions  referred to
in any Loan Document or other instrument evidencing, securing or relating to any
of the Guaranteed  Obligations  or any actions under this  Guaranty;  (vi) fail,
omit or  delay to  enforce,  assert  or  exercise  any  right,  power or  remedy
conferred  on the Bank in this  Guaranty or in any other Loan  Document or other
instrument evidencing, securing or relating to any of the Guaranteed Obligations
or take or refrain from taking any other action;  (vii) accept partial  payments
from the Borrower or any other party;  (viii)  release or  discharge,  wholly or
partially,  the Borrower,  any endorser or any guarantor,  or accept  additional
collateral for the payment of any  Guaranteed  Obligations;  (ix)  compromise or
make any  settlement  or other  arrangement  with the Borrower or any such other
party;  and (x) consent to and  participate  in the proceeds of any  assignment,
trust or mortgage for the benefit of creditors.

         Section 2.04. Unenforceability of Guaranteed Obligations; Invalidity of
Security or Other  Guaranties.  If for any reason now or hereafter  the Borrower
has no legal  existence or is under no legal  obligation to discharge any of the
Guaranteed  Obligations undertaken or purported to be undertaken by it or on its
behalf,  or if any of the moneys  included in the  Guaranteed  Obligations  have
become  irrecoverable  from the  Borrower by  operation  of law or for any other
reason, this Guaranty shall nevertheless be binding on the Guarantor to the same
extent as if the  Guarantor  at all times had been the  principal  debtor on all
such  Guaranteed  Obligations.  This Guaranty  shall be in addition to any other
guaranty or other security for the Guaranteed  Obligations,  and it shall not be
prejudiced  or  rendered  unenforceable  by the  invalidity  of any  such  other
guaranty or security.  The liability of the Guarantor  under this Guaranty shall
remain in full force and effect until payment and  performance in full of all of
the Guaranteed  Obligations.  This Guaranty shall continue to be effective or be
reinstated,  as the  case  may be,  if at any  time  any  payment  of any of the
Guaranteed Obligations is rescinded or must otherwise be 

<PAGE>

restored  or  returned  by  the  Bank,  upon  the   insolvency,   bankruptcy  or
reorganization of the Borrower or otherwise,  all as though such payment had not
been made.

         Section 2.05.  Waivers by Guarantor.  The Guarantor  waives:  notice of
acceptance hereof and reliance hereon,  notice of any action taken or omitted by
the Bank in reliance hereon, any requirement that the Bank be diligent or prompt
in making demands  hereunder,  any  requirement as to any  presentment,  demand,
protest,  giving  notice of any default by the Borrower or  asserting  any other
right of the Bank hereunder and all demands, notices (other than any demands and
notices  which are  specifically  provided  for in the Loan  Agreement)  and all
suretyship  defenses  generally.  The Guarantor also irrevocably  waives, to the
fullest extent permitted by law, all defenses which at any time may be available
in respect of the Guarantor's  obligations hereunder by virtue of any statute of
limitations,  valuation,  stay, homestead or moratorium law or other similar law
now or hereafter in effect.

         Without  limiting the  generality of the  foregoing  provisions of this
Guaranty,  the liability of the Guarantor  shall not be released,  discharged or
otherwise affected by:

         (i)      any  extension,  renewal,  settlement,  compromise,  waiver or
                  release in respect of any  obligation  of the  Borrower or any
                  other guarantor of any of the Guaranteed Obligations;

         (ii)     any change in the time, manner,  amount or place of payment of
                  any Guaranteed  Obligation or any modification or amendment of
                  or supplement to any Loan Document or this Agreement;

         (iii)    any release,  non-perfection  or  invalidity  of any direct or
                  indirect  security for any  obligation  of the  Borrower,  the
                  Guarantor  or any  other  guarantor  of any of the  Guaranteed
                  Obligations;

