Exhibit 10.7

 

ESCROW AGREEMENT

 

This Escrow Agreement (this “Agreement”) is made and entered into this 24th day
of June, 2009, by and among OPHTHALMIC IMAGING SYSTEMS (the “Purchaser”),
MEDIVISION MEDICAL IMAGING LTD. (the “Seller”), and STEPHEN L. DAVIS, ESQ. (the
“Escrow Agent”). Capitalized terms used in this Agreement not otherwise defined
herein shall have their respective meanings given to them in the Asset Purchase
Agreement (as defined below).

 

R E C I T A L S

 

WHEREAS, the Purchaser and the Seller are parties to that certain Asset Purchase
Agreement, dated June 24, 2009 (the “Asset Purchase Agreement”); and

 

WHEREAS, the Purchaser and the Seller have agreed that (i) 3,793,452 shares (the
“Initial Escrow Shares”) of common stock, no par value (the “Common Stock”), of
the Purchaser beneficially owned by the Seller will be deposited into an escrow
account on the closing date (the “PA Closing Date”) of the sale by the Purchaser
to U.M AccelMed, Limited Partnership (“AccelMed”) of 9,633,228 shares of Common
Stock and warrants to purchase 3,211,076 shares of Common Stock pursuant to that
certain Purchase Agreement, dated June __, 2009, between the Purchaser and
AccelMed and (ii) 2,000,000 shares (the “Remaining Escrow Shares,” and
collectively with the Initial Escrow Shares, the “Escrow Shares”) of Common
Stock will be deposited in an escrow account on the closing date (the “APA
Closing Date”) of the Asset Purchase Agreement, in each case pursuant to Section
10.5 of the Asset Purchase Agreement; provided, that the Seller shall have no
obligation to deposit the Remaining Escrow Shares into the Escrow Account (as
defined below) if the Seller has satisfied and discharged all of its OCS Debt
and Obligations (as defined in the Asset Purchase Agreement) prior to the APA
Closing Date.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties agree as follows:

 

ARTICLE 1

ESCROW SHARES

 

1.1   Delivery.     (i) On the PA Closing Date, the Seller shall deposit with
the Escrow Agent, to be held by the Escrow Agent pursuant to the terms of this
Agreement, certificates representing the Initial Escrow Shares and the stock
powers executed in blank with respect to such Initial Escrow Shares (the
“Initial Escrow Materials”) and the Escrow Agent shall deliver the Purchaser on
or about such date, a written confirmation of his receipt of the Initial Escrow
Materials; and

 

(ii) on the APA Closing Date, the Seller shall deposit with the Escrow Agent, to
be held by the Escrow Agent pursuant to the terms of this Agreement,
certificates representing the Remaining Escrow Shares and the stock powers
executed in blank with respect to such Remaining Escrow Shares (the “Remaining
Escrow Materials”) and the Escrow Agent

 

 

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shall deliver the Purchaser on or about such date, a written confirmation of his
receipt of the Initial Escrow Materials; provided, that the Seller shall have no
obligation to deposit the Remaining Escrow Shares into the Escrow Account (as
defined below) if the Seller has satisfied and discharged all of its OCS Debt
and Obligations prior to the APA Closing Date. The Remaining Escrow Materials
shall be deposited together with an irrevocable power of attorney authorizing
the Escrow Agent to release the Remaining Escrow Shares from the Pledge (as
defined below), to file a release notice with the Israeli Registrar of Pledges
and to take any other reasonable action required to implement such release
(without the need for any further consent from the Lenders (as defined below))
immediately prior to any event on which the Escrow Agent shall be entitled to
dispose the Remaining Escrow Shares pursuant this Agreement, resulting in the
Remaining Escrow Shares being free and clear of any third party charge or rights
(as shall be evidenced in writing Israeli Registrar of Pledges’ printout);

