STOCK PURCHASE AGREEMENT

     THIS  STOCK  PURCHASE  AGREEMENT,  dated  as of  December  31,  1997  (this
"Agreement"),  by and between  PALOMAR  MEDICAL  TECHNOLOGIES,  INC., a Delaware
corporation,  with  headquarters  located  at  45  Hartwell  Avenue,  Lexington,
Massachusetts 02173 (the "Company"), and the undersigned (the "Buyer").

                              W I T N E S S E T H:

     WHEREAS,  the Buyer wishes to  purchase,  upon the terms and subject to the
conditions of this Agreement, outstanding shares of Common Stock, $.01 par value
(the "Nexar Common Stock"), of Nexar Technologies,  Inc., a Delaware corporation
("Nexar"),  held by the Company, upon the terms and subject to the conditions of
this Agreement; and

     WHEREAS, in connection herewith the Company and the Buyer have executed and
delivered, one to the other, an Exchange Agreement,  dated as of the date hereof
(the "Exchange Agreement");

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

1.   AGREEMENT TO PURCHASE; PURCHASE PRICE.

     (a)  PURCHASE  OF SHARES.  The Buyer  hereby  agrees to  purchase  from the
Company on the Closing  Date the number of shares (the "Nexar  Shares") of Nexar
Common Stock set forth on the signature  page of this Agreement for the purchase
price set forth on the signature page of this Agreement.

     (b)  DELIVERIES  TO ESCROW  AGENT AND FORM OF PAYMENT.  Promptly  after the
execution and delivery of this Agreement by the parties hereto,  but in no event
later than the Closing Date,  the Buyer shall deposit the purchase price for the
Nexar Shares by  delivering  good funds in United  States  Dollars to the escrow
agent (the "Escrow Agent") identified in the Joint Escrow Instructions  attached
hereto as ANNEX I (the  "Joint  Escrow  Instructions")  against  delivery of the
Nexar  Shares to the Buyer at the  closing.  Promptly  after the  execution  and
delivery of this Agreement by the parties hereto, but in no event later than the
Closing  Date,  the Company  shall  deliver a  certificate  for the Nexar Shares
(which will include  39,264 shares of Common Stock which are not included in the
Nexar Shares and which are not being sold or  transferred  to the Buyer pursuant
to this  Agreement) to the Escrow Agent against  delivery of the purchase  price
for the Nexar Shares to the Escrow Agent. By signing this  Agreement,  the Buyer
and the Company each agrees to all of the terms and conditions of, and becomes a
party to, the Joint  Escrow  Instructions,  all of the  provisions  of which are
incorporated herein by this reference as if set forth herein in full.

     (c) METHOD OF PAYMENT.  Deposit of the purchase  price for the Nexar Shares
by the Buyer with the Escrow Agent shall be made by wire transfer of funds to:

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

                                       1
<PAGE>

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

     (d) CLOSING DELIVERIES.  At the closing,  the Nexar Shares shall be held by
the Escrow Agent until the Escrow Release Date (as defined herein) and an amount
equal to the  purchase  price to be paid by the Buyer for the Nexar Shares shall
be held by the Escrow Agent until the Escrow Release Date.

2.   BUYER REPRESENTATIONS, WARRANTIES, ETC.

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

     (a)  PURCHASE  FOR  INVESTMENT.  The Buyer is  acquiring  the rights  under
Section 8 of this Agreement (the "Price  Guarantee  Rights") for its own account
for investment  only and not with a view towards the public sale or distribution
thereof;

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

     (c)  REOFFERS  AND RESALES.  All  subsequent  offers and sales of the Price
Guarantee  Rights by the Buyer  shall be made  pursuant to  registration  of the
Price  Guarantee  Rights  under the 1933 Act or  pursuant to an  exemption  from
registration;

     (d) COMPANY  RELIANCE.  The Buyer  understands that the Company is agreeing
with the Buyer  concerning the Price Guarantee  Rights in reliance on exemptions
from the  registration  requirements  of the 1933 Act and exemptions  from state
securities  laws and that the Company is relying upon the truth and accuracy of,
and the Buyer's compliance with, the representations,  warranties,  agreements,
acknowledgments  and  understandings  of the Buyer set forth  herein in order to
determine the  availability  of such exemptions and the eligibility of the Buyer
to receive the Price Guarantee Rights;

