LASERSIGHT INCORPORATED
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
September 11, 1998
VIA FACSIMILE
Xxxxxxxx X. Xxxxxx, M.D.
000 Xxxx Xxxxxxxxx
Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000
Re: Revised Agreements
Dear Xx. Xxxxxx:
As we recently discussed, we have agreed that the terms and conditions
of the various agreements among LaserSight Incorporated ("LaserSight"), you,
PhotoMed, Inc. ("PhotoMed") and various other parties, dated as of July 15,
1997, need to be amended based on the Food and Drug Administration's (the "FDA")
recent approval of the LASIK Pre-Market Approval ("PMA") application.
We have agreed as follows:
1. Within 10 business days after the date on which all parties to
this letter have signed a copy of this letter (the "Payment
Date"), LaserSight will pay you $1,500,000.00, 50% of which
shall be paid in cash in immediately available funds to an
account or accounts designated by you, and 50% of which shall
be paid (in LaserSight's sole discretion) in either cash or
shares of unregistered LaserSight common stock, $.001 par
value per share ("Common Stock"), the number of shares of
which shall be calculated using the closing price of a share
of Common Stock for the ten (10) trading days immediately
preceding the Payment Date. Such shares shall have the same
registration rights as are contained in Section 6.4 of the
Agreement and Plan of Merger, dated July 15, 1997(the
"Agreement and Plan of Merger"), among LaserSight, PhotoMed
Acquisition, Inc. ("Photomed-A"), you, Photomed, Xxxxx Xxxxxx
("LK"), Xxxxxx Xxxxxxxx, Trustee for Xxxx Xxxxxxx Xxxxxx,
u/t/d December 27, 1991 ("ASK"), and Xxxxxx Xxxxxxxx, Trustee
for Xxxx Xxxx Xxxxxx, u/t/d December 27, 1991 ("MAK, and
together with you, Photomed, LK and ASK the "Xxxxxx Parties"),
provided that such Common Stock shall be deemed Closing Shares
for purposes of Section 6.4, the Demand Registration Statement
shall remain effective for at least one (1) year, no demand
for registration shall be deemed to have already occurred
under Section 6.4 and references in Sections 6.4(a) and 6.4
(b) to the "first anniversary of the Closing Date" shall be
revised to be "the second anniversary of the Closing Date."
The payment described in this paragraph 1 shall be in lieu of
the $1,750,000.00 payment described in Section 2.2(a) of the
Agreement and Plan of Merger and LaserSight shall have no
further obligations pursuant to such Section so long as the
payment described in the immediately preceding paragraph is
made on the Payment Date. Subject to the full and timely
performance of the obligations described in the immediately
preceding paragraph the rights and obligations associated with
the unwind of the transaction described in Section 2.2(b) of
the Agreement and Plan of Merger are of no further force or
effect and to your actual knowledge PhotoMed-A holds full
right, title and interest to the PMA, free and clear of any
claims by you and your affiliates. The parties also agree that
in consideration of the receipt of the payment described in
this paragraph 1, to your actual knowledge, LaserSight shall
have the sole discretion to pursue commercialization of the
Xxxxxx Laser (as defined in the Agreement and Plan of Merger)
and related PMA and therefore the parties acknowledge that
LaserSight has discharged its obligations under Section 6.5 of
the Agreement and Plan of Merger as it relates to Section
2.2(a).
