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                                                                       EXHIBIT A
                                                                              TO
                                                             SECURITIES PURCHASE
                                                                       AGREEMENT


                          CERTIFICATE OF DESIGNATIONS,
                             PREFERENCES AND RIGHTS

                                       OF

                      SERIES H CONVERTIBLE PREFERRED STOCK

                                       OF

                       PALOMAR MEDICAL TECHNOLOGIES, INC.

                         Pursuant to Section 151 of the
                        Delaware General Corporation Law

        Palomar Medical Technologies, a corporation organized and existing under
the laws of the State of Delaware (the "CORPORATION"), hereby certifies that the
following  resolutions were adopted by the Board of Directors of the Corporation
pursuant to  authority  of the Board of  Directors as required by Section 151 of
the Delaware General Corporation Law.

        RESOLVED,  that pursuant to the  authority  granted to and vested in the
Board of Directors of this Corporation (the "BOARD OF DIRECTORS" or the "BOARD")
in accordance with the provisions of its Certificate of Incorporation, the Board
of  Directors  hereby  authorizes  a  series  of  the  Corporation's  previously
authorized  Preferred Stock,  par value $.01 per share (the "PREFERRED  STOCK"),
and hereby states the designation  and number of shares,  and fixes the relative
rights, preferences, privileges, powers and restrictions thereof as follows:

        Series H Convertible Preferred Stock:

                            I. DESIGNATION AND AMOUNT

        The  designation  of this  series,  which  consists of 20,000  shares of
Preferred  Stock,  is the Series H  Convertible  Preferred  Stock (the "SERIES H
PREFERRED  STOCK")  and the face  amount  shall  be One  Thousand  U.S.  Dollars
($1,000.00) per share (the "FACE AMOUNT").

                                II. NO DIVIDENDS

        The Series H Preferred Stock will bear no dividends,  and the holders of
the Series H 


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                                      -2-

Preferred  Stock  shall not be  entitled  to receive  dividends  on the Series H
Preferred Stock.

                            III. CERTAIN DEFINITIONS

        For purposes of this  Certificate of  Designations,  the following terms
shall have the following meanings:

        A.  "CLOSING  BID PRICE"  means,  for any  security as of any date,  the
closing  bid price of such  security  on the  principal  securities  exchange or
trading  market where such security is listed or traded as reported by Bloomberg
Financial  Markets or a  comparable  reporting  service of  national  reputation
selected by the Corporation  and reasonably  acceptable to holders of a majority
of the then  outstanding  shares  of  Series  H  Preferred  Stock  if  Bloomberg
Financial  Markets is not then  reporting  closing  bid prices of such  security
(collectively,  "BLOOMBERG"),  or if the  foregoing  does  not  apply,  the last
reported  sale  price of such  security  in the  over-the-counter  market on the
electronic bulletin board for such security as reported by Bloomberg,  or, if no
sale price is reported for such  security by  Bloomberg,  the average of the bid
prices of any market  makers for such  security as reported in the "pink sheets"
by the  National  Quotation  Bureau,  Inc. If the  Closing  Bid Price  cannot be
calculated  for such  security on such date on any of the foregoing  bases,  the
Closing Bid Price of such  security on such date shall be the fair market  value
as  reasonably  determined  by  an  investment  banking  firm  selected  by  the
Corporation  and  reasonably  acceptable  to holders  of a majority  of the then
outstanding shares of Series H Preferred Stock, with the costs of such appraisal
to be borne by the Corporation.

        B. "CLOSING  DATE" means the Closing Date under that certain  Securities
Purchase  Agreement  dated March 27, 1997 by and among the  Corporation  and the
initial  purchasers of the Series H Preferred  Stock (the  "SECURITIES  PURCHASE
AGREEMENT").

        C.  "CONVERSION  DATE"  means,  for any  Optional  Conversion,  the date
specified in the notice of conversion  in the form attached  hereto (the "NOTICE
OF  CONVERSION"),  so long as the copy of the Notice of  Conversion is faxed (or
delivered  by  other  means  resulting  in  notice)  to the  Corporation  before
Midnight,  New York City time, on the Conversion Date indicated in the Notice of
Conversion.  If the Notice of Conversion  is not so delivered  before such time,
then the  Conversion  Date shall be the date the holder  delivers  the Notice of
Conversion to the Corporation.  The Conversion Date for the Required  Conversion
at Maturity shall be the Maturity Date (as such terms are defined in Paragraph D
of Article IV).

        D. "CONVERSION PERCENTAGE" shall have the following meaning and shall be
subject to adjustment as provided herein:

           If the Conversion Date is:         Then the Conversion Percentage is:

           On or prior to the 179th day                       100%
           after the Closing Date
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                                      -3-

           On or after the 180th and on or prior               90%
           to the 269th day after the Closing Date

           On or after the 270th day after                     85%
           the Closing Date

        E.  "CONVERSION  PRICE" means,  (i) with respect to any Conversion  Date
occurring prior to the 210th day after the Closing Date, the Variable Conversion
Price and (ii) with  respect to any  Conversion  Date  occurring on or after the
210th day after the Closing Date, the lower of the Conversion  Price Ceiling and
the  Variable  Conversion  Price,  each in effect as of such date and subject to
adjustment as provided herein.

        F.  "CONVERSION  PRICE  CEILING"  means the  average of the  Closing Bid
Prices for the Common Stock for the twenty (20) consecutive  trading days ending
on the trading day  immediately  preceding  the 210th day after the Closing Date
(subject  to  equitable  adjustment  for  any  stock  splits,  stock  dividends,
reclassifications or similar events during such twenty (20) trading day period),
and shall be subject to adjustment as provided herein.

        G. "CONVERSION  PRICE FLOOR" means (i) on or prior to that date which is
two hundred ten (210) days after the Closing  Date,  $6.00,  and (ii) after that
date which is two hundred ten (210) days after the  Closing  Date,  the lower of
(a) $6.00 and (b) the product of (.65) and the  Conversion  Price  Ceiling,  and
shall be subject to adjustment as provided herein.

        H. "N" means the sum of (a) the number of days from, but excluding,  the
date of  issuance  of such  share  of  Series H  Preferred  Stock,  through  and
including  the  earlier  of (i) the  Conversion  Date for such share of Series H
Preferred  Stock and (ii) such date (if any) that the average of the Closing Bid
Prices for the Common  Stock for ten (10)  consecutive  trading  days is greater
than one hundred and seventy five percent (175%) of the initial Conversion Price
Ceiling  determined  under Paragraph F of this Article III (subject to equitable
adjustment for any of the events  described in Article XI.A) plus (b) the number
of days not  included  in clause  (a) of this  Paragraph  H (if any)  during the
period  beginning on, but  excluding,  the date such share of Series H Preferred
Stock was required to be (but was not) redeemed by the  Corporation  pursuant to
Article  VIII.B and the  subsequent  Conversion  Date for such share of Series H
Preferred Stock.

        I. "PREMIUM" means an amount equal to: (i) (.06)x(N/365)x(1,000) for the
period  beginning  on the Closing Date and ending on that date which is 179 days
after the Closing Date, (ii)  (.07)x(N/365)x(1,000)  for the period beginning on
the 180th day after the  Closing  Date and ending on that date which is 269 days
after the Closing Date, and (iii) (.08)x(N/365)x(1,000) for the period beginning
on the 270th day after the Closing Date and thereafter.

        I. "VARIABLE  CONVERSION  PRICE" means, as of any date of determination,
the amount obtained by multiplying  the Conversion  Percentage then in effect by
the  average  of the  Closing  

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Bid Prices for the Common Stock for ten (10) consecutive  trading days ending on
the trading day  immediately  preceding such date of  determination  (subject to
equitable  adjustments for any stock splits, stock dividends,  reclassifications
or similar events during such ten (10) trading day period), and shall be subject
to adjustment as provided herein.