     (e)  INFORMATION  PROVIDED.  The Buyer and its advisors,  if any, have been
furnished with all materials  relating to the business,  finances and operations
of the Company and materials  relating to the Price Guarantee  Rights which have
been  requested  by the Buyer;  the Buyer and its  advisors,  if any,  have been
afforded  the  opportunity  to ask  questions  of the Company and have  received
satisfactory  answers to any such inquiries.  Without limiting the generality of
the  foregoing,  the Buyer has had the  opportunity  to obtain and to review the
Company's  (1) Annual Report on Form 10-KSB for the fiscal year ended  December
31, 1996, (2) Quarterly Reports on Form 10-Q for the fiscal quarters ended March
31,  June 30 and  September  30,  1997,  (3)  Current  Report  on Form 8-K dated
December  9,  1997,  and (4)  Amendment  No.  1 to the  Company's  Registration
Statement on Form S-3 (Registration  No.  333-42129) (the "Company  Registration
Statement")  filed with the SEC on  December  18, 1997  (collectively,  the "SEC
Reports");  the  Buyer has had the  opportunity  to  obtain  and to  review  the
Prospectus,  dated April 15, 1997 as supplemented to the date of this Agreement,
of Nexar  relating to the Nexar Shares (the "Nexar  Prospectus");  and the Buyer
understands  that the Price  Guarantee  Rights and its  investment  in the Nexar
Shares involve a high degree of risk;

     (f)  ABSENCE OF  APPROVALS.  The Buyer  understands  that no United  States
federal  or state  agency or any other  government  or  governmental  agency has
passed on or made any  recommendation  or endorsement of the Nexar Shares or the
Price Guarantee Rights;

                                       2
<PAGE>

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

     (h)  FORWARD-LOOKING  INFORMATION.  The Buyer acknowledges that, except for
the  historical  material  contained  herein or in the SEC Reports,  the matters
disclosed  herein and therein  regarding  the Company and its  subsidiaries  are
forward-looking  statements under the federal securities laws that involve risks
and  uncertainties,  including,  but not limited to,  product  demand and market
acceptance risks, the effect of economic  conditions,  the impact of competitive
products and pricing,  product development,  commercialization and technological
difficulties,  capacity and supply  constraints or difficulties,  the results of
financing  efforts,  actual  purchases  under  agreements,  the  effect  of  the
Company's  accounting  policies,  and other risks  detailed in the SEC Reports.
Actual results could differ  materially  from those  estimated or anticipated in
these  forward-looking  statements.  Without  limiting  the  generality  of  the
foregoing,  the Buyer  acknowledges  the Risk  Factors  set forth in the Company
Registration Statement.

3.   COMPANY REPRESENTATIONS, WARRANTIES, ETC.

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

     (a)  ORGANIZATION  AND  AUTHORITY.   The  Company  is  a  corporation  duly
organized,  validly existing and in good standing under the laws of the State of
Delaware,  and has all requisite corporate power and authority (i) to own, lease
and operate its properties and to carry on its business as now being  conducted,
and (ii) to execute,  deliver and perform its  obligations  under this Agreement
and the  other  agreements  to be  executed  and  delivered  by the  Company  in
connection herewith, and to consummate the transactions contemplated hereby. The
Company is duly qualified to do business as a foreign corporation and is in good
standing in all jurisdictions  wherein such qualification is necessary and where
failure so to qualify  could have a  material  adverse  effect on the  business,
properties, operations, condition (financial or other), results of operations or
prospects of the Company.

     (b) CONCERNING THE NEXAR SHARES. The Nexar Shares have been duly authorized
by Nexar and are fully paid and  non-assessable  and will not subject the holder
thereof to personal  liability by reason of being such holder.  The Nexar Shares
are  owned  beneficially  and of record  by the  Company,  free and clear of all
liens, pledges, charges, equities, encumbrances,  claims and rights of others of
any  nature  whatsoever  and,  upon  transfer  of the Nexar  Shares to the Buyer
pursuant to this Agreement,  the Buyer will acquire good and marketable title to
such  shares,  free  and  clear  of  all  liens,  pledges,  charges,   equities,
encumbrances, claims and rights of others of any nature whatsoever. There are no
preemptive rights or similar rights of any stockholder of the Company,  as such,
to acquire any of the Nexar Shares or the Price Guarantee Rights.

