REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of August ___, 2000 (this
"Agreement"), among OPHTHALMIC IMAGING SYSTEMS, INC. a corporation organized and
existing under the laws of the state of California (the "Company"), and
MEDIVISION MEDICAL IMAGING LTD., a corporation organized and existing under the
laws of Israel (the "Investor").
Pursuant to the Working Capital Funding Agreement, dated as of July 13,
2000, between the Investor and the Company (the "Funding Agreement"), the
Investor has the right to convert loans made by the Investor to the Company into
shares of common stock of the Company, as more particularly described on
Schedule A annexed hereto (the "Conversion Shares").
Pursuant to the Securities Purchase Agreement, dated as of July 13,
2000 (the "Securities Purchase Agreement"), among the Investor, the Company and
Premier Laser Systems, Inc. ("Premier"), the Investor has acquired the shares of
common stock of the Company, as more particularly described on Schedule B
annexed hereto (the "Premier Shares").
In order to induce the Investor to enter into the Funding Agreement and
the Securities Purchase Agreement, the Company has agreed to provide the
registration rights set forth in this Agreement.
In consideration of the foregoing and the covenants and agreements
contained herein, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Definitions.
As used herein, unless the context otherwise requires or
unless otherwise defined, the following terms have the following respective
meanings:
"Affiliate": The meaning set forth in Rule 12b-2 under the
Exchange Act (as in effect on the date of this Agreement).
"Agreement": As defined in the first paragraph hereof.
"Blue Sky Filing": As defined in Section 2.7.
"Commission": The Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
"Common Stock": The Conversion Shares and the Premier Shares,
collectively, such term to include any stock into which such Common Stock shall
have been changed or any stock resulting from any reclassification of such
Common Stock, and all other stock of any class or classes (however designated)
of the Company the holders of which have the right, without limitation as to
amount, either to all or to a share of the balance of current dividends and
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liquidating dividends after the payment of dividends and distributions on any
shares entitled to preference.
"Company": As defined in the first paragraph hereof.
"Exchange Act": The Securities Exchange Act of 1934, as
amended.
"Indemnitees": As defined in Section 2.7.
"Investor": As defined in the first paragraph hereof.
"Investor Affiliate": As defined in Section 7.
"Loss": As defined in Section 2.7.
"Person": A corporation, an association, a partnership, an
organization, a business, an individual, a government or political subdivision
thereof or a governmental agency.
"Funding Agreement": As defined in the second paragraph
hereof.
"Registrable Securities": Any (i) shares of Common Stock; and
(ii) shares of Common Stock issued or issuable with respect to any such Common
Stock by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise. As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when (a) a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement; (b) such securities shall
have been sold pursuant to Rule 144 (or any successor provision) under the
Securities Act or are eligible for sale under Rule 144 (k) (or any successor
provision); (c) such securities shall have been otherwise transferred to a
person who is not an Investor Affiliate of the Investor; or (d) such securities
shall have ceased to be outstanding.
"Registration Expenses": All expenses incident to the
Company's performance of or compliance with this Agreement, including, without
limitation, all registration, filing and NASD fees, all fees and expenses of
complying with securities or blue sky laws, all fees and expenses of listing the
Registrable Securities being registered on any securities exchange, all word
processing, duplicating and printing expenses, messenger and delivery expenses,
the fees and disbursements of counsel for the Company and of its independent
public accountants, including the expenses of any special audits or "comfort"
letters required by or incidental to such performance and compliance, all
expenses incurred by the Investor for its own counsel but excluding any and all
selling expenses relating to the Registrable Securities including underwriting
discounts, non-accountable expenses allowances and commissions, if any;
"Securities Act": The Securities Act of 1933, as amended.
"Securities Purchase Agreement": As defined in the third
paragraph hereof.
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2. Registration Under Securities Act.