 

provided, further that, in the case of (i) and (ii) above, the Seller may, at
any time and in its sole discretion (subject to the terms herein), replace the
Escrow Shares with an autonomous bank guarantee of a reputable Israeli or US
bank, the identity of which should be approved in advance by the Purchaser (the
“Guarantee”) reflecting the Fair Market Value (as defined herein) of the Escrow
Shares, by depositing the Guarantee with the Escrow Agent, whereupon the Escrow
Agent shall confirm receipt of such Guarantee to the Purchaser and shall
immediately release the appropriate amount of the Escrow Shares to the Seller.
The terms and conditions of the Guarantee shall be subject to the prior approval
of the Purchaser, which shall not be unreasonably withheld, provided, further
that the terms and conditions of the Guarantee (including the conditions and
procedure for the realization of the Guarantee) shall not be less favorable to
the Purchaser than the rights and remedies granted to the Purchaser and/or the
Purchaser’s ability to recover from the Escrow Property (as defined below) under
this Agreement. The Escrow Property shall be held in escrow until the earlier of
(i) date of the termination of the Asset Purchase Agreement, or (ii) the later
of (A) the 24 month anniversary of the date of the APA Closing Date or (B) the
satisfaction and discharge by the Seller of the OCS Debt and Obligations (the
“Termination Date”).

 

For purposes of this Section 1.1(ii) “Pledge” shall mean that certain security
and pledge rights granted to the Lenders under that certain convertible loan
agreement between the Purchaser, Seller, the Lenders and Delta Trading And
Services (1986) Ltd, dated January 12, 2009 with respect to an aggregate of
4,837,391 shares of Common Stock of the Purchaser which are owned by MediVision,
out of which 2,000,000 shares of Common Stock of the Purchaser are pledged to
the Lenders and “Lenders” shall mean Noam Allon, Gill Allon and Ariel Shenhar.

 

1.2        Receipt; Escrow Account. The Escrow Agent hereby agrees (i) to accept
delivery of the Escrow Shares or the Guarantee (subject to the Purchaser’s
approval set forth above) and process such delivery based on instructions given
to the Escrow Agent and (ii) to hold the Escrow Shares or the Guarantee in an
escrow account (the “Escrow Account”) in accordance with the terms and
conditions of this Agreement and for the uses and purposes stated herein. The
Escrow Account, unless it holds cash, shall not be an interest bearing account.
Cash, if any, held in the Escrow Account shall be invested in a money market
account mutually acceptable to the Purchaser and the Seller, as specified in
written instructions from the Purchaser and the Seller to the Escrow Agent. In
no event shall any part of the Escrow Shares or the Guarantee be commingled with
any other securities held by the Escrow Agent. The Escrow Account shall not be
subject to any lien or attachment by any creditor of either party hereto and
shall be used solely for the purposes set forth in this Agreement and the Asset
Purchase Agreement. The Escrow Shares or the Guarantee and any amounts in the
Escrow Account shall not be used by the Escrow Agent to offset any obligations
that either the Purchaser or the Seller might have to the Escrow Agent or any of
its affiliates, whether under this Agreement or under any other agreement or
arrangement in any other capacity, nor shall the Escrow Agent have any lien or
claim upon the assets in any form whatsoever.

 

1.3        Distribution and Dividends. All cash dividends on the Escrow Shares,
when and if received by the Escrow Agent, shall be remitted and paid by the
Escrow Agent directly to the Seller and shall not be subject to this Agreement.
Additional shares of capital stock issued on or with respect to the Escrow
Shares as a result of stock splits, stock dividends or other similar capital
adjustments to, or recapitalizations on, the Escrow Shares or all other
distributions (other than cash dividends) thereof (the “Additional
Distributions”) shall be delivered directly by the Purchaser (through its stock
transfer agent) to the Escrow Agent and shall not be issued to the Seller, and
shall be retained in the Escrow Account subject to the terms hereof and shall
constitute Escrow Property. The Escrow Agent hereby agrees to accept delivery of
the Additional Distributions and to hold the Additional Distributions in
accordance with the terms and conditions of this Agreement. The Escrow Agent
shall deliver the Purchaser on or about such date, a written confirmation of his
receipt of the Additional Distributions. The Seller shall be treated as the
beneficial owner of the Escrow Property for tax purposes.

 

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1.4       Voting of Shares. All voting rights with respect to the Escrow Shares
shall be exercised by the Seller.