                                 IV. CONVERSION

        A. Conversion at the Option of the Holder. Subject to the limitations on
conversions  contained  in Paragraph C of this Article IV, each holder of shares
of Series H Preferred Stock may, at any time and from time to time,  convert (an
"OPTIONAL  CONVERSION")  each of its shares of Series H  Preferred  Stock into a
number of fully paid and  nonassessable  shares of Common  Stock  determined  in
accordance with the following formula:

                               1,000 + THE PREMIUM
                                CONVERSION PRICE

        B. Mechanics of Conversion. In order to convert Series H Preferred Stock
into shares of Common  Stock,  a holder  shall:  (x) deliver  (by  facsimile  or
otherwise) a copy of the fully executed  Notice of Conversion to the Corporation
and  (y)  surrender  or  cause  to  be  surrendered  the  original  certificates
representing  the Series H Preferred Stock being converted (the "PREFERRED STOCK
CERTIFICATES"),  duly endorsed, along with a copy of the Notice of Conversion as
soon as practicable  thereafter to the  Corporation.  At the request of a holder
and  upon  receipt  by the  Corporation  of a  facsimile  copy  of a  Notice  of
Conversion from a holder, the Corporation shall immediately send, via facsimile,
a  confirmation  to such holder  stating that the Notice of Conversion  has been
received,  the date upon which the  Corporation  expects  to deliver  the Common
Stock  issuable  upon such  conversion  and the name and  telephone  number of a
contact person at the  Corporation  regarding the  conversion.  The  Corporation
shall  not be  obligated  to issue  shares of Common  Stock  issuable  upon such
conversion  unless either the Preferred Stock  Certificates are delivered to the
Corporation as provided above, or the holder notifies the Corporation  that such
certificates have been lost, stolen or destroyed (subject to the requirements of
Article XIV.B).

                (i) Delivery of Common Stock Upon  Conversion.  The  Corporation
        shall,  within  one  business  day  after  the  later of (a) the  second
        business  day  following  the  Conversion  Date  in  the  case  of  DWAC
        deliveries and the third  business day following the Conversion  date in
        all other cases and (b) the date of such  surrender  (or, in the case of
        lost,  stolen or  destroyed  certificates,  the date on which  indemnity
        pursuant to Article  XIV.B is provided)  (the  "DELIVERY  PERIOD"),  and
        provided the holder has surrendered Preferred Stock Certificates,  issue
        and deliver to or upon the order of the holder (x) that number of shares
        of Common  Stock  issuable  upon  conversion  of such shares of Series H
        Preferred Stock being converted and (y) a certificate  representing  the
        number of shares of Series H  Preferred  Stock not being  converted,  if
        any.

                (ii) Taxes.  The  Corporation  shall pay any and all taxes which
        may be 


<PAGE>
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        imposed  upon it with respect to the issuance and delivery of the shares
        of Common Stock upon the conversion of the Series H Preferred Stock.

                (iii)  No  Fractional  Shares.  If any  conversion  of  Series H
        Preferred  Stock would  result in the  issuance  of either a  fractional
        share of Common Stock,  such  fractional  share shall be disregarded and
        the number of shares of Common Stock  issuable  upon  conversion  of the
        Series H Preferred Stock shall be the closest whole number of shares.

                (iv)  Status  as  Stockholder.  Upon  submission  of a Notice of
        Conversion by a holder of Series H Preferred  Stock,  the shares covered
        thereby shall be deemed  converted into shares of Common Stock as of the
        Conversion  Date and the holder's  rights as a holder of such  converted
        shares of Series H Preferred Stock shall cease and terminate,  excepting
        only the right to receive  certificates  for such shares of Common Stock
        and to any remedies provided herein or otherwise  available at law or in
        equity to such holder because of a failure by the  Corporation to comply
        with the terms of this Certificate of Designations  (including its right
        to regain its status as a Series H  Preferred  Stockholder  pursuant  to
        Article VI.E).

                (v) Conversion Disputes. In the case of any dispute with respect
        to a conversion,  the  Corporation  shall  promptly issue such number of
        shares  of  Common  Stock  as  are  not  disputed  in  accordance   with
        subparagraph  (i) above. If such dispute involves the calculation of the
        Conversion Price, the Corporation shall submit the disputed calculations
        to its outside  accountant via facsimile within two (2) business days of
        receipt of the Notice of  Conversion.  The  accountant  shall  audit the
        calculations and notify the Corporation and the holder of the results no
        later than two (2) business  days from the date it receives the disputed
        calculations.  The accountant's  calculation shall be deemed conclusive,
        absent manifest error. The Corporation  shall then issue the appropriate
        number of shares of Common Stock in  accordance  with  subparagraph  (i)
        above.

        C.  Limitations on Conversions.  (i) Except in a Required  Conversion at
Maturity,  in no event shall a holder of shares of Series H  Preferred  Stock be
entitled to receive shares of Common Stock to the extent that the sum of (a) the
number of  shares  of Common  Stock  beneficially  owned by the  holder  and its
affiliates  (exclusive  of shares  issuable upon  conversion of the  unconverted
portion  of the  shares  of  Series  H  Preferred  Stock or the  unexercised  or
unconverted  portion of any other  securities  of the  Corporation  subject to a
limitation  on  conversion or exercise  analogous to the  limitations  contained
herein)  and (b) the  number  of  shares  of  Common  Stock  issuable  upon  the
conversion  of the shares of Series H Preferred  Stock with respect to which the
determination  of this  subparagraph  is being made,  would result in beneficial
ownership by the holder and its affiliates of more than 4.9% of the  outstanding
shares of Common Stock. For purposes of this subparagraph,  beneficial ownership
shall be determined in accordance with Section 13(d) of the Securities  Exchange
Act of 1934, as amended,  and Regulation 13 D-G thereunder,  except as otherwise
provided in clause (i) above.  The  Corporation  shall be entitled to rely,  and
shall be fully protected in relying,  on any statement or representation made by
a holder of Series H Preferred  Stock to the  Corporation  in connection 

                                      -6-

with  a  particular  conversion  without  any  obligation  on  the  part  of the
Corporation  to make any inquiry or  investigation  or to examine its records or
the  records  of any  transfer  agent  for the  Common  Stock.  The  restriction
contained in this Paragraph C shall not be altered,  amended, deleted or changed
in any manner  whatsoever  unless the holders of a majority of the Common  Stock
and each  holder of Series H  Preferred  Stock shall  approve  such  alteration,
amendment, deletion or change.

                (ii) Except as otherwise  provided in Article  XIII,  during any
        thirty (30) day period  beginning  on the Closing Date and ending on the
        earlier of (a) that date which is two  hundred and nine (209) days after
        the  Closing  Date and (b)  that  date  (if  any)  that the  Corporation
        delivers an Optional Redemption Notice (as defined below) to the holders
        of Series H Preferred  Stock  pursuant to Article  VIII.B,  no holder of
        Series H Preferred Stock may convert in excess of  thirty-three  percent
        (33%) of the shares of Series H Preferred Stock  initially  purchased by
        such Holder;  provided,  however,  if such holder has already  converted
        sixty-six  percent  (66%) of the shares of Series H  Preferred  Stock so
        purchased,  such holder may convert the  remaining  thirty-four  percent
        (34%) of the  shares so  purchased  in the next  succeeding  thirty  day
        period or thereafter.

        D. Required Conversion at Maturity.  Provided all shares of Common Stock
issuable upon conversion of all  outstanding  shares of Series H Preferred Stock
are then (i) authorized  and reserved for issuance,  (ii)  registered  under the
Securities  Act of 1933,  as amended  (the  "SECURITIES  ACT") for resale by the
holders of such  shares of Series H  Preferred  Stock and (iii)  eligible  to be
traded on either the NASDAQ,  the New York Stock  Exchange or the American Stock
Exchange, each share of Series H Preferred Stock issued and outstanding on March
27, 2002 (the "MATURITY  DATE") (and any accrued and unpaid  Conversion  Default
Payments),  automatically shall be converted into shares of Common Stock on such
date in accordance with the conversion formulas set forth in Paragraph A of this
Article IV (the "REQUIRED CONVERSION AT MATURITY").  If a Required Conversion at
Maturity  occurs,  the  Corporation  and the holders of Series H Preferred Stock
shall follow the  applicable  conversion  procedures set forth in Paragraph B of
this Article IV; PROVIDED, HOWEVER, that the holders of Series H Preferred Stock
are not required to deliver a Notice of Conversion to the Corporation.

                    V. RESERVATION OF SHARES OF COMMON STOCK

        A. Reserved Amount. Upon adoption of this Certificate of Designations by
the  Corporation's  Board of  Directors,  the  Corporation  shall have  reserved
4,500,000  authorized  but unissued  shares of Common  Stock for  issuance  upon
conversion  of the  Series H  Preferred  Stock  and  thereafter  the  number  of
authorized  but  unissued  shares of Common  Stock so  reserved  (the  "RESERVED
AMOUNT")  shall at all times be sufficient to provide for the  conversion of the
Series H Preferred Stock  outstanding at the then current  Conversion Price. The
Reserved Amount shall be allocated to the holders of Series H Preferred Stock as
provided in Article XIV.D.