         (iv)     any  change  in the  legal  existence,  structure,  record  or
                  beneficial  ownership  or control of the Borrower or any other
                  guarantor  of  any  of  the  Guaranteed  Obligations,  or  any
                  insolvency,   bankruptcy,   reorganization  or  other  similar
                  proceeding affecting any such Person or its assets;

         (v)      the existence of any claim,  set-off or other rights which the
                  Guarantor may have at any time against the Borrower,  the Bank
                  or any other guarantor of any of the Guaranteed Obligations or
                  any other Person,  whether or not arising in  connection  with
                  this Agreement;

         (vi)     any invalidity or unenforceability  relating to or against the
                  Borrower  or the  Guarantor  for any  reason  under  any  Loan
                  Document  or  under  this  Agreement;   or  any  provision  of
                  applicable  law  or  regulation  purporting  to  prohibit  the
                  payment by any Person of the  principal  of or interest on the
                  Revolving  Note or any  other  amount  payable  under any Loan
                  Document or this Agreement; or


<PAGE>

         (vii)    any other act or  omission  to act or delay of any kind by the
                  Borrower,   the  Bank  or  any  other   Person  or  any  other
                  circumstances  whatsoever  which might, but for the provisions
                  of this paragraph,  constitute a legal or equitable  discharge
                  of the Guarantor's obligations hereunder.

         Section  2.06.  Subrogation.  Unless  and until  all of the  Guaranteed
Obligations  shall have been  indefeasibly  paid in full and all commitments for
further  extensions  of  credit  to the  Borrower  by the Bank  shall  have been
terminated,   the  Guarantor  hereby  irrevocably  and  unconditionally   waives
enforcement of any and all rights of subrogation, contribution or similar rights
which,  but for this Section  2.06, he might  otherwise  have in relation to the
Borrower  or any  other  guarantor  as a result of this  Agreement.  No right of
subrogation,  contribution  or any similar  right will in any event be deemed to
give the Guarantor any claim against the Bank on account of the Bank's  release,
failure to perfect or other  dealing or failing to deal with any  collateral  or
with any Person, even if the value of such subrogation,  contribution or similar
rights is thereby diminished or jeopardized.

         Section 2.07. No Contest with Bank. No set-off, counterclaim, reduction
or diminution of any  obligation,  or any claim or defense of any kind or nature
which the Guarantor has or may have against the Borrower, any other guarantor or
the Bank shall be available hereunder to the Guarantor.  The Guarantor will not,
in any proceedings  under the Bankruptcy  Code or insolvency  proceedings of any
nature,  prove in competition with the Bank in respect of any payment  hereunder
or be  entitled  to have the  benefit of any  counterclaim  or proof of claim or
dividend or payment by or on behalf of the  Borrower or the benefit of any other
security for any Guaranteed  Obligation  which, now or hereafter,  the Guarantor
may hold in competition with the Bank.

         Section 2.08.  Stay of  Acceleration.  If  acceleration of the time for
payment of any amount  payable by the Borrower under any Loan Document is stayed
upon the  insolvency,  bankruptcy or  reorganization  of the Borrower,  all such
amounts otherwise subject to acceleration under the terms of this Guaranty shall
nonetheless  be payable by the  Guarantor  hereunder  forthwith on demand by the
Bank. 

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         Section 3.01.  General  Representations  and Warranties.  The Guarantor
hereby represents and warrants that:

                  (a) The execution,  delivery and  performance by the Guarantor
         of this Agreement do not and will not:

                  (i)      violate  any  provision  of, or require  any  filing,
                           registration,  consent or  approval  under,  any law,
                           rule,  regulation  (including,   without  limitation,
                           Regulation  U), order,  writ,  judgment,  injunction,
                           decree,  determination  or award  presently in effect
                           having applicability to the Guarantor;


<PAGE>

                  (ii)     result in a breach  of or  constitute  a  default  or
                           require any consent  under any  indenture  or loan or
                           credit  agreement  or any other  agreement,  lease or
                           instrument  to which the  Guarantor  is a party or by
                           which the Guarantor or any of his  properties  may be
                           bound or affected; or

                  (iii)    result in, or require,  the creation or imposition of
                           any lien, security interest or other encumbrance upon
                           or with respect to any of the properties now owned or
                           hereafter acquired by the Guarantor.