 

1.5       Transferability; Sale. The interest of the Seller in the Escrow Shares
and any other property comprising the Escrow Account (the “Escrow Property”)
shall not be offered for sale, sold, pledged, assigned, transferred (including
by operation of law) or otherwise disposed of, directly or indirectly, or be
subject to a transaction which would have the same effect, or be subject to any
swap, hedge or other arrangement that transfers, in whole or in part, any of the
economic consequences of ownership of the Escrow Property, whether any such
aforementioned transaction is to be settled by delivery of the Escrow Property,
in cash or otherwise, so long as such Escrow Property is held by the Escrow
Agent hereunder; provided, however, that the Escrow Agent may sell, transfer, or
otherwise dispose of the Escrow Property pursuant to Sections 2.1 and 2.2
hereof, and as otherwise provided in this Agreement.

 

1.6       Nothing in this Agreement shall limit or restrict the Seller from
entering into an agreement with AccelMed and the other parties named therein for
the election of directors of the Company and vote of the Escrow Shares and the
performance of its obligations thereunder.

 

ARTICLE 2

DISBURSEMENTS

 

2.1       Disbursement Request. At any time prior to the Termination Date, upon
written certification by the Purchaser to the Escrow Agent (i) that an amount is
due and payable by the Seller to the Purchaser pursuant to Section 10.2 of the
Asset Purchase Agreement (an “Indemnification Claim Amount”) and such amount has
not been paid, (ii) that an amount is due and payable by the Seller to the
Purchaser pursuant to Section 8.14 of the Asset Purchase Agreement (an “Elop
Claim Amount”), and such amount has not been paid; (iii) that an amount in is
due and payable by the Seller to the Purchaser pursuant to Section 8.15 of the
Asset Purchase Agreement (an “United Mizrachi Bank Claim Amount”) and such
amount has not been paid, or (iv) that an amount is due and payable by the
Seller to the Purchaser pursuant to Section 8.16 of the Asset Purchase Agreement
(an “OCS Claim Amount”), and such amount has not been paid, the Purchaser (on
its own behalf or on behalf of any other Person to whom such amount is to be
paid) may request a disbursement, subject to Article 3 hereof, from the Escrow
Account in payment of such amount, or a portion thereof, if any, by delivering
to the Escrow Agent and the Seller a written notice (a “Purchaser Payment
Request”) which specifies the Indemnification Claim Amount, the Elop Claim
Amount, the United Mizrachi Bank Claim Amount or the OCS Claim Amount, as the
case may be, and which may include instructions to the Escrow Agent to sell
Escrow Shares on behalf of the Seller in customary broker transactions on the
OTC Bulletin Board (or wherever the Common Stock is then listed or quoted for
trading) in an amount equal to the Indemnification Claim Amount, the Elop Claim
Amount, United Mizrachi Bank Claim Amount or the OCS Claim Amount, as the case
may be, and to wire the proceeds from such sale to the account of the Purchaser
set forth in the Purchaser Payment Request. Each Purchaser Payment Request shall
be accompanied by a representation to the Escrow Agent that a copy of such
Purchaser Payment Request has been provided to the Seller.

 

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2.2       Distribution of the Escrow Fund.

(a)       Disbursements upon Joint Instructions. The Escrow Agent will
distribute the Escrow Property, or any portion thereof, having a Fair Market
Value equal to the Indemnification Claim Amount, the Elop Claim Amount, the
United Mizrachi Bank Claim Amount, or the OCS Claim Amount, as the case may be
(or such lesser amount of Escrow Property as is then held in the Escrow
Account), in accordance with, and upon receipt of, the instructions of the
Purchaser and the Seller.

 

(b)       Disbursements upon Purchaser Payment Request. (1) Subject to the
provisions of Article 3, on the tenth (10th) Business Day after receipt from the
Purchaser of a Purchaser Payment Request with respect to an Indemnification
Claim, the Escrow Agent will distribute to the Purchaser (for the account of the
Purchaser or another Person, as the case may be) the Escrow Property, or any
portion thereof, (i) in the case of Escrow Shares, having a Fair Market Value
equal to the Indemnification Claim Amount, or (ii) in the case of cash, equal to
the Indemnification Claim Amount (or in each case, such lesser amount of Escrow
Property as is then held in the Escrow Account).

 

(2)       Subject to the provisions of Section 3.2, on the tenth (10th) Business
Day after receipt from the Purchaser of a Purchaser Payment Request with respect
to an Elop Claim Amount, the Escrow Agent will distribute to the Purchaser (for
the account of the Purchaser or another Person, as the case may be) the Escrow
Property, or any portion thereof, (i) in the case of Escrow Shares, having a
Fair Market Value equal to the Elop Claim Amount, or (ii) in the case of cash,
equal to the Elop Claim Amount (or in each case, such lesser amount of Escrow
Property as is then held in the Escrow Account); and following such distribution
to the Purchaser, the Escrow Agent shall distribute to the Seller, if
applicable, Escrow Shares in an amount equal to 602,409 minus the shares used to
satisfy the Elop Claim Amount.

