SUMMIT TECHNOLOGY INC, S-3, 1995-09-19

SUMMIT TECHNOLOGY INC
S-3, 1995-09-19
COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH

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<PAGE> 1

REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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SUMMIT TECHNOLOGY, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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MASSACHUSETTS 04-2897945
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)

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21 HICKORY DRIVE
WALTHAM, MASSACHUSETTS 02154
(617) 890-1234
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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DAVID F. MULLER, PH.D., CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SUMMIT TECHNOLOGY, INC.
21 HICKORY DRIVE
WALTHAM, MASSACHUSETTS 02154
(617) 890-1234
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
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WITH A COPY TO:

LAUREN JENNINGS, ESQ. DAVID C. CHAPIN, ESQ.
GOLDSTEIN & MANELLO, P.C. ROPES & GRAY
265 FRANKLIN STREET ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02110 BOSTON, MASSACHUSETTS 02110
(617) 439-8900 (617) 951-7000

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /

<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
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PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE
TITLE OF SHARES AMOUNT TO BE AGGREGATE PRICE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock............................ 2,530,000 $46.25 $117,012,500 $40,349
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<FN>
(1) Includes 330,000 shares that the Underwriters have the option, exercisable within 30 days, to purchase
solely to cover over-allotments, if any.

(2) Estimated based on the average of the high and low prices reported by the National Association of
Securities Dealers Automated Quotation ("NASDAQ") National Market System on September 15, 1995.
</TABLE>
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED SEPTEMBER 19, 1995

P R O S P E C T U S

2,200,000 SHARES

SUMMIT TECHNOLOGY, INC.
COMMON STOCK
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All of the shares of common stock (the "Common Stock"), offered hereby are
being offered by Summit Technology, Inc. (the "Company" or "Summit"). The Common
Stock is traded on the NASDAQ National Market System under the symbol "BEAM."
The last reported sale price on the NASDAQ National Market System on September
18, 1995 was $48.875 per share.

PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE INFORMATION SET FORTH UNDER
"RISK FACTORS" BEGINNING ON PAGE 5.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COM-
MISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
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UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) COMPANY(2)
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<S> <C> <C> <C>
Per Share......................... $ $ $
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Total(3).......................... $ $ $
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<FN>
(1) The Company has agreed to indemnify the Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933, as amended. See "Underwriting."

(2) Before deducting estimated expenses payable by the Company of $325,000.

(3) The Company has granted the Underwriters a 30-day option to purchase up to 330,000 additional
shares of Common Stock solely to cover over-allotments, if any. If the Underwriters exercise
such option in full, the total Price to Public, Underwriting Discounts and Commissions and
Proceeds to Company will be $ , $ and $ , respectively. See "Underwriting."

</TABLE>

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The shares of Common Stock are being offered by the several Underwriters
named herein, subject to prior sale, when, as and if accepted by them and
subject to certain conditions. It is expected that certificates for the shares
of Common Stock offered hereby will be available for delivery on or about
, 1995 at the offices of Smith Barney Inc., 388 Greenwich Street, New
York, New York 10013.
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SMITH BARNEY INC.
BEAR, STEARNS & CO. INC.

MORGAN STANLEY & CO.
INCORPORATED

PIPER JAFFRAY INC.

, 1995
<PAGE> 3

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED IN THE OVER-THE-COUNTER MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS MAY ENGAGE IN
PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON STOCK OF THE COMPANY ON THE
NASDAQ NATIONAL MARKET SYSTEM IN ACCORDANCE WITH RULE 10B-6A UNDER THE EXCHANGE
ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT").

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<PAGE> 4

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements and notes thereto appearing elsewhere in
this Prospectus.

THE COMPANY

Summit Technology, Inc. ("Summit" or the "Company") is a worldwide leader
in the development, manufacture and sale of ophthalmic laser systems designed to
correct common refractive vision disorders such as nearsightedness,
farsightedness and astigmatism. The Company's excimer laser system ("Excimer
System") is the first and only excimer laser in the world to have been approved
by the FDA for commercial sale in the United States for ophthalmic use. In
addition, on September 15, 1995, the Company received the first Approvable
Letter ever issued by the Food and Drug Administration ("FDA") for an excimer
laser system to treat nearsightedness with laser vision correction ("LVC"), also
known as photorefractive keratectomy, or PRK. The Approvable Letter covers the
use of the Company's Excimer System to perform LVC between 1.5 and 7.0 diopters
with a six millimeter ablation zone. The Company believes that the Approvable
Letter positions it to receive approval from the FDA to commercially market the
Excimer System in the U.S. to treat nearsightedness utilizing LVC by the end of
1995, although there can be no assurance that such approval ever will be
received.

It is estimated that in excess of 100 million people in the United States
use eyeglasses or contact lenses to correct common vision disorders, with over
60 million of these individuals suffering from nearsightedness. U.S. consumers
spent an estimated $13.8 billion in eyeglass and contact lens purchases in 1993.
The Company believes that LVC performed with its Excimer System will make it
possible for many of these people to eliminate or reduce their reliance on
corrective eyewear. The Company believes that over 30 million people in the U.S.
use contact lenses and that many of these individuals would be particularly
receptive to LVC as they have already chosen to use an alternative to eyeglasses
for vision correction. Furthermore, in 1993 approximately 250,000 radial
keratotomy ("RK") procedures (a manual surgical procedure in which an
ophthalmologist uses a scalpel to make a series of incisions in the cornea) were
performed in the U.S. The Company believes that LVC will be an attractive
alternative to RK since LVC is a less invasive procedure.

According to the two year follow-up data accumulated by the Company during
its Phase III LVC clinical trials, all of the individuals undergoing LVC
experienced an improvement in visual acuity without corrective eyewear. Prior to
LVC, 95% of the eyes were 20/200 or worse. Of the eyes treated, approximately
91% improved to 20/40 or better, the legal requirement to obtain a driver's
license in most states without corrective eyewear, while the remaining 9%
experienced improved vision without corrective eyewear, but still required
corrective eyewear to achieve 20/40 vision or better.

LVC is an outpatient surgical procedure performed with the Excimer System
to treat nearsightedness, farsightedness and astigmatism, whereby submicron
layers of tissue are ablated (removed) from the surface of the cornea in a
computer-assisted, predetermined pattern to reshape the cornea. The average
procedure consists of approximately 150 laser pulses, each of which lasts
several billionths of a second. Cumulative exposure to the laser light is less
than one second. The entire procedure, including patient preparation and
post-operative dressing, generally lasts no more than thirty minutes.

Upon receipt of approval from the FDA to commercially market the Excimer
System in the U.S. for performing LVC, the Company intends to open between 20
and 30 vision correction centers ("Vision Correction Centers") in selected
geographic markets in the U.S. These Vision Correction Centers will provide LVC
directly to consumers. The Company intends to implement a comprehensive consumer
marketing program to promote and increase demand for LVC using television,
radio, print media and teleservices. This marketing program is intended to
benefit the Vision Correction Centers as well as unaffiliated users of the
Excimer Systems.

Upon such FDA approval, the Company also anticipates participating in per
procedure royalties payable to a partnership ("Pillar Point Partners") formed by
the Company and VISX, Incorporated ("VISX") to hold certain U.S. patents
covering excimer laser systems and procedures. Pillar Point Partners will
receive a royalty for each LVC procedure performed in the U.S. using excimer
laser technology licensed by Pillar Point Partners. The per procedure fee
charged by Pillar Point Partners will be fixed at the highest amount proposed

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<PAGE> 5

by either partner, not to exceed $250 per procedure. The Company initially
intends to propose a $250 per LVC procedure royalty. The per procedure royalty
fees paid to Pillar Point Partners are anticipated to provide the Company, as a
co-owner of Pillar Point Partners, with a source of significant recurring
revenue.

The Company's strategy is to become a vertically-integrated vision
correction business by (i) manufacturing and selling laser systems and related
products to correct vision disorders; (ii) operating Vision Correction Centers;
and (iii) participating in per procedure royalty revenues from its ownership in
Pillar Point Partners. The Company believes that this strategy will position it
to participate fully in revenues derived from the sale of LVC equipment and
revenue generated from LVC.

<TABLE>
THE OFFERING

<S> <C>
Common Stock being offered....................... 2,200,000(1)
Common Stock to be outstanding after the
offering....................................... 19,023,994(1)(2)
Use of proceeds.................................. To develop and market the Company's
Vision Correction Centers, promote
consumer acceptance of, and create demand
for, Laser Vision Correction and expand
manufacturing capabilities, and for
research and development, working capital
and other general corporate purposes.
NASDAQ National Market symbol.................... BEAM
<FN>
---------------
(1) Excludes up to 330,000 shares that may be sold by the Company pursuant to
the Underwriters' over-allotment option. See "Underwriting."

(2) Excludes 582,509 shares of Common Stock reserved for issuance upon the
exercise of stock options outstanding on June 30, 1995.
</TABLE>

<TABLE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<CAPTION>
SIX MONTHS
YEARS ENDED DECEMBER 31, ENDED JUNE 30,
---------------------------------------------------- -------------------
1990 1991 1992 1993 1994 1994 1995
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<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenues...................... $11,646 $22,018 $31,130 $26,801 $ 24,210 $ 9,524 $16,368
Gross profit...................... 6,255 12,376 17,765 10,321 4,847 1,660 5,119
Operating income (loss)........... (1,094) 321 (242) (9,182) (15,484) (8,609) (4,305)
Net income (loss)................. (665) 980 (383) (9,154) (15,381) (8,490) (3,971)
Net income (loss) per share....... $ (.05) $ .07 $ (.03) $ (.59) $ (.94) $ (.52) $ (.24)
Weighted average number of common
shares outstanding.............. 12,202 14,933 14,867 15,586 16,444 16,349 16,809
</TABLE>

<TABLE>
<CAPTION>
JUNE 30, 1995
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AS
ACTUAL ADJUSTED
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<S> <C> <C>
BALANCE SHEET DATA:
Working capital.................................................................. $19,527 $121,996
Total assets..................................................................... 48,026 150,495
Capital lease obligations, long-term............................................. 1,228 1,228
Stockholders' equity............................................................. 34,283 136,752
</TABLE>

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Except as otherwise noted herein, all information contained in this
Prospectus assumes no exercise of any outstanding employee, consultant and
director stock options and no exercise of the Underwriters' over-allotment
option.

4
<PAGE> 6

RISK FACTORS

In addition to the information contained elsewhere in this Prospectus,
prospective investors should carefully consider the following risk factors
before purchasing the securities offered hereby.

Absence of Profitability; Possible Future Losses. The Company has
experienced losses in each year of operation since inception in 1986, except for
a modest profit in 1991. For the six months ended June 30, 1995, the Company
incurred a net loss of $4.0 million, bringing its accumulated deficit to $34.0
million as of June 30, 1995. To implement its commercialization strategy, the
Company intends to make significant expenditures in the first twelve months
following FDA approval of LVC for treatment of nearsightedness including,
marketing, opening and operating Vision Correction Centers. The Company is
likely to incur losses through at least the end of 1995, and there can be no
assurances that the Company will ever achieve long-term profitability and
growth. See "Risk Factors -- Uncertain Market Acceptance," "-- Uncertainty of
New Business Venture" and "--Possible Failure to Obtain Regulatory Approvals for
Products."

Uncertain Market Acceptance. The Company believes that its profitability
and growth will depend upon broad acceptance of LVC in the U.S. LVC has not yet
been commercially introduced in the U.S., and there can be no assurance that it
will be accepted by either the ophthalmic community or the general population as
an alternative to existing methods of treating refractive vision disorders. The
acceptance of LVC may be affected adversely by its cost (estimated to be between
$1,200 and $1,600 per eye), concerns relating to its safety and efficacy, the
lack of third party reimbursement for LVC, general resistance to surgery, the
effectiveness of alternative methods of correcting refractive vision disorders,
the lack of long-term follow-up data, the possibility of unknown side effects
and the cost of the Excimer System (approximately $500,000). Promotional efforts
by suppliers of products or procedures which are alternatives to LVC, including
eyeglasses and contact lenses, some of whom may have greater resources than the
Company, may also affect adversely the market acceptance of LVC. The Company's
failure to achieve broad market acceptance of LVC is likely to have a material
adverse effect on the Company's business, financial condition and results of
operations. See "Risk Factors -- "Absence of Profitability; Possible Future
Losses" and "Safety and Efficacy Concerns."

Uncertainty of New Business Venture. The Company's three LVC centers
operating in the U.K. have incurred operating losses since their inception in
1992 and may continue to incur operating losses. Additionally, in the twelve
months following the FDA's approval of LVC for treating nearsightedness, the
Company intends to open 20 to 30 Vision Correction Centers in the U.S., and
anticipates incurring significant ongoing expenses including marketing, public
relations, leasing costs, personnel hiring and training costs. The success of
the Vision Correction Centers will depend on the market acceptance of LVC. The
Company has limited experience in the operation of such centers and the
marketing of LVC directly to consumers.

State and local laws and regulations relating to the Company's operation of
the Vision Correction Centers, which vary significantly from state to state, may
make it difficult or impossible for the Company to open or profitably operate
Vision Correction Centers in certain jurisdictions. The Company currently does
not anticipate opening Vision Correction Centers in every state. In order to
comply with these diverse regulatory frameworks, the Company will be required to
adopt varying strategies to establish and operate its Vision Correction Centers
in different states, which will increase its costs of doing business. Any
changes in the regulatory framework in any one or more states could cause delays
in the Company's operation of the Vision Correction Centers in such states, or
make continued operation unprofitable.

Continued significant marketing and operating expenditures, lack of broad
market acceptance of LVC in the U.S. and operating losses from the LVC centers
in the U.K. could prevent the Vision Correction Centers from becoming
profitable. There can be no assurance that the Vision Correction Centers will at
any time become profitable. Failure of the Vision Correction Centers to become
profitable may have a material adverse effect on the Company's business,
financial condition and results of operations. See "Risk Factors -- Absence of
Profitability; Possible Future Losses," "-- Uncertain Market Acceptance,"
"-- Competition" and "-- Possible Failure to Obtain Regulatory Approvals for
Products."

Patent Concerns. There are a number of U.S. and foreign patents covering
methods and apparatus for performing corneal surgery with excimer lasers and
holmium lasers that are not owned by the Company. If patents held by others were
considered valid and interpreted broadly in an adversarial proceeding, they
could be deemed to cover one or more aspects of the Excimer Systems or the
Company's holmium laser systems

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<PAGE> 7

("Holmium System") or their use to perform one or more procedures. While the
Company either owns or has obtained from Pillar Point Partners (a partnership
formed by the Company and VISX to hold certain U.S. patents) a license to what
it believes are the important U.S. LVC patents, there can be no assurance that
the Company will not be subject to one or more claims for infringement.

In the event one of the Company's products is adjudged to infringe a patent
in a particular market with the likely consequence of a damage award, the
Company and its customers may be enjoined from making, using and selling such
products in such market or be required to obtain a royalty-bearing license, if
available on acceptable terms. Alternatively, in the event a license is not
offered, the Company might be required to redesign those aspects of the products
held to infringe so as to avoid infringement. Any redesign efforts undertaken by
the Company might be expensive and could necessitate FDA review. Furthermore,
they could delay the re-introduction of the Company's products into certain
markets, or may be so significant as to be impractical. If redesign efforts were
impractical, the Company could be prevented from manufacturing and selling the
infringing products, which would have a material adverse effect on the Company's
business, financial condition and results of operations.

Failure to maintain the protection afforded by certain of the Company's
patents and the patents licensed to the Company and VISX by Pillar Point
Partners would have a material adverse effect on the Company's future revenues
and earnings. Further, there can be no assurance that the Company's patents (or
those licensed from Pillar Point Partners) will ultimately be found to be valid,
or that the Company's patent rights (or those licensed from Pillar Point
Partners) will deter others from developing substantially equivalent or
competitive products. Even if an unlicensed competitor's products infringe upon
the Company's patents or those of Pillar Point Partners, it may be costly to
enforce such rights. An infringement action may require the diversion of funds
from the Company's operations and may require management to expend effort that
might otherwise be devoted to the Company's operations. Furthermore, there can
be no assurance that the Company will be successful in enforcing its patent
rights. Any failure by the Company to prevail in patent infringement actions
against others, or any success by another company in enforcing a patent
infringement claim against the Company could have a material adverse effect on
the Company's business, financial condition and results of operations. See "Risk
Factors -- Risks of Pillar Point Partners."

On August 29, 1995, the Company filed suit in the U.S. District Court for
the District of Delaware against VISX for infringement of a certain U.S. patent
with a priority date of 1985, which was purchased by the Company in 1993 ("the
Azema Patent"). The Company is seeking damages for past infringement for all
excimer lasers manufactured by VISX in the U.S. for use outside the U.S. In
addition, the Company is seeking to enjoin VISX from manufacturing and selling
excimer lasers for any purpose other than U.S. clinical trials. As of September
18, 1995, VISX had not yet filed an answer to the Company's complaint. There can
be no assurance that the Company will prevail in this proceeding.

On September 5, 1995, VISX sued the Company and eight Canadian
ophthalmologists who use or have used the Company's Excimer System, in the
Federal Court of Canada, Trial Division, asserting that the Excimer System
infringed certain Canadian patents held by VISX. In such suit, VISX seeks, among
other things, damages for past infringement and a permanent injunction
preventing the Company and the other defendants from manufacturing, marketing,
selling, using and inducing others to use the Excimer System in Canada. The
Company believes that it has valid defenses to VISX's suit and intends to defend
such action vigorously; however, there can be no assurance that the Company will
be successful. The Company does not believe that the Canadian market is material
to its business. There can be no assurance that additional patent infringement
claims in the United States or in other countries will not be asserted against
the Company, or, if asserted, that the Company will be successful in defending
against such claims.

Risks of Pillar Point Partners. There can be no assurance that the
agreements between the Company and VISX relating to Pillar Point Partners will
preclude patent disputes with VISX with respect to technology not included in
Pillar Point Partners in the U.S. or with respect to any technology outside the
U.S., or that the Company's activities will not infringe patents held by other
parties. Under the agreements establishing Pillar Point Partners, the Company
must pay Pillar Point Partners a royalty fee each time its Excimer System is
used to perform LVC in the U.S., regardless of whether the Company performs the
procedure. The Company intends to maintain contractual arrangements permitting
it to collect such royalty fees from purchasers of its

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<PAGE> 8

Excimer Systems, but, there can be no assurance that it will be able to collect
such fees. In forming Pillar Point Partners, the Company has taken measures to
structure the partnership in a manner consistent with U.S. antitrust laws. The
compliance of Pillar Point Partners with these laws will depend upon the
activities of the partners, a determination of what constitutes the relevant
market for purposes of such laws, the number and relative strength of
competitors in such markets and numerous other factors, many of which are
presently unknown or are beyond the control of Pillar Point Partners. No
assurance can be given that the activities of Pillar Point Partners will not be
challenged under such laws. In March 1995, Pillar Point Partners sued
LaserSight, Inc. for patent infringement in the Federal District Court for
Delaware. Although the suit is based on a patent licensed to Pillar Point
Partners by VISX, the Company will share in the expenses of this litigation. In
addition, the defendant, LaserSight, Inc., has entered a counterclaim asserting
the Pillar Point Partners agreements constitute patent misuse. Any successful
challenge to the structure and operation of Pillar Point Partners or to its
patents could have a material adverse effect on the Company's business,
financial condition and results of operations. See "Risk Factors -- Patent
Concerns."

Competition. The vision correction industry is subject to intense
competition. LVC competes with eyeglasses, contact lenses and RK, as well as
with other technologies and surgical techniques currently under development,
such as corneal implants and surgery using different types of lasers. Certain of
the Company's competitors may have greater financial resources than the Company,
which may enable them to market their products or procedures to the consumer and
to the ophthalmic community in a more effective manner. The success of any
competing alternatives to LVC would have a material adverse effect on the
Company's business, financial condition and results of operations. See "Risk
Factors -- Uncertain Market Acceptance."

The Company is aware of a number of businesses that have been formed to
provide U.S. consumers with treatment for nearsightedness using LVC, and others
may be formed at such time as FDA approval for LVC to treat nearsightedness is
obtained. Upon FDA approval, these providers of LVC will compete with the Vision
Correction Centers and may have greater financial resources than the Company
and/or may be or become more experienced in profitably performing LVC. The
Company's Vision Correction Centers also may compete with hospitals, clinics and
private ophthalmologists to the extent such providers perform LVC within the
same geographic areas as a Vision Correction Center. The success of these
providers of LVC using the Company's or similar products in capturing the market
for LVC could have a material adverse effect on the Company's business,
financial condition and results of operations. See "Risk Factors -- Uncertainty
of New Business Venture."

The Excimer System currently competes with other manufacturers' excimer
laser systems sold outside the U.S. If another manufacturer were to receive
approval from the FDA to sell its excimer laser system in the U.S., the Excimer
System would become subject to competition in the U.S. At least one manufacturer
(VISX) currently is in advanced stages of the FDA approval process for such a
system. Additionally, competitors, both in the U.S. and abroad, may enter the
equipment manufacturing business or acquire existing companies. Competing
manufacturers of excimer laser systems may have greater financial resources than
the Company, may be able to offer their products at a lower cost or may develop
procedures that involve a lower per procedure cost. Competition from new
entrants may be particularly prevalent in those countries where significant
regulatory approvals are not required.

Safety and Efficacy Concerns. Concerns with respect to the safety and
efficacy of the Company's Excimer System to perform LVC include predictability
and stability of results. Potential complications and side effects include:
post-operative discomfort; corneal haze during healing (an increase in the light
scattering properties of the cornea); glare/halos (undesirable visual sensations
produced by bright lights); decreases in contrast sensitivity; temporary
increases in intraocular pressure in reaction to post-procedure medication;
modest fluctuations in refractive capabilities during healing; modest decreases
in best corrected vision (i.e., with corrective eyewear); unintended over- or
under-corrections; regression of effect; disorders of corneal healing; corneal
scars; corneal ulcers and induced astigmatism. There can be no assurance that
long-term follow-up data will not reveal additional complications that may have
a material adverse effect on acceptance of LVC which in turn would have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Risk Factors -- Uncertain Market Acceptance."

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Possible Failure to Obtain Regulatory Approvals for Products. The
Company's Excimer Systems and related disposables are regulated as medical
devices by the FDA under the Federal Food, Drug, and Cosmetic Act ("FDC Act").
As such, these devices require premarket clearance or premarket approval ("PMA")
by the FDA prior to commercialization in the U.S. The PMA approval process (and
underlying clinical studies) is lengthy and uncertain and requires substantial
commitments of the Company's financial resources and management's time and
effort. Delays in obtaining or failure to obtain required regulatory approvals
or clearances in the U.S. and other countries would prevent the marketing of the
Excimer System and other devices and impair the Company's ability to generate
funds from operations, which in turn would have a material adverse effect on the
Company's business, financial condition and results of operations. There can be
no assurance that the Company will be able to obtain required premarket
approvals or premarket clearances in the U.S. or certain foreign countries for
intended uses of its Excimer Systems, or any of its other devices for which the
Company seeks approvals or clearances.

The Company believes that the Excimer System requires a PMA or PMA
supplement for each of the surgical procedures which it is intended to perform,
including Phototherapeutic Keratectomy ("PTK"), LVC and Laser Assisted in situ
Keratomileusis ("LASIK"). The FDA has approved the Company's PMA application to
commercially market the Excimer System for PTK in the U.S. The Company has
obtained approval from the FDA to conduct clinical investigations of the Excimer
System for LVC and LASIK pursuant to an Investigational Device Exemption
("IDE"). The FDA may grant premarket approval with respect to a particular
procedure performed with the Excimer System only when it is satisfied that the
use of the device for that particular procedure is safe and effective. In
granting premarket approval, the FDA may restrict the types of patients who may
be treated, thereby limiting the market acceptance of the Excimer System. The
FDA may grant approval of the Excimer System for use with certain procedures but
not others. Modifications to a device that is the subject of an approved PMA,
its labeling, or manufacturing process may require approval by the FDA of PMA
supplements or new PMAs. Supplements to a PMA often require the submission of
the same type of information required for an initial PMA, except that the
supplement is generally limited to that information needed to support the
proposed change from the product covered by the original PMA.

On September 15, 1995, the Company received an Approvable Letter from the
FDA for the Company's PMA for use of the Excimer System in the U.S. to treat
nearsightedness using LVC. The Approvable Letter contains the final conditions
and product labeling requirements that the Company must satisfy prior to the
FDA's approval of the PMA. When and if the conditions have been fulfilled to the
satisfaction of FDA, the agency will issue a PMA approval letter, authorizing
commercial distribution of the device for certain indications. However, there
can be no assurance that the Company will obtain approval of the PMA for use of
the Excimer System to treat nearsightedness using LVC on a timely basis or at
all, and delays in receipt of or failure to receive such approval would have a
material adverse effect on the Company's business, financial condition and
results of operations.

The Company has obtained FDA approval to conduct several additional studies
involving subsets of patients under the Company's IDE for LVC. In addition, the
Company also is engaged in ongoing U.S. trials of its emphasis(R) erodible mask,
a single-use polymer disc developed by the Company to perform LVC ("Erodible
Mask"). There can be no assurance that the device will be shown to be safe and
effective, or that it will be approved or cleared by FDA or foreign bodies, for
the intended uses for which it is being investigated.

In June 1992, the Company was granted 510(k) premarket clearance for the
Holmium System and a related disposable hand-held probe for performing Laser
Sclerostomy ("LS"). In June 1993, the Company was granted premarket clearance
for a second hand-held tip for performing LS. If the Company makes any
modification to its cleared Holmium System or probes that constitutes a major
change to the intended use of the device or that could significantly affect the
safety or effectiveness of the device, the Company will be required to file a
new 510(k), or potentially a PMA, for the modification. The Company believes
that PMA approval is necessary to market the Holmium System for performing Laser
Thermal Keratoplasty ("LTK"). The Company has received approval from the FDA to
conduct several IDE studies of the Holmium System using LTK to treat
approximately 400 eyes for hyperopia and astigmatism. There can be no assurance
that the device will be shown to be safe and effective, or that it will be
approved or cleared by FDA or foreign bodies, for the intended uses for which it
is being investigated.