2.1 Demand Registration.
(a) Request. At any time beginning 180 days after the date
hereof, two times only (but only one time if the Company effects the
registration of the Registrable Securities on Form S-3 or any successor form
that permits a "shelf" registration), upon the written request of holders of at
least 25% of the Registrable Securities, that the Company, effect the
registration under the Securities Act of all or part of the Registrable
Securities, the Company shall promptly give written notice of such request to
all registered holders of Registrable Securities, and thereupon the Company
shall use its best commercially reasonable efforts to effect the registration
under the Securities Act of the Registrable Securities that the Company has been
so requested to register by all such holders for disposition in accordance with
the intended method of disposition stated in such request. Promptly after
receipt of such request, the Company shall give notice thereof to all other
securityholders of the Company, if any, that are entitled to participate in such
registration. The Company shall file the registration statement requested
pursuant to this subsection (a) not later than 30 days following such request,
subject to Section 2.6, and shall use its best commercially reasonable efforts
to have such registration statement declared effective as soon as possible after
the filing thereof.
(b) Underwriting. If the Registration Statement is for an
underwritten offering for Common Stock of the Company, the right of the Investor
to include all or a portion of the Registrable Securities in a registration
pursuant to this Section 2 shall be conditioned upon the Investor's
participation in such underwriting and the inclusion of the Registrable
Securities in the underwriting to the extent provided herein. If the Investor
proposes to distribute the Registrable Securities through such underwriting, it
shall enter into an underwriting agreement in customary form with the managing
underwriter or underwriter(s) selected for such underwriting. Notwithstanding
any other provision of this Agreement, if the managing underwriter determines in
good faith that marketing factors require a limitation of the number of shares
to be underwritten, then the Company and the Investor shall determine the number
of shares each party shall include in such underwriting. If the Investor
disapproves of the terms of any such underwriting, the Investor may elect to
withdraw therefrom by written notice to the Company and the underwriter,
delivered not later than 10 days prior to the date the Registration Statement is
filed with the Commission. Any Registrable Securities excluded or withdrawn from
such underwriting shall be excluded and withdrawn from the registration.
(c) Registration Statement Form. Registrations under this
Section 2.1 shall be on such appropriate registration form of the Commission (i)
as shall be selected by the Company and as shall be reasonably acceptable to
holders of a majority of the Registrable Securities proposed to be sold and (ii)
as shall permit the disposition of such Registrable Securities in accordance
with the intended method or methods of disposition.
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(d) Expenses. The Company shall pay all Registration Expenses
in connection with any registration requested pursuant to this Section 2.1.
(e) Effective Registration Statement. A registration requested
pursuant to this Section 2.1 shall not be deemed to have been effected and shall
not be considered the demand registration which may be requested pursuant to
subsection (a) of this Section 2.1 unless (A) a registration statement with
respect thereto has become effective, (B) such registration statement has
remained effective for the later to occur of the following: (i) two years from
the effective date of the registration statement or (ii) the date such
registered securities cease to be Registrable Securities and (C) such
registration statement has not become subject to any stop order, injunction or
other order or requirement of the Commission or other governmental agency or
court for any reason or such registration statement has become effective within
30 days thereafter.
2.2 Incidental Registration.
(a) Right to Include Registrable Securities. If the Company at
any time proposes to register any of its securities under the Securities Act by
registration on Forms S-1, S-2 or S-3 or any successor or similar form(s),
whether or not for sale for its own account, it shall give prompt written notice
to all holders of Registrable Securities of its intention to do so and of such
holders' rights under this Section 2.2. Upon the written request of any such
holder specifying the Registrable Securities intended to be disposed of by such
holder, made within 15 days after the receipt of any such notice, which request
shall specify the Registrable Securities intended to be disposed of by such
holder, the Company shall use its best commercially reasonable efforts to
include in the registration under the Securities Act all Registrable Securities
which the Company has been so requested to register by the holders thereof, to
the extent requisite to permit the disposition of such Registrable Securities to
be so registered. No registration effected under this Section 2.2 shall relieve
the Company of its obligation to effect any registration upon request under
Section 2.1, nor shall it be deemed to have been effected pursuant to Section
2.1. The Company shall pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section 2.2.
The Company shall have the right to withdraw or cancel any registration under
this Section 2.2 in its sole discretion at any time, provided, however, that the
Investor shall retain all registration rights pursuant to this Section 2.2.