2. If a laser manufactured by or for LaserSight which uses part
or all of the know how of the Xxxxxx Laser is approved by the
FDA for general commercial use for the treatment of hyperopia
(the "Hyperopia Approval") prior to June 1, 1999, then within
thirty (30) days after the date of such approval, LaserSight
will pay to the Xxxxxx Parties that number of shares of Common
Stock which results from dividing (A) $1,000,000.00 by (B) the
average closing price of a share of Common Stock for the ten
(10) day period immediately preceding the date of the
Hyperopia Approval (the "Hyperopia Consideration"). The number
of shares to be issued pursuant to this paragraph 2 shall be
limited by the terms of Section 2.3 of the Agreement and Plan
of Merger. The last sentence of Section 2.2(c) is hereby
deleted. If Hyperopia Approval is granted on or after June 1,
1999 but prior to June 1, 2000, then the $1,000,000.00 amount
utilized to calculate the Hyperopia Consideration shall be
reduced by the number resulting from multiplying $2,739.73 by
the number of days which have elapsed since June 1, 1999. If
Hyperopia Approval is granted on or after June 1, 2000 no
payment shall be due pursuant to this paragraph 2. If between
the date hereof and June 1, 2000 another entity which is
seeking Hyperopia Approval (the "Third Party") either
purchases substantially all of LaserSight's assets or acquires
at least eighty-five percent (85%) of LaserSight's outstanding
Common Stock or LaserSight purchases substantially all of the
Third Party's assets or acquires at least eighty-five percent
(85%) of the Third Party's outstanding common stock, and
subsequent to the closing of such transaction either ceases to
actively pursue or abandons Hyperopia Approval, then upon the
date the relevant party ceases to actively pursue or abandons
Hyperopia Approval it shall be deemed that Hyperopia Approval
has been obtained.
The payment described in this section shall be in lieu of the
payment described in Section 2.2(c) of the Agreement and Plan
of Merger and upon making such payment (or if Hyperopia
Approval is not obtained prior to June 1, 2000) LaserSight
shall have no further obligation pursuant to such Section
other than its indemnification obligations contained in
Section 8 of the Agreement and Plan of Merger.
You agree, as your time permits, to assist LaserSight in
obtaining the Hyperopia Approval described in this paragraph 2
by (i) performing clinical trials, (ii) providing LaserSight
with the results of such trials in a form which may be used
for preparation for submission to the FDA, and (iii)
performing such other services as are agreed to by the parties
from time to time. In connection with such assistance you
agree to only utilize the services of current LaserSight
employees, which shall be provided to you promptly upon your
request, and not to retain any third parties without
LaserSight's prior approval. LaserSight shall comply with
Section 6.5 (other than 6.5(iii)) of the Agreement and Plan of
Merger and all references to FDA Approval shall be deemed to
refer to Hyperopia Approval, references to the PMA application
shall be deemed to refer to the hyperopia application and
references to PMA shall be deemed to refer to a PMA for
Hyperopia Approval. You shall not have liability of any nature
whatsoever based on LaserSight's failure to obtain Hyperopia
Approval.
3. Within two weeks after the Payment Date, LaserSight shall
provide you with a scanning laser which, as further described
below, you shall utilize to pursue FDA equivalency approval of
LaserSight's refractive scanning laser system (which is
currently in clinical trials) as compared to the FDA approval
granted to the Xxxxxx Laser on July 29, 1998 in connection
with the PMA (the "FDA Equivalence Approval").
You directly or indirectly agree to utilize, as your time
permits, the scanning laser provided by LaserSight, together
with such other resources which you deem necessary, to
generate clinical data for submission to the FDA in order to
facilitate receipt of FDA Equivalence Approval. LaserSight
shall be responsible for reasonable out-of-pocket costs and
expenses actually incurred in amounts not to exceed
$150,000.00 in connection with your pursuit of the FDA
Equivalence Approval and any expenses in excess of such amount
shall be borne by you, unless approved in advance by
LaserSight. LaserSight shall reimburse you within thirty (30)
days after it receives proper documentation of expenses
incurred pursuant to the terms of the previous sentence. By
the tenth day after the end of each month, LaserSight shall
provide to you a written report setting forth in detail the
amount of costs and expenses incurred in the immediately prior
month and cumulatively from the date the scanning laser has
been received by you in connection with the LaserSight
resources you have utilized. Within five (5) days after your
receipt of such report from LaserSight you will provide
LaserSight with a report that sets forth all costs and
expenses (on a monthly and cumulative basis) you have incurred
in connection with the pursuit of the FDA Equivalence
Approval. LaserSight shall have the right to terminate your
involvement in this process and the above-described funding if
LaserSight determines that you have failed to satisfy your
obligations in connection with this paragraph 3. In the event
of such a termination by LaserSight, LaserSight will reimburse
you for costs and expenses incurred (pursuant to the terms of
this paragraph) prior to the date of such termination. You
shall not have any liability of any nature whatsoever based on
LaserSight's failure to obtain FDA Equivalence Approval.