     (c)  AGREEMENT.  This  Agreement  has  been  duly and  validly  authorized,
executed and delivered by the Company and this  Agreement is a valid and binding
agreement of the Company enforceable in accordance with its terms, subject as to
enforceability  to general  principles of equity and to bankruptcy,  insolvency,
moratorium  and other similar laws  affecting  the  enforcement  of  creditors'
rights generally.

                                       3
<PAGE>

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

     (e) APPROVALS.  No  authorization,  approval or consent of, or filing with,
any court, governmental body, regulatory agency,  self-regulatory  organization,
or stock exchange or market or the stockholders of the Company is required to be
obtained or made by the Company for (x) the execution,  delivery and performance
by the Company of this  Agreement,  (y) the  transfer  and delivery of the Nexar
Shares  to the  Buyer  pursuant  to this  Agreement  and (z) the  incurrence  or
performance  by the  Company  of  its  obligations  with  respect  to the  Price
Guarantee Rights, other than the requirements of any applicable blue sky laws.

     (f) INFORMATION  PROVIDED.  The information provided by or on behalf of the
Company to the Buyer in connection  with the  transactions  contemplated by this
Agreement (other than the Nexar Prospectus),  including, without limitation, the
information referred to in Section 2(e) of this Agreement,  does not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they are made, not misleading.

     (g) ABSENCE OF CERTAIN CHANGES.  Since December 31, 1996, there has been no
material  adverse  change and no material  adverse  development in the business,
properties, operations, condition (financial or other), results of operations or
prospects  of the  Company  and its  subsidiaries  taken as a whole,  except  as
disclosed in the SEC Reports.

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

     (i)  PROPERTIES.  The Company and its  subsidiaries  have good title to all
property real and personal  (tangible and  intangible) and other assets owned by
them, free and clear of all security  interests,  charges,  mortgages,  liens or
other  encumbrances,  except such as are described in the SEC Reports or such as
do not  materially  interfere with the use of such property made, or proposed to
be made,  by the  Company or its  subsidiaries.  The  leases,  licenses or other
contracts or  instruments  under which the Company and its  subsidiaries  lease,
hold  or are  entitled  to use  any  property,  real  or  personal,  are  valid,
subsisting  and  enforceable  with only  such  exceptions  as do not  materially
interfere  with the use of such  property  made,  or proposed to be made, by the
Company or its subsidiaries. Neither the Company nor any of its subsidiaries has
received  notice of any material  violation of any  applicable  law,  ordinance,
regulation, order or requirement relating to its owned or leased properties.

                                       4
<PAGE>

     (j) LABOR RELATIONS.  No material labor problem exists or, to the knowledge
of the Company,  is imminent with respect to any of the employees of the Company
or any of its subsidiaries.

     (k) SEC FILINGS.  The Company has timely filed all required forms,  reports
and other  documents  with the SEC since  December 31, 1996.  All of such forms,
reports and other documents complied, when filed, in all material respects, with
all applicable  requirements of the 1933 Act and the Securities  Exchange Act of
1934, as amended (the "1934 Act").

     (l)  CONCERNING  THE  NEXAR  SHARES.  The Nexar  Shares  may be sold by the
Company to the Buyer pursuant to the  Registration  Statement of which the Nexar
Prospectus  forms a part and  upon  acquisition  of the  Nexar  Shares  from the
Company  pursuant to this  Agreement,  the Buyer may resell such shares  without
registration under the 1933 Act and without  restriction on the volume or manner
of sale  thereof  so long as the  Buyer is not an  "affiliate"  (as such term is
defined  for  purposes  of  the  1933  Act)  of  Nexar,  subject  to  applicable
limitations on trading in securities while in possession of material  non-public
information concerning Nexar.