                  (b) This  Agreement  has been duly  executed and  delivered on
         behalf of the Guarantor and is a legal, valid and binding obligation of
         the Guarantor, enforceable against the Guarantor in accordance with its
         terms.

                  (c) The  Guarantor  is an  investor  in the  Borrower  and has
         received and expects to receive certain fees from the Borrower.

                  (d) After giving effect to this Agreement and the transactions
         contemplated  hereby,  the Guarantor (A) is and will be able to pay his
         debts as they  become  due,  (B) has and will have  funds  and  capital
         sufficient to carry on his business as now conducted or as contemplated
         to be  conducted,  (C)  owns  property  having  a  value  both  at fair
         valuation  and at present fair  saleable  value greater than the amount
         required to pay his debts as they become due, and (D) is not  insolvent
         and will not be rendered  insolvent as determined  by  applicable  law,
         after taking into account the  reasonable  likelihood of payments being
         required hereunder.

                                   ARTICLE IV

                                    COVENANTS

         Section 4.01. Covenants.  So long as any of the Guaranteed  Obligations
remain  outstanding,  the  Guarantor  will  provide to the Bank,  promptly  upon
request,  such financial and other information as the Bank may from time to time
reasonably request. 

                                    ARTICLE V

                              DEFAULT AND REMEDIES

         Section 5.01. Events of Default.  An Event of Default will be deemed to
have occurred under this Agreement upon the occurrence of any one or more of the
following:

                  (i)      The Guarantor shall fail to make any monetary payment
                           hereunder when due; or


<PAGE>

                  (ii)     Any  representation  or  warranty  of  the  Guarantor
                           contained herein shall at any time prove to have been
                           incorrect in any material respect when made; or

                  (iii)    The  Guarantor  shall fail to perform or observe  any
                           other  obligation or agreement  contained  herein and
                           such failure shall  continue  uncured for thirty (30)
                           days after written notice of such failure is given by
                           the Bank to the Guarantor; or

                  (iv)     Any  default  on the  part  of the  Guarantor  or any
                           Person  controlled by the Guarantor shall exist,  and
                           shall   remain   unwaived   or  uncured   beyond  the
                           expiration  of any  applicable  notice  and/or  grace
                           period,  under  any  other  contract,   agreement  or
                           undertaking  now existing or  hereafter  entered into
                           with or for the benefit of the Bank (or any affiliate
                           of the Bank); or

                  (v)      Any  "Event  of  Default"  (as  defined  in the  Loan
                           Agreement)  shall  occur and shall  continue  uncured
                           beyond the expiration of any applicable notice and/or
                           grace period.

         Section 5.02. Rights and Remedies Upon Default.  Upon the occurrence of
any Event of Default and at any time thereafter during the continuance  thereof,
in addition to any other rights and remedies  available to the Bank hereunder or
otherwise,  the Bank may  exercise any one or more of the  following  rights and
remedies (all of which shall be cumulative):

                  (a)  Enforce  the   provisions  of  this  Agreement  by  legal
         proceedings  for the specific  performance of any covenant or agreement
         contained herein or for the enforcement of any other  appropriate legal
         or equitable  remedy,  and the Bank may recover  damages  caused by any
         breach by the Guarantor of the provisions of this Agreement,  including
         court costs,  reasonable  attorneys'  fees and other costs and expenses
         incurred  in the  enforcement  of  the  obligations  of  the  Guarantor
         hereunder.

                  (b) Exercise all rights and remedies hereunder, under the Loan
         Documents,  and under any other  agreement  with the Bank, and exercise
         all other rights and remedies which the Bank may have under  applicable
         law.