 

(3)       Subject to the provisions of Section 3.2, on the tenth (10th) Business
Day after receipt from the Purchaser of a Purchaser Payment Request with respect
to an United Mizrachi Bank Claim Amount, the Escrow Agent will distribute to the
Purchaser (for the account of the Purchaser or another Person, as the case may
be) all of the Escrow Shares or cash from the sale of all the Escrow Shares.

 

(4)       Subject to the provisions of Section 3.2, on the tenth (10th) Business
Day after receipt from the Purchaser of a Purchaser Payment Request with respect
to an OCS Claim Amount, the Escrow Agent will distribute to the Purchaser (for
the account of the Purchaser or another Person, as the case may be) the Escrow
Property, or any portion thereof, (i) in the case of Escrow Shares, having a
Fair Market Value equal to the OCS Claim Amount, or  (ii) in the case of cash,
equal to the OCS Claim Amount (or in each case, such lesser amount of Escrow
Property as is then held in the Escrow Account); and following such distribution
to the Purchaser, the Escrow Agent shall distribute to the Seller, Escrow
Shares, if applicable, in an amount equal to either (A) if the APA Closing has
occurred, 4,337,349 minus the shares used to satisfy the OCS Claim Amount, or
(B) if the APA Closing has not occurred 2,337,349 minus the shares used to
satisfy the OCS Claim Amount.

 

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(c)       Disbursement upon Lapse of twelve (12) Months. On the twelve (12)
month anniversary of the date of this Agreement, the Escrow Agent will
distribute to the Seller 426,847 Escrow Shares.

 

(d)       Disbursement upon Lapse of twenty-four (24) Months. On the twenty-four
(24) month anniversary of the date of this Agreement, the Escrow Agent will
distribute to the Seller 426,847 Escrow Shares.

 

(e)       Disbursement upon Lapse of Termination Date. On the Termination Date,
and subject to sixty (60) days prior written notice to the Purchaser and the
Seller (a “Termination Notice”), the Escrow Agent will distribute to the Seller
the remaining portion of the Escrow Account, or the undisputed portion thereof
(if any) in the event that (i) the Purchaser has delivered any Purchaser Payment
Request prior to or subsequent to the delivery of the Termination Notice, (ii)
any portion of the Escrow Account is subject to a Payment Dispute (as defined
below) at such time, (iii) or in the event that the Purchaser has made any other
valid claim in return to the termination notice delivered to it.

 

It is hereby understood and agreed that any Escrow Shares to be distributed or
sold, as the case may be, pursuant to this Section 2.2 that are subject to a
pledge agreement in favor of Agfa Gevaert N.V., Delta Trading and Services
(1986), Ltd., Gil Allon, Noam Allon, Ariel Shenhar and/or Yuval Shenhar, if to
be distributed to the Seller, will be distributed prior to any other Escrow
Shares that are not subject to such pledge agreement, and if to be distributed
to the Purchaser or sold by the Escrow Agent will be distributed or sold after
all other Escrow Shares not subject to such pledge agreement are distributed or
sold.

 

ARTICLE 3

DISPUTE RESOLUTION

 

3.1       Payment Disputes.

 