8
<PAGE> 10

Any products manufactured or distributed by the Company pursuant to a
premarket clearance notification or PMA are or will be subject to pervasive and
continuing regulation by the FDA. The FDC Act also requires the Company to
manufacture its products in registered establishments and in accordance with its
Good Manufacturing Practices ("GMP") regulations and to list its devices with
FDA. The Company's facilities in the U.S. and Ireland are subject to periodic
GMP inspections by the FDA. These regulations impose certain procedural and
documentation requirements upon the Company with respect to manufacturing and
quality assurance activities. The FDA has proposed changes to the GMP
regulations which will likely increase the cost of compliance with GMP
requirements. Labeling and promotional activities are subject to scrutiny by the
FDA and, in certain instances, by the Federal Trade Commission. Current FDA
enforcement policy prohibits the marketing of approved medical devices for
unapproved uses. Noncompliance with applicable requirements can result in, among
other things, fines, injunctions, civil penalties, recall or seizure of
products, total or partial suspension of production, denial or withdrawal of
premarket clearance or approval of devices, recommendation by the FDA that the
Company not be allowed to enter into government contracts and criminal
prosecution. The FDA also has the authority to request the repair, replacement
or refund of the cost of any device manufactured or distributed by the Company.
Changes in existing regulatory requirements or adoption of new requirements
could have a material adverse effect on the Company's business, financial
condition and results of operations. There can be no assurance that the Company
will not be required to incur significant costs to comply with laws and
regulations in the future or that laws and regulations will not have a material
adverse effect upon the Company's business, financial condition or results of
operations. All lasers manufactured by the Company are subject to the Radiation
Control for Health and Safety Act administered by the Center for Devices and
Radiological Health of the FDA which imposes record keeping, reporting and
safety requirements on manufacturers of lasers.

Furthermore, the introduction of the Company's products in foreign
countries may require obtaining foreign regulatory clearances. Sales of the
Company's products are currently unrestricted in over 40 countries. Sales of the
Company's laser systems are limited in several countries in addition to the
U.S., including Japan, Taiwan and Mexico. There can be no assurances that the
Company will be able to obtain regulatory clearances for its products in the
U.S. or foreign markets. See "Risk Factors -- Absence of Profitability; Possible
Future Losses" and "-- Uncertain Market Acceptance."

Manufacturing Concerns. The Company currently does not have experience
manufacturing its Excimer System in the volumes that may be required to satisfy
demand in the event that the FDA approves the Excimer System for LVC to treat
nearsightedness, and would require hiring and training of additional
manufacturing personnel to meet increased production demands. In addition, the
Company currently purchases certain components used in the manufacture of the
Excimer Systems from only one of the available suppliers. If any of these
suppliers were to cease providing components to the Company, the Company would
be required to locate and contract with a substitute supplier, and there can be
no assurances that such substitute supplier could be located in a timely manner,
or could provide required components on commercially reasonable terms. A failure
to increase production volumes in a cost-effective or timely manner, or any
interruption in the manufacturing of Excimer Systems, would have a material
adverse effect on the Company's business, financial condition and results of
operations.

Potential Liability Claims and Uninsured Risks; Limited Insurance. The
testing and use of human health care products entail an inherent risk of
physical injury to patients and physicians, and exposes the manufacturer to
potential product liability and other damage claims. In addition, the Company's
products include high voltage power supplies. While the Company maintains
product liability insurance with coverage of $5.0 million per occurrence and an
annual aggregate maximum of $5.0 million, there can be no assurance that any
product liability claim assessed against the Company would not exceed its
insurance coverage. There can be no assurance that adequate product liability
insurance will continue to be available, either at existing or increased levels
of coverage, on commercially reasonable terms, if at all, and that the Company's
existing insurance will be adequate to cover any future claims that may be made.
Also, while the Company is exploring the availability of umbrella liability and
errors and omissions coverage for its Vision Correction Centers, there can be no
assurance that such coverage will be available in amounts sufficient to protect
the Company from malpractice, negligence or other claims, or that it will be
available at an acceptable cost. Even if a claim against the Company is covered
by insurance, the costs of defending a product liability, malpractice,

9
<PAGE> 11

negligence or other action, and/or the assessment of damages in excess of
insurance coverage, could have a material adverse effect on the Company's
business, financial condition and results of operation.

Volatility of Stock Price. The market price of the Company's Common Stock
historically has been volatile. Factors such as announcements of technological
innovations or new products by the Company or its competitors, changes in
domestic or foreign governmental regulations or regulatory approval processes,
developments or disputes relating to patent or proprietary rights and public
concern as to the safety and efficacy of the procedures for which the Excimer
System is used, has and may continue to have a significant impact on the market
price of the Common Stock. Moreover, the possibility exists that the stock
market (and in particular the securities of technology companies such as the
Company) could experience extreme price and volume fluctuations unrelated to
operating performance.

Certain Anti-takeover Provisions of the Company's Charter and By-Laws. The
Company's Articles of Organization and By-Laws, as well as certain state
statutes, contain provisions that could have the effect of discouraging persons
from pursuing a non-negotiated takeover of the Company and preventing certain
changes of control. The Company's Articles of Organization and By-Laws fix the
number of directors at five and provide for the election of directors to
staggered, three-year terms. The Company has also authorized 5,000,000 shares of
preferred stock, $.01 par value, which could be issued with rights senior to the
Common Stock and once issued would impose various procedural and other
requirements that could make it more difficult for stockholders to effect
certain corporate actions. In addition, the Company has adopted a shareholders'
rights plan providing for discount purchase rights to the holders of Common
Stock upon certain acquisitions of the Company's Common Stock. These provisions,
together with the shareholders' rights plan, may discourage a third party from
attempting to acquire control of the Company and may lower the price that an
investor may be willing to pay for shares of the Company's Common Stock.

10
<PAGE> 12

THE COMPANY

Summit Technology, Inc. was incorporated in Massachusetts on November 27,
1985 and commenced operations on January 1, 1986. The Company's executive
offices are located at 21 Hickory Drive, Waltham, Massachusetts 02154, and its
telephone number is (617) 890-1234.

<TABLE>
PRICE RANGE OF COMMON STOCK

The Company's Common Stock is traded on the NASDAQ National Market System
under the symbol "BEAM." The following table sets forth the high and low closing
prices per share for the Common Stock during the indicated periods:

<CAPTION>
COMMON STOCK
-------------
PERIOD HIGH LOW
------ ---- ---
<S> <C> <C>
1993:
First Quarter......................................................... $30 1/4 $ 21
Second Quarter........................................................ 27 3/4 223/8
Third Quarter......................................................... 28 19 1/2
Fourth Quarter........................................................ 28 1/4 21
1994:
First Quarter......................................................... $38 $ 20 7/8
Second Quarter........................................................ 30 3/4 23
Third Quarter......................................................... 36 27
Fourth Quarter........................................................ 39 5/8 28 1/4
1995:
First Quarter......................................................... $34 7/8 $ 28
Second Quarter........................................................ 37 3/4 30 1/2
Third Quarter (through September 18, 1995)............................ 51 1/2 38
</TABLE>

On September 18, 1995, the last reported sale price per share for the
Common Stock was $48 7/8. As of September 15, 1995, there were 3,870 holders of
record of the Common Stock.

DIVIDEND POLICY

The Company has never declared or paid cash dividends on its Common Stock.
The Company currently intends to retain its earnings, if any, to finance future
growth, and therefore does not anticipate paying any cash dividends to holders
of its Common Stock in the foreseeable future.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 2,200,000 shares of
Common Stock being offered hereby are estimated to be approximately $102.5
million ($117.9 million if the Underwriters' over-allotment option is exercised
in full), after deducting the underwriting discounts and commissions and
estimated offering expenses payable by the Company. The Company intends to use
the net proceeds of this offering to develop and market its Vision Correction
Centers, promote consumer acceptance of, and create demand for, LVC through
advertising and marketing and expand manufacturing capabilities for Excimer
Systems, and for research and development, working capital and other general
corporate purposes. Pending such uses, the Company intends to invest the net
proceeds from this offering in short-term, investment grade, interest bearing
securities.

11
<PAGE> 13

<TABLE>

CAPITALIZATION

The following table sets forth the capitalization of the Company as of June
30, 1995 and as adjusted to reflect the receipt of net proceeds from the sale of
the 2,200,000 shares of Common Stock offered hereby. This table should be read
in conjunction with the Consolidated Financial Statements of the Company and
notes thereto appearing elsewhere in this Prospectus.

<CAPTION>
JUNE 30, 1995
------------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Current maturities of capital lease obligations............... $ 452 $ 452
======== =========
Capital lease obligations, long-term.......................... $ 1,228 $ 1,228
Stockholders' equity:
Common Stock, $.01 par value; 60,000,000 shares authorized;
16,823,994 shares issued and outstanding; and 19,023,994
shares issued and outstanding as adjusted(1)............. 168 190
Additional paid-in capital.................................. 68,194 170,641
Accumulated deficit......................................... (33,973) (33,973)
Treasury stock, at cost, 2,981 shares....................... (106) (106)
-------- ---------
Total stockholders' equity.................................... 34,283 136,752
-------- ---------
Total capitalization.......................................... $ 35,511 $ 137,980
======== =========
<FN>
---------------
(1) Excludes 582,509 shares of Common Stock reserved for issuance upon exercise of employee,
consultant and director stock options outstanding on June 30, 1995. See Note 9 to the
Company's Consolidated Financial Statements concerning stock options. Also excludes 330,000
shares subject to the Underwriters' over-allotment option. See "Underwriting."
</TABLE>

12
<PAGE> 14
<TABLE>

SELECTED CONSOLIDATED FINANCIAL INFORMATION

The selected consolidated financial data presented below for each of the five years ended December 31, 1994 are derived from
the Company's Consolidated Financial Statements, which have been audited by KPMG Peat Marwick LLP, independent certified public
accountants, whose reports thereon are unqualified. The selected consolidated financial data presented below for the six month
periods ended June 30, 1994 and 1995 have been derived from the unaudited financial statements of the Company and, in the opinion of
the Company's management, include all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation.
The information below should be read in conjunction with the Consolidated Financial Statements (and notes thereto) and "Management's
Discussion and Analysis of Financial Condition and Results of Operations," included elsewhere in this Prospectus. Operating results
for the six months ended June 30, 1995 are not necessarily indicative of the results that may be expected for the entire fiscal
year.

<CAPTION>
SIX MONTHS
YEARS ENDED DECEMBER 31, ENDED JUNE 30,
------------------------------------------------ -----------------
1990 1991 1992 1993 1994 1994 1995
------- ------- ------- ------- -------- ------- -------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenues........................................ $11,646 $22,018 $31,130 $26,801 $ 24,210 $ 9,524 $16,368
Cost of revenues.................................... 5,391 9,642 13,365 16,480 19,363 7,864 11,249
------- ------- ------- ------- -------- ------- -------
Gross profit........................................ 6,255 12,376 17,765 10,321 4,847 1,660 5,119
Operating expenses.................................. 7,349 12,055 18,007 19,503 20,331 10,269 9,424
------- ------- ------- ------- -------- ------- -------
Operating income (loss)............................. (1,094) 321 (242) (9,182) (15,484) (8,609) (4,305)
Other income (expense).............................. 429 666 (141) 28 103 119 334
------- ------- ------- ------- -------- ------- -------
Income (loss) before income taxes and extraordinary
credit............................................ (665) 987 (383) (9,154) (15,381) (8,490) (3,971)
Income taxes........................................ -- 463 -- -- -- -- --
------- ------- ------- ------- -------- ------- -------
Income (loss) before extraordinary credit........... (665) 524 (383) (9,154) (15,381) (8,490) (3,971)
Extraordinary credit -- utilization of net operating
loss carryforward................................. -- 456 -- -- -- -- --
------- ------- ------- ------- -------- ------- -------
Net income (loss)................................... $ (665) $ 980 $ (383) $(9,154) $(15,381) $(8,490) $(3,971)
======= ======= ======= ======= ======== ======= =======
PER SHARE DATA:
Income (loss) before extraordinary credit........... $ (.05) $ .04 $ (.03) $ (.59) $ (.94) $ (.52) $ (.24)
Extraordinary credit -- utilization of net operating
loss carryforward................................. -- .03 -- -- -- -- --
------- ------- ------- ------- -------- ------- -------
Net income (loss) per share......................... $ (.05) $ .07 $ (.03) $ (.59) $ (.94) $ (.52) $ (.24)
======= ======= ======= ======= ======== ======= =======
Weighted average number of shares of Common Stock
outstanding....................................... 12,202 14,933 14,867 15,586 16,444 16,349 16,809
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
------------------------------------------------ -----------------
1990 1991 1992 1993 1994 1994 1995
------- ------- ------- ------- -------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital..................................... $ 8,043 $25,615 $24,537 $26,618 $ 23,351 $19,132 $19,527
Total assets........................................ 13,666 35,494 38,772 50,548 51,167 45,147 48,026
Long-term debt net of current maturities............ 122 390 729 165 1,177 1,396 1,228
Stockholders' equity................................ 10,141 29,714 29,854 40,383 37,883 33,015 34,283
</TABLE>

13
<PAGE> 15

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Company's
Consolidated Financial Statements and the notes thereto, which are included
elsewhere in this Prospectus.

RESULTS OF OPERATIONS

FIRST SIX MONTHS OF 1995 COMPARED TO FIRST SIX MONTHS OF 1994

Revenues for the six months ended June 30, 1995 increased 71.9% to $16.4
million from $9.5 million for the six months ended June 30, 1994. The increases
were primarily attributable to higher sales of laser systems in the U.S. and
product upgrade revenue.

Regulatory delays in the U.S. will continue to negatively impact the
Company's revenues. In addition, increased competition in international markets,
a long sales cycle and the absence of a significant backlog may make quarterly
revenues unpredictable.

Cost of revenues as a percentage of revenues for the six months ended June
30, 1995 decreased to 68.7% from 82.6% for the six months ended June 30, 1994.
The decrease was primarily attributable to the absorption of fixed overheads
over higher sales volumes. This decrease was offset by increases in costs
incurred for product upgrades and revisions, and to a substantially lesser
extent costs related to the development of the erodible mask. The Company
recognizes a lower gross margin percentage on upgrades than on new sales of
laser systems and expects this trend to continue as it satisfies orders for
these upgrades which have increased significantly in the second quarter of 1995
and will continue at least through the remainder of 1995.

Operating expenses for the six months ended June 30, 1995 decreased 8.2% to
$9.4 million from $10.3 million for the six months ended June 30, 1994.
Operating expenses for the six months ended June 30, 1995 as a percentage of
revenues decreased to 57.6% from 107.8% for the six months ended June 30, 1994.
The decrease was primarily attributable to lower commissions paid to independent
sales representatives.

The net loss for the six months ended June 30, 1995 decreased 53.2% to $4.0
million from $8.5 million for the six months ended June 30, 1994. The net loss
related to LVC centers segment was $1.7 million for the six months ended June
30, 1995 and $1.5 million for the six months ended June 30, 1994.

1994 COMPARED TO 1993

Revenues for the year ended December 31, 1994 decreased 9.7% to $24.2
million from $26.8 million for the year ended December 31, 1993. The decrease
was primarily attributable to lower international sales. The decrease was offset
in part by increases in U.S. sales of Holmium Systems, service revenues and
revenues from the Company's LVC centers in the U.K. The decrease in
international sales was due to increased competition. The Company's upgrade
program continued to impact the Company's average selling price as early
versions of its laser systems were exchanged, on a limited basis, for new laser
systems at a reduced price.

Cost of revenues for the year ended December 31, 1994 as a percentage of
revenues increased to 80.0% from 61.5% for the year ended December 31, 1993. The
increase was primarily attributable to unabsorbed overheads due to a decline in
production volumes, increases in costs incurred for product upgrades and
revisions, and to a substantially lesser extent costs related to the development
of the erodible mask.

Operating expenses for the year ended December 31, 1994 increased 4.2% to
$20.3 million from $19.5 million for the year ended December 31, 1993. The
increases were primarily attributable to expenses related to regulatory affairs
and research and development.

The net loss for the year ended December 31, 1994 increased 68.0% to $15.4
million from $9.2 million for the year ended December 31, 1993.

14
<PAGE> 16

1993 COMPARED TO 1992

Revenues for the year ended December 31, 1993 decreased 13.9% to $26.8
million from $31.1 million for the year ended December 31, 1992. The decrease
was primarily attributable to lower international sales and a decrease in the
average selling price of the Company's laser systems, due to the Company's
upgrade program. The decrease in international sales was due to increased
competition. The decreases were offset in part by increases in U.S. sales of
Holmium Systems and equipment service revenues.

Cost of revenues for the year ended December 31, 1993 as a percentage of
revenues increased to 61.5% from 42.9% for the year ended December 31, 1992. The
increase was primarily attributable to unabsorbed overheads due to a decline in
production volumes, increases in costs incurred for product upgrades and
revisions, and to a substantially lesser extent costs related to the development
of the erodible mask.

Operating expenses for the year ended December 31, 1993 increased 8.3% to
$19.5 million from $18.0 million for the year ended December 31, 1992. The
increases were primarily attributable to development of the LVC centers in the
U.K.

The net loss for the year ended December 31, 1993 increased to $9.2 million
from $.4 million for the year ended December 31, 1992.

LIQUIDITY AND CAPITAL RESOURCES

The Company's liquidity requirements have been met through external
financing. As of June 30, 1995, the Company's cash, cash equivalent balances and
short-term investments decreased $6.1 million to $11.1 million from $17.2
million as of December 31, 1994. The net loss of $4.0 million for the six month
period ended June 30, 1995 was offset by depreciation and amortization of $1.3
million and an increase in deferred revenue of $1.0 million. Accounts receivable
and inventories increased $0.4 million and $1.3 million, respectively.

Cash provided by investing activities of $0.9 million resulted primarily
from a decrease of $2.3 million in short term investments which was offset in
part by additions to property and equipment of $1.1 million.

Cash provided by financing activities of $0.2 million resulted from
proceeds from the exercise of stock options of $0.4 million offset in part by
repayments of capital lease obligations of $0.3 million.

The Company has a $3.0 million leasing facility for capital asset purchases
in the U.S. and the U.K. for up to five years. At June 30, 1995, the Company had
$1.5 million of borrowings under this facility. In March 1995, the Company
received a renewal of its working capital line of credit agreement. The
agreement expires in March of 1996. The agreement allows the Company to borrow
up to $8.0 million against eligible accounts receivable at LIBOR plus 150 basis
points or Prime Rate per annum; if amounts are borrowed, the loan is secured by
accounts receivable and finished goods inventory. At June 30, 1995 the Company
had no borrowings under this facility.

In light of the effect of FDA and other regulatory requirements on the
Company's sales, the costs that the Company is incurring in pursuit and
anticipation of FDA approval, as well as development costs of its Vision
Correction Centers, the Company expects that it will continue to incur losses
until it is permitted by the FDA to sell Excimer Systems in the U.S. to perform
LVC and broad market acceptance of LVC occurs.

The Company intends to continue to expand its business through development
and marketing of the Company's Vision Correction Centers, development of
consumer acceptance of and demand for LVC, the expansion of manufacturing
capabilities and further research and development. Management believes that
internally generated funds and current cash resources, together with proceeds of
this offering, will be adequate to satisfy the Company's cash requirements,
including current anticipated expenditures, for at least twenty-four months.

15
<PAGE> 17

BUSINESS

THE COMPANY

Summit is a worldwide leader in the development, manufacture and sale of
ophthalmic laser systems designed to correct common refractive vision disorders
such as nearsightedness, farsightedness and astigmatism. The Company's Excimer
System is the first and only excimer laser in the world to have been approved by
the FDA for commercial sale in the United States for ophthalmic use. In
addition, on September 15, 1995, the Company received the first Approvable
Letter ever issued by the FDA for an excimer laser system to treat
nearsightedness with LVC. The Approvable Letter covers the use of the Company's
Excimer System to perform LVC between 1.5 and 7.0 diopters with a six millimeter
ablation zone. The Company believes that the Approvable Letter positions it to
receive approval from the FDA to commercially market the Excimer System in the
U.S. to treat nearsightedness utilizing LVC by the end of 1995, although there
can be no assurance that such approval ever will be received.

MARKET

Summit believes that the U.S. market for LVC, which includes both
purchasers of its Excimer Systems and consumers in need of vision correction,
represents its greatest opportunity for future growth. It is estimated that in
excess of 100 million people in the United States use eyeglasses or contact
lenses to correct common vision disorders, with over 60 million of these
individuals suffering from nearsightedness. U.S. consumers spent an estimated
$13.8 billion in eyeglass and contact lens purchases in 1993. The Company
believes that LVC performed with its Excimer System will make it possible for
many of these people to eliminate or reduce their reliance on corrective
eyewear. The Company believes that over 30 million people in the U.S. use
contact lenses and that many of these individuals would be particularly
receptive to LVC as they have already chosen to use an alternative to eyeglasses
for vision correction. Furthermore, in 1993 approximately 250,000 RK procedures
(a manual surgical procedure in which an ophthalmologist uses a scalpel to make
a series of incisions in the cornea) were performed in the U.S. The Company
believes that LVC will be an attractive alternative to RK since LVC is a less
invasive procedure.

The principal purchasers of the Company's products have been
ophthalmologists, universities, clinics and hospitals. There are approximately
13,000 ophthalmologists in the U.S. The Company believes that when FDA approval
of the Excimer System for LVC to treat nearsightedness has been obtained, U.S.
ophthalmologists will be receptive to LVC as a treatment for nearsightedness.
Furthermore, the Company is aware that

16
<PAGE> 18

several businesses have been formed to participate in the LVC market in the
U.S., some of which may purchase the Company's Excimer Systems.

The Company believes that the demand for Excimer Systems will be driven by
the public demand for LVC. Following FDA approval of LVC for treating
nearsightedness, the Company intends to undertake a significant marketing effort
in the U.S. to educate the public about the safety and efficacy of LVC. The
Company believes that through such marketing efforts, it can promote consumer
acceptance of, and create demand for, LVC in the U.S. See "Risk
Factors -- Uncertain Market Acceptance," -- Competition" and "-- Possible
Failure to Obtain Regulatory Approvals for Products" and "Business -- Products
and Procedures."

PRODUCTS AND PROCEDURES

The Company's products are used by ophthalmologists to treat the following:

Refractive Vision Disorders. Images enter the human eye through the
cornea. In a properly functioning eye, the cornea bends (refracts) incoming
images, causing the images to focus on the retina of the eye. A refractive
vision disorder is the inability of the cornea to refract properly incoming
images resulting in blurred vision. Nearsightedness (myopia), farsightedness
(hyperopia) and astigmatism are the three most common refractive vision
disorders. In a nearsighted eye, images are focused in front of the retina. In a
farsighted eye, images are focused behind the retina. In an astigmatic eye,
images are not focused at any one point. These disorders are commonly treated
with corrective eyewear. The Company's products are used to change the shape of
the cornea in a controlled manner so that these images are properly focused on
the retina thereby eliminating or reducing the need for corrective eyewear.

[Picture depicts three graphic images of a human eye, one of which has normal
refractive capabilities, one of which is nearsighted and one of which is
farsighted.]

Corneal Pathologies and Glaucoma. Corneal pathologies, which include
certain diseases, injuries and conditions of the cornea, can result in impaired
vision, discomfort or blindness. Such pathologies include corneal opacities,
irregular corneal surfaces and abnormal tissue growths on the cornea. Another
pathological condition of the eye is glaucoma, a disease characterized by a
sustained elevation of intraocular pressure which, if untreated, may result in
blindness.

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PRODUCTS

The following table presents in summary form the Company's laser systems,
the principal procedures for which they currently can be used, and the status of
the FDA approval process.

SUMMARY OF COMPANY PRODUCTS AND FDA STATUS

<TABLE>
<CAPTION>
TREATMENT
LASER SYSTEMS PROCEDURE APPLICATION FDA STATUS
----------------- ----------------------- ------------------- ----------------------------------
<S> <C> <C> <C>
Excimer System LVC (or PRK) without Nearsightedness Approvable Letter received
Erodible Mask September 15, 1995; FDA approval
anticipated before the end of 1995
LVC with Erodible Mask
Nearsightedness, Ongoing clinical trials
farsightedness and
astigmatism
Phototherapeutic
Keratectomy ("PTK") Corneal pathologies FDA approval received March 1995
Laser Assisted in situ
Keratomileusis Extreme Ongoing clinical trials
("LASIK") nearsightedness
Holmium System Laser Sclerostomy Glaucoma FDA clearance received June 1992
("LS")
Laser Thermal
Keratoplasty ("LTK") Farsightedness and Ongoing clinical trials
astigmatism
</TABLE>

Excimer System. The Company's principal product is its Excimer System,
which is incorporated in a fully integrated ophthalmic surgical laser
workstation for use by ophthalmologists to perform procedures to treat
refractive and other ophthalmic disorders. The Company has sold more than 350
Excimer Systems worldwide. Prior to March 10, 1995 when the FDA approved
commercial sale of the Excimer System for performing PTK, sales of the Excimer
System in the U.S. were restricted to a limited number of clinical trial sites.
As a result of this FDA approval, the Company is authorized to sell commercially
the Excimer System in the U.S. for performing PTK. Sales of the Company's
Excimer Systems outside the U.S. currently are unrestricted in over 40
countries, including most of Europe. The Company believes that sales of its
Excimer Systems will increase upon FDA approval for LVC for nearsightedness and
when broad market acceptance of LVC occurs. In addition to the U.S., the Company
is seeking to obtain regulatory approval for the sale of its Excimer Systems in
other countries, including Japan, Mexico and Taiwan.

The Excimer System delivers pulses of ultraviolet laser light to an eye to
ablate (remove) submicron layers of tissue from the surface of the cornea. The
Excimer System currently is configured to perform procedures either with a
mechanical iris (a device that shapes laser light), or with the Erodible Mask.
All procedures using the Excimer System are performed on an outpatient basis
with topical anesthesia.

Most of the laser light generated by the Excimer System is absorbed by the
ablated (removed) corneal tissue during a procedure. As a result, the laser
light does not penetrate interior portions of the eye and does not create
substantial amounts of heat in the surrounding tissue. These attributes make the
Excimer System well suited to corneal surgery.

The Company continues to refine its Excimer System to improve ergonomics
and versatility. In foreign markets the Company has recently introduced a new
model of the Excimer System designed to use the Erodible Mask for treatment of
astigmatism and farsightedness. The Company anticipates that it will begin
clinical trials of this new model in the U.S. in the near future. See "Risk
Factors -- Safety and Efficacy Concerns" and "-- Possible Failure to Obtain
Regulatory Approvals for Products."

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<PAGE> 20

Erodible Mask. The Excimer System currently is configured to treat
nearsightedness with or without the Erodible Mask, and to treat farsightedness,
astigmatism and combinations of these disorders only with the Erodible Mask. To
use the Erodible Mask, an ophthalmologist determines the correction, selects the
appropriate Erodible Mask and places it in the laser beam path of the Excimer
System. As the Erodible Mask is ablated by the laser, the inverse of its shape
is replicated on the cornea. The Company has produced a limited quantity of
Erodible Masks for clinical trials within the U.S. and has commenced production
of Erodible Masks on a small scale for commercial sale outside of the U.S. Due
to the limited use to date of the Excimer System to treat farsightedness and
astigmatism, the Company cannot yet determine whether the Excimer System will
provide acceptable treatment for these disorders.