         Section  5.03.  Set-off.  In  addition  to any rights now or  hereafter
granted  under  applicable  law and not by way of limitation of any such rights,
upon the occurrence of any Event of Default and during the continuance  thereof,
the  Bank  is  hereby  authorized  at any  time or from  time to  time,  without
presentment,  demand, protest or other notice of any kind to the Guarantor or to
any other Person,  all of which are hereby expressly  waived,  to set off and to
appropriate  and apply any and all  deposits and any other  Indebtedness  at any
time held or owing by the Bank or any affiliate of the Bank to or for the credit
or the account of the Guarantor  against and on account of the  obligations  and
liabilities  of the  Guarantor to the Bank,  under this  Agreement or otherwise,
irrespective  of whether or not the Bank shall have made any demand for  payment
and although said  obligations,  liabilities or claims, or any of them, may then
be contingent or unmatured and without regard for the  availability  or adequacy
of other  collateral.  The Guarantor also grants to the Bank a security interest
with  respect to all his deposits and all  securities  or 

<PAGE>

other  property in the  possession of the Bank or any affiliate of the Bank from
time to time,  and, upon the  occurrence  of any Event of Default,  the Bank may
exercise all rights and remedies of a secured party under the Uniform Commercial
Code.  ANY AND ALL RIGHTS TO REQUIRE THE BANK TO EXERCISE ITS RIGHTS OR REMEDIES
WITH  RESPECT  TO ANY  OTHER  COLLATERAL  WHICH  SECURES  ANY  OF TH  GUARANTEED
OBLIGATIONS PRIOR TO THE EXERCISE BY THE BANK OF ITS RIGHT OF SET-OFF UNDER THIS
SECTION ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

                                  ARTICLE VI

                                 MISCELLANEOUS

         Section 6.01. No Waiver;  Cumulative  Remedies.  No failure or delay on
the part of any party in exercising any right,  power or remedy  hereunder shall
operate as a waiver  thereof,  nor shall any single or partial  exercise  of any
such right,  power or remedy preclude any other or further  exercise  thereof or
the exercise of any other right, power or remedy hereunder.  The remedies herein
provided are  cumulative  and not  exclusive of any remedies  provided by law or
otherwise  available to the Bank. Such remedies may be exercised  without resort
or  regard  to the  other  source  of  satisfaction  of any  liabilities  of the
Guarantor to the Bank.  The  provisions of this Agreement are not limited by nor
in the limitation of any additional or inconsistent  provisions contained in the
Loan Agreement or elsewhere.

         Section 6.02. Amendments,  Waivers and Consents. Neither this Agreement
nor any provision hereof may be amended, waived discharged or terminated orally.
Any such amendment,  waiver,  discharge or termination must be in writing signed
by the party against whom  enforcement  of the amendment,  waiver,  discharge or
termination  is  sought.   Any  waiver  or  consent  may  be  given  subject  to
satisfaction  of  conditions  stated  therein and any waiver or consent shall be
effective only in the specific  instance and for the specific  purpose for which
given.

         Section 6.03. Addresses for Notices, etc. Except as otherwise expressly
provided  in  this  Agreement,   all  notices,   requests,   demands  and  other
communications provided for hereunder shall be in writing and shall be mailed or
delivered to the applicable party at the address indicated below:


         If to the Guarantor

              Mr. A. Neil Pappalardo
              10 Rowes Wharf
              Boston, MA  02110


<PAGE>

         If to the Bank:

              Fleet National Bank
              High Technology Division
              One Federal Street 
              Mail Stop:  MA OF DO7A
              Boston, MA  02110
              Attention:  Lucie Burke, Vice President

or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the other party complying as to delivery with
the  terms of this  Section.  Except  as  otherwise  provided  herein,  all such
notices, requests, demands and other communications shall be deemed delivered on
the earlier of (i) the date  received or (ii) the date of  delivery,  refusal or
non-delivery  indicated on the return  receipt if deposited in the United States
mails,  sent postage  prepaid,  registered  or certified  mail,  return  receipt
requested,  postage and registration or certification charges prepaid, addressed
as aforesaid.

