THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO OPHTHALMIC IMAGING SYSTEMSTHAT SUCH REGISTRATION IS NOT
REQUIRED.
CONVERTIBLE TERM NOTE
---------------------
FOR VALUE RECEIVED, OPHTHALMIC IMAGING SYSTEMS, a California
corporation (the "BORROWER"), hereby promises to pay to LAURUS MASTER FUND,
LTD., c/o Ironshore Corporate Services Ltd., P.O. Box 1234 G.T., Queensgate
House, South Church Street, Grand Cayman, Cayman Islands, Fax: 000-000-0000 (the
"HOLDER") or its registered assigns or successors in interest, on order, the sum
of ONE MILLION TWO HUNDRED THOUSAND DOLLARS ($1,200,000), together with any
accrued and unpaid interest hereon, on September 25th, 2006 (the "MATURITY
DATE") if not sooner paid.
Capitalized terms used herein without definition shall have the
meanings ascribed to such terms in that certain Securities Purchase Agreement
dated as of the date hereof between the Borrower and the Holder (the "PURCHASE
AGREEMENT").
The following terms shall apply to this Note:
ARTICLE I
INTEREST & AMORTIZATION
1.1 Interest Rate and Payments. Subject to Sections 4.9 and 5.6 hereof,
interest payable on this Note shall accrue at a rate per annum equal to six
percent and one half percent (6.5%) per annum (the "Contract Rate"). Interest
shall be payable monthly in arrears commencing on October 25th, 2003 and on the
first day of each consecutive calendar month thereafter (each, a "REPAYMENT
DATE"), and on the Maturity Date, accelerated or otherwise. If an effective
current Registration Statement (as defined in the Registration Rights Agreement)
covering the shares of Common Stock to be issued in connection herewith shall
exist and the volume weighted average of the closing price of the Common Stock
for the five trading days immediately preceding the end of the instant calendar
month shall be 25% higher than the Fixed Conversion Price then in effect, the
Contract Rate for the next succeeding month shall be reduced by 25 basis points
for each such incremental increase .
1
1.2 Monthly Principal Payments. Although Borrower shall make payments
of accrued and unpaid interest under this Note beginning on October 25th, 2003,
amortization of the aggregate principal amount outstanding under this Note (the
"PRINCIPAL AMOUNT") shall begin on December 25th, 2003 (the "AMORTIZATION
Date"). Subject to Section 2.1 below with respect to cash payments made on any
Payment Date, beginning on the Amortization Date, the Borrower shall make
monthly payments to the Holder on each Repayment Date, each in the amount of
$36,363.64 together with any accrued and unpaid interest to date on such portion
of the Principal Amount plus any and all other amounts which are then owing
under this Note but have not been paid (collectively, the "MONTHLY AMOUNT").
ARTICLE II
BORROWER PAYMENT OPTIONS
2.1 Monthly Payments in Cash or Common Stock. Subject to the terms
hereof, the Borrower shall have the sole option to determine whether to satisfy
payment of the Monthly Amount on each Repayment Date either in cash or in shares
of Common Stock (as defined in the Purchase Agreement), or a combination of
both. Each month by the tenth (10th) day of such month, the Borrower shall
deliver to the Holder a written irrevocable notice in the form of Exhibit B
attached hereto electing to pay the Monthly Amount payable on the next Repayment
Date in either cash or Common Stock, or a combination of both (each, a
"REPAYMENT ELECTION NOTICE"). Each Repayment Election Notice shall be delivered
to the Holder not later than the tenth (10th) day of the month prior to the
applicable Repayment Date (the date by which such notice is required to be given
being hereinafter referred to as the "NOTICE DATE"). If, for the Monthly Amount
payment due on any Repayment Date, a Repayment Election Notice is not delivered
to the Holder by the applicable Notice Date for such Repayment Date, then the
Monthly Amount due on such Repayment Date shall be paid in cash. If the Borrower
elects or is required to repay all or a portion of the Monthly Amount in cash on
a Repayment Date, then on such Repayment Date the Borrower shall pay to the
Holder an amount equal to 100% of the Monthly Amount then due in satisfaction of
such obligation. If the Borrower repays all or a portion of the Monthly Amount
in shares of Common Stock, the number of such shares to be issued for such
Repayment Date shall be the number determined by dividing (x) the portion of the
Monthly Amount to be paid in shares of Common Stock, by (y) the Fixed Conversion
Price. For purposes hereof, the "FIXED CONVERSION PRICE" means $1.07.