(b) Priority in Incidental Registrations. In a registration
pursuant to this Section 2.2 involving an underwritten offering, whether or not
for sale for the account of the Company, if the managing underwriter of such
underwritten offering shall inform the Company by letter of its belief that the
number of securities requested by stockholders to be included in such
registration would substantially interfere with its ability to effect such
offering in accordance with the intended method thereof (such letter to state
the basis of such belief and the approximate number of such securities that may
be distributed without such effect), then the
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Company may, upon written notice to all holders of such securities, reduce the
number of Registrable Securities requested to be included in such registration
(if and to the extent stated by such managing underwriter to be necessary to
eliminate such effect) and, if such reduction is not sufficient to eliminate
such effect, then reduce pro rata (if and to the extent stated by such managing
underwriter to be necessary to eliminate such effect) the number of Registrable
Securities requested to be registered by the holders of the Registrable
Securities, on the one hand, and the holders of other securities of the Company
(whether issued before or after the date hereof), on the other hand, in
proportion (as nearly as practicable) to the amount of Registrable Securities
owned by the holders thereof participating in such registration, on the one
hand, and the amount of other securities of the Company owned by the holders
thereof participating in such registration, on the other hand, so that the
aggregate number of securities included in such registration shall be equal to
the number of shares stated in such managing underwriter's letter; provided,
however, that to the extent the Company has granted "piggyback" registration
rights to other holders of its securities prior to the date hereof and such
registration rights do not permit the Company to comply with this provision, in
the reasonable opinion of the Company's counsel, to the extent such holders
request registration of their securities, the Company will use its best
commercially reasonable efforts to achieve as close a result as is possible to
that intended by this Section 2.2(b) without breaching such other agreements.
The number of securities to be included in such registration by the holders of
Registrable Securities shall be apportioned among all holders thereof
participating in the registration in proportion (as nearly as practicable) to
the amount of Registrable Securities owned by each holder thereof or as they may
otherwise agree. The number of securities to be included in such registration by
the holders of other securities of the Company shall be apportioned among all
holders thereof participating in the registration in proportion (as nearly as
practicable) to the amount of other securities owned by each holder thereof or
as they may otherwise agree.
2.3 Registration Procedures. In connection with the Company's
obligations pursuant to Sections 2.1 and 2.2, the Company and where applicable,
the Investor, will as expeditiously as possible:
(a) in the case of a registration pursuant to Section 2.1,
prepare and file with the Commission a registration statement or registration
statements on any appropriate form under the Securities Act and use its best
efforts to cause such registration statement to become effective and to remain
continuously effective for so long as the selling holders of the Registrable
Securities shall request (but in no event longer than the period set forth in
2.1(e)(B);
(b) in the case of a registration pursuant to Section 2.1,
prepare and file with the Commission such amendments and post-effective
amendments to a registration statement as may be necessary to keep such
registration statement effective for the applicable period; cause the related
prospectus to be supplemented by any required prospectus supplement, and as so
supplemented to be filed pursuant to the Securities Act, provided that prior to
filing any such amendments or supplements or any documents that would be
incorporated by reference in such registration statement (filed pursuant to
Section 2.1 or 2.2 hereof), the Company shall furnish to the Investor, its
counsel and the underwriters, if any, copies of all such documents proposed to
be filed (other than documents filed under the Exchange Act), and the Company
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shall consider all reasonable requests by the Investor or the underwriters for
modifications of any such amendments, supplements or documents incorporated by
reference; and the Company and the Investor will comply with the provisions of
the Securities Act with respect to the disposition of all Registrable Securities
covered by such registration statement (including Regulation M and any similar
successor regulations) during the applicable period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
registration statement or supplement to such prospectus;
(c) notify the selling holders of Registrable Securities, and
the managing underwriters, if any, as promptly as practicable, and (if requested
by any such Person) confirm such advice in writing, (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and, with
respect to a registration statement or any post-effective amendment, when it has
become effective, (ii) of any request by the Commission for amendments or
supplements to a registration statement or related prospectus or for additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of a registration statement or the initiation of
any proceedings for that purpose, (iv) if at any time the representations and
warranties of the Company made as contemplated by subsection (k) below cease to
be true and correct, (v) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation of any proceeding for
such purpose, (vi) of the happening of any event that requires the making of any
changes in a registration statement or related prospectus so that such documents
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading and (vii) of the Company's reasonable determination that
a post-effective amendment to a registration statement would be appropriate;
(d) in the case of a registration pursuant to Section 2.1,
make every reasonable effort to obtain the withdrawal of any order suspending
the effectiveness of a registration statement, or the lifting of any suspension