4.   CERTAIN COVENANTS AND ACKNOWLEDGMENTS.

     (a) TRANSFER RESTRICTIONS.  The Buyer acknowledges that the Price Guarantee
Rights have not been and are not being  registered  under the  provisions of the
1933  Act  and  may  not  be  transferred  unless  (A)  subsequently  registered
thereunder  for resale or (B) the Buyer shall have  delivered  to the Company an
opinion of counsel,  reasonably satisfactory in form, scope and substance to the
Company,  to the effect that the Price Guarantee Rights or portion thereof to be
sold or transferred may be sold or transferred  without such  registration;  (2)
any sale of the Price Guarantee  Rights made in reliance on Rule 144 promulgated
under  the 1933 Act may be made only in  accordance  with the terms of said Rule
and further,  if said Rule is not applicable,  any resale of the Price Guarantee
Rights or any portion thereof under  circumstances  in which the seller,  or the
person  through whom the sale is made,  may be deemed to be an  underwriter,  as
that term is used in the 1933  Act,  may  require  compliance  with  some  other
exemption under the 1933 Act or the rules and regulations of the SEC thereunder;
and (3)  neither the Company  nor any other  person is under any  obligation  to
register  the Price  Guarantee  Rights  under the 1933 Act or to comply with the
terms and conditions of any exemption thereunder (other than pursuant to Section
4(d) hereof).

     (b)  REPORTING  STATUS.  So long as the Company  shall have any  obligation
under this Agreement  with respect to the Price  Guarantee  Rights,  the Company
shall file all reports  required to be filed with the SEC pursuant to Section 13
or 15(d) of the 1934 Act, and the Company shall not,  prior to the date which is
two years after the Closing Date,  terminate its status as an issuer required to
file  reports  under  the  1934  Act  even  if the  1934  Act or the  rules  and
regulations thereunder would permit such termination.

     (c) USE OF PROCEEDS.  Neither the Company nor any subsidiary of the Company
owns or has any present  intention of acquiring any "margin stock" as defined in
Regulation G (12 CFR Part 207) of the Board of Governors of the Federal  Reserve
System ("margin  stock").  The proceeds of sale of the Nexar Shares will be used
for general  working  capital  purposes and in the  operation of the  Company's
business. None of such proceeds will be used, directly or indirectly (1) to make
any loan to or  investment  in any other person or (2) for the purpose,  whether
immediate, incidental or ultimate, of purchasing or carrying any margin stock or
for the purpose of maintaining,  reducing or retiring any indebtedness which was
originally  incurred to  purchase or carry any stock that is  currently a margin
stock  or  for  any  other  purpose  which  might  constitute  the  transactions
contemplated  by this  Agreement a "purpose  credit"  within the meaning of such
Regulation  G.  Neither the Company nor any agent acting on 

                                       5
<PAGE>

its behalf has taken or will take any action which might cause this Agreement or
the transactions  contemplated  hereby to violate  Regulation G, Regulation T or
any other  regulation of the Board of Governors of the Federal Reserve System or
to  violate  the 1934  Act,  in each  case as in  effect  now or as the same may
hereafter be in effect.

     (d) BLUE SKY LAWS.  On or before the Closing  Date,  the Company shall take
such action as shall be necessary to qualify, or to obtain an exemption for, the
Price  Guarantee  Rights  under  such of the  securities  or "blue  sky" laws of
jurisdictions  in the United  States as shall be  applicable  to the sale of the
Price  Guarantee  Rights to the Buyer  pursuant to this  Agreement.  The Company
shall  furnish  copies  of all  filings,  applications,  orders  and  grants  or
confirmations of exemptions relating to such securities or "blue sky" laws on or
before the Closing Date.

     (e) CERTAIN EXPENSES.  Whether or not the closing occurs, the Company shall
pay or  reimburse  the Buyer for all  reasonable  expenses  (including,  without
limitation,  legal fees and  expenses  of counsel to the Buyer)  incurred by the
Buyer in  connection  with  this  Agreement  and the  transactions  contemplated
hereby.  For purposes of this provision,  invoices of the Buyer's legal counsel
in the form customarily given by such counsel to the Buyer shall be satisfactory
detail and evidence of the same.

     (f) BEST EFFORTS.  Each of the parties shall use its best efforts timely to
satisfy each of the conditions to the other party's obligations to complete the
closing of the transactions  contemplated by this Agreement set forth in Section
6 or 7, as the case may be, of this  Agreement on or before the Closing Date and
to satisfy each of the other  party's  conditions  to escrow  release in Section
5(b)(2) or 5(b)(3), as the case may be, on or before the applicable date.