2.2 No Effective Registration. Notwithstanding anything to the contrary
herein, the Borrower shall be prohibited from exercising its right to repay any
part of any Monthly Amount in shares of Common Stock (and must deliver cash in
respect thereof) on any applicable Repayment Date if at any time from the Notice
Date for such Repayment Date through the date upon which such payment is made by
delivery of certificates for shares of Common Stock (i) there fails to exist an
effective current Registration Statement (as defined in the Registration Rights
Agreement) covering
2
the shares of Common Stock to be issued, or (ii) an Event of Default hereunder
exists and is continuing, unless such Event of Default is cured within any
applicable cure period or is otherwise waived in writing by the Holder in whole
or in part at the Holder's option.
2.3 Common Stock Payment Guidelines. Notwithstanding anything to the
contrary herein, if the Borrower has elected to pay all or a portion of the
Monthly Amount due on such Repayment Date in shares of Common Stock and the
closing price of the Common Stock as reported by Bloomberg, L.P. on the
Principal Market (as defined in Section 4.7 hereof) for any of the 11 trading
days preceding a Repayment Date was less than 110% of the Fixed Conversion
Price, then the Holder shall have the option to refuse to accept any portion of
such payment in shares of Common Stock and require the Borrower to pay in cash
instead. Any part of the Monthly Amount due on such Repayment Date which the
Borrower did not elect to pay in shares of Common Stock shall be paid by the
Borrower in cash on such Repayment Date. Any part of the Monthly Amount due on
such Repayment Date which the Borrower elected to pay in shares of Common Stock
but which must be paid in cash (because the closing price of the Common Stock on
one or more of the 11 trading days preceding the applicable Repayment Date was
less than 110% of the Fixed Conversion Price and the Holder elected to require
payment in cash instead of accepting shares of Common Stock) shall be paid
within three (3) business days of the applicable Repayment Date.
2.4 Optional Prepayments in Common Stock. In the event that the closing
price of the Common Stock on the Principal Market is greater than 115% of the
Fixed Conversion Price for a period of at least five (5) consecutive trading
days, then the Borrower may, at its sole option, provide the Holder written
notice (a "CALL NOTICE") requiring the conversion at the Fixed Conversion Price
of all or a portion of the outstanding principal of this Note (subject to
compliance with Section 2.3 and 3.2 if payment is less than all of the principal
and interest then due), together with accrued interest on the amount being
prepaid, as of the date set forth in such Call Notice (the "CALL DATE"). The
Call Date shall be at least eleven (11) trading days following the date of the
Call Notice. Provided that:
(i) on the Call Date there has been filed with the Securities
and Exchange Commission and declared effective a current registration
statement covering the shares of Common Stock which are to be issued
pursuant to the Call Notice, and
then on the Call Date the Borrower shall deliver to the Holder certificates
evidencing the shares of Common Stock issued in satisfaction of the principal
and interest being retired. Notwithstanding the foregoing, the Borrower's right
to issue shares of Common Stock in payment of obligations under this Note shall
be subject to the limitation that the number of shares of Common Stock issued in
connection with any Call Notice shall not exceed 25% of the aggregate dollar
trading volume of the Common Stock for the eleven (11) trading days immediately
preceding the Call Date (as such volume
3
is reported by Bloomberg L.P.). If the price of the Common Stock falls below
115% of the Fixed Conversion Price during the eleven (11) trading day period
immediately preceding the Call Date, then the Holder will then be required to
convert only such amount of the Note as shall equal twenty five percent (25%) of
the aggregate dollar trading volume (as such volume is reported by Bloomberg
L.P.) for each day that the Common Stock has exceeded 115% of the then
applicable Fixed Conversion Price.