Holmium System. The Holmium System delivers high intensity pulses of
infrared light to an eye by means of a fiber optic cable and a single-use,
hand-held probe that directly contacts the eye at the exact spots chosen by the
ophthalmologist. All procedures using the Holmium System are performed on an
outpatient basis with topical anesthesia.

PROCEDURES

Laser Vision Correction ("LVC"). LVC (also known as Photorefractive
Keratectomy, or "PRK") is an outpatient surgical procedure performed with the
Excimer System to treat nearsightedness, farsightedness and astigmatism, whereby
submicron layers of tissue are ablated (removed) from the surface of the cornea
in a predetermined pattern to reshape the cornea. The goal of LVC is to
eliminate or to reduce a person's reliance on corrective eyewear. The Company
estimates that ophthalmologists around the world have used the Company's Excimer
Systems to perform over 250,000 procedures to treat nearsightedness, including
approximately 2,750 procedures in U.S. clinical trials.

When performing LVC with the Excimer System, the ophthalmologist determines
the exact correction required (which is measured by the same examination used to
prescribe eyeglasses or contact lenses) and programs the correction into the
Excimer System's computer. If an Erodible Mask is used, the Erodible Mask itself
contains the correction. The ophthalmologist removes the thin surface layer of
the cornea (the epithelium) and positions the patient for the laser procedure.
The Excimer System emits laser pulses, each of which lasts several billionths of
a second, to ablate submicron layers of tissue from the surface of the cornea in
a predetermined pattern to reshape the front surface of the cornea. The average
procedure consists of approximately 150 laser pulses and lasts approximately 15
to 40 seconds. Cumulative exposure to the laser light is less than one second.
The entire procedure, including patient preparation and post-operative dressing,
generally lasts no more than thirty minutes.

Following the procedure, the ophthalmologist may prescribe topical
pharmaceuticals to promote corneal healing and to alleviate discomfort.
Individuals undergoing LVC generally experience discomfort for approximately 24
hours, and blurred vision for approximately 48 to 72 hours, after the procedure.
Although most patients experience improvement in uncorrected vision within a few
days of the procedure, it generally takes from two to six months for the
correction to stabilize and for the full benefit of the procedure to be
realized. An individual typically has one eye treated in a session, with the
second eye treated three to six months thereafter. See "Risk Factors -- Safety
and Efficacy Concerns" and "-- Possible Failure to Obtain Regulatory Approvals
for Products."

Phototherapeutic Keratectomy ("PTK"). PTK is an outpatient surgical
procedure performed with the Excimer System to treat corneal pathologies. In
this procedure, submicron layers of tissue are ablated from the surface of the
cornea in order to remove diseased, scarred or sight-inhibiting tissue. The goal
of PTK is not necessarily to cure the corneal pathology, but rather to alleviate
the symptoms associated with the pathology. In March 1995 the FDA approved the
Company's Excimer System to perform PTK, and as a result the Company is the only
ophthalmic laser manufacturer with FDA approval to sell ophthalmic excimer laser
systems in the U.S. The Company estimates that its Excimer Systems have been
used worldwide to perform approximately 8,000 PTK procedures.

Other Procedures. Other procedures performed with the Excimer System and
the Holmium System include Laser In Sito Keratomileusis ("LASIK") (a procedure
performed with the Excimer System to treat

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<PAGE> 21

extreme nearsightedness), Laser Thermal Keratoplasty ("LTK") (a procedure
performed with the Holmium System to treat farsightedness and astigmatism by
shrinkage of corneal tissue) and Laser Sclerostomy ("LS") (a surgical procedure
performed with the Holmium System to treat the symptoms of glaucoma by making an
opening in the front chamber of the eye). The Company estimates that
ophthalmologists around the world have used its products to perform over 5,000
LASIK procedures and over 1,100 LTK procedures. The Company has received FDA
clearance to sell its Holmium System in the U.S. for treatment of glaucoma with
LS and is currently engaged in FDA clinical trials seeking approval to sell the
Excimer System and the Holmium System to perform LASIK and LTK, respectively.

SAFETY AND EFFICACY

According to the two year follow-up data accumulated by the Company during
its LVC clinical trials, all of the individuals undergoing LVC experienced an
improvement in visual acuity without corrective eyewear. Prior to LVC, 95% of
the eyes were 20/200 or worse. Of the eyes treated, approximately 91% improved
to 20/40 or better, the legal requirement to obtain a driver's license in most
states without corrective eyewear, while the remaining 9% experienced improved
vision without corrective eyewear, but still required corrective eyewear to
achieve 20/40 vision or better.

The first LVC procedure for the treatment of nearsightedness using the
Excimer System was performed in 1989 and the first PTK procedure for the
treatment of a corneal pathology using the Excimer System was performed in 1988.
A large majority of such procedures have been performed only in the past four
years. Concerns with respect to the safety and efficacy of the Excimer System to
perform procedures include predictability and stability of results and potential
complications, such as modest decreases in best corrected vision and side
effects from LVC, PTK, LASIK and LTK. See "Risk Factors -- Safety and Efficacy
Concerns."

VISION CORRECTION CENTERS

Upon receipt of approval from the FDA to commercially market the Excimer
System in the U.S. for LVC to treat nearsightedness, the Company intends to open
between 20 and 30 Vision Correction Centers in selected geographic markets in
the U.S. These Vision Correction Centers will provide LVC directly to consumers.
Each Vision Correction Center will be staffed by optometrists, ophthalmologists
and administrative personnel. The Company will provide each Vision Correction
Center with an Excimer System and related equipment. Each Vision Correction
Center will treat consumers who come directly to the Vision Correction Center
and under certain circumstances will make its facilities available for use by
local area ophthalmologists.

The Company believes that, as a direct provider of LVC, its Vision
Correction Centers will benefit from any increase in the market demand for LVC.
Upon FDA approval for commercial sale of the Excimer System in the U.S. for LVC
to treat nearsightedness, the Company intends to implement a comprehensive
consumer marketing program to explain and promote LVC generally, using
television, radio and print media and teleservices. Based on market studies
conducted by the Company, the Company believes that such a marketing program
will have a significant impact on the consumer demand for LVC. In addition, the
Company intends to implement a direct-marketing program to direct consumers who
are interested in LVC to a Vision Correction Center.

In selected geographic markets, the Company intends to affiliate Vision
Correction Centers with a prominent hospital or university (an "Institution").
The Company anticipates that each Institution will utilize an Excimer System for
performing LVC within the Institution's facilities. The Company also will
provide a variety of business consulting, management and marketing services to
each Institution. LVC customers within the geographic region of an Institution
will be referred for treatment either to the Institution or to one of the Vision
Correction Centers based on the convenience of location to the customer. In
certain areas, the advertising and marketing materials used by the Company will
include the name of the Institution. The Company believes that it will benefit
from such affiliations because of the reputation of such Institutions. In

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<PAGE> 22

turn, the Company believes that the Institutions will benefit from the services
provided by the Company and the access to a customer base generated from the
Company's marketing activities. The Company also believes that unaffiliated
users of Excimer Systems will benefit from the Company's marketing activities.
The Company intends to direct patients to such users in areas where there are no
Vision Correction Centers, and the Company may from time to time open additional
Vision Correction Centers in response to market demand.

The Company has organized advisory boards of prominent optometrists and
ophthalmologists with experience in LVC to establish medical and operational
standards for the Vision Correction Centers. The Company further is developing
proprietary systems to track medical data relating to all procedures performed
at the Vision Correction Centers. The Company believes that these features,
together with the identification of the Company as the leading manufacturer of
excimer laser systems, will enhance consumer and ophthalmologist perceptions of
the Vision Correction Centers.

The Company believes that its experience in operating three LVC centers in
the U. K. has helped it refine the center concept for the U.S. market. These
centers have incurred operating losses since inception, and the Company believes
they may continue to incur operating losses.

The Company began segment reporting for its LVC centers in the year ended
December 31, 1992 and has reported approximately $2.0 million of capital
expenditures and approximately $6.2 million of operating losses as of June 30,
1995 in connection with these development activities and related marketing
activities. The Company anticipates that this segment will continue to incur
operating losses through at least the end of 1995, and will continue to incur
substantial ongoing marketing, operating and development expenses following FDA
approval for the Excimer System for LVC to treat nearsightedness.

The Company's Vision Correction Center business is owned by Refractive
Centers International, Inc. ("RCII"), a subsidiary of the Company. The
authorized capital of RCII is 10,000,000 shares of common stock, of which
5,000,000 have been issued to the Company and 800,000 have been reserved for
issuance under RCII's employee stock option plan. As of June 30, 1995, options
to purchase 710,250 shares of RCII common stock have been granted at an exercise
price of $.50 per share, of which 450,000 were granted to David F. Muller, the
Company's President and Chief Executive Officer. The options have a term of five
or ten years, and as of June 30, 1995, 24,050 were exercisable. The Company
intends to further capitalize RCII with additional equity contributions and
through intercompany loans with market rates and terms. The Company also intends
to enter into agreements with RCII that compensate each company for capital
transfers and services rendered to each other. All such transactions and
agreements will be subject to approval by Summit's Board of Directors.

MARKETING

The Company intends to implement a multi-tiered professional and consumer
marketing strategy upon receipt of FDA approval for commercial sale of its
Excimer System in the U.S. for LVC to treat nearsightedness.

Consumer Market Acceptance. The Company believes that its future success
is dependent on broad consumer market acceptance of LVC as an alternative to
eyeglasses, contact lenses, RK and other corrective treatments. The Company's
efforts to promote LVC directly to the consumer, known as "category
development," will be conducted through a comprehensive marketing program,
utilizing proven methods of television, radio and print advertising, public
relations and teleservices, that is based on historically successful programs
for consumer marketing of other medical products and procedures. The Company has
engaged advertising, telemarketing and public relations firms in the medical and
consumer marketing areas to work with it in category development. The Company
will benefit from broad consumer demand through sales of its Excimer Systems,
receipt of its percentage share of the per-procedure royalties paid to Pillar
Point Partners and otherwise, and treatment of customers in its Vision
Correction Centers.

Vision Correction Centers. In addition to the Company's efforts in
category development, the Company will utilize direct consumer advertising,
consumer public relations and teleservices methods to promote its Vision
Correction Centers and the Institutions as preferred locations for LVC. The
Company intends to focus

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<PAGE> 23

this advertising in geographic areas in which Institutions and Vision Correction
Centers will be located. Interested customers will be offered a toll-free
telephone number to pursue LVC as a potential treatment at a Vision Correction
Center. In certain cases, this advertising will highlight the affiliation
between Vision Correction Centers and affiliated Institutions. If a Vision
Correction Center is not geographically convenient to a customer, the customer
will be directed to the most geographically convenient owner of an Excimer
System in their area.

Excimer Systems. The Company sells its Excimer Systems and related
products worldwide (subject to regulatory restrictions) through directly
employed sales people, independent sales representatives and distributors. The
Company intends to continue devoting significant resources to marketing its
Excimer System in the U.S. for performing PTK and, upon receipt of approval from
the FDA to market commercially the Excimer System in the U.S. for LVC to treat
nearsightedness, the Company anticipates making a substantial increase in such
marketing efforts. The Company sells its products on open credit to select
distributors and end users, but in many instances requires a letter of credit or
a commitment from a third party lessor to secure payment. The U.S. list price of
an Excimer System and a Holmium System ranges from $475,000 to $525,000,
depending upon specifications.

The Company sponsors a series of educational programs that are designed to
introduce the Company's products and procedures, in which several thousand
ophthalmologists from approximately 50 countries have participated. The Company
has established the Summit International Laser User Group, which is an
organization bringing together approximately 500 top researchers, academicians
and clinicians from around the world, including the U.S., to exchange
information about the development and application of the Company's products. See
"Risk Factors -- Uncertain Market Acceptance," "-- Uncertainty of New Business
Venture" and " -- Possible Failure to Obtain Regulatory Approval for Products."

PATENTS

GENERAL

There are a number of U.S. patents covering methods and apparatus for
performing corneal surgery with excimer lasers, including several owned by the
Company and VISX. All U.S. patents now or hereafter granted to the Company or
VISX which could preclude either company from making, using or selling in the
U.S. its excimer laser corneal surgery systems as designed on June 3, 1992, have
been or are required to be exclusively licensed or offered for exclusive license
to Pillar Point Partners, a partnership jointly formed by the Company and VISX
in 1992 primarily to settle their U.S. patent disputes (the "Partnership" or
"Pillar Point Partners"). There also are several foreign patents covering
apparatus for performing excimer laser corneal surgery, including patents or
patent rights held by the Company, VISX and others. If the foreign patents held
by VISX or others were considered valid and interpreted broadly in an
adversarial proceeding, they could be deemed to cover one or more aspects of
certain of the Company's excimer-based products manufactured or sold abroad.

The Company believes that the protection afforded by certain of its patents
and the patents licensed to the Company and VISX by Pillar Point Partners is
material to its future revenues and earnings. The Company currently holds over
50 U.S. and foreign patents and has several patent applications pending in the
U.S. and elsewhere. See "Risk Factors -- Patent Concerns."

PILLAR POINT PARTNERS

On June 3, 1992, the Company, through a subsidiary, entered into a
Formation Agreement ("Formation Agreement") with a subsidiary of VISX to settle
disputes regarding their U.S. patents covering methods and apparatus for
performing ultraviolet laser corneal surgery (the "Subject Matter"). Pursuant to
the Formation Agreement, the Company and VISX (the "Partners") each contributed
to Pillar Point Partners (also referred to as the "Partnership") the exclusive
right to make, use and sell apparatus and perform (including the right to
license others to perform) procedures covered by any of their U.S. patents
relating to the Subject Matter (the "Pillar Point Patents"). The Partnership
arrangement does not cover foreign patents. The Partnership's strategy is to
license Pillar Point Patents to manufacturers and sellers of ophthalmic excimer
laser systems in the U.S., including Summit and VISX, in return for per
procedure royalties and royalties on equipment sales.

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<PAGE> 24

Simultaneously with the formation of the Partnership, the Company and VISX
entered into separate license agreements with the Partnership, for the life of
the Pillar Point Patents, whereby each is entitled to the benefit of the Pillar
Point Patents. The Partnership's patent rights will begin to expire in May 2004
(seventeen years from the issuance date of the first patent), subject to the
possible extension of the term of certain patents covering products regulated by
the FDA. The duration of such patent term extensions if available to, and sought
by, the patent owners, will be determined by the U.S. Patent Office, after
calculation of the regulatory review period and taking into account the
remaining duration of the patent after FDA approval is obtained.

In general, each of Summit and VISX are required to pay to the Partnership
equipment royalties ranging from 3% to 6%. No sales royalties are due on sales
of systems until the Excimer System is approved by the FDA for LVC to treat
nearsightedness, or on sales to affiliates of the Company or VISX unless the
number of systems sold to such affiliates exceeds 50% of all systems
manufactured by such manufacturer in the U.S. in a given year. In addition, each
licensee is required to pay the Partnership a per procedure royalty each time a
laser system sold or leased by it in the U.S. is used to perform a procedure
covered by the Pillar Point Patents, including procedures performed at Vision
Correction Centers. The per procedure royalties will be set by the Partnership
after the FDA approves the procedure. The agreements provide that the per
procedure fee charged by Pillar Point Partners will be fixed at the highest
amount proposed by either partner, up to $250 per procedure. The Company
currently intends to propose $250 as the initial per procedure LVC royalty. Each
licensee has complete discretion whether and to what extent it will require per
procedure royalty payments from customers; however each licensee is required to
make the royalty payments to the Partnership regardless of collection from
customers. While the Company intends to recover a per procedure fee from its
customers, there can be no assurance that it will be able to do so.

Partnership profits and losses are allocated between the Partners by
revenue category and cash is distributed monthly. Profits from royalties
received from third parties as a result of the sale of their equipment are
allocated 50% to Summit and 50% to VISX. Profits from royalties on equipment
sales paid to the Partnership by Summit and VISX are allocated entirely to VISX.
The first $30 of profits realized from each per procedure royalty from LVC
procedures using an adjustable iris is allocated to VISX and the remaining
profits are allocated 50% to Summit and 50% to VISX. Partnership profits
realized from the receipt of each per procedure royalty from LVC procedures
performed with an Erodible Mask are allocated so that VISX receives the first
$30, Summit receives the next $30, with the balance allocated 50% to each
thereafter. Partnership profits realized from receipt of each PTK per procedure
royalty are allocated 51% to VISX and 49% to Summit, but the Partnership has
decided not to charge any per procedure fees for PTK. The agreements further
provide that the Partners waive any rights to bring an action to partition the
Partnership property and that neither Partner may voluntarily cause a
dissolution of the Partnership.

The agreements forming Pillar Point Partners have been challenged in a
counterclaim to a patent infringement suit brought by the Partnership in March
1995, against LaserSight, Inc. in the Federal District Court in Delaware.
LaserSight, Inc. has alleged that these agreements and the alleged pooling of
patents thereunder constitute patent misuse. Any successful challenge to the
structure and operation of Pillar Point Partners could have a material adverse
effect on the Company's business, financial condition and result of operations.
See "Risk Factors -- Patent Concerns" and "-- Risks of Pillar Point Partners."

AZEMA PATENT

In 1993, the Company purchased certain U.S. and foreign patents for an
aggregate purchase price, including acquisition costs, of $5.1 million in cash
and 50,000 shares of Common Stock. One of these patents is the Azema Patent,
which the Company believes to be the only basic laser vision correction patent
in the U.S. that is not held by Pillar Point Partners. As required by the terms
of the governing agreements, the Company offered Pillar Point Partners the
opportunity to acquire exclusive rights under the Azema Patent, but Pillar Point
Partners declined. On August 29, 1995, the Company filed suit in the U.S.
District Court for the District of Delaware against VISX for infringement of the
Azema Patent. The Company is seeking damages for past infringement for all
excimer lasers manufactured by VISX in the U.S. for use outside the U.S. In
addition, the Company is seeking to enjoin VISX from manufacturing and selling
excimer lasers for

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<PAGE> 25

any purpose other than U.S. clinical trials. As of September 18, 1995, VISX had
not yet filed an answer to the Company's complaint. There can be no assurance
that the Company will prevail in this proceeding.

On August 3, 1995, a German court determined that the Schwind Keratom
ophthalmic excimer laser system distributed by Coherent, and the Chiron
Technolas Keracor 116 ophthalmic excimer laser system distributed by Chiron
Technolas, infringe the German counterpart of the Azema Patent. The court has
entered cease and desist orders against Schwind and Chiron Technolas and has
ordered them to pay damages to the Company for past infringements. Both the
Schwind and Chiron Technolas excimer laser systems are manufactured in Germany.
On September 5, 1995, the Company posted the requisite bond in Germany to
enforce the injunction issued against Chiron Technolas by the German court, as a
result of which Chiron Technolas is now prohibited from manufacturing, selling
or using its Keracor 116 ophthalmic excimer laser systems in Germany, where its
production facility is located. Chiron Technolas and Schwind have appealed the
judgment and Chiron Technolas has also filed a nullity action with the German
Patent Office. Although the Company believes it will prevail in this nullity
action, there can be no assurance that the German counterpart of the Azema
Patent will survive the proceeding. If the nullity action is decided against the
Company, its infringement verdicts in Germany will be overturned and it will be
liable for damages (which may or may not exceed the amount of the bond).

CANADA

On September 5, 1995, VISX sued the Company and eight Canadian
ophthalmologists who use or have used the Company's Excimer System, in the
Federal Court of Canada, Trial Division, asserting that the Excimer System
infringed certain Canadian patents held by VISX. In such suit, VISX seeks, among
other things, damages for past infringement and a permanent injunction
preventing the Company and the other defendants from manufacturing, marketing,
selling using and inducing others to use the Excimer System in Canada. The
Company believes that it has valid defenses to VISX's suit and intends to defend
such action vigorously; however, there can be no assurance that the Company will
be successful. The Company does not believe that the Canadian market is material
to its business. See "Risk Factors -- Patent Concerns."

OTHER

In 1992, the Company entered into a licensing agreement with IBM pursuant
to which IBM granted the Company a non-exclusive license to its patent covering
excimer laser ablation of tissue and the Company agreed to pay to IBM a royalty
of 2% of the net selling price of its Excimer Systems sold or leased in the U.S.
and certain other countries. The Company has also entered into a license
agreement with Patlex Corporation which holds certain patents on lasers. Under
this agreement, the Company has agreed to pay a royalty on certain laser
components of its products.

Issuance of one of the Company's European patents covering apparatus for
performing LVC is undergoing review in opposition through proceedings in the
European Patent Office. Another patent held by the Company is being challenged
in an invalidity action before the German Patent Office. While the Company
believes that it will prevail in such proceedings, there can be no assurance
that the Company's patents will survive such proceedings.

RESEARCH AND PRODUCT DEVELOPMENT

The Company intends to remain a leader in the development, manufacture and
sale of state-of-the-art laser technologies for the treatment of ophthalmic
disorders. In keeping with this goal, the Company expended $5.4 million, $5.7
million and $6.2 million for research, engineering and product development,
including regulatory and clinical affairs, during fiscal 1992, 1993 and 1994,
respectively. The Company expects to continue spending significant amounts on
these areas for the foreseeable future. The Research, Development and
Engineering Department, which also deals with regulatory and clinical affairs,
is comprised of 52 full-time employees, of whom five have Ph.D.'s and twelve
have Masters degrees.

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INSTALLATION, SERVICE AND TRAINING

The Company installs and maintains its Excimer Systems through a
combination of directly employed technicians and Company-trained employees of
its distributors. Installation, training and the first year of maintenance are
included in the purchase price of the Excimer System, except for sales to
certain distributors who are required to install Excimer Systems and provide
maintenance to their customers for one year. Thereafter, the Company offers
annual equipment maintenance contracts to customers who have purchased Excimer
Systems directly from the Company. Upon installation of an Excimer System, a
clinical specialist from the Company travels to the site to train the
ophthalmologist in the clinical use and operation of the Excimer System. The
Company maintains a 24-hour telephone service for emergency maintenance calls.

INSURANCE AND PRODUCT LIABILITY

The testing and use of human health care products entails an inherent risk
of physical injury to patients and physicians, and exposes the manufacturer to
potential product liability and other damage claims. In addition, the Company's
products include high voltage power supplies. Although the Company has not had
any product liability claims against it to date, there can be no assurance that
any damages which may be assessed against the Company would not exceed its
insurance coverage. The costs of defending a product liability or similar
action, and/or the assessment of damages in excess of insurance coverage, could
have a material adverse effect on the Company. The Company maintains product
liability insurance with coverage of $5.0 million per occurrence and an annual
aggregate maximum of $5.0 million.

The Company anticipates that ophthalmologists who will perform laser
procedures at Vision Correction Centers will be required to maintain their own
malpractice insurance coverage. The Company is currently exploring the
availability and cost of obtaining umbrella coverage with respect to any
malpractice claims relating to procedures performed at Vision Correction Centers
and of obtaining Errors and Omissions coverage with respect to clinic
administrative staff. See "Risk Factors -- Potential Liability Claims and
Uninsured Risks; Limited Insurance."

MANUFACTURING AND FACILITIES

The Company presently leases 50,000 square feet of manufacturing and office
space in Waltham, Massachusetts, under a ten-year lease expiring in August 2000
and 5,300 square feet of office space in Boston, Massachusetts under a five-year
lease expiring in March 2000. The Company also leases a 25,000 square foot
manufacturing facility in Cork, Ireland, under a lease expiring in 2026. To
date, the Company's manufacturing activities have consisted primarily of the
production of limited quantities of its products. The Company believes that if
it were to obtain FDA approval for commercial sale of the Excimer Laser for LVC
to treat nearsightedness, it would have the capacity to manufacture a sufficient
number of Excimer Systems to satisfy immediate demand. The Company also has the
manufacturing space to produce Excimer Systems in much greater volumes; however,
any significant increase in manufacturing capacity will require the hiring and
training of qualified manufacturing personnel. See "Risk
Factors -- Manufacturing Concerns."

EMPLOYEES

As of June 30, 1995, the Company employed 236 persons full-time in the
U.S., Ireland and other European countries, of whom approximately 67 were in
manufacturing, 52 in research, engineering, product development and regulatory
and clinical affairs, 37 in field service, 64 in selling, marketing and
administration and 16 in the vision correction center segment. Of such
employees, 164 are located in the U.S., 51 in Ireland and 21 in other parts of
the world. None of the Company's employees is represented by a union. The
Company believes that its relations with its employees are good.

COMPETITION

The Company is subject to competition in two principal areas: (i) the
consumer market for vision correction; and (ii) the professional market for
ophthalmic excimer laser equipment.

25
<PAGE> 27

Consumer Market. In the foreseeable future, the Company believes that
eyeglass and contact lens use will continue to be the most popular alternative
to LVC. Advantages of corrective eyewear include the comparatively low immediate
cost (although the Company believes that eyeglass and contact lens wearers may
spend well in excess of the cost of LVC over their lifetimes) and the avoidance
of surgery. It is likely that eyeglass and contact lens manufacturers, some of
whom have greater financial resources than the Company, will continue to
develop, enhance and market their products to make them as attractive as
possible to people with refractive vision disorders. Other manual surgical,
laser surgical and non-surgical techniques to treat vision disorders, such as
RK, are currently in use and under development, which may prove to be more
attractive to consumers than LVC.

The Company is aware of a number of businesses that have been formed to
provide LVC directly to consumers in the U.S., and others may be formed at such
time as FDA approval of the Excimer System for LVC to treat nearsightedness is
obtained, some of which may have greater financial resources than the Company.
The Company believes that some of these businesses are pursuing a strategy of
marketing LVC directly to consumers through optical chains. Such businesses, as
well as hospitals, clinics and private ophthalmologists who own excimer laser
equipment, may compete with the Company's Vision Correction Centers in the
geographic areas in which Vision Correction Centers are located. The Company
believes that the potential demand for LVC is sufficiently large that most
markets will support more than one business that offers LVC, and that the
marketing efforts of each may increase overall demand for LVC. See "Risk
Factors -- Competition."

Ophthalmic Excimer Laser Equipment. The Company's Excimer System is the
only excimer laser that has been approved by the FDA for commercial sale in the
U.S. for any ophthalmic application, and the only Excimer System that has
received an Approvable Letter from the FDA to treat nearsightedness with LVC.
The Company believes that it has a significant lead over all other equipment
manufacturing competitors involved in the U.S. regulatory process. The Company
further believes that there are significant requirements for entry into the
manufacturing field, including patents and the long lead time required to obtain
FDA approvals. Other companies, however, are engaged in the manufacture of
ophthalmic excimer laser equipment both in the U.S. and abroad, and additional
competitors may enter the equipment manufacturing business or acquire existing
companies. Competitors may have greater financial resources than the Company,
may be able to offer their products at a lower cost or may develop procedures
that involve a lower per-procedure cost. Competition from new entrants may be
particularly prevalent in those countries where significant regulatory approvals
are not required. See "Risk Factors -- Competition."