        B. Increases to Reserved  Amount.  If the Reserved  Amount for any three
(3) 
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consecutive  trading  days (the last of such  three (3)  trading  days being the
"AUTHORIZATION  TRIGGER  DATE")  shall (i) during the  period  beginning  on the
Closing Date and ending on that date which is one hundred fifty (150) days after
the  Closing  Date be less  than 100% of the  number  of shares of Common  Stock
issuable upon  conversion of the Series H Preferred  Stock on such trading days,
or (ii) on or after  that date which is one  hundred  fifty one (151) days after
the  Closing  Date,  be less than 135% of the  number of shares of Common  Stock
issuable upon  conversion of the Series H Preferred  Stock on such trading days,
the Corporation shall immediately notify the holders of Series H Preferred Stock
of  such  occurrence  and  shall  take  immediate  action   (including   seeking
shareholder  approval to authorize the issuance of  additional  shares of Common
Stock) to increase the Reserved Amount to 150% of the number of shares of Common
Stock into which the Series H Preferred Stock are then convertible. In the event
the Corporation fails to so increase the Reserved Amount within ninety (90) days
after an  Authorization  Trigger Date,  each holder of Series H Preferred  Stock
shall  thereafter  have the option,  exercisable in whole or in part at any time
and from time to time by delivery of a Redemption  Notice (as defined in Article
VIII.D) to the Corporation,  to require the Corporation to purchase for cash, at
an amount  per share  equal to the  Redemption  Amount  (as  defined  in Article
VIII.C),  a portion of the holder's  Series H Preferred  Stock such that,  after
giving effect to such purchase,  the holder's  allocated portion of the Reserved
Amount  exceeds 135% of the total  number of shares of Common Stock  issuable to
such holder upon conversion of its Series H Preferred  Stock. If the Corporation
fails to redeem  any of such  shares  within  five (5)  business  days after its
receipt of a  Redemption  Notice,  then such  holder  shall be  entitled  to the
remedies provided in Article VIII.D.

                       VI. FAILURE TO SATISFY CONVERSIONS

        A. Conversion Default Payments.  If, at any time, (x) a holder of shares
of Series H Preferred  Stock submits a Notice of Conversion and the  Corporation
fails for any reason  (other  than  because  such  issuance  would  exceed  such
holder's allocated portion of the Reserved Amount, for which failure the holders
shall have the remedies  set forth in Article V) to deliver,  on or prior to the
fourth  business day  following the  expiration of the Delivery  Period for such
conversion,  the shares of Common  Stock to which such holder is  entitled  upon
such conversion,  or (y) the Corporation provides notice to any holder of Series
H Preferred  Stock at any time of its  intention  not to issue  shares of Common
Stock upon exercise by any holder of its  conversion  rights in accordance  with
the terms of this  Certificate of Designations  other than because such issuance
would exceed such holder's allocated portion of the Reserved Amount (each of (x)
and (y) being a "CONVERSION  DEFAULT"),  then the  Corporation  shall pay to the
affected  holder,  in the case of a Conversion  Default  described in clause (x)
above,  and to all  holders,  in the case of a Conversion  Default  described in
clause (y) above,  payments for the first ten (10) business  days  following the
expiration of the Delivery Period, in the case of a Conversion Default described
in clause (x), and for the first ten (10) business days of any other  Conversion
Default,  an amount equal to $1,000 per day. In the event any Conversion Default
continues beyond such ten (10) business day period, the Corporation shall pay to
the holder an additional amount equal to:

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                     (.24) x (D/365) x (the Default Amount)

where:

        "D"  means  the  number of days  after  the  expiration  of the ten (10)
business day period described above through and including the Default Cure Date;

        "DEFAULT AMOUNT" means (i) the total Face Amount of all shares of Series
H  Preferred  Stock held by such  holder  plus (ii) the total  Premium as of the
first day of the  Conversion  Default on all shares of Series H Preferred  Stock
included in clause (i) of this definition; and

        "DEFAULT  CURE  DATE"  means (i) with  respect to a  Conversion  Default
described in clause (x) of its definition,  the date the Corporation effects the
conversion  of the full  number of shares of Series H  Preferred  Stock and (ii)
with respect to a Conversion  Default described in clause (y) of its definition,
the date the  Corporation  begins to honor all conversions of Series H Preferred
Stock in accordance with Article IV.A.

        The  payments  to which a  holder  shall be  entitled  pursuant  to this
Paragraph A are referred to herein as  "CONVERSION  DEFAULT  PAYMENTS." A holder
may elect to receive accrued  Conversion  Default Payments in cash or to convert
all or any portion of such accrued  Conversion  Default  Payments,  at any time,
into  Common  Stock  at the  Conversion  Price  in  effect  at the  time of such
conversion.  In the event a holder  elects to  receive  any  Conversion  Default
Payments in cash, it shall so notify the  Corporation  in writing.  Such payment
shall be made in  accordance  with and be subject to the  provisions  of Article
XIV.F.  In the  event a holder  elects  to  convert  all or any  portion  of the
Conversion Default Payments, the holder shall indicate on a Notice of Conversion
such portion of the Conversion  Default  Payments which such holder elects to so
convert and such  conversion  shall otherwise be effected in accordance with the
provisions of Article IV.

        B.  Adjustment  to  Conversion  Price.  If a  holder  has  not  received
certificates  for all shares of Common Stock prior to the tenth (10th)  business
day after the expiration of the Delivery  Period with respect to a conversion of
Series H Preferred  Stock for any reason (other than because such issuance would
exceed such holder's allocated portion of the Reserved Amount, for which failure
the holders shall have the remedies set forth in Article V), then the Conversion
Price in respect of any shares of Series H  Preferred  Stock held by such holder
shall  thereafter be the lesser of (i) the  Conversion  Price on the  Conversion
Date  specified in the Notice of  Conversion  which  resulted in the  Conversion
Default  and (ii) the  lowest  Conversion  Price in  effect  during  the  period
beginning on, and including,  such Conversion Date through and including the day
such shares of Common Stock are delivered to the holder and (iii) the Conversion
Price  (calculated  in accordance  with Article  III.E) on the  Conversion  Date
specified  in the  Notice of  Conversion  for such  share of Series H  Preferred
Stock. If there shall occur a Conversion Default of the type described in clause
(y) of Article VI.A,  then the  Conversion  Price with respect to any conversion
thereafter  shall be the lower of (x) the lowest  Conversion  Price in effect

                                      -9-

at any time  during the period  beginning  on,  and  following,  the date of the
occurrence  of such  Conversion  Default  through and including the Default Cure
Date and (y) the Conversion Price  (calculated in accordance with Article III.E)
on the  Conversion  Date specified in the Notice of Conversion for such share of
Series H Preferred  Stock..  The Conversion Price shall thereafter be subject to
further adjustment for any events described in Article XI.

        C. Buy-In Cure. If (i) the  Corporation  fails for any reason to deliver
during the Delivery  Period shares of Common Stock to a holder upon a conversion
of shares of Series H Preferred  Stock having a Conversion Date on or prior to a
date upon which the  Corporation  has notified the applicable  holder in writing
that  the  Corporation  is  unable  to honor  conversions  and  (ii)  after  the
applicable  Delivery  Period  with  respect  to  such  conversion,  such  holder
purchases (in an open market transaction or otherwise) shares of Common Stock to
deliver in  satisfaction  of a sale by such holder of the shares of Common Stock
which such holder anticipated  receiving upon such conversion (a "BUY-IN"),  the
Corporation  shall pay such holder (in addition to any other remedies  available
to the  holder)  the  amount by which (x) such  holder's  total  purchase  price
(including  brokerage  commissions,  if any) for the  shares of Common  Stock so
purchased  exceeds (y) the total Face Amount (plus the accrued Premium  thereon)
of the  portion of the Series H Preferred  Stock  resulting  in the Buy-In.  For
example,  if a holder  purchases  shares of Common Stock having a total purchase
price of $11,000 to cover a Buy-In with  respect to an attempted  conversion  of
Series H  Preferred  Stock  having a total Face  Amount and  accrued  Premium of
$10,000,  the  Corporation  will be required to pay the holder $1,000.  A holder
shall  provide  the  Corporation  written  notification  indicating  any amounts
payable to such holder pursuant to this Paragraph C. The Corporation  shall make
any  payments  required  pursuant  to this  Paragraph C in  accordance  with and
subject to the provisions of Article XIV.F.