of the qualification of any of the Registrable Securities for sale in any
jurisdiction, as soon as practicable;
(e) in the case of a registration pursuant to Section 2.1, if
requested in a timely manner by the managing underwriters, as promptly as
practicable incorporate in a prospectus supplement or post-effective amendment
such information as the managing underwriters and the holders of Registrable
Securities being sold in connection with an underwritten offering agree should
be included therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect to the
number of Registrable Securities being sold to such underwriters, the purchase
price being paid therefor by such underwriters and with respect to any other
terms of the offering of the Registrable Securities to be sold in such offering;
make all required filings of such prospectus supplement or post-effective
amendment as soon as practicable after being notified of the matters to be
incorporated in such prospectus supplement or post-effective amendment; and
supplement or make amendments to any registration statement with respect to
information relating to any holder or the terms of the sale or offering of the
Registrable Securities if requested in a timely
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manner in writing by any holder of Registrable Securities covered by such
registration statement or any underwriter of such Registrable Securities;
(f) furnish to the lead managing underwriter and each holder
of Registrable Securities selling Registrable Securities thereunder, without
charge, at least one signed copy of the registration statement or statements and
any post-effective amendment thereto, and to each other selling holder of
Registrable Securities, at least one conformed copy thereof, including financial
statements and schedules, all documents incorporated therein by reference and
all exhibits (including those incorporated by reference);
(g) deliver to each holder of Registrable Securities and the
underwriters, if any, without charge, as many copies of the prospectus or
prospectuses (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons may reasonably request;
(h) in the case of a registration pursuant to Section 2.1,
prior to any public offering of Registrable Securities, use its best
commercially reasonable efforts to register or qualify or cooperate with the
selling holders of Registrable Securities, the underwriters, if any, and their
respective counsel in connection with the registration or qualification of such
Registrable Securities for offer and sale under the securities or blue sky laws
of such jurisdictions as any selling holder or underwriter reasonably requests
in writing, keep each such registration or qualification effective during the
period such registration statement is required to be kept effective and do any
and all other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Securities covered by the applicable
registration statement; provided that the Company shall not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service of
process in any such jurisdiction where it is not then so subject;
(i) in the case of a registration pursuant to Section 2.1,
cooperate with the selling holders of Registrable Securities and the managing
underwriters, if any, to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not bearing any
restrictive legends unless required by applicable law; and enable such
Registrable Securities to be in such denominations and registered in such names
as the managing underwriters may request at least two business days prior to the
closing of any sale of Registrable Securities to the underwriters; provided that
the Company receive such request in writing not less than 10 days prior to such
closing;
(j) in the case of a registration pursuant to Section 2.1,
upon the occurrence of any event contemplated by clause (c)(vi) above, prepare a
supplement or post-effective amendment to the applicable registration statement
or related prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the selling
holders of the Registrable Securities, such prospectus will not
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contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading;
(k) in the case of a registration pursuant to Section 2.1,
enter into such agreements (including an underwriting agreement) and take all
such other reasonable actions in connection therewith in order to expedite or
facilitate the disposition of such Registrable Securities and in connection
therewith, when an underwriting agreement is entered into and when the
registration is an underwritten registration, (i) make such representations and
warranties to the underwriters with respect to the registration statement,
prospectus and documents incorporated by reference, if any, in form, substance
and scope as are customarily made by issuers in similar offerings; (ii) obtain
opinions of counsel to the Company (which may be the general counsel) addressed
to the underwriters and updates thereof in the form, scope and substance as are
customary in similar offerings; (iii) enter into an underwriting agreement in
form, scope and substance as is customary in underwritten offerings; (iv)
furnish a signed counterpart, addressed to such underwriters, of a "comfort"
letter, dated the effective date of such registration statement (and dated the
date of the closing under the underwriting agreement), signed by the independent
public accountants who have certified the Company's financial statements
included in such registration statement, covering the matters with respect to
such registration statement (and the prospectus included therein) and with
respect to events subsequent to the date of such financial statements, as are
customarily covered in accountants' letters delivered to the underwriters in
underwritten public offerings of securities, (v) if an underwriting agreement is
entered into, the same shall set forth in full the indemnification provisions
and procedures of Section 2.7 with respect to all parties to be indemnified
pursuant to such section, with such other indemnification provisions as are
customary and acceptable to the underwriters, the holders of a majority of the
Registrable Securities proposed to be sold and the Company; and (vi) the Company
shall deliver such documents and certificates as may reasonably be requested by
the managing underwriters, if any, to evidence compliance with this paragraph
(k) and with any customary conditions contained in the underwriting agreement.