The Borrower shall not be permitted to give the Holder more than one
Call Notice under this Note during any 22-day period.
Any principal amount of this Note which is prepaid pursuant to this
Section 2.4 shall be deemed to constitute payments of outstanding principal
applying to Monthly Amounts for the remaining Repayment Dates in chronological
order.
2.5 Optional Prepayment in Cash. If such prepayment is made on before
the first anniversary of the date hereof, the Borrower will have the option of
prepaying this Note in full ("OPTIONAL REDEMPTION") by paying to the Holder a
sum of money equal to one hundred twelve percent (112%) of the principal amount
of this Note together with accrued but unpaid interest thereon and any and all
other sums due, accrued or payable to the Holder arising under this Note or the
Purchase Agreement or any Related Document (as defined in the Purchase
Agreement) (the "REDEMPTION AMOUNT") outstanding on the day written notice of
redemption (the "NOTICE OF REDEMPTION") is given to the Holder, which Notice of
Redemption shall specify the date for such Optional Redemption (the "REDEMPTION
PAYMENT DATE"). If such prepayment is made after the first but on or before the
second anniversary of the date hereof, the Borrower may make an Optional
Redemption by paying to the Holder a sum of money equal to one hundred seven
percent (107%) of the Redemption Amount and if such prepayment is made after the
second but on or before the third anniversary of the date hereof, the Borrower
may make an Optional Redemption by paying to the Holder a sum of money equal to
one hundred three percent (103%) of the Redemption Amount. A Notice of
Redemption shall not be effective with respect to any portion of this Note for
which the Holder has a pending election to convert pursuant to Section 3.1 and
the Redemption Amount shall be determined as if such election to convert had
been completed immediately prior to the date of the Notice of Redemption. The
Redemption Payment Date shall be not earlier than the day after the date of the
Notice of Redemption and not later than seven (7) days after the date of the
Notice of Redemption. On the Redemption Payment Date, the Redemption Amount must
be paid in good funds to the Holder. In the event the Borrower fails to pay the
Redemption Amount by the Redemption Payment Date, then such Redemption Notice
will be null and void.
4
ARTICLE III
CONVERSION RIGHTS
3.1. Holder's Conversion Rights. If the closing price of the Common
Stock on the Conversion Date (as defined below) is greater than the Fixed
Conversion Price, and a Registration Statement covering the shares of Common
Stock which are issuable pursuant to conversion hereof has been declared
effective by the Securities and Exchange Commission and is effective and current
on the Conversion Date, the Holder shall have the right, but not the obligation,
to convert all or any portion of the then aggregate outstanding principal amount
of this Note, together with interest and fees due hereon, into shares of Common
Stock subject to the terms and conditions set forth in this Article III. The
Holder may exercise such right by delivery to the Borrower of a written notice
of conversion not less than one (1) day prior to the date upon which such
conversion shall occur. The date upon which such conversion shall occur is the
"CONVERSION DATE").
3.2 Conversion Limitation. Notwithstanding anything contained herein to
the contrary, the Holder shall not be entitled to convert pursuant to the terms
of this Note an amount that would be convertible into that number of Conversion
Shares which would exceed the difference between the number of shares of Common
Stock beneficially owned by such Holder or issuable upon exercise of warrants
held by such Holder and 4.99% of the outstanding shares of Common Stock of the
Borrower. For the purposes of the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and Regulation 13d-3 thereunder. The Holder may void the Conversion Share
limitation described in this Section 3.2 upon 75 days prior notice to the
Borrower or without any notice requirement upon an Event of Default.