        D.  Redemption  Right.  If  the  Corporation  fails,  and  such  failure
continues  uncured for five (5)  business  days after the  Corporation  has been
notified  thereof in writing by the holder,  for any reason  (other than because
such  issuance  would  exceed such  holder's  allocated  portion of the Reserved
Amount,  for which  failure the  holders  shall have the  remedies  set forth in
Article V) to issue shares of Common Stock within ten (10)  business  days after
the expiration of the Delivery Period with respect to any conversion of Series H
Preferred  Stock,  then the  holder  may elect at any time and from time to time
prior to the Default  Cure Date for such  Conversion  Default,  by delivery of a
Redemption Notice (as defined in Article VIII.D) to the Corporation, to have all
or any portion of such holder's  outstanding  shares of Series H Preferred Stock
purchased  by the  Corporation  for cash,  at an amount  per share  equal to the
Redemption  Amount (as defined in Article VIII.C).  If the Corporation  fails to
redeem any of such shares  within five (5) business  days after its receipt of a
Redemption  Notice,  then such holder shall be entitled to the remedies provided
in Article VIII.D.

        E.  Retention of Rights as Series H Preferred  Stockholder.  If a holder
has not received  certificates for all shares of Common Stock prior to the tenth
(10th)  business day after the expiration of the Delivery Period with respect to
a conversion of Series H Preferred  Stock for any reason,  then the  Corporation
shall,  as soon as  practicable,  return  such  unconverted  shares  of 

                                      -10-

Series H Preferred Stock to the holder and (unless the holder  otherwise  elects
to retain its status as a holder of Common  Stock) the holder  shall  regain the
rights of a holder of Series H Preferred  Stock with respect to such shares.  In
all cases,  the holder shall  retain all of its rights and remedies  (including,
without  limitation,  (i) the  right  to  receive  Conversion  Default  Payments
pursuant to Paragraph A above to the extent required thereby for such Conversion
Default  and any  subsequent  Conversion  Default and (ii) the right to have the
Conversion Price with respect to subsequent conversions determined in accordance
with  Paragraph  B above) for the  Corporation's  failure  to  convert  Series H
Preferred Stock.

                          VII. [INTENTIONALLY OMITTED]

                     VIII. REDEMPTION DUE TO CERTAIN EVENTS

        A. Redemption by Holder.  In the event (each of the events  described in
clauses  (i)-(v) below after  expiration of the applicable  cure period (if any)
being a "REDEMPTION EVENT"):

                (i) the  Common  Stock  (including  all of the  shares of Common
        Stock  issuable  upon  conversion  of the Series H  Preferred  Stock) is
        suspended  from  trading on any of, or is not listed or  designated  for
        quotation (and  authorized) for trading on at least one of, the New York
        Stock Exchange,  the American Stock Exchange, the NASDAQ National Market
        or the NASDAQ Small Cap Market  ("NASDAQ")  for an aggregate of ten (10)
        trading days in any nine (9) month period,

                (ii)  the  Registration  Statement  required  to be filed by the
        Corporation   pursuant  to  Section  2(a)  of  the  Registration  Rights
        Agreement,  dated as of March 27, 1997, by and among the Corporation and
        the other signatories thereto (the "REGISTRATION RIGHTS AGREEMENT"), has
        not been declared  effective by the 180th day following the Closing Date
        or such Registration Statement,  after being declared effective,  cannot
        be utilized by the holders of Series H Preferred Stock for the resale of
        all of their  Registrable  Securities  (as  defined in the  Registration
        Rights  Agreement) for an aggregate of more than thirty (30) days in any
        consecutive twelve month period,

                (iii) the  Corporation  fails,  and any such  failure  continues
        uncured  for five (5)  business  days  after  the  Corporation  has been
        notified  thereof in writing by the  holder,  to remove any  restrictive
        legend on any  certificate  or any shares of Common  Stock issued to the
        holders  of Series H  Preferred  Stock upon  conversion  of the Series H
        Preferred   Stock  as  and  when   required  by  this   Certificate   of
        Designations,  the  Securities  Purchase  Agreement or the  Registration
        Rights Agreement,

                (iv) the  Corporation  provides notice to any holder of Series H
        Preferred Stock,  including by way of public announcement,  at any time,
        of its  intention  not to issue  shares of Common Stock to any holder of
        Series H Preferred Stock upon conversion in accordance with the terms of
        this  Certificate of Designations  (other than due to the  circumstances
        contemplated 

<PAGE>
                                      -11-

        by Article V, for which the holders shall have the remedies set forth in
        such Article), or

                (v) the Corporation shall:

                        (a) sell,  convey or dispose of all or substantially all
                of its assets;

                        (b) merge,  consolidate  or engage in any other business
                combination   with  any  other  entity  (other  than  a  merger,
                consolidation  or business  combination  in which the holders of
                the Corporation's voting securities  immediately  preceding such
                merger, consolidation or business combination own, on a pro rata
                basis,   at  least  50%  of  the   surviving   entity's   voting
                securities); or

                        (c) have fifty percent (50%) or more of the voting power
                of its capital stock owned beneficially by one person, entity or
                "group"  (as  such  term  is used  under  Section  13(d)  of the
                Securities Exchange Act of 1934, as amended),

        then, upon the occurrence of any such Redemption  Event,  each holder of
        shares of Series H  Preferred  Stock shall  thereafter  have the option,
        exercisable  in whole  or in part at any  time and from  time to time by
        delivery of a Redemption Notice (as defined in Paragraph D below) to the
        Corporation  while such  Redemption  Event  continues,  to  require  the
        Corporation  to  purchase  for cash  any or all of the then  outstanding
        shares of Series H Preferred Stock held by such holder for an amount per
        share equal to the  Redemption  Amount (as defined in Paragraph C below)
        in effect at the time of the redemption hereunder.  For the avoidance of
        doubt,  the occurrence of any event described in clauses (i), (ii), (iv)
        or (v) above shall  immediately  constitute a Redemption Event and there
        shall be no cure period.

        B. Redemption by Corporation.

                (i) If at any time after that date which is two (2) years  after
        the Closing  Date,  the average of the Closing Bid Prices for the Common
        Stock  for ten  (10)  consecutive  trading  days  is  greater  than  the
        Conversion  Price  Ceiling  multiplied  by  1.5  (subject  to  equitable
        adjustments  for stock splits,  stock  dividends,  reclassifications  or
        similar  events  during  such ten (10)  trading  day  period),  then the
        Corporation  shall have the right to redeem up to fifty percent (50%) of
        the Series H Preferred Stock for a price per share equal to the Optional
        Redemption  Amount (as defined below).  If at any time after the Closing
        Date the average of the Closing Bid Prices for the Common  Stock for ten
        (10)  consecutive  trading  days is greater  than the  Conversion  Price
        Ceiling  multiplied by 2.0 (subject to equitable  adjustments  for stock
        splits, stock dividends, reclassifications or similar events during such
        ten (10) trading day period) then the  Corporation  shall have the right
        to redeem (such right,  collectively with the  Corporation's  redemption
        rights pursuant to the immediately preceding sentence, shall be referred
        to as "REDEMPTION AT CORPORATION'S ELECTION") any or all of the Series H
        Preferred Stock for an amount equal to the Optional redemption Amount. A
        Redemption  at  Corporation's  Election  shall  
<PAGE>
                                      -12-

        be exercisable by the  Corporation in its sole discretion by delivery of
        an Optional  Redemption  Notice (as defined below).  Holders of Series H
        Preferred  Stock may convert all or any part of their shares of Series H
        Preferred  Stock into Common Stock by  delivering a Notice of Conversion
        to the Corporation at any time prior to that date which is ten (10) days
        after receipt of an Optional Redemption Notice. The "OPTIONAL REDEMPTION
        Amount"  with  respect to each share of  Preferred  Stock  means (a) for
        redemptions  pursuant to the first sentence of this subparagraph (i), an
        amount equal to:

                                (1,000 + P) x 1.5
                                       CCP

        and  (b)  for  redemptions  pursuant  to the  second  sentence  of  this
        subparagraph (I), an amount equal to:

                                (1,000 + P) x 2.0
                                       CCP

        where:

                "P"  means  the  accrued  Premium  on such  share  of  Series  H
        Preferred Stock through the date of redemption; and

                "CCP"  means the  Conversion  Price  Ceiling  on the date of the
        redemption.