GOVERNMENT REGULATION

BACKGROUND

The Company's Excimer Systems and related disposables (including the
Erodible Mask) are regulated as medical devices by the FDA under the FDC Act. As
such, these devices require premarket clearance or premarket approval (also
referred to as a PMA) by the FDA prior to commercialization in the U.S. Pursuant
to the FDC Act, the FDA regulates the manufacture, distribution and production
of medical devices in the U.S. Noncompliance with applicable requirements can
result, among other things, in fines, injunctions, civil penalties, recall or
seizure of products, total or partial suspension of production, denial or
withdrawal of premarket clearance or approval of devices, recommendations by the
FDA that the Company not be allowed to enter into government contracts and
criminal prosecution. The FDA also has authority to request repair, replacement
or refund of the cost of any device manufactured or distributed by the Company.

In the U.S., medical devices are classified into one of three classes
(i.e., Class I, II, or III) on the basis of the controls deemed necessary by the
FDA to reasonably ensure their safety and effectiveness. Class I devices are
subject to general controls (e.g., labeling, premarket notification and
adherence to GMPs) and Class II devices are subject to general and special
controls (e.g., performance standards, postmarket surveillance, patient
registries and FDA guidelines). Generally, Class III devices are those which
must receive premarket approval by the FDA to ensure their safety and
effectiveness (e.g., life-sustaining, life-supporting and

26
<PAGE> 28

implantable devices, or new devices which have been found not to be
substantially equivalent to legally marketed devices).

Before a new device can be introduced to the market, the manufacturer
generally must obtain FDA clearance through either a 510(k) premarket
notification or approval of a PMA. A 510(k) clearance will be granted if the
submitted information establishes that the proposed device is "substantially
equivalent" to a legally marketed Class I or Class II medical device, or to a
Class III medical device for which the FDA has not called for PMAs. The FDA has
recently been requiring a more rigorous demonstration of substantial equivalence
than in the past. It generally takes from four to 12 months from submission to
obtain 510(k) premarket clearance, but it may take longer. The FDA may determine
that a proposed device is not substantially equivalent to a legally marketed
device, or that additional information is needed before a substantial
equivalence determination can be made. A "not substantially equivalent"
determination, or a request for additional data, could delay the market
introduction of new products that fall into this category and could have a
material adverse effect on the Company's business, financial condition and
results of operations. For any of the Company's devices that are cleared through
the 510(k) process, modifications or enhancements that could significantly
affect the safety or effectiveness of the device or that constitute a major
change to the intended use of the device will require a new 510(k) submission.
There can be no assurance that the Company will obtain 510(k) premarket
clearance within the above time frames, it at all, for any of the devices for
which it may file a 510(k).

A PMA application must be filed if a proposed device is not substantially
equivalent to a legally marketed Class I or Class II device, or if it is a Class
III device for which the FDA has called for PMAs. A PMA application must be
supported by valid scientific evidence which typically includes extensive data,
including preclinical and clinical trial data, to demonstrate the safety and
effectiveness of the device. If human clinical trials of a device are required,
and the device presents a "significant risk," the sponsor of the trial (usually
the manufacturer or the distributor of the device) will have to file an
Investigational Device Exemption ("IDE") application prior to commencing human
clinical trials. The IDE application must be supported by data, typically
including the results of animal and laboratory testing. If the IDE application
is approved, human clinical trials may begin at a specific number of
investigational sites with a specific number of patients, as approved by the
FDA. Sponsors of clinical trials are permitted to sell those devices distributed
in the course of the study provided such compensation does not exceed recovery
of the costs of manufacture, research, development and handling. An IDE
supplement must be submitted and approved by the FDA before a sponsor or
investigator may make a change to the investigational plan that may affect its
scientific soundness or the rights, safety or welfare of subjects.

The PMA application must contain the results of clinical trials, the
results of all relevant bench tests, laboratory and animal studies, a complete
description of the device and its components, and a detailed description of the
methods, facilities and controls used to manufacture the device. In addition,
the submission must include the proposed labeling, advertising literature and
training materials (if required). Upon receipt of a PMA application, the FDA
makes a threshold determination as to whether the application is sufficiently
complete to permit a substantive review. If the FDA determines that the PMA
application is sufficiently complete to permit a substantive review, the FDA
will accept the application for filing. The FDA review of a PMA generally takes
one to two years from the date the PMA is accepted for filing but may take
significantly longer. The review time is often significantly extended by the FDA
asking for more information, including additional clinical trials for
clarification of information already provided in the submission. A number of
devices for which FDA approval has been sought by other companies have never
been approved for marketing.

The PMA process is lengthy and uncertain and requires substantial
commitments of the Company's financial resources and management's time and
effort. Significant unforeseen delays in the approval process could occur as a
result of the FDA's failure to schedule advisory review panels, changes in
established review guidelines, regulations or administrative interpretations, or
determinations by the FDA that the clinical data collected are insufficient to
support the safety and efficacy of one or more of the devices for their intended
uses or that the data warrants the continuation of clinical studies. Toward the
end of the PMA review process, the FDA generally will conduct an inspection of
the manufacturer's facilities to ensure that the facilities are in compliance
with applicable GMP requirements. If the FDA's evaluation of both the PMA
application and the

27
<PAGE> 29

manufacturing facilities are favorable, the FDA will either issue an approval
letter or an Approvable Letter, which usually contains a number of conditions
which must be met in order to obtain final approval of the PMA. When and if the
conditions have been fulfilled to the satisfaction of the FDA, the agency will
issue a PMA approval letter, authorizing commercial distribution of the device
for certain indications. If the FDA's evaluation of the PMA application or
manufacturers facilities are not favorable, the FDA will deny approval of the
PMA application or issue a "not approvable letter". Furthermore, the FDA may
approve a device for some procedures but not others or for certain classes of
patients and not others. Modifications to a device that is the subject of an
approved PMA, its labeling or manufacturing process may require approval by the
FDA of PMA supplements or new PMAs. Supplements to a PMA often require the
submission of the same type of information required for an initial PMA, except
that the supplement is generally limited to that information needed to support
the proposed change from the product covered by the original PMA. Delays in
obtaining, or failure to obtain, requisite regulatory approvals or clearances in
the U.S. and other countries would prevent the marketing of the Excimer System
and other devices and impair the Company's ability to generate funds from
operations, which in turn would have a material adverse effect on the Company's
business, financial condition, and results of operations. See "Risk Factors --
Possible Failure to Obtain Regulatory Approvals for Products."

EXCIMER SYSTEM

The Company believes that the Excimer System requires a PMA or PMA
supplement for each of the surgical procedures which it is intended to perform,
including PTK, LVC and LASIK. The FDA has approved the Company's PMA application
to commercially market the Excimer System for PTK in the U.S. The Company has
obtained approval from the FDA to conduct clinical investigations of the Excimer
System for LVC and LASIK pursuant to an approved IDE. The FDA may grant
premarket approval with respect to a particular procedure performed with the
Excimer System only when it is satisfied that the use of the device for that
particular procedure is safe and effective. In granting premarket approval, the
FDA may restrict the types of patients who may be treated, thereby limiting the
market acceptance of the Excimer System. The FDA may grant approval of the
Excimer System for use with certain procedures but not others. Until premarket
approval is obtained, the Company may conduct limited clinical trials of the
device in the U.S. pursuant to an IDE. Currently, the Company has permission to
conduct excimer laser clinical trials in the U.S. at 20 sites, 19 of which
currently are active. Not all procedures are being performed at each site.

LVC. According to the two year follow-up data accumulated by the Company
during its Phase III LVC clinical trials, all of the individuals undergoing LVC
experienced an improvement in visual acuity without corrective eyewear. Prior to
LVC, 95% of the eyes were 20/200 or worse. Of the eyes treated, approximately
91% improved to 20/40 or better, the legal requirement to obtain a driver's
license in most states without corrective eyewear, while the remaining 9%
experienced improved vision without corrective eyewear, but still required
corrective eyewear to achieve 20/40 vision or better. The Company's LVC PMA
application for treatment of nearsightedness was accepted for filing by the FDA
on December 23, 1993 and was recommended for conditional approval by the FDA's
Advisory Panel on October 20, 1994.

On September 15, 1995, the Company received an Approvable Letter from the
FDA for the Company's PMA for use of the Excimer System in the U.S. to treat
nearsightedness using LVC. The Approvable Letter specifies a six millimeter
ablation zone for myopic corrections between 1.5 and 7.0 diopters. On September
18, 1995, the Company advised the FDA that it agreed to this request. The
Approvable Letter further contains the final conditions and product labeling
requirements that the Company must satisfy prior to the FDA's approval of the
PMA. The Approvable Letter also requires the initiation of postmarket studies
("PMS") and surveillance. The Company anticipates submitting the PMS protocols
to the FDA on a timely basis. The submission and completion of the PMS protocols
are not a condition to issuance of the approval letter. The data generated by
the PMS studies, however, will be reviewed by the FDA in determining whether
future restrictions on device labeling or use are warranted. When and if the
conditions have been fulfilled to the satisfaction of the FDA, the agency will
issue a PMA approval letter authorizing commercial distribution of the device to
treat nearsightedness using LVC. However, there can be no assurance that the
Company will obtain approval of the PMA for use of the Excimer System to treat
nearsightedness using LVC on a timely

28
<PAGE> 30

basis or at all, and delays in receipt of or failure to receive such approval
would have a material adverse effect on the Company's business, financial
condition or results of operations. See "Risk Factors -- Possible Failure to
Obtain Regulatory Approvals for Products."

On March 10, 1995, the FDA approved the Company's PMA application for the
Excimer System for performing PTK. Pursuant to such approval, the Company may
commercially market the Excimer System in the U.S. for performing PTK.

Other Procedures. The Company has obtained FDA approval to conduct several
additional studies involving subsets of patients under the Company's IDE for
LVC. Under a separate IDE from the LVC study, the Company has obtained approval
to conduct three therapeutic refractive studies on three different subsets of
patients using the LVC procedure. The FDA has not published guidelines for
clinical trials of the Excimer System for performing other procedures and the
Company is working with the FDA to design appropriate trials for such procedures
on a case by case basis. Because the FDA has not published guidelines with
respect to clinical trials for LASIK, it is not known whether or to what extent
the FDA may require further clinical trials of such procedures. There can be no
assurance that the device will be shown to be safe and effective, or that it
will be approved or cleared by the FDA or foreign bodies, for the intended uses
for which it is being investigated.

ERODIBLE MASK

The Company also is engaged in ongoing U.S. trials of the Erodible Mask.
The FDA has not published guidelines for clinical trials of the Erodible Mask;
thus, the Company does not know whether, or to what extent, clinical trials in
addition to those currently being conducted will be required. There can be no
assurance that the device will be shown to be safe and effective, or that it
will be approved or cleared by FDA or foreign bodies, for the intended uses for
which it is being investigated.

HOLMIUM SYSTEM

The Holmium System was developed by the Company for use by ophthalmologists
to treat hyperopia and astigmatism with LTK and to treat glaucoma with LS. In
June 1992, the Company was granted 510(k) premarket clearance for the Holmium
System and a related disposable hand-held probe for performing LS. In June 1993,
the Company was granted premarket clearance for a second hand-held tip for
performing LS. If the Company makes any modifications to its cleared Holmium
System or probes that constitute a major change to the intended use of the
device or that could significantly affect the safety or effectiveness of the
device, the Company would be required to file a new 510(k), or potentially a
PMA, for the modification. The Company believes that PMA approval is necessary
to market the Holmium System for performing LTK. The Company has received
approval from the FDA to conduct several IDE studies of the Holmium System using
LTK to treat approximately 400 eyes for hyperopia and astigmatism. Such trials
are ongoing. There can be no assurance that the device will be shown to be safe
and effective, or that it will be approved or cleared by the FDA or foreign
bodies, for the intended uses for which it is being investigated.

VISION CORRECTION CENTERS

In the event the FDA approves the commercial marketing of the Excimer
System for LVC to treat nearsightedness in the U.S., the Company intends to
develop a network of centers for the delivery of LVC directly to the public,
some of which will be Vision Correction Centers and some of which will be
located at Institutions (collectively, "Centers"). Centers located at
Institutions will be owned by the respective Institutions, such as hospitals and
universities (with the Company providing equipment and/or management services),
while Vision Correction Centers may be owned either by the Company or by one or
more healthcare professionals.

Numerous state laws and regulations presently affect the manner in which
the Company may establish or operate Centers, which vary significantly from
state to state. In some instances these laws and regulations are ambiguous, and
sometimes state regulators fail to provide adequate guidelines. The Company
believes that it has adopted a strategy that will enable it to establish its
network of Centers in compliance with all applicable

29
<PAGE> 31

regulatory requirements. However, federal and state regulatory attention may
continue to be directed to the practice of medicine, and any changes in state or
federal law or regulations, or in governmental agency and judicial
interpretations of such laws and regulations, could cause one of the Company's
strategies that is now in compliance with applicable laws to cease so to comply.
Additionally, while U.S. federal laws and regulations do not now clearly affect
Centers, there can be no assurance that the federal regulatory scheme will not
in the future place impediments upon the Company's proposed network of Centers.

Current state regulatory requirements and restrictions that relate to
corporate entities such as the Company that are involved in the ownership and
operation of healthcare facilities include prohibitions against: the corporate
practice of medicine except by an entity owned by healthcare professionals
and/or wherein the professionals exercise control over medical judgments;
patient referrals by healthcare professionals (including ophthalmologists and
optometrists) to a facility owned or compensated by such referring professional
(either generally, or sometimes by defining such payments as "kick backs"); and
"fee splitting" between healthcare professionals and corporate entities. Other
state laws specifically regulate the nature and compensation provisions of
employment or management relationships that healthcare professionals may have
with a corporate-owned facility, affect the form of business entity to be
utilized, limit payments either to the entity or to healthcare professionals to
the "fair market value" of their contributions, or affect the manner of
marketing the service performed at the healthcare facility. Additional
regulations in some states also now affect, or in the future may affect, the
establishment of Centers, including requirements for certificates of need and/or
other licensing to open a Center, and registration of medical laser equipment.

The Company believes that it has developed strategies for use in most
states to operate the Centers in compliance with applicable law. The business
terms and organizational structure of the Centers will vary significantly from
state to state, however, in order to accommodate the local regulatory framework.
There can be no assurance that the Company will be able to establish its Centers
in all of the jurisdictions its business strategy dictates, to continue such
Centers in the event of future regulatory changes, or profitably to operate any
or all of its Centers. See "Risk Factors -- Uncertainty of New Business
Venture."

OTHER REGULATORY REQUIREMENTS

All lasers manufactured by the Company are subject to the Radiation Control
for Health and Safety Act administered by the Center for Devices and
Radiological Health of the FDA. The law requires laser manufacturers to file new
product and annual reports and to maintain quality control, product testing and
sales records, to incorporate certain design and operating features in lasers
sold to end users pursuant to a performance standard, and to comply with
labeling and certification requirements. Various warning labels must be affixed
to the laser, depending on the class of the product under the performance
standard.

There can be no assurance that future changes in review guidelines,
regulations or administrative interpretations by the FDA or other regulatory
bodies, with possible retroactive effect, will not adversely affect the Company.
In addition to the foregoing, the manufacture, sale and use of the Company's
products are

30
<PAGE> 32

subject to numerous federal, state, local and foreign government laws and
regulations relating to such matters as safe working conditions, manufacturing
practices, environmental protection, fire hazard control and disposal of
hazardous or potentially hazardous substances. There can be no assurance that
the Company will not be required to incur significant costs to comply with such
laws and regulations in the future, or that such laws or regulations will not
have a material adverse effect upon the Company's ability to conduct business.
See "Risk Factors -- Possible Failure to Obtain Regulatory Approvals for
Products."

Furthermore, the introduction of the Company's products in foreign
countries may require obtaining foreign regulatory clearances. Sales of the
Company's products are currently unrestricted in over 40 countries. Sales of the
Company's laser systems are limited in several countries in addition to the
U.S., including Japan, Taiwan and Mexico. There can be no assurances that the
Company will be able to obtain regulatory clearances for its products in the
U.S. or foreign markets. See "Risk Factors -- Possible Failure to Obtain
Regulatory Approvals for Products. FDA Approvals for Products."

31
<PAGE> 33
<TABLE>

MANAGEMENT

OFFICERS AND DIRECTORS

The following table sets forth certain information concerning officers and directors of
the Company:

<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
David F. Muller...................... 46 President, Chief Executive Officer and Chairman
of the Board
Howard P. Apple...................... 55 Vice President, Research and Development
Rajiv P. Bhatt....................... 37 Executive Vice President, Treasurer and Chief
Financial Officer
Kimberley A. Doney................... 38 Executive Vice President, Regulatory, Clinical
and Quality Affairs
John B. Frantzis..................... 39 Vice President, Sales
Ronald Herskowitz.................... 41 Executive Vice President, Professional Business
Development
Ray H. Krauss........................ 46 Executive Vice President and Chief of
Operations
Peter J. Klopotek.................... 42 Vice President, Science and Technology
Peter E. Litman...................... 44 Executive Vice President and General Counsel
Robert D. Terrio..................... 49 Vice President, Customer Support
Jeffrey A. Bernfeld (2).............. 38 Director
Richard F. Miller (1)................ 44 Director
John A. Norris....................... 48 Director
Richard M. Traskos (1)(2)............ 47 Director
<FN>
---------------
(1) Audit Committee

(2) Compensation Committee
</TABLE>

Dr. Muller co-founded the Company in 1985 and has been its President, Chief
Executive Officer and Chairman of the Board since its inception. His present
term of office as Director will expire in 1996. Prior to founding the Company,
Dr. Muller was a founder of ExciMed Technologies, a joint venture acquired by
the Company. From 1983 to 1985, Dr. Muller was a product manager for Lambda
Physik of Acton, Massachusetts, where he was responsible for development of
excimer laser products and marketing strategies. Dr. Muller received a Ph.D. in
physical chemistry from Cornell University, an M.B.A. from the Wharton School
and an A.B. in chemistry and physics from Boston University.

Dr. Apple joined the Company in March, 1994 from Critikon, a Johnson &
Johnson company, where he served for eleven years, most recently as research
fellow and prior to that as director of research and development and business
development director. Critikon develops and manufactures critical care
instrumentation and devices. Dr. Apple holds a Ph.D. and an M.S. in biomedical
engineering and electrical engineering from Case Western Reserve University, an
M.B.A. from Columbia University and a B.A. in physics/math from Carleton
College.

Mr. Bhatt joined the Company in September, 1994. Prior to joining Summit,
Mr. Bhatt was the Chief Financial Officer and a member of the Board of Directors
of Carlisle Plastics, Inc., a diversified manufacturer of consumer plastic
products. In this capacity, Mr. Bhatt was responsible for all financial and
administrative functions. Mr. Bhatt holds an M.B.A. in corporate finance from
the University of Michigan and a bachelor of commerce degree from the University
of Bombay. Mr. Bhatt is a certified public accountant.

Ms. Doney joined the Company in October 1989 as the Vice President of
Regulatory and Clinical Affairs. Prior to joining the Company, Ms. Doney was a
consultant for Endosonics, Inc., where she was responsible for preparation of
marketing, educational and clinic investigation materials. From 1983 to 1989,
Ms. Doney was employed by Trimedyne, Inc., a medical laser company, her last
position being vice president of clinical

32
<PAGE> 34

affairs. Ms. Doney holds an M.B.A. from the University of Southern California
and a B.A. from the University of California.

Mr. Frantzis joined the Company in August 1990 as North American Sales
Manager. Mr. Frantzis was promoted to the position of Worldwide Sales Manager in
1991, to Director of Sales in 1994 and to his current position as Vice President
of Sales in January 1995. Prior to joining the Company, Mr. Frantzis was a
regional manager for ADC Telecommunications, a manufacturer of central office
switching and test equipment. Mr. Frantzis holds a Bachelor's degree in Business
Administration from Washington & Jefferson College.

Dr. Herskowitz joined the Company in September 1993 from Polymer Technology
Corp., a wholly owned subsidiary of Bausch & Lomb. Polymer is a world leader in
the development and sale of specialty contact lens materials and solutions. He
was employed by Polymer from March 1986 until joining the Company, most recently
as vice president, research and development and prior to that as vice president,
technical affairs. Dr. Herskowitz holds a Doctor of Optometry degree from the
Illinois College of Optometry and a B.A. in Chemistry from Knox College.

Mr. Krauss joined the Company in May 1992 from Iolab/SITE Microsurgical
Systems, Inc., an ophthalmic equipment company and subsidiary of Johnson &
Johnson, where he served as division vice president from December 1988 to May
1992. Mr. Krauss holds an M.B.A. and an M.S.E.E. from Case Western Reserve and a
B.S.E.E. from Lehigh University.

Dr. Klopotek joined the Company in January 1987 as Manager of Laser
Development. Dr. Klopotek was promoted to the position of Chief Scientist in
1990 and to Vice President, Science and Technology in October 1991. Prior to
joining the Company, Dr. Klopotek was project manager at Lambda Physik GmbH in
Gottingen, Germany from 1984 to 1986. Dr. Klopotek holds a Ph.D. in physics from
the Max Planck Institute and an M.S. in electrical engineering.

Mr. Litman joined the Company in September 1990. Prior to joining the
Company, Mr. Litman was a partner for six years with the law firm of Goldstein &
Manello, P.C., the Company's principal law firm. Mr. Litman served as outside
counsel to the Company from August 1986 through August 1990. Mr. Litman received
a J.D. from Columbia University School of Law and a B.A. from the University of
Pennsylvania.

Mr. Terrio joined the Company in September 1993. From 1984 until joining
the Company, Mr. Terrio served as general manager of the test instrument
division and corporate vice president of sales at Nicolet Instrument
Corporation. Nicolet produces instrumentation used in the biomedical, analytical
and electronics industries. Mr. Terrio holds a B.S. in management from Cardinal
Stritch College.

Mr. Bernfeld was first elected to the Board in October, 1988 and was
re-elected in 1995 for a three year term expiring in 1998. Mr. Bernfeld is a
vice president and general counsel of Spire Corporation, a publicly held company
specializing in biomaterials, optoelectronics and energy technologies. From 1991
through June, 1992, Mr. Bernfeld was a principal of the consulting firm Global
Solutions, Inc., and from 1988 to 1990 Mr. Bernfeld was vice president and
general counsel of the Mediplex Group, Inc. Prior to joining Mediplex, Mr.
Bernfeld was a partner with the law firm of Goldstein & Manello, P.C., the
Company's principal law firm.

Mr. Miller was elected to the Board in June 1988 and was re-elected in 1994
for a three year term expiring in 1997. Since August 1994, Mr. Miller has served
as an investment executive with First Albany Corporation, a financial services
firm. From 1991 through August, 1994, Mr. Miller was a private investor, and
prior to that was an investment banker employed by Tucker, Anthony & R.L. Day,
Inc. from 1979 to 1991, where he last held the position of first vice president.

Mr. Norris was elected to the Board in May 1990, and his present term of
office will expire in 1996. Mr. Norris is President and Chief Executive Officer
of National Pharmaceutical Council, Inc., an educational resource for
research-based pharmaceutical companies, a position he has held since May, 1995.
From February, 1994 through such date, he served as President of John A. Norris,
Esquire, a health care law and public policy affairs consulting firm founded in
February, 1994. From June 1988 through February 1994, he was executive vice
president of Hill and Knowlton, Inc., a consulting and public relations firm,
and served as the worldwide director of its Health Sciences Consulting Group.
Prior to joining Hill and Knowlton in 1988,

33
<PAGE> 35

Mr. Norris served as deputy commissioner and chief operating officer of the FDA
from 1985 to 1988, where his main responsibility was overseeing the daily
operations of the FDA. Mr. Norris is teaching healthcare policy at Harvard
University. Mr. Norris currently serves as a director of Cytologies, Inc.

Mr. Traskos was first elected to the Board in March, 1987 and was
re-elected in 1995 for a three year term expiring in 1998. In March 1993, Mr.
Traskos commenced employment as an insurance broker and vice president of Arthur
A. Watson & Company, Inc., a business insurance brokerage firm located in
Wethersfield, Connecticut. Previously, Mr. Traskos served as a director and
senior vice president of Allen, Russell & Allen, Inc., a business insurance
brokerage and consulting firm with principal offices located in Hartford,
Connecticut. Mr. Traskos is a licensed insurance broker and certified insurance
consultant.

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<PAGE> 36

UNDERWRITING

Under the terms and subject to the conditions contained in the Underwriting
Agreement dated the date hereof, each of the Underwriters (the "Underwriters")
named below has severally agreed to purchase, and the Company has agreed to sell
to such Underwriter, shares of Common Stock which equal the number of shares set
forth opposite the name of such Underwriter below:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
---------------------------------------- -------------
<S> <C>
Smith Barney Inc. ...................................................
Bear, Stearns & Co. Inc. ............................................
Morgan Stanley & Co. Incorporated....................................
Piper Jaffray Inc. ..................................................
-------------
Total......................................................
=============
</TABLE>

The Underwriters are obligated to take and pay for all shares of Common
Stock offered hereby (other than those covered by the over-allotment option
described below) if any such shares are taken.

The Underwriters, for whom Smith Barney Inc., Bear, Stearns & Co. Inc.,
Morgan Stanley & Co. Incorporated and Piper Jaffray Inc. are acting as
Representatives, propose to offer part of the shares directly to the public at
the public offering price set forth on the cover page of this Prospectus and
part to certain dealers at a price which represents a concession not in excess
of $. per share under the public offering price. The Underwriters may
allow, and such dealers may reallow, a concession not in excess of $. per
share to certain other dealers. After the offering of the shares of Common
Stock, the public offering price and such concessions may be changed by the
Underwriters.

The Company has granted to the Underwriters an option, exercisable for 30
days from the date of this Prospectus, to purchase up to 330,000 additional
shares of Common Stock at the price to public set forth on the cover page of
this Prospectus less the underwriting discounts and commissions. The
Underwriters may exercise such option solely for the purpose of covering
over-allotments, if any, in connection with the sale of the shares offered
hereby. To the extent such option is exercised, each Underwriter will be
obligated, subject to certain conditions, to purchase approximately the same
percentage of such additional shares as the number of shares set forth opposite
such Underwriter's name in the preceding table bears to the total number of
shares listed in such table.

