[SARNOFF CORPORATION LETTER HEAD]
Dr. Frank S. Castellana
227 Sturart Road Eadt
Princeton, NJ, 08540
Dear Frank, August 14, 2000
Following our discussions this afternoon, I would like to document the
understandings that we have reached on the financial structure of the Joint
Venture Company for optical diagnostic products.
1. The equity position for Sarnoff would be determined as a fraction of
that of Mediscience. Initially, Sarnoff would have 12% of the equity.
On completion of the milestones in the first phase of work, Sarnoff's
equity share would grow to 18%
2. Sarnoff will make agreements for non-competition and exclusive
licensing of intellectual property with the Joint Venture Company.
3. Sarnoff will carry out the first phase program of work as originally
proposed at the price of $2.8M.
4. Sarnoff's decision to participate in the Joint Venture Company on this
basis will be based on achieving an initial capitalization and relevant
valuation to Mediscience acceptable to Sarnoff and to Mediscience.
I believe that these understandings will be the foundation of a vigorous and
productive commitment to realize the great potential of the diagnostic products
we have been planning. I am looking forward eagerly to working with you to go
forward with this opportunity.
Sincerely,
/s/ Donald J. Channin
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Donald J. Channin
Head, Electro-Optics
Cc: Yizhong Yu, Frank Pantuso, Jim Keszenhemer, Bob Andreas, Dave Zish
