PURCHASE AGREEMENT
THIS AGREEMENT is made as of the 24 day of June, 2009, by and between Ophthalmic Imaging Systems (the “Company”), a corporation organized under the laws of the State of California, with its principal offices at 000 Xxxxxxx Xxx, Xxxxx X, Xxxxxxxxxx, XX 00000 and the purchaser whose name and address is set forth on the signature page hereof (the “Purchaser”).
IN CONSIDERATION of the mutual covenants contained in this Agreement, the Company and the Purchaser agree as follows:
SECTION 2. Agreement to Sell and Purchase the Shares and the Warrants.
2.1 Closing. At the Closing (as defined in Section 3.1), the Company will, subject to the terms of this Agreement, issue and sell to the Purchaser, and the Purchaser will buy from the Company, upon the terms and conditions hereinafter set forth:
(a) 9,633,228 shares of Common Stock (the “1st Installment Shares”) for a purchase price per share equal to $0.41522 resulting in an aggregate purchase price of $3,999,908.90 (the “1st Installment”), which reflects a pre-money valuation of the Company of $7,200,000 as of the Closing Date, taking into account all outstanding shares of the Company and assuming the conversion or exercise of all outstanding notes and warrants (calculating their conversion at the maximum number of underlying shares), options, convertible securities or loans, which in any event, can only be exercised on a price per share lower than $0.41522 (such calculation shall be referred as the “Fully Diluted Basis”); at the Closing, the 1st Installment Shares shall represent 36.35% of the Company’s issued and outstanding shares on a Fully Diluted Basis; and
(b) a warrant to purchase up to 3,211,076 shares of Common Stock (i.e., 33% of the 1st Installment Shares) (the “1st Installment Warrant Shares”) exercisable at $1.00 per share for a period of three years commencing upon the Closing Date (the “1st Installment Warrant”), which warrant shall be substantially in the form set forth in Exhibit A-1 hereto.
2.2 Deferred Closing. At the Deferred Closing (as defined in Section 3.2), the Company will, subject to the terms of this Agreement, issue and sell to the Purchaser, and the Purchaser will buy from the Company, upon the terms and conditions hereinafter set forth:
(a) 3,581,089 shares of Common Stock (the “2nd Installment Shares” and, together with 1st Installment Shares, the “Shares”) for a purchase price per share equal to $0.55848 (subject to adjustment for reverse and forward stock splits and similar transactions) resulting in an aggregate purchase price of $1,999,966.50 (the “2nd Installment”), which reflects
a pre-money valuation of the Company of $10,800,000 as of the Deferred Closing Date, on a Fully Diluted Basis; and
(b) a warrant to purchase up to 1,193,696 shares of Common Stock (i.e., 33% of the 2nd Installment Shares) (the “2nd Installment Warrant Shares” and, together with the 2nd Installment Warrant Shares, the “Warrant Shares”) exercisable at $1.00 per share, for a period of three years from the Closing Date (the “2nd Installment Warrant” and, together with the 1st Installment Warrant, the “Warrants”,and the Shares, the Warrants and the Warrant Shares shall be collectively referred to as, the “Securities”), which warrant shall be substantially in the form set forth in Exhibit A-2 hereto.
(c) If at the time of the Deferred Closing Date, the Company’s Board of Directors determines in good faith that the Company’s financial situation requires the Company to raise additional funds in a capital raising transaction (in addition to 2nd Installment), the Purchaser (in its capacity as a shareholder in the Company) hereby agrees not to object to such capital raising transaction and will agree to waive its participation right (as set forth in Section 8.14 below) in connection therewith; provided, that such capital raising transaction is with Persons who are shareholders of MediVision Medical Imaging Ltd., the parent entity of the Company (“MediVision”), on the date hereof, in an aggregate amount not to exceed $1,500,000, at a price per share not less than $0.55848 (subject to adjustment for reverse and forward stock splits and similar transactions), and without the provision of any special rights to such investors. For avoidance of doubt, nothing herein shall be deemed as an obligation of any Purchaser Director (as defined below) to vote in any manner at any meeting of the Company’s Board of Directors (the “Board”) concerning this matter and each such director shall serve his duties in accordance with applicable law.
SECTION 3.
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Delivery of the Shares at the Closing and at the Deferred Closing.
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3.1
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Closing
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(a) The completion of the purchase and sale of the 1st Installment Shares (the “Closing”) shall occur at the offices of Xxxxxxxx Xxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 as soon as practicable and as agreed to by the parties hereto, within three business days following the execution of this Agreement, or on such later date or at such different location as the parties shall agree in writing, but not prior to the date that the conditions for Closing set forth in Sections 3.1(b) and 3.1(c) below have been satisfied or waived by the appropriate party (the “Closing Date”).
(b) The Company’s obligation to complete the purchase and sale of the 1st Installment Shares and deliver such stock certificate to the Purchaser at the Closing shall be subject to the following conditions, any one or more of which may be waived by the Company:
(i)
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receipt by the Company of the 1st Installment; and
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(ii) each of the representations and warranties of the Purchaser made herein shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date as though made at that time.
(c) The Purchaser’s obligation to accept delivery of the 1st Installment Shares, such stock certificate and the 1st Installment Warrant, and to pay the 1st Installment at the
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Closing shall be subject to the following conditions, any one or more of which may be waived by the Purchaser:
(i) the delivery to the Purchaser by counsel to the Company of a legal opinion dated as of the Closing Date in the form set forth in Exhibit B;
(ii) each of the representations and warranties of the Company set forth herein are true and correct in all respects as of the date of this Agreement and as of such Closing Date as though made at that time and that the Company shall have complied in all respects with all the agreements and satisfied in all respects all the conditions herein on its part to be performed or satisfied on or prior to such Closing Date, and the Purchaser shall have received a certificate executed by the chief executive officer and chief financial officer of the Company, dated as of the Closing Date, to the foregoing effect, in the form set forth in Exhibit C-1;
(iii) the execution by the Company of a written agreement (copy of each shall be delivered to the Purchaser at the Closing) with each of the Company’s lenders, United Mizrachi Bank (“United Bank”) and The Tail Wind Fund Ltd. (“Tail Wind”) which agreement is binding on the parties thereto, and pursuant to which each of United Bank and Tail Wind agree to forgo any principal payments payable by the Company (or any of its subsidiaries) under any United Bank or Tail Wind indebtedness outstanding on the Closing Date until January 1, 2011, and in the case of United Bank, the United Bank consents to and approves the MediVision Assets Transaction (as defined below) and the transaction contemplated thereunder. Notwithstanding the foregoing, if the Company makes a principal payment to United Bank in 2010 in amount higher than the Company’s Earnings Before Interest, Taxes and Amortization (“EBITDA”) for the year ended December 31, 2010, then within three business days after the filing with the SEC (as defined below) of the Company’s audited financial statements for the year ended December 31, 2010, the Company will issue shares of Common Stock to the Purchaser free of charge and without payment of any consideration by the Purchaser, in an amount equal to the amount of principal payments made to United Bank minus EBITDA divided by 0.41522 (the “Additional Shares”); the provisions of Section 7.1 shall apply, mutatis mutandis, to the Additional Shares, and the Company shall take all required actions set forth in Section 7.1 in order to register the Additional Shares;
(iv) the execution by the Company and MediVision of a written agreement (a copy of which shall be delivered to the Purchaser at the Closing) (the “Assets Purchase Agreement”), which agreement is binding on the Company and the parties thereto, for the purchase of certain assets of MediVision in a manner and under terms reasonably satisfactory to the Purchaser (the “MediVision Assets Transaction”);
(v) the deposit by MediVision of 3,793,452 shares of Common Stock, currently owned by MediVision, in escrow with Xxxxxxx X. Xxxxx, Esq. and the execution of the escrow agreement by all parties thereto (copy of which shall be delivered to the Purchaser at the Closing), pursuant to the terms of Section 8.7(b) herein;
(vi) the execution by MediVision and the receipt by the Purchaser at the Closing of a copy of a binding and irrevocable proxy, substantially in the form set forth in Exhibit D, appointing Xxx Xxxxx as its true and lawful attorney-in-fact and proxy with respect to all shares of Common Stock owned by MediVision (i.e, 9,380,843 shares) to vote FOR the Stockholder Approvals (as defined below) at the Company’s 2010 Annual Meeting of
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(vii) the execution by Agfa Gevaert N.V., Delta Trading and Services (1986) Ltd, Xxx Xxxxx, Xxxx Xxxxx, Xxxxx Xxxxxxx and Xxxxx Xxxxxxx (collectively, the “Principal MV Shareholders,” and together with MediVision, the “MediVision/Principal MV Shareholders Group”) and the receipt by the Purchaser at the Closing of copies of binding and irrevocable proxies, substantially in the form of set forth in Exhibit E, appointing Xxxx Xxxxx as their true and lawful attorney-in-fact and proxy with respect to all shares of MediVision owned by such entities or persons to vote FOR the MediVision Assets Transaction and any other matters for which MediVision’s shareholders are asked to grant their vote or consent in connection with the consummation of the MediVision Assets Transaction.
(viii) the receipt by the Purchaser from the Company of a copy of resolutions adopted by the Board approving the execution of the Transaction Documents, the consummation of the transactions contemplated therein, the appointment of Xxx Xxxxxx and Xxxxx Xxxxx to the Board as of the Closing and the delivery of a director indemnification agreement to each of them.
(ix) the delivery to the Purchaser of a duly executed secretary certificate, dated as of the Closing Date, in the form of Exhibit F-1.
3.2
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Deferred Closing.
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(b) The Company’s obligation to complete the purchase and sale of the 2nd Installment Shares and the 2nd Installment Warrant, and deliver the stock certificate and the 2nd Installment Warrant to the Purchaser at the Deferred Closing shall be subject to the following conditions, any one or more of which may be waived by the Company:
(i)
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receipt by the Company of the 2nd Installment; and
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(ii) each of the representations and warranties of the Purchaser made herein shall be true and correct in all material respects (except for those representations and warranties that are qualified by Material Adverse Effect, which shall be true and correct in all respects) as of the Deferred Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specific date.
(c) The Purchaser’s obligation to accept delivery of the 2nd Installment Shares, the stock certificate and the 2nd Installment Warrant, and to pay the 2nd Installment at the Deferred Closing, shall be subject to the completion of the Closing in all respects, and to the following conditions, any one or more of which may be waived by the Purchaser:
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(i) The Company shall have generated, for the period from January 1, 2009 to March 31, 2010, consolidated aggregate revenues (calculated in accordance with “generally accepted accounting principles” as shall be defined in the Q1 Financial Statements) of at least $2,000,000 from the sale of EMR Products (as defined below), of which at least $1,000,000 is generated (as shall be evidenced in writing to the Purchaser prior to the Deferred Closing Date) from sales of the Company (excluding sales by Abraxas Medical Solutions Ltd., a subsidiary of the Company (“Abraxas Medical”)) to the ophthalmology segment (the “Milestone”). If the Milestone shall not be achieved in full, the Purchaser shall not be obligated to invest any portion of the 2nd Installment; provided, that the Purchaser shall be entitled at its sole discretion to invest all or any portion of the 2nd Installment on the terms set forth herein. For the purpose of this Section 3.2, “EMR Product” shall mean all software, installation training, service and maintenance of the Electronic Medical Records and Practice Management;
(ii) the delivery to the Purchaser by counsel to the Company of a legal opinion dated as of the Deferred Closing Date in the form set forth in Exhibit B; and
(iii) each of the representations and warranties of the Company set forth herein shall be true and correct in all material respects (except for those representations and warranties that are qualified by Material Adverse Effect, which shall be true and correct in all respects) as of the Deferred Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specific date) and that the Company has complied in all respects with all the agreements and satisfied in all respects all the conditions herein on its part to be performed or satisfied on or prior to such Deferred Closing Date, and the Purchaser shall have received a certificate executed by the chief executive officer and chief financial officer of the Company, dated as of the Deferred Closing Date, to the foregoing effect in the form set forth in Exhibit C-2.
(iv) the delivery to the Purchaser of a duly executed secretary certificate, dated as of the Deferred Closing Date, in the form of Exhibit F-2.
3.3 At each of the Closing and the Deferred Closing, the Purchaser shall deliver, in immediately available funds, the full amount of the purchase price for the Shares being purchased hereunder by wire transfer to an account designated by the Company, and the Company shall deliver to the Purchaser one or more stock certificates and Warrants registered in the name of the Purchaser, or in such nominee name(s) as designated by the Purchaser in writing, representing the number of Shares and the number of the Warrant Shares set forth in Section 2 above and bearing an appropriate legend referring to the fact that the Shares and the Warrants were sold in reliance upon the exemption from registration under the Securities Act provided by Section 4(2) thereof and Rule 506 of Regulation D promulgated thereunder. The name(s) in which the stock certificates are to be registered are set forth in the Stock Certificate Questionnaire attached hereto as part of Appendix I.
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4.1 Organization and Qualification. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation with corporate power and authority to own or lease its properties and conduct its business in all material respects as described in the SEC Reports (as defined below) and the Company is qualified to do business as a foreign corporation in each jurisdiction in which qualification is required, except where failure to so qualify would not have a Material Adverse Effect (as defined herein). The Company’s subsidiaries (each a “Subsidiary” and collectively the “Subsidiaries”) are listed on Exhibit G to this Agreement and are the only subsidiaries, direct or indirect, of the Company. Each Subsidiary is a direct or indirect wholly owned subsidiary of the Company (except as otherwise set forth in Exhibit G). Each Subsidiary is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation, with corporate power and authority to own or lease its properties and conduct its business, and is qualified to do business as a foreign corporation in each jurisdiction in which qualification is required, except where failure to so qualify would not have a Material Adverse Effect.
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issuance and sale of the Shares and Warrant Shares by the Company pursuant to this Agreement. The Warrant Shares have been duly authorized and, upon exercise in accordance with the applicable Warrants, the Warrant Shares will be validly issued, fully paid and nonassessable, and will conform in all material respects to the description of the Common Stock set forth in the Form 8-A. No stockholder of the Company has any right (which has not been waived or has not expired by reason of lapse of time following notification of the Company’s intention to file the Registration Statement (as hereinafter defined)) to require the Company to register the sale of any capital stock owned by such stockholder under the Registration Statement (other than rights granted to the Tail Wind Fund, Ltd. and Solomon Strategic Holdings, Inc.).
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not paid or declared any dividends or other distributions with respect to their capital stock and none of the Company or any Subsidiary is in default in the payment of principal or interest on any outstanding debt obligations; (iv) there has not been any change in the capital stock of the Company or its Subsidiaries other than the sale of the Shares hereunder and shares or options issued pursuant to employee equity incentive plans or purchase plans approved by the Company’s Board of Directors, or indebtedness material to the Company or its Subsidiaries (other than in the ordinary course of business and any required scheduled payments); and (v) there has not occurred any event that has caused or could reasonably be expected to cause a Material Adverse Effect.
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has received the prior written consent of the Purchaser for the specific use contemplated which consent shall not be unreasonably withheld.
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with all applicable provisions of the Xxxxxxxx-Xxxxx Act of 2002, as amended and the rules and regulations promulgated thereunder.