3.3 Mechanics of Xxxxxx's Conversion. In the event that the Holder
elects to convert this Note into Common Stock, the Holder shall give notice of
such election by delivering an executed and completed notice of conversion
("NOTICE OF CONVERSION") to the Borrower and such Notice of Conversion shall
provide a breakdown in reasonable detail of the Principal Amount, accrued
interest and fees being converted. On each Conversion Date (as hereinafter
defined) and in accordance with its Notice of Conversion, the Holder shall make
the appropriate reduction to the Principal Amount, accrued interest and fees as
entered in its records and shall provide written notice thereof to the Borrower
within two (2) business days after the Conversion Date. Each date on which a
Notice of Conversion is delivered or telecopied to the Borrower in accordance
with the provisions hereof shall be deemed a Conversion Date (the "CONVERSION
DATE"). A form of Notice of Conversion to be employed by the Holder is annexed
hereto as Exhibit A. The Borrower will cause the transfer agent to transmit the
certificates representing the
5
Conversion Shares to the Holder upon resale by crediting the account of the
Holder's designated broker with the Depository Trust Corporation ("DTC") through
its Deposit Withdrawal Agent Commission ("DWAC") system within three (3)
business days after receipt by the Borrower of the Notice of Conversion (the
"DELIVERY DATE").
In the case of the exercise of the conversion rights set forth
herein the conversion privilege shall be deemed to have been exercised and the
Conversion Shares issuable upon such conversion shall be deemed to have been
issued upon the date of receipt by the Borrower of the Notice of Conversion. The
Holder shall be treated for all purposes as the record holder of such Common
Stock, unless the Holder provides the Borrower written instructions to the
contrary.
3.4 Conversion Mechanics.
(a) The number of shares of Common Stock to be issued upon each
conversion of this Note shall be determined by dividing that portion of the
principal and interest and fees to be converted, if any, by the Fixed Conversion
Price. In the event of any conversions of outstanding principal amount under
this Note in part pursuant to this Article III, such conversions shall be deemed
to constitute conversions of outstanding principal amount applying to Monthly
Amounts for the remaining Repayment Dates in chronological order. By way of
example, if the original principal amount of this Note is $1,200,000 and the
Holder converted $75,000 of such original principal amount prior to the first
Repayment Date, then (1) the principal amount of the Monthly Amount due on the
first Repayment Date would equal $0, (2) the principal amount of the Monthly
Amount due on the second Repayment Date would equal $0 and (3) the principal
amount of the Monthly Amount due on the third Repayment Dates would be
$22,272.72.
(b) The Fixed Conversion Price and number and kind of shares or other
securities to be issued upon conversion is subject to adjustment from time to
time upon the occurrence of certain events, as follows:
A. Stock Splits, Combinations and Dividends. If the shares of Common
Stock are subdivided or combined into a greater or smaller number of shares of
Common Stock, or if a dividend is paid on the Common Stock in shares of Common
Stock, the Fixed Conversion Price or the Conversion Price, as the case may be,
shall be proportionately reduced in case of subdivision of shares or stock
dividend or proportionately increased in the case of combination of shares, in
each such case by the ratio which the total number of shares of Common Stock
outstanding immediately after such event bears to the total number of shares of
Common Stock outstanding immediately prior to such event.
6
B. During the period the conversion right exists, the Borrower will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of Common Stock upon the full conversion of
this Note. The Borrower represents that upon issuance, such shares will be duly
and validly issued, fully paid and non-assessable. The Borrower agrees that its
issuance of this Note shall constitute full authority to its officers, agents,
and transfer agents who are charged with the duty of executing and issuing stock
certificates to execute and issue the necessary certificates for shares of
Common Stock upon the conversion of this Note.
3.5 Issuance of New Note. Upon any partial conversion of this Note, a
new Note containing the same date and provisions of this Note shall, at the
request of the Holder, be issued by the Borrower to the Holder for the principal
balance of this Note and interest which shall not have been converted or paid.
The Borrower will pay no costs, fees or any other consideration to the Holder
for the production and issuance of a new Note.
ARTICLE IV
EVENTS OF DEFAULT
If an Event of Default (as defined below) occurs and is continuing, the
Borrower's rights under Sections 2.1, 2.3 and 2.4 shall immediately cease and be
of no further effect until such time as the Event of Default has been cured, or
has been waived by the Holder. Upon the occurrence and continuance of an Event
of Default beyond any applicable grace period, the Holder may make all sums of
principal, interest and other fees then remaining unpaid hereon and all other
amounts payable hereunder due and payable within five (5) days after written
notice from Holder to Borrower (each occurrence being a "DEFAULT NOTICE
PERIOD"). In the event of such an acceleration, the amount due and owing to the
Holder shall be 112% of the outstanding principal amount of the Note (plus
accrued and unpaid interest and fees, if any). If, with respect to any Event of
Default other than a payment default described in Section 4.1 below, within the
Default Notice Period the Borrower cures the Event of Default, the Event of
Default will be deemed to no longer exist and any rights and remedies of Holder
pertaining to such Event of Default will be of no further force or effect.