         Section 6.04. Costs, Expenses and Taxes. The Guarantor agrees to pay on
demand all costs and expenses (including,  without limitation,  reasonable legal
fees) of the Bank in connection with the preparation,  execution and delivery of
this Agreement and all other instruments and documents to be delivered hereunder
and any amendments or  modifications  of any of the foregoing,  or in connection
with the examination,  review or administration of any of the foregoing, as well
as the costs and expenses (including, without limitation the reasonable fees and
out-of-pocket expenses of legal counsel) incurred by the Bank in connection with
preserving,  enforcing or exercising any rights or remedies under this Agreement
and all other instruments and documents to be delivered  hereunder,  all whether
or not legal action is instituted. In addition, the Guarantor shall be obligated
to pay any and all stamp and other taxes  payable or determined to be payable in
connection  with the  execution  and  delivery of this  Agreement  and all other
instruments and documents to be delivered hereunder, and the Guarantor agrees to
save the Bank harmless from and against any and all liabilities  with respect to
or resulting  from any delay in paying or omission to pay such taxes.  Any fees,
expenses  or other  charges  which  the Bank is  entitled  to  receive  from the
Guarantor  hereunder  shall bear  interest  from the date of demand for  payment
until paid at the lesser of (i) a fluctuating  rate per annum which shall at all
times be equal t the sum of four (4%)  percent  per annum plus the Prime Rate as
in  effect  from  time to  time  or (ii)  the  maximum  rate  permitted  by then
applicable law.

         Section  6.05.   Representations   and   Warranties.   All   covenants,
agreements,  representations and warranties made herein or in any other document
delivered by or on behalf of the  Guarantor  pursuant to or in  connection  with
this  Agreement are material and shall be deemed to have been relied upon by the
Bank, notwithstanding any investigation heretofore or hereafter made by the Bank
and shall survive the making of the Revolving  Loans as contemplated in the Loan
Agreement,  and shall  continue  in full  force and effect so long as any of the
Guaranteed  Obligations  remain  outstanding  and unpaid or any facility for the
making of loans to the Borrower remains in effect.  All statements  contained in
any certificate or other paper delivered

<PAGE>

to the Bank at any time by or on behalf of the Guarantor  pursuant  hereto shall
constitute representations and warranties by the Guarantor hereunder.

         Section 6.06.  Binding  Effect;  Assignment.  This  Agreement  shall be
binding upon the Guarantor and his heirs, executors, administrators,  successors
and assigns and shall  inure to the benefit of the Bank and its  successors  and
assigns.  The  Guarantor may not assign this  Agreement or any rights  hereunder
without the express written consent of the Bank.

         Section 6.07.  Reproduction of Agreement.  This Agreement and all other
instruments, documents and papers which relate thereto which have been or may be
hereafter  furnished  to  the  Bank  may  be  reproduced  by  the  Bank  by  any
photographic,  photostatic,  micro-card, miniature photographic,  xerographic or
similar  process,  and the Bank may destroy the original from which any document
was so reproduced.  Any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence  and whether or not such  reproduction  was made in the
regular course of business).

         Section  6.08.  Consent  to  Jurisdiction.  The  Guarantor  irrevocably
submits to the  non-exclusive  jurisdiction  of any  Massachusetts  court or any
federal court sitting within The  Commonwealth of  Massachusetts  over any suit,
action or proceeding arising out of or relating to this Agreement. The Guarantor
irrevocably  waives, to the fullest extent permitted by law, any objection which
he may now or hereafter have to the laying of venue of any such suit,  action or
proceeding  brought in such a court and any claim that any such suit,  action or
proceeding has been brought in an inconvenient  forum. The Guarantor agrees that
final  judgment in any such suit,  action or proceeding  brought in such a court
shall be  enforced  in any  court of  proper  jurisdiction  by a suit  upon such
judgment,  provided  that service of process in such action,  suit or proceeding
shall have been effected  upon the Guarantor in one of the manners  specified in
the following paragraph of this Section 6.08 or as otherwise permitted by law.