The above shall be done at each closing under such underwriting or as and to the
extent required thereunder;
(l) otherwise use its best commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission and make
generally available to its security holders earnings statements satisfying the
provisions of Section 11(a) of the Securities Act no later than 90 days after
the end of any 12-month period (i) beginning with the first day of the Company's
first fiscal quarter next succeeding each sale of Registrable Securities after
the effective date of a registration statement and (ii) beginning with the first
day of the Company's first fiscal quarter next succeeding any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm or best efforts
underwriting offering, which statements shall cover such 12-month periods;
(m) use its best commercially reasonable efforts to cause all
such Registrable Securities to be listed on each securities exchange, if any, on
which securities of the class then being registered are listed; and
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(n) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such registration
statement.
The Company may require each holder of Registrable Securities
as to which any registration is being effected to promptly furnish to the
Company such information regarding such holder and the distribution of such
Registrable Securities as the Company may from time to time reasonably request
in writing in order to comply with the Securities Act. Each holder of
Registrable Securities as to which any registration is being effected agrees to
notify the Company as promptly as practicable of any inaccuracy or change in
information previously furnished by such holder to the Company or of the
happening of any event as a result of which any prospectus relating to such
registration contains an untrue statement of a material fact regarding such
holder or the distribution of such Registrable Securities or omits to state any
material fact regarding such holder or the distribution of such Registrable
Securities required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and to promptly furnish to the Company any additional information
required to correct and update any previously furnished information or required
so that such prospectus shall not contain, with respect to such holder or the
distribution of such Registrable Securities, 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, in light of the circumstances under which they
were made, not misleading.
Each holder of Registrable Securities agrees that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 2.3(c)(ii), (iii), (v), (vi) or (vii), such holder will
forthwith discontinue disposition of such Registrable Securities covered by such
registration statement or prospectus until such holder's receipt of the copies
of the supplemented or amended prospectus relating to such registration
statement or prospectus, or until it is advised in writing by the Company that
the use of the applicable prospectus may be resumed, and has received copies of
any additional or supplemental filings that are incorporated by reference in
such Prospectus, and, if so directed by the Company, such holder will deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies then in such holder's possession, of the prospectus covering the
Registrable Securities at the time of receipt of such notice.
2.4 Underwritten Offerings. In the case of any underwritten
offering requested pursuant to Section 2.1, the holders of a majority of the
Registrable Securities proposed to be sold shall select the investment banking
firm or firms, which shall be reasonably satisfactory to the Company. The
Company shall enter into an underwriting agreement which shall contain,
customary representations and warranties and shall be reasonably satisfactory in
form and substance to the holders of a majority of the Registrable Securities
proposed to be sold.
If the Company at any time proposes to register any of its
securities under the Securities Act as contemplated by Section 2.2 and such
securities are to be distributed by or through one or more underwriters, the
Company shall select the investment banking firm or
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firms in its sole discretion and the holders of Registrable Securities to be
distributed therein shall be parties to the underwriting agreement between the
Company and the underwriters.
2.5 Preparation; Reasonable Investigation. In connection with
the preparation and filing of each registration statement under the Securities
Act pursuant to this Agreement, the Company shall give the selling holders of
Registrable Securities, their underwriters, and their respective counsel and
accountants, a reasonable opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto (other than
documents filed under the Exchange Act and incorporated by reference therein),
and shall give each of them such access to its books and records and such
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary, in the opinion of such holders' and such underwriters'
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.