5.   CLOSING DATE; ESCROW RELEASE.

     (a) CLOSING  DATE.  The date of the sale of the Nexar Shares (the  "Closing
Date") shall be January 8, 1998. Such closing shall occur on the Closing Date at
the  offices of the Escrow  Agent.  The Buyer and the Company  agree that,  upon
completion of the closing on the Closing Date,  the Nexar Shares shall be deemed
to be sold by the Company and  purchased  by the Buyer and only  delivery of the
Nexar  Shares to the Buyer upon  release  from  escrow by the  Escrow  Agent and
delivery of the  purchase  price to the Company  upon release from escrow by the
Escrow Agent shall not have occurred.

     (b) ESCROW  RELEASE.  (1) The Buyer  hereby  instructs  the Escrow Agent to
submit to Nexar or its  transfer  agent  the  certificate  for the Nexar  Shares
promptly  after the Closing Date to register  the transfer  thereof to the Buyer
and to dispatch  the balance of the shares of Common Stock  represented  by such
certificate to the Company.

          (2) The release by the Escrow  Agent of the Nexar  Shares to the Buyer
shall be subject to the following conditions precedent,  any or all of which may
be waived by the Company:

               (A) on or before  January 15, 1998,  the Buyer and the  custodian
          (the "Custodian") identified in the Custody Agreement, dated as of the
          date  hereof in the form  attached  hereto  as ANNEX II (the  "Custody
          Agreement")  shall have executed and delivered,  one to the other, the
          Custody Agreement and the Buyer shall have furnished a copy thereof to
          the Company;

               (B) on or before January 15, 1998, the closing under the Exchange
          Agreement  shall have  occurred and the Buyer shall have  executed and
          delivered  to the  Company a general  release  and  waiver in the form
          specified in the Exchange Agreement;

                                       6
<PAGE>

               (C) on or before  January 29,  1998,  the Nexar Shares shall have
          been  transferred  of record  to, and  registered  in the name of, the
          Buyer, without restrictive legend; and

               (D) on or before  January 29, 1998, a certificate  for the 39,264
          shares of  Common  Stock  included  in the  certificate  for the Nexar
          Shares shall have been returned to the Company.

          (3) The  release by the Escrow  Agent to the  Company of the  purchase
price for the Nexar Shares  shall be subject to  satisfaction  of the  following
conditions precedent any or all of which may be waived by the Buyer:

               (A) the  representations  and  warranties  of the Company in this
          Agreement  made as of the date of this Agreement and as of the Closing
          Date shall have been true and correct in all  material  respects as of
          the date of this Agreement and as of the Closing Date;

               (B) the  Company  shall  have  performed  on or before the Escrow
          Release Date all covenants and  agreements of the Company  required to
          be performed on or before the Escrow Release Date.

               (C) on or before January 15, 1998, a notification by the Buyer to
          the Attorney General of the Commonwealth of Massachusetts  pursuant to
          G.L.  c.  271,  Sec.  49(d)  of  the  laws  of  the   Commonwealth  of
          Massachusetts  making  the  provisions  of G.L.  c.  271,  Sec.  49(a)
          inapplicable to the transactions  contemplated by this Agreement shall
          have  been  given  to and  accepted  by the  Attorney  General  of the
          Commonwealth of Massachusetts;

               (D) on or before  January 15, 1998, the Buyer shall have received
          a certificate, dated the Closing Date, of the Secretary of the Company
          certifying  (1) the  certificate of  incorporation  and by-laws of the
          Company as in effect on the Closing Date,  (2) all  resolutions of the
          Board of Directors (and committees thereof) of the Company relating to
          this Agreement and the transactions  contemplated  hereby and (3) such
          other matters as reasonably requested by the Buyer;

               (E) on or before  January 29,  1998,  the Nexar Shares shall have
          been  transferred  of record  to, and  registered  in the name of, the
          Buyer, without restrictive legend; and

               (F) on or before  January 15, 1998, the Buyer shall have received
          an opinion of counsel  for the  Company,  dated the Closing  Date,  in
          form, scope and substance reasonably satisfactory to the Buyer, to the
          effect set forth in ANNEX III attached hereto.

               (G) on or before  January 15, 1998, the Buyer shall have received
          a certificate,  dated the Closing Date, of the Chief Executive Officer
          or the Chief Financial  Officer of the Company  confirming the matters
          set forth in Section 7(b).

          (4) The date on which  all of the  conditions  precedent  in  Sections
5(b)(2) and 5(b)(3) are satisfied or waived is referred to herein as the "Escrow
Release Date."