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offering. In addition to the above, the Purchaser shall maintain in confidence the receipt and content of any notice of a Suspension (as defined in Section 5.17 below). The foregoing agreements shall not apply to any information that is or becomes publicly available through no fault of the Purchaser, or that the Purchaser is legally required to disclose; provided, however, that if the Purchaser is requested or ordered to disclose any such information pursuant to any court or other government order or any other applicable legal procedure, it shall use commercially reasonable efforts to provide the Company with prompt notice of any such request or order in time sufficient to enable the Company to seek an appropriate protective order.
“[NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED] WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”
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The Purchaser understands that the Warrants will bear a restrictive legend in substantially the same form.
5.14 Removal of Legend; Transfer Agent Instructions. The Company hereby covenants with the Purchaser to, no later than three trading days following the delivery by the Purchaser to the Company of a legended certificate representing Shares or Warrant Shares (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer), and either (i) Purchaser’s Certificate of Subsequent Sale (A) in the form of Appendix II hereto, (B) executed by an officer of, or other authorized person designated by, the Purchaser, and (C) to the effect that the Shares or Warrant Shares have been sold in accordance with a Registration Statement or in a transaction exempt from the registration requirements of the Securities Act and any applicable state securities or Blue Sky laws or (ii) an opinion of counsel reasonably satisfactory to the Company that the Shares or Warrant Shares are freely transferable and that the legend is no longer required on such stock certificate, deliver or cause the Company’s transfer agent to deliver to the transferee of the Shares or Warrant Shares or to the Purchaser, as applicable, a new stock certificate representing such Shares or Warrant Shares that is free from all restrictive and other legends. The Company acknowledges that the remedy at law for a breach of its obligations under this Section 5.14 may be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 5.14, that the Purchaser shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required.
5.15 Stop Transfer. The certificates representing the Shares and Warrant Share will be subject to a stop transfer order with the Company’s transfer agent that restricts the transfer of such shares except upon receipt by the transfer agent of a written confirmation from the Purchaser to the effect that the Purchaser has satisfied its prospectus delivery requirements, in the form attached as Appendix II hereto.
5.17 Public Sale or Distribution. The Purchaser hereby covenants with the Company not to make any sale of the Shares or Warrant Shares under any Registration Statement without complying with the provisions of this Agreement and without effectively causing the prospectus delivery requirement under the Securities Act to be satisfied (whether physically or through compliance with Rule 172 under the Securities Act or any similar rule), and the Purchaser acknowledges and agrees that such Shares or Warrant Shares are not transferable on the books of the Company unless the certificate submitted to the transfer agent evidencing the Shares is accompanied by a separate Purchaser’s Certificate of Subsequent Sale: (i) in the form of Appendix II hereto, (ii) executed by an officer of, or other authorized person designated by, the Purchaser, and (iii) to the effect that (A) the Shares or Warrant Shares have been sold in accordance with the Registration Statement, the Securities Act and any applicable state securities or Blue Sky laws and (B) the prospectus delivery requirement effectively has been satisfied. The
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Purchaser acknowledges that there may occasionally be times when the Company must suspend the use of the prospectus (the “Prospectus”) forming a part of the Registration Statement (a “Suspension”) until such time as an amendment to the Registration Statement has been filed by the Company and declared effective by the Commission, or until such time as the Company has filed an appropriate report with the Commission pursuant to the Exchange Act. Without the Company’s prior written consent, which consent shall not be unreasonably withheld or delayed, the Purchaser shall not use any written materials to offer the Shares for resale other than the Prospectus, including any “free writing prospectus” as defined in Rule 405 under the Securities Act. The Purchaser covenants that it will not sell any Shares or Warrant Shares pursuant to said Prospectus during the period commencing at the time when Company gives the Purchaser written notice of the suspension of the use of said Prospectus and ending at the time when the Company gives the Purchaser written notice that the Purchaser may thereafter effect sales pursuant to said Prospectus. Notwithstanding the foregoing, the Company agrees that no Suspension shall be for a period of longer than 60 consecutive days, and no Suspension shall be for a period longer than 90 days in the aggregate in any 365 day period. The Purchaser further covenants to notify the Company promptly of the sale of all of its Shares or Warrant Shares.
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7.1
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Registration Procedures and Expenses. The Company shall:
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(a) as soon as practicable, but in no event later than 60 days following the Closing Date (the “Initial Registration Statement Filing Deadline”), prepare and file with the Commission a Registration Statement on Form S-1 or Form S-3 (or such other form appropriate for such purpose) (the “Initial Registration Statement”), relating to the resale of the 1st Installment Shares, the 1st Installment Warrant Shares and any shares of Common Stock issued or issuable, directly or indirectly upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing by the Purchaser from time to time.
(b) as soon as practicable, but in no event later than 60 days following the Deferred Closing Date (the “Deferred Closing Filing Deadline”), prepare and file with the Commission a Registration Statement on Form S-1 or Form S-3 (or such other form appropriate for such purpose) (the “Deferred Closing Registration Statement”), relating to the resale of the 2nd Installment Shares, the 2nd Installment Warrant Shares and any shares of Common Stock issued or issuable, directly or indirectly upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing by the Purchaser from time to time. For purposes of this Agreement, the term, “Registration Statement” shall include each of the Initial Registration Statement, the Deferred Closing Registration Statement and any registration Statement filed pursuant to Section 7.2 and the term “Registrable Securities” shall mean, collectively, 1st Installment Shares, the 1st Installment Warrant Shares, 2nd Installment Shares, the 2nd Installment Warrant Shares and any shares of Common Stock issued or issuable, directly or indirectly upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing.
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(c) use its commercially reasonable efforts, subject to receipt of necessary information from the Purchaser, to cause the Commission to declare each of the Initial Registration Statement and the Deferred Closing Registration Statement effective within 180 days after the Closing Date or the Deferred Closing Date (as the case may be) (the “Effectiveness Deadline”);
(d) promptly prepare and file with the Commission such amendments and supplements to each Registration Statement and the prospectus used in connection therewith as may be necessary to keep each Registration Statement effective until such time as all of the Registrable Securities covered by the Registration Statement become eligible for resale by the Purchaser without any volume or other restrictions under Rule 144 or any other rule of similar effect; provided, that for the avoidance of doubt, in no event shall the Company have any obligation to keep any Registration Statement effective after such time as all of the Registrable Securities covered by such Registration Statement have been sold pursuant to the Registration Statement or Rule 144;
(e) furnish to the Purchaser with respect to the Registrable Securities registered under any Registration Statement (and to each underwriter, if any), such number of copies of prospectuses and such other documents as the Purchaser may reasonably request, in order to facilitate the public sale or other disposition of all Registrable Securities under such Registration Statement by the Purchaser (or its valid transferees);
(f) file documents required of the Company for normal Blue Sky clearance in states specified in writing by the Purchaser; provided, however, that the Company shall not be required to qualify to do business or consent to service of process in any jurisdiction in which it is not now so qualified or has not so consented;
(g) bear all expenses in connection with the procedures in paragraphs (a) through (f) of this Section 7.1 and the registration of the Registrable Securities pursuant to any Registration Statement, other than fees and expenses, if any, of counsel or other advisers to the Purchaser or underwriting discounts, brokerage fees and commissions incurred by the Purchaser, if any, in connection with the offering of the Registrable Securities pursuant to any Registration Statement;
(h) file a Form D with respect to the 1st Installment Shares and the 1st Warrants and the 2nd Installment Shares and the 2nd Installment Warrants (as the case may be) as required under Regulation D;
(i) file a Current Report on Form 8-K with the Commission describing the transactions contemplated by this Agreement on each of the Closing Date and the Deferred Closing Date (as the case may be); and
(j) in order to enable the Purchaser to sell the Registrable Securities under Rule 144 under the Securities Act, use its commercially reasonable efforts to comply with the requirements of Rule 144, including without limitation, use its commercially reasonable efforts to comply with the requirements of Rule 144(c)(1) with respect to current public information about the Company and to timely file all reports required to be filed by the Company under the Exchange Act until the Purchaser is no longer an affiliate of the Company, but in any
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event for at least one year from the Closing Date or the Deferred Closing Date (as the case may be).
The Company understands that the Purchaser disclaims being an underwriter, but the Purchaser being deemed an underwriter shall not relieve the Company of any obligations it has hereunder. A draft of the proposed Registration Statement Questionnaire to be completed by the Purchaser is attached hereto as Appendix I.
7.2
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(a) If the Commission informs the Company that all of the Registrable Securities required to be registered under any Registration Statement cannot be included in such Registration Statement due to Commission Comments (as defined below), then the Company shall, from, time to time, (i) inform the Purchaser of the receipt of the Commission Comments and use its commercially reasonable efforts to file amendments to such Registration Statement as required by the Commission and/or (ii) withdraw such Registration Statement and file a new registration statement (a “New Registration Statement”), in either case covering the maximum number of Registrable Securities permitted to be registered by the Commission, on Form S-1 or S-3 or such other form available to register for resale the Registrable Securities as a secondary offering; provided, however, that prior to filing such amendment or New Registration Statement, the Company shall be obligated to use its commercially reasonable efforts to advocate with the Commission for the registration of all of the Registrable Securities in accordance with the Commission Comments. Notwithstanding any other provision of this Agreement, if any Commission Comments sets forth a limitation of the number of Registrable Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate with the Commission for the registration of all or a greater number of Registrable Securities), unless otherwise directed in writing by the Purchaser as to its Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement will first be reduced by Warrant Shares. In the event the Company amends a Registration Statement or files a New Registration Statement, as the case may be, under clauses (i) or (ii) above, the Company will use its commercially reasonable efforts to file with the Commission, as promptly as allowed by the Commission or Commission Comments provided to the Company or to registrants of securities in general, one or more registration statements on Form S-1 or Form S-3 or such other form available to register for resale those Registrable Securities that were not registered for resale on the Registration Statement, as amended, or the New Registration Statement.
(b) For purposes of this Agreement, “Commission Comments” means written comments pertaining solely to Rule 415 under the Securities Act which are received by the Company from the Commission with respect to a filed Registration Statement which requires the Company to limit the amount of Registrable Securities which may be included therein to a number of shares which is less than such amount sought to be registered under such Registration Statement.
(c) For purposes of this Agreement, the Filing Deadline of any Registration Statement filed pursuant to this Section 7.2, shall be 30 days after the receipt of the Commission Comments which required the filing of such Registration Statement.
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(e) The Company agrees that it will, subject to receipt of necessary information from the Purchaser, file each New Registration Statement as soon as practicable after it becomes aware that the filing of such New Registration Statement will be required, but in any event by its Filing Deadline, and it will use commercially reasonable efforts to cause the Commission to declare each New Registration Statement effective within by its respective Effectiveness Deadline.
(f) The Company agrees that it will use commercially reasonable efforts to respond to any comments received from the SEC with respect to any Registration Statement, including but not limited to Commission Comments, as soon as practical but in any event within 14 business days (United States) from the receipt thereof.
(a) The Purchaser agrees that it will not effect any disposition of the Shares or Warrant Shares or its right to purchase the Shares or Warrant Shares that would constitute a sale within the meaning of the Securities Act or pursuant to any applicable state securities laws, except as contemplated in the Registration Statement referred to in Section 7.1 or as otherwise permitted by law, and that it will promptly notify the Company of any changes in the information set forth in the Registration Statement regarding the Purchaser or its plan of distribution.
(b) The Company acknowledges and agrees that the Purchaser may from time to time pledge, and/or grant a security interest in, some or all of the legended Shares and Warrant Shares in connection with applicable securities laws, pursuant to a bona fide margin agreement in compliance with a bona fide margin loan. Such a pledge would not be subject to approval or consent of the Company and no legal opinion of legal counsel to the pledgee, secured party or pledgor shall be required in connection with the pledge, but such legal opinion shall be required in connection with a subsequent transfer or foreclosure following default by the Purchaser transferee of the pledge. No notice shall be required of such pledge, but Purchaser’s transferee shall promptly notify the Company of any such subsequent transfer or foreclosure. The Purchaser acknowledges that the Company shall not be responsible for any pledges relating to, or the grant of any security interest in, any of the Shares or Warrant Shares or for any agreement, understanding or arrangement between the Purchaser and its pledgee or secured party. At the Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Shares or Warrant Shares may reasonably request in connection with a pledge or transfer of the Shares, including the preparation and filing of any required prospectus supplement under Rule 424(b)(3) of the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders thereunder. Each Purchaser acknowledges and agrees that, except as otherwise provided in Section 5.17 and in this Section 7.3, any Shares or Warrant Shares subject to a pledge or security interest as contemplated by this Section 7.3(b) shall continue to bear the legend set forth in Section 5.13 and be subject to the restrictions on transfer set forth in Section 5.17 and in this Section 7.3.
7.4
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Indemnification. For the purpose of this Section 7.4:
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(i) the term “Purchaser/Affiliate” shall mean any affiliate of the Purchaser, including a transferee who is an affiliate of the Purchaser, and any person who controls the Purchaser or any affiliate of the Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act; and
(ii) the term “Registration Statement” shall include any preliminary prospectus, final prospectus, free writing prospectus, exhibit, supplement or amendment included in or relating to, and any document incorporated by reference in, any Registration Statement referred to in Section 7.1 and 7.2.
(a) The Company agrees to indemnify and hold harmless the Purchaser and each Purchaser/Affiliate, against any losses, claims, damages, liabilities or expenses, joint or several, to which the Purchaser or Purchaser/Affiliates may become subject, under the Securities Act, the Exchange Act, or any other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of the Company), insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof as contemplated below) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, including the Prospectus, financial statements and schedules, and all other documents filed as a part thereof, as amended at the time of effectiveness of the Registration Statement, including any information deemed to be a part thereof as of the time of effectiveness pursuant to paragraph (b) of Rule 430A, or pursuant to Rules 430B, 430C or 434, of the Rules and Regulations, or the Prospectus, in the form first filed with the Commission pursuant to Rule 424(b) of the Regulations, or filed as part of the Registration Statement at the time of effectiveness if no Rule 424(b) filing is required or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state in any of them a material fact required to be stated therein or necessary to make the statements in the Registration Statement or any amendment or supplement thereto not misleading or in the Prospectus or any amendment or supplement thereto not misleading in light of the circumstances under which they were made, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the Prospectus, or any amendment or supplement thereto, and will promptly reimburse the Purchaser and each Purchaser/Affiliate for any legal and other expenses as such expenses are reasonably incurred by the Purchaser or such Purchaser/Affiliate in connection with investigating, defending or preparing to defend, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the Company will not be liable for amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, and the Company will not be liable in any such case to the extent that any such loss, claim, damage, liability or expense arises out of or is based upon (i) an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, the Prospectus or any amendment or supplement thereto in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Purchaser expressly for use therein, or (ii) the failure of such Purchaser to comply with the covenants and agreements contained in Sections 5.17 or 7.3 hereof respecting the sale of the Shares or Warrant Shares, or (iii) the inaccuracy of any representation or warranty made by such Purchaser herein or (iv) any statement or omission in any Prospectus that is corrected in any subsequent Prospectus that was delivered to the Purchaser prior to the pertinent sale or sales by the Purchaser.