The occurrence of any of the following events is an "EVENT OF DEFAULT":
4.1 Failure to Pay Principal, Interest or other Fees. The Borrower
fails to pay when due any installment of principal, interest or other fees
hereon in accordance herewith, or the Borrower fails to pay when due any amount
due under any other promissory note issued by Borrower to the Holder in
accordance with the terms of such other promissory note, and such failure
continues for a period of three (3) days after the due date.
7
4.2 Breach of Covenant. The Borrower breaches any material covenant or
other term or condition of this Note or the Purchase Agreement in any material
respect and such breach, if subject to cure, continues for a period of thirty
(30) days after the occurrence thereof.
4.3 Breach of Representations and Warranties. Any material
representation or warranty of the Borrower made herein, in the Purchase
Agreement, or in any Related Document (as defined in the Purchase Agreement)
shall be materially false or misleading and shall not be cured for a period of
ten (10) days after written notice thereof is received by the Borrower from the
Holder.
4.4 Receiver or Trustee. The Borrower shall make an assignment for the
benefit of creditors, or apply for or consent to the appointment of a receiver
or trustee for it or for a substantial part of its property or business; or such
a receiver or trustee shall otherwise be appointed, provided, however, that if a
receiver or trustee shall otherwise be involuntarily appointed by a third party
without the consent of the Borrower, the Borrower shall have forty five (45)
days to cure such default..
4.5 Judgments. Any money judgment, writ or similar final process shall
be entered or filed against the Borrower or any of its property or other assets
for more than $125,000, and shall remain unvacated, unbonded or unstayed for a
period of ninety (90) days.
4.6 Bankruptcy. (a) Bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings or relief under any bankruptcy law
or any law for the relief of debtors shall be instituted by the Borrower.
(b) Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law or any law
for the relief of debtors shall be instituted against the Borrower without the
Borrower's consent unless such proceedings are vacated within forty five (45)
days after the filing thereof..
4.7 Stop Trade. An SEC stop trade order or Principal Market trading
suspension of the Common Stock shall be in effect for 5 consecutive days or 5
days during a period of 10 consecutive days, excluding in all cases a suspension
of all trading on a Principal Market, provided that the Borrower shall not have
been able to cure such trading suspension within 30 days of the notice thereof
or list the Common Stock on another Principal Market within 60 days of such
notice. The "Principal Market" for the Common Stock shall include the NASD OTC
Bulletin Board, NASDAQ SmallCap Market, NASDAQ National Market System, American
Stock Exchange, or New York Stock Exchange (whichever of the foregoing is at the
time the principal trading exchange or market for the Common Stock, or any
securities exchange or other securities market on which the Common Stock is then
being listed or traded.
8
4.8 Failure to Deliver Common Stock or Replacement Note. The Borrower's
failure to timely deliver Common Stock to the Holder pursuant to and in the form
required by this Note, and Section 9 of the Securities Purchase Agreement, if
such failure to timely deliver Common Stock shall not be cured within two (2)
days or failure to deliver a replacement Note, if such failure to deliver a
replacement Note is not cured within seven (7) Business Days.
DEFAULT RELATED PROVISIONS
4.9 Payment Grace Period. The Borrower shall have a three (3) business
day grace period to pay any monetary amounts due under this Note or the Purchase
Agreement or any Related Document, after which grace period a default interest
rate of five percent (5%) per annum above the then applicable interest rate
hereunder shall apply to the monetary amounts due.
4.10 Conversion Privileges. The conversion privileges set forth in
Article III shall remain in full force and effect immediately from the date
hereof and until this Note is paid in full.