          (5) On the  Escrow  Release  Date,  the  Company  and the Buyer  shall
instruct the Escrow Agent that the Escrow Release Date has occurred.

                                       7
<PAGE>

          (6) If the Escrow Release Date does not occur on or before January 29,
1998,  then the Escrow  Agent  shall  release to the Company all shares of Nexar
Common Stock in the  possession  of the Escrow Agent and shall release an amount
equal to the  purchase  price for the Nexar  Shares to the  Buyer.  If the Nexar
Shares have been issued in the name of the Buyer,  the Buyer shall  cooperate in
causing such shares to be re-issued in the Company's name.

6.   CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.

     The Buyer  understands  that the  Company's  obligation  to sell the Nexar
Shares  to the  Buyer  pursuant  to  this  Agreement  on  the  Closing  Date  is
conditioned  upon the satisfaction of the following  conditions  precedent on or
before the Closing Date (any or all of which may be waived by the Company in its
sole discretion):

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

     (b)  Delivery by the Buyer to the Escrow  Agent of good funds as payment in
full of an amount equal to the purchase price for the Nexar Shares in accordance
with Section 1(c) hereof; and

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

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

     The Company  understands  that the Buyer's  obligations to purchase and pay
for the  Nexar  Shares  pursuant  to this  Agreement  on the  Closing  Date  are
conditioned  upon the satisfaction of the following  conditions  precedent on or
before the  Closing  Date (any or all of which may be waived by the Buyer in its
sole discretion):

     (a)  Delivery  by the  Company to the Escrow  Agent of the Nexar  Shares in
accordance with this Agreement; and

     (b) The accuracy on the Closing Date of the  representations and warranties
of the Company  contained  in this  Agreement as if made on the Closing Date and
the  performance  by the Company on or before the Closing Date of all  covenants
and agreements of the Company required by this Agreement and all other documents
and instruments relating hereto to be performed on or before the Closing Date.

8.   PRICE GUARANTEE RIGHTS.

     (a) CUSTODY  DEPOSIT.  If the Nexar Shares are released by the Escrow Agent
to the Buyer on the Escrow  Release  Date in  accordance  with the Joint  Escrow
Instructions, immediately following such release on the Escrow Release Date, the
Buyer shall deposit  400,000 of the Nexar Shares with the Custodian  pursuant to
the  Custody  Agreement.  Such  deposit  shall be made  solely for  purposes  of
administering  the  provisions  of this  Section  8 with  respect  to the  Price
Guarantee  Rights and shall not in any way limit or affect the  ownership of the
Nexar Shares by the Buyer and shall not in any manner  create any lien,  pledge,
charge,  equity,  encumbrance,  claim  or  right of the  Company  of any  nature
whatsoever in or with respect to the Nexar Shares.  For purposes of this Section
8, the Nexar  Shares shall be deemed to include any  

                                       8
<PAGE>

additional  shares of Nexar  Common  Stock  distributed  to or  received  by the
Custodian as a stock  dividend,  stock split or other  distribution on the Nexar
Shares held by the Custodian.

     (b) RELEASE FROM CUSTODY.  The Buyer shall have the right from time to time
to direct the  Custodian  to release  from custody the Nexar Shares by notice to
the Custodian in the form attached as Exhibit A to the Custody  Agreement (each,
a "Release  Notice");  PROVIDED,  HOWEVER,  that the aggregate Release Price (as
defined  herein) of all Nexar Shares  released  from custody by the Buyer during
any period of 30  consecutive  days may not  exceed  $666,667.00;  and  PROVIDED
FURTHER,  HOWEVER,  that the Buyer shall be required to direct the  Custodian to
release all of the Nexar  Shares to the Buyer on or before the date which is two
years after the Closing  Date.  The Buyer shall furnish to the Company a copy of
each Release Notice given by the Buyer to the Custodian  within one Business Day
after the Buyer gives such Release  Notice to the  Custodian.  A Release  Notice
given by the Buyer to the  Custodian  shall be deemed for all  purposes to be in
proper  form  unless the  Company  notifies  the Buyer in writing  within  three
Business  Days after such  Release  Notice has been given  (which  notice  shall
specify all defects in such Release Notice),  and any Release Notice  containing
any such defect  shall  nonetheless  be effective on the date given if the Buyer
promptly  undertakes to correct all such  defects.  No such claim of error shall
limit or delay the  buyer's  right to release of the Nexar  Shares to which such
Release Notice  relates.  Any Nexar Shares as to which the Buyer has not given a
Release  Notice on or before the date which is two years after the Closing  Date
shall be automatically released on the date which is two years after the Closing
Date (the "Automatic Release") and the Redemption Price for such shares shall be
calculated as of such date.