                (ii) The  Corporation  shall effect each  redemption  under this
        Section  VIII.B by giving  at least ten (10)  trading  days but not more
        than twenty (20) trading days  (subject to extension as set forth below)
        prior  written  notice (the  "OPTIONAL  REDEMPTION  NOTICE") of the date
        which such  redemption is to become  effective (the  "EFFECTIVE  DATE OF
        REDEMPTION")  and the Optional  Redemption  Amount to (a) the holders of
        Series H Preferred  Stock  selected  for  redemption  at the address and
        facsimile number of such holder appearing in the Corporation's  register
        for the  Series H  Preferred  Stock and (b) the  transfer  agent for the
        Common Stock,  which Optional  Redemption Notice shall be deemed to have
        been delivered on the business day after the  Corporation's  fax (with a
        copy sent by overnight  courier) of such notice to the holders of Series
        H Preferred Stock.

                (iii) The Optional Redemption Amount shall be paid to the holder
        of the Series H Preferred Stock being redeemed within three (3) business
        days of the Effective Date of Redemption;  PROVIDED,  HOWEVER,  that the
        Corporation  shall  not be  obligated  to  deliver  any  portion  of the
        Optional Redemption Amount until either the certificates  evidencing the
        Series H Preferred  Stock being  redeemed are delivered to the office of
        the  Corporation,  or the  holder  notifies  the  Corporation  that such
        certificates  have been  lost,  stolen or  destroyed  and  delivers  the
        documentation  in accordance with Article XIV.B hereof.  Notwithstanding
        anything  herein to the  contrary,  in the event  that the  certificates
        evidencing  the Series H Preferred  Stock  redeemed are 
<PAGE>
                                      -13-

        not delivered to the Corporation prior to the 3rd business day following
        the  Effective  Date of  Redemption,  the  redemption  of the  Series  H
        Preferred  Stock  pursuant to this Article  VIII.B shall still be deemed
        effective  as of the  Effective  Date of  Redemption  and  the  Optional
        Redemption Price shall be paid to the holder of Series H Preferred Stock
        redeemed  within  five (5)  business  days of the date the  certificates
        evidencing the Series H Preferred Stock redeemed are actually  delivered
        to the Corporation.

                (iv) Notwithstanding the provisions of Article IV hereof, if the
        Conversion  Price on the date a holder  delivers a Conversion  Notice is
        less than or equal to the  Conversion  Price  Floor then in effect,  the
        Corporation  may, at its option,  elect to redeem the shares of Series H
        Preferred  Stock  which are the subject of such  Conversion  Notice at a
        price per share equal to the Floor Redemption  Amount (as defined below)
        in lieu of converting such shares to Common Stock. Each holder of Series
        H Preferred  Stock shall have the right, by sending a written request to
        the  Corporation,  to require the Corporation to provide advance written
        notice to such  holder  stating  whether the  Corporation  will elect to
        exercise its  redemption  rights  pursuant to this  paragraph  (iv). The
        Corporation  shall  have five (5)  business  days from  receipt  of such
        request  to reply in writing to such  holder.  In the event  Corporation
        either  fails to so reply or replies  that it will not elect to exercise
        such  redemption  rights,  the  Corporation  shall forfeit its rights to
        redeem  shares of Series H Preferred  Stock  pursuant to this  paragraph
        (iv)  during  the  thirty  (30) day  period  immediately  following  the
        expiration of the Corporation's reply period or receipt of such election
        not to redeem, as the case may be. In the event the Corporation notifies
        a holder of its intention to redeem  shares of Series H Preferred  Stock
        pursuant to this  paragraph  (v) and such holder  delivers a  Conversion
        Notice at any time during which the  Corporation  has redemption  rights
        pursuant to this paragraph (iv) and the  Corporation,  prior to the date
        of such  Conversion  Notice,  has not provided  such holder with written
        notice  that it no longer  intends to  exercise  its  redemption  rights
        pursuant to this paragraph  (iv), the  Corporation  shall, no later than
        thirty (30) days from the date of such  Conversion  Notice,  pay to such
        holder the Floor Redemption  Amount for each share of series H Preferred
        which is covered by such Conversion  Notice. The Floor Redemption Amount
        per share means an amount equal to:

                                (1000+P) x (RAP)

                where:

                "P"  means  the  accrued  Premium  on such  share  of  Series  H
        Preferred Stock through the date of redemption.

                "RAP" means:

                If the Redemption occurs:                    RAP

                On or prior to the 209th 
                day after the Closing Date                   110%
<PAGE>
                                      -14-

                On or after the 210th and on or prior
                to the 299th day after the Closing Date      112%

                On or after the 300th and on or prior
                to the 394th day after the Closing Date      115%

                On or after the 395th day
                after the Closing Date                       120%


                (v) If the  Corporation  fails to pay,  when due and owing,  any
        Optional  Redemption Amount or Floor Redemption Amount,  then the holder
        of Series H Preferred Stock entitled to receive such Optional Redemption
        Amount or Floor  Redemption  Amount,  as the case may be, shall have the
        right,  at any time and from time to time,  to require the  Corporation,
        upon written  notice,  to immediately  convert (in  accordance  with the
        terms of paragraph A of Article IV) any or all of the shares of Series H
        Preferred Stock which are the subject of such redemption, into shares of
        Common Stock at the lowest  Conversion Price in effect during the period
        beginning on the date the  Corporation  elected to redeem such shares of
        Series H  Preferred  Stock  and  ending on the  earlier  of the date the
        Corporation  effects  such  redemption  and the  twentieth  trading  day
        following  either  the  Conversion  Date which gave rise to the right of
        redemption (in the case of a redemption pursuant to subparagraph (iv) of
        this  Paragraph B) or the Effective Date of Redemption (in the case of a
        Redemption at Corporation's  Election), as the case may be. In addition,
        if the Corporation fails to pay a Floor Redemption Amount,  when due and
        owing,  the  Corporation  shall  thereafter   forfeit  its  rights  this
        Paragraph B to effect any  redemption  with respect to any or all issued
        and outstanding shares of Series H Preferred Stock, and in the case of a
        failure to pay all or any  portion  of an  Optional  Redemption  Amount,
        shall pay the holder  entitled  to such  Optional  Redemption  Amount an
        amount equal to:

                                       ORA
                                       ____ x (ORF-LCBP)
                                       OCP

        where:

                "ORA" means the amount of the Optional  Redemption  Amount which
        the Corporation failed to so pay;

                "OCP" means the Conversion Price in effect on the Effective Date
        of Redemption;

                "ORF" means (i) with respect to any  redemption  pursuant to the
        first  sentence  of  Article   VIII.B  (I),  the  product   obtained  by
        multiplying 1.5 by the Conversion Price Ceiling and (ii) with respect to
        any redemption  pursuant to the second  sentence of Article  VIII.B(ii),
        the product 
<PAGE>
                                      -15-

        obtained by multiplying 2.0 by the Conversion Price Ceiling; and

                "LCBP" means the lowest  Closing Big Price of the  Corporation's
        Common Stock during the Twenty (20) trading day period  beginning on the
        Effective Date of redemption.


        C. Definition of Redemption Amount. The "REDEMPTION AMOUNT" with respect
to a share of Series H Preferred Stock means an amount equal to:

                                    1,000 + P
                                                 X     M
                                    ---------
                                       C P

        where:

                "P"  means  the  accrued  Premium  on such  share  of  Series  H
        Preferred Stock through the date of redemption;

                "CP"  means  the  Conversion  Price in effect on the date of the
        Redemption Notice; and

                "M" means the  highest  Closing  Bid Price of the  Corporation's
        Common Stock during the period  beginning on the date of the  Redemption
        Notice and ending on the date of the redemption.