If on or prior to the date which is four (4) months after the
date on which LaserSight delivers to you the scanning laser
described in this paragraph (the "Equivalency Approval Date")
FDA grants the FDA Equivalence Approval, then LaserSight will
pay the Xxxxxx Parties $1,000,000.00. If such approval is
received after the Equivalency Approval Date but prior to the
first year anniversary of the Equivalency Approval Date, then
LaserSight shall pay the Xxxxxx Parties $1,000,000.00 less the
number resulting from multiplying $2,739.73 times the number
of days which have elapsed since the Equivalency Approval
Date. If FDA Equivalence Approval is granted on or after the
first year anniversary of the Equivalency Approval Date no
payment shall be due pursuant to this paragraph 3. Any payment
required by the terms of this paragraph shall be made within
10 days after the receipt of FDA Equivalence Approval by wire
transferring, in immediately available funds, the required
payment amount to an account or accounts designated by you as
agent for the Xxxxxx Parties.
The payment described in this section shall be in lieu of the
payment described in Section 2.2(d) of the Agreement and Plan
of Merger and upon making such payment (or if FDA Equivalence
Approval is not obtained prior to the first year anniversary
of the Equivalency Approval Date) LaserSight shall have no
further obligation pursuant to such Section other than its
indemnification obligations contained in Section 8 of the
Agreement and Plan of Merger.
4. If LaserSight acquires (through license, with the ability to
sublicense, or otherwise) the rights to utilize the patents
previously held by Pillar Point Partners, Summit Technology,
Inc. or Visx, Inc. (collectively, the "PP Patents") and as a
result of such acquisition is not required in connection with
such acquisition to pay a per procedure fee or royalty, then
LaserSight agrees that it will not assert against you, Eyes of
the Future, P.C., a Pennsylvania professional corporation
("EOTF"), Xxxxxxxx X. Xxxxxx, M.D., P.C., a Pennsylvania
professional corporation ("PC"), or a Xxxxxx Affiliate (as
defined in the Patent Purchase Agreement, dated July 15, 1997,
between you and LaserSight) for so long as you maintain an
ownership interest of at least 25% in EOTF and PC and satisfy
such definition of Xxxxxx Affiliate, as applicable, any claim
for infringement of such Pillar Point patents based on your or
such entities' use of up to three (3) excimer lasers. The
non-assertion clauses of this section do not constitute a
license or convey any right or interest in the PP Patents and
is not assignable or otherwise transferable by you or such
entities. In addition, LaserSight agrees that it will license
lasers purchased (in excess of the three (3) lasers mentioned
immediately above) by you, EOTF and/or PC (as long as you
maintain an ownership interest of at least 25% in such
entities) and/or a Xxxxxx Affiliate on terms and conditions
then utilized by LaserSight for licenses of a similar scope
(e.g., number of lasers covered by such license, volume of
procedures performed by the licensee, patents covered by the
license, etc.) and that if subsequent to the grant of such
license to you, EOTF, PC or a Xxxxxx Affiliate LaserSight
grants a license of a similar scope (taking into account the
number of lasers covered by such license, volume of procedures
performed by the licensee, patents covered by the license,
etc.) except at more favorable per procedure or royalty rate
than those previously provided to you, EOTF, PC or a Xxxxxx
Affiliate, LaserSight shall notify the relevant party and such
party will be entitled to receive the more favorable per
procedure or royalty rate subject to the same terms and
conditions under which such more favorable rates have been
granted.