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(b) Each Purchaser will indemnify and hold harmless the Company, each of its directors, each of its officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against any losses, claims, damages, liabilities or expenses to which the Company, each of its directors, each of its officers who signed the Registration Statement or controlling person may become subject, under the Securities Act, the Exchange Act, or any other federal or state statutory law or regulation, or at common law or otherwise (including in settlement of any litigation, but only if such settlement is effected with the written consent of such Purchaser) insofar as such losses, claims, damages, liabilities or expenses (or actions in respect thereof as contemplated below) arise out of or are based upon: (i) any failure to comply with the covenants and agreements contained in Sections 5.10 or 7.2 hereof respecting the sale of the Shares; (ii) the inaccuracy of any representation or warranty made by such Purchaser herein; or (iii) any untrue or alleged untrue statement of any material fact contained in the Registration Statement, the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements in the Registration Statement or any amendment or supplement thereto not misleading or in the Prospectus or any amendment or supplement thereto not misleading in the light of the circumstances under which they were made, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the Prospectus, or any amendment or supplement thereto, in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Purchaser expressly for use therein; and will reimburse the Company, each of its directors, each of its officers who signed the Registration Statement or controlling person for any legal and other expense reasonably incurred by the Company, each of its directors, each of its officers who signed the Registration Statement or controlling person in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that each Purchaser’s aggregate liability under this Section 7 shall not exceed the amount of proceeds received by such Purchaser on the sale of the Shares pursuant to the Registration Statement.
(c) Promptly after receipt by an indemnified party under this Section 7.4 of notice of the threat or commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Section 7.4 promptly notify the indemnifying party in writing thereof, but the omission to notify the indemnifying party will not relieve it from any liability that it may have to any indemnified party for contribution or otherwise under the indemnity agreement contained in this Section 7.4 to the extent it is not prejudiced as a result of such failure. In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent that it may wish, jointly with all other indemnifying parties similarly notified, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the indemnified party, and the indemnifying party and the indemnified party shall have reasonably concluded, based on an opinion of counsel reasonably satisfactory to the indemnifying party, that there may be a conflict
24
of interest between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of its election to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Section 7.4 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless: (i) the indemnified party shall have employed such counsel in connection with the assumption of legal defenses in accordance with the proviso to the preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel, reasonably satisfactory to such indemnifying party, representing all of the indemnified parties who are parties to such action); or (ii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of action, in each of which cases the reasonable fees and expenses of counsel shall be at the expense of the indemnifying party. The indemnifying party shall not be liable for any settlement of any action without its written consent. In no event shall any indemnifying party be liable in respect of any amounts paid in settlement of any action unless the indemnifying party shall have approved in writing the terms of such settlement; provided, that such consent shall not be unreasonably withheld. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnification could have been sought hereunder by such indemnified party from all liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in this Section 7.4 is required by its terms but is for any reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified party under paragraphs (a), (b) or (c) of this Section 7.4 in respect to any losses, claims, damages, liabilities or expenses referred to herein, then each applicable indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of any losses, claims, damages, liabilities or expenses referred to herein: (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Purchaser from the private placement of Common Stock hereunder; 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 the relative fault of the Company and the Purchaser in connection with the statements or omissions or inaccuracies in the representations and warranties in this Agreement and/or the Registration Statement 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 Purchaser on the other shall be deemed to be in the same proportion as the amount paid by the Purchaser to the Company pursuant to this Agreement for the Shares purchased by the Purchaser that were sold pursuant to the Registration Statement bears to the difference (the “Difference”) between the amount the Purchaser paid for the Shares that were sold pursuant to the Registration Statement and the amount received by such Purchaser from such sale. The relative fault of the Company on the one hand and the Purchaser on the other shall
25
SECTION 8.
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8.1
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(a) In connection with (i) the Company’s 2010 Annual Meeting of Shareholders or (ii) or any other special meeting of the Company’s shareholders duly convened prior to the Company’s 2010 Annual Meeting of Shareholders, the Company shall prepare and file with the Commission a proxy statement
26
meeting in accordance with the requirements of Section 14 of the Exchange Act and the related rules and regulations thereunder promulgated by the Commission (the “Proxy Statement”) to solicit the approval by stockholders holding a majority of the outstanding voting stock of the Company present, in person or by proxy, at the Stockholders’ Meeting (as defined below) of an amendment to the Company’s articles of incorporation providing for an increase in the amount of authorized Common Stock equal to 100,000,000 shares or in any greater amount such that in any event, the Company shall have at the Deferred Closing sufficient amount of authorized Common Stock to enable it to perform its obligations under this Agreement (the “Stockholder Approval[s]”). The Company shall use its best efforts to (i) file the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 (the “2009 10-K”) as soon as possible after such date, (ii) file the Proxy Statement immediately after it files the 2009 10-K, (iii) cause the Proxy Statement to be declared effective under the Exchange Act as soon as possible promptly as reasonably practicable after such filing (if the first filing is a preliminary proxy statement) and (iv) mail the Proxy Statement to the stockholders of the Company as soon as practicable.
(b) The Company shall keep the Purchaser apprised of the status of matters relating to the Proxy Statement and the Stockholders’ Meeting, including promptly furnishing the Purchaser and its counsel with copies of notices or other communications related to the Proxy Statement and the Stockholders’ Meeting received by the Company from the Commission or any other third party.
8.2 Stockholders’ Meeting. The Company shall, in accordance with the laws of the State of California and the Company’s articles of incorporation and bylaws, use its commercially reasonable efforts to convene a meeting of holders of Common Stock to consider and vote upon giving the Stockholder Approval (the “Stockholders’ Meeting”) as soon as practicable after the filing of a definitive proxy statement in connection with the Stockholders’ Meeting, but in any event by May 15, 2010. Subject to fiduciary obligations under applicable law, the Board shall recommend such Stockholder Approval, shall not withdraw or modify such recommendation and shall solicit such Stockholder Approval. Without limiting the generality of the foregoing, if the Board withdraws or modifies its recommendation, the Company shall nonetheless cause the Stockholders’ Meeting to be convened and a vote to be taken, and the Board may communicate to the Company’s stockholders its basis for such withdrawal or modification.
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(iii) three directors to be nominated by MediVision or the Principal MV Shareholders (the “MediVision Directors”); and
(iv) one director to be nominated by the Purchaser and MediVision or the Principal MV Shareholders who shall be a reputable individual from the Company’s industry, and who shall act as the Chairman of the Board;
provided, that at the first annual meeting of the Company’s shareholders following the execution of this Agreement, (1) the Purchaser shall nominate Xx. Xxxxx Xxxxxxx, pursuant to Section 8.3(a)(ii), to serve as a director until the next annual meeting, subject to his continuance service as the Company’s chief financial officer during such period and (ii) MediVision or the Principal MV Shareholders shall nominate Xx. Xxxx Xxxxx, pursuant to Section 8.2(a)(iii), to serve as a director until the next annual meeting, subject to his continuance service as the Company’s chief executive officer during such period.
In addition, Xxxx Xxxxx, in the sole discretion of the Board of Directors of the Company, shall attend all meetings of the Board of Directors as an observer (the “Representative”) and, in this respect, the Company shall give the Representative copies of all notices, minutes, consents, and other materials that it provides to its directors; provided, however, that such representative shall agree to hold in confidence and trust and to act in a fiduciary manner with respect to all information so provided; and provided further, that the Company reserves the right to withhold any information and to exclude such representative from any meeting or portion thereof if access to such information or attendance at such meeting could adversely affect the attorney-client privilege between the Company and its counsel or result in disclosure of trade secrets or a conflict of interest.
8.5 Indemnification Agreements. At the Closing, the Company shall execute and deliver indemnification agreements substantially in the form attached hereto as Exhibit H (the “Indemnification Agreements”) with each of the Purchaser Directors.
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(a) The Board will have nine members.
(b) The Board shall have an audit committee, the composition and duties of which shall be in compliance with all applicable federal and state securities laws and the rules of the OTC Bulletin Board, and which shall consist of at least three members of the Board. One of the Purchaser Directors shall be appointed as the Chairman of the Company’s Audit Committee.
(c) The Board shall have a compensation committee, the composition and duties of which shall be in compliance with all applicable federal and state securities laws and rules of the OTC Bulletin Board, and which shall consist of three members of the Board. The duties of the compensation committee will include (i) authorizing the compensation of any executive officer, (ii) setting number of shares reserved under the Company’s option pool, and (iii) setting employee compensation guidelines. The Purchaser Director shall have a veto right with respect to any resolution adopted by the compensation committee with regards to any issuance of Abraxas options (as set forth in Section 8.17 below).
(d) The Purchaser and MediVision shall have the right, but not the obligation, to cause one Purchaser Director and one MediVision Director to serve on each of the Audit Committee, the Compensation Committee and any other committee of the Board or any other committee of the Board of any subsidiary of the Company (if any).
8.7
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(a) Indemnification for breach representations, warranties or covenants. The Company will, to the fullest extent permitted by law, defend the Purchaser, and each of its Affiliates, directors, officers, agents and employees (the “Purchaser Indemnitees”) or settle (provided that the Company will not agree to any settlement without the applicable Purchaser Indemnitee’s prior written consent, which consent shall not be unreasonably withheld or delayed) at the Company’s expense any Action or Proceeding and indemnify them for all Losses and Expenses (both as defined below) arising out of or in connection with a breach of any representations, warranties or covenants of the Company in this Agreement. The Company will indemnify and hold harmless the Purchaser Indemnitees from and against any and all damages, costs, liabilities and attorneys’ fees, incurred in defending and/or resolving such Action or Proceeding; provided, that (i) the Company is promptly notified in writing of such Action or Proceeding (provided, that any failure to deliver such notice will not relieve the Company of liability under this Section 8.7), (ii) the Company will have the sole control of the defense and/or settlement thereof (provided, that if representation of the Purchaser Indemnitees by counsel retained by the Company would be inappropriate due to any actual or potential differing interest between the Purchaser Indemnitee and the Company or any third party represented by such counsel, the Purchaser Indemnitees will have the right to retain one separate counsel, with reasonable fees and expenses to be paid by the Company), (iii) the Purchaser Indemnitees furnish to the Company, on request, information available to the Purchaser Indemnitees for such defense, and (iv) the Purchaser Indemnitees reasonably cooperate in any defense and/or settlement thereof as long as the Company pays all of the Purchaser Indemnitees’ reasonable out of pocket expenses and attorneys’ fees. The Purchaser Indemnitees will not admit any such Action or Proceeding or any allegations made in such Action or Proceeding without, to the extent practicable, the prior written consent of the Company (which will not be unreasonably withheld or delayed). For purposes of this Agreement, an “Action or Proceeding” means any claim,
29
action, suit, judgments, settlements, litigation, proceeding, mediation, arbitration or investigation or audit by any Person, and “Losses and Expenses,” means damages, expenses, losses, costs, liabilities (including without limitation, incident to any Action or Proceeding.
(b) Special Indemnification for the MediVision Assets Transaction. The Company will, to the fullest extent permitted by law, defend the Purchaser Indemnitees or settle (provided that the Company will not agree to any settlement without the applicable Purchaser Indemnitee’s prior written consent, which consent shall not be unreasonably withheld or delayed) at the Company’s expense any Action or Proceeding and indemnify them for all Losses and Expenses (both as defined below) arising out of or in connection with any liability, indebtedness, restriction or obligation imposed on the Company or any subsidiary of the Company or any Material Adverse Effect suffered by the Company or any subsidiary of the Company as a result of or in connection with the MediVision Assets Transaction (including without limitation, any liability related to the obligations of MediVision to the Israeli Office of the Chief Scientist (the “OCS Claims”) or any approval required to be provided by it in connection with such transaction (the “OCS Approval”). In order to secure certain obligations of MediVision to the Company under the Asset Purchase Agreement and to secure the indemnification obligation of the Company to the Purchaser set forth in this Section 8.7(b), MediVision shall comply with the escrow provisions set forth in Section 10.5 of the Asset Purchase Agreement. The Company hereby undertakes to take all required actions and to enforce any and all rights and remedies granted to it or to which it is entitled under the Assets Purchase Agreement, by applicable law, or otherwise, in order to perform its indemnification obligation set forth in this Section 8.7(b), including without limitation, (i) Company’s right to purchase and sell certain shares of Common Stock for the repayment of the Elop Debt (as such term is defined and as further described Section 8.14 of the Asset Purchase Agreement), (ii) Company’s right to purchase and cancel and/or reclassify certain shares of Common Stock into treasury shares entitling their holder to no rights, in connection with the Untied Mizrachi Bank Loan (as such term is defined and as further described in Section 8.15 of the Asset Purchase Agreement); The Board of the Company shall adopt, on or prior to the Closing Date, a resolution (a copy of which shall be delivered to the Purchaser at the Closing) approving such cancellation and/or reclassification, subject to the occurrence of the relevant conditions, and (iii) Company’s rights purchase and sell certain shares of Common Stock for the repayment of the OCS Debt and Obligations (as such term is defined and as further described Section 8.16 of the Asset Purchase Agreement).
30
shall be conducted only in, and the Company shall not take any action except in, the ordinary course of business consistent with past practice, and (ii) the Company shall use its commercially reasonable efforts to preserve its business organization intact, to keep available the services of its current officers and employees, and to maintain its existing relations with suppliers, creditors, business partners and others having business dealings with the Company, to the end that the Company’s goodwill and ongoing business shall be unimpaired at the Closing.
8.11 Exclusivity; Break-Up Fee. Until the Closing Date, the Company shall not, directly or indirectly, and shall direct its directors, officers, employees, representatives, Affiliates and agents, including investment bankers, financial advisors, attorneys and accountants (collectively, the “Representatives”) not to, directly or indirectly, solicit or encourage any offers, engage in any discussions (other than to inform any initiating party that it is subject to this provision) or enter into any agreements or commitments with respect to the purchase of, or the sale or transfer or issuance (whether by merger, consolidation or otherwise) of, (i) any shares of capital stock of the Company or another entity organized by affiliates or any securities convertible into or exchangeable for any such stock for the primary purpose of raising capital or (ii) all or substantially all of the assets, or any material assets, of the Company or any subsidiary thereof (“Acquisition Proposals”); provided, however, that nothing contained in this Section 8.11 shall prohibit the Board from providing information in connection with, and negotiating, another unsolicited, bona fide written proposal regarding an Acquisition Proposal that the Board shall have determined in good faith, after considering applicable law, and after consulting with independent outside counsel, that such action is required in order for the Board to comply with its fiduciary duties to the Company’s stockholders under applicable law; provided, further, that if (a) the Board determines to enter into an Acquisition Proposal prior to the Closing, (b) the Stockholder Approvals are not obtained prior to the Deferred Closing Date, the Closing is not consummated due to failure to obtain any consent of any third party on part of the Company (including any governmental approvals), (c) the Stockholder Approvals are not obtained prior to the Deferred Closing Date, or (d) the Company breaches its exclusivity undertaking above, the Company shall pay to the Purchaser a break-up fee equal to $100,000 within seven days of the Purchaser’s written request. The Company shall notify the Purchaser promptly if any proposal or offer, or any inquiry or contact with any Person with respect thereto, regarding an Acquisition Proposal is made, such notice to include the identity of the Person making such proposal, offer, inquiry or contact, and the terms of such Acquisition Proposal. In addition, if the Company receives an Acquisition Proposal that would require the Board, in exercising its fiduciary duties as described above, to determine not to consummate the transactions contemplated hereby prior to the Closing, the Company shall endeavor to negotiate with the Purchaser, for a period not to exceed 10 days, a new transaction with the Purchaser that is comparable to such Acquisition Proposal.