        D. Redemption  Defaults.  If the Corporation fails to pay any holder the
Redemption  Amount with respect to any share of Series H Preferred  Stock within
five (5) business days of its receipt of a notice  requiring such  redemption (a
"REDEMPTION  NOTICE"),  then the holder of Series H Preferred  Stock  delivering
such  Redemption  Notice (i) shall be entitled  to  interest  on the  Redemption
Amount at a per annum rate equal to the lower of  twenty-four  percent (24%) and
the highest rate  permitted by  applicable  law from the date of the  Redemption
Notice until the date of redemption hereunder, and (ii) shall have the right, at
any time and from time to time, to require the Corporation, upon written notice,
to immediately  convert (in accordance  with the terms of Paragraph A of Article
IV) all or any portion of the  Redemption  Amount,  plus  interest as aforesaid,
into shares of Common Stock at the lowest  Conversion Price in effect during the
period  beginning  on the  date  of the  Redemption  Notice  and  ending  on the
Conversion Date with respect to the conversion of such Redemption Amount. In the
event  the  Corporation  is not able to  redeem  all of the  shares  of Series H
Preferred  Stock subject to Redemption  Notices,  the  Corporation  shall redeem
shares of Series H Preferred Stock from each holder pro rata, based on the total
number of shares of Series H  Preferred  Stock  included  by such  holder in the
Redemption  Notice  relative to the total number of shares of Series H Preferred
Stock in all of the Redemption Notices.

                                    IX. RANK
<PAGE>
                                      -16-

        All shares of the Series H  Preferred  Stock shall rank (i) prior to the
Corporation's common stock, par value $.01 per share (the "COMMON STOCK");  (ii)
pari  passu  with any class or series of capital  stock of the  Corporation  now
outstanding  or  hereafter  created  other than the  Common  Stock or classes or
series of capital stock of the Corporation specifically ranking, by their terms,
junior to the Series H Preferred Stock (the "PARI PASSU SECURITIES");  and (iii)
junior  to any class or series of  capital  stock of the  Corporation  hereafter
created (with the consent of the holders of Series H Preferred Stock obtained in
accordance with Article XIII hereof) specifically  ranking, by its terms, senior
to the Series H Preferred  Stock (the "SENIOR  SECURITIES"),  in each case as to
distribution  of assets  upon  liquidation,  dissolution  or  winding  up of the
Corporation, whether voluntary or involuntary.

                            X. LIQUIDATION PREFERENCE

        A. If the  Corporation  shall  commence a voluntary  case under the U.S.
Federal  bankruptcy  laws or any  other  applicable  bankruptcy,  insolvency  or
similar  law,  or consent to the entry of an order for relief in an  involuntary
case under any law or to the  appointment of a receiver,  liquidator,  assignee,
custodian,  trustee, sequestrator (or other similar official) of the Corporation
or of any  substantial  part of its  property,  or make  an  assignment  for the
benefit of its  creditors,  or admit in writing its  inability  to pay its debts
generally  as they  become due, or if a decree or order for relief in respect of
the Corporation shall be entered by a court having  jurisdiction in the premises
in an  involuntary  case  under the U.S.  Federal  bankruptcy  laws or any other
applicable bankruptcy, insolvency or similar law resulting in the appointment of
a receiver,  liquidator,  assignee,  custodian,  trustee, sequestrator (or other
similar official) of the Corporation or of any substantial part of its property,
or ordering the winding up or liquidation of its affairs, and any such decree or
order  shall be  unstayed  and in effect for a period of sixty (60)  consecutive
days and,  on  account  of any such  event,  the  Corporation  shall  liquidate,
dissolve or wind up, or if the Corporation shall otherwise  liquidate,  dissolve
or wind up (a "LIQUIDATION EVENT"), no distribution shall be made to the holders
of any shares of capital stock of the Corporation (other than Senior Securities)
upon liquidation,  dissolution or winding up unless prior thereto the holders of
shares  of  Series  H  Preferred  Stock  shall  have  received  the  Liquidation
Preference with respect to each share.  If, upon the occurrence of a Liquidation
Event, the assets and funds available for distribution  among the holders of the
Series  H  Preferred  Stock  and  holders  of Pari  Passu  Securities  shall  be
insufficient to permit the payment to such holders of the  preferential  amounts
payable  thereon,  then the entire assets and funds of the  Corporation  legally
available for  distribution  to the Series H Preferred  Stock and the Pari Passu
Securities  shall be distributed  ratably among such shares in proportion to the
ratio that the  Liquidation  Preference  payable on each such share bears to the
aggregate  Liquidation  Preference payable on all such shares.  After payment in
full of the Liquidation Preference of the shares of the Series H Preferred Stock
and the Pari Passu Securities,  the holders of such shares shall not be entitled
to any further participation in any distribution of assets by the Corporation.

        B. The purchase or redemption by the  Corporation of stock of any class,
in any manner permitted by law, shall not, for the purposes hereof,  be regarded
as a  liquidation,  

<PAGE>
                                      -16-

dissolution  or winding up of the  Corporation.  Neither  the  consolidation  or
merger of the Corporation with or into any other entity nor the sale or transfer
by the Corporation of less than  substantially  all of its assets shall, for the
purposes hereof, be deemed to be a liquidation, dissolution or winding up of the
Corporation.

        C. The  "LIQUIDATION  PREFERENCE"  with  respect  to a share of Series H
Preferred  Stock  means an  amount  equal to the Face  Amount  thereof  plus the
Premium  thereon  through  the  date  of  final  distribution.  The  Liquidation
Preference  with respect to any Pari Passu  Securities  shall be as set forth in
the Certificate of Designations filed in respect thereof.

                     XI. ADJUSTMENTS TO THE CONVERSION PRICE

        The Conversion Price shall be subject to adjustment from time to time as
follows:

        A. Stock  Splits,  Stock  Dividends,  Etc.  If at any time on or after a
determination  of the Conversion  Price Ceiling or Conversion  Price Floor,  the
number of  outstanding  shares of Common  Stock is  increased  by a stock split,
stock  dividend,  combination,  reclassification  or other  similar  event,  the
Conversion  Price Ceiling and  Conversion  Price Floor shall be  proportionately
reduced,  or if the number of outstanding shares of Common Stock is decreased by
a reverse  stock split,  combination  or  reclassification  of shares,  or other
similar event at anytime on or after the  determination  of the Conversion Price
Ceiling or Conversion  Price Floor,  the Conversion Price Ceiling and Conversion
Price Floor shall be proportionately  increased.  In such event, the Corporation
shall notify the transfer agent for the Common Stock of such change on or before
the effective date thereof.

        B.  Adjustment Due to Major  Announcement.  In the event the Corporation
(i) makes a public announcement that it intends to consolidate or merge with any
other entity (other than a merger in which the  Corporation  is the surviving or
continuing entity and its capital stock is unchanged) or to sell or transfer all
or substantially all of the assets of the Corporation or (ii) any person,  group
or entity  (including  the  Corporation)  publicly  announces a tender  offer to
purchase  50% or  more  of the  Corporation's  Common  Stock  (the  date  of the
announcement  referred  to  in  clause  (i)  or  (ii)  of  this  Paragraph  B is
hereinafter  referred to as the "ANNOUNCEMENT  DATE"), then the Conversion Price
shall,   effective  upon  the  Announcement  Date  and  continuing  through  the
Abandonment  Date (as defined  below),  be equal to the  Conversion  Price which
would  have  been  applicable  for  an  Optional  Conversion  occurring  on  the
Announcement  Date.  From and after the Abandonment  Date, the Conversion  Price
shall be determined as set forth in Article III.F  "ABANDONMENT DATE" means with
respect  to any  proposed  transaction  or  tender  offer  for  which  a  public
announcement  as  contemplated  by this Paragraph B has been made, the date upon
which the Corporation (in the case of clause (i) above) or the person,  group or
entity (in the case of clause (ii) above) publicly  announces the termination or
abandonment  of the  proposed  transaction  or tender  offer  which  caused this
Paragraph B to become operative.

