EXHIBIT 99.2
AMENDMENT TO ROYALTY AGREEMENT
------------------------------
This Amendment to Royalty Agreement (the "Amendment") dated as of March 14,
1997 is entered into among Laser Partners, a Florida general partnership
("Recipient"), LaserSight Centers Incorporated, a Delaware corporation
("Grantor"), and LaserSight Incorporated, a Delaware corporation ("LSI").
RECITALS
--------
A. Recipient and Grantor have entered into a Royalty Agreement dated
January 15, 1993 (the "Royalty Agreement").
B. Recipient and LSI have entered into an Exchange Agreement dated January
25, 1993 (the "Exchange Agreement").
C. Grantor, LSI and the shareholders of the Corporation have entered into a
certain Agreement for Purchase and Sale of Stock dated December 3, 1992, as
amended and restated on January 15, 1993, as further amended by an Amendment to
Agreement for Purchase and Sale of Stock on April 5, 1993 and by a LaserSight
Centers Incorporated Consent of Shareholders dated as of July 10, 1995, and as
further amended by a Second Amendment to Agreement for Purchase and Sale of
Stock (the "Second Amendment") dated as of the date hereof (as so amended, the
"Stock Purchase Agreement") pursuant to which LSI has acquired all of the issued
and outstanding stock of Grantor.
D. LSI, Grantor and Recipient desire to amend the Royalty Agreement as set
forth herein.
E. The Audit Committee of the Board of Directors of LSI (the "LaserSight
Board") has recommended that the LaserSight Board approve the Amendment, and the
LaserSight Board has approved the Amendment.
AGREEMENTS
----------
The parties agree as follows:
1. Paragraph 2 of the Royalty Agreement is hereby deleted and the following
is substituted therefore:
2. Grant of Royalty. Effective upon the first to occur of (i) the
fifth anniversary of the date of the Amendment, or (ii) the issuance of
600,000 unregistered shares of LSI's common stock, par value $.001 ("LSI
Stock"), pursuant to Section 1.2(b)(ii) of the Stock Purchase Agreement,
Grantor hereby irrevocably grants to Recipient a perpetual royalty (the
"Royalty Payment") to be calculated by multiplying (i) the Royalty Fee (as
defined in Paragraph 3), by (ii) each eye on which photorefractive
keratectomy ("PRK") is performed by a fixed or mobile excimer laser which
is owned or operated by Grantor, LSI or a Subsidiary (as defined herein) of
LSI ("Laser Procedure"). The obligation to make Royalty Payments pursuant
to this Paragraph 2 is perpetual and nonterminable.
For purposes hereof, "Subsidiary" means a corporation, partnership or
limited liability company of which LSI or its other Subsidiaries own,
directly or indirectly, more than 80% of the shares, or ownership
interests, as applicable, necessary to elect the board of directors or
other governing body, as applicable, of such corporation, partnership or
limited liability company.
The parties acknowledge and agree that the term "Laser Procedure" does
not include (i) procedures which do not involve both an excimer laser and
the performance of PRK (e.g., follow-up treatment related to the removal of
cataracts, iridotomy, treatment of glaucoma, etc.), (ii) Laser Procedures
which are performed by a third party in connection with any license,
royalty or other similar arrangement granted by Grantor, LSI or a
Subsidiary, and (iii) Laser Procedures which are performed pursuant to a
contract with an insurance company, health maintenance organization,
preferred provider organization, or a similar managed care company or an
employer, pursuant to which Grantor, LSI or a Subsidiary agrees to arrange
for the delivery of eye care services other than PRK or for eye care
services which include PRK without any identifiable fee attributable
thereto.
2. Paragraph 3 of the Royalty Agreement is hereby deleted and the following
is substituted therefore:
3. Royalty Fee. The Royalty Fee shall be the lesser of (i) $43.00, or
(ii) the product of 6.66% times the average fee received during the
relevant period by Grantor, LSI or a Subsidiary, as applicable, for
performing PRK on an eye. The Royalty Payment may be paid, in LSI's sole
discretion, in cash or through the issuance of unregistered shares of LSI
Stock pursuant to the terms and conditions of Paragraph 4.
3. Paragraph 4 of the Royalty Agreement is hereby deleted and the following
is substituted therefore:
4. Payment of Royalty Fee.
--------------------------
(a) Within 60 days after the end of each fiscal quarter commencing
after the date of this Amendment in which Grantor is obligated to make
Royalty Payments pursuant to Paragraph 2, LSI will provide Recipient with a
statement setting forth the number of Laser Procedures performed during
such fiscal quarter (the "Statement").
(b) If all or any portion of a Royalty Payment is to be paid in cash,
then at the same time the Statement is delivered to Recipient, Grantor
shall also deliver to Recipient a LSI check for all or any portion of the
Royalty Payment.
(c) If all or any portion of a Royalty Payment is to be paid through
the issuance of LSI Stock, then at the same time the Statement is delivered
to Recipient, Grantor shall also deliver to Recipient a copy of a letter
which had been sent by LSI to LSI's transfer agent instructing such
transfer agent to issue shares of LSI Stock pursuant to this Paragraph 4.
(d) If all or any portion of the Royalty Payment is to be paid through
the issuance of LSI Stock, the number of shares of LSI Stock to be issued
shall be determined by dividing (i) the total amount of the Royalty Payment
to be paid in LSI Stock, by (ii) the average closing price of a share of
LSI common stock for the ten calendar day period immediately preceding the
date of the letter to the transfer agent described in Section 4(c), as
reported by the NASDAQ Stock Market or such other securities exchange or
national market system on which LSI Stock is then listed.