31
inaccurate or that such party has failed to comply with or satisfy in any material respect any covenant, condition or agreement to be complied with or satisfied by such party under this Agreement, in each case such that the conditions set forth in this Agreement would not be satisfied. No party to this Agreement shall take any action that would cause any representation or warranty made by such party in this Agreement to be untrue if made at Closing.
(i) Merge into or consolidate with any other person or entity or permit any other person or entity to merge or consolidate with it; sell all or substantially all of the assets of the Company; liquidate, dissolve or wind-up the Company; acquire any interest in any business from any person or entity; sell, transfer, lease or otherwise dispose of (in one or more transactions) any of its material assets; purchase, lease or otherwise acquire (in one or more transactions) any material asset or more;
(ii) Authorize, offer, sell or issue any (a) security or security converted into equity for a purchase price or exercise price, as the case may be, lower than the average purchase price to be paid by the Purchaser for the two installments (or lower than the 1st Installment purchase price, if the 2nd Installment was not paid), and (b) debt security, provided that following two years from the Closing, the Company may issue debt security in an aggregate amount lower than $2,000,000 per year without the Purchaser’s consent, and in any event, excluding the issuance of options to employees, including directors;
(iii) Incur indebtedness for borrowed money or guarantee or act as a surety for any debt from financial institutions in excess of $100,000 other then in the ordinary course of business;
(iv) Grant a security interest in an asset or combination of assets of the Company valued individually or in the aggregate at $250,000 or more;
(v) Sell, lease, sublease, license or otherwise transfer any of the rights, title and interest in any Company intellectual property valued individually or in the aggregate at $250,000 or more;
(vi) Purchase, license or otherwise acquire any of the rights, title or interest in any intellectual property of any third party valued individually or in the aggregate at $250,000 or more;
(vii) Any deviation of $250,000 or more from the Company’s budget for 2009 and 2010 as disclosed to the Purchaser prior to the Closing (the 2010 budget can only be approved with the Purchaser’s consent); or
(viii) Hire or terminate any executive officer of the Company, including the Chief Executive Officer and Chief Financial Officer; or
(ix) Approval of interested parties transaction(s) (excluding grant of options), to include without limitation, transactions, directly or indirectly, between the
32
Company and any of its directors and officers and any transaction with MediVision (including its directors and officers).
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(a)
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if to the Company, to:
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000 Xxxxxxx Xxx, Xxxxx 0
Xxxxxxxxxx, XX 00000
Attention: Xxx Xxxxx
Facsimile: 000-000-0000
Email: Xxxx@xxxx.xxx
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with a copy to:
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Xxxxxxxx Xxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile: 000-000-0000
E-mail: Xxxxx.xxxxxxx@xxxxxxxxxxxxxxx.xxx
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or to such other person at such other place as the Company shall designate to the Purchaser in writing; and
(b) if to the Purchaser, at its address as set forth at the end of this Agreement, or at such other address or addresses as may have been furnished to the Company in writing.
SECTION 13. Governing Law; Venue. This Agreement is to be construed in accordance with and governed by the federal law of the United States of America and the internal laws of the State of California without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of California to the rights and duties of the parties. Each of the Company and the Purchaser submits to the exclusive jurisdiction of the state and federal courts sitting in the city of Sacramento, State of California, for purposes of all legal proceedings arising out of or relating to this Agreement and the transactions contemplated hereby. Each of the Company and the Purchaser irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.
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[Remainder of Page Left Intentionally Blank]
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By:
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/s/ Xxx Xxxxx
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Name:
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Xxx Xxxxx
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Title:
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Chief Executive Officer
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By:
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/s/ Xxxxx Xxxxxxx
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Name:
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Xxxxx Xxxxxxx
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Title:
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Chief Financial Officer
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U. M. ACCELMED, LIMITED PARTNERSHIP
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||
by A.M ACCELMED MANAGEMENT G(2009) LTD.,
its General Partner
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By:
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/s/ Xxx Xxxxxx
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Name:
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Xxx Xxxxxx
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Title:
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Chairman
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0 Xxxxxxxxxx Xx.
Xxxxxxxx Xxxxxxx
00000, Xxxxxx
X.X.Xxx 12006
Attention: Xx. Xxx Xxxxxx
Facsimile: 972-9-9588594
E-mail: Xxx@xxxxxxxx.xx.xx
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with a copy to (which shall not constitute a notice):
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Shenhav & Co. Law Offices
4 Ha’nechoshet St., Ramat Ha’xxxxxx, Xxx Xxxx 00000, Xxxxxx
Attention: Xx. Xxxx Xxxxxxx, Adv.
Facsimile: 972-3-6110788
E-mail: xxxx@xxxxxxxxxx.xx.xx
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Signature Page to Purchase Agreement
36
List of Exhibits, Appendices and Schedules
Exhibits
Exhibit A-1 and Exhibit A-2 – Form of Warrants
Exhibit B – Legal Opinion
Exhibit C-1 and Exhibit C-2 – Officer Certificates
Exhibit D – Form of Irrevocable Proxy by MediVision
Exhibit E – Form of Irrevocable Proxy by MediVision shareholders
Exhibit F-1 and Exhibit F-2 – Secretary Certificates
Exhibit G – List of Subsidiaries
Exhibit H – Director Indemnification Agreements
Exhibit I – Escrow Agreement
Appendices
Appendix I – Stock Certificate Questionnaire
Appendix II – Certificate of Subsequent Sale
Schedules
Schedule 4.3(i) – Outstanding Capitalization
Schedule 4.3(ii) – Outstanding Options to Purchase, Preemptive Rights and Other Rights
Schedule 4.19 – Company Budget and Strategic Work Plan
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EXHIBIT A-1
FORM OF 1st WARRANTS
NEITHER THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. SUCH SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED (A) EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS, OR (B) UNLESS SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES ACT. NOTWITHSTANDING THE FOREGOING, SUCH SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES.
WARRANT
Warrant No. [__] Dated: [_______ __], 2009
Ophthalmic Imaging Systems, a California corporation (the “Company”), hereby certifies that, for value received, U.M. Accelmed, Limited Partnership or its registered assigns (the “Holder”), is entitled to purchase from the Company up to a total of 3,211,076 shares of common stock, no par value (the “Common Stock”), of the Company (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”) at an exercise price equal to $1.00 per share (as adjusted from time to time as provided in Section 9, the “Exercise Price”), at any time and on or after the date hereof (the “Initial Exercise Date”) and through and including the date that is 36 (thirty-six) months from the date hereof (being June [l], 2012) (the “Expiration Date”), subject to the following terms and conditions. This Warrant (this “Warrant”) was issued pursuant to that certain Purchase Agreement, dated as of June [l], 2009, by and among the Company and the Holder (the “Purchase Agreement”).
SECTION 1. Definitions. In addition to the terms defined below and elsewhere in this Warrant, capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Purchase Agreement.
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SECTION 4. Exercise and Duration of Warrants.
4.1. This Warrant shall be exercisable by the registered Holder at any time and from time to time on or after the Initial Exercise Date and including the Expiration Date. At 6:30 P.M., New York City time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value.
4.2. A Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in the form attached hereto (the “Exercise Notice”), appropriately completed and duly signed, and (ii) payment of the Exercise Price for the number of Warrant Shares as to which this Warrant is being exercised (which may take the form of a “cashless exercise” if so indicated in the Exercise Notice), and the date such items are delivered to the Company (as determined in accordance with the notice provisions hereof) is an “Exercise Date.” The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice shall have the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.
5.1. Upon exercise of this Warrant, the Company shall promptly issue or cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as the Holder may designate, a certificate for the Warrant Shares issuable upon such exercise, free of restrictive legends unless a legend is required to be placed on the certificate pursuant to the Purchase Agreement. The Holder, or any Person so designated by the Holder to receive Warrant Shares, shall be deemed to have become the holder of record of such Warrant Shares as of the Exercise Date. The Company shall, upon the written request of the Holder and provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, use its
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commercially reasonable efforts, to credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder's or its designee's balance account with DTC through its Deposit Withdrawal Agent Commission system (“DWAC”); provided, that the Holder provides the Company the reasonably necessary details to effect the foregoing DWAC delivery.
5.2. This Warrant is exercisable, either in its entirety or, from time to time, for a portion of the number of Warrant Shares. Upon surrender of this Warrant following one or more partial exercises, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.
5.3. If within three Trading Days after the Company's receipt of an Exercise Notice the Company shall fail to issue and deliver a certificate to the Holder and register the shares of Common Stock issuable pursuant to the Exercise Notice on the Company's share register or credit the Holder's balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon such exercise, and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within three Trading Days after the Holder's request and in the Holder's discretion, either (i) pay cash to the Holder in an amount equal to the Holder's total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company's obligation to deliver such certificate (and to issue such shares of Common Stock) or credit such Holder's balance account with DTC shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such shares of Common Stock or credit such Holder's balance account with DTC and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the Closing Bid Price on the date of exercise. For purposes of this Warrant, “Closing Bid Price” shall mean, for any security as of any date, the last closing bid price for such security on the Trading Market, as reported by the Bloomberg Financial Markets (“Bloomberg”), or, if the Trading Market begins to operate on an extended hours basis and does not designate the closing bid price, then the last bid price of such security prior to 4:00:00 p.m., New York Time, as reported by Bloomberg, or, if the Trading Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the Eligible Market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. “Principal Market” means the OTC Bulletin Board® or, at any time that the Common Stock is not quoted on the OTC Bulletin Board, the Eligible Market on which the Common Stock is listed or quoted for trade. “Eligible Market” means the Principal Market,
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the American Stock Exchange, The New York Stock Exchange, Inc., The NASDAQ Capital Market, The NASDAQ Global Market or The NASDAQ Global Select Market.
5.4. The Company's obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing herein shall limit a Holder's right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company's failure to timely deliver certificates representing shares of Common Stock upon exercise of this Warrant as required pursuant to the terms hereof.
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upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. The Company will take all such action as may be necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed.
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delivered to the Holder), the obligation to deliver to the holder of the Warrant such shares of stock, securities or assets as, in accordance with the foregoing provisions, such holder may be entitled to purchase and the other obligations under this Warrant. The provisions of this paragraph (b) shall similarly apply to successive Fundamental Transactions.
The following formula illustrates the foregoing:
NP = OP x (OP x CS + C) / (OP x CSA)
WHERE
NP = the adjusted Exercise Price (after the Dilutive Issuance)
OP = Exercise Price in effect immediately prior to such Dilutive Issuance
CS = the number of outstanding shares of Common Stock immediately prior to such Dilutive Issuance
C = the consideration, if any, received by the Company upon such Dilutive Issuance
CSA = the number of outstanding shares of Common Stock immediately after such Dilutive Issuance
Notwithstanding the foregoing, no adjustments shall be made, paid or issued under this Section 9(c) in respect of an Exempt Issuance. For purposes of this Warrant: “Common
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Stock Equivalents” shall mean securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, shares of Common Stock, or Preferred Stock; and “Exempt Issuance” shall mean the issuance of: (a) shares of Common Stock or Common Stock Equivalents to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose by the Board of Directors or a majority of the members of a committee established for such purpose by the Board of Directors; (b) securities upon the exercise of this Warrant (and any other securities issued pursuant to the Purchase Agreement) and/or the exercise or conversion of Common Stock Equivalents issued and outstanding on the date of this Warrant (as set forth in Schedule 4.3(i) of the Purchase Agreement); provided, that such securities have not been amended since the date of this Warrant to increase the number of such securities or to decrease the exercise, exchange or conversion price of such securities; or (c) securities issued in connection with any stock split, stock dividend, recapitalization or similar transaction by the Company.
9.4. Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to Section 9(a), the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be adjusted proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the increased or decreased number of Warrant Shares, as applicable, shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.
9.5. Calculations. All calculations under this Section 9 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.
9.6. Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 9, the Company at its expense will promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Transfer Agent.
9.7. Notice of Corporate Events. If the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including without limitation any granting of rights or warrants to subscribe for or purchase any capital stock of the Company or any Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material terms and conditions of such transaction, at least ten calendar days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction, and the Company will take all steps reasonably necessary in order to insure that the Holder is given
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the practical opportunity to exercise this Warrant prior to such time so as to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice.
X = Y [(A-B)/A]
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where:
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X = the number of Warrant Shares to be issued to the Holder.
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Y = the number of Warrant Shares with respect to which this Warrant is being exercised.
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A = the average of the Closing Prices for the five Trading Days immediately prior to (but not including) the Exercise Date.
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B = the Exercise Price.
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Notwithstanding anything in this Warrant to the contrary, the Holder may only exercise this Warrant through a cashless exercise if no Registration Statement (as defined in the Purchase Agreement) is effective for more than 30 consecutive days that covers the Warrant Shares issuable upon the exercise of this Warrant.
For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued pursuant to the Purchase Agreement.
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upon exercise of this Warrant, the number of Warrant Shares to be issued will be rounded up to the nearest whole share.
SECTION 12. Notices. Any and all notices or other communications or deliveries hereunder (including without limitation any Exercise Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in the Purchase Agreement prior to 6:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in the Purchase Agreement on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The address for such notices or communications shall be as set forth in the Purchase Agreement with respect to the Company and, with respect to the Holder, the Holder’s last address as shown on the Warrant Register.
SECTION 13. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon 10 days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or stockholder services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.
14.1. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, this Warrant shall not be registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws, the Company may require, as a condition of allowing such transfer (i) that the Holder furnish to the Company a legal opinion of counsel to the Holder to such effect, the substance of which shall be reasonably acceptable to the Company and (ii) that the holder or transferee execute and deliver to the Company an investment letter in form and substance acceptable to the Company representing that they are acquiring such Warrant Shares for investment purposes and that they are an accredited investor as defined in Rule 501(a) under the Securities Act. The Holder understands that it must bear the economic risk of its investment in this Warrant and any securities obtainable upon exercise of this Warrant for an indefinite period of time, as this Warrant and such securities have not been registered under Federal or state securities or blue sky laws.
14.2. The Holder represents that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of this Warrant or the
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exercise of the Warrant and the finance operations and business of the Company; and (ii) the opportunity to request such additional information which the Company possesses or can acquire without unreasonable effort or expense. Nothing contained in this Section 14(b) shall alter, amend or change the Holder’s reliance on the representations, covenants or warranties contained herein.
14.3. The Holder represents that it is an “accredited investor” within the meaning of Regulation D promulgated under the Securities Act and that it is acquiring the Warrants for its own account and not with a present view to, or for sale in connection with, any distribution thereof in violation of the registration requirements of the Securities Act, without prejudice, however, to such Holder’s right, subject to the provisions of this Warrant, at all times to sell or otherwise dispose of all or any part of the Warrant and Warrant Shares.
14.4. The Holder represents that it, either by reason of such Holder’s business or financial experience or the business or financial experience of its professional advisors (who are unaffiliated with and who are not compensated by the Company or any affiliate, finder or selling agent of the Company, directly or indirectly), has such sophistication, knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment in the Company and the capacity to protect such Holder’s interests in connection with the transactions contemplated by this Warrant and the Purchase Agreement.
14.5. The Holder represents that it has the ability to bear the economic risks of its investment for an indefinite period of time and could afford a complete loss of its investment.
14.6. The Holder agrees and acknowledges that the representations made by the Holder in this Section 14 are conditions to the exercise of this Warrant.
SECTION 15. Miscellaneous.
15.1. Subject to the restrictions on transfer set forth on the first page hereof, this Warrant may be assigned by the Holder. This Warrant may not be assigned by the Company except to a successor in the event of a Fundamental Transaction (subject to the provisions of Section 9(b) hereof). This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing signed by the Company and the Holder and their successors and assigns.
15.2. The Company will not, by amendment of its governing documents or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder against impairment. Without limiting
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the generality of the foregoing, the Company (i) will not increase the par value of any Warrant Shares above the amount payable therefor on such exercise, (ii) will take all such action as may be reasonably necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares on the exercise of this Warrant, and (iii) will not close its stockholder books or records in any manner which interferes with the timely exercise of this Warrant.
15.3. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the laws of the State of California. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the city of Sacramento, State of California, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the transaction documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or that such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under Section 12 hereof and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. The Company hereby waives all rights to a trial by jury.
15.4. The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.
15.5. In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.
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By: ____________________________
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Name:
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Title:
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FORM OF EXERCISE NOTICE
(To be executed by the Holder to exercise the right to purchase shares of
Common Stock under the foregoing Warrant)
The undersigned is the Holder of Warrant No. _______ (the “Warrant”) issued by Ophthalmic Imaging Systems, a California corporation (the “Company”). As a condition to this exercise, the undersigned Holder hereby represents and warrants to the Company that the representations and warranties set forth in Section 14 of the Warrant are true and correct as of the date hereof as if they had been made on such date with respect to the Warrant Shares. The undersigned Holder further acknowledges that the sale, transfer, assignment or hypothecation of the Warrant Shares to be issued upon exercise of this Warrant is subject to the terms and conditions contained in Section 14 of this Warrant. Capitalized terms used herein and not otherwise defined have the respective meanings set forth in the Warrant.
(1) The Warrant is currently exercisable to purchase a total of ______________ Warrant Shares.
(2) The undersigned Holder hereby exercises its right to purchase _________________ Warrant Shares pursuant to the Warrant.
(3) The Holder intends that payment of the Exercise Price shall be made as (check one):
____ “Cash Exercise” under Section 10
____ “Cashless Exercise” under Section 10
(4) If the holder has elected a Cash Exercise, the holder shall pay the sum of $____________ to the Company in accordance with the terms of the Warrant.
(5) Pursuant to this exercise, the Company shall deliver to the holder _______________ Warrant Shares in accordance with the terms of the Warrant.
(6) Following this exercise, the Warrant shall be exercisable to purchase a total of ______________ Warrant Shares.
Dated: ______________, ___________
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Name of Holder:
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(Print) ________________________________
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By: ________________________________
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Name: ________________________________
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Title: ________________________________
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(Signature must conform in all respects to name of holder as specified on the face of the Warrant)
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__________________________________ | ||
Taxpayer Identification Number
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ACKNOWLEDGED AND AGREED TO this ___ day of ___________, 20__
By:
Name: ______________________
Title: ______________________
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FORM OF ASSIGNMENT
[To be completed and signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ________________________________ the right represented by Warrant to purchase ____________ shares of Common Stock of Ophthalmic Imaging Systems to which the Warrant relates and appoints ________________ attorney to transfer said right on the books of Ophthalmic Imaging Systems with full power of substitution in the premises. As a condition to this assignment, the Holder acknowledges that its assignee must deliver a written instrument to the Company that the representations and warranties of Section 14 of the Warrant are true and correct as of the date hereof as if they had been made by such assignee on such date with respect to the Warrants.
Dated: ,
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(Signature must conform in all respects to name of holder as specified on the face of the Warrant)
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Address of Transferee
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______________________________________ | |
______________________________________ | |
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Taxpayer Identification Number
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In the presence of:
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EXHIBIT A-2
FORM OF 2nd WARRANTS
NEITHER THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. SUCH SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED (A) EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS, OR (B) UNLESS SOLD PURSUANT TO RULE 144 UNDER THE SECURITIES ACT. NOTWITHSTANDING THE FOREGOING, SUCH SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES.
WARRANT
Warrant No. [__] Dated: [_______ __], 2010
Ophthalmic Imaging Systems, a California corporation (the “Company”), hereby certifies that, for value received, U.M. Accelmed, Limited Partnership or its registered assigns (the “Holder”), is entitled to purchase from the Company up to a total of 1,193,696 shares of common stock, no par value (the “Common Stock”), of the Company (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”) at an exercise price equal to $1.00 per share (as adjusted from time to time as provided in Section 9, the “Exercise Price”), at any time and on or after the Initial Exercise Date (as defined below) and through and including the date that is 36 (thirty-six) months from the date hereof (being June [l], 2012) (the “Expiration Date”), subject to the following terms and conditions. This Warrant (this “Warrant”) was issued pursuant to that certain Purchase Agreement, dated as of June [l], 2009, by and among the Company and the Holder (the “Purchase Agreement”).
“Initial Exercise Date” shall mean the date that any of the following occurs: (i) the date that the Company consummates a merger with and into another corporation or the date the Company consummates a sale, transfer or other disposition of all or substantially all of its assets,
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(ii) the date that the average closing price per share of the Company’s Common Stock on the OTC Bulletin Board (or wherever the Common Stock is listed or quoted for trading on the date in question) for 10 consecutive Trading Days exceeds $2.00; (iii) the date the Company’s Board of Directors authorizes a transaction pursuant to which the Company will raise at least $1,500,000 in capital raising transaction with persons who are shareholders of MediVision Medical Imaging Ltd., the parent entity of the Company, on the date hereof; and (iv) March __, 2012.
19.1. This Warrant shall be exercisable by the registered Holder at any time and from time to time on or after the Initial Exercise Date and including the Expiration Date. At 6:30 P.M., New York City time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value.
19.2. A Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in the form attached hereto (the “Exercise Notice”), appropriately completed and duly signed, and (ii) payment of the Exercise Price for the number of Warrant Shares as to which this Warrant is being exercised (which may take the form of a “cashless exercise” if so indicated in the Exercise Notice), and the date such items are delivered to the Company (as determined in accordance with the notice provisions hereof) is an “Exercise Date.” The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice shall have the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.
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20.1. Upon exercise of this Warrant, the Company shall promptly issue or cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as the Holder may designate, a certificate for the Warrant Shares issuable upon such exercise, free of restrictive legends unless a legend is required to be placed on the certificate pursuant to the Purchase Agreement. The Holder, or any Person so designated by the Holder to receive Warrant Shares, shall be deemed to have become the holder of record of such Warrant Shares as of the Exercise Date. The Company shall, upon the written request of the Holder and provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, use its commercially reasonable efforts, to credit such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder's or its designee's balance account with DTC through its Deposit Withdrawal Agent Commission system (“DWAC”); provided, that the Holder provides the Company the reasonably necessary details to effect the foregoing DWAC delivery.
20.2. This Warrant is exercisable, either in its entirety or, from time to time, for a portion of the number of Warrant Shares. Upon surrender of this Warrant following one or more partial exercises, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.
20.3. If within three Trading Days after the Company's receipt of an Exercise Notice the Company shall fail to issue and deliver a certificate to the Holder and register the shares of Common Stock issuable pursuant to the Exercise Notice on the Company's share register or credit the Holder's balance account with DTC for the number of shares of Common Stock to which the Holder is entitled upon such exercise, and if on or after such Trading Day the Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within three Trading Days after the Holder's request and in the Holder's discretion, either (i) pay cash to the Holder in an amount equal to the Holder's total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which point the Company's obligation to deliver such certificate (and to issue such shares of Common Stock) or credit such Holder's balance account with DTC shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such shares of Common Stock or credit such Holder's balance account with DTC and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the Closing Bid Price on the date of exercise. For purposes of this Warrant, “Closing Bid Price” shall mean, for any security as of any date, the last closing bid price for such security on the Trading Market, as reported by the Bloomberg Financial Markets (“Bloomberg”), or, if the Trading Market begins to operate on an extended hours basis and does not designate the closing bid price, then the last bid price of such security prior to 4:00:00 p.m., New York Time, as reported by Bloomberg, or, if the Trading Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the Eligible Market where such security is listed or traded as reported by Bloomberg, or if the foregoing
55
do not apply, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. “Principal Market” means the OTC Bulletin Board® or, at any time that the Common Stock is not quoted on the OTC Bulletin Board, the Eligible Market on which the Common Stock is listed or quoted for trade. “Eligible Market” means the Principal Market, the American Stock Exchange, The New York Stock Exchange, Inc., The NASDAQ Capital Market, The NASDAQ Global Market or The NASDAQ Global Select Market.
20.4. The Company's obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing herein shall limit a Holder's right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company's failure to timely deliver certificates representing shares of Common Stock upon exercise of this Warrant as required pursuant to the terms hereof.
SECTION 22. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable bond or indemnity, if requested. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the New Warrant.
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SECTION 23. Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of persons other than the Holder (after giving effect to the adjustments and restrictions of Section 9, if any). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. The Company will take all such action as may be necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed.
24.2. Fundamental Transactions. If any capital reorganization, reclassification of the capital stock of the Company, consolidation or merger of the Company with another corporation, or sale, transfer or other disposition of all or substantially all of the Company’s assets to another corporation shall be effected (each a “Fundamental Transaction”), then, as a condition of such Fundamental Transaction, lawful and adequate provision shall be made whereby the Holder shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions herein specified and in lieu of the Warrant Shares immediately theretofore issuable upon exercise of the Warrant, such shares of stock, securities or assets as would have been issuable or payable with respect to or in exchange for a number of Warrant Shares equal to the number of Warrant Shares immediately theretofore issuable upon exercise of the Warrant, had such Fundamental Transaction not taken place, and in any such case appropriate provision shall be made with respect to the rights and interests of the Holder to the end that the provisions hereof
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(including, without limitations, provision for adjustment of the Exercise Price) shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any shares of stock, securities or properties thereafter deliverable upon the exercise hereof. The Company shall not effect any such Fundamental Transaction unless prior to or simultaneously with the consummation thereof the successor corporation (if other than the Company) resulting from such consolidation or merger, or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or entity shall assume, by written instrument executed and delivered to the Company (a copy of which shall be delivered to the Holder), the obligation to deliver to the holder of the Warrant such shares of stock, securities or assets as, in accordance with the foregoing provisions, such holder may be entitled to purchase and the other obligations under this Warrant. The provisions of this paragraph (b) shall similarly apply to successive Fundamental Transactions.
The following formula illustrates the foregoing:
NP = OP x (OP x CS + C) / (OP x CSA)
WHERE
NP = the adjusted Exercise Price (after the Dilutive Issuance)
OP = Exercise Price in effect immediately prior to such Dilutive Issuance
CS = the number of outstanding shares of Common Stock immediately prior to such Dilutive Issuance
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C = the consideration, if any, received by the Company upon such Dilutive Issuance
CSA = the number of outstanding shares of Common Stock immediately after such Dilutive Issuance
Notwithstanding the foregoing, no adjustments shall be made, paid or issued under this Section 9(c) in respect of an Exempt Issuance. For purposes of this Warrant: “Common Stock Equivalents” shall mean securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, shares of Common Stock, or Preferred Stock; and “Exempt Issuance” shall mean the issuance of: (a) shares of Common Stock or Common Stock Equivalents to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose by the Board of Directors or a majority of the members of a committee established for such purpose by the Board of Directors; (b) securities upon the exercise of this Warrant (and any other securities issued pursuant to the Purchase Agreement) and/or the exercise or conversion of Common Stock Equivalents issued and outstanding on the date of this Warrant (as set forth in Schedule 4.3(i) of the Purchase Agreement); provided, that such securities have not been amended since the date of this Warrant to increase the number of such securities or to decrease the exercise, exchange or conversion price of such securities; or (c) securities issued in connection with any stock split, stock dividend, recapitalization or similar transaction by the Company.
24.4. Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to Section 9(a), the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be adjusted proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the increased or decreased number of Warrant Shares, as applicable, shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.
24.6. Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 9, the Company at its expense will promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Transfer Agent.
24.7. Notice of Corporate Events. If the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including without limitation any granting of rights or warrants to subscribe
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for or purchase any capital stock of the Company or any Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material terms and conditions of such transaction, at least ten calendar days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction, and the Company will take all steps reasonably necessary in order to insure that the Holder is given the practical opportunity to exercise this Warrant prior to such time so as to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice.
X = Y [(A-B)/A]
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where:
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X = the number of Warrant Shares to be issued to the Holder.
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Y = the number of Warrant Shares with respect to which this Warrant is being exercised.
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A = the average of the Closing Prices for the five Trading Days immediately prior to (but not including) the Exercise Date.
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B = the Exercise Price.
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Notwithstanding anything in this Warrant to the contrary, the Holder may only exercise this Warrant through a cashless exercise if no Registration Statement (as defined in the Purchase Agreement) is effective for more than 30 consecutive days that covers the Warrant Shares issuable upon the exercise of this Warrant.
For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed
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to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued pursuant to the Purchase Agreement.
SECTION 26. Fractional Shares. The Company shall not be required to issue or cause to be issued fractional Warrant Shares on the exercise of this Warrant. If any fraction of a Warrant Share would, except for the provisions of this Section, be issuable upon exercise of this Warrant, the number of Warrant Shares to be issued will be rounded up to the nearest whole share.
SECTION 27. Notices. Any and all notices or other communications or deliveries hereunder (including without limitation any Exercise Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in the Purchase Agreement prior to 6:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in the Purchase Agreement on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The address for such notices or communications shall be as set forth in the Purchase Agreement with respect to the Company and, with respect to the Holder, the Holder’s last address as shown on the Warrant Register.
SECTION 28. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon 10 days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or stockholder services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.
SECTION 29. Investment Intent; Limited Transferability.
29.1. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, this Warrant shall not be registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws, the Company may require, as a condition of allowing such transfer (i) that the Holder furnish to the Company a legal opinion of counsel to the Holder to such effect, the substance of which shall be reasonably acceptable to the Company and (ii) that the holder or transferee execute and deliver to the Company an investment letter in form and substance acceptable to the Company representing that they are acquiring such Warrant Shares for investment purposes and that they are an accredited investor as defined in Rule 501(a) under the Securities Act. The Holder understands that it must bear the economic risk of its
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investment in this Warrant and any securities obtainable upon exercise of this Warrant for an indefinite period of time, as this Warrant and such securities have not been registered under Federal or state securities or blue sky laws.
29.2. The Holder represents that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of this Warrant or the exercise of the Warrant and the finance operations and business of the Company; and (ii) the opportunity to request such additional information which the Company possesses or can acquire without unreasonable effort or expense. Nothing contained in this Section 14(b) shall alter, amend or change the Holder’s reliance on the representations, covenants or warranties contained herein.
29.3. The Holder represents that it is an “accredited investor” within the meaning of Regulation D promulgated under the Securities Act and that it is acquiring the Warrants for its own account and not with a present view to, or for sale in connection with, any distribution thereof in violation of the registration requirements of the Securities Act, without prejudice, however, to such Holder’s right, subject to the provisions of this Warrant, at all times to sell or otherwise dispose of all or any part of the Warrant and Warrant Shares.
29.4. The Holder represents that it, either by reason of such Holder’s business or financial experience or the business or financial experience of its professional advisors (who are unaffiliated with and who are not compensated by the Company or any affiliate, finder or selling agent of the Company, directly or indirectly), has such sophistication, knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of its investment in the Company and the capacity to protect such Holder’s interests in connection with the transactions contemplated by this Warrant and the Purchase Agreement.
29.5. The Holder represents that it has the ability to bear the economic risks of its investment for an indefinite period of time and could afford a complete loss of its investment.
29.6. The Holder agrees and acknowledges that the representations made by the Holder in this Section 14 are conditions to the exercise of this Warrant.
SECTION 30. Miscellaneous.
30.1. Subject to the restrictions on transfer set forth on the first page hereof, this Warrant may be assigned by the Holder. This Warrant may not be assigned by the Company except to a successor in the event of a Fundamental Transaction (subject to the provisions of Section 9(b) hereof). This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing signed by the Company and the Holder and their successors and assigns.
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30.2. The Company will not, by amendment of its governing documents or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder against impairment. Without limiting the generality of the foregoing, the Company (i) will not increase the par value of any Warrant Shares above the amount payable therefor on such exercise, (ii) will take all such action as may be reasonably necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares on the exercise of this Warrant, and (iii) will not close its stockholder books or records in any manner which interferes with the timely exercise of this Warrant.
30.3. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the laws of the State of California. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the city of Sacramento, State of California, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the transaction documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or that such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under Section 12 hereof and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. The Company hereby waives all rights to a trial by jury.
30.4. The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.
30.5. In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS
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OPHTHALMIC IMAGING SYSTEMS
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By: ___________________________
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Name:
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Title:
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64
FORM OF EXERCISE NOTICE
(To be executed by the Holder to exercise the right to purchase shares of
Common Stock under the foregoing Warrant)
To Ophthalmic Imaging Systems:
The undersigned is the Holder of Warrant No. _______ (the “Warrant”) issued by Ophthalmic Imaging Systems, a California corporation (the “Company”). As a condition to this exercise, the undersigned Holder hereby represents and warrants to the Company that the representations and warranties set forth in Section 14 of the Warrant are true and correct as of the date hereof as if they had been made on such date with respect to the Warrant Shares. The undersigned Holder further acknowledges that the sale, transfer, assignment or hypothecation of the Warrant Shares to be issued upon exercise of this Warrant is subject to the terms and conditions contained in Section 14 of this Warrant. Capitalized terms used herein and not otherwise defined have the respective meanings set forth in the Warrant.
(1) The Warrant is currently exercisable to purchase a total of ______________ Warrant Shares.
(2) The undersigned Holder hereby exercises its right to purchase _________________ Warrant Shares pursuant to the Warrant.
(3) The Holder intends that payment of the Exercise Price shall be made as (check one):
____ “Cash Exercise” under Section 10
____ “Cashless Exercise” under Section 10
(4) If the holder has elected a Cash Exercise, the holder shall pay the sum of $____________ to the Company in accordance with the terms of the Warrant.
(5) Pursuant to this exercise, the Company shall deliver to the holder _______________ Warrant Shares in accordance with the terms of the Warrant.
(6) Following this exercise, the Warrant shall be exercisable to purchase a total of ______________ Warrant Shares.
Dated: ______________, ___________
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Name of Holder:
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(Print) ________________________________
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By: ________________________________
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Name: ________________________________
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Title: ________________________________
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(Signature must conform in all respects to name of holder as specified on the face of the Warrant)
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__________________________________ | ||
Taxpayer Identification Number
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ACKNOWLEDGED AND AGREED TO this ___ day of ___________, 20__
OPHTHALMIC IMAGING SYSTEMS
By:
Name: ______________________
Title: ______________________
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++
FORM OF ASSIGNMENT
[To be completed and signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ________________________________ the right represented by Warrant to purchase ____________ shares of Common Stock of Ophthalmic Imaging Systems to which the Warrant relates and appoints ________________ attorney to transfer said right on the books of Ophthalmic Imaging Systems with full power of substitution in the premises. As a condition to this assignment, the Holder acknowledges that its assignee must deliver a written instrument to the Company that the representations and warranties of Section 14 of the Warrant are true and correct as of the date hereof as if they had been made by such assignee on such date with respect to the Warrants.
Dated: ,
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______________________________________ | |
(Signature must conform in all respects to name of holder as specified on the face of the Warrant)
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______________________________________ | |
Address of Transferee
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______________________________________ | |
______________________________________ | |
______________________________________ | |
Taxpayer Identification Number
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In the presence of:
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EXHIBIT B
FORM OF LEGAL OPINION
1. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of California, with authority to own, lease and operate its properties and conduct its business as described in the SEC Reports. The Company is duly qualified to transact business as a foreign corporation and to own, lease and operate its properties in such states as required, except for such jurisdictions where the failure to so qualify would not, individually or in the aggregate, have a Material Adverse Effect.
2. The Transaction Documents have been duly authorized, executed and delivered by the Company and constitute the legal, valid and binding obligations of the Company.
3. The Company has the corporate power and authority to enter into and perform its obligations under the Transaction Documents, including, without limitation, to issue, sell and deliver the Securities as contemplated by the Transaction Documents.
4. The Shares and Warrants have been duly authorized and, when paid for as provided in the Purchase Agreement, will be validly issued, fully paid and nonassessable free of any preemptive or similar rights contained in (i) the Articles of Incorporation or Bylaws of the Company or (ii) in any agreement filed as an exhibit to the SEC Reports. The Warrant Shares have been duly authorized, and when issued and delivered in accordance with the terms of the respective Warrants, will be validly issued, fully paid, non-assessable and free of any preemptive or similar rights contained in (a) the Articles of Incorporation or Bylaws of the Company or (b) in any agreement filed as an exhibit to the SEC Reports.
5. The Company has an authorized capitalization as set forth in Section ___of the Purchase Agreement.
6. The Common Stock of the Company, including the Shares, conform in all material respects to the description thereof contained under the Company’s Form 8-A filed with the Commission on May 13, 1993.
7. The execution and delivery of the Purchase Agreement by the Company and the performance by the Company of its obligations thereunder: (i) will not result in any violation of the provisions of the Articles of Incorporation or By-laws of the Company; (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of any agreement filed as an exhibit to the SEC Reports, or (iii) any federal, New York or California law, applicable to the Company and applicable for transactions of the type contemplated by the Purchase Agreement.
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8. The execution and delivery of the Purchase Agreement by the Company and the performance by the Company of its obligations thereunder will not require any authorization, approval or consent of any court or governmental authority or agency or filing with any federal, New York or California government or regulatory commission, board, authority or agency, or with any self-regulatory organization or other non-governmental regulatory authority, or approval of the stockholders of the Company, except (i) the filing of the Registration Statements pursuant to Section 7 of the Purchase Agreement, (ii) the filing of a Current Report on Form 8-K with the Commission, (iii) the filing of a Form D in accordance with Regulation D under the Securities Act and (iv) as required by state securities laws.
9. Assuming the continued accuracy and completeness of the representations, warranties and covenants of the Company and the Purchaser contained in the Purchase Agreement at the time of issuance of the relevant securities, the Company’s offer, sale and issuance of the Shares, Warrants and Warrant Shares in the manner contemplated by the Transaction Documents, will be exempt from the registration requirements of the Securities Act.
10. The Company is not, and, immediately after giving effect to the offering and sale of the Shares, will not be an “investment company” as such term is defined in the Investment Company Act.
11. To our knowledge, there are no rights to have securities of the Company registered under the Registration Statement contemplated by the Purchase Agreement which have not been waived by the holders of such rights or which have not expired by reason of lapse of time or otherwise.
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EXHIBIT C-1
FORM OF OFFICER CERTIFICATE
OPHTHALMIC IMAGING SYSTEMS
The undersigned, Chief Executive Officer and Chief Financial Officer of Ophthalmic Imaging Systems, a California corporation (the “Company”), pursuant to Section 3.1(c)(ii) of the Purchase Agreement, dated as of June ___, 2009 (the "Purchase Agreement"), by and between the Company and U.M. AccelMed, Limited Partnership. (the “Purchaser”), hereby represents, warrants and certifies to the Purchaser as follows (capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Purchase Agreement):
1. Each of the representations and warranties of the Company set forth in the Purchase Agreement were true and correct in all respects when made and are true and correct in all respects as of the date hereof as though made at that time; and
2. The Company has complied in all respects with all the agreements and satisfied in all respects all the conditions in the Purchase Agreement on its part to be performed or satisfied on or prior to the Closing Date
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Xxx Xxxxx
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Chief Executive Officer
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Xxxxx Xxxxxxx
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Chief Financial Officer
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EXHIBIT C-2
FORM OF OFFICER CERTIFICATE
OPHTHALMIC IMAGING SYSTEMS
The undersigned, Chief Executive Officer and Chief Financial Officer of Ophthalmic Imaging Systems, a California corporation (the “Company”), pursuant to Section 3.2(c)(iii) of the Purchase Agreement, dated as o ___, 2010 (the "Purchase Agreement"), by and between the Company and U.M. AccelMed, Limited Partnership (the “Purchaser”), hereby represents, warrants and certifies to the Purchaser as follows (capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Purchase Agreement):
1. Each of the representations and warranties of the Company set forth in the Purchase Agreement are true and correct in all material respects (except for those representations and warranties that are qualified by Material Adverse Effect, which shall be true and correct in all respects) as of the Deferred Closing Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specific date).
2. The Company has complied in all respects with all the agreements and satisfied in all respects all the conditions in the Purchase Agreement on its part to be performed or satisfied on or prior to the Deferred Closing Date.
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____________________________________
Xxx Xxxxx |
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Chief Executive Officer
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____________________________________
Xxxxx Xxxxxxx |
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Chief Financial Officer
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EXHIBIT D
FORM OF MV PROXY
IRREVOCABLE PROXY
MediVision Medical Imaging Ltd. (the “Stockholder”), an Israeli corporation and a stockholder of Ophthalmic Imaging Systems, a California corporation (the “Company”), hereby irrevocably (to the fullest extent permitted by law) appoints and constitutes Xxx Xxxxx (the “Proxy Holder”), a resident of the State of California, as a true and lawful attorney-in-fact and proxy of the Stockholder, with full power and authority to act, including full power of substitution, in the name, place and stead of the Stockholder, and on behalf and for the use and benefit of the Stockholder, to the full extent of the Stockholder’s rights with respect to __________ shares of the Company’s common stock, no par value (the “Common Stock”), owned by the Stockholder as of the date of this proxy and with respect to any and all shares of the Common Stock hereafter and prior to the 2010 Annual Meeting (as defined below) purchased by the Stockholder (the “Shares”).
Upon the execution hereof, all prior proxies given by the Stockholder with respect to any of the Shares are hereby revoked, and no subsequent proxies will be given with respect to any of the Shares so long as this proxy is in full force and effect.
At the 2010 annual meeting of the stockholders of the Company (the “2010 Annual Meeting”), to be held at 000 Xxxxxxx Xxx, Xxxxx X, Xxxxxxxxxx, Xxxxxxxxxx 00000, or at any other location selected by the Company’s Board of Directors, the Proxy Holder has the full power and authority to and is hereby instructed to act, in the name, place and stead of the Stockholder, and on behalf and for the use and benefit of the Stockholder, to vote the Shares FOR the approval of an amendment to the Company’s restated articles of incorporation providing for an increase in the amount of authorized Common Stock equal to 100,000,000 shares (the “Proposal”).
This proxy shall terminate immediately following the later of (x) the conclusion of the meeting at which the Company acts with respect to the Proposal and in which the Proposal has been approved by the Company’s stockholders or (y) any adjournments thereof.
This proxy shall be binding upon the heirs, estate, executors, personal representatives and assigns of the Stockholder (including any transferee of any of the Shares). No Shares shall be transferred, assigned or pledged by the Stockholder prior to the termination of this Proxy unless such transferee or assignee has executed and delivered to the U.M. Accelmed, Limited Partnership (the “Purchaser”) a duly executed proxy in the form and substance set forth herein with respect to the purchased Shares.
The Stockholder, the Company’s largest stockholder, hereby affirms that this power of attorney is given in consideration for, among other things, the Purchaser’s execution and delivery of the Purchase Agreement. THIS PROXY IS COUPLED WITH AN INTEREST AND IS IRREVOCABLE.
72
This proxy shall be interpreted in accordance with the internal laws of the State of California, without giving effect to principles or conflicts of law.
MEDIVISION MEDICAL IMAGING LTD. | |||
DATED: June ___, 2009
|
By:
|
||
Name | |||
Title | |||
73
EXHIBIT E
Exhibit E –Form of Irrevocable Proxy by MediVision shareholders
IRREVOCABLE PROXY
The Undersigned does hereby irrevocably make, constitute and appoint any one of Messrs, Xxxxx Xxxxxx and/or Xxxx Xxxxx, (in any such case, the “Proxyholder”), as the attorney and proxy of the Undersigned, with full power of substitution, including to receive notice on behalf of the Undersigned, to attend on behalf of the Undersigned, represent and vote, on his sole discretion, and/or to execute, on behalf of the Undersigned, any written resolution of MediVision Medical Imaging Ltd’s (the “Company”) shareholders, for all shares of the Company that the Undersigned holds of record, as indicted in the Company’s shareholders convened in order to approve the signing of the Asset Purchase Agreement between the Company and Ophthalmic Imaging Systems (the “APA”) and all schedules of an ancillary documents to the APA (the “Meeting”).
Proxyholder shall cast the votes which the Shares are entitled in favor of approval of the abovementioned APA and schedules.
The Undersigned agrees that this Irrevocable Proxy is made irrevocable by him and coupled with an interest by the Proxyholder in the Shares, all in accordance with the provisions of Israeli law.
The receipt of notice, attendance, vote and signature of the Proxy shall be deemed, for all intent and purpose, receipt of notice by, attendance of, vote and signature by the Undersigned, and shall have full force and effect as if received, attended, voted and executed by the Undersigned.
This Irrevocable Proxy shall automatically terminate in its entirety and be of no further force or effect immediately following the conclusion of the Meeting.
The Undersigned executes this Irrevocable Proxy this ____ day of June 2009.
Print Name _______________________
74
EXHIBIT F-1
FORM OF SECRETARY CERTIFICATE
OPHTHALMIC IMAGING SYSTEMS
The undersigned hereby certifies that he is the duly elected, qualified and acting Secretary of OPHTHALMIC IMAGING SYSTEMS, a California corporation (the “Company”), and that as such he is authorized to execute and deliver this certificate in the name and on behalf of the Company and in connection with the Purchase Agreement, dated as of___, 2009 (the “Purchase Agreement”), by and between the Company and ACCELMED L.P., and further certifies in his official capacity, in the name and on behalf of the Company, the items set forth below. Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Purchase Agreement.
(b)
|
Attached hereto as Exhibit A is a true, correct and complete copy of the resolutions duly adopted by the Board of Directors of the Company at a meeting of the Board of Directors held on May ___, 2010. Such resolutions have not in any way been amended, modified, revoked or rescinded, have been in full force and effect since their adoption to and including the date hereof and are now in full force and effect.
|
(c)
|
Attached hereto as Exhibit B is a true, correct and complete copy of the Restated Articles of Incorporation of the Company, together with any and all amendments thereto, and no action has been taken to further amend, modify or repeal such Restated Articles of Incorporation, the same being in full force and effect in the attached form as of the date hereof.
|
(d)
|
Attached hereto as Exhibit C is a true, correct and complete copy of the Amended and Restated Bylaws of the Company and any and all amendments thereto, and no action has been taken to further amend, modify or repeal such Amended and Restated Bylaws, the same being in full force and effect in the attached form as of the date hereof.
|
(e)
|
The following persons are the duly elected officers of the Company occupying the offices set forth opposite their respective names, each such officer is authorized to execute on behalf of the Company the Transaction Documents and any other documents required to be executed or delivered in connection therewith, and the signature set forth opposite each such officer’s respective name is his true signature.
|
Name
|
Office
|
Signature
|
Xxxxx Xxxxxxx
|
Chief Financial Officer and Secretary
|
________________________
|
Xxx Xxxxx
|
Chief Executive Officer
|
________________________
|
75
|
_______________________________
Name: Xxxxx Xxxxxxx |
|
Title: Secretary
|
I, Xxx Xxxxx, in my capacity as Chief Executive Officer of Ophthalmic Imaging Systems, a California corporation (the “Company”), hereby certify that Xxxxx Xxxxxxx is the duly elected, qualified and acting Secretary of the Company and that the signature appearing above is his genuine signature.
|
_______________________________
Name: Xxx Xxxxx |
|
Title: Chief Executive Officer
|
76
EXHIBIT F-2
FORM OF SECRETARY CERTIFICATE
OPHTHALMIC IMAGING SYSTEMS
The undersigned hereby certifies that he is the duly elected, qualified and acting Secretary of OPHTHALMIC IMAGING SYSTEMS, a California corporation (the “Company”), and that as such he is authorized to execute and deliver this certificate in the name and on behalf of the Company and in connection with the Purchase Agreement, dated as of___, 2009 (the “Purchase Agreement”), by and between the Company and ACCELMED L.P., and further certifies in his official capacity, in the name and on behalf of the Company, the items set forth below. Capitalized terms used but not otherwise defined herein shall have the meaning set forth in the Purchase Agreement.
(f)
|
Attached hereto as Exhibit A is a true, correct and complete copy of the resolutions duly adopted by the Board of Directors of the Company at a meeting of the Board of Directors held on May ___, 2010. Such resolutions have not in any way been amended, modified, revoked or rescinded, have been in full force and effect since their adoption to and including the date hereof and are now in full force and effect.
|
(g)
|
Attached hereto as Exhibit B is a true, correct and complete copy of the Restated Articles of Incorporation of the Company, together with any and all amendments thereto, and no action has been taken to further amend, modify or repeal such Restated Articles of Incorporation, the same being in full force and effect in the attached form as of the date hereof.
|
(h)
|
Attached hereto as Exhibit C is a true, correct and complete copy of the Amended and Restated Bylaws of the Company and any and all amendments thereto, and no action has been taken to further amend, modify or repeal such Amended and Restated Bylaws, the same being in full force and effect in the attached form as of the date hereof.
|
(i)
|
The following persons are the duly elected officers of the Company occupying the offices set forth opposite their respective names, each such officer is authorized to execute on behalf of the Company the Transaction Documents and any other documents required to be executed or delivered in connection therewith, and the signature set forth opposite each such officer’s respective name is his true signature.
|
Name
|
Office
|
Signature
|
Xxxxx Xxxxxxx
|
Chief Financial Officer and Secretary
|
|
Xxx Xxxxx
|
Chief Executive Officer
|
________________________
|
77
|
_______________________________
Name: Xxxxx Xxxxxxx |
|
Title: Secretary
|
I, Xxx Xxxxx, in my capacity as Chief Executive Officer of Ophthalmic Imaging Systems, a California corporation (the “Company”), hereby certify that Xxxxx Xxxxxxx is the duly elected, qualified and acting Secretary of the Company and that the signature appearing above is his genuine signature.
|
_______________________________
Name: Xxx Xxxxx |
|
Title: Chief Executive Officer
|
78
EXHIBIT G
LIST OF SUBSIDIARIES
Name of Subsidiary
|
State or Other Jurisdiction of Incorporation/Organization
|
Abraxas Medical Solutions Ltd.
|
Delaware
|
OIS Global Ltd.
|
Israel
|
79
EXHIBIT H
FORM OF INDEMNIFICATION AGREEMENT
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the “Agreement”), is made and entered into as of the ____ day of ____________, 2009, between Ophthalmic Imaging Systems, Inc., a California corporation (“Corporation”), and __________________ (“Director”).
Section 1. Indemnity of Director. Corporation hereby agrees to hold harmless and indemnify Director to the fullest extent authorized by the provisions of Section 317 of the Code, as it may be amended from time to time.
Section 2. Additional Indemnity. Subject only to the limitations set forth in Section 3 hereof, Corporation hereby further agrees to hold harmless and indemnify Director:
(a) against any and all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by Director in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including an action by or in the right of Corporation) to which Director is, was or at any time becomes a party, or is threatened to be made a party, by reason of the fact that Director is, was or at any time becomes a director, officer, employee or agent of Corporation, or is or was serving or at any time serves at the request of Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise; and
(b) otherwise to the fullest extent as indemnification may be provided to Director by Corporation under the provisions of Article V of the Articles and Sections 204(a)(11) and 317 of the Code.
80
Section 3. Limitations on Additional Indemnity.
(a) No indemnification pursuant to Section 2 hereof shall be paid by Corporation for any of the following:
(i) to the extent that Director is or has been indemnified or reimbursed pursuant to Section 1 hereof or any Directors and Officers Liability Insurance purchased and maintained by Corporation;
(ii) with respect to remuneration paid to Director if it shall be determined by a final judgment or other final adjudication that such remuneration was in violation of applicable law;
(iii) on account of any suit pursuant to the provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended, and amendments thereto or similar provisions of any federal, state or local statutory law in which judgment is rendered against Director for an accounting of profits made from the purchase or sale by Director of securities of Corporation;
(iv) if a final decision by a court having jurisdiction in the matter shall determine that such indemnification is not lawful under applicable law; or
(v) on account of any action, suit or proceeding (other than a proceeding referred to in Section 8(b) hereof) commenced by the Director against Corporation or against any officer, director or shareholder of Corporation unless authorized in the specific case by action of the Board of Directors;
(b) In addition to those limitations set forth above in paragraph (a) of this Section 3, no indemnification pursuant to Section 2 hereof in an action brought by or in the right of Corporation for breach of the Directors duties to Corporation and its shareholders shall be paid by Corporation for any of the following:
(i) on account of Director’s acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, unless Director had reasonable cause to believe his conduct was lawful or had no reasonable cause to believe his conduct was unlawful;
(ii) on account of acts or omissions that Director believes to be contrary to the best interests of Corporation or its shareholders or that involve the absence of good faith on the part of Director;
(iii) to the extent prohibited by Section 310 of the Code (contracts in which a director has material financial interest);
(iv) to the extent prohibited by Section 316 of the Code (corporate actions subjecting directors to joint and several liability for prohibited distributions, loans and guarantees); or,
(v) in any circumstances in which indemnity is expressly prohibited by Section 317 of the Code;
(c) Notwithstanding the foregoing, Corporation hereby acknowledges that Director may have certain rights to indemnification, advancement of expenses and/or insurance provided by AccelMed, L.P. or its affiliates (“AccelMed”) Corporation hereby agrees that it (i) is, relative to AccelMed, the indemnitor of first resort (i.e., Corporation’s obligations to Director under this Agreement
81
are primary and any duplicative, overlapping or corresponding obligations of AccelMed are secondary), (ii) shall be required to make all advances and other payments under this Agreement, and shall be fully liable therefor, without regard to any rights Director may have against AccelMed, and (iii) irrevocably waives, relinquishes and releases AccelMed from any and all claims against AccelMed for contribution, subrogation or any other recovery of any kind in respect thereof. Corporation further agrees that no advancement or payment by AccelMed on behalf of Director with respect to any claim for which Director has sought indemnification from Corporation shall affect the foregoing and AccelMed shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of Director against Corporation. Corporation and Director agree that AccelMed is an express third party beneficiary of the terms of this Section 3(c).
(a) Corporation will be entitled to participate therein at its own expense;
(b) Except as otherwise provided below, to the extent that it may wish, Corporation jointly with any other indemnifying party similarly notified will be entitled to assume the defense thereof, with counsel satisfactory to Director (such consent not to be unreasonably withheld). After notice from Corporation to Director of its election to assume the defense thereof, Corporation will not be liable to Director under this Agreement for any legal or other expenses subsequently incurred by Director in connection with the defense thereof other than reasonable costs of investigation or as otherwise provided
82
below. Director shall have the right to employ counsel in such action, suit or proceeding but the fees and expenses of such counsel incurred after notice from Corporation of its assumption of the defense thereof shall be at the expense of Director unless (i) the employment of counsel by Director has been authorized by Corporation, (ii) Director shall have reasonably concluded that there may be a conflict of interest between Corporation and Director in the conduct of the defense of such action, or (iii) Corporation shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and expenses of counsel shall be at the expense of Corporation. Corporation shall not be entitled to assume the defense of any action, suit or proceeding brought by or on behalf of Corporation or as to which Director shall have made the conclusion provided for in (ii) above; and
(c) Corporation shall not be liable to indemnify Director under this Agreement for any amounts paid in settlement of any action or claim effected without its written consent. Corporation shall not settle any action or claim in any manner that would impose any penalty or limitation on Director without Director’s written consent. Neither Corporation nor Director will unreasonably withhold or delay its consent to any proposed settlement.
(a) In the event that Director employs his or her own counsel pursuant to Section 6(b)(i) through (iii) above, Corporation shall advance to Director, prior to any final disposition of any threatened or pending action, suit or proceeding, whether civil, criminal, administrative or investigative, any and all reasonable expenses (including legal fees and expenses) incurred in investigating or defending any such action, suit or proceeding within ten (10) days after receiving copies of invoices presented to Director for such expenses; and
(b) Director agrees that Director will reimburse Corporation for all reasonable expenses paid by Corporation in defending any civil or criminal action, suit or proceeding against Director in the event and only to the extent it shall be ultimately determined by a final judicial decision (from which there is no right of appeal) that Director is not entitled, under applicable law, the Articles or the Corporation’s Bylaws or this Agreement, to be indemnified by Corporation for such expenses.
(a) Corporation expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on Corporation hereby in order to induce Director to serve as a director of Corporation, and acknowledges that Director is relying upon this Agreement in serving in such capacity.
(b) In the event Director is required to bring any action to enforce rights or to collect moneys due under this Agreement and is successful in such action, Corporation shall reimburse Director for all of Director’s reasonable fees and expenses in bringing and pursuing such action.
83
holding office; provided, that this Agreement shall supersede any prior agreements or understandings, both written and oral, between Director and Corporation, with respect to the subject matter hereof; provided, further, that, notwithstanding the foregoing proviso, and in light of the fact that this Agreement is generally intended to provide for indemnification to the fullest extent possible except as prohibited by law, this Agreement shall not be construed to deprive Director of any indemnification permitted by applicable law with respect to an act or omission to which Director would otherwise have been entitled under any such prior agreement. To the extent that a change in the California Code permits greater indemnification by agreement than would be afforded currently under Corporation’s Articles of Incorporation and Bylaws and this Agreement, it is the intent of the parties hereto that Director shall enjoy by this Agreement the greater benefits so afforded by such change. Corporation will not adopt any amendment to any of the corporate documents the effect of which would be to deny, diminish or encumber Directors’s right to indemnification under this Agreement.
84
OPHTHALMIC IMAGING SYSTEMS, INC.
|
||
By:
|
||
Name:
|
Xxx Xxxxx
|
|
Title:
|
Chief Executive Officer
|
By:
|
||
Name:
|
Xxxxx Xxxxxxx
|
|
Title:
|
Chief Financial Officer
|
DIRECTOR:
_________________________
Name:
85
APPENDIX I
SUMMARY INSTRUCTION SHEET FOR PURCHASER
(to be read in conjunction with the entire
Purchase Agreement which follows)
A. Complete the following items on BOTH Purchase Agreements (Sign two originals):
1. Signature Page:
|
(i)
|
Name of Purchaser (Individual or Institution)
|
|
(ii)
|
Name of Individual representing Purchaser (if an Institution)
|
|
(iii)
|
Title of Individual representing Purchaser (if an Institution)
|
|
(iv)
|
Signature of Individual Purchaser or Individual representing Purchaser
|
|
2.
|
Appendix I - Stock Certificate Questionnaire/Registration Statement Questionnaire:
|
Provide the information requested by the Stock Certificate Questionnaire and the Registration Statement Questionnaire.
|
3.
|
Return BOTH properly completed and signed Purchase Agreements including the properly completed Appendix I to (initially by facsimile with original by overnight delivery):
|
[Street Address]
[City, State ZIP]
Attention:
Facsimile:
|
B. Instructions regarding the transfer of funds for the purchase of Shares will be sent by facsimile to the Purchaser by the Company at a later date.
C. Upon the resale of the Shares by the Purchaser after the Registration Statement covering the Shares is effective, as described in the Purchase Agreement, the Purchaser:
|
(i)
|
must deliver a current prospectus of the Company to the buyer (prospectuses must be obtained from the Company at the Purchaser’s request); and
|
|
(ii)
|
must send a letter in the form of Appendix II to the Company so that the Shares may be properly transferred.
|
86
Appendix I
(Page 1 of 3)
OPHTHALMIC IMAGING SYSTEMS
Pursuant to Section 3 of the Agreement, please provide us with the following information:
1.
|
The exact name that your Shares are to be registered in (this is the name that will appear on your stock certificate(s)). You may use a nominee name if appropriate:
|
_____________________________
|
2.
|
The relationship between the Purchaser of the Shares and the Registered Holder listed in response to item 1 above:
|
_____________________________
|
3.
|
The mailing address of the Registered Holder listed in response to item 1 above:
|
_____________________________
_____________________________
_____________________________
_____________________________
|
4.
|
The Social Security Number or Tax Identification Number of the Registered Holder listed in response to item 1 above:
|
_____________________________
|
87
Appendix I
(Page 2 of 3)
OPHTHALMIC IMAGING SYSTEMS
In connection with the preparation of the Registration Statement, please provide us with the following information:
SECTION 1. Pursuant to the “Selling Stockholder” section of the Registration Statement, please state your or your organization’s name exactly as it should appear in the Registration Statement:
SECTION 2. Please provide the number of shares that you or your organization will own immediately after Closing, including those Shares purchased by you or your organization pursuant to this Purchase Agreement and those shares purchased by you or your organization through other transactions and provide the number of shares that you have or your organization has the right to acquire within 60 days of Closing:
SECTION 3. Have you or your organization had any position, office or other material relationship within the past three years with the Company or its affiliates?
_____ Yes _____ No
If yes, please indicate the nature of any such relationships below:
SECTION 4. Are you (i) FINRA Member (see definition), (ii) a Controlling (see definition) shareholder of FINRA Member, (iii) a Person Associated with a Member of FINRA (see definition), or (iv) an Underwriter or a Related Person (see definition) with respect to the
88
proposed offering; or (b) do you own any shares or other securities of any FINRA Member not purchased in the open market; or (c) have you made any outstanding subordinated loans to any FINRA Member?
Answer: o Yes o No If “yes,” please describe below
SECTION 5. If the Selling Stockholder is an entity, please disclose:
(i)
|
who for the entity has the sole or shared power to vote or direct the vote of any such securities?
|
|
________________________________
|
(ii)
|
who for the entity has the sole or shared power the dispose or direct the disposition of any such securities?
|
|
________________________________
|
(iii)
|
do any of the foregoing persons disclaim beneficial ownership of such securities
|
Answer: o Yes o No
|
If so, who?
|
89
Appendix I
(Page 3 of 3)
FINRA Member. The term “FINRA member” means either any broker or dealer admitted to membership in the Financial Industry Regulatory Authority, Inc. (“FINRA”). (FINRA Manual, By-laws of FINRA Regulation, Inc. Article I, Definitions)
Control. The term “control” (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power, either individually or with others, to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise. (Rule 405 under the Securities Act of 1933, as amended)
Person Associated with a member of FINRA. The term “person associated with a member of FINRA” means every sole proprietor, partner, officer, director, branch manager or executive representative of any FINRA Member, or any natural person occupying a similar status or performing similar functions, or any natural person engaged in the investment banking or securities business who is directly or indirectly controlling or controlled by a FINRA Member, whether or not such person is registered or exempt from registration with FINRA pursuant to its bylaws. (FINRA Manual, By-laws of FINRA Regulation, Inc. Article I, Definitions)
Underwriter or a Related Person. The term “underwriter or a related person” means, with respect to a proposed offering, underwriters, underwriters’ counsel, financial consultants and advisors, finders, members of the selling or distribution group, and any and all other persons associated with or related to any of such persons. (FINRA Interpretation)
90
APPENDIX II
CERTIFICATE OF SUBSEQUENT SALE
[Transfer Agent]
[Address]
Attention:
The undersigned, [an officer of, or other person duly authorized by]
_____________________________________________________________ hereby certifies
[fill in official name of individual or institution]
that he/she [said institution] is the Purchaser of the shares evidenced by the attached certificate,
and as such, sold such shares on _______________ in accordance with the terms of the
[date]
Purchase Agreement and in accordance with Registration Statement
number ____________________________________________ or otherwise in accordance with
[fill in the number of or otherwise identify Registration Statement]
the Securities Act of 1933, as amended, and, in the case of a transfer pursuant to the Registration
Statement, the requirement of delivering a current prospectus by the Company has been
complied with in connection with such sale.
|
Print or Type: | ||
Name of Purchaser
(Individual or
Institution):
|
||
Name of Individual
representing
Purchaser (if an
Institution)
|
||
Title of Individual
representing
Purchaser (if an
Institution):
|
||
Signature by:
|
||
Individual Purchaser
or Individual repre-
senting Purchaser:
|
91
SCHEDULE 4.3(i) and 4.3(ii)
OUTSTANDING CAPITALIZATION
AND
OUTSTANDING OPTIONS TO PURCHASE RIGHTS AND OTHER RIGHTS
AND
OUTSTANDING OPTIONS TO PURCHASE RIGHTS AND OTHER RIGHTS
Form
|
Source
|
Exercise Price |
Issue
Date |
Expiration
Date |
Current
Issued |
%
|
Options
& Warrants |
Available
For Grant |
Convertible
Note |
Agreements
Pending |
Fully
Diluted |
|||
Shares
|
Currently outstanding-MediVIsion
|
9,380,843
|
55.6%
|
9,380,843
|
40.2%
|
|||||||||
Currently outstanding - Open market
|
7,485,988
|
44.4%
|
7,485,988
|
32.1%
|
||||||||||
Options
|
2000 Non Statutory Stock Option Plan
|
$ |
0.4060
|
9/6/2001
|
9/6/2011
|
150,000
|
150,000
|
0.6%
|
||||||
$ |
0.4060
|
10/23/2002
|
10/23/2012
|
80,000
|
80,000
|
0.3%
|
||||||||
$ |
0.4060
|
4/10/2003
|
4/10/2013
|
590,000
|
590,000
|
2.5%
|
||||||||
$ |
0.1000
|
1/2/2002
|
1/2/2012
|
20,000
|
20,000
|
0.1%
|
||||||||
$ |
2.8300
|
3/7/2007
|
3/7/2017
|
8,000
|
8,000
|
0.0%
|
||||||||
$ |
0.1600
|
1/6/2009
|
1/6/2019
|
312,836
|
312,836
|
1.3%
|
||||||||
-
|
0.0%
|
|||||||||||||
Options
|
2003 Stock Option Plan
|
$ |
0.6810
|
10/24/2004
|
10/24/2014
|
284,167
|
284,167
|
1.2%
|
||||||
$ |
1.9600
|
3/3/2006
|
3/3/2016
|
20,000
|
20,000
|
0.1%
|
||||||||
$ |
1.8300
|
6/14/2006
|
6/14/2016
|
103,000
|
103,000
|
0.4%
|
||||||||
$ |
0.1600
|
1/6/2009
|
1/6/2019
|
144,664
|
144,664
|
0.6%
|
||||||||
-
|
0.0%
|
|||||||||||||
Options
|
2005 Stock Option Plan
|
$ |
0.8200
|
12/19/2007
|
12/19/2015
|
335,000
|
335,000
|
1.4%
|
||||||
$ |
1.0500
|
12/19/2007
|
12/19/2015
|
335,000
|
335,000
|
1.4%
|
||||||||
$ |
0.1600
|
1/6/2009
|
1/6/2019
|
80,000
|
80,000
|
0.3%
|
||||||||
-
|
0.0%
|
|||||||||||||
Options
|
2009 Stock Option Plan
|
No options granted from this plan to date
|
750,000
|
750,000
|
3.2%
|
|||||||||
-
|
0.0%
|
|||||||||||||
Warrants
|
The Tail Wind Fund
|
$ |
1.8700
|
10/29/2007
|
12/10/2012
|
526,973
|
526,973
|
2.3%
|
||||||
Warrants
|
Solomon Strategic Holdings, Inc.
|
$ |
1.8700
|
10/29/2007
|
12/10/2012
|
89,698
|
89,698
|
0.4%
|
||||||
Ratchet on Warrants
|
The Tail Wind Fund
|
$ |
1.1528
|
10/29/2007
|
12/10/2012
|
244,452
|
244,452
|
1.0%
|
||||||
Ratchet on Warrants
|
Solomon Strategic Holdings, Inc.
|
$ |
1.1528
|
10/29/2007
|
12/10/2012
|
41,609
|
41,609
|
0.2%
|
||||||
-
|
0.0%
|
|||||||||||||
Convertible note
|
The Tail Wind Fund
|
$ |
1.6500
|
10/29/2007
|
712,121
|
712,121
|
3.1%
|
|||||||
Convertible note
|
Solomon Strategic Holdings, Inc.
|
$ |
1.6500
|
10/29/2007
|
121,212
|
121,212
|
0.5%
|
|||||||
Ratchet on Convertible note
|
The Tail Wind Fund
|
$ |
0.9220
|
10/29/2007
|
468,082
|
468,082
|
2.0%
|
|||||||
Ratchet on Convertible note
|
Solomon Strategic Holdings, Inc.
|
$ |
0.9220
|
10/29/2007
|
79,674
|
79,674
|
0.3%
|
|||||||
Warrants
|
The Tail Wind Fund
|
$ |
1.0000
|
No signed agreement yet
|
427,273
|
427,273
|
1.8%
|
|||||||
Warrants
|
Solomon Strategic Holdings, Inc.
|
$ |
1.0000
|
No signed agreement yet
|
72,727
|
72,727
|
0.3%
|
|||||||
Warrants
|
United Mizrahi Bank
|
$ |
1.0000
|
No signed agreement yet
|
350,000
|
350,000
|
1.5%
|
|||||||
Warrants
|
Broker
|
$ |
0.0100
|
No signed agreement yet
|
123,457
|
123,457
|
0.5%
|
|||||||
-
|
0.0%
|
|||||||||||||
Totals
|
16,866,831
|
100.0%
|
3,365,399
|
750,000
|
1,381,089
|
973,457
|
23,336,775
|
100.0%
|
||||||
100.0%
|
||||||||||||||
AccelMed
|
9,633,228
|
|||||||||||||
AccelMed warrants
|
3,211,076
|
|||||||||||||
12,844,304
|
||||||||||||||
Extra 25% for tailwind
|
362,501
|
|||||||||||||
Fully Diluted
|
36,181,079
|
|||||||||||||
Reduce cap limitation as Tailwind caped at 1.4M shares |
(1,383,821)
|
|||||||||||||
Total cap reserve
|
34,797,259
|
|||||||||||||
Autorized
|
35,000,000
|
|||||||||||||
Left over
|
202,741
|
92
SCHEDULE 4.19
Company Budget and Strategic Work Plan
Confidential Treatment Requested under 17 C.F.R. Sections 200.80(B)(4), 200.83 and 200.406
Certain portions of this Sechedule 4.19 have been redacted and a request for Confidential Treatment therefore has been requested.
|
||||||||
Strictly Private and Confidential
|
||||||||
Schedule 4.19
|
||||||||
Flag
|
Total
|
|||||||
OIS/MDV projection 2010
|
||||||||
2009
|
Q1 2010
|
Q2 2010
|
Q3 2010
|
Q4 2010
|
2010
|
|||
No.
|
Cash-Flow component
|
6
|
7
|
|||||
1
|
WinStation
|
|||||||
S
|
Total Sales (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
M
|
Manufacturing Cost (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
Gross Margin (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Gross Margin (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
G&A (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
S&M (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
O
|
Sustained R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
D Extra R&D (K$) |
*
|
*
|
*
|
*
|
*
|
*
|
||
Total R&D Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total R&D Expenses (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Operating Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
C
|
Capital Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
E
|
Depreciation (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
I
|
EBIT (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
*
|
*
|
*
|
*
|
*
|
*
|
|||
0
|
IRI 1
|
|||||||
S
|
Total Sales (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
M
|
Manufacturing Cost (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
Gross Margin (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Gross Margin (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
G&A (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
S&M (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Sustained R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
D
|
Extra R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
Total R&D Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total R&D Expenses (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Operating Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
C
|
Capital Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
E
|
Depreciation (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
I
|
EBIT (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
0
|
IRI 2_Canon CR1+WS
|
|||||||
S
|
Total Sales (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
M
|
Manufacturing Cost (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
Gross Margin (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Gross Margin (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
G&A (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
S&M (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Sustained R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
D
|
Extra R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
Total R&D Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total R&D Expenses (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Operating Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
C
|
Capital Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
E
|
Depreciation (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
I
|
EBIT (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
93
2009
|
Q1 2010
|
Q2 2010
|
Q3 2010
|
Q4 2010
|
2010
|
|||
No.
|
Cash-Flow component
|
6
|
7
|
1
|
Symphony
|
|||||||
S
|
Total Sales (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
M
|
Manufacturing Cost (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
Gross Margin (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Gross Margin (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
G&A (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
S&M (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Sustained R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
D
|
Extra R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
Total R&D Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total R&D Expenses (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Operating Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
C
|
Capital Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
E
|
Depreciation (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
I
|
EBIT (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
*
|
*
|
*
|
*
|
*
|
*
|
|||
1
|
EMR&PM
|
|||||||
S
|
Total Sales (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
M
|
Manufacturing Cost (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
Gross Margin (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Gross Margin (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
G&A (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
S&M (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Sustained R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
D
|
Extra R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
Total R&D Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total R&D Expenses (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Operating Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
C
|
Capital Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
E
|
Depreciation (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
I
|
EBIT (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
*
|
*
|
*
|
*
|
*
|
*
|
|||
1
|
EyeScan
|
|||||||
S
|
Total Sales (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
M
|
Manufacturing Cost (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
Gross Margin (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Gross Margin (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Royalties (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
G&A (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
S&M (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Sustained R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
D
|
Extra R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
Total R&D Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total R&D Expenses (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Operating Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
C
|
Capital Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
E
|
Depreciation (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
I
|
EBIT (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
*
|
*
|
*
|
*
|
*
|
*
|
94
2009
|
Q1 2010
|
Q2 2010
|
Q3 2010
|
Q4 2010
|
2010
|
|||
No.
|
Cash-Flow component
|
6
|
7
|
0
|
DIH
|
|||||||
S
|
Total Sales (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
M
|
Manufacturing Cost (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
Gross Margin (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Gross Margin (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
G&A (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
S&M (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Sustained R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
D
|
Extra R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
Total R&D Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total R&D Expenses (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Operating Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
C
|
Capital Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
E
|
Depreciation (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
I
|
EBIT (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
P&L View
|
||||||||
Growth
|
*
|
*
|
*
|
*
|
*
|
*
|
||
S
|
Total Sales (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
M
|
Manufacturing Cost (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
Gross Margin (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Gross Margin (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Royalties (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
O
|
G&A (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
G&A (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
S&M (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
S&M (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Sustained R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Sustained R&D (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
D
|
Amortization of R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
Extra R&D (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total R&D Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
R&D Expenses (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Operating Expenses + Extra R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Operating Expenses + Extra R&D (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
I
|
EBIT (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
EBIT (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Financial Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Other Income ($K)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
T2
|
Taxable Income (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
T%
|
Income Tax Rate (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
T
|
Income Tax (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
OF
|
Net Operating Income (K$/Yr.)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
Cash Flow View
|
||||||||
E
|
Depreciation (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
Amortization (R&D)$
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Non-Cash Extraordinary Item (APA)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
W%
|
Working Capital (% of sales change)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
W
|
Working Capital Change (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
C
|
Capital Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
Repayment of loans (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
New loans or capital raise (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Loans at the end of the year ($K)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
V
|
Residual Value of Assets
|
*
|
*
|
*
|
*
|
*
|
*
|
|
AF
|
Total Cash Flow (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
CF
|
Total Cumulative Cash Flow (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
R
|
Annual Discount Rate (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
DAF
|
Annual Discounted Cash Flow (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
DCF
|
Cumulative Discounted Cash Flow (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
|
IRR
|
Internal Rate of Return (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
95
2009
|
Q1 2010
|
Q2 2010
|
Q3 2010
|
Q4 2010
|
2010
|
|||
No.
|
Cash-Flow component
|
6
|
7
|
R&D Breakdown
|
||||||||
WinStation
|
||||||||
Sustained R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Extra R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total Development Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total Development Expenses (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
IRI 1
|
||||||||
Sustained R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Extra R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total Development Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total Development Expenses (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
IRI 2_Canon CR1+WS
|
||||||||
Sustained R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Extra R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total Development Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total Development Expenses (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Symphony
|
||||||||
Sustained R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Extra R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total Development Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total Development Expenses (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
EMR&PM
|
||||||||
Sustained R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Extra R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total Development Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total Development Expenses (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
EyeScan
|
||||||||
Sustained R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Extra R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total Development Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total Development Expenses (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total R&D
|
||||||||
Sustained R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Extra R&D (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total Development Expenses (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total Development Expenses (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total Capitalized Development Exp (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total Capitalized Development Exp (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total Real Development Exp (K$)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
Total Real Development Exp (%)
|
*
|
*
|
*
|
*
|
*
|
*
|
||
96