2.6 Limitations, Conditions and Qualifications to Obligations
Under Registration Covenants. The obligations of the Company under Section 2.1
to use its best commercially reasonable efforts to cause the Registrable
Securities to be registered under the Securities Act are subject to each of the
following limitations, conditions and qualifications:
(a) The Company shall be entitled to postpone the filing or
effectiveness of any registration statement otherwise required to be prepared
and filed by it pursuant to Section 2.1 for a reasonable period of time (but not
exceeding 60 days) if the Company determines, in its reasonable judgment, that
such registration and offering, or such offers and sales, would interfere with
any financing, acquisition, corporate reorganization or other material
transaction involving the Company or any of its Affiliates or would require the
Company to disclose material non-public information. The Company shall promptly
give the requesting holders of Registrable Securities written notice of such
determination, containing a general statement of the reasons for such
postponement and an approximation of the anticipated delay. If the Company shall
so postpone the filing of a registration statement, the requesting holders of
Registrable Securities shall have the right to withdraw the request for
registration by giving written notice to the Company within 30 days (or within
the period of postponement if such period is less than 30 days) after receipt of
the notice of postponement in the event of such withdrawal, such request shall
not be deemed a request for registration pursuant to Section 2.1 hereof.
(b) No holder of Registrable Securities may participate in any
underwritten offering hereunder unless such holder (i) agrees to sell such
holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements.
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2.7 Indemnification.
(a) Indemnification by the Company. In the event of any
registration of Registrable Securities, the Company shall indemnify, defend and
hold harmless the holder of any Registrable Securities that are covered by such
registration statement, each other Person who participates as an underwriter in
the offering or sale of such securities and each person who controls any such
holder or underwriter within the meaning of the Securities Act, and each of the
respective partners, officers, directors, employees and agents of the foregoing
in their respective capacities as such (the "Indemnitees"), to the full extent
lawful, from and against any and all actions, suits, claims, proceedings, costs,
damages, judgments, amounts paid in settlement and expenses (including, without
limitation, reasonable attorneys' fees and disbursements), whether joint or
several (collectively, a "Loss"), to which any such Indemnitee may become
subject under the Securities Act or any other statute or common law, insofar as
any such Loss may arise out of or be based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in any registration
statement under which such securities were registered, any preliminary, final or
summary prospectus contained therein, or any amendment or supplement thereto, or
in any filing made in connection with the qualification of the offering under
blue sky or other securities laws of jurisdictions in which the Registrable
Securities are offered ("Blue Sky Filing"), or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary in
order to make the statements therein not misleading or (ii) any violation by the
Company of any federal, state or common law, rule or regulation applicable to
the Company and relating to action required of or inaction by the Company in
connection with any such registration, and the Company will defend each
Indemnitee in connection with investigating or defending such Loss and provide
each Indemnitee with counsel reasonably acceptable to such Indemnitee or, if the
Company fails to defend each Indemnitee on a timely basis, as set forth in
Section 2.7(c), reimburse each Indemnitee for any legal or other expenses
reasonably incurred in connection with investigating or defending such Loss;
provided, however, that such indemnification covenant shall not (i) apply to any
Loss arising out of, or based upon, any such untrue statement or alleged untrue
statement, or any such omission or alleged omission, if such statement or
omission was made in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Indemnitee specifically stating
that it is for use in connection with preparation of the registration statement,
any preliminary prospectus or final prospectus contained in the registration
statement, any such amendment or supplement thereto or any Blue Sky Filing or
(ii) inure to the benefit of any underwriter or person controlling such
underwriter to the extent that any such Loss arises out of such Indemnitee's
failure to send or give a copy of the final prospectus, as the same may be then
supplemented or amended, to the Person asserting an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus.
Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of any Indemnitee and shall
survive the transfer of such securities by any Indemnitee. In no event shall any
indemnity paid by the Company to any indemnified party pursuant to this Section
2.7(a) or otherwise exceed the net proceeds received by the Investor in such
offering.
