My aquastar 125b ng froze in cold weather and spewed water everywhere. when installes I was told it was ok to have this unit on outside wall. ... any suggestions

Generally speaking, tankless water heaters should not be installed on an outside wall, especially if they are masonary (which lose more heat to the outside) - regardless of what the installer told you. If the wall reaches & goes below the freezing point, so will the water pipes supplying the heater. However I am somewhat surprised that the heating element did not compensate, if indeed it was the heater that froze. I would recommend moving the heater to an interior wall if possible. You may also want to check the thermostat setting as well.