         The  Guarantor  hereby  consents to process  being  served in any suit,
action or  proceeding of the nature  referred to in the  preceding  paragraph of
this  Section  6.08  either  (i) by  mailing a copy  thereof  by  registered  or
certified mail, postage prepaid, return receipt requested, to him at his address
set forth in  Section  6.03 or (ii) by  serving a copy  thereof  upon him at his
address set forth in Section 6.03.  The  Guarantor  irrevocably  waives,  to the
fullest extent  permitted by law, all claims of erro by reason of any service as
contemplated  herein and agrees that such  service  shall (x) be deemed in every
respect  effective  service  upon such  Guarantor  in any such  suit,  action or
proceeding and (y) to the fullest extent  permitted by law, be taken and held to
be valid personal service upon and personal delivery to the Guarantor.

         Section 6.09.  Governing Law. This Agreement  shall be governed by, and
construed in accordance with, the laws of The Commonwealth of Massachusetts.

         Section  6.10.  Severability.  In the event that any  provision of this
Agreement or the application  thereof to any Person,  property or  circumstances
shall be held to any extent to be invalid or  unenforceable,  the  remainder  of
this Agreement and the  application of such provision 

<PAGE>

to Persons, properties or circumstances other than those as to which it has been
held invalid or unenforceable shall not be affected thereby,  and each provision
of this Agreement shall be valid and enforceable to the fullest extent permitted
by law.

         Section 6.11. Headings.  Article and Section headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.

         Section 6.12.  WAIVER OF JURY TRIAL.  THE GUARANTOR AND THE BANK HEREBY
KNOWINGLY,  VOLUNTARILY AND INTENTIONALLY MUTUALLY WAIVE THE RIGHT TO A TRIAL BY
JURY  IN  RESPECT  OF ANY  CLAIM  BASED  HEREON,  ARISING  OUT OF,  UNDER  OR IN
CONNECTION WITH THIS  AGREEMENT,  THE LOAN AGREEMENT OR ANY OTHER LOAN DOCUMENTS
OR OUT OF ANY COURSE OF CONDUCT, COURSE OF DEALING,  STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF ANY PARTY. THIS WAIVER CONSTITUTES A MATERIAL  INDUCEMENT
FOR THE BANK TO ENTER INTO THE LOAN AGREEMENT AND TO MAKE LOANS AS  CONTEMPLATED
THEREIN.

         IN WITNESS  WHEREOF,  the Guarantor has executed this Agreement,  as an
instrument under seal, as of the day and year first above written.

         BY HIS SIGNATURE, THE BORROWER ACKNOWLEDGES: (A) THAT HE HAS RECEIVED A
COPY OF THIS  AGREEMENT  AND EACH OF THE  OTHER  LOAN  DOCUMENTS  AND HAS HAD AN
OPPORTUNITY  TO  REVIEW  SAME,  (B) THAT HE HAS HAD AN  OPPORTUNITY  TO  REQUEST
FINANCIAL  INFORMATION  FROM  THE  BORROWER  AND HAS  RECEIVED  ALL  INFORMATION
REQUESTED,  AND (C) THAT HE HAS HAD AN  OPPORTUNITY  TO CONSULT WITH HIS COUNSEL
AND  FINANCIAL  ADVISORS  WITH  RESPECT  TO THIS  AGREEMENT  AND THE OTHER  LOAN
DOCUMENTS AND HAS SO CONSULTED TO THE EXTENT HE HAS DEEMED APPROPRIATE.

WITNESS:                                            ____________________________
                                                    A. Neil Pappalardo
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