(a)       If, after delivery of a Purchaser Payment Request with respect to an
Indemnification Claim Amount, the Seller desires to challenge the amount of the
disbursement requested therein (a “Payment Dispute”), then the Seller must do so
prior to the tenth (10th) Business Day after a Purchaser Payment Request is
given by delivering to the Escrow Agent and the Purchaser written notice (a
“Dispute Notice”) describing in reasonable detail the amount of the requested
distribution to be challenged and the basis for such challenge. If the Seller
delivers a Dispute Notice or any dispute otherwise arises as to the terms of the
Escrow Account, the Purchaser and the Seller shall attempt to resolve the
dispute and if they are unable to do so within thirty (30) days after delivery
of the Dispute Notice, the dispute shall be resolved in accordance with the
dispute resolution procedures contained in Section 12.5 of the Asset Purchase
Agreement. If, upon final resolution of the dispute, either by mutual agreement
or in accordance with the dispute resolution procedures contained in Section
12.5 of the Asset Purchase Agreement, all or a portion of the Escrow Property is
determined to be payable to the Purchaser, upon receipt of (i) a joint written
direction of the Purchaser and the Seller, or (ii) any final non-appealable
Order directing the Escrow Agent as to the disposition of such dispute, then the
Escrow Agent shall promptly release to the Purchaser the amount so
determined/directed. Each party shall be responsible for its own fees and
expenses in connection with a dispute of any Indemnification Claim Amount, Elop
Claim Amount, United Mizrachi Bank Claim Amount or OCS Claim Amount, provided
that if the final non-appealable Order direct the payment to the Purchaser of
the all or substantially all the amount claimed by the Purchaser under the
Purchaser Payment Request, then the Seller shall reimburse the Purchaser for all
expenses incurred by the Purchasers in connection with a dispute under this
Section 3.1.  

 

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(b)       It is hereby agreed and acknowledged by the Seller that any and all
Purchaser Payment Requests with respect to Elop Claim Amount, United Mizrachi
Bank Claim Amount or OCS Claim Amount shall not be subject to the dispute
procedure set fort in Section 3.1(a) above and the Escrow Agent shall distribute
Escrow Property, or any portion thereof on the tenth (10th) Business Day after
receipt from the Purchaser of a Purchaser Payment Request, as set forth in
Section 2.2(b).

 

3.2       Valuation of Escrow Property.

 

(a)       Fair Market Value. For purpose of this Agreement,

 

(i) the Fair Market Value of each Escrow Share in connection with an
Indemnification Claim Amount, an United Mizrachi Bank Claim Amount and an OCS
Claim Amount shall be the volume weighted average price based on the closing
price per share of the Purchaser’s Common Stock on the OTC Bulletin Board (or
wherever the Common Stock is listed or quoted for trading on the date in
question) for the thirty-day trading period ending on the day prior to the date
on which the claim was “finally determined” (as defined below), with appropriate
adjustment to take into account any stock split, reverse stock split, stock
dividend, recapitalization or other similar capital adjustments with respect to
the Purchaser’s Common Stock

 

(ii) the Fair Market Value of each of the Escrow Shares in connection with an
United Mizrachi Bank Claim Amount shall be $0.41522 per share, with appropriate
adjustment to take into account any stock split, reverse stock split, stock
dividend, recapitalization or other similar capital adjustments with respect to
the Purchaser’s Common Stock, and

 

(iii) the Fair Market Value of each Escrow Share for the purpose of providing
the Guarantee shall be the volume weighted average price based on the closing
price per share of the Purchaser’s Common Stock on the OTC Bulletin Board (or
wherever the Common Stock is listed or quoted for trading on the date in
question) for the thirty-day trading period ending on the day prior to the date
of replacing the Escrow Shares with the Guarantee.

 

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For purposes of this Section 3.2, the date on which a claim was “finally
determined” shall mean (a) in the case of Section 2.2(a), the payment date
stated in the joint written instructions; (b) in the case of Section 2.2(b), the
payment date stated in the Purchaser Payment Request; provided, however, that
nothing in this Section 3.2(a) shall prejudice the right of any indemnified
party to seek full indemnification for any Indemnification Claim Amount, Elop
Claim Amount, United Mizrachi Bank Claim Amount, or OCS Claim Amount for which
the Escrow Property is not the sole recourse pursuant to the Asset Purchase
Agreement. Notwithstanding anything to the contrary herein, Escrow Property to
be released shall be rounded to the nearest share.

 

(b)       Calculation. The Fair Market Value with respect to an Indemnification
Claim Amount, a Elop Claim Amount or an OCS Claim Amount shall be calculated by
the Purchaser within five (5) Business Days after the date on which a claim has
been “finally determined” (as defined in Section 3.2(a) above), and the results
of such calculation shall be provided to the Escrow Agent in writing signed by
the Purchaser (the “Calculation Notice”) within such 5-day period. In no event
shall the Escrow Agent be required to determine the Fair Market Value of the
Escrow Property. The Calculation Notice shall specify (i) the Indemnification
Claim Amount, the Elop Claim Amount or the OCS Claim Amount; (ii) the Fair
Market Value of Escrow Property on a per share basis; and (iii) and the exact
number of shares of Escrow Shares and the amount of other Escrow Property (if
any) to be released from the escrow.