No fractional share of LSI Stock will be issued; Recipient who would
otherwise be entitled to a fractional share of LSI Stock shall receive in
lieu thereof an amount of cash (rounded to the nearest whole cent), without
interest, equal to such fractional share of LSI Stock multiplied by the
closing price of a share of LSI Stock as of the date of the Amendment as
reported by the NASDAQ Stock Market or such other securities exchange or
national market system on which LSI Stock is then listed.
4. Paragraph 5 of the Royalty Agreement is hereby deleted and the following
is substituted therefore:
5. Books and Records. Recipient shall have the right to inspect the books
and records of Grantor which are necessary to confirm the number of Laser
Procedures on which Royalty Payments were calculated. Such inspection must occur
during normal business hours with at least 48 hours advance notice.
5. Paragraph 6 of the Royalty Agreement is hereby deleted and the following
is substituted therefore:
6. Miscellaneous.
(a) This Agreement constitutes the entire understanding of the
parties, shall supersede and replace any prior agreements, and shall not be
amended or otherwise altered except in writing, executed by the parties.
(b) All notices, requests, demands and other communications hereunder
shall be in writing and shall be delivered in person or sent by registered
or certified mail, postage prepaid or by facsimile to the following
addresses:
If to Recipient:
Laser Partners
c/o Xxxxxxx X. X'Xxxxxxx, Xx., M.D.
0000 Xxxxx Xxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxxx Xxxxx
Star Tobacco Co.
00 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
(000) 000-0000
If to LSI:
LaserSight Incorporated
00000 Xxxxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
Xxx Xxxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Telecopy No.: (000) 000-0000
Any party may change its address for receiving notice by written notice
given to the others named above.
(c) It is a condition precedent to LSI's obligations under the
Amendment and the Royalty Agreement that:
(i) Recipient shall have completed, dated and executed the
Recipient's Certificate in the form attached to the Amendment as
Exhibit A and, if Recipient is not an "accredited investor" (as
defined in Regulation D of the SEC), Recipient shall have established
to the satisfaction of LSI that Recipient, either alone or with its
"purchaser representative" (as defined in such Regulation D), has such
knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of an investment in the LSI
Shares.
(ii) LSI shall have entered into:
(A) a settlement agreement, in form and of substance which
is satisfactory to LSI, determined in LSI's sole discretion,
related to the action known as Public Company Publishing, Inc. v.
LaserSight Incorporated, Case Number 96-546-CV-ORL-19 pending in
the United States District, Middle District of Florida, Orlando
Division, and
(B) a Second Amendment to Agreement for Purchase and Sale of
Stock among the Grantor, LSI and the Sellers (as defined
therein), which amends the Agreement for Purchase and Sale of
Stock dated January 15, 1993 between such parties.
(d) Each party to this Agreement shall pay its own costs and expenses
in connection with the transactions contemplated hereby. If any action is
brought by either party to enforce any provision of this Agreement, the
prevailing party shall be entitled to recover court costs, arbitration
expenses and reasonable attorneys fees.
(e) This Agreement shall be governed by and construed in accordance
with the internal substantive laws of the State of Missouri and the parties
hereby irrevocably and unconditionally consent and submit to the
jurisdiction of Missouri courts over all matters relating to the Agreement
and the Amendment. Each party agrees that service of process and any action
or proceeding hereunder may be made upon such party by certified mail,
return receipt requested to the address for notice set forth herein. Each
party irrevocably waives any objection it may have to the venue of any
action, suit or proceeding brought in such courts or to the convenience of
the form and each party irrevocably waives the right to proceed in any
other jurisdiction. Final judgment in any such action, suit or other
proceeding shall be conclusive and may be enforced in other jurisdictions
by suit on the judgment, a certified or true copy of which shall be
conclusive evidence of the fact that the amount of any indebtedness or
liability of any party therein described.
6. The Exchange Agreement is hereby terminated and has no further force or
effect.
7. Nothing contained in the Amendment or in the Royalty Agreement shall
create, or imply that any of LSI or any Subsidiary has, any duty or obligation
to perform or arrange for the performance of PRK by a fixed or mobile excimer
laser (the "Business"). The LaserSight Board may in its discretion discontinue,
sell or transfer the Business at any time.
8. If any term of the Amendment conflicts with the terms of the Royalty
Agreement, the term of the Amendment shall prevail. Except as amended hereby,
the Royalty Agreement remains in full force and effect.
9. The Amendment may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one in the same document.
10. Neither the Recipient nor any of the partners of Recipient shall issue
or cause the publication of any press release or other announcement with respect
to the Amendment or the transactions contemplated hereby without the written
consent of LSI.
IN WITNESS WHEREOF, the parties hereto have duly executed the Amendment as
of the date first above written.
LASERSIGHT INCORPORATED LASER PARTNERS,
a Florida general partnership
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxxxx
By:--------------------------- By: ------------------------------
Xxxxxxx X. Xxxxxx Xxxxxx X. Xxxxxxxx,
President and Chief Executive Officer Managing Partner
LASERSIGHT CENTERS INCORPORATED
/s/ Xxxxxxx X. Xxxxxx
By: --------------------------
Title: -----------------------
