Coherent Signs Partnering Agreement with Palomar for Laser-Based Hair Removal Systems.

SANTA CLARA, Calif.--(BW HealthWire)--Nov. 18, 1997--Coherent, Inc. (NASDAQ:COHR) announced today that it has signed a definitive partnering agreement with Palomar Medical Technologies, Inc. (NASDAQ:PMTI) to act as the exclusive distributor for Palomar's laser-based hair removal systems in the United States, the Far East and most countries in Europe. Coherent, founded in 1966 and with annual revenues of approximately $400 million, is the world's largest independent laser company with over 200 direct sales representatives worldwide.

Key provisions of the final contract include a $3.5 million up-front fee from Coherent for distribution rights to Palomar's current and future hair removal products, a license to key patents relating to hair removal, and a three-year warrant to purchase shares of Palomar common stock with an exercise price of $5.25 per share. Under the terms of the agreement, Coherent is responsible for sales, marketing, service, training and education. Palomar will continue to design, develop and manufacture its laser-based hair removal systems.

Bernard Couillaud, president and chief executive officer of Coherent, said, "We are pleased to announce the signing of the agreement and excited to be entering the laser hair removal market with Palomar's EpiLaser system. Our sales force has been trained and we are already actively selling the product. The addition of the EpiLaser to our existing cosmetic laser products gives us the unique opportunity to offer the physician a complete state-of-the-art line of cosmetic laser systems, backed by Coherent's renowned service organization."

"We are pleased to begin our partnership with Coherent so we can combine our resources to accelerate the distribution of Palomar's patent-protected EpiLaser on a broad, worldwide scale to the large physician marketplace," said L.P. (Dan) Valente, chief executive officer and president of Palomar. "Although the agreement is just now official, both companies have been working together closely since the Letter of Intent was signed September 18, and therefore we anticipate making an immediate impact on the marketplace."

"Safe Harbor" Statement Under the Private Securities Litigation Reform Act 

The statements in this press release that relate to future plans, events or performance are forward-looking statements that involve risks and uncertainties, including risks associated with uncertainties related to contract cancellations, manufacturing risks, competitive factors, uncertainties pertaining to customer orders, demand for products and services, development of markets for the Company's products and services and other risks identified in the Company's SEC filings. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are encouraged to refer to the risk disclosures described in the Company's reports on Form 10-K, 10-Q and 8-K, as applicable.

Palomar Medical Technologies, Inc. is a leading supplier of proprietary laser systems for dermatological and cosmetic laser treatments, and also engages in the development and sale of specialty electronic products. To date, Palomar has installed more than 160 EpiLaser hair removal systems to physician practices worldwide, and over 25,000 EpiLaser treatments have been performed. Palomar's Cosmetic Technology International, Inc. subsidiary has now established more than a dozen revenue-sharing laser centers in the U.S. and internationally.

Coherent is recognized as a world leader in the design, manufacture and marketing of lasers and systems for medical, scientific, OEM and micromachining applications. Please direct any questions to Robert J. Quillinan, Executive Vice President and Chief Financial Officer at [phone]. For more information about Coherent, visit our Web site at http://www.cohr.com. To receive a full text copy of this press release by fax, please call [phone].

CONTACT: Coherent Inc.

Robert J. Quillinan, [phone]