 

The Escrow Agent shall have no duty whatsoever to independently verify the
accuracy of the calculations provided pursuant to this Sections 3.2(b)(1) or (2)
and shall be entitled to rely on the calculation provided to the Escrow Agent by
the Purchaser.

 

ARTICLE 4

ESCROW AGENT

 

4.1       Appointment. The Purchaser and the Seller hereby appoint the Escrow
Agent to serve hereunder and the Escrow Agent hereby accepts such appointment
and agrees to perform all duties which are expressly set forth in this
Agreement. The Seller hereby acknowledges that the Escrow Agent also serves as
outside legal counsel to the Purchaser, and shall continue to serve as counsel
to Purchaser. Both Seller and Purchaser expressly agree to waive any conflicts
of interest arising from the Escrow Agent’s role or performance of duties under
this Agreement or as counsel to Purchaser.

 

4.2       Duties; Limitation of Liability of Escrow Agent.

 

(a)       The duties and responsibilities of the Escrow Agent hereunder shall be
determined solely by the express provisions of this Agreement, and no other or
further duties or responsibilities shall be implied. The Escrow Agent shall not
have any liability under, nor duty to inquire into, the terms and provisions of
any agreement or instructions, other than as outlined in this Agreement. It is
understood and agreed that should any dispute arise with respect to the payment
and/or ownership or right of possession of the Escrow Property, the Escrow Agent
is authorized and directed to retain in its possession, without liability to
anyone, all or any part of the Escrow Property until such dispute shall have
been settled either by mutual agreement by the parties concerned or by the final
decision of the arbitrators in accordance with the dispute resolution procedures
contained in Section 12.5 of the Asset Purchase Agreement.

 

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(b)       The Escrow Agent may rely and shall be protected in acting or
refraining from acting upon any written notice, instruction or request furnished
to it hereunder and believed by it to be genuine and to have been signed or
presented by the proper party or parties. The Escrow Agent shall be under no
duty to inquire into or investigate the validity, accuracy or content of such
document. The Escrow Agent shall have no duty to solicit any items which may be
due it hereunder.

 

(c)       The Escrow Agent shall not be liable for any action taken or omitted
by it in good faith unless a court of competent jurisdiction determines that the
Escrow Agent’s willful misconduct or gross negligence was the primary cause of
any loss to the Purchaser or the Seller.

 

(d)       The Escrow Agent shall not incur any liability for following the
instructions herein contained or expressly provided for, or written instructions
given jointly by the Purchaser and the Seller, or by the Purchaser (to the
extent that the Seller was provided with the right to dispute a payment pursuant
to an in accordance with Section 3.1 above).

 

(e)       In the event that the Escrow Agent shall be uncertain as to its duties
or rights hereunder or shall receive instructions, claims or demands from any
party hereto which, in its opinion, conflict with any of the provisions of this
Agreement, it shall be entitled to refrain from taking any action and its sole
obligation shall be to keep safely all property held in escrow until it shall be
directed otherwise in writing by all of the other parties hereto or by a final
order or judgment of a court of competent jurisdiction.

 

(f)        If, in the sole opinion and discretion of the Escrow Agent, a
conflict or dispute arises, and as a result of that conflict or dispute the
Escrow Agent is unable to perform his duties or resolve the conflict or dispute,
then the Escrow Agent may refer the matter to private arbitration by another
attorney. The Escrow Agent shall notify the parties of his decision to refer the
matter to arbitration, and the parties promptly shall select an arbitrator. If
the parties are unable to agree on an arbitrator, or cannot choose an arbitrator
within 10 days of the Escrow Agent’s notification of a conflict or dispute, then
the Escrow Agent may choose the arbitrator. The arbitrator shall be an attorney
in the County of Sacramento, California, licensed to practice law in the State
of California. Once the arbitrator has been chosen and assigned the dispute or
conflict relating to the Escrow Agent’s duties, the parties shall promptly
deliver to the arbitrator all arguments and materials necessary to assist the
arbitrator in rendering a decision. The arbitrator may, and shall try to,
resolve the dispute or conflict within twenty days of being chosen by the
parties or Escrow Agent. The decision of the arbitrator shall be final and
nonappealable.