        C.  Adjustment Due to Merger,  Consolidation,  Etc. If, at any time when
any Series H 
<PAGE>
                                      -18-

Preferred   Stock  is  issued   and   outstanding,   there   shall  be  (i)  any
reclassification or change of the outstanding shares of Common Stock (other than
a change in par value,  or from par value to no par value,  or from no par value
to par  value,  or as a  result  of a  subdivision  or  combination),  (ii)  any
consolidation  or merger of the Corporation  with any other entity (other than a
merger in which the  Corporation  is the surviving or continuing  entity and its
capital stock is unchanged),  (iii) any sale or transfer of all or substantially
all of the assets of the  Corporation  or (iv) any share  exchange  pursuant  to
which all of the  outstanding  shares of Common Stock are  converted  into other
securities  or  property,  then the  holders of Series H  Preferred  Stock shall
thereafter have the right to receive upon  conversion,  in lieu of the shares of
Common Stock  immediately  theretofore  issuable  (without  giving effect to any
limitations  upon  conversion  imposed by Article  IV.C),  such shares of stock,
securities  and/or other property as may be issued or payable with respect to or
in exchange  for the number of shares of Common  Stock  immediately  theretofore
issuable  upon  conversion  (without  giving  effect  to  any  limitations  upon
conversion imposed by Article IV.C) had such merger, consolidation,  exchange of
shares, recapitalization, reorganization or other similar event not taken place,
and in any such case,  appropriate  provisions shall be made with respect to the
rights and  interests of the holders of the Series H Preferred  Stock to the end
that the  provisions  hereof  (including,  without  limitation,  provisions  for
adjustment of the  Conversion  Price and of the number of shares of Common Stock
issuable upon  conversion of the Series H Preferred  Stock) shall  thereafter be
applicable,  as nearly as may be  practicable in relation to any shares of stock
or  securities   thereafter   deliverable  upon  the  conversion  thereof.   The
Corporation  shall not effect any  transaction  described  in this  Paragraph  C
unless (i) each holder of Series H Preferred  Stock has received  written notice
of such  transaction  at least thirty (30) days prior  thereto,  but in no event
later  than ten (10) days  prior to the  record  date for the  determination  of
shareholders  entitled  to vote with  respect  thereto,  and (ii) the  resulting
successor  or  acquiring  entity  (if not the  Corporation)  assumes  by written
instrument the obligations of this Paragraph C. The above provisions shall apply
regardless of whether or not there would have been a sufficient number of shares
of Common Stock  authorized  and available  for issuance upon  conversion of the
shares  of  Series  H  Preferred  Stock  outstanding  as of  the  date  of  such
transaction,   and  shall  similarly  apply  to  successive   reclassifications,
consolidations, mergers, sales, transfers or share exchanges.

        D. Adjustment Due to Distribution.  If the Corporation  shall declare or
make any distribution of its assets (or rights to acquire its assets) to holders
of Common Stock as a partial liquidating  dividend,  by way of return of capital
or  otherwise  (including  any  dividend or  distribution  to the  Corporation's
shareholders in cash or shares (or rights to acquire shares) of capital stock of
a subsidiary (I.E. a spin-off)) (a "Distribution"), then the holders of Series H
Preferred  Stock shall be entitled,  upon any  conversion  of shares of Series H
Preferred Stock after the date of record for determining  shareholders  entitled
to such Distribution, to receive the amount of such assets which would have been
payable to the holder with respect to the shares of Common Stock  issuable  upon
such  conversion  (without  giving  effect to any  limitations  upon  conversion
imposed  by Article  IV.C) had such  holder  been the  holder of such  shares of
Common Stock on the record date for the  determination of shareholders  entitled
to such Distribution.
<PAGE>
                                      -19-

        E. [Intentionally Omitted]

        F. Purchase Rights.  If at any time when any Series H Preferred Stock is
issued and  outstanding,  the Corporation  issues any Convertible  Securities or
rights to purchase stock, warrants,  securities or other property (the "PURCHASE
RIGHTS") pro rata to the record  holders of any class of Common Stock,  then the
holders of Series H Preferred Stock will be entitled to acquire,  upon the terms
applicable to such Purchase  Rights,  the aggregate  Purchase  Rights which such
holder  could  have  acquired  if such  holder  had held the number of shares of
Common Stock acquirable upon complete conversion of the Series H Preferred Stock
(without  giving effect to any limitations  upon  conversion  imposed by Article
IV.C)  immediately  before  the date on which a record is taken  for the  grant,
issuance or sale of such Purchase  Rights,  or, if no such record is taken,  the
date as of which the record holders of Common Stock are to be determined for the
grant, issue or sale of such Purchase Rights.

        G. Notice of  Adjustments.  Upon the  occurrence  of each  adjustment or
readjustment  of  the  Conversion   Price  pursuant  to  this  Article  XI,  the
Corporation,   at  its  expense,  shall  promptly  compute  such  adjustment  or
readjustment  and prepare and furnish to each holder of Series H Preferred Stock
a certificate  setting  forth such  adjustment  or  readjustment  and showing in
detail the facts  upon  which such  adjustment  or  readjustment  is based.  The
Corporation  shall, upon the written request at any time of any holder of Series
H Preferred Stock,  furnish to such holder a like certificate  setting forth (i)
such adjustment or readjustment, (ii) the Conversion Price at the time in effect
and (iii) the number of shares of Common Stock and the amount,  if any, of other
securities or property which at the time would be received upon  conversion of a
share of Series H Preferred Stock.

                               XII. VOTING RIGHTS

        The  holders  of the  Series H  Preferred  Stock  have no  voting  power
whatsoever, except as otherwise provided by the Delaware General Corporation Law
(the "GENERAL CORPORATE LAW"), in this Article XII and in Article XIII below.

        Notwithstanding  the above, the Corporation shall provide each holder of
Series H Preferred  Stock,  at its request,  with copies of proxy  materials and
other information sent to shareholders. If the Corporation takes a record of its
shareholders for the purpose of determining shareholders entitled to (a) receive
payment of any  dividend  or other  distribution,  any right to  subscribe  for,
purchase or otherwise  acquire  (including  by way of merger,  consolidation  or
recapitalization) any share of any class or any other securities or property, or
to receive any other right, or (b) to vote in connection with any proposed sale,
lease  or  conveyance  of  all  or  substantially  all  of  the  assets  of  the
Corporation, or any proposed merger, consolidation,  liquidation, dissolution or
winding  up of the  Corporation,  the  Corporation  shall  mail a notice to each
holder, at least twenty (20) days prior to the record date specified therein (or
thirty  (30)  days  prior  to the  consummation  of the  transaction  or  event,
whichever is earlier,  but in no event earlier than public  announcement of such
proposed  transaction),  of the date on which any such 
<PAGE>
                                      -20-

record is to be taken for the  purpose  of such  vote,  dividend,  distribution,
right or other event,  and a brief statement  regarding the amount and character
of such vote, dividend,  distribution,  right or other event to the extent known
at such time.

        To the  extent  that  under the  General  Corporate  Law the vote of the
holders of the Series H Preferred Stock, voting separately as a class or series,
as applicable,  is required to authorize a given action of the Corporation,  the
affirmative  vote or consent of the holders of at least a majority of the shares
of the Series H Preferred  Stock  represented  at a duly held meeting at which a
quorum is present or by written  consent of a majority of the shares of Series H
Preferred Stock (except as otherwise may be required under the General Corporate
Law) shall  constitute  the approval of such action by the class.  To the extent
that under the General Corporate Law holders of the Series H Preferred Stock are
entitled to vote on a matter with holders of Common  Stock,  voting  together as
one class,  each share of Series H Preferred Stock shall be entitled to a number
of votes  equal to the  number of shares of Common  Stock  into which it is then
convertible (without giving effect to any limitations upon conversion imposed by
Article IV.C) using the record date for the taking of such vote of  shareholders
as the date as of which  the  Conversion  Price is  calculated.  Holders  of the
Series H  Preferred  Stock  shall be  entitled to notice of (and copies of proxy
materials and other information sent to shareholders)  all shareholder  meetings
or written  consents with respect to which they would be entitled to vote, which
notice would be provided pursuant to the  Corporation's  by-laws and the General
Corporate Law.

                           XIII. PROTECTION PROVISIONS

        So long as any shares of Series H Preferred Stock are  outstanding,  the
Corporation  shall not, without first obtaining the approval (by vote or written
consent,  as provided by the General Corporate Law) of the holders of at least a
majority of the then outstanding shares of Series H Preferred Stock:

                (a) alter or change the rights, preferences or privileges of the
        Series H Preferred Stock;

                (b) alter or change the rights, preferences or privileges of any
        capital stock of the Corporation so as to affect  adversely the Series H
        Preferred Stock;

                (c)  create any new class or series of  capital  stock  having a
        preference  over the  Series H  Preferred  Stock as to  distribution  of
        assets upon  liquidation,  dissolution or winding up of the  Corporation
        (as previously defined in Article IX hereof, "SENIOR SECURITIES");

                (d)  increase  the  authorized  number  of  shares  of  Series H
        Preferred Stock;

                (e) issue any  shares of Series H  Preferred  Stock  other  than

<PAGE>
                                      -21-

        pursuant to the Securities Purchase Agreement; or

                (f) redeem,  or declare or pay any cash dividend or distribution
        on, any capital stock of the Corporation  ranking junior to the Series H
        Preferred  Stock  as  to   distribution  of  assets  upon   liquidation,
        dissolution  or  winding  up of the  Corporation  (including  the Common
        Stock).