The Company and the Underwriters have agreed to indemnify each other
against certain liabilities, including liabilities under the Securities Act.

The Company and its executive officers and directors have agreed that, for
a period of 90 days from the date of this Prospectus, they will not, without the
prior written consent of Smith Barney Inc., offer, sell, contract to sell, or
otherwise dispose of any shares of Common Stock or any securities convertible
into, or exercisable or exchangeable for, Common Stock except, that the Company
may sell shares of Common Stock in certain limited circumstances and that the
executive officers of the Company, other than David F. Muller, may sell up to
60,000 shares in the aggregate.

The Underwriters and certain selling group members that currently act as
market makers for the Common Stock may engage in "passive market making" in the
Common Stock in accordance with Rule 10b-6A under the Exchange Act. Rule 10b-6A
permits, upon the satisfaction of certain conditions, underwriters and selling
group members participating in a distribution that are also market makers in the
security being distributed to engage in limited market making transactions
during the period when Rule 10b-6 under the Exchange Act would otherwise
prohibit such activity. In general, under Rule 10b-6A, any Underwriter or

35
<PAGE> 37

selling group member engaged in passive market making in the Common Stock (i)
may not effect transactions in, or display bids for, the Common Stock at a price
that exceeds the highest bid for the Common Stock displayed by a market maker
that is not participating in the distribution of the Common Stock, (ii) may not
have net daily purchases of the Common Stock that exceed 30% of its average
daily trading volume in such stock for the two full consecutive calendar months
immediately preceding the filing date of the registration statement of which
this Prospectus forms a part and (iii) must identify its bids as bids made by a
passive market maker.

LEGAL OPINIONS

The legality of the issuance of the Common Stock offered hereby will be
passed upon for the Company by Goldstein & Manello, P.C., 265 Franklin Street,
Boston, Massachusetts 02110. Certain legal matters will be passed upon for the
Underwriters by Ropes & Gray, One International Place, Boston, Massachusetts
02110.

EXPERTS

The consolidated financial statements and schedule as of December 31, 1994
and 1993, and for each of the years in the three-year period ended December 31,
1994 have been included herein and in the Registration Statement in reliance
upon the report of KPMG Peat Marwick LLP, independent certified public
accountants, appearing elsewhere herein, and upon the authority of said firm as
experts in accounting and auditing.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents are incorporated herein by reference: (i) Annual
Report on Form 10-K of the Company for the year ended December 31, 1994; (ii)
Quarterly Report on Form 10-Q of the Company for the quarter ended March 31,
1995; (iii) Quarterly Report on Form 10-Q of the Company for the quarter ended
June 30, 1995; (iv) the description of the Company's Common Stock which is
contained in its Registration Statement on Form 8-A filed under the Exchange Act
on May 16, 1988; (v) the description of the Company's Rights Agreement which is
contained in its Registration Statement on Form 8-A filed under the Exchange Act
on April 2, 1990; and (vi) the agreements filed by the Company as exhibits to
its Form 8-K filed under the Exchange Act on June 5, 1992. All documents filed
by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act after the date of this Prospectus and prior to the termination of the
offering of the Common Stock made hereby shall be deemed to be incorporated by
reference in this Prospectus and to be part hereof from the date of filing of
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for all purposes to the extent that a statement contained in this Prospectus or
any other subsequently filed document that is also incorporated by reference
herein modifies or supersedes such statement. The Company hereby undertakes to
provide without charge to each person to whom a copy of this Prospectus has been
delivered, on the written or oral request of any such person, including any
beneficial owner of Common Stock, a copy of any or all of the documents referred
to above which have been or may be incorporated in this Prospectus by reference,
other than exhibits to such documents unless such exhibits are specifically
incorporated by reference into the documents that the Prospectus incorporates.
Requests for such copies should be directed to Peter E. Litman, Executive Vice
President and General Counsel of the Company, 21 Hickory Drive, Waltham,
Massachusetts 02154. Mr. Litman's telephone number is (617) 890-1234.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Exchange
Act, and, in accordance therewith, files reports and other information with the
Securities and Exchange Commission (the "Commission"). Such reports and other
information may be inspected and copied at the public reference facilities of
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; at
the Regional Offices of the Commission at 7 World Trade Center, 13th Floor, New
York, N.Y. 10048; and at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of such materials may be obtained

36
<PAGE> 38

from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Company's Common Stock is
traded on the NASDAQ National Market and such reports, proxy statements and
other information can be inspected at the offices of National Association of
Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.

The Company has filed with the Securities and Exchange Commission a
Registration Statement on Form S-3 under the Securities Act of 1933, as amended,
with respect to the securities offered hereby. This Prospectus does not contain
all of the information set forth in the Registration Statement and the exhibits
and schedules thereto. For further information relating to the Company,
reference is made to such Registration Statement, exhibits and schedules.
Statements contained in this Prospectus as to the contents of any document
referred to herein are not necessarily complete, and each such statement is
qualified in its entirety by reference to each such document.

37
<PAGE> 39

<TABLE>

SUMMIT TECHNOLOGY, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<CAPTION>
PAGE
-----
<S> <C>
Independent Auditors' Report.......................................................... F-2
Consolidated Balance Sheets as of December 31, 1993 and 1994, and June 30, 1995....... F-3
Consolidated Statements of Operations for the Years Ended December 31, 1992, 1993 and
1994 and for the Six Months Ended June 30, 1994 and 1995............................ F-4
Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 1992,
1993 and 1994 and for the Six Months Ended June 30, 1995............................ F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 1992, 1993 and
1994 and for the Six Months Ended June 30, 1994 and 1995............................ F-6
Notes to Consolidated Financial Statements............................................ F-7
</TABLE>

F-1
<PAGE> 40

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Summit Technology, Inc.:

We have audited the accompanying consolidated balance sheets of Summit
Technology, Inc. and subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the years in the three-year period ended December 31, 1994.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Summit
Technology, Inc. and subsidiaries at December 31, 1994 and 1993, and the results
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 1994, in conformity with generally accepted accounting
principles.

KPMG Peat Marwick LLP

Boston, Massachusetts
February 13, 1995

F-2
<PAGE> 41

<TABLE>

SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1993 AND 1994 AND JUNE 30, 1995
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<CAPTION>
DECEMBER 31,
------------------- JUNE 30,
1993 1994 1995
-------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................... $ 2,819 $ 8,656 $ 4,902
Short-term investments...................................... 8,120 8,495 6,219
Receivables, net of allowance of $760 in 1993, $1,049 in
1994 and $974 in 1995.................................... 14,480 9,535 10,041
Inventories (note 3)........................................ 9,885 7,028 8,323
Prepaid expenses and other current assets................... 964 1,079 1,868
Notes receivable from officers (note 4)..................... 350 665 689
-------- -------- --------
Total current assets................................ 36,618 35,458 32,042
-------- -------- --------
Property and equipment, net (note 5).......................... 6,234 6,398 6,598
-------- -------- --------
Other assets:
Patents, net (note 6)....................................... 5,769 6,925 6,852
Other assets, net........................................... 1,927 2,386 2,534
-------- -------- --------
TOTAL ASSETS.................................................. $ 50,548 $ 51,167 $ 48,026
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable............................................ $ 1,311 $ 2,749 2,485
Accrued expenses (note 7)................................... 5,095 5,860 5,549
Current maturities of capital lease obligations (note 8).... 438 516 452
Deferred revenue............................................ 3,156 2,982 4,029
-------- -------- --------
Total current liabilities........................... 10,000 12,107 12,515
Capital lease obligations, less current maturities (note 8)... 165 1,177 1,228
-------- -------- --------
Total liabilities................................... 10,165 13,284 13,743
-------- -------- --------
Commitments and contingencies (notes 8 and 10)
Stockholders' equity (note 9):
Preferred stock, $.01 par value. Authorized 5,000,000
shares................................................... -- -- --
Common stock, $.01 par value. Authorized 60,000,000 shares;
issued 16,304,303 shares in 1993, 16,790,065 shares in
1994 and 16,823,994 shares in 1995....................... 163 168 168
Additional paid-in capital.................................. 54,846 67,760 68,194
Accumulated deficit......................................... (14,621) (30,002) (33,973)
-------- -------- --------
40,388 37,926 34,389
Treasury stock, at cost, 205 shares in 1993, 1,166 shares in
1994 and 2,981 shares in 1995............................ (5) (43) (106)
-------- -------- --------
Total stockholders' equity.......................... 40,383 37,883 34,283
-------- -------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.................... $ 50,548 $ 51,167 $ 48,026
======== ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE> 42

<TABLE>

SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1992, 1993 AND 1994 AND
SIX MONTHS ENDED JUNE 30, 1994 AND 1995
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS
-------------------------------- ENDED JUNE 30,
1992 1993 1994 ---------------------------
------- ------- -------- 1994 1995
----------- -----------
(UNAUDITED) (UNAUDITED)
----------- -----------
<S> <C> <C> <C> <C> <C>
Net revenues...................... $31,130 $26,801 $ 24,210 $ 9,524 $16,368
Cost of revenues.................. 13,365 16,480 19,363 7,864 11,249
------- ------- -------- ------- -------
Gross profit................. 17,765 10,321 4,847 1,660 5,119
Operating expenses................ 18,007 19,503 20,331 10,269 9,424
------- ------- -------- ------- -------
Operating loss............... (242) (9,182) (15,484) (8,609) (4,305)
------- ------- -------- ------- -------
Other income (expense)............ (141) 28 103 119 334
------- ------- -------- ------- -------
Net loss..................... $ (383) $(9,154) $(15,381) $(8,490) $(3,971)
======= ======= ======== ======= =======
Net loss per share................ $ (.03) $ (.59) $ (.94) $ (.52) $ (.24)
======= ======= ======== ======= =======
Weighted average number of
common shares
outstanding................ 14,867 15,586 16,444 16,349 16,809
======= ======= ======== ======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE> 43

<TABLE>

SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1992, 1993, AND 1994 AND SIX MONTHS ENDED JUNE 30, 1995
(IN THOUSANDS)

<CAPTION>
NOTES
RECEIVABLE
PREFERRED STOCK COMMON STOCK ADDITIONAL FOR TOTAL
------------------ ------------------- PAID-IN ACCUMULATED TREASURY COMMON STOCK STOCKHOLDERS'
SHARES PAR VALUE SHARES PAR VALUE CAPITAL DEFICIT STOCK PURCHASE EQUITY
------ --------- ------- --------- ---------- ----------- -------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31,
1991............ 12 $ -- $14,737 $ 147 $ 34,746 $ (5,084) $ (85) $ (10) $ 29,714
Exercise of Stock
Options......... -- -- 446 5 826 -- (477) -- 354
Other shares
issued.......... -- -- 8 -- 165 -- -- -- 165
Repayment of notes
receivable...... -- -- -- -- -- -- (2) 7 5
Conversion,
cancellation and
redemption of
preferred
stock........... (12) -- 80 1 (1) -- -- -- --
Net loss.......... -- -- -- -- -- (383) -- -- (383)
-- --
------ ---- ------- -------- ---- ------ -------
Balance at
December 31,
1992............ -- -- 15,271 153 35,736 (5,467) (564) (3) 29,855
Sale of common
stock, net of
issuance
costs........... -- -- 1,150 12 19,017 -- -- -- 19,029
Retirement of
treasury
stock........... -- -- (231) (2) (562) -- 563 -- (1)
Repayment of note
receivable...... -- -- -- -- -- -- -- 3 3
Other shares
issued.......... -- -- 10 -- 202 -- 1 -- 203
Exercise of stock
options......... -- -- 104 -- 453 -- (5) -- 448
Net loss.......... -- -- -- -- -- (9,154) -- -- (9,154)
-- --
------ ---- ------- -------- ---- ------ -------
Balance at
December 31,
1993............ -- $ -- 16,304 $ 163 $ 54,846 $ (14,621) $ (5) $ -- $ 40,383
== == ====== ==== ======= ======== ==== ====== =======
Sale of common
stock, net of
issuance
costs........... -- -- 350 4 11,114 -- -- -- 11,118
Retirement of
treasury
stock........... -- -- (9) -- (305) -- 305 -- --
Other shares
issued.......... -- -- 50 -- 1,082 -- -- -- 1,082
Exercise of stock
options......... -- -- 95 1 1,023 -- (343) -- 681
Net loss.......... -- -- -- -- -- (15,381) -- -- (15,381)
-- --
------ ---- ------- -------- ---- ------ -------
Balance at
December 31,
1994............ -- $ -- 16,790 $ 168 $ 67,760 $ (30,002) $ (43) $ -- $ 37,883
== == ====== ==== ======= ======== ==== ====== =======
Exercise of stock
options......... -- -- 34 -- 434 -- (63) -- 371
Net loss.......... -- -- -- -- -- (3,971) -- -- (3,971)
-- --
------ ---- ------- -------- ---- ------ -------
Balance at June
30, 1995
(Unaudited)..... -- $ -- 16,824 $ 168 $ 68,194 $ (33,973) $ (106) $ -- $ 34,283
== == ====== ==== ======= ======== ==== ====== =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE> 44

<TABLE>

SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1992, 1993 AND 1994 AND
SIX MONTHS ENDED JUNE 30, 1994 AND 1995
(IN THOUSANDS)

<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS
------------------------------ ENDED JUNE 30,
1992 1993 1994 -------------------------
-------- -------- -------- 1994 1995
----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss................................................... $ (383) $ (9,154) $(15,381) $(8,490) $(3,971)
Adjustments to reconcile net loss to net cash used by
operating activities:
Depreciation and amortization............................ 1,267 1,710 2,253 1,087 1,252
Provision for (recovery of) losses on accounts
receivable............................................. 617 985 357 177 (75)
Changes in operating assets and liabilities:
Accounts receivable, net............................... (7,575) 521 3,688 4,837 (431)
Inventories............................................ (3,143) (3,824) 2,166 (51) (1,295)
Prepaid expenses and other current assets.............. 232 167 (125) (19) (813)
Accounts payable....................................... 651 5 1,439 (295) (265)
Accrued expenses....................................... 1,997 1,271 1,100 404 (311)
Deferred revenue....................................... (114) 669 (176) (293) 1,047
-------- -------- -------- ------- -------
Net cash used by operating activities............... (6,451) (7,650) (4,679) (2,643) (4,862)
-------- -------- -------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease (increase) in short-term investments.............. (5,876) (2,244) (374) 1,842 2,276
Additions to property and equipment........................ (1,761) (3,063) (1,180) (200) (1,057)
Purchase of patents........................................ -- (5,470) (317) (284) (93)
Change in other assets..................................... (108) (994) 177 284 (236)
Issuance of notes receivable from officers................. (346) -- (100) (100) --
Repayment of notes receivable from officers................ 20 381 -- -- --
Proceeds from sale of property............................. -- 162 -- -- --
-------- -------- -------- ------- -------
Net cash provided (used) by investing activities.... (8,071) (11,228) (1,794) 1,542 890
-------- -------- -------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of long-term debt and capital lease
obligations.............................................. (363) (616) (617) (283) (289)
Proceeds from long-term debt and capital lease
obligations.............................................. 157 -- 1,279 1,279 136
Increase in short-term debt................................ -- -- -- 1,000 --
Proceeds from sale of common stock......................... -- 19,029 11,118 -- --
Proceeds from exercise of stock options.................... 353 418 476 155 371
Proceeds from shares sold under Employee Stock Purchase
Plan..................................................... 20 130 54 -- --
Repayment of notes receivable for common stock purchase.... 4 2 -- -- --
-------- -------- -------- ------- -------
Net cash provided by financing activities........... 171 18,963 12,310 2,151 218
-------- -------- -------- ------- -------
Increase (decrease) in cash and cash equivalents.... (14,351) 85 5,837 1,050 (3,754)
Cash and cash equivalents at beginning of year............... 17,085 2,734 2,819 2,819 8,656
-------- -------- -------- ------- -------
Cash and cash equivalents at end of year..................... $ 2,734 $ 2,819 $ 8,656 $ 3,869 $ 4,902
======== ======== ======== ======= =======
Supplemental disclosures:
Interest paid.............................................. $ 106 $ 93 $ 185 $ 25 $ 156
======== ======== ======== ======= =======
Income taxes paid.......................................... $ 21 $ 15 $ 5 $ -- $ 5
======== ======== ======== ======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE> 45

SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

YEARS ENDED DECEMBER 31, 1992, 1993, AND 1994 AND SIX MONTHS (UNAUDITED) ENDED
JUNE 30, 1994 AND 1995

1. NATURE OF BUSINESS

Summit Technology, Inc. (the "Company") designs, manufactures and markets
ophthalmic refractive laser systems for the treatment of vision disorders such
as nearsightedness, farsightedness, astigmatism, glaucoma and certain corneal
irregularities. In addition, the Company owns and operates three laser vision
correction centers in the United Kingdom.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries after elimination of material intercompany
accounts and transactions.

Revenue Recognition

The Company recognizes revenue on product sales when the products are
shipped and the customer takes ownership and on physician education programs
when the services are performed. The Company recognizes service contract revenue
ratably over the length of the contract. The Company accrues the cost of
warranty and product upgrade obligations when the product is shipped. The
Company records payments received in advance of product sales and physician
education programs as deferred revenue.

Cash Equivalents

Cash equivalents consist of certificates of deposit and highly liquid
investment grade corporate bonds with a maturity of three months or less.

Short-term Investments

Short-term investments consist of U.S. Government securities and investment
grade corporate bonds with maturities between three and twelve months. The
Company has the intent and the ability to hold these investments to maturity.
Short-term investments are carried at cost plus accrued interest, which
approximates market.

Concentration of Credit Risk

The Company's trade receivables can potentially subject it to credit risk.
The Company limits its credit risk of U.S. receivables by obtaining advance
deposits and commitments from customers and third-party leasing companies. The
Company limits its credit risk of international receivables by using
distributors with proven credit history or by requiring irrevocable letters of
credit. In addition, all sales are made in U.S. dollars.

Inventories

Inventories are stated at the lower of cost or market, cost being
determined using the first-in, first-out (FIFO) method.

F-7
<PAGE> 46

SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
Property and Equipment

Property and equipment is stated at cost. Property and equipment under
capital leases is stated at the lower of the present value of future minimum
lease payments at the beginning of the lease term or fair market value at the
inception of the lease. Depreciation on property and equipment is calculated
using the straight-line method over the estimated useful lives of the assets
ranging from five to ten years. Amortization on property and equipment held
under capital leases and leasehold improvements is calculated using the
straight-line method over the shorter of the lease term or estimated useful life
of the asset.

Research and Development Expenses

Expenditures for research, engineering and product development, including
regulatory and clinical affairs, are expensed as incurred. These expenses were
approximately $5,416, $5,682 and $6,186 for the years ended December 31, 1992,
1993 and 1994, respectively. These expenses were approximately $2,860 and $2,742
for the six months ended June 30, 1994 and 1995, respectively.

Other Assets

Patents consist of patents and patent application costs. Other assets
include deposits, organization costs, and long-term trade receivables. Patents
are amortized over the patent's economic life using the straight-line method.
Organization costs are amortized over five years using the straight-line method.

Income Taxes

Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes ("SFAS 109"). Under
SFAS 109, deferred tax assets and liabilities are recognized based on temporary
differences between the financial statement and tax basis of assets and
liabilities and carryforwards using current statutory tax rates. Adoption of
SFAS 109 had no effect on the net loss for the year ended December 31, 1993.

Foreign Currency Translation

Assets, liabilities, and expenses related to foreign operations are
remeasured in U.S. dollars at the appropriate exchange rates. Gains and losses
resulting from remeasurement are included in other income and expense.

Net Loss Per Share

Net loss per common share is based on the weighted average number of common
shares outstanding during each year.

Reclassifications

Certain reclassifications were made to the 1992 and 1993 Consolidated
Financial Statements to conform to the 1994 presentation.

F-8
<PAGE> 47

SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. INVENTORIES

<TABLE>
Inventories consist of the following:

<CAPTION>
DECEMBER 31,
----------------- JUNE 30,
1993 1994 1995
------ ------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Raw materials and subassemblies....................... $4,545 $4,370 $ 4,798
Work in process....................................... 1,089 1,815 2,267
Finished goods........................................ 4,251 843 1,258
------ ------ -------
$9,885 $7,028 $ 8,323
====== ====== =======
</TABLE>

4. NOTES RECEIVABLE FROM OFFICERS

Notes Receivable from officers consist of demand notes receivable including
accrued interest with interest rates ranging from 7.0% to 8.0%.

5. PROPERTY AND EQUIPMENT

<TABLE>
Property and equipment consists of the following:

<CAPTION>
DECEMBER 31,
------------------- JUNE 30,
1993 1994 1995
------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Leasehold improvements.............................. $ 1,500 $ 1,406 $ 1,461
Manufacturing and test equipment.................... 5,616 7,322 7,838
Furniture, fixtures and office equipment............ 2,932 3,347 3,829
------- ------- -------
$10,048 $12,075 $13,128
Less Accumulated Depreciation....................... (3,814) (5,677) (6,530)
------- ------- -------
Net Property and Equipment................ $ 6,234 $ 6,398 $ 6,598
======= ======= =======
</TABLE>

6. PATENTS

In December 1993, the Company purchased several U.S. and foreign patents
for a purchase price of $5.1 million including acquisition costs plus 50,000
shares of common stock.

<TABLE>
<CAPTION>
DECEMBER 31,
----------------- JUNE 30,
1993 1994 1995
------ ------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Patents............................................... $5,769 $7,136 $ 7,229
Patent Amortization................................... -- (211) (377)
------ ------ -------
Net Patents................................. $5,769 $6,925 $ 6,852
====== ====== =======
</TABLE>

F-9
<PAGE> 48

SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. ACCRUED EXPENSES

<TABLE>
Accrued expenses consist of the following:

<CAPTION>
DECEMBER 31,
----------------- JUNE 30,
1993 1994 1995
------ ------ -----------
(UNAUDITED)
<S> <C> <C> <C>
Accrued commissions................................... $1,144 $ 888 $ 260
Accrued payroll and vacation.......................... 667 851 986
Accrued warranty costs................................ 740 873 801
Accrued product upgrade costs......................... 642 1,155 1,130
Other accrued expenses................................ 1,902 2,093 2,372
------ ------ -------
$5,095 $5,860 $ 5,549
====== ====== =======
</TABLE>

8. FINANCING AND LEASING ARRANGEMENTS

Leases

Capital lease obligations consist of amounts due under equipment lease
agreements. At December 31, 1994, the cost and accumulated depreciation of the
related equipment was $3,034 and $1,768, respectively.

The Company leases its office and manufacturing facilities in the U.S.
under an operating lease expiring in 2000. The Company leases office space for
its outpatient clinics in the U.K. under operating leases expiring in 2000. The
Company leases an office and manufacturing facility in Ireland under an
operating lease expiring in 2026. Rent expense was approximately $559, $576, and
$675, for the years ended December 31, 1992, 1993, and 1994, respectively. Rent
expense was approximately $337 and $368 for the six months ended June 30, 1994
and 1995, respectively.

<TABLE>
At December 31, 1994, future minimum payments for capital leases and
minimum rental payments under noncancellable operating leases were as follows:

<CAPTION>
CAPITAL LEASES OPERATING LEASES
-------------- ----------------
<S> <C> <C>
Year ending December 31:
1995.................................................. $ 665 $ 683
1996.................................................. 568 669
1997.................................................. 499 628
1998.................................................. 325 618
1999.................................................. -- 591
Thereafter............................................ -- 3,763
------ ------
Minimum future lease payments...................... 2,057 $6,952
======
Less amounts representing interest...................... 364
------
Present value of minimum future lease payments..... 1,693
Less current maturities................................. 516
------
Capital leases, less current maturities............ $1,177
======
</TABLE>

The Company has a $3.0 million leasing facility that allows financing of
capital asset purchases in the United States and the United Kingdom for up to
five years at interest rates currently ranging from 8.1% to 10.4%. At December
31, 1994, the Company had $1.4 million ($1.5 million at June 30, 1995)of
borrowings under this facility. At June 30, 1995, the Company had $1.5 million
of borrowings under this facility. In March 1995, the Company received a renewal
of its working capital line of credit agreement. The agreement

F-10
<PAGE> 49

SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. FINANCING AND LEASING ARRANGEMENTS -- (CONTINUED)
expires in March of 1996. The line of credit agreement allows the Company to
borrow up to $8.0 million against eligible accounts receivable at LIBOR plus 150
basis points or Prime Rate per annum. At December 31, 1994 and June 30, 1995 the
Company had no borrowings under this facility.

9. STOCKHOLDERS' EQUITY

Common and Preferred Stock

As of December 31, 1994 and June 30, 1995, the Company has authorized
5,000,000 shares of preferred stock of $.01 par value and 60,000,000 shares of
common stock at $.01 par value. The terms and conditions of the preferred stock,
including any preferences and dividends, will not be established until such
time, if ever, as such shares are in fact issued by the Company.

Stock Options

In March 1987, the Company adopted a Stock Option Plan (the "Plan"). The
Plan permits the Company to grant both incentive and nonincentive stock options.
The stock options are generally exercisable one year after grant in equal
installments over five to ten years. The Company has reserved 1,883,282 shares
of Common Stock for issuance under this Plan.

<TABLE>
<CAPTION>
OPTIONS AVAILABLE OPTIONS OUTSTANDING OPTION PRICE
----------------- ------------------- -------------
<S> <C> <C> <C>
Balances, December 31, 1991.............. 144,980 871,190 $ .50-19.00
Increase in shares reserved.............. 250,000 -- --
Options granted.......................... (270,522) 270,522 18.63-29.75
Options exercised........................ -- (445,873) .50-11.00
Options canceled......................... 7,785 (7,785) .75-27.00
-------- -------- ------------
Balances, December 31, 1992.............. 132,243 688,054 1.75-29.75
Options granted.......................... (123,662) 123,662 1.00-25.25
Options exercised........................ -- (104,499) 1.75-24.25
Options canceled......................... 107,453 (107,453) 10.13-29.75
-------- -------- ------------
Balances, December 31, 1993.............. 116,034 599,764 1.00-29.75
-------- -------- ------------
Options granted.......................... (119,615) 119,615 1.00-34.25
Options exercised........................ -- (94,871) 2.44-29.75
Options canceled......................... 48,854 (48,854) 6.22-34.25
-------- -------- ------------
Balances, December 31, 1994.............. 45,273 575,654 1.00-34.25
-------- -------- ------------
Increase in shares reserved.............. 250,000 -- --
Options granted.......................... (26,680) 26,680 28.75-35.00
Options exercised........................ -- (33,995) 6.94-27.00
Options canceled......................... 7,830 (7,830) 20.00-34.25
-------- -------- ------------
Balances, June 30, 1995.................. 276,423 560,509 $ 1.00-35.00
======== ======== ============
</TABLE>

At December 31, 1994, 317,469 shares (298,523 shares at June 30, 1995) were
exercisable under the Plan at exercise prices ranging from $1.00 to $29.75
($1.00 to $29.25 at June 30, 1995).