 

4.3       Indemnification. The Purchaser and the Seller hereby agree to jointly
and severally indemnify the Escrow Agent for, and to hold it harmless against
any loss, liability or expense arising out of or in connection with this
Agreement and carrying out its duties hereunder, including the costs and
expenses of investigating or defending itself against any claim

 

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of liability, except in those cases where the Escrow Agent has been guilty of
gross negligence or willful misconduct. The costs of enforcing this indemnity
shall be paid by the Purchaser and the Seller if the Escrow Agent is determined
by a court of competent jurisdiction to be the prevailing party; provided, that
the Purchaser, on the one hand, and the Seller, on the other hand, shall each
pay one-half of such costs. This right of indemnification shall survive the
termination of this Agreement and the resignation of the Escrow Agent.

 

4.4       Compensation/Fees to Escrow Agent. The Escrow Agent has agreed to
serve without compensation for his services hereunder. Notwithstanding the
foregoing, the Escrow Agent shall be entitled to be reimbursed for all costs and
expenses incurred in performing his duties hereunder, and shall be compensated
for time spent as Escrow Agent at his then standard hourly rate by the
Purchaser.

 

ARTICLE 5

OTHER PROVISIONS

 

5.1       Notices. Any notice or other document to be given hereunder by any
party hereto to any other party shall be give in the manner required by Section
12.6 of the Asset Purchase Agreement.

 

5.2       Successor Escrow Agent. In the event the Escrow Agent becomes
unavailable or unwilling to continue in its capacity herewith, the Escrow Agent
may resign and be discharged from its duties or obligations hereunder by giving
its resignation to the parties to this Agreement, specifying a date not less
than thirty (30) calendar days following such notice date of when such
resignation will take effect, provided that in no event shall the Escrow Agent
resign prior to appointment of a successor to ensure that the Escrow Property
shall consecutively be held in escrow under the terms herein during until the
termination Date. The Purchaser will designate a successor escrow agent prior to
the expiration of such period by giving written notice to the Escrow Agent and
the Seller. In addition, the Purchaser may appoint, at any time prior to the
termination Date, a successor escrow agent with the consent of the Seller, which
consent shall not be unreasonably withheld. The Escrow Agent will promptly
transfer the Escrow Property to such designated successor. The terms of this
Agreement shall bind any successor escrow agent.

 

5.3       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.

 

5.4       Representation and Warranties of the Purchaser and the Seller. Each of
the Purchaser and the Seller hereby represents and warrants (i) that this
Agreement has been duly authorized, executed and delivered on its behalf and
constitutes its legal, valid and binding obligation and (ii) that the execution,
delivery and performance of this Agreement does not and will not violate any
applicable law or regulation.

 

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5.5       Further Acts and Assurances. The parties agree to execute and deliver
any and all documents and to take such further action as shall be reasonably
required to effectuate the provisions of this Agreement.

 

5.6.      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.

 

5.7       Amendment; Waiver. This Agreement may be amended or modified, and any
of the terms, covenants, representations, warranties, or conditions hereto may
be waived, only by a written instrument executed by the parties hereto, or in
the case of a waiver, by the party waiving compliance. Any waiver by any party
of any condition, or of the breach of any provision, term, covenant,
representation, or warranty contained in this Agreement, in any one or more
instances, shall not be deemed to be nor construed as further or continuing
waiver of any such condition, or of the breach of any other provision, term,
covenant, representation, or warranty of this Agreement.

 

5.8       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, (i) 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 (ii) 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.

 

5.9       Integration. This Agreement and the Asset Purchase Agreement contain
the entire understanding among the parties hereto with respect to the escrow
contemplated hereby and supersedes and replaces all prior and contemporaneous
agreements and understandings, oral or written, with regard to such escrow.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as of the
date first written above.

 

 

Purchaser:

 

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

 

 

 

 

 

 

 

Seller:

 

MEDIVISION MEDICAL IMAGING LTD.

 

 

By:  /s/ Noam Allon                                            

Name:  Noam Allon

Title:    President and Chief Executive Officer

 

 

Escrow Agent:

/s/ Stephen L. Davis, Esq.                              

Stephen L. Davis, Esq.

 

 

 

 

 

 

 

 

 

 

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