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(b) Indemnification by the Holders of Registrable Securities.
As a condition to including any Registrable Securities in any registration
statement filed pursuant to Section 2.1 or 2.2, the Company shall have received
an undertaking satisfactory to it from each prospective seller of such
Registrable Securities to indemnify, defend and hold harmless (in the same
manner and to the same extent as set forth in subsection (a) of this Section
2.7) the Company, each other person who participates as an underwriter in the
offering or sale of such securities and each person who controls any such holder
or underwriter within the meaning of the Securities Act, and each of their
respective partners, officers, directors, employees and agents, and each other
person, if any, who controls the Company within the meaning of the Securities
Act, with respect to any untrue statement or alleged untrue statement in, or
omission or alleged omission from, such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein or any Blue
Sky Filing, or any amendment or supplement thereto, if such statement or alleged
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such seller
specifically stating that it is for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement. Such indemnity shall remain in full force and effect,
regardless of any investigation made by or on behalf of the Company or any such
director, officer or controlling person and shall survive the transfer of such
securities by such seller. In no event shall any indemnity paid by any seller to
the Company pursuant to this Section 2.7(b) or otherwise exceed the net proceeds
received by such seller in such offering.
(c) Indemnification Procedure. Any party entitled to
indemnification under this Section 2.7 (the "indemnified party") will give
prompt written notice (the "Notice") to the other party (the "indemnifying
party") of any matters giving rise to a claim for indemnification; provided,
that the failure of indemnified party to indemnification hereunder to give
notice as provided herein shall not relieve the indemnifying party of its
obligations under this Section 2.7 except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice. In case any action,
proceeding or claim is asserted against the indemnified party in respect of
which indemnification is sought hereunder, the indemnifying party shall be
entitled to participate in and to assume the defense thereof with counsel
reasonably satisfactory to the indemnified party. In the event that the
indemnifying party advises the indemnified party that it will contest such a
claim for indemnification hereunder, or fails, within thirty (30) days of
receipt of the Notice to notify, in writing, the indemnified party of its
election to defend, settle or compromise, at its sole cost and expense, any
action, proceeding or claim (or discontinues its defense at any time after it
commences such defense), then the indemnified party may, at its option, defend,
settle or otherwise compromise or pay such action or claim. In any event, unless
and until the indemnifying party elects in writing to assume and does so assume
the defense of any such claim, proceeding or action, the indemnified party's
costs and expenses arising out of the defense, settlement or compromise of any
such action, claim or proceeding shall be losses subject to indemnification
hereunder. The indemnified party shall cooperate fully with the indemnifying
party in connection with any negotiation or defense of any such action or claim
by the indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the indemnified party which relates to such
action or claim. The indemnifying party shall keep the indemnified party fully
apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. If the indemnifying party elects to defend
any such
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action or claim, then the indemnified party shall be entitled to participate in
such defense with counsel of its choice. The indemnifying party shall not be
liable for any settlement of any action, claim or proceeding effected without
its prior written consent. Notwithstanding anything in this Section 2.7 to the
contrary, the indemnifying party shall not, without the indemnified party's
prior written consent, settle or compromise any claim or consent to entry of any
judgment in respect thereof which imposes any future obligation on the
indemnified party or which does not include, as an unconditional term thereof,
the giving by the claimant or the plaintiff to the indemnified party of a
release from all liability in respect of such claim. The indemnification
required by this Section 2.7 for an action or claim brought by a third party
shall be made by periodic payments of the amount thereof during the course of
investigation or defense, as and when bills are received for expenses related to
the legal defense or investigation, so long as the indemnified party irrevocably
agrees to refund such moneys if it is ultimately determined by a court of
competent jurisdiction that such party was not entitled to indemnification. The
indemnity agreements contained herein shall be in addition to (a) any cause of
action or similar rights of the indemnified party against the indemnifying party
or others, and (b) any liabilities the indemnifying party may be subject
pursuant to the law.
2.8 Registration Expenses. All Registration Expenses, shall be
borne by the Company whether or not any registration statement becomes
effective. The Company shall, in any event, pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with the listing of the
securities to be registered on any securities exchange and the fees and expenses
of any Person, including special experts, retained by the Company.