In February 1989, the Company granted an officer options to purchase
150,000 shares of Common Stock at $1.50 per share. The options are restricted,
nonincentive, and were granted outside of the Company's Plan. At December 31,
1994 and June 30, 1995, all 150,000 shares were exercisable.

F-11
<PAGE> 50

SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. STOCKHOLDERS' EQUITY -- (CONTINUED)
In May 1992, the Company adopted a Stock Option Plan for Outside Directors
(the "Director's Plan") and reserved 50,000 shares of Common Stock for issuance
under the Director's Plan. At June 30, 1995, 22,000 options were outstanding at
option prices ranging from $15.75 to $22.31 and 18,000 options were exercisable
at prices ranging from $15.75 to $22.31. At December 31, 1994, 20,000 options
were outstanding at option prices ranging from $15.75 to $22.31 and 8,000
options were exercisable at prices ranging from $20.16 to $22.31.

Refractive Centers International, Inc. Stock Option Plan

In August 1993, the Company adopted a Stock Option Plan to grant options to
purchase shares of its subsidiary, Refractive Centers International, Inc. ("the
RCII Plan") and reserved 2,500,000 shares of Refractive Centers International,
Inc. for issuance under the RCII Plan. In September of 1995, the Company
decreased the number of shares reserved from 2,500,000 to 800,000. At December
31, 1994, 660,250 options were outstanding at an option price of $0.50 and
23,100 were exercisable. At June 30, 1995, 710,250 options were outstanding at
an option price of $0.50 and 24,050 options were exercisable.

Employee Stock Purchase Plan

In May 1991, the Company adopted an Employee Stock Purchase Plan (the
"Purchase Plan"). The Purchase Plan is available to all eligible full-time
employees, excluding those owning 5% or more of the Company's Common Stock.
Pursuant to the Purchase Plan, employees can purchase the Company's Common
Stock, at 85% of fair market value, in an amount up to 5% of the employee's
wages during the semi-annual plan purchase period. At December 31, 1994, 250,000
shares of Common Stock were reserved under the Purchase Plan and 11,570 shares
were issued.

Shareholder Rights Plan

In March 1990, the Board of Directors adopted a Shareholder Rights Plan
("Rights Plan") pursuant to which each stockholder of the Company holds one
currently non-exercisable right ("Right") for each share of Common Stock
beneficially held. The Rights become exercisable upon the occurrence of a
"Distribution Date," whereupon the holder is entitled to purchase from the
Company one-quarter of a share of Common Stock at the exercise price of $12.50,
subject to adjustment. Generally, a Distribution Date occurs if (a) a person or
group becomes a beneficial owner of 15% or more of the Company's outstanding
shares of Common Stock without the prior approval of the Board ("Acquiring
Plan"), or (b) ten business days lapse following the commencement of, or
announcement of an intention to make, a tender or exchange offer for the Common
Stock not approved by the Board, which, if consummated, would result in a person
or group becoming a beneficial owner of 15% or more of the Company's outstanding
shares of Common Stock.

If a person or group becomes an Acquiring Person, a "Flip-In Event" thereby
occurs concurrently with the Distribution Date, with the effect that each Right
(other than those owned by such Acquiring Person) will entitle its holder to
obtain Common Stock having a market value of eight times the Right's exercise
price for a purchase price equal to four times the exercise price of the Rights,
in effect allowing a Rights holder to purchase a fixed amount of the Company's
Common Stock at a discount of 50% off the market price. If a person or group
becomes an Acquiring Person (hence triggering a Flip-In Event), and thereafter
the Company is involved in a merger or other business combination with the
Acquiring Person where the Company is not the surviving entity and the holders
of the Company's Common Stock are not the holders of all of the surviving
entity's Common Stock, or the sale of 50% or more of the Company's assets and
earning power to the Acquiring Person occurs a "Flip-Over Event", each Right
(other than those owned by the Acquiring Person) will then entitle the holder to
obtain eight times the Right's exercise price for a purchase price equal to four
times the exercise price of the Rights.

F-12
<PAGE> 51

SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. COMMITMENTS AND CONTINGENCIES

Commitments

During 1991, the Irish Development Authority ("IDA") agreed to reimburse
the Company up to approximately $740 for rent, training and fixed asset
acquisition costs incurred in conjunction with the opening of its manufacturing
facility in Cork, Ireland. The Company may be required to repay the grants if
the facility is closed within eight years of the final grant drawdown. As of
December 31, 1994, the Company has received approximately $503 from the IDA
under these agreements.

In February 1992, the Company entered into a licensing agreement with IBM
pursuant to which IBM granted the Company a license to its patent covering
excimer laser ablation of tissue and the Company agreed to pay IBM a royalty of
2% of the net selling price of its Excimer Systems sold or leased in the U.S.
and certain other countries. The Company also licenses certain laser patents
from Patlex Corporation. Under this license, the Company has agreed to pay
royalties, not to exceed one hundred thousand dollars per year, with respect to
OmniMed/Excimer (Excimer System) sales. In 1993, the Company agreed to pay
Patlex royalties with respect to OmniMed/Holmium (Holmium System) sales.

Contingencies

Patents and Royalties

There are a number of United States patents covering methods and apparatus
for performing corneal surgery with excimer lasers, including several owned by
the Company and VISX Incorporated ("VISX") (one of the Company's competitors),
which have been exclusively licensed to Pillar Point Partners, a partnership
owned jointly by the Company and VISX. All U.S. patents now or hereafter granted
to the Company or VISX which could preclude either company from making, using,
or selling in the U.S. its excimer laser corneal surgery systems as designed on
June 3, 1992, have been or are required to be exclusively licensed to Pillar
Point Partners. The Company is currently reviewing two U.S. patents held by a
third party which, according to such party, cover certain aspects of the
Company's excimer laser.

There are also several foreign patents covering apparatus for performing
excimer laser corneal surgery, including patents or patent rights held by the
Company, VISX, and others. If the foreign patents held by VISX and others were
considered valid and interpreted broadly in an adversarial proceeding, they
could be deemed to cover one or more aspects of certain of the Company's
excimer-based products manufactured or sold abroad.

Further, the Company believes that Sunrise Technologies, Inc. holds U.S.
patents covering methods and apparatus, and has submitted European patent
applications covering apparatus, for performing Laser Thermokeratoplasty and for
certain specific methods of performing Laser Sclerostomy with a holmium laser.
Although the Company has not sought or received an opinion of counsel, the
Company believes, based on due inquiry, that its Holmium Laser System either
does not infringe or that it has valid defenses against the patents of Sunrise
Technologies, Inc.

There can be no assurance that patent infringement claims in the U.S. or in
other countries will not be asserted against the Company by VISX (limited in the
U.S. to technology not included in Pillar Point Partners) or others, or, if
asserted, that the Company will be successful in defending against such claims.
In the event one of the Company's products is adjudged to infringe patents of
others with the likely consequence of a damage award, the Company and its
customers may be enjoined from using and selling such products or be required to
obtain a royalty-bearing license, if available on acceptable terms.
Alternatively, in the event a license is not offered, the Company might be
required to redesign those aspects of the products held to infringe so as to
avoid infringement. Any redesign efforts undertaken by the Company might be
expensive and could necessitate FDA review. Furthermore, they could delay the
re-introduction of the Company's products into certain markets, or may be so
significant as to be impractical.

F-13
<PAGE> 52

SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. COMMITMENTS AND CONTINGENCIES -- (CONTINUED)
On August 3, 1995, a German court determined that the Schwind Keratom
ophthalmic excimer laser system distributed by Coherent, and the Chiron
Technolas Keracor 116 ophthalmic excimer laser system distributed by Chiron
Technolas, infringe the German counterpart of the Azema Patent (see Note 6). The
court has entered cease and desist orders against Schwind and Chiron Technolas
and has ordered them to pay damages to the Company for past infringements. Both
the Schwind and Chiron Technolas excimer laser systems are manufactured in
Germany. On September 5, 1995, the Company posted the requisite bond in Germany
to enforce the injunction issued against Chiron Technolas by the German court,
as a result of which Chiron Technolas is now prohibited from manufacturing,
selling or using its Keracor 116 ophthalmic excimer laser systems in Germany,
where its production facility is located. Chiron Technolas and Schwind have
appealed the judgment and Chiron Technolas has also filed a nullity action with
the German Patent Office. Although the Company believes it will prevail in this
nullity action, there can be no assurance that the German Azema patent will
survive the proceeding. If the nullity action or Chiron's appeal is decided
against the Company, its infringement verdict in Germany will be overturned and
it will be liable for damages which may or may not exceed the amount of the
bond.

On August 29, 1995, the Company filed suit in the U.S. District Court for
the District of Delaware against VISX for infringement of the Azema Patent. The
Company is seeking damages for past infringement for all excimer lasers
manufactured by VISX in the U.S. for use outside the U.S. In addition, the
Company is seeking to enjoin VISX from manufacturing and selling excimer lasers
for any purpose other than U.S. clinical trials.

On September 5, 1995, VISX sued the Company and eight Canadian
ophthalmologists who use or have used the Company's Excimer System, in the
Federal Court of Canada, Trial Division, asserting that the Excimer System
infringed certain Canadian patents held by VISX. In such suit, VISX seeks, among
other things, damages for past infringement and a permanent injunction
preventing the Company and the other defendants from manufacturing, marketing,
selling using and inducing others to use the Excimer System in Canada. The
Company believes that it has valid defenses to VISX's suit and intends to defend
such action vigorously; however, there can be no assurance that the Company will
be successful. The Company does not believe that the Canadian market is material
to its business.

F-14
<PAGE> 53

SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

11. INCOME TAXES

<TABLE>
The appropriate tax effect of each type of temporary difference and
carryforward that gives rise to significant portions of the deferred tax assets
and liabilities are as follows:

<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------- SIX MONTHS ENDED
1993 1994 JUNE 30, 1995
------- -------- ----------------
(UNAUDITED)
<S> <C> <C> <C>
Deferred tax asset:
Net operating loss................. $ 6,691 $ 11,682 $ 13,426
Research and development credit.... 685 685 685
Inventory adjustments.............. 716 591 591
Other temporary differences........ 893 985 985
------- -------- --------
Subtotal........................... $ 8,985 $ 13,943 $ 15,687
Valuation allowance................ (8,638) (13,759) (15,503)
------- -------- --------
$ 347 $ 184 $ 184
Deferred tax liability:
Patent costs....................... 239 76 76
Other temporary differences........ 108 108 108
------- -------- --------
$ 347 $ 184 $ 184
------- -------- --------
Net Deferred Tax Asset............... $ 0 $ 0 $ 0
======= ======== ========
</TABLE>

Due to the uncertainty of the timing of realizing the tax benefit of the
temporary differences and carryforwards, the Company has recorded a valuation
allowance against its deferred tax assets. The valuation allowance for deferred
tax assets as of January 1, 1993, was $5,946. The net change in the total
valuation allowance for the years ended December 31, 1993, December 31, 1994 and
June 30, 1995 was $2,692, $5,121 and $1,744, respectively. The net operating
loss amount includes approximately $5,100 of employee stock option compensation
deductions which will be credited to additional paid-in capital when realized.

At December 31, 1994, the Company had an operating loss carryforward of
approximately $32,171 available to offset future federal taxable income. In
addition, the Company has research and experimentation tax credit carryforwards
of approximately $685. The operating loss and tax credit carryforwards expire in
varying amounts through 2010. Pursuant to Section 382 of the Internal Revenue
Code, if there is a change in stock ownership of the Company exceeding 50%
during a three-year period, the utilization of the Company's net operating loss
may be limited. Utilization of the Company's net operating loss carryforward
will not be limited by Section 382.

There are no unremitted earnings in the Company's subsidiaries.

12. SEGMENT INFORMATION

During 1992, the Company classified its operations into two business
segments: medical equipment and laser vision correction centers. Operations
within the medical equipment segment include the design, development,
production, and sale of proprietary medical systems and single-use disposable
components for a variety of ophthalmic applications. The laser vision correction
center segment includes costs associated with the establishment of outpatient
clinics.

F-15
<PAGE> 54

SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

12. SEGMENT INFORMATION -- (CONTINUED)
Segment Information

<TABLE>
<CAPTION>
MEDICAL LASER VISION
EQUIPMENT CORRECTION CENTERS CONSOLIDATED
--------- ------------------ ------------
<S> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1993
Sales..................................... $ 26,740 $ 61 $ 26,801
Loss from operations...................... (7,502) (1,680) (9,182)
Depreciation and amortization............. 1,447 221 1,668
Identifiable assets....................... 48,494 2,054 50,548
Capital expenditures...................... 1,332 1,731 3,063

YEAR ENDED DECEMBER 31, 1994
Sales..................................... $ 23,371 $ 839 $ 24,210
Loss from operations...................... (13,205) (2,279) (15,484)
Depreciation and amortization............. 1,828 425 2,253
Identifiable assets....................... 49,085 2,082 51,167
Capital expenditures...................... 1,139 41 1,180

SIX MONTHS ENDED JUNE 30, 1995
Sales..................................... $ 15,941 $ 427 $ 16,368
Loss from operations...................... (2,706) (1,599) (4,305)
Depreciation and amortization............. 1,024 228 1,252
Identifiable assets....................... 45,007 3,019 48,026
Capital expenditures...................... 903 154 1,057
</TABLE>

F-16
<PAGE> 55

SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

12. SEGMENT INFORMATION -- (CONTINUED)
Geographic Area

<TABLE>
The following table summarizes financial information by geographic area:

<CAPTION>
UNITED STATES EUROPE ELIMINATIONS CONSOLIDATED
------------- -------- ------------ ------------
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1992:
Total revenues:
Unaffiliated customers......... $ 16,991 $ 14,139 $ -- $ 31,130
Intercompany transfers......... 8,364 1,638 (10,002) --
-------- -------- -------- --------
Total....................... $ 25,355 $ 15,777 $(10,002) $ 31,130
======== ======== ======== ========
Income (loss) from operations.... $ (425) $ 183 $ -- $ (242)
======== ======== ======== ========
Identifiable assets.............. $ 37,701 $ 11,218 $(10,147) $ 38,772
======== ======== ======== ========
YEAR ENDED DECEMBER 31, 1993:
Total revenues:
Unaffiliated customers......... $ 13,965 $ 12,836 $ -- $ 26,801
Intercompany transfers......... 6,925 2,870 (9,795) --
-------- -------- -------- --------
Total....................... $ 20,890 $ 15,706 $ (9,795) $ 26,801
======== ======== ======== ========
Loss from operations............. $ (8,175) $ (1,007) $ -- $ (9,182)
======== ======== ======== ========
Identifiable assets.............. $ 51,551 $ 15,951 $(16,954) $ 50,548
======== ======== ======== ========
YEAR ENDED DECEMBER 31, 1994:
Total revenues:
Unaffiliated customers......... $ 19,475 $ 4,735 $ -- $ 24,210
Intercompany transfers......... 2,426 2,364 (4,790) --
-------- -------- -------- --------
Total....................... $ 21,901 $ 7,099 $ (4,790) $ 24,210
======== ======== ======== ========
Loss from operations............. $ (9,092) $ (6,493) $ 101 $(15,484)
======== ======== ======== ========
Identifiable assets.............. $ 76,325 $ 9,109 $(34,267) $ 51,167
======== ======== ======== ========
</TABLE>

Intercompany transfers represent shipments of parts and subassemblies
between the Company and its European subsidiary. These shipments are made at
transfer prices which approximate prices charged to unaffiliated customers and
have been eliminated from consolidated net revenues.

Significant Customers

For the years ended December 31, 1992 and 1993, a different customer
accounted for 14% and 11% of total net revenues, respectively. There were no
significant customers for the year ended December 31, 1994. For the six months
ended June 30, 1995, a different customer accounted for 14% of net revenues.

F-17
<PAGE> 56

SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

12. SEGMENT INFORMATION -- (CONTINUED)
Export Sales

<TABLE>
Export sales, which were immaterial in 1994, from the Company's U.S.
operation to unaffiliated customers by geographic area were as follows:

<CAPTION>
1992 1993
--- ---
<S> <C> <C>
Pacific Rim & Far East................................... 21% 20%
Europe & Mideast......................................... 27% 8%
North and Latin America.................................. 3% 9%
</TABLE>

The above percentages do not include sales to unaffiliated customers made
from the Company's European subsidiary.

13. RETIREMENT PLAN

In 1991, the Company established a Retirement Plan (the "Plan") for all
domestic employees under Section 401(k) of the Internal Revenue Code. Employees
may contribute from 2% to 18% of their salary subject to contribution limits
defined by the Internal Revenue Code. The Company may, at its discretion, match
in cash or its common stock 50% of an employee's contribution up to 4% of the
employee's salary. For the years ended December 31, 1992, 1993 and 1994, the
Company issued common stock valued at $61, $76 and $62, respectively
representing its matching contribution to the Plan.

14. PILLAR POINT PARTNERSHIP

Pursuant to a partnership and licensing arrangement with VISX, the Company
and VISX are obligated to pay royalties on U.S. equipment sales and procedures
performed with such equipment in the U.S. to Pillar Point Partners if and when
FDA approval is obtained for commercial sale of excimer lasers to perform
Photorefractive Keratectomy. Pillar Point Partners is jointly owned by the
Company and VISX. As of December 31, 1994 and June 30, 1995 no royalties were
owed to Pillar Point Partners.

15. SUPPLEMENTAL CASH FLOW INFORMATION

For the years ended December 31, 1992, 1993, and 1994, the Company recorded
the following non cash transactions:

1992
Additions to capital lease obligations of $871.
Treasury stock received from exercise of stock options of $477.
Shares issued under Retirement Plan of $61.

1993
Retirement of treasury stock of $564.
Shares issued under Retirement Plan of $76.

F-18
<PAGE> 57

SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

15. SUPPLEMENTAL CASH FLOW INFORMATION -- (CONTINUED)
1994
Shares issued for patent rights of $966.
Retirement of treasury stock of $305.
Notes receivable for common stock purchase of $205.
Shares issued under Retirement Plan of $62.

F-19
<PAGE> 58
===============================================================================

NO DEALER, SALES PERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES OFFERED
HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN
OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS
DATE.

------------------------

<TABLE>
TABLE OF CONTENTS

<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 5
The Company........................... 11
Price Range of Common Stock........... 11
Dividend Policy....................... 11
Use of Proceeds....................... 11
Capitalization........................ 12
Selected Consolidated Financial
Information......................... 13
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 14
Business.............................. 16
Management............................ 32
Underwriting.......................... 35
Legal Opinions........................ 36
Experts............................... 36
Incorporation of Certain Documents by
Reference........................... 36
Available Information................. 36
Index to Consolidated Financial
Statements.......................... F-1

UNTIL , 1995 (25 DAYS AFTER
THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE REGISTERED
SECURITIES, WHETHER OR NOT PARTICIPATING IN
THIS DISTRIBUTION, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS IS IN ADDITION TO
THE OBLIGATION OF DEALERS TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND
WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTION.
</TABLE>

2,200,000 SHARES

SUMMIT TECHNOLOGY, INC.

COMMON STOCK

------------------------

PROSPECTUS
, 1995
------------------------

SMITH BARNEY INC.

BEAR, STEARNS & CO. INC.

MORGAN STANLEY & CO.
INCORPORATED

PIPER JAFFRAY INC.

===============================================================================
<PAGE> 59

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

<TABLE>
The following table sets forth the estimated expenses to be borne by the Company in
connection with the offering of the securities registered hereby:

<CAPTION>
EXPENSE COST
------- ----
<S> <C>
Securities and Exchange Commission Registration Fee....................... $ 40,349
NASD Filing Fee........................................................... 12,201
Nasdaq Fees............................................................... 17,500
Blue Sky Fees and Expenses................................................ 7,500
Legal Fees and Expenses................................................... 80,000
Accounting Fees and Expenses.............................................. 35,000
Printing, Engraving and Mailing Expenses.................................. 80,000
Miscellaneous............................................................. 52,450
--------
TOTAL........................................................... $325,000
========
<FN>
---------------
* Estimated
</TABLE>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 67 of the Massachusetts Business Corporation Law sets forth certain
circumstances under which directors, officers, employees and agents may be
indemnified against liability that they may incur in their capacity as such.
Section 67 of the Massachusetts Business Corporation Law provides as follows:

Indemnification of directors, officers, employees and other agents of a
corporation, and persons who serve at its request as directors, officers,
employees or other agents of another organization, or who serve at its request
in any capacity with respect to any employee benefit plan, may be provided by it
to whatever extent shall be specified in or authorized by (i) the articles of
organization or (ii) a by-law adopted by the stockholders or (iii) a vote
adopted by the holders of a majority of the shares of stock entitled to vote on
the election of directors. Except as the articles of organization or by-laws
otherwise require, indemnification of any persons referred to in the preceding
sentence who are not directors of the corporation may be provided by it to the
extent authorized by the directors. Such indemnification may include payment by
the corporation of expenses incurred in defending a civil or criminal action or
proceeding in advance of the final disposition of such action or proceeding,
upon receipt of an undertaking by the person indemnified to repay such payment
if he shall be adjudicated to be not entitled to indemnification under this
section which undertaking may be accepted without reference to the financial
ability of such person to make repayment. Any such indemnification may be
provided although the person to be indemnified is no longer an officer,
director, employee or agent of the corporation or of such other organization or
no longer serves with respect to any such employee benefit plan.

No indemnification shall be provided for any person with respect to any
matter as to which he shall have been adjudicated in any proceeding not to have
acted in good faith in the reasonable belief that his action was in the best
interest of the corporation or, to the extent that such matter relates to
service with respect to an employee benefit plan, in the best interests of the
participants or beneficiaries of such employee benefit plan.

The absence of any express provision for indemnification shall not limit
any right of indemnification existing independently of this section.

A corporation shall have power to purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or other agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or other agent of another organization or with
respect to any

II-1
<PAGE> 60

employee benefit plan, against any liability incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability.

The Company's Articles of Organization provide that directors are not
liable to the Company or its shareholders for monetary damages for breach of
fiduciary duty except for: (a) any breach of the director's duty of loyalty to
the Company or its shareholders; (b) acts or omissions not in good faith or that
involve intentional misconduct or knowing violations of law; (c) under the
Massachusetts Business Corporation Law provisions imposing joint and several
liability for improper distributions to shareholders or loans to officers or
directors; (d) transactions from which a director derived an improper personal
benefit; or (e) for any act or omission occurring prior to the effective date of
such provision.

The Company's By-Laws require the Company to indemnify all officers,
directors, employees and agents of the Company against all liabilities and
expenses they may incur on account of all actions threatened or brought against
them by reason of their services to the Company. No indemnification is provided
for any person with respect to any matter as to which such person has been
adjudicated in any proceeding not to have acted in good faith in the reasonable
belief that his action was in the best interests of the Company. The Company
maintains a director's and officer's liability insurance policy in the aggregate
amount of $3,000,000 on behalf of its directors and officers. The insurance
policy expires on October 28, 1995, unless renewed or earlier terminated.

<TABLE>
ITEM 16. EXHIBITS

<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C> <C>
1 Underwriting Agreement
5 Opinion of Goldstein & Manello, P.C. regarding legality(1)
23 (a) Consent of KPMG Peat Marwick LLP
23 (b) Consent of Goldstein & Manello, P.C. (included in Exhibit 5)
24 Power of Attorney
<FN>
---------------
(1) To be filed by amendment to the Registration Statement
</TABLE>

FINANCIAL STATEMENT SCHEDULES

Schedule II - Valuation and Qualifying Accounts

ITEM 17. UNDERTAKINGS

Undertaking required by Regulation S-K, Item 512(a)

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;

(iii) To include any material information with respect to a plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;

provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.

II-2
<PAGE> 61

(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.

Undertaking required by Regulation S-K, Item 512(b)

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

Undertaking required by Regulation S-K, Item 512(h)

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

Undertaking required by Regulation S-K, Item 512(i)

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof."

II-3
<PAGE> 62

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Waltham, Commonwealth of Massachusetts, on the 19th
day of September, 1995.

SUMMIT TECHNOLOGY, INC.

By: /s/ DAVID F. MULLER

------------------------------------
David F. Muller
President, Chief Executive
Officer and Chairman of the Board

<TABLE>
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has
been signed below by the following persons in the capacities and on the dates indicated:

<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ DAVID F. MULLER President, Chief Executive September 19, 1995
--------------------------------------------- Officer and Chairman of the
David F. Muller Board

/s/ RAJIV P. BHATT Treasurer and Chief September 19, 1995
--------------------------------------------- Financial Officer
Rajiv P. Bhatt

/s/ JEFFREY A. BERNFELD Director September 19, 1995
---------------------------------------------
Jeffrey A. Bernfeld

/s/ RICHARD F. MILLER Director September 19, 1995
---------------------------------------------
Richard F. Miller

/s/ JOHN A. NORRIS Director September 19, 1995
---------------------------------------------
John A. Norris

/s/ RICHARD M. TRASKOS Director September 19, 1995
---------------------------------------------
Richard M. Traskos
</TABLE>

II-4
<PAGE> 63

<TABLE>

SCHEDULE II

SUMMIT TECHNOLOGY, INC. AND SUBSIDIARIES

Valuation and Qualifying Accounts
December 31, 1992, 1993 and 1994 and June 30, 1995 (unaudited)
(in thousands)

<CAPTION>
Balance at
Beginning Additions/ Amounts Balance at End
ALLOWANCE FOR DOUBTFUL ACCOUNTS of Period (Deductions) Written Off of Period
------------------------------- ---------- ------------ ----------- --------------
<S> <C> <C> <C> <C>
December 31, 1992............ $ 165 $ 617 $ 32 $ 750
December 31, 1993............ $ 750 $ 985 $ 975 $ 760
December 31, 1994............ $ 760 $ 357 $ 68 $1,049
June 30, 1995................ $ 1,049 $ (75) $-- $ 974
</TABLE>

S-1

<PAGE> 1

2,200,000 Shares

SUMMIT TECHNOLOGY, INC.

Common Stock

UNDERWRITING AGREEMENT
----------------------
__________ , 1995

SMITH BARNEY INC.
BEAR, STEARNS & CO. INC.
MORGAN STANLEY & CO.
PIPER JAFFRAY INC.