     (C)  RELEASE  PRICE.  For  purposes  of  computing  the amount of the Price
Guarantee  Rights,  a Release  Price  shall be  determined  for each Nexar Share
released pursuant to a Release Notice or the Automatic Release.  As used herein,
the following terms shall have the following meanings:

          "Market Price" of any security on any date means the closing bid price
of such  security  on such date on the  Nasdaq  National  Market  or such  other
securities exchange or other market on which such security is listed for trading
which constitutes the principal securities market for such security, as reported
by Bloomberg,  L.P. (subject to equitable adjustments from time to time on terms
reasonably  acceptable  to the Buyer and the Company for (1) stock  splits,  (2)
stock dividends, (3) combinations, (4) capital reorganizations,  (5) issuance to
all holders of Nexar Common Stock rights or warrants to purchase shares of Nexar
Common Stock, (6) the distribution by Nexar to all holders of Nexar Common Stock
of evidences of indebtedness of Nexar or cash (other than regular quarterly cash
dividends),  (7)  repurchases  of  shares of Nexar  Common  Stock in one or more
transactions which, individually or in the aggregate,  result in the purchase of
more than ten  percent of the Nexar  Common  Stock  outstanding  and (8) similar
events  relating to the Nexar Common  Stock,  in each such case which occur,  or
with respect to which "ex-"  trading of the Nexar  Common Stock begins  during a
period of five  consecutive  Trading Days used for determining the Release Price
of any Nexar Shares).

          "Release  Date"  means any date on which a Release  Notice is given by
the  Buyer  pursuant  to the  Custody  Agreement  and the date of the  Automatic
Release, if any.

          "Release  Percentage"  means,  with respect to any Release  Date,  the
applicable percentage set forth opposite such date below:

         DATE                                                 RELEASE PERCENTAGE

         Closing Date through 30th day thereafter                    100%

         31st through 60th day after Closing Date                     95%

                                       9
<PAGE>

         61st through 90th day after Closing Date                     90%

         91st day after Closing Date and thereafter                   85%

          "Release  Price" means,  for any Release Date,  the product of (x) the
arithmetic  average of the Market  Price of the Nexar  Common Stock for the five
consecutive  Trading  Days ending on the Trading Day prior to such  Release Date
TIMES (y) the Release Percentage applicable to such Release Date.

          "Trading Day" means a day on whichever of (x) the national  securities
exchange or (y) the Nasdaq  National  Market which at the time  constitutes  the
principal securities market for the Common Stock is open for general trading.

     (d) PAYMENT OF PRICE GUARANTEE RIGHTS. If after release of all of the Nexar
Shares by the Custodian under the Custody  Agreement the ("Final Release Date"),
the  aggregate  Release  Price  for all of the Nexar  Shares  shall be less than
$2,000,000.00  then the Company  shall pay to the Buyer as and when  required by
this Agreement an amount equal to the amount by which $2,000,000.00  exceeds the
aggregate Release Price for all of the Nexar Shares. The amount, if any, payable
by the Company to the Buyer  pursuant to this Section 8(d) shall be paid by wire
transfer in immediately available funds on the date which is two years after the
Closing  Date,  to such account as shall be specified for such purpose by notice
from the Buyer to the  Company.  Any amount due under this Section 8(d) which is
not paid when due shall accrue interest at the rate of 14% per annum until paid.

9.   MISCELLANEOUS.

     (a) This Agreement  shall be governed by and interpreted in accordance with
the laws of the Commonwealth of Massachusetts.

     (b) This  Agreement  may be  executed  in  counterparts  and by the parties
hereto on separate counterparts,  all of which together shall constitute one and
the same  instrument.  A  facsimile  transmission  of this  Agreement  bearing a
signature  on behalf of a party hereto shall be legal and binding on such party.
Although  this  Agreement  is dated as of the date  first set forth  above,  the
actual date of  execution  and  delivery of this  Agreement by each party is the
date set forth below such party's  signature on the signature page hereof.  Any
reference in this Agreement or in any of the documents executed and delivered by
the parties hereto in connection  herewith to the date of execution and delivery
of this  Agreement  shall be deemed a  reference  to the later of such dates set
forth below each party's respective signature on the signature page hereof.

