Termination of International Distribution Agreement

TERMINATION OF INTERNATIONAL DISTRIBUTION AGREEMENT

THIS TERMINATION (" Termination" ), effective as of January 8, 2009 (" Effective Date" ), is made by and between Palomar Medical Technologies, Inc. (" Palomar" ) with its principal place of business at 82 Cambridge Street, Burlington, MA 01803 and Q-MED AB (publ) with its principal place of business at Seminariegatan 21, 752 28 Uppsala, Sweden (" Distributor" ).

WITNESSETH:

WHEREAS, the parties executed an International Distribution Agreement on January 8, 2008, as amended (the " Agreement" ); and

WHEREAS, the parties wish to terminate the Agreement as follows.

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

Subject to Section 11.6 of the Agreement, the parties hereby mutually agree to terminate the Agreement as of the Effective Date.

The parties agree that the initial public announcements of the Termination of the Agreement shall be in the forms of press releases attached hereto as Exhibit A (Palomar' s press release) and Exhibit B (Q-MED' s press release). The parties also agree that Palomar will file a copy of this Termination with the United States Securities and Exchange Commission.

IN WITNESS WHEREOF, this Termination was executed in duplicate by authorized officers of the parties on the last date set forth below.

Place and Date: Place and Date: Palomar Medical Technologies, Inc. Q-Med AB (publ) /s/ Joseph P. Caruso /s/ Bengt c5gerup Joseph P. Caruso Bengt c5gerup CEO President and CEO

Exhibit A

PRESS RELEASE for January 8, 2009 at 2:00AM USA Eastern Time Contacts: Kayla Castle Q-Med AB Publ. Investor Relations Manager Bengt c0gerup, Chief Executive Officer Palomar Medical Technologies, Inc. Tel: +46 (0)70 974 9025 781-993-2411 Anders Blom, Sr. Director Corporate ir@palomarmedical.com Development & Strategy Tel: +46 (0)70 974 9060

PALOMAR AND Q-MED AB TERMINATE INTERNATIONAL DISTRIBUTION AGREEMENT


BURLINGTON, MA (January 8, 2009) 85 Palomar Medical Technologies, Inc. (Nasdaq:PMTI), a leading researcher and developer of light-based systems for cosmetic treatments, today announced the termination of its international distribution agreement with the Swedish company Q-MED AB (OMX Nordic Exchange, Stockholm Mid Cap:QMED), a leading biotech/medical device company based in Uppsala, Sweden. The international distribution agreement was originally entered into in January 2008 with the intention that Q-MED would eventually be responsible for the marketing, advertising, promotion, sale and distribution of Palomar' s professional products for aesthetic treatments outside North America.

Due to the downturn in the world-wide economic environment, Q-MED' s efforts are being concentrated on their own product line of dermal fillers. Both Palomar and Q-MED agreed that Palomar will be better served by separately continuing to expand its existing distribution channel.

Joseph P. Caruso, Palomar Chief Executive Officer said, " Although we are choosing to end our distribution agreement, this was a good learning experience and we have forged a positive relationship with Q-MED that may be beneficial in the future. We believe that during these challenging economic times we will be better positioned with full control of our international distribution. We have signed up many new distributors over the past twelve months and continue to work closely with all of our distributors to help maximize their sales efforts. Territories outside North America should continue to provide growth opportunities for us as we expand our efforts."

Bengt c5gerup, Q-MED Chief Executive Officer said, " By working closely with Palomar we have learned more about Palomar' s top-end technological platforms and products. Considering the present challenging market conditions, Q-Med is focusing on its leading dermal filler product line, Restylaneae as well as on the on-going launch of Macrolane99, the first injectable body contouring product line, and the Restylane Vital99 product line for skin rejuvenation. Hopefully we will be able to utilize our relationship and the knowledge we have built in the f ...