As Representatives of the Several Underwriters

c/o SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013

Dear Sirs:

Summit Technology, Inc., a Massachusetts corporation (the "Company"),
proposes to issue and sell an aggregate of 2,200,000 shares (the "Firm Shares")
of its common stock, $0.01 par value per share (the "Common Stock"), to the
several underwriters named in Schedule I hereto (the "Underwriters"). The
Company also proposes to sell to the Underwriters, upon the terms and
conditions set forth in Section 2 hereof, up to an additional 330,000 shares
(the "Additional Shares") of Common Stock. The Firm Shares and the Additional
Shares are hereinafter collectively referred to as the "Shares".

The Company wishes to confirm as follows its agreement with you (the
"Representatives") and the other several Underwriters on whose behalf you are
acting, in connection with the several purchases of the Shares by the
Underwriters.

<PAGE> 2
1. REGISTRATION STATEMENT AND PROSPECTUS. The Company has
prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations promulgated thereunder (collectively,
the "Act"), a registration statement on Form S-3 under the Act (File No. ____)
(the "Registration Statement"), including a prospectus subject to completion
relating to the Shares. The term "Registration Statement" as used in this
Agreement means the Registration Statement (including all financial schedules
and exhibits), as amended or supplemented at the time it becomes effective, or,
if the registration statement became effective prior to the execution of this
Agreement, as supplemented or amended prior to the execution of this Agreement.
If it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the Registration Statement will be filed and must
be declared effective before the offering of the Shares may commence, the term
"Registration Statement" as used in this Agreement means the Registration
Statement as amended by said post-effective amendment. The term "Prospectus"
as used in this Agreement means the Prospectus in the form included in the
Registration Statement, or, if the Prospectus included in the Registration
Statement omits information in reliance on Rule 430A under the Act and such
information is later filed with the Commission pursuant to Rule 424(b) under
the Act, the term "Prospectus" as used in this Agreement means the prospectus
in the form included in the Registration Statement as supplemented by the
addition of the Rule 430A information contained in the prospectus filed with
the Commission pursuant to Rule 424(b) and any amendments thereto. The term
"Prepricing Prospectus" as used in this Agreement means the Prospectus subject
to completion in the form included in the Registration Statement at the time of
the initial filing of the Registration Statement with the Commission, as such
Prospectus shall have been amended from time to time prior to the date of the
Prospectus. Any reference in this Agreement to the Registration Statement, any
Prepricing Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Act, as of the date of the Registration Statement, any Prepricing
Prospectus or the Prospectus, as the case may be, and any reference to any
amendment or supplement to the Registration Statement, any Prepricing
Prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after such date under the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder (collectively,
the "Exchange Act") which, upon filing, are incorporated by reference therein,
as required by paragraph (b) of Item 12 of Form S-3. As used herein, the term
"Incorporated Documents" means the documents which at the time are incorporated
by reference in the Registration Statement, any Prepricing Prospectus, the
Prospectus, or any amendment or supplement thereto.

2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees,
subject to all the terms and conditions set forth herein, to issue and sell to
each Underwriter and, upon the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions set forth herein, each Underwriter agrees, severally and not
jointly, to purchase from the Company, at a purchase price of $________ per
Share (the "purchase price per share"), the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto (or such number of
Firm Shares increased as set forth in Section 10 hereof).

The Company also agrees, subject to all the terms and conditions set
forth herein, to sell to the Underwriters, and, upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, the Underwriters
shall have the right to purchase from the Company, at the purchase price per
share, pursuant to an option (the "over-allotment option") which may be
exercised at any time and from time to time prior to 9:00 P.M., New York City
time, on the 30th day after the date of the Prospectus (or, if such 30th day
shall be a Saturday or Sunday or a holiday, on the next business day thereafter
when the New York Stock Exchange is open for trading), up to an aggregate of
330,000 Additional Shares. Additional Shares may be purchased only for the
purpose of covering over-allotments made in connection with the offering of the
Firm Shares. Upon any exercise of the over-allotment option, each Underwriter,
severally and not jointly, agrees to purchase from the Company the number of

- 2 -

<PAGE> 3
Additional Shares (subject to such adjustments as you may determine in order to
avoid fractional shares) which bears the same proportion to the number of
Additional Shares to be purchased by the Underwriters as the number of Firm
Shares set forth opposite the name of such Underwriter in Schedule I hereto (or
such number of Firm Shares increased as set forth in Section 10 hereof) bears
to the aggregate number of Firm Shares.

3. TERMS OF PUBLIC OFFERING. The Company has been advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable and initially
to offer the Shares upon the terms set forth in the Prospectus.

4. DELIVERY OF THE SHARES AND PAYMENT THEREFOR. Delivery to the
Underwriters of, and payment for, the Firm Shares shall be made at the office
of Smith Barney Inc., 388 Greenwich Street, New York, NY 10013, at 10:00 A.M.,
New York City time, on__________ ___, 1995 (the "Closing Date"). The place of
closing for the Firm Shares and the Closing Date may be varied by agreement
between you and the Company.

Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at the aforementioned office
of Smith Barney Inc. at such time on such date (the "Option Closing Date"),
which may be the same as the Closing Date but shall in no event be earlier than
the Closing Date nor earlier than two nor later than ten business days after
the giving of the notice hereinafter referred to, as shall be specified in a
written notice from you on behalf of the Underwriters to the Company of the
Underwriters' determination to purchase a number, specified in such notice, of
Additional Shares. The place of closing for any Additional Shares and the
Option Closing Date for such Shares may be varied by agreement between you and
the Company.

Certificates for the Firm Shares and for any Additional Shares to be
purchased hereunder shall be registered in such names and in such denominations
as you shall request prior to 9:30 A.M., New York City time, on the second
business day preceding the Closing Date or any Option Closing Date, as the case
may be. Such certificates shall be made available to you in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day prior to the Closing Date or the Option Closing Date, as the case
may be. The certificates evidencing the Firm Shares and any Additional Shares
to be purchased hereunder shall be delivered to you on the Closing Date or the
Option Closing Date, as the case may be, against payment of the purchase price
therefor by certified or official bank check or checks payable in New York
Clearing House (next day) funds to the order of the Company. Time shall be of
the essence in performing the obligations under this Agreement and delivery at
the time and place specified pursuant to this Agreement is a further condition
of the obligation of each Underwriter hereunder.

5. AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters as follows:

(a) If, at the time this Agreement is executed and
delivered, it is necessary for the Registration Statement or a post-effective
amendment thereto to be declared effective before the

- 3 -
<PAGE> 4
offering of the Shares may commence, the Company will endeavor to cause the
Registration Statement or such post-effective amendment to become effective as
soon as possible and will advise you promptly and, if requested by you, will
confirm such advice in writing, when the Registration Statement or such
post-effective amendment has become effective.

(b) The Company will advise you promptly and, if
requested by you, will confirm such advice in writing: (i) of any request by
the Commission for amendment of or a supplement to the Registration Statement,
any Prepricing Prospectus or the Prospectus or for additional information; (ii)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of the suspension of
qualification of the Shares for offering or sale in any jurisdiction or the
initiation of any proceeding for such purpose; and (iii) within the period of
time referred to in paragraph (f) below, of any change in the Company's
condition (financial or other), business, prospects, properties, net worth or
results of operations, or of the happening of any event, which makes any
statement of a material fact made in the Registration Statement or the
Prospectus (as then amended or supplemented) untrue or which requires the
making of any additions to or changes in the Registration Statement or the
Prospectus in order to state a material fact required by the Act to be stated
therein or necessary in order to make the statements therein not misleading, or
of the necessity to amend or supplement the Prospectus or the Registration
Statement to comply with the Act, the Exchange Act or any other law. If at any
time the Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, the Company will make every reasonable effort to
obtain the withdrawal of such order at the earliest possible time.

(c) The Company will furnish to you and your counsel,
without charge (i) five signed copies of the Registration Statement as
originally filed with the Commission and of each amendment thereto, including
financial statements, consents and all exhibits to the Registration Statement,
(ii) such number of conformed copies of the Registration Statement as
originally filed and of each amendment thereto, but without exhibits, as you
may request, (iii) such number of copies of the Incorporated Documents, without
exhibits, as you may request, and (iv) five copies of the exhibits to the
Incorporated Documents.

(d) The Company will not file any amendment or supplement
to the Registration Statement, the Prepricing Prospectus, or the Prospectus or,
prior to the end of the period of time referred to in the first sentence in
subsection (f) below, file any document which upon filing becomes an
Incorporated Document, of which you shall not previously have been advised or
to which, after you shall have received a copy of the document proposed to be
filed, you shall reasonably object.

(e) Prior to the execution and delivery of this
Agreement, the Company has delivered to you, without charge, in such quantities
as you have requested, copies of each form of the Prepricing Prospectus. The
Company consents to the use, in accordance with the provisions of the Act and
the securities or "Blue Sky" laws of the jurisdictions in which any of the
Shares are offered by any of the several Underwriters or by dealers, prior to
the date of the Prospectus, of each Prepricing Prospectus so furnished by the
Company.

- 4 -
<PAGE> 5
(f) As soon after the execution and delivery of this
Agreement as possible and thereafter from time to time for such period as in
the opinion of counsel for the Underwriters a prospectus is required by the Act
to be delivered in connection with offers or sales of any of the Shares by any
Underwriter or dealer, the Company will expeditiously deliver to each
Underwriter and each dealer, without charge, as many copies of the Prospectus
(and of any amendment or supplement thereto) as you may reasonably request.
The Company consents to the use of the Prospectus (and of any amendment or
supplement thereto) in accordance with the provisions of the Act and the
securities or Blue Sky laws of the jurisdictions in which any of the Shares are
offered by the any of several Underwriters or by any dealers to whom Shares may
be sold, both in connection with the offering and sale of the Shares and for
such period of time thereafter as the Prospectus is required by the Act to be
delivered in connection with sales by any Underwriter or dealer. If during
such period of time any event shall occur that, in the judgment of the Company
or in the opinion of counsel for the Underwriters, is required to be set forth
in the Prospectus (as then amended or supplemented) or should be set forth
therein in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is necessary
to supplement or amend the Prospectus (or to file under the Exchange Act any
document which, upon filing, becomes an Incorporated Document) in order to
comply with the Act or any other law, the Company will forthwith prepare and,
subject to the provisions of paragraph (d) above, file with the Commission an
appropriate supplement or amendment thereto (or to such document), and will
expeditiously furnish to the Underwriters and dealers a reasonable number of
copies thereof. In the event that the Company and you, as Representatives of
the several Underwriters, agree that the Prospectus should be amended or
supplemented, the Company, if requested by you, will promptly issue a press
release announcing or disclosing the matters to be covered by the proposed
amendment or supplement.

(g) The Company will cooperate with you and with counsel
for the Underwriters in connection with the registration or qualification of
the Shares for offering and sale by the several Underwriters and by dealers
under the securities or Blue Sky laws of such jurisdictions as you may
designate and will file such consents to service of process or other documents
necessary or appropriate in order to effect such registration or qualification;
provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any
action which would subject it to service of process in suits, other than those
arising out of the offering or sale of the Shares, in any jurisdiction where it
is not now so subject.

(h) The Company will make generally available to its
security holders a consolidated earnings statement, which need not be audited,
covering a twelve-month period commencing after the effective date of the
Registration Statement and ending not later than 15 months thereafter, as soon
as practicable after the end of such period, which consolidated earnings
statement shall satisfy the provisions of Section 11(a) of the Act and Rule 158
promulgated thereunder.

(i) For a period of five years following the effective
date of the Registration Statement, the Company will furnish to you (i) as soon
as available, a copy of each report of the Company mailed to stockholders or
filed with the Commission, and (ii) from time to time such other information
concerning the Company as you may request.

- 5 -
<PAGE> 6
(j) If this Agreement shall terminate or shall be
terminated after execution pursuant to any provisions hereof (otherwise than
pursuant to the second paragraph of Section 10 hereof or by notice given by you
terminating this Agreement pursuant to Section 10 or Section 11 hereof) or if
this Agreement shall be terminated by the Underwriters because of any failure
or refusal on the part of the Company to comply with the terms or fulfill any
of the conditions of this Agreement, the Company agrees to reimburse the
Representatives for all out-of-pocket expenses (including fees and expenses of
counsel for the Underwriters) incurred by you in connection herewith.

(k) The Company will apply the net proceeds from the sale
of the Shares substantially in accordance with the description set forth in the
Prospectus.

(l) If Rule 430A of the Act is employed, the Company will
timely file the Prospectus pursuant to Rule 424(b) under the Act and will
advise you of the time and manner of such filing.

(m) Except as provided in this Agreement, the Company
will not offer for sale (except pursuant to the Company's (i) 1987 Stock Option
Plan, (ii) the 1992 Stock Option Plan for Outside Directors and (iii) the 1991
Employee Stock Purchase Plan), sell, contract to sell or file a registration
statement under the Act covering, or otherwise dispose of any Common Stock or
any securities convertible into or exercisable or exchangeable for Common
Stock, or grant any options or warrants to purchase Common Stock, for a period
of 90 days after the date of the Prospectus, without the prior written consent
of Smith Barney Inc.

(n) The Company has furnished or will furnish to you
"lock-up" letters, in form and substance satisfactory to you, signed by each of
its current executive officers and directors.

(o) Except as stated in this Agreement and in the
Prepricing Prospectus and Prospectus, the Company has not taken, nor will it
take, directly or indirectly, any action designed to or that might reasonably
be expected to cause or result in stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of the Shares.

(p) The Company will use its best efforts to have the
Shares listed, subject to notice of issuance, on the Nasdaq National Market on
or before the Closing Date.

(q) If the Commission shall issue a stop order suspending
the effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the lifting of that order at the earliest possible
time.

(r) The Company will pay or cause to be paid the costs
incident to: (i) the authorization, issuance, sale and delivery of the Shares
and to the performance by the Company of its obligations under this Agreement
and any taxes payable in that connection; (ii) the costs incidental to the
preparation, printing and filing under the Act, and delivery and distribution
to the Underwriters, of the Registration Statement and any amendments and
exhibits thereof, each Prepricing Prospectus, Prospectus and any amendment or
supplement to the Prospectus; (iii) the costs of printing, delivery

- 6 -
<PAGE> 7
and distribution of this Agreement and any underwriters questionnaires; (iv)
the costs of filing with, and any quotation fees payable to, the National
Association of Securities Dealers, Inc.; (v) any costs attributable to the
qualifications of the Shares for trading on NASDAQ; and (vi) the reasonable
fees and expenses (including reasonable fees and disbursements of counsel to
the Underwriters in connection herewith) of qualifying the Shares for offering
and sale under the Act and the securities laws of the several jurisdictions and
of preparing and printing a Blue Sky memorandum; PROVIDED HOWEVER, that except
as provided in this paragraph and paragraph 5(j), the Underwriters shall pay
their own costs and expenses, including the fees and expenses of their counsel,
any transfer taxes and the expenses of advertising any offering of the Shares
made by the Underwriters.

6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Underwriter that:

(a) Each Prepricing Prospectus included as part of the
Registration Statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied when
so filed in all material respects with the provisions of the Act. The
Commission has not issued any order preventing or suspending the use of any
Prepricing Prospectus.

(b) The Company and the transactions contemplated by this
Agreement meet the requirements for using Form S-3 under the Act. The
Registration Statement in the form in which it became or becomes effective and
also in such form as it may be when any post-effective amendment thereto shall
become effective and the Prospectus and any supplement or amendment thereto
when filed with the Commission under Rule 424(b) under the Act, complied or
will comply in all material respects with the provisions of the Act and will
not at any such time contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, except that this representation and warranty
does not apply to statements in or omissions from the Registration Statement or
the Prospectus made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by or on behalf
of any Underwriter by you expressly for use therein.

(c) The Incorporated Documents heretofore filed, when they
were filed (or, if any amendment with respect to any such document was filed,
when such amendment was filed), conformed in all material respects with the
requirements of the Act and the Exchange Act and any further Incorporated
Documents so filed will, when they are filed, conform in all material respects
with the requirements of the Act and the Exchange Act; no such document when it
was filed (or, if an amendment with respect to any such document was filed,
when such amendment was filed), contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and no such
further document, when it is filed, will contain an untrue statement of a
material fact or will omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading.

(d) All the issued and outstanding shares of Common Stock
of the Company have been duly authorized and validly issued, are fully paid and
nonassessable and are free of any

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<PAGE> 8
preemptive or similar rights; the Shares have been duly authorized and, when
issued and delivered to the Underwriters against payment therefor in accordance
with the terms of this Agreement, will be validly issued, fully paid and
nonassessable and free of any preemptive or similar rights; and the capital
stock of the Company conforms to the description thereof in the Registration
Statement and the Prospectus.

(e) The Company is a corporation duly organized and
validly existing in good standing under the laws of The Commonwealth of
Massachusetts with full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement and the Prospectus, and is duly registered and qualified to conduct
its business and is in good standing in each jurisdiction or place where the
nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure to register or qualify
does not have a material adverse effect on the condition (financial or other),
business, properties, net worth or results of operations of the Company and the
Subsidiaries (as hereinafter defined) taken as a whole.

(f) All the Company's subsidiaries (collectively, the
"Subsidiaries") are listed in Exhibit 22 to the Company's 1994 Annual Report on
Form 10-K which is incorporated by reference into the Registration Statement.
Each Subsidiary is a corporation duly organized, validly existing and in good
standing in the jurisdiction of its incorporation, with full corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus, and is
duly registered and qualified to conduct its business and is in good standing
in each jurisdiction or place where the nature of its properties or the conduct
of its business requires such registration or qualification, except where the
failure to register or qualify does not have a material adverse effect on the
condition (financial or other), business, properties, net worth or results of
operations of such Subsidiary; all the outstanding shares of capital stock of
each of the Subsidiaries have been duly authorized and validly issued, are
fully paid and nonassessable, and are owned by the Company directly, or
indirectly through one of the other Subsidiaries, free and clear of any lien,
adverse claim, security interest, equity, or other encumbrance including
preemptive or other rights, except as otherwise described in the Registration
Statement.

(g) There is no litigation and there are no legal or
governmental proceedings pending or, to the knowledge of the Company,
threatened, against the Company or any of the Subsidiaries, or to which the
Company or any of the Subsidiaries is a party, or to which any of their
respective properties is subject, that are required to be described in the
Registration Statement or the Prospectus but are not described as required.

(h) There are no agreements, contracts, indentures,
leases or other instruments that are required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement or any Incorporated Document under the Act or the
Exchange Act which has not been described or filed as required by the Act or
the Exchange Act.

(i) Neither the Company nor any of the Subsidiaries is in
violation of its corporate charter or by-laws, or other organizational
documents, or of any law, ordinance, administrative or

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<PAGE> 9
governmental rule or regulation applicable to the Company or any of the
Subsidiaries or of any decree of any court or governmental agency or body
having jurisdiction over the Company or any of the Subsidiaries. Neither the
Company nor any of its Subsidiaries is in material default, and no event has
occurred which would constitute a material default in the due performance and
observance of any term, covenant, obligation, agreement or condition contained
in any bond, debenture, note or any other evidence of indebtedness or in any
material agreement, license, indenture, mortgage lease or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any of their respective properties may be bound.

(j) Neither the issuance or sale of the Shares, the
execution, delivery or performance of this Agreement by the Company nor the
consummation by the Company of the transactions contemplated hereby (i)
requires any consent, approval, authorization or other order of or registration
or filing with, any court, regulatory body, administrative agency or other
governmental body, agency or official (except such as may be required for the
registration of the Shares under the Act and the Exchange Act and compliance
with the securities or Blue Sky laws of the various jurisdictions in which any
of the Shares will be sold, all of which have been or will be effected in
accordance with this Agreement) or conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the corporate
charter or bylaws, or other organizational documents, of the Company or any of
the Subsidiaries or (ii) conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, any organizational or incorporation
document, agreement, indenture, lease or other instrument to which the Company
or any of the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound or (iii) violates or will violate any
statute, law, ordinance, administrative or governmental rule or regulation or
filing or judgment, injunction, order or decree of any court or governmental
agency applicable to the Company or any of the Subsidiaries or any of their
respective properties, or (iv) will result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any
of the Subsidiaries pursuant to the terms of any agreement or instrument to
which any of them is a party or by which any of them may be bound or to which
any of their property or assets of any of them is subject.

(k) To the Company's knowledge, and by reason of the
accountant's relationship with the Company and the Subsidiaries, the
accountants, KPMG Peat Marwick LLP, who have certified or shall certify the
financial statements included or incorporated by reference in the Registration
Statement and the Prospectus (or any amendment or supplement thereto) are
independent public accountants as required by the Act.

(l) The financial statements, together with related
schedules and notes, included or incorporated by reference in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), present
fairly, in all material respects, the consolidated financial position, results
of operations and changes in financial position of the Company and the
Subsidiaries on the basis stated in the Registration Statement at the
respective dates or for the respective periods to which they apply; such
statements and related schedules and notes have been prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods involved, except as disclosed therein; and the other financial and
statistical information and data included or

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<PAGE> 10
incorporated by reference in the Registration Statement and the Prospectus,
including the information contained under the caption "Capitalization" (and any
amendment or supplement thereto), are accurately presented and prepared on a
basis consistent with such financial statements and the books and records of
the Company and the Subsidiaries.

(m) The Company has all necessary corporate power and the
execution and delivery of, and the performance by the Company of its
obligations, including the issuance of the Shares, under this Agreement, have
been duly and validly authorized by the Company, and this Agreement has been
duly executed and delivered by the Company and constitutes the valid and
legally binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as rights to indemnity and contribution
hereunder may be limited by the Act, the Exchange Act or state securities laws.

(n) Except as disclosed in the Registration Statement and
the Prospectus (or any amendment or supplement thereto), since the respective
dates as of which such information is given in the Registration Statement and
the Prospectus, neither the Company nor any of the Subsidiaries has incurred
any liability or obligation, direct or contingent, or entered into any
transaction, whether or not in the ordinary course of business, that is
material to the Company and the Subsidiaries taken as a whole, which would
require the making of a change in the Registration Statement or the Prospectus
in order to make any material statement therein not misleading. There has not
been any change in the capital stock, or material increase in the short-term
debt or long-term debt, of the Company or any of the Subsidiaries, or any
material adverse change, or any development involving or which may reasonably
be expected to involve, a prospective material adverse change, in the condition
(financial or other), business, net worth or results of operations of the
Company and the Subsidiaries taken as a whole.

(o) Each of the Company and the Subsidiaries has good and
marketable title to all property (real and personal) described in the
Prospectus as being owned by it, which is material to the business of the
Company and its Subsidiaries taken as a whole free and clear of all liens,
claims, security interests or other encumbrances which would materially
interfere with the conduct of the business of the Company and its Subsidiaries
taken as a whole (except such as are described in the Registration Statement
and the Prospectus or in a document filed as an exhibit to the Registration
Statement) and all the property described in the Prospectus as being held under
lease by each of the Company and the Subsidiaries is held by it under valid,
subsisting and enforceable leases.

(p) The Company has not distributed and, prior to the
later to occur of (i) the Closing Date and (ii) completion of the distribution
of the Shares, will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement, the
Prepricing Prospectus, the Prospectus or other materials, if any, permitted by
the Act and state securities laws.

(q) The Company and each of the Subsidiaries has not
failed to obtain the permits, licenses, franchises, certificates and
authorizations of governmental or regulatory authorities ("Permits") as are
necessary to own its respective properties and to conduct its business in the
manner

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<PAGE> 11
described in the Prospectus, (subject to such qualifications as may be set
forth in the Prospectus), which failure would have a material adverse effect on
the financial condition, results of operation, business or prospects of the
Company and the Subsidiaries taken as a whole). The Company and each of the
Subsidiaries has fulfilled and performed all its material obligations with
respect to the Permits and no event has occurred which allows, or would allow,
revocation or termination of any Permit or would result in any other material
impairment of the rights of the holder of any such Permit, (subject in each
case to such qualification as may be set forth in the Prospectus); and, except
as described in the Prospectus, none of the Permits contains any restriction
that is materially burdensome to the Company or any of the Subsidiaries.

(r) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

(s) To the Company's knowledge, neither the Company nor
any of its Subsidiaries nor any employee or agent of the Company or any
Subsidiary has made any payment of funds of the Company or any Subsidiary or
received or retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.

(t) The Company and each of the Subsidiaries have filed
all tax returns required to be filed, which returns are complete and correct,
and neither the Company nor any Subsidiary is in default in the payment of any
taxes which were payable pursuant to said returns or any assessments with
respect thereto.

(u) No holder of any security of the Company has any
right to require registration of shares of Common Stock or any other security
of the Company or capital stock of any Subsidiary because of the filing of the
Registration Statement or consummation of the transactions contemplated by this
Agreement.

(v) The Company and the Subsidiaries own or possess or
have adequate rights to use all patents, patent application, trademarks,
trademark registrations, service marks, service mark registrations, trade
names, copyrights, licenses, inventions, trade secrets and rights necessary for
the conduct of the business of the Company and the Subsidiary taken as a whole
and the Company is not aware of any claim to the contrary or any challenge by
any other person to the rights of the Company and the Subsidiaries with respect
to the foregoing which could have a materially adverse effect on the financial
condition, results of operation, business or prospects of the Company and the
Subsidiaries, except as described in the Registration Statement.

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<PAGE> 12
(w) Except as disclosed in the Registration Statement and
the Prospectus no relationships, direct or indirect, exist between or among the
Company and any of its Subsidiaries on the one hand and the directors,
officers, stockholders, customers or suppliers of the Company or any of its
Subsidiaries on the other hand.

The Company has complied with all provisions of Florida
Statutes, 517.075, relating to issuers doing business with Cuba.

7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each of you and each other Underwriter and each
person, if any, who controls any Underwriter within the meaning of the Act or
the Exchange Act from and against any and all losses, claims, damages,
liabilities, joint or several, and expenses (including reasonable costs of
investigation) to which you may be subject under the Act or otherwise arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Prepricing Prospectus or in the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or
arising out of or based upon any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission which has been
made therein or omitted therefrom in reliance upon and in conformity with the
information relating to such Underwriter furnished in writing to the Company by
or on behalf of any Underwriter through you expressly for use in connection
therewith; provided, however, that the indemnification contained in this
paragraph (a) with respect to any Prepricing Prospectus shall not inure to the
benefit of any Underwriter (or to the benefit of any person controlling such
Underwriter) on account of any such loss, claim, damage, liability or expense
arising from the sale of the Shares by such Underwriter to any person if a copy
of the Prospectus shall not have been delivered or sent to such person within
the time required by the Act, and the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in such
Prepricing Prospectus was corrected in the Prospectus, provided that the
Company has delivered the Prospectus to the several Underwriters in requisite
quantity on a timely basis to permit such delivery or sending. For purposes of
the immediately preceding sentence, the term "Prospectus" shall not be deemed
to include the documents incorporated therein by reference, and no Underwriter
shall be obligated to send or give any supplement or amendment to any document
incorporate by reference in any Prepricing Prospectus or Prospectus to any
person other than a person to whom such Underwriter had delivered such
incorporated document or documents in response to a written request therefore.
The foregoing indemnity agreement shall be in addition to any liability which
the Company may otherwise have to any Underwriter or person controlling such
Underwriter.