If  holders of at least a majority  of the then  outstanding  shares of Series H
Preferred  Stock agree to allow the  Corporation  to alter or change the rights,
preferences or privileges of the shares of Series H Preferred  Stock pursuant to
subsection (a) above, then the Corporation shall deliver notice of such approved
change to the holders of the Series H Preferred Stock that did not agree to such
alteration or change (the "DISSENTING Holders") and the Dissenting Holders shall
have the right, for a period of thirty (30) days, to convert all of their shares
of  Series H  Preferred  Stock  pursuant  to the  terms of this  Certificate  of
Designations  as they existed prior to such  alteration or change or to continue
to hold their shares of Series H Preferred Stock.

                               XIV. MISCELLANEOUS

        A.  Cancellation of Series H Preferred  Stock. If any shares of Series H
Preferred  Stock are  converted  pursuant to Article IV, the shares so converted
shall be  canceled,  shall  return to the  status of  authorized,  but  unissued
preferred  stock of no  designated  series,  and  shall not be  issuable  by the
Corporation as Series H Preferred Stock.

        B. Lost or Stolen  Certificates.  Upon receipt by the Corporation of (i)
evidence of the loss,  theft,  destruction or mutilation of any Preferred  Stock
Certificate(s)  and  (ii) (y) in the case of  loss,  theft  or  destruction,  of
indemnity  reasonably  satisfactory  to the  Corporation,  or (z) in the case of
mutilation,   upon   surrender  and   cancellation   of  the   Preferred   Stock
Certificate(s),  the  Corporation  shall execute and deliver new Preferred Stock
Certificate(s)  of like tenor and date.  However,  the Corporation  shall not be
obligated to reissue such lost or stolen Preferred Stock  Certificate(s)  if the
holder  contemporaneously  requests  the  Corporation  to convert  such Series H
Preferred Stock.

        C. [Intentionally Omitted]

        D. Allocations of Reserved Amount. The Reserved Amount and each increase
to the Reserved Amount shall be allocated pro rata among the holders of Series H
Preferred  Stock based on the number of shares of Series H Preferred  Stock held
by each holder at the time of the  establishment  of or increase in the Reserved
Amount,  as the  case may be.  In the  event a holder  shall  sell or  otherwise
transfer  any of  such  holder's  shares  of  Series  H  Preferred  Stock,  each
transferee shall be allocated a pro rata portion of such  transferor's  Reserved
Amount. Any portion of the Reserved Amount which remains allocated to any person
or entity which does not hold any Series H Preferred Stock shall be allocated to
the remaining  holders of shares of Series H Preferred  Stock, pro rata based on
the number of shares of Series H Preferred  Stock then held by such holders.  
<PAGE>
                                      -22-

        E.  Statements  of Available  Shares.  So long as any shares of Series H
Preferred Stock are outstanding,  the Corporation shall deliver to each holder a
written  report  notifying  the holders of any  occurrence  which  prohibits the
Corporation  from issuing  Common Stock upon any  conversion.  In addition,  the
Corporation  shall  provide,   within  ten  (10)  days  after  delivery  to  the
Corporation of a written request by any holder, any of the following information
as of the date of such  request:  (i) the  total  number  of  shares of Series H
Preferred  Stock  outstanding,  (ii) the total  number of shares of Common Stock
issued upon all prior  conversions of Series H Preferred Stock,  (iii) the total
number of shares of Common Stock which are reserved for issuance upon conversion
of the Series H Preferred Stock, (iv) the total number of shares of Common Stock
which may thereafter be issued by the Corporation  upon conversion of the Series
H Preferred Stock before the Corporation would exceed the Reserved Amount.

        F. Payment of Cash;  Defaults.  Whenever the  Corporation is required to
make any cash payment to a holder under this  Certificate of Designations  (as a
Conversion  Default  Payment,  upon redemption or otherwise),  such cash payment
shall be made to the holder within five (5) business days after delivery by such
holder of a notice  specifying that the holder elects to receive such payment in
cash and the method (E.G., by check, wire transfer) in which such payment should
be made.  If such  payment is not  delivered  within such five (5)  business day
period,  such  holder  shall  thereafter  be  entitled to interest on the unpaid
amount at a per annum rate equal to the lower of  twenty-four  percent (24%) and
the highest rate  permitted by applicable  law until such amount is paid in full
to the holder.

        G. Remedies  Cumulative.  The remedies  provided in this  Certificate of
Designations shall be cumulative and in addition to all other remedies available
under this Certificate of Designations,  at law or in equity (including a decree
of specific  performance  and/or other  injunctive  relief),  and nothing herein
shall  limit a holder's  right to pursue  actual  damages for any failure by the
Corporation to comply with the terms of this  Certificate of  Designations.  The
Corporation  acknowledges that a breach by it of its obligations  hereunder will
cause  irreparable  harm to the holders of Series H Preferred Stock and that the
remedy at law for any such breach may be inadequate.  The Corporation  therefore
agrees,  in the event of any such breach or  threatened  breach,  the holders of
Series H Preferred  Stock shall be entitled,  in addition to all other available
remedies,  to an  injunction  restraining  any breach,  without the necessity of
showing economic loss and without any bond or other security being required.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>
                                      -23-


        IN WITNESS  WHEREOF,  this  Certificate of  Designations  is executed on
behalf of the Corporation this 26th day of March, 1997.


                                            PALOMAR MEDICAL TECHNOLOGIES, INC.




                                            By:             /s/
                                               --------------------------------
                                                  Sarah Burgess Reed
                                                  Assistant Secretary


<PAGE>

                              NOTICE OF CONVERSION

                    (To be Executed by the Registered Holder
                in order to Convert the Series H Preferred Stock)

The undersigned  hereby  irrevocably  elects to convert  ____________  shares of
Series H Preferred Stock (the  "CONVERSION"),  represented by stock  certificate
No(s).  ___________ (the "PREFERRED STOCK  CERTIFICATES")  into shares of common
stock ("COMMON STOCK") of Palomar Medical Technologies, Inc. (the "CORPORATION")
according to the conditions of the Certificate of Designations,  Preferences and
Rights  of  Series  H  Convertible   Preferred   Stock  (the   "CERTIFICATE   OF
DESIGNATIONS"),  as of the date written below. If securities are to be issued in
the name of a person other than the  undersigned,  the undersigned  will pay all
transfer  taxes  payable with respect  thereto and is  delivering  herewith such
certificates.  No fee will be charged to the holder for any  conversion,  except
for  transfer  taxes,  if any. A copy of each  Preferred  Stock  Certificate  is
attached hereto (or evidence of loss, theft or destruction thereof).

The  undersigned  represents  and  warrants  that all  offers  and  sales by the
undersigned of the securities issuable to the undersigned upon conversion of the
Series H Preferred  Stock shall be made pursuant to  registration  of the Common
Stock under the Securities  Act of 1933, as amended (the "ACT"),  or pursuant to
an exemption from registration under the Act.


                          Date of Conversion:
                                             -------------------------

                          Applicable Conversion Price:
                                                       -------------------------

                          Amount of Conversion Default Payments 
                          to be Converted, if any:
                                                  ------------------------------

                          Number of Shares of
                          Common Stock to be Issued:
                                                    ----------------------------



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

                        (Must be _____ exactly as _____ appears on the Preferred
                         Stock Certificate)

                                           Name:
                                                --------------------------------

                                           Address:
                                                --------------------------------
                                           Social Security or
                                           Federal Tax I.D. Number:
                                                                   -------------

* The  Corporation  is not  required to issue  shares of Common  Stock until the
original  Preferred  Stock   Certificate(s)  (or  evidence  of  loss,  theft  or
destruction  thereof)  to be  converted  are  received by the  Corporation.  The
Corporation  shall  issue and  deliver  shares of Common  Stock to an  overnight
courier not later than the  business day  following  the later of (a) the second
business day following the  Conversion  Date in the case of DWAC  deliveries and
the third business day following the Conversion  Date in all other cases and (b)
receipt of the original  Preferred  Stock  Certificate(s)  (or evidence of loss,
theft or destruction thereof) to be converted,  and shall make payments pursuant
to the  Certificate  of  Designations  for the number of business days that such
issuance and delivery is late.