     (c)  The  headings,   captions  and  footers  of  this  Agreement  are  for
convenience   of   reference   and  shall  not  form  part  of,  or  affect  the
interpretation of, this Agreement.

     (d) If any provision of this Agreement shall be invalid or unenforceable in
any  jurisdiction,  such  invalidity  or  unenforceability  shall not affect the
validity or enforceability of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.

     (e) This  Agreement may be amended only by an instrument in writing  signed
by the party to be charged with enforcement.

     (f)  Failure  of any  party to  exercise  any right or  remedy  under  this
Agreement or otherwise,  or delay by a party in exercising such right or remedy,
or any course of  dealings

                                       10
<PAGE>

between  the  parties,  shall not  operate as a waiver  thereof or an  amendment
hereof,  nor shall any single or partial exercise of any such right or power, or
any  abandonment  or  discontinuance  of steps to enforce such a right or power,
preclude any other or further exercise thereof or exercise of any other right or
power.

     (g) Any notices  required or  permitted to be given under the terms of this
Agreement  shall be sent by mail or delivered  personally  (which shall  include
telephone  line  facsimile  transmission  with answer back  confirmation)  or by
courier  and shall be  effective  five days after being  placed in the mail,  if
mailed, or upon receipt,  if delivered  personally or by courier, in the case of
the Company  addressed to the Company at its address  shown in the  introductory
paragraph of this  Agreement,  Attention:  Director of Finance  (telephone  line
facsimile  transmission  number (781) 676-7330) or, in the case of the Buyer, at
its  address  shown  on the  signature  page of this  Agreement,  with a copy to
Genesee  International,  Inc.,  10500 N.E.  8th Street,  Suite  1920,  Bellevue,
Washington  98004-4332  (telephone  line  facsimile  transmission  number  (425)
462-4645) or such other  address as a party shall have provided by notice to the
other party in accordance with this provision.

     (h) Prior to the Closing Date, the Buyer shall have the right to assign its
rights and obligations  under this Agreement with respect to the purchase of all
or any  portion of the Nexar  Shares,  provided  any such  assignee,  by written
instrument duly executed by such assignee,  assumes all obligations of the Buyer
hereunder  with  respect to the  purchase of the portion of the Nexar  Shares so
assigned and makes the same  representations and warranties with respect thereto
as the Buyer makes in this  Agreement,  whereupon the Buyer shall be relieved of
any further  obligations,  responsibilities  and liabilities with respect to the
purchase  of all or the  portion  of the Nexar  Shares  the  obligation  for the
purchase of which has been so  assigned.  Any  transfer  of Nexar  Shares by the
Buyer of rights  under this  Agreement  after the Closing  Date shall be made in
accordance with Section 4(a).

     (i) The respective representations, warranties, covenants and agreements of
the Buyer and the Company contained in this Agreement or made by or on behalf of
them,  respectively,  pursuant to this  Agreement  shall survive the delivery of
payment  for the  Preferred  Shares  and shall  remain in full  force and effect
regardless  of any  investigation  made by or on  behalf  of them or any  person
controlling or advising any of them.

     (j) This Agreement and its Annexes set forth the entire  agreement  between
the parties  hereto with respect to the subject  matter hereof and supersede all
prior  agreements  and  understandings,  whether  written or oral,  with respect
thereto.

     (k) The language used in this  Agreement  will be deemed to be the language
chosen by the parties to express  their  mutual  intent,  and no rules of strict
construction will be applied against any party.

                                       11
<PAGE>

     IN WITNESS  WHEREOF,  this  Agreement has been duly executed by the parties
hereto by their  respective  officers  thereunto duly  authorized as of the date
first set forth above.

NUMBER OF NEXAR SHARES:  500,000

PURCHASE PRICE:  $2,000,000.00

                                       ADVANTAGE FUND LIMITED

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

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

                                       Facsimile No.:     011-599-97322008

                                       PALOMAR MEDICAL TECHNOLOGIES, INC.

                                       By:   /s/  Joseph P. Caruso
                                          -------------------------------
                                         Title:   Chief Financial Officer