ARTICLE V
MISCELLANEOUS
5.1 Failure or Indulgence Not Waiver. No failure or delay on the part
of the Holder hereof in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege. All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
5.2 Notices. Any notice herein required or permitted to be given shall
be in writing and shall be deemed effectively given: (a) upon personal delivery
to the party notified, (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day, (c) five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the
Borrower at the address provided in the Purchase Agreement executed in
connection herewith with a copy to Xxxxx X. Xxxxxxx, Esq. Xxxxxxx & Xxxxxxxxx
Xxxxxx Xxxxxx LLP 000 Xxxxxxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 facsimile number
(000) 000-0000, and to the Holder at the address provided in the Purchase
Agreement for such Holder, with a copy to Xxxx X. Xxxxxx, Esq., 000 Xxxxx Xxxxxx
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, facsimile number (000) 000-0000, or at
such other address as the Borrower or the Holder may designate by ten days
advance written notice to the other parties hereto. A Notice of Conversion shall
be deemed given when made to the Borrower pursuant to the Purchase Agreement.
9
5.3 Amendment Provision. The term "Note" and all reference thereto, as
used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented, and any successor instrument issued pursuant to Section 3.3
hereof, as it may be amended or supplemented.
5.4 Assignability. This Note shall be binding upon the Borrower and its
successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns, and may be assigned by the Holder in accordance with the
requirements of the Purchase Agreement.
5.5 Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of laws. Any action brought by either party against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state courts of New York or in the federal courts located in the state of
New York. Both parties and the individual signing this Note on behalf of the
Borrower agree to submit to the jurisdiction of such courts. The prevailing
party shall be entitled to recover from the other party its reasonable
attorney's fees and costs. In the event that any provision of this Note is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable under any law
shall not affect the validity or unenforceability of any other provision of this
Note.
5.6 Maximum Payments. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Borrower to the Holder and thus refunded to the
Borrower.
5.7 Security Interest. The holder of this Note has been granted a
security interest in certain assets of the Borrower more fully described in a
Security Agreement dated as of September 25th, 2003.
5.8 Construction. Each party acknowledges that its legal counsel
participated in the preparation of this Note and, therefore, stipulates that the
rule of construction that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against the other.
[Balance of page intentionally left blank; signature page follows.]
10
IN WITNESS WHEREOF, each Borrower has caused this Convertible Term Note
to be signed in its name effective as of this 25th day of September, 2003.
OPHTHALMIC IMAGING SYSTEMS
By:________________________________
Name:______________________________
Title:_____________________________
WITNESS:
-------------------------------
11
EXHIBIT A
NOTICE OF CONVERSION
--------------------
(To be executed by the Holder in order to convert all or part of the Note into
Common Stock
[Name and Address of Holder]
The Undersigned hereby elects to convert $_________ of the principal due on
[specify applicable Repayment Date] under the Convertible Term Note issued by
OPHTHALMIC IMAGING SYSTEMSdated September 25th, 2003 by delivery of Shares of
Common Stock of OPHTHALMIC IMAGING SYSTEMS on and subject to the conditions set
forth in Article II of such Note.
1. Date of Conversion _______________________
2. Shares To Be Delivered: _______________________
Date: ____________ .
By:_______________________________
Name:_____________________________
Title:______________________________
12
EXHIBIT B
REPAYMENT ELECTION NOTICE
-------------------------
(To be executed by the Borrower in order to pay all or part of a Monthly Amount
with Common Stock)
[Name and Address of Holder]
OPHTHALMIC IMAGING SYSTEMS hereby elects to pay $_________ of the Monthly Amount
due on [specify applicable Repayment Date] under the Convertible Term Note
issued by OPHTHAMIC IMAGING SYSTEMS,INC. dated September 25th, 2003 by delivery
of Shares of Common Stock of OPHTHALMIC IMAGING SYSTEMS on and subject to the
conditions set forth in Article II of such Note.
1. Fixed Conversion Price: $_______________________
2. Amount to be paid: $_______________________
3. Shares To Be Delivered (2 divided by 1): __________________
Date: ____________ OPHTHALMIC IMAGING SYSTEMS
By:_______________________________
Name:_____________________________
Title:______________________________
13
