Fifth Amendment to the September 7, 2004 Joint Development and License Agreement Between Palomar Medical Technologies, Inc. and Johnson & Johnson Consumer Companies, Inc.

Fifth Amendment to the September 7, 2004 Joint Development and License Agreement Between Palomar Medical Technologies, Inc. and Johnson & Johnson Consumer Companies, Inc. (the “Agreement”)

Whereas , pursuant to the Agreement, the parties are engaged in a collaboration to develop, clinically test and potentially commercialize home-use, light-based devices for (i) reducing or reshaping body fat including cellulite; (ii) reducing appearance of skin aging; and (iii) reducing or preventing acne; and

Whereas , the parties desire to modify certain provisions of the Agreement in order to **; and

Whereas , the parties desire to modify certain provisions of the Agreement in order to Allow JJC to terminate the Agreement after the Optimization Period.

Now, Therefore, in consideration of the foregoing premises, the mutual promises and covenants of the parties contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as follows effective on the 1st day of April 2009 for items 1, 2, and 4, below and on the 1 ^st day of December 2008 for items 3 and 5, below:

1. **

2.     ARTICLE III.E.3 is hereby amended and replaced with the following:

    3.        Optimization Period .

    a)        JJC shall fund Palomar’s efforts during the Optimization Period with Optimization Payments paid on a Calendar Quarterly basis. As of the Effective Date, the Parties believe that the Optimization Payments set forth in Appendix F , and as defined in ARTICLE VI.A.3, reflect a reasonable estimate of the costs to complete the Optimization Period for the ** Initial Products that enter into the Optimization Period. The cost of the activities to be conducted by Palomar during the Optimization Period is a rough estimation and not final. The Optimization Payments, as mutually agreed to during the ** for each Initial Product as provided in ARTICLE III.E.2.a) and as provided for in the R&D Plan, shall be fixed and final, subject only to changes thereto by the R&D Committee thereafter as provided in ARTICLE III (taking into account ARTICLE III.C.4.c)). **

    b)        During the Optimization Period, **Palomar shall work to complete the deliverables to be set forth in the R&D Plan, as modified for the Optimization Period, for each Initial Product that enters the Optimization Period. Palomar shall notify JJC in writing of the date of its completion of the Optimization Period for each such Initial Product.

**Omitted pursuant to request for confidential treatment by Palomar Medical Technologies, Inc. and filed separately with the SEC.

    c)               The Optimization Period shall end on the Optimization Completion Date**

3.     Article VII.A. is hereby amended and replaced with the following: