Exhibit 10.6

 

 

 

ASSET PURCHASE AGREEMENT

Among

OPHTHALMIC IMAGING SYSTEMS

and

MEDIVISION MEDICAL IMAGING LTD.

Dated as of June 24, 2009

 

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Article 1.

DEFINITIONS

1

1.1

Certain Definitions

1

1.2

Terms Defined Elsewhere in this Agreement

7

 

Article 2.

PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

8

2.1

Purchase and Sale of Assets

8

2.2

Excluded Assets

10

2.3

Assumption of Liabilities

11

2.4

Excluded Liabilities

12

2.5

Further Conveyances and Assumptions; Consent of Third Parties

12

2.6

Purchase Price Allocation

13

 

Article 3.

SALE AND PURCHASE OF CAPITAL STOCK

13

3.1

Sale and Purchase of Shares

13

 

Article 4.

CONSIDERATION

13

4.1

Consideration

13

 

Article 5.

CLOSING AND TERMINATION

13

5.1

Closing Date

13

5.2

Termination of Agreement

14

5.3

Procedure upon Termination

15

5.4

Effect of Termination

15

 

Article 6.

REPRESENTATIONS AND WARRANTIES OF SELLER

15

6.1

Organization of Seller and its subsidiaries

16

6.2

Corporate Authority; Approval and Fairness

16

6.3

Consents of Third Parties; No Violations

17

6.4

Financial Statements

18

6.5

Accounts Receivable

20

6.6

Title to Purchased Assets; Intellectual Property

20

6.7

Ownership and Transfer of Shares

20

6.8

Intellectual Property

21

6.9

Seller Material Agreements and Governmental Contracts

22

6.10

Absence of Certain Developments

25

6.11

Litigation

26

6.12

Financial Advisors

27

6.13

Environmental Matters

27

6.14

Tax Returns and Payments

27

6.15

Tax Matters

29

6.16

Encryption and Other Restricted Technology

30

6.17

Warranties/Product Liability

30

6.18

Product certifications

30

6.19

Completeness of Disclosure

31

 
 
 
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Article 7.

REPRESENTATIONS AND WARRANTIES OF PURCHASER

31

7.1

Organization and Good Standing

31

7.2

Authorization of Agreement

31

7.3

Conflicts; Consents of Third Parties

32

7.4

Litigation

32

7.5

Financial Advisors

32

7.6

Condition of the Business; Disclaimer of Reliance

32

7.7

Restriction on Activities

33

7.6

Completeness of Disclosure

33

 

Article 8.

COVENANTS

33

8.1

Access to Information

33

8.2

Conduct of the Business Pending the Closing

34

8.3

Consents

37

8.4

Further Assurances

38

8.5

Confidentiality

38

8.6

Non Competition

38

8.7

Preservation of Records

39

8.8

Publicity

39

8.9

Disclosure Schedules; Supplementation and Amendment of Schedules

40

8.10

Control of Business

40

8.11

Foreign Tax Declarations

40

8.12

Exclusivity

40

8.12

Good Standing Certificates

40

8.12

Elop Payment

40

8.13

United Mizrachi Bank Loan

42

 

Article 9.

CONDITIONS TO CLOSING

41

9.1

Conditions Precedent to Obligations of Purchaser

41

9.2

Conditions Precedent to Obligations of Seller

42

9.3

Frustration of Closing Conditions

43

 

Article 10.

SURVIVAL

44

10.1

Survival of Representations and Warranties

44

10.2

Indemnification by Seller

44

10.3

Indemnification by Purchaser

45

10.4

Indemnification Procedures

46

10.4

Escrow

46

10.5

Exclusive Remedy

58

 

Article 11.

TAXES

48

11.1

Payment of Sales, Use or Similar Taxes

48

11.2

Cooperation on Tax Issues

48

11.3

Tax Refunds; Tax Benefit Amounts

51

11.4

Tax Matters

49

 
 
 
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Article 12.

MISCELLANEOUS

51

12.1

Modification or Amendment

51

12.2

Waiver of Conditions

51

12.3

Counterparts

51

12.4

Governing Law; Waiver of Jury Trial; Specific Performance

51

12.5

Dispute Resolution

52

12.6

Notices

52

12.7

Entire Agreement

54

12.8

No Third Party Beneficiaries

54

12.9

Obligations of OIS and MediVision

54

12.10

Transfer taxes

54

12.11

Severability

54

12.12

Interpretation; Construction

54

12.13

Assignment

55

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ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT (hereinafter called this “Agreement”), dated June
24, 2009, among OPHTHALMIC IMAGING SYSTEMS, a California corporation (“OIS” or
“Purchaser”), and MEDIVISION MEDICAL IMAGING LTD., an Israeli company
(“MediVision” or “Seller”).

RECITALS

WHEREAS, Seller presently conducts the Business;

WHEREAS, Seller desires to sell, transfer and assign to Purchaser, and Purchaser
desires to acquire and assume from Seller, all of the Purchased Assets and all
of the Assumed Liabilities, all as more specifically provided herein;

WHEREAS, certain terms used in this Agreement are defined in Section 1.1; and

WHEREAS, Seller currently owns approximately 56% of the issued and outstanding
shares of common stock of Purchaser.

NOW, THEREFORE, in consideration of the premises, and of the representations,
warranties, covenants and agreements contained herein, the parties hereto agree
as follows:

ARTICLE 1.

DEFINITIONS

1.1       Certain Definitions. For purposes of this Agreement, the following
terms shall have the meanings specified in this Section 1.1:

“Agreement” means any written Agreement, agreement, indenture, note, bond,
mortgage, loan, instrument, lease or license.

“Affiliate” has the meaning defined in Rule 2b-2 promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”).

“BDO Fairness Opinion” means the opinion of BDO Seidman Ziv Haft Consulting
Group obtained by MediVision as part of its assessment of the transactions
contemplated by this Agreement, to the effect that the consideration to be
received by MediVision under this Agreement is fair from a financial point of
view, as of the date of such opinion. It is agreed and understood that this BDO
Fairness Opinion is relied upon by MediVision and OIS.

“Business” means (i) the activities, agreements, business, assets, operations
and Intellectual Property of Seller directly related to IRI, including, without
limitation, any activities, agreements, business. Assets, operations and
Intellectual Property relating to the EyeScan products, if any, (ii) the
activities, agreements, business, assets and operations of Seller’s branch

 

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in Belgium (the “Belgium Activities”), and (iii) all rights of Seller under each
of the Purchased Agreements.

“Business Day” means any day (other than Friday, Saturday or Sunday) of the year
on which national banking institutions in New York are open to the public for
conducting business and are not required or authorized to close.

“Cash” means cash, cash equivalents, bank deposits and similar cash items,
excluding cash deposits which constitute Purchased Assets pursuant to Section
2.1(h).

“CCS” means CCS Pawlowski GmbH.

“CCS Deed” means a notarial deed of transfer of the Purchased Shares of CCS by
Seller and Purchaser before a German civil law notary.

“Code” means the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.

“Commercially Reasonable Efforts” means the efforts, time and costs a prudent
person desirous of achieving a result would use, expend or incur in similar
circumstances to achieve such results as expeditiously as possible, provided
that such person is not required to expend funds or assume liabilities beyond
those that are reasonable in nature and amount in the context of the
transaction.

“Confidential Information” means any (i) confidential and non-public
information, whether visually, in writing or otherwise concerning the
strategies, ideas, policies, sub-contractors, suppliers, customers, vendors,
competitors, business and affairs of the applicable Person, graphs, samples,
inventions and ideas, past, current and planned marketing methods, processes,
strategies and materials, supplier and customer lists, price lists, pricing
policies and strategies, market studies, business plans, agreements with any
Person, proposals, equipment purchase strategies, names or other information,
strategies for business plans, plans, ideas, concepts, designs, drawings,
specifications, techniques, models, data, Documentation, diagrams, flow charts,
research, discoveries, development, processes, procedures and “know how”, and
any information, however documented, that is proprietary, confidential and
non-public, whether or not such information would be deemed a trade secret under
applicable Law; (ii) confidential and non-public information concerning the
business and affairs of the applicable Person and its respective Affiliates
(which includes financial statements, financial projections and budgets,
historical and projected sales, capital spending budgets and plans, the names
and backgrounds of key personnel, proposed personnel and personnel training
techniques and materials), however documented; and (iii) confidential and
non-public information contained in all notes, analyses, compilations, studies,
summaries and all other material prepared by the applicable Person or its
respective representatives containing or based, in whole or in part, on any
information included in any of the foregoing clauses (i) and (ii).
Notwithstanding anything to the contrary contained herein, Confidential
Information of any party hereto shall not include any information that (A) is or
was in the public domain at the time of its receipt, or subsequently came into
the public domain through no fault of the receiving party; (B) was received by
any party hereto from an unrelated third party, free of any obligation of
confidence to the disclosing  party; (C) was already in the possession of the
receiving party prior to receipt thereof, directly or indirectly, from such
disclosing party; (D) is independently acquired or developed by the receiving
party without violating any of its obligations to such other party under this
Agreement or (E) is required to be disclosed by applicable Law.

 

 

 

2

 

 

 

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“Damages” means, collectively, any and all Liabilities, deficiencies, expenses,
damages, Orders, costs and expenses, including reasonable attorneys’ fees and
expert witness and consultant fees; provided, however, “Damages” shall not
include any punitive or exemplary damages (collectively, “Extraordinary
Damages”), except to the extent such Extraordinary Damages result from a Third
Party Claim.

“Documentation” means files, documents, instruments, papers, books, reports,
records, tapes, microfilms, photographs, letters, budgets, forecasts, ledgers,
journals, title policies, customer and supplier lists, regulatory filings,
operating data and plans, technical documentation (including design
specifications, functional requirements, operating instructions, logic manuals,
flow charts, etc.), user documentation (including installation guides, user
manuals, training materials, release notes, working papers, etc.), marketing
documentation (including sales brochures, flyers, pamphlets, web pages, etc.),
and other similar materials directly related to the Business and the Purchased
Assets in each case whether or not in electronic form; provided, however, that
“Documentation” shall not include duplicate copies of such Documentation
retained by Seller or its Affiliates subject to the obligations relating to the
use and disclosure thereof set forth in this Agreement.

“Environment” means the natural and man-made environment, including all or any
of the following media, namely air, water and land (including air within
buildings and other material or man-made structures above or below the ground)
and any living organisms (including man) or systems supported by those media.

“Environmental Law” means any Law relating to the protection of the environment
or human health and safety.

“ERISA” means the Employment Retirement Income Security Act of 1974, as amended.

“Excluded Agreements” means, except for the Purchased Agreements, each of the
Agreements to which Seller is a party, including, for the avoidance of doubt,
this Agreement and the rights of Seller pursuant hereto.

“Former Employee” means any Employee who has separated from service with
MediVision or any of its Subsidiaries prior to the Closing.

“GAAP” means generally accepted accounting principles in the United States as of
the date hereof.

“Governmental Body” means any government or governmental or regulatory body
thereof, or political subdivision thereof, whether foreign, federal, state, or
local, or any agency, commission, instrumentality or authority thereof, or any
quasi governmental or private body exercising any regulatory or Taxing Authority
thereunder or any court, tribunal, judicial body, administrative officer,
magistrate or panel, or arbitrator (public or private).

 

 

 

3

 

 

 

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“Hazardous Material” means any mixture or material containing any material that
is listed, classified or regulated by any government authority or any
Environmental Law, including any petroleum products, asbestos or polychlorinated
biphenyls.

“Indebtedness” of any Person means, without duplication, (i) the principal of
and, accreted value and accrued and unpaid interest in respect of
(A) indebtedness of such Person for money borrowed and (B) indebtedness
evidenced by notes, debentures, bonds or other similar instruments the payment
of which such Person is responsible or liable; (ii) all obligations of such
Person issued or assumed as the deferred purchase price of property or services,
all conditional sale obligations of such Person, and all obligations of such
Person under any title retention agreement (but excluding trade accounts payable
and other accrued current liabilities incurred in the Ordinary Course of
Business) and all obligations of such Person as lessee under leases that have
been or should be, in accordance with GAAP, recorded as capital leases;
(iii) all obligations of the type referred to in clauses (i) and (ii) of any
other Persons the payment of which such Person is responsible or liable,
directly or indirectly, as obligor, guarantor, surety or otherwise; and (iv) all
obligations of the type referred to in clauses (i) through (iii) of other
Persons secured by any Lien on any property or asset of such Person (whether or
not such obligation is assumed by such Person).

“Indemnified Party” means any Person claiming indemnification under any
provision of Article 10.

“Indemnifying Party” means any Person against whom a claim for indemnification
is being asserted under any provision of Article 10.

“Intellectual Property” means (i)(A) trademarks, service marks, brand names,
certification marks, collective marks, d/b/a’s, Internet domain names, logos,
trade names, and other indicia of origin, all applications and registrations for
the foregoing; (B) all patents, registrations, invention disclosures and
applications therefor, including divisions, continuations, continuations-in-part
and renewal applications, and including renewals, extensions and reissues;
(C) copyrightable published works of authorship including without limitation
databases and other compilations of information), copyrights therein and
thereto, and registrations and applications therefor, and all renewals,
extensions, restorations and reversions thereof; and (D) all know-how, trade
secrets, confidential or proprietary information, customer lists, technical
information, plans drawings and blue prints; and (ii) all rights referred to in
clauses (A) through (D) whether registered or not registered.

“Intentional Misrepresentation” means an intentional misrepresentation
(including the intentional omission of a material fact) made (i) in Article 6,
which any of the Persons identified on Schedule 1.1(a) actually knew to be false
on the date hereof, or (ii) in the certificate(s) delivered to Purchaser
pursuant to Section 9.1(c) hereof, which any of the Persons identified on
Schedule 1.1(a) actually knew to be false on the Closing Date or (iii) in
Article 7, which any of the Persons identified on Schedule 1.1(b) actually knew
to be false on the date hereof, or (iv) in the certificate(s) delivered to
Purchaser pursuant to Section 9.2(c) hereof, which any of the Persons identified
on  Schedule 1.1(b) actually knew to be false on the Closing Date.

 

 

 

4

 

 

 

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“IRI” means the Integrated Retina Imager.

“IRS” means the United States Internal Revenue Service and, to the extent
relevant, the United States Department of Treasury.

“Knowledge of Purchaser” means the actual knowledge of each Person identified on
Schedule 1.1(b).

“Knowledge of Seller” means the actual knowledge of each Person identified on
Schedule 1.1(a).

“Law” means any foreign, federal, state, provincial or local law, statute, code,
ordinance, rule, regulation, order, requirement or rule of law (including common
law), by-laws, legislations, directives, treaties, decisions of court or
tribunal and judgments.

“Legal Proceeding” means any judicial, administrative or arbitral actions, suits
or proceedings (public or private) by or before a Governmental Body.

“Liability” means any debt (including Indebtedness), liability or obligation
(whether direct or indirect, secured or unsecured, absolute or contingent,
accrued or unaccrued, liquidated or unliquidated, or due or to become due), and
including all costs and expenses relating thereto.

“Lien” means any lien, encumbrance, pledge, mortgage, deed of trust, security
interest, claim, lease, charge, option, right of pre-emption, right to acquire,
covenant, right of first offer or refusal, easement, assignment, retention or
other security agreement or arrangement, servitude or transfer restriction or
other encumbrance.

“OCS” means the office of the Chief Scientist of the Israeli Ministry of
Industry, Trade & Labor.

“OCS Debt” means all Seller’s (directly or through any subsidiary) Indebtedness
owed to OCS having an outstanding balance ($1,800,000) together with any and all
ancillary amounts thereon (interest, fees, fine, levies, adjustments, etc.).

“OIS Loan” means all Seller’s Indebtedness owed to Purchaser having an
outstanding balance not to exceed Four Million Two Hundred Thousand Dollars
($4,200,000) in principal amount immediately prior to the Closing Date, as
described in Section 2.3(a).

“Order” means any order, injunction, judgment, decree, ruling, writ, assessment,
award or other decision issued, promulgated or entered by or with any
Governmental Body of competent jurisdiction.

“Ordinary Course of Business” means the ordinary and usual course of normal
day-to-day operations of the Business, as conducted by Seller or its
subsidiaries.

 

 

 

5

 

 

 

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“Permits” means the approvals, authorizations, consents, licenses, permits or
certificates of a Governmental Body.

“Permitted Exceptions” means (i) statutory Liens for current Taxes, assessments
or other governmental charges not yet delinquent or the amount or validity of
which is being contested in good faith by appropriate proceedings;
(ii) mechanics’, carriers’, worker’s, repairers’ and similar Liens arising or
incurred in the Ordinary Course of Business; (iii) zoning, entitlement and other
land use regulations by any Governmental Body; (iv) title of a lessor under a
capital or operating lease; and (v) such other imperfections in title, charges,
easements, restrictions and encumbrances which would not be material to the
Business of Seller or its subsidiaries.

“Person” means any individual, corporation, partnership, limited liability
company, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Body or other entity.

“Products” means the products or services developed, manufactured, marketed,
provided or sold by either Seller, as it relates to the Business, or by any
Subsidiary, including those set forth on Schedule 1.1(b).

“Purchased Agreements” refers to the Distributor Agreements, service agreements
and other agreements as specified in Schedule 2.1(a).

“Purchased Intellectual Property” means all the Intellectual Property of IRI,
including all the know-how and prototypes associated thereto and including the
know-how accumulated by Seller during the IRI Project set forth on
Schedule 2.1(d) that shall be transferred by Seller to Purchaser under this
Agreement; provided however, that “Purchased Intellectual Property” shall not
include any OCS Funded Technology.

“Purchaser Material Adverse Effect” means the ability of Purchaser to perform
its obligations under this Agreement or to consummate the transactions
contemplated hereby.

“Reference Date” means June 24, 2009.

“Software” means any and all (i) computer programs, including any and all
software implementations of algorithms, models and methodologies, whether in
source code or object code; and (ii) databases and compilations, including any
and all data and collections of data, whether machine readable or otherwise.

“Subsidiary” has the meaning ascribed thereto in Section 6.1.

“Tax” or “Taxes” means any and all taxes, charges, levies, deficiencies or other
assessments of whatever kind or nature including, without limitation, all net
income, gross income, profits, gross receipts, excise, real or personal
property, sales, ad valorem, goods and services, withholding, social security,
retirement, excise, employment, unemployment, minimum, estimated, severance,
stamp, property, occupation, environmental, recycling, waste disposal, windfall
profits, use, service, net worth, payroll, franchise, license, gains,
customs, transfer, recording and other taxes, customs duty, assessments or
charges of any kind whatsoever, imposed by any Taxing Authority, together with
any interest, penalties or additions to tax relating thereto.

 

 

 

6

 

 

 

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“Taxing Authority” means the IRS, Israel Tax Authority and any other
Governmental Body responsible for the administration or collection of any Tax.

“Third Party Claim” means any claim or the commencement of any Legal Proceeding
by any Person who is not a party to this Agreement or an Affiliate of a party to
this Agreement.

“Transfer Documents” means the Bill of Sale, in such form as attached as
Exhibit A hereto, the Assignment and Assumption Agreement, in such form as
attached as Exhibit B hereto, and the CCS Deed.

“Treasury Regulations” means the United States Treasury Regulations (including
Temporary and Proposed Regulations) promulgated by the Internal Revenue Service,
as such regulations may be amended from time to time (including corresponding
provisions of succeeding Regulations).

“United Mizrachi Bank Loan” means Seller’s Indebtedness owed to United Mizrachi
Bank having an outstanding balance of One and a Half Million Dollars
($1,500,000) in principal amount immediately prior to the Closing Date.

1.2       Terms Defined Elsewhere in this Agreement. For purposes of this
Agreement, the following terms have meanings set forth in the sections
indicated:

 

Term

Section

AAA

Accounts Receivable

12.5

2.1(i)

Agreement

Preamble

Arbitrator

12.5

Assumed Liabilities

2.3

Belgian Activities

1.1 (in Business definition)

Closing

5.1(a)

Closing Date

5.1(a)

Confidentiality Agreement

12.7

Covenant Survival Period

10.1(b)

Decision
Disputes
Elop

12.5
12.5
6.8(ii)

Escrow Agent

10.5

Escrow Agreement

10.5

Escrow Fund

10.5

Exchange Act

1.1 (in Affiliate definition)

Excluded Assets

2.2

 

 

 

 

7

 

 

 

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Excluded Liabilities

2.4

Extraordinary Damages
Financial Statements

1.1 (in Damages definition)
6.4(a)

Foreign Tax Withholding Certificate

8.11

IAS

6.4(v)

Indemnification Claim

10.4(b)

IRI Project

6.8(ii)

ISA

6.4(iii)

MediVision ESE Report

6.4(i)

MediVision Product

6.17

MediVision Product Certifications

6.18

MediVision Recommendation

6.2(ii)

OCS Funded Technology

6.15(i)

Post-Closing Covenants

10.1(b)

Pre-Closing Covenants

10.1(b)

Pre-Closing Tax Period

11.3(a)

Purchased Assets

2.1

Purchased Shares

3.1

Purchased Trade Secrets

6.8(iii)

Purchaser

Preamble

Purchaser Documents

7.2(i)

Purchaser Indemnified Parties

10.2(a)

Seller

Preamble

Seller Disclosure Letter

6

Seller Documents

6.2(i)

Seller Indemnified Parties

10.3(a)

Seller Material Adverse Effect

6.1

Seller Material Agreements

6.9(iii)

Software Products

6.8(vi)

Subsidiary

6.1

Survival Period

10.1(b)

Tax

6.16

Tax Claim

11.4(b)

Tax Return

6.16

Termination Date

5.2(a)

Total Consideration

4.1

Transaction Documents

7.2(i)

Transfer Taxes

11.1

Warranty Survival Period

10.1(a)

 

 

 

 

8

 

 

 

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ARTICLE 2.

 

PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

2.1       Purchase and Sale of Assets. On the terms and subject to the
conditions set forth in this Agreement, at the Closing, Purchaser shall
purchase, acquire and accept from Seller, and Seller shall sell, transfer,
assign, convey and deliver to Purchaser all of Seller’s right, title and
interest in, to and under the Purchased Assets free and clear of any Liens or
Liabilities other than Permitted Exceptions and Assumed Liabilities. “Purchased
Assets” shall mean the following assets and rights of Seller:

(a)       all rights of Seller under each of the Purchased Agreements;

(b)       the Purchased Shares.

(c)       Seller’s Belgium Activities;

(d)       the Purchased Intellectual Property as set forth on Schedule 2.1(d),
including ownership and all other rights Seller may have with respect to the
Purchased Intellectual Property;

(e)       all Documentation and know-how accumulated by Seller during the IRI
Project, in connection with the Purchased Intellectual Property, including
Documentation relating to the IRI Project; and a non-exclusive non-transferrable
license to Purchaser to use any of Seller’s Intellectual Property which is not
Purchased Intellectual Property solely to the extent necessary to conduct the
Buisness;

(f)        the rights of Seller under non-disclosure or confidentiality,
non-compete, or non-solicitation agreements with third parties or with Employees
or Former Employees of Seller or Subsidiary, in each case to the extent directly
related to the Business as of the Closing Date;

(g)       the rights of Seller under or pursuant to all warranties,
representations and guarantees made by suppliers, manufacturers and contractors
to the extent directly related to the Business as of the Closing Date;

(h)       all Cash generated by the operation of the Purchased Assets at and
after the Closing Date;

(i)        the accounts receivable of Seller directly related to the Business as
of the Closing Date (“Accounts Receivable”) and all rights of Seller to collect
(and retain) from customers of the Business, all fees and other amounts payable
to Seller, or that may become payable after the Closing Date as set forth on
Schedule 2.1(i).

(j)        all of Seller’s causes of action, claims, credits, demands or rights
of set-off against third parties, directly related to the Business as of the
Closing Date;

 

 

 

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(k)       all goodwill associated with the Business as of the Closing Date,
together with the right to represent to third parties that Purchaser is the
owner of the Business as of the Closing Date;

(l)        all of Seller’s computer, Software, telecommunications, fixtures,
fittings, machinery and other fixed assets as set forth on Schedule 2.1(l); and

(m)      all proceeds received or receivable by Seller under insurance policies
as a result of any damage to or destruction of any Purchased Asset that occurs
during the period between the Reference Date and the Closing Date to the extent
Seller has not used such proceeds to repair or replace such damaged or destroyed
Purchased Asset.

Notwithstanding the foregoing, the transfer of the Purchased Assets pursuant to
this Agreement shall not include the assumption of any Liability related to the
Purchased Assets unless Purchaser expressly assumes such Liability pursuant to
Section 2.3.

2.2       Excluded Assets. Nothing herein contained shall be deemed to sell,
transfer, assign or convey the Excluded Assets to Purchaser, and Seller shall
retain all right, title and interest to, in and under the Excluded Assets.
“Excluded Assets” shall mean all assets, properties, interests and rights of
Seller other than the Purchased Assets, including without limitation each of the
following assets:

(a )      the Excluded Agreements;

(b)       all Cash of Seller directly related to the Business and held by Seller
prior to the Closing Date other than Cash generated by the operation of the
Purchased Assets at and after the Closing Date;

(c)       all minute books, organizational documents, stock registers and such
other books and records of Seller as pertains to ownership, organization or
existence of Seller and duplicate copies of such records as are necessary to
enable Seller to file Tax returns and reports;

(d)       any Intellectual Property rights of Seller, except for the Purchased
Intellectual Property;

(e)       [Reserved]

(f)       ownership and other rights with respect to all Seller’s benefit plans;

(g)       any other books and records that Seller reasonably demonstrates that
are required by Law or Order to retain the original thereof, provided that, if
permitted by Law or Order, Seller shall provide Purchaser with copies of such
books and records that relate to the Business;

(h)       any bank accounts of Seller;

(i)        any claim, right or interest of Seller in or to any refund, rebate,
abatement or other recovery for Taxes attributable to the ownership or operation
of the Purchased Assets for any period ending prior to the Closing Date or for
Taxes attributable to the ownership or operation of the Excluded Assets for any
period, together with any interest due thereon or penalty rebate arising
therefrom;

 

 

 

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(j)        other than as described in Section 2.1(m), all insurance policies or
rights to proceeds thereof relating to the assets, properties, business or
operations of Seller, other than those relating to the Purchased Assets and
Assumed Liabilities;

(k)       any rights, claims or causes of action of Seller against third parties
relating to assets, properties, business or operations of Seller not directly
related to the Purchased Assets;

(l)        all Tax returns and financial statements of Seller and the Business
and all records (including working papers) directly related thereto; provided,
that upon request Seller shall provide Purchaser with copies of the portions of
such Tax returns, financial statements and records that relate solely to
Subsidiary;

(m)      all of Seller’s causes of action, claims, credits, demands or rights of
set-off against third parties, to the extent related to any Excluded Asset;

(n)      all rights that accrue to Seller under this Agreement;

(o)      all OCS Funded Technology;

(p)       the following products of Seller (i) AngioVision product line,
including AngioVision 1000 and AngioVision 2000; (ii) DigiPhoto Product line,
including DigiPhoto 640 and DigiPhoto 780; (iii) CamVision Product line,
including CamVision 1000 and CamVision 2000; (iv) SpotVision; (v); RadVision;
and (vi) Seller’s interest in the CGLT product; and

(q)       all rights, powers and assets not included in the Purchased Assets.

2.3       Assumption of Liabilities. On the terms and subject to the conditions
set forth in this Agreement, at the Closing, Purchaser shall assume, effective
as of the Closing, and shall timely perform, pay and discharge in accordance
with their respective terms only the following Liabilities (collectively, the
“Assumed Liabilities”):

(a)       Liabilities of Seller under the United Mizrachi Bank Loan not to
exceed $1,500,000 in principal amount and the OIS Loan not to exceed $4,200,000
in principal amount (the material terms of which, including their respective
interests rates, are as set forth in Schedule 2.3(a));

(b)       Liabilities of Seller under the Purchased Agreements (other than for
previously paid performance required to have been made prior to the Closing
Date);

(c)       Liabilities of Seller in connection with the Belgian Activities as set
forth on Schedule 2.3(c);

(d)       [Reserved]

 

 

 

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(e)       Liabilities arising at or after the Closing Date from sales at and
after the Closing Date of the Purchased Assets pursuant to product warranties,
product returns and rebates;

(f)        Liabilities arising from claims or lawsuits related to events arising
in connection with the Purchased Assets at or after the Closing Date;

(g)       One-half of Transfer Taxes applicable to the transfer of the Purchased
Assets pursuant to this Agreement;

(h)       Liabilities for Taxes relating to the Purchased Assets for all taxable
periods beginning at or after the Closing Date;

(i)        Liabilities and obligations of Seller directly relating to the
Purchased Intellectual Property, as set forth on Schedule 2.3(i);

(j)        Liabilities and obligations of Seller arising at or after the Closing
Date from an event occurring at or after the Closing Date under non-disclosure
or confidentiality, non-compete, or non-solicitation agreements with third
parties or with Employees or Former Employees of Seller or any Subsidiary, in
each case to the extent directly related to the Business as of the Closing Date
as set forth on Schedule 2.1(j); and

(k)       Liabilities of Seller under or pursuant to all warranties,
representations and guarantees made by suppliers, manufacturers and contractors
to the extent directly related to the Business as of the Closing Date as set
forth on Schedule 2.1(k).

2.4       Excluded Liabilities. Purchaser will not assume or be liable for any
Excluded Liabilities. “Excluded Liabilities” shall mean all Liabilities of
Seller other than the Assumed Liabilities. Excluded Liabilities shall include
Liabilities existing on or attributable to an act, omission or circumstance that
occurred or existed prior to the Closing Date in respect of the Business, other
than (i) the obligation to perform under the Purchased Agreements on or after
Closing, and (ii) the Assumed Liabilities as otherwise specifically provided
herein, and the following Liabilities:

(a)       all Liabilities arising out of Excluded Assets, including Excluded
Agreements;

(b)       except as otherwise provided in Section 2.3(g), all Liabilities for
Taxes (i) for all taxable periods of Seller, in the case of Taxes relating to
the Excluded Assets, (ii) for all taxable periods ending prior to the Closing
Date, in the case of Taxes relating to the Purchased Assets and (iii) under any
Tax allocation, sharing or similar agreement;

(c)       one-half of all Transfer Taxes applicable to the transfer of the
Purchased Assets pursuant to this Agreement;

(d)       all Liabilities relating to amounts required to be paid or assumed by
Seller hereunder; and

 

 

 

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(e)       Liabilities arising under or pursuant to Environmental Laws directly
related to the Business or the Purchased Assets, whether known or unknown,
contingent or reserved, including but not limited to Liabilities arising out of
or directly related to the presence, use, storage, disposal, treatment or
release of Hazardous Materials by the Business or at any of the Purchased
Assets;

2.5       Further Conveyances and Assumptions; Consent of Third Parties. From
time to time following the Closing, Seller and Purchaser shall execute,
acknowledge and deliver all such further conveyances, notices, assumptions,
releases and acquittances and such other instruments, and shall take such
further actions, as may be reasonably necessary or appropriate to assure fully
to Purchaser and its successors or assigns, all of the rights, titles and
interests intended to be conveyed to Purchaser under this Agreement, the
Transfer Documents and the Escrow Agreement and to assure fully to Seller and
its Affiliates and their successors and assigns, the assumption of the
liabilities and obligations intended to be assumed by Purchaser under this
Agreement, the Transfer Documents and the Escrow Agreement, and to otherwise
make effective the transactions contemplated hereby and thereby.

ARTICLE 3.

SALE AND PURCHASE OF CAPITAL STOCK

3.1       Sale and Purchase of Shares. Upon the terms and subject to the
conditions contained herein, on the Closing Date, Seller shall sell, assign,
transfer, convey and deliver to Purchaser, free and clear of any Lien except
Permitted Exceptions, and Purchaser shall purchase from Seller, all of the
shares of CCS which are issued and outstanding and which are owned by Seller,
which constitute sixty three percent (63%) of the issued and outstanding shares
of CCS (the “Purchased Shares”).

ARTICLE 4.

CONSIDERATION

4.1       Consideration. The aggregate consideration (“Total Consideration”) for
the Purchased Assets shall be as follows:

(a)       In full payment of the purchase price for the Purchased Intellectual
Property, Purchaser shall deem satisfied the inter-company Indebtedness owed by
Seller to Purchaser under the OIS Loan and, as of the Closing Date, Purchaser
will fully release and forever discharge Seller and/or its Affiliates from any
and all liens, charges, pledges, security interests, debts, liabilities, claims,
demands, obligations and other encumbrances arising from or related to such
inter-company Indebtedness, including but not limited to principal and interest
of the OIS Loan, which thereafter shall be deemed fully paid and discharged and
all agreements relating thereto terminated. Without derogating from the
forgoing, Purchaser shall sign all instruments required in order to cancel any
pledge or other security interest registered upon or otherwise applicable to OIS
shares owned by Seller and/or any Seller Intellectual Property or other assets,
as security for repayment of such indebtedness, all of which shall be deemed
terminated and discharged as of the Closing.

 

 

 

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(b)       In full payment of the purchase price of the Purchased Agreements,
the Purchased Shares and the Belgian Activities, Purchaser shall assume,
pursuant to an assignment and assumption agreement, the Indebtedness owed by
Seller to United Mizrachi Bank under the United Mizrachi Bank Loan, and fully
release and forever discharge Seller from any and all liens, charges, pledges
security interests, debts, liabilities, claims, demands, obligations and other
encumbrances arising from or related to such Indebtedness. Without derogating
from the forgoing, Purchaser shall sign all instruments required in order to
cancel any pledge or other security interest registered upon or otherwise
applicable to OIS shares owned by Seller and/or any Seller Intellectual Property
or other assets, as security for repayment of such indebtedness, all of which
shall be deemed terminated and discharged as of the Closing.

ARTICLE 5.

 

CLOSING AND TERMINATION

5.1       Closing Date.

(a)       The consummation of the purchase, sale of the Purchased Assets and the
assumption of the Assumed Liabilities provided for in Article 2 hereof (the
“Closing”) shall take place at the offices of Troutman Sanders LLP, 405
Lexington Avenue, New York, New York 10174 (or at such other place as the
parties may designate in writing) at 10:00 a.m. (Eastern standard time) on a
date to be specified by the parties (the “Closing Date”), which date shall be no
later than the Termination Date (as defined below); provided, that the
satisfaction or waiver of the conditions set forth in Article 9 (other than
conditions that by their nature are to be satisfied at the Closing, but subject
to the satisfaction or waiver of those conditions at such time) shall have
occurred, unless another time, date or place is agreed to in writing by the
parties hereto. Notwithstanding anything in the foregoing to the contrary, the
parties hereto agree that the Closing may be conducted by electronic exchange
(by facsimile, .pdf transmission or similar means of electronic transmission)
and telephonic confirmation of all relevant closing deliveries, except to the
extent necessary to transfer title to the Purchased Shares.

(b)       On the Closing Date, the Purchased Shares shall be transferred by
Seller to Purchaser by means of the execution of the CCS Deed. The fees and
expenses of such German civil law notary shall be split equally between Seller
and Purchaser.

(c)       On the Closing Date, Seller shall deliver or cause to be delivered to
Purchaser the following documents and evidence:

 

(i)

written statements signed by Seller, executing the sale, transfer, assignment,
conveyance and delivery, to Purchaser, of the Purchased Intellectual Property,
Purchased Shares, Purchased Agreements and all documentation associated with the
Belgian Activities;

 

(ii)

in relation to CCS, the statutory registers and minute books (written up to the
time of Closing), certificate of incorporation; and

 

 

 

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(iii)

Officer Certificate of a qualified officer of United Mizrachi Bank indicating
the balance due on the United Mizrachi Bank Loan and the terms of the loan
(interest payment dates, maturity date, collateral).

(d)       From and after the Closing Date, Purchaser will receive the benefit of
the Purchased Assets and Purchased Shares and shall accrue the obligation of the
Assumed Liabilities, and as of such time, the risk of loss of the Purchased
Assets and Purchased Shares shall be deemed transferred from Seller to
Purchaser.

(e)       On the Closing Date, Purchaser shall deliver or cause to be delivered
to Seller an Officer Certificate of a qualified officer of Purchaser indicating
the balance due on the OIS Loan and the terms of the loan, including, the
interest payment dates, maturity date, and collateral).

5.2       Termination of Agreement. This Agreement may be terminated prior to
the Closing as follows:

(a)       At the election of Seller or Purchaser on or after October 22, 2009
(such date, as it may be extended under this Section 5.2(a), the “Termination
Date”), if the Closing shall not have occurred by the close of business on such
date, provided that the terminating party is not in breach in any material
respect of any of its obligations hereunder; and provided, further, that upon
the mutual written agreement of Purchaser and Seller, the Termination Date may
be extended for agreed upon additional periods of time;

(b)       by mutual written consent of Seller and Purchaser;

(c)       by Seller or Purchaser if there shall be in effect a final
nonappealable Order of a Governmental Body of competent jurisdiction
restraining, enjoining or otherwise prohibiting the consummation of the
transactions contemplated hereby; provided, however, that the right to terminate
this Agreement under this Section5.2(c)  shall not be available to a party if
such Order was primarily due to the failure of such party to perform any of its
obligations under this Agreement; or

(d)       by Purchaser if (i)  Seller shall be in material violation of any of
its obligations hereunder, and if such violation (if curable) is not cured
within twenty (20) days after the giving of written notice by Purchaser to
Seller or (ii) there has been any event, change, occurrence or circumstance that
renders any of the conditions set forth in Article 9 incapable of being
satisfied by the Termination Date.

(e)       by Seller if (i) Purchaser shall be in material violation of any of
its obligations hereunder, and if such violation (if curable) is not cured
within twenty (20) days after the giving of written notice by Seller to
Purchaser, or (ii) there has been any event, change, occurrence or circumstance
that renders any of the conditions set forth in Article 9 incapable of being
satisfied by the Termination Date.

 

 

 

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5.3       Procedure upon Termination. In the event of termination and
abandonment by Purchaser or Seller pursuant to Section 5.2 hereof, written
notice thereof shall forthwith be given to the other party or parties, and this
Agreement shall terminate, and the transactions contemplated hereunder shall be
abandoned, without further action by Purchaser or Seller.

5.4       Effect of Termination.

(a)       In the event that this Agreement is validly terminated in accordance
with Sections 5.2 and 5.3, then each of the parties shall be relieved of their
duties and obligations arising under this Agreement after the date of such
termination and such termination shall be without liability to Purchaser or
Seller; provided, that no such termination shall relieve any party hereto from
liability for any willful breach of this Agreement and; provided, further, that
the obligations of the parties set forth in Sections 5.4, 8.5, 8.6, and 12.2
through 12.10 hereof shall survive any such termination and shall be enforceable
hereunder.

(b)       Nothing in this Section 5.4 shall relieve Purchaser or Seller of any
liability for a breach of any of its covenants or agreements or breach of its
representations and warranties contained in this Agreement prior to the date of
termination. The Damages recoverable by the non-breaching party shall include
all attorneys’ fees reasonably incurred by such party in connection with the
transactions contemplated hereby.

(c)       Nothing in this Section 5.4 shall relieve Purchaser or Seller of their
obligations under Section 8.5, and such obligations shall survive any
termination of this Agreement. If this Agreement is terminated pursuant to
Section 5.2 hereof, Purchaser and Seller shall promptly destroy any Confidential
Information of the other in its possession.

ARTICLE 6.

 

REPRESENTATIONS AND WARRANTIES OF SELLER

Except as set forth in the corresponding sections or subsections of the
disclosure letter delivered to Purchaser by Seller concurrently with the
execution and delivery of this Agreement (the “Seller Disclosure Letter”),
Seller hereby represents and warrants to Purchaser that:

6.1       Organization. Each of Seller and Subsidiary (as defined below) is a
legal entity duly organized and validly existing under the laws of the
jurisdiction of its incorporation or organization and has all requisite
corporate power and authority to own, lease and operate its properties and
assets and to carry on its business as it is now being conducted, and is
qualified to do business as a foreign corporation in each jurisdiction where the
ownership, leasing or operation of its assets or properties or the conduct of
its business requires such qualification, except where the failure to be so
organized, qualified or to have such power or authority, individually or in the
aggregate, has not had and would not reasonably be expected to have a Seller
Material Adverse Effect (as defined below). Seller has made available to
Purchaser complete and correct copies of Seller’s and Subsidiary’s charter or
comparable governing documents, each as amended to the date hereof, and each as
so delivered is in full force and effect. Neither Seller nor Subsidiary is in
violation of any provisions of its Articles of

 

 

 

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Association or comparable governing documents. No dissolution, revocation or
forfeiture proceedings regarding Seller or Subsidiary have been commenced. The
minute books of Seller and Subsidiary made available to Purchaser or its
representatives contain accurate records of all meetings of their boards of
directors, all committees of the boards of directors and all of their
shareholders’ meetings in the last five years. Section 6.1 of the Seller
Disclosure Letter contains a correct and complete list of each jurisdiction
where Seller and Subsidiary are organized and qualified to do business. As used
in this Agreement, the term (i) “Subsidiary” shall refer to CCS; and (ii)
“Seller Material Adverse Effect” means (i) an event, occurrence, fact,
condition, change or effect that has a material adverse effect on the Purchased
Assets (taken as a hole), or the operations, condition (financial or otherwise)
or results of operations or prospects of the Business, or (ii) preventing,
materially delaying or materially impairing Seller’s or Subsidiary’s ability to
consummate the transactions contemplated by this Agreement.

6.2       Corporate Authority; Approval and Fairness.

(i)        Seller has all requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement and each other
agreement, document, instrument or certificate contemplated by this Agreement or
to be executed by Seller in connection with the consummation of the transactions
contemplated by this Agreement (the “Seller Documents”), to perform its
respective obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby and no other corporate proceedings
on the part of Seller are necessary to authorize this Agreement or any Seller
Document to which it is a party or to consummate the transactions contemplated
by this Agreement. The execution, delivery and performance of this Agreement and
each of the Seller Documents and the consummation of the transactions
contemplated hereby and thereby have been duly authorized and approved by all
requisite corporate action on the part of Seller. This Agreement has been, and
each of the Seller Documents will be at or prior to the Closing, duly and
validly executed and delivered by Seller and (assuming the due authorization,
execution and delivery by the other parties hereto and thereto) this Agreement
constitutes, and each of the Seller Documents when so executed and delivered
will constitute, legal, valid and binding obligations of Seller, enforceable
against Seller in accordance with its respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting
creditors’ rights and remedies generally, and subject, as to enforceability, to
general principles of equity.

(ii)       (A) Each of the audit committee and the board of directors of
MediVision has: (I) unanimously determined that this Agreement and the
transactions contemplated by this Agreement are fair to, and in the best
interests of, MediVision and its shareholders; (II) approved this Agreement and
the transactions contemplated hereby; and (III) made all other affirmative
determinations required to be made by it in connection with this Agreement and
the transactions contemplated hereby under the Israeli Companies Law; and
(B) the board of directors of MediVision has: (I) resolved to recommend approval
of this Agreement and the transactions contemplated hereby to the general
meeting of MediVision’s shareholders (the “MediVision Recommendation”) and
directed that this Agreement be submitted to the general meeting of MediVision’s

 

 

 

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shareholders for their approval; and (II) received the BDO Fairness Opinion, to
the effect that the consideration to be received by MediVision under this
Agreement is fair from a financial point of view, as of the date of such
opinion, to MediVision.

6.3       Consent of Third Parties; No Violations.

 
(i)        Except as set for in Section 6.3(i) of the Seller Disclosure Letter,
no consent, waiver, approval, Order, Permit or authorization of, or declaration
or filing with, or notification to, any Person or any Governmental Bodyis
required on the part of Seller in connection with the execution and delivery of
this Agreement, the compliance by Seller with any of the provisions hereof, the
consummation of the transactions contemplated hereby, and except such other
consents, waivers, approvals, Orders, Permits or authorizations the failure of
which to obtain would not have a Seller Material Adverse Effect.

(ii)       Other than as set forth in Section 6.3(ii) of the Seller Disclosure
Letter, and/or other than Permitted Exceptions, execution, delivery and
performance of this Agreement by Seller does not constitute or result in the
creation of imposition of any Lien on any of the Business or the Purchased
Assets or conflict with, or result in any violation of or default (with or
without notice or lapse of time, or both) under, or give rise to a right of
termination or cancellation under, any provision of (i) the certificate of
incorporation and bylaws or comparable organizational documents of Seller or
Subsidiary; (ii) any Seller Material Agreement or material Permit to which
Seller or Subsidiary is a party or by which any of the Business or the Purchased
Assets are subject; (iii) any Order of any Governmental Body by which any of the
Business or the Purchased Assets may be subject; or (v) any applicable Law.
Section 6.3(ii) of the Seller Disclosure Letter sets forth a correct and
complete list of Seller Material Agreements pursuant to which consents or
waivers are or may be required prior to consummation of the transactions
contemplated by this Agreement.

(iii)      Other than as described in Section 6.3(iii) of the Seller Disclosure
Letter, except for: (A) relationships with Seller or Subsidiary as an officer,
director, or employee thereof (and compensation by Seller or Subsidiary in
consideration of such services) in accordance with the terms of their
employment; and (B) relationships with Seller as shareholders or option holders
therein, to the Knowledge of Seller, none of the directors or officers, or the
shareholders of Seller, or any known member of any of their families or
Affiliates, are presently a party to, or have been a party to during the year
preceding the date of this Agreement, any transaction, agreement or arrangement
with Seller or Subsidiary. To the Knowledge of Seller none of the officers,
directors or shareholders of Seller have any known interest in any property,
real or personal, tangible or intangible, including inventions, copyrights,
trademarks, or trade names, used in or pertaining to the business, or any
supplier, distributor, or customer of Seller, except for the normal rights of a
shareholder or option holder or Seller. Other than as described in Section
6.3(iii) of the Seller Disclosure Letter, Seller and Subsidiary have not, since
July 1, 2004, (x) extended or maintained credit, arranged for the extension of
credit or renewed an extension of credit in the form of a personal loan to or
for any director or executive officer of Seller or (y) materially modified any
term of any such extension or maintenance of credit.

 

 

 

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6.4       MediVision Reports; Financial Statements.

(i)        To the Knowledge of Seller, as of their respective dates (or, if
amended prior to the date hereof, as of the date of such amendment) all forms,
statements, reports and documents filed with or furnished to the Euronext Stock
Exchange (the “MediVision ESE Reports”) did not and will not, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading. Each English language
translation of a non-English language document filed as an exhibit to, or
incorporated by reference into, any MediVision ESE Report constitutes a true,
correct and complete translation of the original document in all material
respects.

(ii)       MediVision does not maintain disclosure controls and procedures that
are designed to ensure that information required to be disclosed by MediVision
is recorded and reported on a timely basis to the individuals responsible for
the preparation of MediVision’s filings with the Euronext Stock Exchange and
other public disclosure documents. MediVision and Subsidiary maintain a system
of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are generally executed in accordance with management’s general
or specific authorizations; (ii) transactions are generally recorded as
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability;
(iii) access to assets is generally permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any material
differences. MediVision’s management has disclosed to MediVision’s auditors and
the audit committee of MediVision’s board of directors (A) any significant
deficiencies in the design or operation of its internal controls over financial
reporting that are reasonably likely to materially adversely affect MediVision’s
ability to record, process, summarize and report financial information and has
identified for MediVision’s auditors and audit committee of MediVision’s board
of directors any material weaknesses in internal control over financial
reporting and (B) any fraud, whether or not material, that involves management
or other employees who have a significant role in MediVision’s internal control
over financial reporting. MediVision has made available to OIS (i) the material
information relating to any such disclosure made by management to MediVision’s
auditors and audit committee since December 31, 2000 and (ii) any material
communication since December 31, 2000 made by management or MediVision’s
auditors to its audit committee. Since December 31, 2000, no material complaints
from any source regarding accounting, internal accounting controls or auditing
matters, and no material concerns from MediVision employees regarding
questionable accounting or auditing matters, have been received by MediVision.
MediVision has made available to OIS the material information relating to all
such material complaints or concerns relating to other matters made since
December 31, 2000 and through the date hereof. No attorney representing
MediVision or Subsidiary, whether or not employed by MediVision or Subsidiary,
has reported to MediVision any evidence of a violation of securities Laws,
breach of fiduciary duty or similar violation by MediVision or any of its
officers, directors, employees or agents to MediVision’s chief legal officer,
audit committee (or other committee designated for the purpose) of the board of
directors.

 

 

 

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(iii)      Each of the consolidated balance sheets included in or incorporated
by reference into any MediVision ESE Reports (including the related notes and
schedules) fairly presents in all material respects the consolidated financial
position of MediVision and its consolidated subsidiaries as of its date and each
of the consolidated statements of income, changes in shareholders’ equity
(deficit) and cash flows included in or incorporated by reference into
MediVision ESE Reports (including any related notes and schedules) fairly
presents in all material respects the results of operations, retained earnings
(loss) and changes in financial position, as the case may be, of such companies
for the periods set forth therein (subject, in the case of unaudited statements,
to notes and normal year-end audit adjustments that will not be material in
amount or effect), in each case in accordance with International Accounting
Standards (“IAS”) consistently applied during the periods involved, except as
may be noted therein.

(iv)      MediVision has previously furnished to OIS a complete and correct copy
of any material amendments or modifications, which have not yet been filed with
the Euronext Stock Exchange but which are required to be filed, to agreements,
documents or other instruments which previously had been filed by MediVision
with the Euronext Stock Exchange.

(v)       MediVision has made available to OIS all material position papers with
respect to accounting policies and practices, including any quarterly position
made available to MediVision’s principal financial and accounting officer, its
audit committee or its independent registered public accounting firm;
MediVision’s revenue recognition policies and practices are and have been in
compliance in all material respects with all applicable rules, regulations and
statements of the Euronext Stock Exchange with respect thereto; and MediVision’s
controls over its revenue recognition policies and practices have been
communicated to and applied in all material respects by its sales organization.

(vi)      Neither MediVision nor any of its subsidiaries has any liabilities
(absolute, accrued, contingent or otherwise) of a nature required to be
disclosed in a MediVision ESE Report or on a consolidated balance sheet or in
the related notes to consolidated financial statements prepared in accordance
with IAS and the rules of the Euronext Stock Exchange and which are not so
reported and which are, individually or in the aggregate, material to the
business, results of operations, assets or financial condition of MediVision and
its Subsidiaries taken as a whole, except liabilities permitted to be incurred
under this Agreement.

6.5       Accounts Receivable. All Accounts Receivable: (i) have arisen from
bona fide transactions in the Ordinary Course of Business consistent with past
practice and are payable on ordinary trade terms, (ii) to the Knowledge of
Seller, are legal, valid and binding obligations of  the respective debtors
enforceable in accordance with their terms, and (iii) are not subject to any
valid counterclaim. All Accounts Receivable of Seller and its subsidiaries
reflected on the balance sheet are good and fully collectible at the aggregate
recorded amounts thereof, net of any applicable reserve for returns or doubtful
accounts reflected thereon.

 

 

 

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6.6       Title to Purchased Assets, Intellectual Property.

(i)        Except as set forth in Schedule 6.6(i), Seller owns and has good and
marketable title to each of the Purchased Assets, free and clear of all Liens
(other than Permitted Exceptions).

(ii)       Except as set forth on Schedule 6.4(ii), Seller exclusively owns and
has rights to use all Purchased Intellectual Property, free and clear of any
Liens (other than Permitted Exceptions). Except as set forth on
Schedule 6.4(ii), to the Knowledge of Seller, (i) none of the Purchased
Intellectual Property infringes or results from the misappropriation of any
Intellectual Property of any third Person, (ii) no third Person is infringing or
misappropriating any Purchased Intellectual Property, and (iii) none of the
Purchased Intellectual Property is the subject of any current claim of
infringement or misappropriation received by Seller or Subsidiary in writing.

6.7       Ownership and Transfer of Purchased Shares. Seller is the record and
beneficial owner of the Purchased Shares, which constitute sixty three percent
(63%) of the issued and outstanding shares of CCS free and clear of any and all
Liens (other than Permitted Exceptions). To the Knowledge of Seller, CCS has no
shares reserved for issuance for any outstanding share option plan as of the
date hereof. Seller has the corporate power and authority to sell, transfer,
assign and deliver the Purchased Shares being sold by it as provided in this
Agreement, and such delivery will convey to Purchaser good and marketable title
to the Purchased Shares, free and clear of any and all Liens (other than
Permitted Exceptions).

6.8       Intellectual Property.

 

(i)        Seller owns or has a valid right to use the Purchased Intellectual
Property used in its business as presently conducted, except as, individually or
in the aggregate, has not had and would not reasonably be expected to have a
Seller Material Adverse Effect. Section 6.8(i) of the Seller Disclosure Letter
sets forth the (x) Purchased Intellectual Property owned by Seller, indicating
for each registered item the registration or application number and the
applicable filing jurisdiction and (y) material Intellectual Property Agreements
to which Seller or Subsidiary is a party, or is bound by or has rights under
associated with the Purchased Intellectual Property. Except as set forth in
Section 6.8(i) of the Seller Disclosure Letter, Seller has exclusive ownership
of the Purchased Intellectual Property owned by it, free and clear of all Liens
(other than Permitted Exceptions), exclusive licenses and non-exclusive licenses
other than those granted in connection with the sale of products in the Ordinary
Course of Business. The Purchased Intellectual Property owned by Seller is to
the Knowledge of Seller valid, subsisting and enforceable, and is not subject to
any outstanding order, judgment, decree or agreement (other than Permitted
Exceptions) adversely affecting Seller’s or Subsidiary’s use thereof or its
rights thereto. Seller is aware of no facts that would

 

 

 

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materially adversely affect its or Subsidiary’s ability to utilize the Purchased
Intellectual Property as intended, including any patents or other Intellectual
Property of others (other than Permitted Exceptions) that could be infringed by
the manufacture, use, or sale of products derived from the Purchased
Intellectual Property. To the Knowledge of Seller, neither Seller nor Subsidiary
has infringed or otherwise violated the Intellectual Property rights, related to
the Purchased Intellectual Property, of any third party, and, except as set
forth in Section 6.8(i) of the Seller Disclosure Letter, neither Seller nor
Subsidiary has received any notice or claim challenging ownership of the
Purchased Intellectual Property owned by Seller or Subsidiary or claiming that
Seller or Subsidiary infringes or misappropriates the Intellectual Property of
any third party related to the Purchased Intellectual Property (other than
Permitted Exceptions).

(ii)       Without limiting the foregoing, except as set forth in
Section 6.8(ii) of the Seller Disclosure Letter, Seller owns all Intellectual
Property directly related to the IRI. Section 6.8(ii) of the Seller Disclosure
Letter sets forth all Agreements to which Seller or Subsidiary is a party, or is
bound by or has rights under, directly relating to the IRI, its development, or
the Intellectual Property directly related thereto (“IRI Project”). Except as
set forth in Section 6.8(ii) of the Seller Disclosure Letter, Seller has
exclusive ownership of all Intellectual Property directly related to the IRI,
free and clear of all Liens (other than Permitted Exceptions), exclusive
licenses and non-exclusive licenses other than those granted in connection with
the sale of products in the ordinary course of business. The Intellectual
Property directly relating to the IRI is valid, subsisting and enforceable and
is not subject to any outstanding order, judgment or decree (other than
Permitted Exceptions) adversely affecting Seller’s use thereof or its rights
thereto. Except for a settlement agreement, dated as of _______, (the “Elop
Settlement Agreement”) entered into by Seller and Elbit Systems Electro-Optics
Elop Ltd. (“Elop”) and the agreements set forth in Section 6.8(ii) of the Seller
Disclosure Letter, there are no agreements (other than Permitted Exceptions)
adversely affecting Seller’s use of the IRI Project or the Intellectual Property
rights related thereto. Seller is aware of no facts that would adversely affect
its ability to utilize such Intellectual Property as intended, including any
patents or other Intellectual Property of others (other than Permitted
Exceptions) that could be infringed by the manufacture, use, or sale of products
derived from such Intellectual Property.

(iii)      Seller and Subsidiary have taken reasonable and customary measures to
protect the confidentiality and value of all trade secrets related to the
Purchased Intellectual Property, that are owned, used or held by Seller or
Subsidiary (“Purchased Trade Secrets”), and to the Knowledge of Seller, such
Purchased Trade Secrets (other than Permitted Exceptions) have not been used,
disclosed to or discovered by any person except pursuant to valid and
appropriate non-disclosure and/or license agreements which have not been
breached. To the Knowledge of Seller, no Employee has any patents issued or
applications pending for any device, process, design or invention of any kind
now used or currently known to be needed by Seller or Subsidiary in connection
with the Purchased Intellectual Property, in the furtherance of its business,
which patents or applications have not been assigned to Seller or Subsidiary.
All current Employees and all Former Employees that were involved in the
development of Seller Products or

 

 

 

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Intellectual Property have executed valid intellectual property and
confidentiality agreements for the benefit of Seller or Subsidiary in a form
that Seller has prior to the date of this Agreement provided to Purchaser. Every
agreement, under which Intellectual Property was developed, created or otherwise
made, for Seller or Subsidiary, assigns all rights to such Intellectual Property
to Seller or to Subsidiary.

(iv)      Neither Seller nor Subsidiary has granted any licenses or other rights
to third parties to use the Purchased Intellectual Property other than
non-exclusive licenses granted in the ordinary course of business pursuant to
customary terms that have been previously provided to Purchaser.

(v)       Seller has source code for each version of software which is part of
the Purchased Intellectual Property, owned by it or Subsidiary and used in the
past five (5) years. The source code for such software will compile into object
code or otherwise is capable of being installed and operated. Once compiled
and/or installed, such software in all material respects will have the features,
functions and performance described in the documentation pertaining to it and
will execute on the computer platforms for which it is designed. To the
Knowledge of Seller, except as set forth in Section 6.8(v) of the Seller
Disclosure Letter, none of the software owned by Seller or Subsidiary which is
Purchased Intellectual Property contains any shareware, open source code, or
other software whose use requires disclosure or licensing of Intellectual
Property, including any GNU or GPL libraries or code.

(vi)      Section 6.8(vi) of the Seller Disclosure Letter contains a list of all
software that is sold, licensed, leased or otherwise distributed by Seller or
Subsidiary or resellers (the “Software Products”), in connection with the
Purchased Intellectual Property, indicating, in each case, the name, owner and
most recent version of the Software Product and information regarding any
third-party code that is embedded in such Software Product. For the avoidance of
doubt, software that is obtained under a “limited license” or open source
license shall be considered “third-party code.”

6.9       Seller Material Agreements and Governmental Contracts.

(i)        Each Seller Material Agreement (as defined below) disclosed or
required to be disclosed in Schedule 6.9(i) is in full force and effect and
constitutes a legal, valid and binding agreement of, enforceable in accordance
with its terms against, Seller or Subsidiary, as the case may be, as a party
thereto and, to the Knowledge of Seller, the other party thereto. Neither Seller
nor Subsidiary, as the case may be, nor, to the Knowledge of Seller, any other
party to any Seller Material Agreement, is in violation or breach of or default
under, in any respect, any such Seller Material Agreement (or, with notice or
lapse of time or both, would be in violation or breach of or default under, in
any material respect, any such Seller Material Agreement). Neither Seller nor
Subsidiary, as the case may be, has received any written notice from any other
party to any Seller Material Agreement to the termination or non-renewal of such
Seller Material Agreement.

 

 

 

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(ii)       Except as set forth on Schedule 6.9(ii), neither Seller nor
Subsidiary has received any written notice of any default or event that with
notice or lapse of time or both would constitute a default by Seller or
Subsidiary under any Seller Material Agreement.

(iii)      Schedule 6.9(i) sets forth all of the following Agreements to which
Seller or Subsidiary is a party or by which they are bound and that are directly
related to the Purchased Assets or by which the Purchased Assets may be bound or
affected:

(A)      (i) any Agreement for the purchase of raw materials that is reasonably
likely to require payments of One Hundred Thousand Dollars ($100,000) or more in
any year; (ii) any Agreement for the acquisition of or investment in capital
equipment for an aggregate purchase price or investment value of One Hundred
Thousand Dollars ($100,000) or more; (iii) any Agreement authorizing the
distribution or resale by any Person of any of Seller’s products or services or
(iv) any Agreement for the sale or rental of products or services that is
reasonably likely to result in payments to Seller and Subsidiary of One Hundred
Thousand Dollars ($100,000) or more in any year;

(B)      any partnership, joint venture or other similar agreement or
arrangement relating to the formation, creation, operation, management or
control of any partnership or joint venture material to Seller or Subsidiary or
in which Seller owns more than a five percent (5%) voting or economic interest,
or any interest valued at more than One Hundred Thousand Dollars ($100,000)
without regard to percentage voting or economic interest;

(C)      any Agreement relating to indebtedness for borrowed money or the
deferred purchase price of property (in either case, whether incurred, assumed,
guaranteed or secured by any asset) in excess of One Hundred Thousand Dollars
($100,000);

(D)      any non-competition Agreement or other Agreement that (i) purports to
limit in any material respect either the type of business in which Seller or
Subsidiary may engage or the manner or locations in which any of them may so
engage in any business, (ii) could require the disposition of any material
assets, line of business or product line of Seller or Subsidiary, (iii) grants
“most favored nation” status, including Seller and Subsidiary or (iv) prohibits
or limits the rights of Seller or Subsidiary in any material respect to make,
sell or distribute any products or services, or use, transfer, license,
distribute or enforce any of their respective Intellectual Property rights;

(E)       any Agreement to which Seller or Subsidiary is a party containing a
standstill or similar agreement pursuant to which the party has agreed not to
acquire assets or securities of the other party or any of its Affiliates;

(F)       any Agreement between Seller or Subsidiary and any director or officer
of Seller or any Person beneficially owning five percent (5%) or more of the
outstanding shares;

 

 

 

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(G)      any Agreement providing for indemnification by Seller or Subsidiary of
any Person, except for any such Agreement that is (x) not material to Seller and
Subsidiary and (y) entered into in the ordinary course of business;

(H)      any dealer, distributor, joint marketing or development Agreement
currently in force under which Seller or Subsidiary has continuing material
obligations to jointly market any product, technology or service and which may
not be canceled without penalty upon notice of ninety (90) days or less, or any
Agreement pursuant to which Seller or Subsidiary has continuing material
obligations to jointly develop any Intellectual Property that will not be owned,
in whole or in part, by Seller or Subsidiary and which may not be canceled
without penalty upon notice of ninety (90) days or less;

(I)        any Agreement or commitment currently in force to license any third
party to manufacture or reproduce any Seller Product, service or technology or
any Agreement or commitment currently in force to sell or distribute any Seller
Products, service or technology involving amounts in excess of Two Hundred Fifty
Thousand Dollars ($250,000) per annum, except agreements with distributors or
sales representatives in the ordinary course of business cancelable without
penalty upon notice of ninety (90) days or less;

(J)       any mortgages, indentures, guarantees, loans or credit agreements,
security agreements or other agreements or instruments relating to the borrowing
of money or extension of credit, other than trade payables incurred and
extensions of credit to customers granted in the ordinary course of business;

(K)      any settlement agreement under which Seller or Subsidiary has material
ongoing obligations;

(L)       all Agreements relating to the governance or shareholding of CCS,
including any Agreements between Seller and the other shareholder of CCS that
affect or may affect such governance or shareholding;

(M)     all Agreements relating to the development or ownership of the IRI or
the Intellectual Property relating thereto;

(N)      any Agreement or commitment not otherwise disclosed pursuant to one of
the other clauses of this Section 6.7(i) involving in excess of One Hundred
Thousand Dollars ($100,000) being paid by or to Seller or Subsidiary in any
twelve (12) month period;

(O)      any other Agreement or group of related Agreements that, if terminated
or subject to a default by any party thereto, would, individually or in the
aggregate, be reasonably likely to have a Seller Material Adverse Effect (the
Agreements described in clauses (A)-(Q), together with all exhibits and
schedules to such Agreements, being the “Seller Material Agreements”).

(iv)      A true and correct copy of each Seller Material Agreement has
previously been delivered to Purchaser and neither Seller, Subsidiary nor, to
the Knowledge of Seller, any other party thereto is in default with respect to a
material obligation under or material breach in any respect under the terms of
any such Seller Material Agreement.

 

 

 

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(v)       Except as set forth on Schedule 6.9(v), neither Seller nor Subsidiary
is party to any material Agreement to which the other ultimate contracting party
is a Governmental Body (including any subcontract with a prime contractor or
other subcontractor who is a party to any such Agreement)

6.10     Absence of Certain Developments. Except as expressly contemplated by
this Agreement or as set forth on Schedule 6.10, since December 31, 2008,
Subsidiary and the Business has been conducted only in the Ordinary Course of
Business, and, with respect to the Business, the Purchased Assets and
Subsidiary, there has not been:

(a)       any event, change or circumstance which has had, or is reasonably
likely to have, a Seller Material Adverse Effect;

(b)       any material damage (normal wear and tear excepted), destruction,
eminent domain taking or other casualty loss (whether or not covered by
insurance) affecting Subsidiary or the Business or any Purchased Asset in any
material respect;

(c)       any purchase, sale, mortgage, pledge, lease, or creation or other
incurrence of any Lien on the Business, any Purchased Asset or asset of
Subsidiary, other than purchases, sales or leases of assets in the Ordinary
Course of Business or the creation or incurrence of Permitted Exceptions;

(d)       any material change in any method of accounting or accounting practice
with respect to the Business or Subsidiary;

(e)       any entry into, termination, amendment, cancellation, or other
modification of any Agreement or any waiver of, or agreement with respect to,
any rights or obligations set forth therein, other than in the Ordinary Course
of Business;

(f)        any material settlement, waiver or agreement with respect to any
Legal Proceeding, Liability, or other right;

(g)       any incurrence or assumption of any Indebtedness in an aggregate
amount greater than Fifty Thousand Dollars ($50,000);

(h)       any (i) delay or postponement of the payment of any accounts payable
or any change in the methodology employed by Seller or Subsidiary with respect
to the payment thereof, (ii) acceleration of the collection of Accounts
Receivable or any change in the methodology employed by Seller or Subsidiary
with respect to the payment thereto, (iii) turnover of inventory, or
(iv) incurrence of other Liabilities outside of the Ordinary Course of Business,
which in the case of (i)-(iv) above, exceeds in the aggregate an amount greater
than Fifty Thousand Dollars ($50,000);

 

 

 

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(i)        any transaction with any Affiliate outside of the Ordinary Course of
Business;

(j)        any declaration, setting aside or payment of any dividend or other
distribution in respect of the capital stock (or other applicable equity or
beneficial interest) of Subsidiary, or any direct or indirect redemption,
purchase or other acquisition by Seller or its Affiliates of any such capital
stock (or other applicable equity or beneficial interest), or any Option with
respect to, Subsidiary;

(k)       any authorization, issuance, sale or other disposition by Subsidiary
of any shares of capital stock (or other applicable equity or beneficial
interest) of, or option with respect to, Subsidiary, or any modification or
amendment of any right of any holder of any outstanding shares of capital stock
(or other applicable equity or beneficial interest) of, or option with respect
to, Subsidiary;

(l)        any (A) reorganization, liquidation or dissolution of Seller or
Subsidiary or (B) business combination involving Seller or Subsidiary and any
other Person;

(m)      any amendment to the organizational documents of Subsidiary or the
taking of any action with respect to any such amendment;

(n)       except as set forth on Schedule 6.10(n), any violation, breach or
default under, or the taking or failure to take any action that (with or without
notice or lapse of time or both) would constitute a violation or breach of, or
default under, any term or provision of any Permit held or used by Subsidiary or
Seller and relating to the Business or the Purchased Assets; or

(o)       any entering into of an agreement to do or engage in any of the
foregoing.

6.11     Litigation. Except as set forth in Schedule 6.11 of the Seller
Disclosure Letter, there are no (A) civil, criminal or administrative actions,
suits, claims, hearings, arbitrations, investigations or other proceedings
pending or, to the Knowledge of Seller, threatened against Seller or Subsidiary
that relates to or may affect the Business, the Purchased Assets or Seller’s or
Subsidiary’s obligations under this Agreement, except for those that would not,
individually or in the aggregate, reasonably be expected to have a Seller
Material Adverse Effect or (B) obligations or liabilities of Seller or
Subsidiary, whether or not accrued, contingent or otherwise, and whether or not
required to be disclosed in Seller’s Financial Statements, or any other facts or
circumstances known to Seller that could reasonably be expected to result in any
claims against, or obligations or liabilities of, Seller or Subsidiary that
relates to or may affect the Business, the Purchased Assets or Seller’s or
Subsidiary’s obligations under this Agreement, including those relating to
environmental and occupational safety and health matters, except for those that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Seller Material Adverse Effect. Neither Seller nor Subsidiary
is a party to or subject to the provisions of any judgment, order, writ,
injunction, decree or award of any Governmental Body that relates to or may
affect the Business, the Purchased Assets or Seller’s or Subsidiary’s
obligations under this Agreement which, individually or in the aggregate, has
had, or would reasonably be expected to have, a Seller Material Adverse Effect.

 

 

 

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6.12     Financial Advisors. No Person has acted, directly or indirectly, as a
broker, finder or financial advisor for Seller in connection with the
transactions contemplated by this Agreement and no Person is entitled to any fee
or commission or like payment in respect thereof. Seller shall be solely
obligated for the payment of all fees and expenses of any such broker, finder,
or financial advisor.

6.13     Environmental Matters. Except as may not have a Seller Material Adverse
Effect, (i) Seller and its Subsidiaries are not in violation of any
Environmental Law; (ii) no real property currently or, to the Knowledge of
Seller, formerly owned or operated by Seller or Subsidiary is, or with respect
to formerly owned or operated properties, to the Knowledge of Seller is,
contaminated with any Hazardous Material or requires remediation under any
Environmental Law; (iii) Seller and Subsidiary do not have knowledge of being
subject to liability for any off-site disposal or contamination; (iv) Seller and
its Subsidiaries have not received any claims or notices alleging liability
under any Environmental Law; and (v) to the Knowledge of Seller, there are no
circumstances involving Seller or Subsidiary that could result in any claims,
liabilities, costs or restrictions on the ownership, use or transfer of any
property pursuant to any Environmental Law.

6.14     Tax Returns and Payments.

(i)        Each of Seller and Subsidiary (w) has prepared in good faith and duly
and timely filed (taking into account any extension of time within which to
file) all material Tax Returns (as defined below) required to be filed by it,
and all such Tax Returns are complete and accurate in all material respects and
prepared in substantial compliance with all applicable Laws; (x) with respect to
any Tax Returns that are required to be filed after the date hereof but prior to
the Closing Date, each of Seller and Subsidiary shall prepare in good faith and
duly and timely file (taking into account any extension of time within which to
file) all such Tax Returns and such Tax Returns shall be complete and accurate
in all material respects and prepared in substantial compliance with all
applicable Laws; (y) has paid all Taxes (as defined below) relating to Purchased
Assets that it is (or was) required to pay, whether or not shown as due on such
Tax Returns, and has withheld all Taxes it has been obligated to withhold from
amounts owing to any employee, creditor or third party, except with respect to
matters contested in good faith for which adequate reserves have been
established and which are set forth in Section 6.14(i) of the Seller Disclosure
Letter; and (z) has not waived any statute of limitations with respect to Taxes
relating to Purchased Assets or agreed to any extension of time with respect to
a Tax assessment or deficiency. Seller and Subsidiary have complied in all
material respects with all applicable Laws relating to Taxes relating to
Purchased Assets. Except as set forth in Section 6.14(i) of the Seller
Disclosure Letter, there are no pending, or to the Knowledge of Seller,
threatened audits, examinations, investigations or other proceedings in respect
of Taxes or Tax matters relating to Purchased Assets involving Seller or
Subsidiary. Seller has made available to Purchaser true and correct copies of
the Israeli Tax Returns and German income and VAT Tax Returns filed by Seller
and Subsidiary for each of the fiscal years ended December 31, 2006, 2005 and
2004; neither Seller nor Subsidiary has filed (and was not required to file) any
income or VAT Tax Returns in any jurisdictions other than Israel and Germany for

 

 

 

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such fiscal periods, and no claims have been made relating to Purchased Assets
by any other jurisdiction that Seller and/or Subsidiary is or may be subject to
income or VAT taxation by that jurisdiction. The unpaid Taxes of Seller and
Subsidiary (A) did not, as of the date hereof, exceed the reserves for Tax
liabilities (rather than any reserve for deferred Taxes established to reflect
timing differences between book and Tax income) and (B) will not exceed such
reserves as adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of Seller and Subsidiary in filing
their Tax Returns. Neither Seller nor Subsidiary has incurred any liability for
Taxes relating to Purchased Assets outside the ordinary course of business
consistent with past custom and practice. Seller and Subsidiary are in
compliance in all material respects with all terms and conditions of any Tax
exemptions, Tax incentive, Tax holiday or other Tax reduction agreement,
approval or order of any Governmental Body relating to Purchased Assets and, to
the Knowledge of Seller, subject to receipt of the Approvals required herein,
the execution of this Agreement will not have any adverse effect on the validity
and effectiveness of any such Tax exemptions, Tax incentive, Tax holiday or
other Tax reduction agreement or order.

(ii)       There are no Tax sharing agreements or similar agreements relating to
Purchased Assets under which Seller or Subsidiary could be liable for the Taxes
of any Person that is neither Seller nor Subsidiary of Seller. There are no
material Liens for Taxes on Purchased Assets except for Taxes not yet due or
payable. Except as would not reasonably be expected to have a Seller Material
Adverse Effect, all inter-company transactions and charges between and among
Seller and Subsidiary or Purchaser or any of its subsidiaries relating to
Purchased Assets are at arm’s-length terms or other terms permitted by
applicable Laws with respect to Taxes.

(iii)      No elections have been made under U.S. Treasury regulations
Section 301.7701-3 with respect to Seller or Subsidiary.

(iv)      Neither Seller nor Subsidiary is (or has been) a “controlled foreign
corporation” within the meaning of Code Section 957.

(v)       Neither Seller nor Subsidiary has been (or held, directly or
indirectly, an interest in) a United States real property corporation within the
meaning of Code Section 897(c)(2).

(vi)      Neither Seller nor Subsidiary is “engaged in trade or business within
the United States” within the meaning of Code Section 882 or otherwise subject
to U.S. federal income tax on a net income basis.

As used in this Agreement, (A) the term “Tax” (including, with correlative
meaning, the term “Taxes”) includes all United States, federal, state, local and
foreign (including, without limitation, Israeli and German) income, profits,
franchise, gross receipts, environmental, customs duty, share capital,
severance, stamp, payroll, sales, employment, social security (or similar),
unemployment, disability, use, property, withholding, excise, production, value
added, occupancy, alternative or add-on minimum and other taxes, duties or
assessments of any nature whatsoever relating to Purchased Assets, together with
all interest, indexation

 

 

 

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penalties and other penalties and additions imposed with respect to such amounts
and any interest in respect of such penalties and additions, and (B) the term
“Tax Return” includes all returns and reports (including elections,
declarations, disclosures, amendments, schedules, estimates and information
returns) required to be supplied, or supplied, to a Tax authority relating to
Taxes.

6.15     Tax Matters.

(i)        Neither the Buisness nor the Purchased Assets, directly or
indirectly, use any technology that was developed using funding provided by the
OCS (“OCS Funded Technology”), or the Investment Center of the Israeli Ministry
of Industry, Trade & Labor, nor is any of the technology contained in any of the
Purchased Assets is based on the OCS Funded Technology. To the Knowledge of
Seller, there has been no indication from any Israeli Tax authority that the
execution of this Agreement would adversely affect Seller’s ability to set off
for Israeli Tax purposes in the future any and all losses accumulated by Seller
as of the Closing Date.

(ii)       Neither Seller nor Subsidiary, with resepct to the Business or the
Purchased Assets, are a party to or bound by any Tax indemnity, Tax sharing or
Tax allocation agreement.

(iii)      Neither Seller nor Subsidiary, with respect to the Business or the
Purchased Assets, have made any payments, are obligated to make any payments, or
are a party to any agreement that under certain circumstances could obligate
Seller or Subsidiary to make any payments that are not deductible under Code
Section 280G (or any corresponding or similar provision or administrative rule
of federal, state, local, or foreign law). Subsequent to the Closing Date.

(iv)      There is no outstanding request for ruling from any Taxing Authority,
or closing agreement (within the meaning of Code Section 7121 or any analogous
provision of applicable Law) relating to any Tax for which Seller or Subsidiary,
with respect to the Business or the Purchased Assets, is or may be liable or
with respect to Seller’s or Subsidiary’s income, assets or business, power of
attorney or adjustment related to, or in connection with, any Tax that could
result in a Lien on any Purchased Assets or Purchased Shares.

(v)       CCS is and has always been classified as corporation within the
meaning of Treasury Regulation Section 301.7701-2(b), and has not made an
election pursuant to Treasury Regulation Section 301.7701-2(a), from the date of
its respective organization through and including the Closing Date.

(vi)      Subsidiary is not a “passive foreign investment company within the
meaning of Section 1297(a) of the Code nor has it made an election pursuant to
Section 1295 of the Code to be treated as a “qualified electing fund” or has
made a “mark-to-market” election pursuant to Section 1296 of the Code.

 

 

 

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(vii)     None of Seller or Subsidiary has participated in or cooperate with a
boycott within the meaning of Section 999(b)(3) of the Code.

6.16     Encryption and Other Restricted Technology. Seller’s and Subsidiary’s
Business directly related to the Purchased Assets as currently conducted does
not involve the use or development of, or engagement in, technology whose
development, commercialization or export is restricted under Israeli Law, and
Seller’s and Subsidiary’s Business directly related to the Purchased Assets as
currently conducted does not require Seller or Subsidiary to obtain a license
from the Israeli Ministry of Defense or an authorized body thereof pursuant to
Section 2(a) of the Control of Products and Services Declaration (Engagement in
Encryption), 1974 or other legislation regulating the development,
commercialization or export of technology

6.17     Warranties/Product Liability. Except as set forth on Section 6.17 of
the Seller Disclosure Letter and except as specifically reflected, reserved
against or otherwise disclosed in Seller’s financial statements or incurred
since the date thereof in the ordinary course of business except as does not
constitute a Seller Material Adverse Effect, (i) there is no notice, demand,
claim, action, suit, inquiry, hearing, proceeding, notice of violation or
investigation from, by or before any Governmental Body relating to any Product,
including the packaging and advertising related thereto, designed, formulated,
manufactured, processed, sold or placed in the stream of commerce by Seller or
Subsidiary or any services provided by Seller or Subsidiary, or claim or lawsuit
involving a Product that is pending or, to the Knowledge of Seller, threatened,
by any Person, and (ii) there has not been, nor is there under consideration by
Seller or Subsidiary, any Product recall or post-sale warning of a material
nature concerning any Product. All Products comply in all material respects with
applicable Governmental Authorizations and Laws, and there have not been and
there are no material defects or deficiencies in such Products.

6.18     Product Certifications. The product certifications (“MediVision Product
Certifications”) given or granted by manufacturers, manufacturers associations,
technical associations, or similar bodies, or by any Governmental Body, in each
case with respect to Products, are all the MediVision Product Certifications
relating to Business or the Purchased Assets, and constitute all the MediVision
Product Certifications necessary for Seller and Subsidiary, in connection with
the Buisness or the Purchased Assets, to conduct their respective businesses as
currently conducted, and are listed in Section 6.18 of the Seller Disclosure
Letter, except as does not constitute a Seller Material Adverse Effect. Seller
has not made any material modifications or updates to the Products which would
require MediVision Product Certifications different from or in addition to those
set forth on Section 6.18 of the Seller Disclosure Letter and, other than as set
forth on Section 6.18 of the Seller Disclosure Letter, to the Knowledge of
Seller, none of the MediVision Product Certifications would be terminated,
rescinded or modified as a result of the execution of this Agreement.

6.19     Completeness of Disclosure. No representation or warranty by Seller in
this Agreement contains or on the Closing Date will contain an untrue statement
of material fact or omits or on the Closing Date will omit to state a material
fact required to be stated therein or necessary to make the statements made
therein not misleading.

 

 

 

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ARTICLE 7.

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Except as set forth in the corresponding sections or subsections of the
disclosure letter delivered to Seller by Purchaser concurrently with the
execution and delivery of this Agreement (the “Purchaser Disclosure Letter”),
Purchaser hereby represents and warrants to Seller that:

7.1       Organization and Good Standing. Purchaser is a legal entity duly
organized, validly existing and in good standing under the Laws of California
and has all requisite corporate power and authority to own, lease and operate
its properties and assets and to carry on its business as it is now being
conducted, and is qualified to do business as a foreign corporation in each
jurisdiction where the ownership, leasing or operation of its assets or
properties or the conduct of its business requires such qualification, except
where the failure to be so organized, qualified or to have such power or
authority, individually or in the aggregate, has not had and would not
reasonably be expected to have a Purchaser Material Adverse Effect.

7.2       Authorization of Agreement.

(i)        Purchaser has all requisite power and authority to execute and
deliver this Agreement and each other agreement, document, instrument or
certificate contemplated by this Agreement or to be executed by Purchaser in
connection with the consummation of the transactions contemplated hereby and
thereby (the “Purchaser Documents” and, collectively with the Seller Documents,
the “Transaction Documents”) and to consummate the transactions contemplated
hereby and thereby and no other corporate proceedings on the part of Purchaser
is necessary to authorize this Agreement or any Purchaser Document to which it
is a party or to consummate the transactions contemplated by this Agreement. The
execution, delivery and performance by Purchaser of this Agreement and each
Purchaser Document have been duly authorized by all requisite company action on
behalf of Purchaser. This Agreement has been, and each Purchaser Document will
be at or prior to the Closing, duly executed and delivered by Purchaser and
(assuming the due authorization, execution and delivery by the other parties
hereto and thereto) this Agreement constitutes, and each Purchaser Document when
so executed and delivered will constitute, the legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar Laws affecting creditors’ rights and remedies generally, and
subject, as to enforceability, to general principles of equity.

(ii)       Each of the audit committee and the board of directors of Purchaser
has: (I) unanimously determined that this Agreement and the transactions
contemplated by this Agreement are fair to, and in the best interests of,
Purchaser and its shareholders; and (II) approved this Agreement and the
transactions contemplated hereby.

 

 

 

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7.3      Conflicts; Consents of Third Parties.

(a)       Except as set forth in Section 7.3(a) of the Purchaser Disclosure
Letter, none of the execution and delivery and performance by Purchaser of this
Agreement, the consummation of the transactions contemplated hereby, or the
compliance by Purchaser with any of the provisions hereof will conflict with, or
result in any violation of or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination or cancellation under,
any provision of (i) the articles of incorporation of Purchaser, (ii) any
material Agreement or Permit to which Purchaser is a party or by which Purchaser
or its properties or assets are bound, (iii) any Order of any Governmental Body
applicable to Purchaser or by which any of the properties or assets of Purchaser
are bound or (iv) any applicable Law, other than, in the case of clauses (ii),
(iii) and (iv), such conflicts, violations, defaults, terminations or
cancellations that would not have a Purchaser Material Adverse Effect.

(b)       Except as set for in Section 7.3(b) of Purchaser Disclosure Letter, no
consent, waiver, approval, Order, Permit or authorization of, or declaration or
filing with, or notification to, any Person or Governmental Body is required on
the part of Purchaser in connection with the execution and delivery of this
Agreement, the compliance by Purchaser with any of the provisions hereof, the
consummation of the transactions contemplated hereby, and except such other
consents, waivers, approvals, Orders, Permits or authorizations the failure of
which to obtain would not have a Purchaser Material Adverse Effect.

7.4       Litigation. There is no suit, claim, action, arbitration, proceeding
pending or, to the Knowledge of Purchaser, investigation pending or, to the
Knowledge of Purchaser, threatened against Purchaser, or to which Purchaser is
otherwise a party before any Governmental Body, that if adversely determined,
would reasonably be expected to adversely affect the consummation of Purchaser’s
obligations under this Agreement.

7.5       Financial Advisors. No Person has acted, directly or indirectly, as a
broker, finder or financial advisor for Purchaser in connection with the
transactions contemplated by this Agreement and no Person is entitled to any fee
or commission or like payment in respect thereof. Purchaser shall be solely
obligated for the payment of all fees and expenses of any such broker, finder,
or financial advisor.

7.6       Condition of the Business; Disclaimer of Reliance. Notwithstanding
anything contained in this Agreement to the contrary, Purchaser acknowledges and
agrees that Seller is not making any representations or warranties whatsoever,
express or implied, beyond those expressly given by Seller in Article 6 hereof
(as modified by the Schedules hereto), and Purchaser acknowledges and agrees
that, except for the representations and warranties contained therein, the
Business, the Purchased Assets and the Purchased Shares are being transferred on
a “where is” and, as to condition, “as is” basis. Any claims Purchaser may have
for breach of representation or warranty shall be based solely on the
representations and warranties of Seller set forth in Article 6 hereof (as
modified by the Schedules hereto). Purchaser further represents that Seller, any
of its Affiliates or any other Person has not made any representation or
warranty, express or implied, as to the accuracy or completeness of any
information regarding Seller, the Business, the Purchased Assets, the Purchased
Shares, or the transactions contemplated by this Agreement not expressly set
forth in this Agreement. Purchaser specifically disclaims that it is

 

 

 

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relying upon or has relied upon any such other representations or warranties.
Purchaser acknowledges that it has conducted to its satisfaction, its own
independent investigation of the Buisness, the Purchased Assets and the
Purchased Shares and has been provided access and an opportunity to review
information in respect of the Business and the Purchased Assets requested by
Purchaser and, in making the determination to proceed with the transactions
contemplated by this Agreement, Purchaser has relied on the results of its own
independent investigation.

7.7       Restriction on Activities. There is no agreement, commitment,
judgment, injunction, order or decree binding upon Purchaser to which Purchaser
is a party which prohibits or impairs Purchaser’s ability to consummate the
transactions contemplated by this Agreement, except as would not, individually
or in the aggregate, reasonably be expected to have a Purchaser Material Adverse
Effect.

7.8       Completeness of Disclosure. No representation or warranty by Purchaser
in this Agreement contains or on the Closing Date will contain an untrue
statement of material fact or omits or on the Closing Date will omit to state a
material fact required to be stated therein or necessary to make the statements
made therein not misleading.

ARTICLE 8.

COVENANTS

8.1       Access to Information.

(a)       Seller agrees that, prior to the Closing, Purchaser shall be entitled,
through its officers, employees and representatives (including its legal
advisors and accountants), to make such investigation of the properties,
businesses and operations of Seller or Subsidiary in connection with the
Purchased Assets, and such examination of the Documentation relating to the
Purchased Assets, Subsidiary, the Purchased Shares and the Assumed Liabilities
as it reasonably requests and to make extracts and copies of such Documentation.
Any such investigation and examination shall be conducted during regular
business hours upon reasonable advance notice and under reasonable circumstances
and shall be subject to restrictions under applicable Law. Seller shall cause
the officers, employees, consultants, agents, accountants, attorneys and other
representatives of Seller and Subsidiary to cooperate with Purchaser and
Purchaser’s representatives in connection with such investigation and
examination, and Purchaser and its representatives shall cooperate with Seller,
Subsidiary, and their representatives and shall use their Commercially
Reasonable Efforts to minimize any disruption to the Business. Notwithstanding
anything herein to the contrary, no such investigation or examination shall be
permitted to the extent that it would require Seller or Subsidiary to disclose
information subject to attorney-client privilege or conflict with any written
confidentiality obligations to which Seller or Subsidiary is bound; provided,
however, that such information subject to attorney-client privilege or
confidentiality obligations shall be disclosed to Purchaser in the event that
the underlying subject matter relates primarily to the Purchased Assets or
relates to Subsidiary. Except as otherwise set forth in this Agreement, prior to
the Closing, without the prior written consent of Seller, which may be withheld
for any reason, (i) Purchaser shall not contact any suppliers to, or customers
of, Seller or Subsidiary, and (ii) Purchaser shall have no

 

 

 

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right to perform invasive or subsurface investigations of the properties or
facilities of Seller or Subsidiary.

(b)       Seller and Purchaser shall, upon reasonable advance notice, use
Commercially Reasonable Efforts to make such records held by it or their
Affiliates relating to the Purchased Assets available to the other party (during
normal business hours and subject to restrictions under applicable Laws) as may
be reasonably requested by the other party in connection with (i) the
preparation of financial statements (including the Final Closing Statement) or
regulatory filings in respect of periods ending prior to Closing; (ii) any
insurance claims by, Legal Proceedings against, disputes relating to any
indemnification obligation under Article 10 (Indemnification) between, or
governmental investigations of Seller, Subsidiary or Purchaser or any of their
Affiliates; or (iii) in order to enable Seller or Purchaser to comply with their
respective obligations under this Agreement and each other agreement, document
or instrument contemplated hereby or thereby. Seller and Purchaser shall be
entitled, at their sole cost and expense, to make copies of the books and
records to which they are entitled to access pursuant to this Section 8.1(b).

(c)       Notwithstanding anything in this Agreement to the contrary, the
respective obligations and rights of Purchaser and Seller pursuant to Section
8.1(b) shall apply during the pendency of any Legal Proceeding between any of
Purchaser or its Affiliates (including its subsidiaries) or their respective
officers, directors, employees, equity holders, agents, representatives,
successors and permitted assigns, on the one hand, and Seller or its Affiliates
or their respective officers, directors, employees, equity holders, agents,
representatives, successors and permitted assigns, on the other hand, so long as
such Legal Proceeding does not primarily relate to the subject matter of the
records described in Section 8.1(b). In the event that such Legal Proceeding
does primarily relate to the subject matter of the records described in
Section 8.1(b), applicable rules of discovery shall govern.

8.2       Conduct of the Business Pending the Closing.

(a)       Prior to the Closing, except (i) as set forth on Section 8.2(a) of the
Seller Disclosure Letter, (ii) as required by applicable Law, (iii) as otherwise
contemplated by this Agreement or (iv) with the prior written consent of
Purchaser, Seller shall, solely as relates to the Business, and shall cause
Subsidiary to:

 

(i)

conduct the Business and the business of Subsidiary only in the Ordinary Course
of Business; and

 

(ii)

use its Commercially Reasonable Efforts to (A) preserve the present business
operations, organization and goodwill of Seller (as they relate to the Business
or the Purchased Assets) and Subsidiary and (B) preserve the present
relationships with customers and suppliers of Seller (as they relate to the
Business or the Purchased Assets) and Subsidiary.

(b)       Except (i) as set forth on Schedule 8.2(b) of the Seller Disclosure
Letter, (ii) as required by applicable Law, (iii) as otherwise contemplated by
this Agreement or (iv) with the prior written consent of Purchaser, Seller shall
not, solely as relates to the Purchased Assets, and shall not permit Subsidiary
to:

 

 

 

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(i)

subject any of the Buisness or the Purchased Assets or any of the assets of
Subsidiary, to any Lien, except for Permitted Exceptions, or subject the
Purchased Shares to any Lien;

 

(ii)

acquire assets outside the Ordinary Course of Business from any other Person
(except pursuant to an existing Agreement or inventory in the Ordinary Course of
Business ) or sell, assign, license, transfer, convey, lease or otherwise
dispose of any portion of the Business or the Purchased Assets (except pursuant
to an existing Agreement or inventory in the Ordinary Course of Business or for
the purpose of disposing of obsolete or worthless assets) in each case, with an
aggregate value in excess of One Hundred Thousand Dollars ($100,000);

 

(iii)

cancel or compromise any debt or claim or waive or release any right of
Subsidiary or Seller that constitutes a Purchased Asset except in the Ordinary
Course of Business;

 

(iv)

merge or consolidate with any other Person, except for any such transactions
among Seller’s wholly-owned subsidiaries, or restructure, reorganize or
completely or partially liquidate or otherwise enter into any agreements or
arrangements imposing material changes or restrictions on its assets, operations
or businesses;

 

(v)

declare, set aside, make or pay any dividend or other distribution, payable in
cash, stock, property or otherwise, with respect to the Purchased Shares;

 

(vi)

issue (other than on exercise of options of Seller or rights of Seller set forth
in the Seller Disclosure Letter), sell, pledge, dispose of, grant, transfer,
encumber, or authorize the issuance, sale, pledge, disposition, grant, transfer,
lease, license, guarantee or encumbrance of, any shares of its or Subsidiary’s
capital stock, or securities or rights convertible or exchangeable into or
exercisable for any shares of such capital stock, or any options, warrants or
other rights of any kind to acquire any shares of such capital stock or such
convertible or exchangeable securities, including any options of Seller or
rights of Seller;

 

(vii)

reclassify, split, combine, subdivide or redeem, purchase or otherwise acquire,
directly or indirectly, any of Subsidiary’s capital stock or securities
convertible or exchangeable into or exercisable for any shares of Subsidiary’s
capital stock;

 

 

 

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(viii)

adopt or propose any change in its articles of association or other applicable
governing instruments of Seller or Subsidiary that would adversely affect the
Business or the Purchased Assets or Seller’s ability to perform its obligations
under this Agreement;

 

(ix)

make any material Tax election, make any change in any method of accounting for
Tax purposes or make any application with any Governmental Body or seek any Tax
ruling from a Governmental Body, if there is a risk that such ruling may result
in any terms, restrictions, liabilities or obligations being imposed on the
Business or the Purchased Assets;

 

(x)

incur any Indebtedness for borrowed money or guarantee such Indebtedness of
another Person, or issue or sell any debt securities or warrants or other rights
to acquire any of its or Subsidiary’s debt securities, except for
(A) Indebtedness for borrowed money incurred in the Ordinary Course of Business
consistent with past practices (x) not to exceed One Hundred Thousand Dollars
($100,000) in the aggregate or (y) in replacement of existing Indebtedness for
borrowed money on terms substantially consistent with or more beneficial than
the indebtedness being replaced, or (B) guarantees by Seller of Indebtedness of
its wholly-owned subsidiaries incurred in compliance with this Section 8.2 or
(C) interest rate swaps on customary commercial terms consistent with past
practice and in compliance with its risk management policies in effect on the
date of this Agreement and not to exceed One Hundred Thousand Dollars ($100,000)
of notional debt in the aggregate;

 

(xi)

make any loans, advances or capital contributions to or investments in any
Person (other than between itself and any of its direct or indirect wholly-owned
Subsidiaries);

 

(xii)

modify, other than in an immaterial manner, any policy or procedure with respect
to the collection of receivables or payment of payables directly related to the
Buisness or the Purchased Assets;

 

(xiii)

pay, discharge or satisfy before it is due any material claim or Liability
directly related to the Buisness or the Purchased Assets or fail to pay any such
item in a timely manner directly related to the Business or the Purchased
Assets, in each case except in accordance with the Ordinary Course of Business;

 

(xiv)

make any changes with respect to accounting policies or procedures that
adversely affects the Buisness or the Purchased Assets, except as required by
changes in applicable generally accepted accounting principles;

 

 

 

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(xv)

except in the Ordinary Course of Business, amend, waive, surrender or terminate
or agree to the amendment, waiver, surrender or termination of any Seller
Material Agreement or any material Permit that adversely affects the Business or
the Purchased Assets;

 

(xvi)

except in the Ordinary Course of Business, exercise any right or option under or
extend or renew any Seller Material Agreement that adversely affects the
Business or the Purchased Assets;

 

(xvii)

except in the Ordinary Course of Business enter into or engage in any
transaction with its Affiliates that adversely affects the Business or the
Purchased Assets;

 

(xviii)

pay any management charge to Seller or any entity other than Subsidiary;

 

(xix)

take any action that would reasonably be expected to result in a material
increase in Tax liability (or a corresponding loss of Tax attributes) relating
to the Business or the Purchased Assets other than in the Ordinary Course of
Business;

 

(xx)

agree, commit or offer (in writing or otherwise) to take any of the actions
described in clauses “(i)” through “(xix)” of this Section 8.2(b).

8.3       Consents.

(a)       Seller shall (and shall cause its respective Affiliates to) use its
Commercially Reasonable Efforts, and Purchaser shall (and shall cause its
Affiliates to) cooperate with Seller, to obtain at the earliest practicable date
all consents and approvals required to consummate the transactions contemplated
by this Agreement; provided however, that Seller, Subsidiary and Purchaser shall
not be obligated to pay any consideration therefor to any third party from whom
consent or approval is requested.

(b)       Purchaser shall (and shall cause its respective Affiliates to) use its
Commercially Reasonable Efforts, and Seller shall (and shall cause its
Affiliates to) cooperate with Purchaser, to obtain at the earliest practicable
date all consents and approvals required to consummate the transactions
contemplated by this Agreement; provided however, that Purchaser, Subsidiary and
Seller shall not be obligated to pay any consideration therefor to any third
party from whom consent or approval is requested.

8.4       Further Assurances. Subject to, and not in limitation of,
Sections 8.3(a) and (b), Seller and Purchaser shall each use its Commercially
Reasonable Efforts to (A)(i) furnish upon

 

 

 

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request such further information, (ii) execute and deliver to each other such
other documents and (iii) take all actions necessary or appropriate to
consummate the transactions contemplated by this Agreement, and (B) cause the
fulfillment at the earliest practicable date of all of the conditions to their
respective obligations to consummate the transactions contemplated by this
Agreement.

8.5       Confidentiality.

(a)       Seller Confidentiality. Seller shall keep confidential, and cause its
respective Affiliates and each of their respective officers, directors,
employees, representatives and advisors to keep confidential (i) from the date
hereof, all Confidential Information being provided to Seller by or on behalf of
Purchaser regarding Purchaser, any of its Affiliates, and any of its or their
businesses in connection with the transactions contemplated by this Agreement
and (ii) after the Closing Date and subject to the consummation of the Closing,
all Confidential Information regarding the Buisness, Purchased Assets, Assumed
Liabilities, and Subsidiary.

(b)       Purchaser Confidentiality. Purchaser shall keep confidential, and
cause its Affiliates and each of their respective officers, directors,
employees, representatives and advisors to keep confidential from the date
hereof, all Confidential Information being provided to Purchaser by or on behalf
of Seller regarding Seller, any of its respective Affiliates, and any of their
respective businesses; provided, however, that after the Closing Date and
subject to the consummation of the Closing, Purchaser shall only be required to
keep confidential, and cause its Affiliates and each of their respective
officers, directors, employees, representatives and advisors to keep
confidential all Confidential Information provided to Purchaser by or on behalf
of Seller that is not related to the Business, the Purchased Assets, Assumed
Liabilities or Subsidiary.

8.6       Non Competition.

(a)       As an inducement for Purchaser to consummate the transactions set
forth in this Agreement, Seller (and its respective Affiliates) agrees that, for
a period of three (3) years following the Closing Date, it shall not, directly
or indirectly, engage or invest in, own, manage, join, operate, finance,
control, or participate in the ownership, management, operation, financing or
control of, or loan any money to, or have any financial interest in, or acquire
any right to share in the profits of, be employed by, associated with, or in any
manner connected with, lend its name or credit to, or render services or advice
to, any business or Person whose products, services or activities compete, in
whole or in part, or in any way interfere, with the Business, the Purchased
Assets or Subsidiary anywhere within the world; provided, however, Seller may
purchase or otherwise acquire, in the aggregate, up to five percent (5%) of the
outstanding voting shares of any publicly held company and any amount of OIS
shares of capital stock (but without otherwise participating in the business
activities of such company) without otherwise violating the provisions of this
Section 8.6.

(b)       Seller acknowledges that the provisions of this Section 8.6 and the
period of time, scope and type of restrictions on Seller’s activities set forth
herein are reasonable and necessary for the protection of Purchaser, which is
paying substantial monies and other benefits to Seller, and are an essential
inducement to Purchaser’s entering into and performing this Agreement and the
Transaction Documents to which Purchaser is party. If any covenant

 

 

 

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contained in this Section 8.6 shall be determined by any Governmental Body to be
invalid or unenforceable by reason of its extending for too great a period of
time or by reason of its being too extensive in any other respect, (x) such
covenant shall be interpreted to extend over the maximum period of time for
which it may be enforceable and/or to the maximum extent in all other respects
as to which it may be enforceable, all as determined by such Governmental Body
making such determination, and (y) in its reduced form, such covenant shall then
be enforceable, but such reduced form of covenant shall only apply with respect
to the operation of such covenant in the particular jurisdiction in or for which
such adjudication is made. It is the intention of the parties hereto that the
provisions of this Section 8.6 shall be enforceable to the maximum extent
permitted by applicable Law.

(c)       Seller acknowledges that any breach or threatened breach of the
covenants contained in this Section 8.6 will likely cause Purchaser material and
irreparable damage, the exact amount of which will be difficult to ascertain,
and that the remedies at Law for any such breach will likely be inadequate.
Accordingly, to the extent permitted by applicable Law, Purchaser shall, in
addition to all other available rights and remedies (including, but not limited
to, seeking such Damages as it can show it has sustained by reason of such
breach), be entitled to seek specific performance and injunctive relief in
respect of any breach or threatened breach of this covenant, without being
required to post bond or other security and without having to prove the
inadequacy of the available remedies at Law.

8.7       Preservation of Records. Seller and Purchaser agree that each of them
shall preserve and keep the records held by it or their Affiliates relating to
the Business or the Purchased Assets for a period of seven (7) years from the
Closing Date and shall make such records through the period ending on the
Closing Date available to the other as may be reasonably required by such party
in connection with, any insurance claims by, Legal Proceedings or Tax audits
against or governmental investigations of Seller, Subsidiary or Purchaser or any
of their Affiliates or in order to enable Seller or Purchaser to comply with
their respective obligations under this Agreement and each other agreement,
document or instrument contemplated hereby or thereby. In the event Seller or
Purchaser wish to destroy such records prior to such time, such party shall
first give thirty (30) days prior written notice to the other and such other
party shall have the right at its option and expense, upon prior written notice
given to such party within that thirty (30) day period, to take possession of
the records within sixty (60) days after the date of such notice.

8.8       Publicity.

(a)       None of Seller or Purchaser shall, and they shall cause their
respective Affiliates not to, issue any press release or public announcement
concerning this Agreement or the transactions contemplated hereby without
obtaining the prior written approval of the other parties hereto, which approval
will not be unreasonably withheld or delayed, unless, in the sole judgment of
Purchaser or Seller, as applicable, disclosure is otherwise required by
applicable Law or by the applicable rules of any stock exchange on which
Purchaser or Seller list securities, provided that, to the extent required by
applicable Law, the party intending to make such release shall use its
Commercially Reasonable Efforts consistent with such applicable Law to consult
with the other party with respect to the timing and content thereof.

 

 

 

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(b)       Purchaser and Seller each agree that the terms of this Agreement shall
not be disclosed or otherwise made available to the public and that copies of
this Agreement shall not be publicly filed or otherwise made available to the
public, except where such disclosure, availability or filing is required by
applicable Law and only to the extent required by such Law. In the event that
such disclosure, availability or filing is required by applicable Law, Purchaser
and Seller (as applicable) each agree to use their Commercially Reasonable
Efforts to obtain “confidential treatment” of this Agreement with the U.S.
Securities and Exchange Commission (or the equivalent treatment by any other
Governmental Body) and to redact such terms of this Agreement as the other party
shall reasonably request.

8.9       Disclosure Schedules; Supplementation and Amendment of Schedules.
Seller shall promptly supplement or amend the Schedules until the Closing with
respect to any matter hereafter arising or discovered that would have been
required to be set forth or described in the Schedules; provided that no such
supplement or amendment shall have any effect on the satisfaction of the
condition to Closing set forth in Section 9.1(a) or for purposes of determining
whether Purchaser is entitled to indemnification pursuant to Article 10.

8.10     Control of Business. Notwithstanding anything in this Agreement to the
contrary, Purchaser acknowledges on behalf of itself and its Affiliates and its
and their directors, officers, employees, Affiliates, agents, representatives,
successors and assigns that the operation of the Business remains in the
dominion and control of Seller and Subsidiary until the Closing and that none of
the foregoing Persons will provide, directly or indirectly, any directions,
orders, advice, aid, assistance or information to any director, officer or
employee of Seller, except as specifically contemplated or permitted by Article
8 including, without limitation, Section 8.3 or as otherwise consented to in
advance by an officer of Seller.

8.11     Foreign Tax Declarations. Seller shall provide Purchaser, on or prior
to the Closing Date, with any certificates required under applicable foreign Law
to avoid foreign Tax withholding with respect to the purchase of the Purchased
Shares or Purchased Assets (a “Foreign Tax Withholding Certificate”).

8.12     Exclusivity.    From the date of this Agreement until the Closing or
the termination of this Agreement in accordance with Section 5.2, Seller will
not (and will not permit its respective Affiliates or any of its Affiliates’
representatives to) directly or indirectly: (a) solicit, initiate, or encourage
the submission of any proposal or offer from any Person relating to, or enter
into or consummate any transaction relating to, the acquisition of the Purchased
Assets or the Subsidiary or any merger, recapitalization, share exchange, sale
of substantial assets (other than sales of inventory in the Ordinary Course of
Business) or any similar transaction or alternative to the contemplated
transactions hereunder or (b) participate in any discussions or negotiations
regarding, furnish any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any Person to do or seek
any of the foregoing, except as may be required under the laws of Israel. Seller
will notify Purchaser immediately if any Person makes any proposal, offer,
inquiry or contact with respect to any of the foregoing (whether solicited or
unsolicited).

8.13     Belgian and German Approvals.

 

 

 

 

 

 

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(a)        Each party to this Agreement shall use all reasonable efforts to
deliver and file, as promptly as practicable after the date of this Agreement,
each notice, report or other document required to be delivered by such party to,
or filed by such party with, any Belgian and/or German Governmental Entity with
respect to this Agreement. MediVision and OIS shall use all reasonable efforts
to obtain, as promptly as practicable after the date of this Agreement, any
consents and approvals that may be required pursuant to Belgian and/or German
legal requirements in connection with this Agreement.

(b)       MediVision and OIS each shall: (i) give the other parties prompt
notice of the commencement of any legal proceeding by or before any Belgian
and/or German Governmental Entity with respect to this Agreement or any of the
other transactions contemplated by this Agreement; (ii) keep the other parties
informed as to the status of any such legal proceeding; and (iii) promptly
inform the other parties of any communication to any Governmental Entity
regarding this Agreement. MediVision and OIS will consult and cooperate with one
another, and will consider in good faith the views of one another, in connection
with any analysis, appearance, presentation, memorandum, brief, argument,
opinion or proposal made or submitted in connection with any Belgian and/or
German legal proceeding relating to this Agreement. In addition, except as may
be prohibited by any Belgian and/or German Governmental Entity or by any Belgian
and/or German Legal Requirement, MediVision and OIS will permit authorized
representatives of the other party to be present at each meeting or conference
relating to any such legal proceeding and to have access to and be consulted in
connection with any document, opinion or proposal made or submitted to any
Belgian and/or German Governmental Entity in connection with any such legal
proceeding.

8.14     Elop Payment. Seller agrees that, by April 15, 2011, it will use its
best efforts to satisfy and discharge all of its obligations under the Elop
Settlement Agreement, including, without limitation, paying any and all amounts
that are owed by Seller to Elop pursuant to the Elop Settlement Agreement, in an
amount not to exceed US$250,000 (the “Elop Debt”), and Seller shall provide
written evidence, reasonably satisfactory to Purchaser, that all of Seller’s
obligations under the Elop Settlement Agreement have be satisfied and
discharged; provided that if the Elop Debt is not paid by April 15, 2011,
Purchaser and Seller hereby agree that Purchaser shall pay the Elop Debt
directly to Elop. In order to facilitate such payment by Purchaser, Purchaser
shall be entitled to instruct (in accordance with the escrow agreement
substantially in the form attached hereto as Exhibit C) the Escrow Agent (as
defined below) to disburse from the Escrow Reserve (as defined below) to
Purchaser, free of any charge or consideration, either (i) an appropriate number
of shares of common stock of Purchaser (or an amount of cash held with the
Escrow Agent, if such exist at such time), as shall be determined by Purchaser
in accordance with the escrow agreement (the “Elop Debt Released Shares”), or
(ii) the cash proceeds from the sale of the number of shares of Common Stock of
Purchaser in the Escrow Reserve equal to the amount paid by Purchaser in
accordance with the escrow agreement and Purchaser may use the proceeds to pay
the Elop Debt. The Seller further agrees that upon the satisfaction and
discharge of its obligations under the Elop Settlement Agreement, or the
satisfaction of such obligations by Purchaser, as the case may be, it will
promptly assign to Purchaser the patent No. PCT/IL2005/00086 with the title of
“Integrated Retinal Imager and Method” (i.e., the “IRI Patent “) that is the
subject of the Elop Settlement Agreement. A signed conditional assignment letter
for the assignment of the IRI Patent to Purchaser shall be delivered to
Purchaser at the Closing.

 

 

 

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8.15     United Mizrachi Bank Loan. If the Closing shall not have occurred by
the close of business on October 22, 2009 (i.e., 120 days from the date of this
Agreement), Purchaser shall be entitled, at its sole discretion and without the
need for any consent, approval or notice to Seller, to instruct (in accordance
with the escrow agreement substantially in the form attached hereto as
Exhibit C) the Escrow Agent to disburse from the Escrow Reserve to Purchaser,
free of any charge or consideration all of the shares in the Escrow Reserve (the
“Mizrachi Loan Released Shares”) or the proceeds from the sale of all of the
shares in the Escrow Reserve. Purchaser shall be entitled, at its sole
discretion and without the need for any consent, approval or notice to Seller,
as the exclusive owner of the Mizrachi Loan Released Shares, to adopt
appropriate corporate resolutions and to take any other action for the
cancellation of the Mizrachi Loan Released Shares and/or their reclassification
as treasury shares entitling their holder to no rights.

8.16     OCS Debt. Seller agrees that it will use its best efforts to pay the
OCS Debt to the OCS and to satisfy and discharge all other obligations of Seller
to the OCS in connection with the transactions contemplated herein
(collectively, the “OCS Debt and Obligations”), and Seller shall provide written
evidence, reasonably satisfactory to Purchaser, that all of Seller’s OCS Debt
and Obligations have be satisfied and discharged; provided that Purchaser may
pay the OCS Debt and Obligations directly to the OCS if Seller agrees to such
payment. If Purchaser makes such payment to the OCS, Purchaser shall be entitled
to instruct (in accordance with the escrow agreement substantially in the form
attached hereto as Exhibit C) the Escrow Agent (as defined below) to disburse
from the Escrow Reserve to Purchaser, free of any charge or consideration,
either (i) an appropriate number of shares of common stock of Purchaser (or an
amount of cash held with the Escrow Agent, if such exist at such time), as shall
be determined by Purchaser in accordance with the escrow agreement (the “OCS
Debt Released Shares”), or (ii) the cash proceeds from the sale of the number of
shares of the Common Stock of Purchaser in the Escrow Reserve equal to the
amount paid by Purchaser and Purchaser may use the proceeds to pay the OCS Debt
and Obligations.

ARTICLE 9.

 

CONDITIONS TO CLOSING

9.1       Conditions Precedent to Obligations of Purchaser. The obligation of
Purchaser to consummate the transactions contemplated by this Agreement is
subject to the fulfillment, on or prior to the Closing Date, of each of the
following conditions (any or all of which may be waived by Purchaser in whole or
in part to the extent permitted by applicable Law):

(a)       the representations and warranties of Seller set forth in this
Agreement and in each of the Transaction Documents shall be true and correct in
all material respects as of the Closing Date as though made on and as of the
Closing Date, except that those representations and warranties that are modified
as to materiality or contain a qualification referring to a “Material Adverse
Effect” or any similar modification or qualification shall be true and correct
in all respects as of said dates;

 

 

 

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(b)       Seller shall have performed and complied in all material respects with
all obligations and agreements required in this Agreement to be performed or
complied with by them prior to the Closing Date;

(c)       Purchaser shall have received a certificate signed by an authorized
officer of Seller, dated the Closing Date, certifying that the conditions
contained in Sections 9.1(a)  and 9.1(b) have been fulfilled;

(d)       there shall not be in effect on the Closing Date any Order or Law
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or any of
the Transaction Documents or that could reasonably be expected to otherwise
result in a material diminution of the benefits of the transactions contemplated
by this Agreement or any of the Transaction Documents to Purchaser, and there
shall not be pending or threatened on the Closing Date any action in, before or
by any Governmental Body that could reasonably be expected to result in the
issuance of any such Order or the enactment, promulgation or deemed
applicability of any such Law to Purchaser or the transactions contemplated by
this Agreement or any of the Transaction Documents;

(e)       there shall not be any action, suit, or proceeding pending or
threatened before any Governmental Body that could reasonably be expected to
(i) prevent consummation of any of the transactions contemplated by this
Agreement or the Transaction Documents, (ii) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation, or
(iii) have a Seller Material Adverse Effect on the right of Purchaser to own the
Purchased Shares or to own and operate the Purchased Assets (and no such Order
shall be in effect);

(f)       [Reserved];

(g)       Reserved

(h)       The consents and approvals set forth on Schedule 9.1(h) shall have
been obtained;

(i)        Since December 31, 2008, there shall not have been any event, change,
effect or development that, individually or in the aggregate, has had, or would
be reasonably expected to have, a Seller Material Adverse Effect;

(j)        Seller shall have delivered, or caused to be delivered, to Purchaser
a legal opinion of Eitan-Mehulal Law Group, dated as of the Closing Date, in the
form of Exhibit D hereto;

(k)       Seller shall have delivered, or caused to be delivered, to Purchaser a
duly executed Bill of Sale in the form of Exhibit A hereto;

(l)        Seller shall have delivered, or caused to be delivered, to Purchaser
a duly executed Assignment and Assumption Agreement in the form of Exhibit B
hereto;

 

 

 

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(m)      Seller shall have delivered, or caused to be delivered, to Purchaser a
duly executed Escrow Agreement in the form of Exhibit C;

(n)       Seller shall have delivered (A) copies of resolutions of the board of
directors and the shareholders of Seller authorizing and approving this
Agreement, the Transaction Documents and the transactions contemplated hereby
and thereby and all of the transactions and agreements contemplated hereby and
thereby; (B) the certificate of incorporation, as amended, and bylaws, as
amended, of Seller; and (C) the names of the officer or officers of Seller
authorized to execute this Agreement, the Transaction Documents and the
transaction contemplated herein and therein, all certified by any authorized
representative of Seller, to be true, correct, complete and in full force and
effect and unmodified as of the Closing Date;

(o)       Seller shall have delivered certified organizational documents of
Seller and Subsidiary, including all amendments thereto;

(p)       Seller, shall have delivered, or caused to be delivered, to Purchaser
share certificate(s) representing the Purchased Shares, duly endorsed in blank
or accompanied by properly executed share transfer powers, and a duly executed
CCS Deed; and

(q)       Seller shall have delivered such other documents or instruments
reasonably requested by Purchaser or its agents to confirm or carry out
performance of the covenants and satisfaction of the conditions required by this
Agreement, the Transaction Documents and the documents contemplated hereby and
thereby.

9.2       Conditions Precedent to Obligations of Seller. The obligations of
Seller to consummate the transactions contemplated by this Agreement are subject
to the fulfillment, prior to or on the Closing Date, of each of the following
conditions (any or all of which may be waived by Seller in whole or in part to
the extent permitted by applicable Law):

(a)       the representations and warranties of Purchaser set forth in this
Agreement and in each of the Transaction Documents shall be true and correct in
all material respects as of the Closing Date as though made on and as of the
Closing Date, except that those representations and warranties that are modified
as to materiality or contain a qualification referring to a “Material Adverse
Effect” or any similar modification or qualification shall be true and correct
in all respects as of said dates;

(b)       Purchaser shall have performed and complied in all material respects
with all obligations and agreements required by this Agreement to be performed
or complied with by Purchaser on or prior to the Closing Date;

(c)       Seller shall have received a certificate signed by an authorized
officer of Purchaser, dated the Closing Date, certifying that the conditions
contained in Sections 9.1(a) and 9.1(b) have been fulfilled;

(d)       Purchaser shall have delivered (A) copies of resolutions of the board
of directors of Purchaser authorizing and approving this Agreement, the
Transaction Documents

 

 

 

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and the transactions contemplated hereby and thereby and all of the transactions
and agreements contemplated hereby and thereby; (B) the certificate of
incorporation, as amended, and bylaws, as amended, of Purchaser; and (C) the
names of the officer or officers of Purchaser authorized to execute this
Agreement, the Transaction Documents and the transaction contemplated herein and
therein, all certified by any authorized representative of Purchaser, to be
true, correct, complete and in full force and effect and unmodified as of the
Closing Date;

(e)       there shall not be in effect on the Closing Date any Order or Law
restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement or any of
the Transaction Documents or that could reasonably be expected to otherwise
result in a material diminution of the benefits of the transactions contemplated
by this Agreement or any of the Transaction Documents to Seller, and there shall
not be pending or threatened on the Closing Date any action in, before or by any
Governmental Body that could reasonably be expected to result in the issuance of
any such Order or the enactment, promulgation or deemed applicability of any
such Law to Seller or the transactions contemplated by this Agreement or any of
the Transaction Documents;

(f)        Seller shall have received consent from the United Mizrachi Bank to
Purchaser’s assumption of Liabilities of Seller under the United Mizrachi Bank
Loan;

(g)       Purchaser shall have delivered, or caused to be delivered, to Seller a
duly executed Assignment and Assumption Agreement in the form attached hereto as
Exhibit B hereto;

(h)       Purchaser shall have delivered, or caused to be delivered, to Seller a
duly executed Escrow Agreement; and

9.3       Frustration of Closing Conditions. None of Seller or Purchaser may
rely on the failure of any condition set forth in Sections 9.1 or 9.2, as the
case may be, if such failure was caused by such party’s failure to comply with
any provision of this Agreement.

ARTICLE 10.

SURVIVAL

10.1       Survival of Representations and Warranties.

(a)       The representations and warranties of the parties hereto contained in
this Agreement shall survive the Closing until the twenty-four (24) month
anniversary of the Closing Date (the “Warranty Survival Period”).

(b)       All of the covenants or other agreements of the parties hereto
contained in this Agreement shall survive until fully performed or fulfilled,
unless and to the extent only that non-compliance with such covenants or
agreements is waived in writing by the party entitled to such performance. No
claim for a breach of a covenant or other agreement set forth in this Agreement
that (i) by its nature is required to be performed by or prior to Closing (the
“Pre-Closing Covenants”) may be made or brought by any party hereto after the
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the Closing Date, and (ii) by its nature is required to be performed after
Closing (the “Post-Closing Covenants”) may be made or brought by any party
hereto after the first anniversary of the last date on which each such
Post-Closing Covenant was required to be performed (in each case, a “Covenant
Survival Period” and collectively with the Warranty Survival Period, the
“Survival Period”).

(c)       Notwithstanding Sections 10.1(a) hereof, any breach of any
representation or warranty in respect of which indemnity may be sought under
this Agreement shall survive the applicable Survival Period if notice in writing
of the inaccuracy or breach thereof giving rise to such right of indemnity shall
have been given to the party against whom such indemnity may be sought prior to
such time. Any claim not asserted in accordance with this Article 10.1 on or
prior to the expiration of the applicable Survival Period will be irrevocably
and unconditionally released and waived except in cases of Intentional
Misrepresentation.

10.2       Indemnification by Seller.

(a)       Seller hereby agrees to indemnify and hold Purchaser and its
directors, officers, employees, Affiliates, stockholders, agents, attorneys,
representatives, successors and permitted assigns (collectively, the “Purchaser
Indemnified Parties”) harmless from and against any and all Damages to the
extent based upon or resulting from or incurred in connection with:

 

(i)

any breach of, or inaccuracy in, any representation or warranty made by Seller
in this Agreement or in any document, schedule, instrument or certificate
delivered hereunder or in respect of a claim made based upon alleged facts that
if true could constitute any such breach or inaccuracy;

 

(ii)

any breach or violation of any Pre-Closing Covenant or Post-Closing Covenant by
Seller;

 

(iii)

any Accounts Receivable set forth on Seller balance sheet as of the Closing Date
which are not fully collected within one (1) year after the Closing Date, net of
any applicable reserve for returns or doubtful accounts reflected thereon.

 

(iv)

any Excluded Liability; and

 

(v)

any pending litigation on or before the Closing Date related to the Business,
the Purchased Assets, the Assumed Liabilities, or Subsidiary;

In the event that Seller may be obligated to indemnify Purchaser Indemnified
Parties under both subsections (i) or (ii) and any of subsections (iii)-(v) of
this Section 10.2, Seller’s obligations under any of subsections (iii)-(v) shall
be controlling and the limitations provided in Sections 10.1 shall not apply.

 

 

 

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(b)       Purchaser shall take and shall cause its Affiliates to take all
reasonable steps to mitigate any Damages upon becoming aware of any event which
would reasonably be expected to, or does, give rise thereto.

(c)       Seller shall have no liability (for indemnification or otherwise) with
respect to claims under Sections 10.2(a), until the total of all Damages with
respect to such matters exceeds Fifty Thousand Dollars ($50,000), and then for
the total amount of Damages.

10.3       Indemnification by Purchaser.

(a)       Purchaser hereby agrees to indemnify and hold Seller and its
directors, officers, employees, Affiliates, agents, attorneys, representatives,
successors and permitted assigns (collectively, the “Seller Indemnified
Parties”) harmless from and against, and pay to the applicable Seller
Indemnified Parties the amount of, any and all Damages based upon or resulting
from:

 

(i)

any breach of, or inaccuracy in, any representation or warranty made by
Purchaser in this Agreement or in any other document, schedule, instrument or
certificate delivered hereunder or in respect of a claim made based upon alleged
facts that if true could constitute any such breach or inaccuracy;

 

(ii)

any breach or violation of any Pre-Closing Covenant or Post-Closing Covenant by
Purchaser;

 

(iii)

based upon or arising directly from any Assumed Liability; and

 

(iv)

based upon or arising directly from Purchaser’s operation of the Purchased
Assets after the Closing Date;

(b)       Seller shall take and cause their Affiliates to take all reasonable
steps to mitigate any Damages upon becoming aware of any event which would
reasonably be expected to, or does, give rise thereto.

(c)       Purchaser shall have no liability (for indemnification or otherwise)
with respect to claims under Sections 10.2(a), until the total of all Damages
with respect to such matters exceeds Fifty Thousand Dollars ($50,000), and then
for the total amount of Damages.

10.4        Indemnification Procedures.

(a)       A claim for indemnification for any matter not involving a third-party
claim may be asserted by notice to the party from whom indemnification is
sought.

(b)       In the event that any Legal Proceeding shall be instituted or that any
claim or demand shall be asserted by any third party in respect of which payment
may be sought under Sections 10.2 and 10.3 hereof (an “Indemnification Claim”),
the Indemnified Party shall promptly cause written notice of the assertion of
any Indemnification Claim of which it has knowledge which is covered by this
indemnity to be forwarded to the Indemnifying Party. The

 

 

 

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failure of the Indemnified Party to give reasonably prompt notice of any
Indemnification Claim shall not release, waive or otherwise affect the
Indemnifying Party’s obligations with respect thereto except to the extent that
the Indemnifying Party is irreparably and materially prejudiced as a result of
such failure in which case such indemnification shall be reduced but only to the
extent of such irreparable and material prejudice. The Indemnifying Party shall
have the right, at its sole option and expense, to select counsel of its choice
to defend the Indemnifying Party, which must be reasonably satisfactory to the
Indemnified Party, and to vigorously and diligently defend against, negotiate,
settle (subject to subsection (c)) any Indemnification Claim which relates to
any Damages indemnified against by it hereunder; provided, however, that the
Indemnified Party may, at the sole cost and expense of the Indemnifying Party,
at any time after the Indemnified Party’s delivery of the notice referred to in
the first sentence of this clause (b) and before such Indemnifying Party’s
written response to the Indemnified Party, file any motion, answer or other
pleadings or take any other action that the Indemnified Party reasonably
believes to be necessary or appropriate to protect its interests. If the
Indemnifying Party elects to defend against, negotiate or settle any
Indemnification Claim which relates to any Damages indemnified by it hereunder,
it shall, within thirty (30) days (or sooner if the nature of the
Indemnification Claim so requires), notify the Indemnified Party of its intent
to do so and provide reasonable assurance of its ability to pay the
Indemnification Claim; provided that if the Indemnifying Party elects not to
defend against, negotiate, or settle any Indemnification Claim which relates to
any Damages indemnified against hereunder, the Indemnified Party may defend
against, negotiate or settle such Indemnification Claim at the sole cost and
expense of the Indemnifying Party. If the Indemnifying Party shall assume the
defense of any Indemnification Claim, the Indemnified Party may participate, at
its or their own expense, in the defense of such Indemnification Claim;
provided, however, that such Indemnified Party shall be entitled to participate
in any such defense with separate counsel at the expense of the Indemnified
Party; and provided, further, that the Indemnifying Party shall not be required
to pay for more than one such counsel (plus any appropriate local counsel) for
all indemnified parties in connection with any Indemnification Claim. The
parties hereto agree to cooperate fully with each other in connection with the
defense, negotiation or settlement of any such Indemnification Claim.

(c)       Notwithstanding anything in Section 10.4(b) to the contrary, neither
the Indemnifying Party nor the Indemnified Party shall, without the written
consent of the other party, settle or compromise any Indemnification Claim or
permit a default or consent to entry of any judgment unless the claimant
provides to the Indemnified Party an unqualified release from all liability in
respect of the Indemnification Claim. Notwithstanding the foregoing, if a
settlement offer solely for money damages is made by the applicable third party
claimant with a release as per the preceding sentence, and the Indemnifying
Party notifies the Indemnified Party in writing of the Indemnifying Party’s
willingness to accept the settlement offer and pay the amount called for by such
offer, and the Indemnified Party declines to accept such offer, the Indemnified
Party may continue to contest such Indemnification Claim, free of any
participation by the Indemnifying Party, and the amount of any ultimate
liability with respect to such Indemnification Claim that the Indemnifying Party
has an obligation to pay hereunder shall be limited to the lesser of (A) the
amount of the settlement offer that the Indemnified Party declined to accept
plus the Damages of the Indemnified Party relating to such Indemnification Claim
through the date of its rejection of the settlement offer, or (B) the aggregate
Damages of the Indemnified Party with respect to such Indemnification Claim.

 

 

 

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(d)       In the event any Indemnified Party should have a claim under Sections 
10.2 or 10.3, as applicable, against any Indemnifying Party that does not
involve a third party claim, the Indemnified Party shall deliver a written
notice with reasonable promptness to the Indemnifying Party. The failure by any
Indemnified Party to give such notice shall not impair such party’s rights
hereunder except to the extent that an Indemnifying Party demonstrates that it
has been irreparably and materially prejudiced thereby in which case such
indemnification shall be reduced but only to the extent of such irreparable and
material prejudice. If the Indemnifying Party notifies the Indemnified Party
that it does not dispute the claim described in such notice or fails to notify,
in writing, the Indemnified Party within thirty (30) days thereafter whether the
Indemnifying Party disputes the claim described in such notice, the Damages in
the amount specified in such written notice shall be conclusively deemed a
liability of the Indemnifying Party and the Indemnifying Party shall pay the
amount of such Loss to the Indemnified Party on demand. If the Indemnifying
Party has timely disputed its liability with respect to such claim, the
Indemnifying Party and the Indemnified Party shall proceed in good faith to
attempt to negotiate a resolution of such dispute within thirty (30) days.

(e)       After any final decision, judgment or award shall have been rendered
by a Governmental Body of competent jurisdiction and the expiration of the time
in which to appeal therefrom, or a settlement shall have been consummated, or
the Indemnified Party and the Indemnifying Party shall have arrived at a
mutually binding agreement with respect to an Indemnification Claim hereunder,
the Indemnified Party shall forward to the Indemnifying Party notice of any sums
due and owing by the Indemnifying Party pursuant to this Agreement with respect
to such matter.

(f)        This Section 10.4 shall not apply to any Claims made in respect of
Taxes, which shall be specifically governed by Section 11.4.

(g)       This Section 10.4 shall not apply to any actions taken pursuant to
Sections 8.14, 8.15 and/or 8.16, which shall be specifically governed by their
respective terms

10.5     Escrow. On the earlier of (i) the date of execution of a Purchase
Agreement between Purchaser U.M AccelMed, Limited Partnership (“AccelMed”), or
(ii) the date of execution of this Agreement, Seller shall deposit 3,793,452
shares of common stock of Purchaser beneficially owned by Seller, free of any
third parties rights, into an escrow account, and (ii) on the Closing Date,
Seller shall deposit additional 2,000,000 shares of common stock of Purchaser,
beneficially owned by Seller free of any third parties rights, into an escrow
account (all such securities, together with any and all proceeds of disposal of
such securities by Seller (if and to the extent such disposal was consummated
prior to the lapse of the Escrow Period), the “Escrow Reserve”), in each case
held by Stephen L. Davis, as escrow agent (the “Escrow Agent”), and governed by
an agreement to be executed by the applicable parties substantially in the form
attached hereto as Exhibit C; provided, that Seller shall have no obligation to
deposit the 2,000,000 shares of common stock of Purchaser in the escrow account
on the Closing Date if Seller has satisfied and discharged all of its OCS Debt
and Obligations prior to the Closing Date. The Escrow Reserve shall be retained
by the Escrow Agent until the earlier of (1) date of the termination of this
Agreement, or (2) the later of (A) the 24 month anniversary of the Closing Date
or (B) the satisfaction and discharge by Seller of the OCS Debt and Obligations
(the “Escrow Period”) in order to (a) secure the indemnification obligations of
Seller pursuant to

 

 

 

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Section 10.2 ; (b) secure the obligations of Seller and to enable the provision
of remedies to Purchaser pursuant to Section 8.14, (c) secure the obligations of
Seller and to enable the provision of remedies to Purchaser pursuant to Section
8.15, and (d) secure the obligations of Seller and to enable the provision of
remedies to Purchaser pursuant to Section 8.16. Any amounts remaining in the
Escrow Reserve after satisfaction of the obligations hereof shall be disbursed
in accordance with the escrow agreement.

10.6     Exclusive Remedy. From and after the Closing, the sole and exclusive
remedy for any breach or failure to be true and correct, or alleged breach or
failure to be true and correct, of any representation or warranty or any
covenant or agreement in this Agreement, shall be indemnification in accordance
with this Section 10. For avoidance of doubt, it is acknowledged that the
indemnification of Purchaser under Section 10 shall not be limited to the Escrow
Reserve and Purchaser shall be entitled to recover from and to be indemnified
for all Damages regardless of the value or amount of the Escrow Reserve.
Notwithstanding the foregoing, this Section 10.6 shall not operate to limit the
rights of the parties to seek equitable remedies (including specific performance
or injunctive relief).

ARTICLE 11

 

TAXES

11.1     Payment of Sales, Use or Similar Taxes. Purchaser and Seller shall each
be responsible for any federal, state, local or foreign sales Taxes applicable
in their respective jurisdictions to the Purchased Assets and Purchased Shares
and all other applicable sales, use, value-added, stamp, documentary, filing,
recording, real estate transfer, stock transfer, gross receipts, registration,
duty, securities transactions, transfer or similar fees or Taxes or governmental
charges (including real property transfer gains Taxes, UCC3 filing fees, FAA,
ICC, DOT, real estate and motor vehicle registration, title recording or filing
fees and other amounts payable in respect of transfer filings) in connection
with the transactions contemplated by this Agreement (other than Taxes measured
by or with respect to income imposed on Seller or its Affiliates) (collectively,
“Transfer Taxes”). Purchaser shall file all necessary documents (including all
Tax Returns) with respect to all such amounts in a timely manner. To the extent
Seller has any Liability for any Transfer Taxes under this Section 11.1.

11.2      Cooperation on Tax Issues.

(a)       Purchaser and Seller shall furnish or cause to be furnished to each
other, as promptly as practicable, such information and assistance relating to
the Purchased Assets, Purchased Shares and the Assumed Liabilities as is
reasonably necessary for the preparation and filing of any Tax Return, claim for
refund or other filings relating to Tax matters, for the preparation for any Tax
audit, for the preparation for any Tax protest, for the prosecution or defense
of any suit or other proceeding relating to Tax matters. Such cooperation shall
include the retention and (upon the other party’s request) the provision of
records and information which are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. Seller agrees (A) to retain all books and records
with respect to Tax matters pertinent to Subsidiary relating to any taxable
period beginning at or before the

 

 

 

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Closing Date until the expiration of the statute of limitations (and, to the
extent notified by Purchaser, any extensions thereof) of the respective taxable
periods, and to abide by all record retention agreements entered into with any
Governmental Body, and (B) to give the other party reasonable written notice
prior to transferring, destroying or discarding any such books and records and,
if the other party so requests, Seller shall allow the other party to take
possession of such books and records.

(b)       Seller and Purchaser further agree, upon request, to use their
reasonable efforts to obtain any certificate or other document from any
Governmental Body or any other Person as may be necessary to mitigate, reduce or
eliminate any Tax that could be imposed (including, but not limited to, with
respect to the transactions contemplated hereby). The reasonable costs incurred
by Seller and Purchaser during the process of obtaining said certificate or
other document shall be borne by the party that benefits of the mitigation,
reduction or elimination of any Tax.

11.3      Tax Refunds; Tax Benefit Amounts.

(a)       Any refunds or credits of Taxes of Subsidiary attributable to any
period (or portion thereof) ending at or before the Closing Date (a “Pre-Closing
Tax Period”) which is an Excluded Asset shall be for the benefit of, and
promptly paid to, Seller to the extent not reflected as an asset in the balance
sheet or the Total Consideration; provided, however, if the Tax being refunded
shall have been paid by Purchaser or an Affiliate of Purchaser after the Closing
Date, such refund shall be paid to Purchaser or such Affiliate. Purchaser shall
forward or reimburse to Seller any such Tax refunds or credits received within
five (5) days after receipt thereof (but no earlier than two (2) Business Days
after the deposit of any such payment made by check has cleared) reduced by any
reasonable out-of-pocket expenses incurred by Purchaser or Subsidiary to collect
such refund or credit.

(b)       Neither Purchaser nor any of its Affiliates shall amend, refile,
revoke or otherwise modify any Tax Return or Tax election of Subsidiary with
respect to a Pre-Closing Tax Period without the prior written consent of Seller.
Neither Purchaser nor any of its Affiliates shall make or cause Subsidiary to
make an election under Section 338 of the Code or any comparable or similar
election under any provision of state, local or foreign Tax Law with respect to
the Purchased Shares.

11.4       Tax Matters.

(a)       Tax Indemnification.

 

(i)

Except as otherwise contemplated in this Agreement, Seller hereby agrees to be
liable for and to indemnify and hold Purchaser harmless from and against all
Taxes of Subsidiary for any taxable period ending at or before the Closing Date.

 

(ii)

Seller hereby agrees to be liable for and to indemnify and hold Purchaser
harmless from and against all Excluded Liabilities set forth in Sections 2.4(b)
and 2.4(c).

 

 

 

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(iii)

Purchaser hereby agrees to be liable for and to indemnify and hold Seller
harmless from and against all Taxes of Subsidiary for any taxable period
beginning after the Closing Date.

 

(iv)

Purchaser hereby agrees to be liable for and to indemnify and hold Seller
harmless from and against all Assumed Liabilities set forth in Sections 2.3(g)
and 2.3(h).

 

(b)       Tax Audits.

 

(i)

If notice of any action, suit, investigation or audit with respect to Taxes of
Subsidiary (a “Tax Claim”) shall be received by either party for which the other
party may reasonably be expected to be liable pursuant to this Agreement, the
notified party shall notify the other party in writing of such Tax Claim.
Failure to notify the other party of the Tax Claim will not relieve the other
party of any liability that it may have to the notified party, except to the
extent that the other party demonstrates that the defense of such Tax Claim is
prejudiced by the notified party’s failure to give such notice.

 

(ii)

To the extent the Tax Claim relates to a Pre-Closing Tax Period, Seller will
have the right to assume control of the defense of the Tax Claim with counsel of
their choice at any time within thirty (30) days after Seller has received
notice of the Tax Claim. If Seller assumes such defense, Subsidiary and/or
Purchaser shall have the right to participate in the defense thereof and to
employ at their own expense counsel reasonably acceptable to Seller separate
from the counsel employed by Seller. So long as Seller has assumed and is
conducting the defense of the Tax Claim in accordance with the above, Subsidiary
and/or Purchaser will not consent to the entry of any judgment on or enter into
any settlement with respect to the Tax Claim without the prior written consent
of Seller. In the event that Seller refuse to assume the defense of the Tax
Claim as provided above, Subsidiary and/or Purchaser may defend against the Tax
Claim; provided, however, that neither Subsidiary nor Purchaser may consent to
the entry of any judgment on or enter into any settlement with respect to the
Tax Claim without the prior written consent of Seller.

(c)       Disputes. Any dispute as to any matter covered hereby shall be
resolved by Purchaser and Seller in good faith. The fees and expenses of such
accounting firm shall be borne equally by Seller, on the one hand, and Purchaser
on the other. If any dispute with respect to a Tax Return is not resolved prior
to the due date of such Tax Return, such Tax Return shall be filed in the manner
which the party responsible for preparing such Tax Return deems correct.

 

 

 

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(d)       Time Limits. Any claim under this Section 11.4  may only be made until
(a) the third anniversary of the filing of the relevant Tax Return with respect
to any Tax for a Pre-Closing Period filed with a United States federal, state or
local Taxing Authority, and (b) the relevant statute of limitations under
applicable Tax Law for any Tax Return filed with a foreign Taxing Authority.

ARTICLE 12.

 

MISCELLANEOUS AND GENERAL

12.1     Modification or Amendment. Subject to any limitations under applicable
Law, at any time prior to the Closing Date, this Agreement may be amended,
modified or supplemented in writing by the parties hereto, by action of the
board of directors of the respective parties.

12.2     Waiver of Conditions. The conditions to each of the parties’
obligations to execute this Agreement are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable Law.

12.3     Counterparts. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.

12.4     Governing Law; Waiver of Jury Trial; Specific Performance.

(a)       Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL
RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION, EXCEPT FOR MATTERS INVOLVING CORPORATE AFFAIRS OF MEDIVISION.

(b)       Waiver. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT
MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT,
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 12.4.

 

 

 

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(c)       Injunctive Relief. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement, this being in addition to any other
remedy to which such party is entitled at law or in equity

12.5     Dispute Resolutions. The parties shall use their best efforts to
resolve amicably any and all disputes, controversies, claims or differences
(“Disputes”) relating to this Agreement. If either party gives written notice to
the other party that a Dispute has arisen, and the parties are unable within
five (5) business days of such written notice to resolve the Dispute, then it
shall be resolved by binding arbitration, which shall be administered by the
American Arbitration Association (“AAA”) and shall be conducted in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
(the “Rules”), as such Rules may be amended from time to time, with the hearing
locale to be Sacramento, California. A single neutral arbitrator (the
“Arbitrator”) shall preside over the arbitration and decide the Dispute (the
“Decision”). The AAA shall use its normal procedures pursuant to the Rules for
selection of the Arbitrator. The Decision shall be binding, and the prevailing
party may enforce such decision in any court of competent jurisdiction. The
parties shall cooperate with each other in causing the arbitration to be held in
as efficient and expeditious a manner as practicable and, in this connection, to
furnish such documents and make available such Persons as the Arbitrator may
request. All proceedings and decisions of the Arbitrator shall be maintained in
confidence, to the extent legally permissible, and shall not be made public by
any party or any Arbitrator without the prior written consent of all parties to
the arbitration, except as may be required by law. The expenses of the
arbitration shall be borne by the non-prevailing party to the arbitration,
including, but not limited to, the cost of experts, evidence and legal counsel.

12.6     Notices. Any notice, request, instruction or other document to be given
hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, or by
facsimile:

 

if to Purchaser:

Ophthalmic Imaging Systems
221 Lathrop Way, Suite 1
Sacramento, CA 95815
Attn: Gil Allon, Chief Executive Officer
Phone: 916-646-2020
Fax: 916-646-0207
Email: Info@oisi.com

 

 

 

 

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with a copy to:

Troutman Sanders LLP
The Chrysler Building
405 Lexington Avenue
New York, NY 10174
Attn: Henry I. Rothman, Esq.
Phone: 212-704-6000
Fax: 212-704-6288
Email: henry.rothman@troutmansanders.com

 

if to Seller:

MediVision Medical Imaging, Ltd.
Hermon Building, Industrial Park
PO Box 45
Yokneam Elit 20692, Israel
Attn: Noam Allon, President & CEO
Phone: 011-972-4-989-4884
Fax: 011-972-4-989-4883
Email: general@medivision-ois.com

 

with a copy to:

Eitan-Mehulal Law Group
10 Abba Eban Blvd.
PO Box 2081
Herzlia 46120, Israel
Attn: Nir Weissberger
Tel +972-9-972-6000
Fax +972-9-972-6001
Email: nirweissberger@israelilaw.com

 

If to Escrow Agent:

Stephen L. Davis
c/o Davis & Leonard LLP
8880 Cal Center Drive
Suite 180
Sacramento, CA 95826
Tel (916) 362-9000
Fax (916) 362-9066
Email: sdavis@davisandleonard.com

 

 

or to such other persons or addresses as may be designated in writing by the
party to receive such notice as provided above. Any notice, request, instruction
or other document given as provided above shall be deemed given to the receiving
party upon actual receipt, if delivered personally; three (3) Business Days
after deposit in the mail, if sent by registered or certified mail; upon
confirmation of successful transmission if sent by facsimile (provided that if
given by facsimile such notice, request, instruction or other document shall be
followed up within one (1) Business

 

 

 

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Day by dispatch pursuant to one of the other methods described herein); or on
the next Business Day after deposit with an overnight courier, if sent by an
overnight courier.

12.7     Entire Agreement. This Agreement (including any exhibits hereto),
Seller Disclosure Letter and Purchaser Disclosure Letter (the “Confidentiality
Agreement”) constitute the entire agreement, and supersede all other prior
agreements, understandings, representations and warranties both written and
oral, among the parties, with respect to the subject matter hereof.

12.8     No Third-Party Beneficiaries. OIS and MediVision hereby agree that
their respective representations, warranties and covenants set forth herein are
solely for the benefit of the other party hereto, in accordance with and subject
to the terms of this Agreement and this Agreement is not intended to, and does
not, confer upon any Person other than the parties hereto any rights or remedies
hereunder, including, without limitation, the right to rely upon the
representations and warranties set forth herein. The representations and
warranties in this Agreement are the product of negotiations among the parties
hereto and are for the sole benefit of the parties hereto. Any inaccuracies in
such representations and warranties are subject to waiver by the parties hereto
without notice or liability to any other Person. In some instances, the
representations and warranties in this Agreement may represent an allocation
among the parties hereto of risks associated with particular matters regardless
of the knowledge of any of the parties hereto. Consequently, Persons other than
the parties hereto may not rely upon the representations and warranties in this
Agreement as characterizations of actual facts or circumstances as of the date
of this Agreement or as of any other date.

12.9     Obligations of OIS and of MediVision. Whenever this Agreement requires
a Subsidiary of OIS to take any action, such requirement shall be deemed to
include an undertaking on the part of OIS to cause such Subsidiary to take such
action. Whenever this Agreement requires a Subsidiary of MediVision to take any
action, such requirement shall be deemed to include an undertaking on the part
of MediVision to cause such Subsidiary to take such action.

12.10   Transfer Taxes. All transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including penalties and interest)
incurred in connection with the execution of this Agreement shall be paid when
due.

12.11   Severability. The provisions of this Agreement shall be deemed
severable, and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor to carry out, so far as may be valid and
enforceable, the intent and purpose of such invalid or unenforceable provision
and (b) the remainder of this Agreement and the application of such provision to
other Persons or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any
other jurisdiction.

12.12   Interpretation; Construction.

 

 

 

 

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(a)       Headings, etc. The table of contents and headings herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
Where a reference in this Agreement is made to a Section or Exhibit, such
reference shall be to a Section of or Exhibit to this Agreement unless otherwise
indicated. Whenever the words “include,” “includes” or “including” are used in
this Agreement, they shall be deemed to be followed by the words “without
limitation.”

(b)       No Presumption. The parties have participated jointly in negotiating
and drafting this Agreement. In the event that an ambiguity or a question of
intent or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provision
of this Agreement.

(c)       Disclosure Letters. Each party hereto has or may have set forth
information in its respective Disclosure Letter in a section thereof that
corresponds to the section of this Agreement to which it relates. The fact that
any item of information is disclosed in a Disclosure Letter to this Agreement
shall not be construed to mean that such information is required to be disclosed
by this Agreement.

(d)       Calculation of Time Period. When calculating the period of time before
which, within which or following which, any act is to be done or step taken
pursuant to this Agreement, the date that is the reference date in calculating
such period shall be excluded. If the last day of such period is a non-Business
Day, the period in question shall end on the next succeeding Business Day.

(e)       Dollars. Any reference in this Agreement to $ shall mean U.S. dollars.

(f)        Exhibits/Schedules. The Exhibits and Schedules to this Agreement are
hereby incorporated and made a part hereof and are an integral part of this
Agreement. All Exhibits and Schedules annexed hereto or referred to herein are
hereby incorporated in and made a part of this Agreement as if set forth in full
herein. Any matter or item disclosed on one Schedule shall be deemed to have
been disclosed on each other Schedule if its relevance to such other Schedules
is clearly apparent. Disclosure of any item on any Schedule shall not constitute
an admission or indication that such item or matter is material or would have a
Material Adverse Effect. No disclosure on a Schedule relating to a possible
breach or violation of any Agreement, Law or Order shall be construed as an
admission or indication that breach or violation exists or has actually
occurred. Any capitalized terms used in any Schedule or Exhibit but not
otherwise defined therein shall be defined as set forth in this Agreement.

(g)       Reflected On or Set Forth In. An item arising with respect to a
specific representation or warranty shall be deemed to be “reflected on” or “set
forth in” a balance sheet or other financial statement, to the extent any such
phrase appears in such representation or warranty, if (a) there is a reserve,
accrual or other similar item underlying a number on such balance sheet or other
financial statement that related to the subject matter of such representation
that is clearly apparent, (b) such item is otherwise specifically set forth on
the balance sheet or other financial statement or (c) is specifically set forth
in the notes thereto.

 

 

 

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12.13   Assignment. This Agreement shall not be assignable by operation of law
or otherwise. Any purported assignment in violation of this Agreement is void.

 

 

 

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized officers of the parties hereto as of the date first written
above.

 

 

OPHTHALMIC IMAGING SYSTEMS

By:  /s/ Gil
Allon                                                                                    
Name: Gil Allon
Title: Chief Executive Officer

 

By:  /s/  Ariel
Shenhar                                                                            
Name: Ariel Shenhar
Title: Chief Financial Officer

 

MEDIVISION MEDICAL IMAGING LTD.

By:  /s/ Noam
Allon                                                                               
Name:   Noam Allon
Title:     President and Chief Executive Officer

AGREED AS TO ARTICLE 10 BY ESCROW AGENT

 

 

By:           /s/ Stephen Davis                                       
Name:      Stephen Davis
Title:        Escrow Agent

 

 

 

 

 

 

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