(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company, such Underwriter or such
controlling person shall promptly notify the Company and the Company shall
assume the defense thereof, including the employment of counsel and payment of
all fees and expenses. Such Underwriter or any such controlling person shall
have the right to employ separate counsel in any such action, suit or
proceeding and to participate in the defense thereof, but

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<PAGE> 13
the fees and expenses of such counsel shall be at the expense of such
Underwriter or such controlling person unless (i) the Company has agreed in
writing to pay such fees and expenses, (ii) the Company has failed to assume
the defense and employ counsel, or (iii) the named parties to any such action,
suit or proceeding (including any impleaded parties) include both such
Underwriter or such controlling person and the Company and such Underwriter or
such controlling person shall have been advised by its counsel that
representation of such indemnified party and the Company by the same counsel
would be inappropriate under applicable standards of professional conduct
(whether or not such representation by the same counsel has been proposed) due
to actual or potential differing interests between them (in which case the
Company shall not have the right to assume the defense of such action, suit or
proceeding on behalf of such Underwriter or such controlling person). It is
understood, however, that the Company shall, in connection with any one such
action, suit or proceeding or separate but substantially similar or related
actions, suits or proceedings in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of only one separate firm of attorneys (in addition to any local
counsel) at any time for all such Underwriters and controlling persons not
having actual or potential differing interests with you or among themselves,
which firm shall be designated in writing by Smith Barney Inc., and that all
such fees and expenses shall be reimbursed as they are incurred. The Company
shall not be liable for any settlement of any such action, suit or proceeding
effected without its written consent, but if settled with such written consent,
or if there be a final judgment for the plaintiff in any such action, suit or
proceeding, the Company agrees to indemnify and hold harmless any Underwriter,
to the extent provided in the preceding paragraph, and any such controlling
person from and against any loss, claim, damage, liability or expense by reason
of such settlement or judgment.

(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, and any person who controls the Company within the
meaning of the Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company to each Underwriter, but only with respect to
information relating to such Underwriter furnished in writing by or on behalf
of such Underwriter by you, or on your behalf, expressly for use in the
Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto. If any action, suit or proceeding shall be
brought against the Company, any of its directors, any such officer, or any
such controlling person based on the Registration Statement, the Prospectus or
any Prepricing Prospectus, or any amendment or supplement thereto, and in
respect of which indemnity may be sought against any Underwriter pursuant to
this paragraph (c), such Underwriter shall have the rights and duties given to
the Company by paragraph (b) above (except that if the Company shall have
assumed the defense thereof such Underwriter shall not be required to do so,
but may employ separate counsel therein and participate in the defense thereof,
but the fees and expenses of such Company counsel shall be at such
Underwriter's expense), and the Company, its directors, any such officer, and
any such controlling person shall have the rights and duties given to the
Underwriters by paragraph (b) above. The foregoing indemnity agreement shall be
in addition to any liability which the Underwriters may otherwise have to the
Company, its directors or officers.

(d) If the indemnification provided for in this Section 7 is
insufficient or unavailable to an indemnified party under paragraphs (a) or (c)
hereof in respect of any losses, claims, damages,

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<PAGE> 14
liabilities or expenses referred to therein, then an indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities or expenses (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Shares, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Underwriters on the other in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus. The relative fault of the Company
on the one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand or
by the Underwriters on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

(e) The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined
by a pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price of the Shares underwritten by it and distributed to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to
this Section 7 are several in proportion to the respective numbers of Firm
Shares set forth opposite their names in Schedule I hereto (or such numbers of
Firm Shares increased as set forth in Section 10 hereof) and not joint.

(f) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.

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<PAGE> 15
(g) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect in connection with any
indemnification being sought under this Agreement based upon a breach of such
representation or warranty regardless of (i) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter, the
Company, its directors or officers, or any person controlling the Company, (ii)
acceptance of any Shares and payment therefor hereunder, and (iii) any
termination of this Agreement. A successor to any Underwriter or any person
controlling any Underwriter, or to the Company, its directors or officers, or
any person controlling the Company, shall be entitled to the benefits of the
indemnity, contribution and reimbursement agreements contained in this Section
7.

8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters to purchase the Firm Shares hereunder are
subject to the following conditions:

(a) If, at the time this Agreement is executed and
delivered, it is necessary for the Registration Statement or a post-effective
amendment thereto to be declared effective before the offering of the Shares
may commence, the Registration Statement or such post-effective amendment shall
have become effective not later than 5:30 P.M., New York City time, on the date
hereof, or at such later date and time as shall be consented to in writing by
you, and all filings, if any, required by Rules 424 and 430A under the Act
shall have been timely made; no stop order suspending the effectiveness of the
registration statement shall have been issued and no proceeding for that
purpose shall have been instituted or, to the knowledge of the Company or any
Underwriter, threatened by the Commission, and any request of the Commission
for additional information (to be included in the registration statement or the
prospectus or otherwise) shall have been complied with to your satisfaction.

(b) Subsequent to the effective date of this Agreement,
there shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, net worth, or results of operations of the Company or the
Subsidiaries not contemplated by the Prospectus, which in your opinion, as
Representatives of the several Underwriters, would materially adversely affect
the market for the Shares, or (ii) any event or development relating to or
involving the Company or any officer or director of the Company which makes any
statement made in the Prospectus untrue or which, in the opinion of the Company
and its counsel or the Underwriters and their counsel, requires the making of
any addition to or change in the Prospectus in order to state a material fact
required by the Act or any other law to be stated therein or necessary in order
to make the statements therein not misleading, if amending or supplementing the
Prospectus to reflect such event or development would, in your opinion, as
Representatives of the several Underwriters, materially adversely affect the
market for the Shares.

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<PAGE> 16
(c) All corporate proceedings and other legal matters
incident to the authorizing, form and validity of this Agreement, the issuance
of the Shares, the Registration Statement and the Prospectus and all other
legal matters material to this Agreement and the transactions contemplated
hereby shall be satisfied.

(d) You shall have received on the Closing Date, and any
Option Closing Date, an opinion of Goldstein & Manello, P.C., counsel for the
Company, dated the Closing Date and addressed to you, as Representatives of the
several Underwriters, to the effect that:

(i) The Company is a corporation duly incorporated and
validly existing in good standing under the laws of The Commonwealth of
Massachusetts with full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement and the Prospectus (and any amendment or supplement thereto), and is
duly registered and qualified to conduct its business and is in good standing
in each jurisdiction or place where the nature of its properties or the conduct
of its business requires such registration or qualification, except where the
failure so to register or qualify does not have a material adverse effect on
the condition (financial or other), business, properties, net worth or results
of operations of the Company and the Subsidiaries taken as a whole;

(ii) Each of Refractive Centers International, Inc. and
Summit Partner, Inc. (collectively, the "Material Subsidiaries") is a
corporation duly organized and validly existing in good standing under the laws
of the jurisdiction of its organization, with full corporate power and
authority to own, lease, and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus (and any
amendment or supplement thereto); and all the outstanding shares of capital
stock of each of the Material Subsidiaries have been duly authorized and
validly issued, are fully paid and nonassessable, and are owned by the Company
directly, except as described in the Registration Statement, or indirectly
through one of the other Subsidiaries, free and clear of any perfected security
interest, or, to the best knowledge of such counsel after reasonable inquiry,
any other security interest, lien, adverse claim, equity or other encumbrance;

(iii) The authorized and outstanding capital stock of the
Company is as set forth under the caption "Capitalization" in the Prospectus;
and the authorized capital stock of the Company conforms in all material
respects as to legal matters to the description thereof contained in the
Prospectus under the caption "Description of Capital Stock";

(iv) All the shares of capital stock of the Company
outstanding prior to the issuance of the Shares have been duly authorized and
validly issued, and are fully paid and nonassessable;

(v) The Shares have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor in accordance with
the terms hereof, will be validly issued, fully paid and nonassessable and free
of any preemptive, or to the best knowledge of such counsel after reasonable
inquiry, similar rights that entitle or will entitle any person to acquire any
Shares upon the issuance thereof by the Company;

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<PAGE> 17
(vi) The form of certificates for the Shares conforms to
the requirements of the Massachusetts Business Corporation Law;

(vii) The Registration Statement and all post-effective
amendments, if any, have become effective under the Act and, to the best
knowledge of such counsel after reasonable inquiry, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose are pending before or contemplated by the
Commission; and any required filing of the Prospectus pursuant to Rule 424(b)
has been made in accordance with Rule 424(b);

(viii) The Company has corporate power and authority to enter
into this Agreement and to issue, sell and deliver the Shares to the
Underwriters as provided herein, and this Agreement has been duly authorized,
executed and delivered by the Company and is a valid, legal and binding
agreement of the Company, enforceable against the Company in accordance with
its terms, except as enforcement of rights to indemnity and contribution
hereunder may be limited by the Act, the Exchange Act or any other applicable
Federal or state securities laws or principles of public policy and subject to
the qualification that the enforceability of the Company's obligations
hereunder may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or affecting creditors'
rights generally, and by general equitable principals.

(ix) The Shares will be authorized for listing on the
Nasdaq National Market, subject to official notice of issuance.

(x) Except as described in the Prospectus, there are no
outstanding options, warrants or other rights calling for the issuance of, and
such counsel does not know of any commitment, plan or arrangement to issue, any
shares of capital stock of the Company or any security convertible into or
exchangeable or exercisable for capital stock of the Company;

(xi) Except as described in the Prospectus, there is no
holder of any security of the Company or any other person who has the right,
contractual or otherwise, to cause the Company to sell or otherwise issue to
them, or to permit them to underwrite the sale of, the Shares or the right to
have any Common Stock or other securities of the Company included in the
Registration Statement or the right, as a result of the filing of the
Registration Statement, to require registration under the Act of any shares of
Common Stock or other securities of the Company;

(xii) Neither the Company nor any of the Material
Subsidiaries is in violation of its respective corporate charter or bylaws, or
other organizational documents, or to the best knowledge of such counsel after
reasonable inquiry, is in default in the performance of any material
obligation, agreement or condition contained in any bond, debenture, note or
other evidence of indebtedness, except as may be disclosed in the Prospectus;

(xiii) Neither the offer, sale or delivery of the Shares,
the execution, delivery or performance of this Agreement, compliance by the
Company with the provisions hereof nor consummation by the Company of the
transactions contemplated hereby conflicts or will conflict with

- 17 -
<PAGE> 18
or constitutes or will constitute a breach of, or a default under, the
certificate or articles of incorporation or bylaws, or other organizational
documents, of the Company or any of the Material Subsidiaries or any agreement,
indenture, lease or other instrument to which the Company or any of the
Material Subsidiaries is a party or by which any of them or any of their
respective properties is bound that is an exhibit to the Registration Statement
or to any Incorporated Document, or is known to such counsel after reasonable
inquiry, or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of the Material
Subsidiaries, nor will any such action result in any violation of any existing
law, regulation, ruling (assuming compliance with all applicable state
securities and Blue Sky laws), judgment, injunction, order or decree known to
such counsel after reasonable inquiry, applicable to the Company, the Material
Subsidiaries or any of their respective properties;

(xiv) No consent, approval, authorization or other order
of, or registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency, or official is required on the part
of the Company (except as have been obtained under the Act and the Exchange Act
or such as may be required under state securities or Blue Sky laws governing
the purchase and distribution of the Shares) for the valid issuance and sale of
the Shares to the Underwriters as contemplated by this Agreement;

(xv) The Registration Statement and the Prospectus and any
supplements or amendments thereto (except for the financial statements and the
notes thereto and the schedules and other financial and statistical data
included therein, as to which such counsel need not express any opinion) comply
as to form in all material respects with the requirements of the Act; and each
of the Incorporated Documents (except for the financial statements and the
notes thereto and the schedules and other financial and statistical data
included therein, as to which counsel need not express any opinion) complies as
to form in all material respects with the Exchange Act and the rules and
regulations of the Commission thereunder;

(xvi) To the best knowledge of such counsel after
reasonable inquiry, (A) other than as described or contemplated in the
Prospectus (or any supplement thereto), there are no legal or governmental
proceedings pending or threatened against the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries is a party, or
to which any of their property, is subject, which are required to be described
in the Registration Statement or Prospectus (or any amendment or supplement
thereto) and (B) there are no agreements, contracts, indentures, leases or
other instruments, that are required to be described in the Registration
Statement or the Prospectus (or any amendment or supplement thereto) or to be
filed as an exhibit to the Registration Statement or any Incorporated Document
that are not described or filed as required, as the case may be;

(xvii) To the best knowledge of such counsel after
reasonable inquiry, neither the Company nor any of the Subsidiaries is in
violation of any law, ordinance, administrative or governmental rule or
regulation, state or Federal, applicable to the Company or any of the
Subsidiaries or of any decree of any court or governmental agency or body
having jurisdiction over the Company or any of the Subsidiaries;

- 18 -
<PAGE> 19
(xviii) The statements in the Registration Statement and
Prospectus, insofar as they are descriptions of contracts, agreements or other
legal documents, or refer to statements of law or legal conclusions, are
accurate and present fairly the information required to be shown; and

(xix) Although counsel has not undertaken, except as otherwise
indicated in their opinion, to determine independently, and does not assume any
responsibility for, the accuracy or completeness of the statements in the
Registration Statement, such counsel has participated in the preparation of the
Registration Statement and the Prospectus, including review and discussion of
the contents thereof (including review and discussion of the contents of all
Incorporated Documents), and nothing has come to the attention of such counsel
that has caused them to believe that the Registration Statement (including the
Incorporated Documents) at the time the Registration Statement became
effective, or the Prospectus, as of its date and as of the Closing Date or the
Option Closing Date, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that any
amendment or supplement to the Prospectus, as of its respective date, and as of
the Closing Date or the Option Closing Date, as the case may be, contained any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no opinion with respect to the financial
statements and the notes thereto and the schedules and other financial and
statistical data included in the Registration Statement or the Prospectus or
any Incorporated Document).

In rendering their opinion as aforesaid, counsel may rely upon an
opinion or opinions, each dated the Closing Date, of other counsel retained by
them or the Company as to laws of any jurisdiction other than the United States
or The Commonwealth of Massachusetts, provided that (1) each such local counsel
is acceptable to the Representatives, (2) such reliance is expressly authorized
by each opinion so relied upon and a copy of each such opinion is delivered to
the Representatives and is, in form and substance satisfactory to them and
their counsel, and (3) counsel shall state in their opinion that they believe
that they and the Underwriters are justified in relying thereon.

(d) You shall have received on the Closing Date an opinion of
Ropes & Gray, counsel for the Underwriters, dated the Closing Date and
addressed to you, as Representatives of the several Underwriters, with respect
to the matters referred to in clauses (v), (vii), (viii), (xv) and (xix) of the
foregoing paragraph (c) and such other related matters as you may request.

(e) You shall have received letters addressed to you, as
Representatives of the several Underwriters, and dated the date hereof and the
Closing Date from KPMG Peat Marwick L.L.P., independent certified public
accountants, substantially in the forms heretofore approved by you.

(f)(i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been taken or, to the knowledge of the Company, shall be contemplated by the
Commission at or prior to the Closing Date; (ii) there shall not have been any
change in the capital stock of the Company nor any material increase in the
short-term or long-term debt of the Company (other than in the ordinary course
of business) from that

- 19 -
<PAGE> 20
set forth or contemplated in the Registration Statement or the Prospectus (or
any amendment or Supplement thereto); (iii) there shall not have been, since
the respective dates as of which information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), except
as may otherwise be stated in the Registration Statement and Prospectus (or any
amendment or supplement thereto), any material adverse change in the condition
(financial or other), business, prospects, properties, net worth or results of
operations of the Company and the Subsidiaries taken as a whole; (iv) the
Company and the Subsidiaries shall not have any liabilities or obligations,
direct or contingent (whether or not in the ordinary course of business), that
are material to the Company and the Subsidiaries, taken as a whole, other than
those reflected in the Registration Statement or the Prospectus (or any
amendment or supplement thereto); and (v) all the representations and
warranties of the Company contained in this Agreement shall be true and correct
on and as of the date hereof and on and as of the Closing Date as if made on
and as of the Closing Date, and you shall have received a certificate, dated
the Closing Date and signed by the chief executive officer and the chief
financial officer of the Company (or such other officers as are acceptable to
you), to the effect set forth in this Section 8(g) and in Section 8(h) hereof.

(g) The Company shall have furnished to the Underwriters and their
counsel a letter of Hogan & Hartson, Federal Food and Drug Administration
counsel to the Company, addressed to the Underwriters and their counsel and
dated the date hereof, and Option Closing Date, if any, stating that such
counsel has reviewed the portions of the Registration Statement captioned "Risk
Factors--Possible Failure to Obtain Regulatory Approvals for Products" and
Business--Government Regulation" ("Regulatory Matters") and confirming that
such Regulatory Matters are accurate summaries in all material respects of the
provisions purported to be summarized under such captions.

(h) The Company shall have furnished to the Underwriters and their
counsel a letter of Lahive and Cockfield, patent counsel to the Company,
addressed to the Underwriters and their counsel and dated the date hereof, and
the Option Closing Date, if any, stating that such counsel has reviewed the
portions of the Registration Statement captioned "Risk Factors--Patent
Concerns" and "Business--Patent" ("Patent Matters") and confirming that such
Patent Matters are accurate summaries in all material respects of the
provisions purported to be summarized under such captions.

(i) The Company shall not have failed at or prior to the Closing
Date to have performed or complied with any of its agreements herein contained
and required to be performed or complied with by it hereunder at or prior to
the Closing Date.

(j) Prior to the Closing Date the Shares shall have been listed,
subject to notice of issuance, on the Nasdaq National Market.

(k) The Company shall have furnished or caused to be furnished to
you such further certificates and documents as you shall have requested.

All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are satisfactory in form
and substance to you and your counsel.

- 20 -
<PAGE> 21
Any certificate or document signed by any officer of the Company and
delivered to you, as Representatives of the Underwriters, or to counsel for the
Underwriters, shall be deemed a representation and warranty by the Company to
each Underwriter as to the statements made therein.

The several obligations of the Underwriters to purchase Additional
Shares hereunder are subject to the satisfaction on and as of any Option
Closing Date of the conditions set forth in this Section 8, except that, if any
Option Closing Date is other than the Closing Date, the certificates, opinions
and letters referred to in paragraphs (c) through (g) shall be dated the Option
Closing Date in question and the opinions called for by paragraphs (c), (d) and
(e) shall be revised to reflect the sale of Additional Shares.

9. EXPENSES. The Company agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the Prospectus,
and each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Registration Statement, each
Prepricing Prospectus, the Prospectus, the Incorporated Documents, and all
amendments or supplements to any of them, as may be reasonably requested for
use in connection with the offering and sale of the Shares; (iii) the
preparation, printing, authentication, issuance and delivery of certificates
for the Shares, including any stamp taxes in connection with the original
issuance and sale of the Shares; (iv) the printing (or reproduction) and
delivery of this Agreement, the preliminary and supplemental Blue Sky Memoranda
and all other agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Shares; (v) the listing of the Shares on
the Nasdaq National Market; (vi) the registration or qualification of the
Shares for offer and sale under the securities or Blue Sky laws of the several
states as provided in Section 5(g) hereof (including the reasonable fees,
expenses and disbursements of counsel for the Underwriters relating to the
preparation, printing or reproduction, and delivery of the preliminary and
supplemental Blue Sky Memoranda and such registration and qualification); (vii)
the transportation and other expenses incurred by or on behalf of Company
representatives (not including the underwriters) in connection with
presentations to prospective purchasers of the Shares; and (ix) the fees and
expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company.

10. EFFECTIVE DATE OF AGREEMENT. This Agreement shall
become effective: (i) upon the execution and delivery hereof by the parties
hereto; or (ii) if, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, when
notification of the effectiveness of the registration statement or such
post-effective amendment has been released by the Commission. Until such time
as this Agreement shall have become effective, it may be terminated by the
Company pursuant to Paragraph 11, by notifying you by telegram, telecopy or
telephone, subsequently confirmed by letter or in writing, or by you, as
Representatives of the several Underwriters, by notifying the Company by
telegram, telecopy or telephone, subsequently confirmed by letter or in
writing.

- 21 -
<PAGE> 22
If any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters are obligated but fail or refuse to purchase is not
more than one-tenth of the aggregate number of Shares which the Underwriters
are obligated to purchase on the Closing Date, each non-defaulting Underwriter
shall be obligated, severally, in the proportion which the number of Firm
Shares set forth opposite its name in Schedule I hereto bears to the aggregate
number of Firm Shares set forth opposite the names of all non-defaulting
Underwriters or in such other proportion as you may specify in accordance with
Section 20 of the Master Agreement Among Underwriters of Smith Barney Inc., to
purchase the Shares which such defaulting Underwriter or Underwriters are
obligated, but fail or refuse, to purchase. If any one or more of the
Underwriters shall fail or refuse to purchase Shares which it or they are
obligated to purchase on the Closing Date and the aggregate number of Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares which the Underwriters are obligated to purchase on
the Closing Date and arrangements satisfactory to you and the Company for the
purchase of such Shares by one or more non-defaulting Underwriters or other
party or parties approved by you and the Company are not made within 36 hours
after such default, this Agreement will terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case which does
not result in termination of this Agreement, either you or the Company shall
have the right to postpone the Closing Date, but in no event for longer than
seven days, in order that the required changes, if any, in the Registration
Statement and the Prospectus or any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any such default of any
such Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule I hereto who, with your approval and the approval of the Company,
purchases Shares which a defaulting Underwriter is obligated, but fails or
refuses, to purchase.

Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.

11. TERMINATION OF AGREEMENT. This Agreement shall be subject to
termination in your absolute discretion, without liability on the part of any
Underwriter to the Company by notice to the Company, if prior to the Closing
Date or any Option Closing Date (if different from the Closing Date and then
only as to the Additional Shares), as the case may be, if (i) trading in
securities generally on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market shall have been suspended or materially
limited, (ii) a general moratorium on commercial banking activities in New York
or Massachusetts shall have been declared by either Federal or state
authorities, or (iii) there shall have occurred any outbreak or escalation of
hostilities or other international or domestic calamity, crisis or change in
political, financial or economic conditions, the effect of which on the
financial markets of the United States is such as to make it, in your judgment,
impracticable or inadvisable to commence or continue the offering of the Shares
at the offering price to the public set forth on the cover page of the
Prospectus or to enforce contracts for the resale of the Shares by the
Underwriters. Notice of such termination may be given to the Company by
telegram, telecopy or telephone and shall be subsequently confirmed by letter.

- 22 -
<PAGE> 23
12. INFORMATION FURNISHED BY THE UNDERWRITERS. The statements set
forth in the last paragraph on the cover page, the stabilization legend on the
inside front cover, and the statements under the caption "Underwriting" in any
Prepricing Prospectus and in the Prospectus, constitute the only information
furnished by or on behalf of the Underwriters by you as such information is
referred to in Sections 6(b) and 7 hereof.

13. MISCELLANEOUS. Except as otherwise provided in Sections 5, 10
and 11 hereof, notice given pursuant to any provision of this Agreement shall
be in writing and shall be delivered (i) if to the Company, at the office of
the Company at 21 Hickory Drive, Waltham, Massachusetts 02154, Attention: Peter
Litman, Esq., Executive Vice President and General Counsel; or (ii) if to you,
as Representatives of the several Underwriters, care of Smith Barney Inc., 388
Greenwich Street, New York, New York 10013, Attention: Manager, Investment
Banking Division.

This Agreement has been and is made solely for the benefit of the
several Underwriters, the Company, its directors and officers, and the other
controlling persons referred to in Section 7 hereof and their respective
successors and assigns, to the extent provided herein, and no other person
shall acquire or have any right under or by virtue of this Agreement. Neither
the term "successor" nor the term "successors and assigns" as used in this
Agreement shall include a purchaser from any Underwriter of any of the Shares
in his status as such purchaser.

14. APPLICABLE LAW; COUNTERPARTS. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of New York.

This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.

- 23 -
<PAGE> 24
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Underwriters.

Very truly yours,

SUMMIT TECHNOLOGY, INC.

By ........................
Chief Executive Officer

Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Underwriters named in Schedule I
hereto.

SMITH BARNEY INC.
BEAR STEARNS & CO. INC.
MORGAN STANLEY & CO.
PIPER JAFFRAY INC.

As Representatives of the Several Underwriters

By SMITH BARNEY INC.

By ..........................
Managing Director

- 24 -
<PAGE> 25

<TABLE>
SCHEDULE I

SUMMIT TECHNOLOGY, INC.

<CAPTION>
Number of
Underwriter Firm Shares
----------- -----------
<S> <C>
Smith Barney Inc. ....................................................
Bear, Stearns & Co. Inc. ..............................................
Morgan Stanley & Co. .................................................
Piper Jaffray Inc. ...................................................

_________
Total.......................................................
=========
</TABLE>

- 25 -

<PAGE> 1

EXHIBIT 23(A)

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

The Board of Directors
SUMMIT TECHNOLOGY, INC.

The audits referred to in our report dated February 13, 1995, included the
related financial statement schedule as of December 31, 1994, and for each of
the years in the three-year period ended December 31, 1994, included in the
registration statement. This financial statement schedule is the responsibility
of the Company's management. Our responsibility is to express an opinion on this
financial statement schedule based on our audits. In our opinion, such financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.

We consent to the use of our report included herein and to the references
to our firm under the heading "Selected Consolidated Financial Information" and
"Experts" in the registration statement.

KPMG PEAT MARWICK LLP

Boston, Massachusetts
September 18, 1995

<PAGE> 1

<TABLE>

EXHIBIT 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes
and appoints David F. Muller with full power to act as his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and in his name, place and stead, in any and
all capacities, to sign any or all amendments to the Registration Statement on Form S-3 registering up
to 2,200,000 shares of the common stock, $.01 par value per share of Summit Technology, Inc., including
without limitation, post effective amendments, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent of
any of them, or substitute or substitutes, lawfully does or causes to be done by virtue hereof.

<S> <C> <C>
/s/ JEFFREY A. BERNFELD Director September 19, 1995
---------------------------------------------
Jeffrey A. Bernfeld

/s/ RICHARD F. MILLER Director September 19, 1995
---------------------------------------------
Richard F. Miller

/s/ JOHN A. NORRIS Director September 19, 1995
---------------------------------------------
John A. Norris

/s/ RICHARD M. TRASKOS Director September 19, 1995
---------------------------------------------
Richard M. Traskos
</TABLE>