Notwithstanding the foregoing, if in connection with
LaserSight acquiring (through licensure or otherwise) the
right to utilize the PP Patents, LaserSight is required to pay
a per procedure fee or other royalty, then the terms of this
section will not preclude LaserSight from charging you, EOTF,
PC or a Xxxxxx Affiliate such fees or royalties (but no amount
in addition to such fees or royalties) for up to fifteen (15)
lasers. In addition, LaserSight agrees that it will license
lasers purchased (in excess of the fifteen (15) lasers
mentioned immediately above) by you, EOTF and PC (as long as
you maintain an ownership interest of at least 25% in such
entities) and a Xxxxxx Affiliate on terms and conditions then
utilized by LaserSight for licenses of a similar scope (e.g.,
number of lasers covered by such license, volume of procedures
performed by the licensee, patents covered by the license,
etc.) and that if subsequent to the grant of such license to
you, EOTF, PC or a Xxxxxx Affiliate LaserSight grants a
license of a similar scope (taking into account the number of
lasers covered by such license, volume of procedures performed
by the licensee, patents covered by the license, etc.) except
at more favorable per procedure or royalty rates than those
previously provided to you, EOTF, PC or a Xxxxxx Affiliate,
LaserSight shall notify the relevant party and such party will
be entitled to receive the more favorable per procedure or
royalty rate subject to the same terms and conditions under
which such more favorable rates have been granted.
5. The right to receive royalties described in Section 2(c) of
your Consulting Agreement with LaserSight dated July 15, 1997
shall end on August 1, 1999 rather than as currently stated in
such agreement.
6. Except as modified hereby the agreements referenced in this
letter shall remain in full force and effect.
7. You and the parties hereto agree to execute any and all
agreements, including, without limitation, certain amendments
to the Agreement and Plan of Merger, which may be necessary to
fully and accurately document and carry out the terms of this
letter.
8. LaserSight hereby acknowledges and agrees that (i) the 25,000
stock options previously granted to Xx. Xxxxxx did not
terminate thirty (30) days after the termination of his
Consulting Agreement with LaserSight, (ii) such options vest
pursuant to the following schedule, and (iii) such options
expire on July 29, 2002:
Number of Cumulative
Year Percentage Vested Shares Vested Number of Shares
---- ----------------- ------------- ----------------
0-1 0 0 0
1-2 25% 6,250 6,250
2-3 25% 6,250 12,500
3-4 25% 6,250 18,750
4-5 25% 6,250 25,000
Since this letter shall serve as an amendment to the various agreements
it will only be valid upon execution by all the parties indicated below.
Please review the enclosed and contact me with any questions you may
have. If none, please have this letter executed by all parties and return to my
attention. LaserSight, intending to be legally bound, has signed this letter
agreement.
If the LaserSight Board does not approve this letter agreement on or
before September 17, 1998, this letter agreement shall be void and the Xxxxxx
Parties and LaserSight may exercise any rights under the Agreement and Plan of
Merger, including, but not limited to, the unwind.
Very truly yours,
LASERSIGHT INCORPORATED
/s/Xxxxxxx X. Xxxxxx
By: ----------------------------------
Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
Dated: September 15, 1998
PHOTOMED, INC. PHOTOMED ACQUISITION, INC.
/s/Xxxxxxxx X. Xxxxxx, M.D. /s/ Xxxxxxx X. Xxxxxx
By:--------------------------- By: ----------------------------------
Its:-------------------------- Xxxxxxx X. Xxxxxx
Dated: September 15, 1998 President and CEO
Dated: September 15, 1998
/s/Xxxxxxxx X. Xxxxxx, M.D. /s/Xxxxxx Xxxxxxxx
--------------------------------- ----------------------------------
Xxxxxxxx X. Xxxxxx, M.D. Xxxxxx Xxxxxxxx, Trustee for Xxxx Xxxxxxx
Dated: September 15, 1998 Xxxxxx, u/t/d December 27, 1991
Dated September 15, 1998
/s/Xxxxx Xxxxxx /s/ Xxxxxx Xxxxxxxx
--------------------------------- ----------------------------------
Xxxxx Xxxxxx Xxxxxx Xxxxxxxx, Trustee for Xxxx Xxxx
Dated September 15, 1998 Xxxxxx, u/t/d December 27, 1991
Dated: September 15, 1998