3. Amendments and Waivers. This Agreement may be amended with the
consent of the Company and the Company may take any action herein prohibited, or
omit to perform any act herein required to be performed by it, only if the
Company shall have obtained the written consent to such amendment, action or
omission to act, of the holders of a majority of the amount of Registrable
Securities then outstanding. Each holder of any Registrable Securities at the
time or thereafter outstanding shall be bound by any consent authorized by this
Section 3, whether or not such securities shall have been marked to indicate
such consent.
4. Registration Rights. The Company covenants that it will not grant
any right of registration under the Securities Act relating to any of its shares
of capital stock or other securities to any Person other than pursuant to this
Agreement unless the rights so granted to such other Person, except as provided
herein, do not limit or restrict the Investor's rights hereunder.
5. Nominees for Beneficial Owners. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, such
beneficial owner may, at its election and upon notice to the Company, be treated
as the holder of such securities for purposes of any request or other action by
any holder or holders of securities pursuant to this Agreement or any
determination of any number or percentage of shares of securities held by any
holder or holders
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of securities contemplated by this Agreement. If the beneficial owner of any
Registrable Securities so elects, the Company may require assurances reasonably
satisfactory to it of such owner's beneficial ownership of such Registrable
Securities.
6. Notices. Any notice or demand that is required or provided to be
given under this Agreement shall be deemed to have been sufficiently given and
received for all purposes when delivered by hand, facsimile transmission or
courier, or five days after being sent by certified or registered mail, postage
and charges prepaid, return receipt requested, to the following addresses:
If to the Company: Ophthalmic Imaging Systems, Inc.
Address: 221 Lathrop Way, Suite I
Sacramento, CA 95815
Attention: President
Facsimile No. (916) 646-0207
Telephone No. (916) 646-2020
With a copy to: Gibson, Dunn & Crutcher, LLP
1530 Page Mill Road
Palo Alto, CA 94304
Attention: Lawrence Calof, Esq.
Facsimile No. (650) 849-5333
Telephone No. (650) 849-5300
If to the Investor: Medivision Medical Imaging Ltd.
P.O. Box 45
Industrial Park
Yokneam Elit
20692 Israel
With a copy to: Parker Chapin LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
Attention: Henry I. Rothman, Esq.
Fax No.: (212) 704-6288
If to any other holder of Registrable Securities, at such address set
forth in the Company's records, or with respect to any party hereto, at any
other address designated in writing in accordance with the provisions of this
Section 6.
7. Assignment. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and assigns. The rights or any portion thereof of the Investor herein
may not be assigned by the Investor without the
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written consent of the Company except that such rights may be assigned by the
Investor at its sole discretion (and thereupon by such assignee) without the
consent of the Company to an Investor Affiliate (as defined below); provided,
however, that (A) the Company is given prior written notice by the assignor
stating the name and address of the permitted assignee and identifying the
Registrable Securities with respect to which such rights are being assigned, and
(B) such assignee agrees in writing to be bound by the terms of this Agreement.
For purposes of this Section 7, an "Investor Affiliate" is any Person controlled
by or under common control with the Investor.
8. Descriptive Headings. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
9. Governing Law. The validity and interpretation of this Agreement
shall be governed by, and construed and enforced in accordance with, the laws of
the State of New York, without giving effect to the principles of conflicts of
law thereof.
10. Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
[END OF PAGE]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first above written.
OPHTHALMIC IMAGING SYSTEMS, INC.
By:
---------------------------------------
Name:
Title:
MEDIVISION MEDICAL IMAGING LTD.
By:
---------------------------------------
Name:
Title:
[SIGNATURE PAGE - REGISTRATION RIGHTS AGREEMENT]
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SCHEDULE A
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CONVERSION SHARES
The principal amount of borrowings under the line of credit, and
accrued interest thereon, pursuant to the Funding Agreement is convertible into
shares of common stock of the Issuer at a conversion price of $0.80 per share.
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SCHEDULE B
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PREMIER SHARES
The Investor has acquired 5,964,635 shares of common stock of the
Company from Premier.
18
