Exhibit 10.5

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the “Agreement”), is made and entered into as of
the __ day of ___________, between Ophthalmic Imaging Systems, Inc., a
California corporation (“Corporation”), and ______________ (“Director”).

WHEREAS, Director will be a member of the Board of Directors of Corporation, and
in such capacity, will perform a valuable service for Corporation;

WHEREAS, in accordance with the authorization provided by subsections (a)(10)
and (a)(11) of Section 204 of the California General Corporation Code, as
amended (“Code”), Article Four and Five of the Corporation’s Amended and
Restated Articles of Incorporation (the “Articles”) provides that the liability
of directors of Corporation for monetary damages shall be eliminated to the
fullest extent permissible under California law and authorizes Corporation to
provide indemnification to members of its Board of Directors through agreements
with such members in excess of the indemnification otherwise permitted by
Section 317 of the Code;

WHEREAS, Corporation recognizes that the indemnification provided by this
Agreement is of great importance in attracting highly qualified individuals,
such as Director, to serve as members of its Board of Directors; and

WHEREAS, in order to induce Director to serve as a member of the Board of
Directors of Corporation, Corporation has determined and agreed to enter into
this Agreement with Director for the purpose of fully implementing the
provisions of Section 204 and Section 317 of the Code and Article Four and Five
of the Articles.

NOW, THEREFORE, in consideration of Director’s service as a director after the
date hereof, the parties hereto agree as follows:

Section 1.      Indemnity of Director.   Corporation hereby agrees to hold
harmless and indemnify Director to the fullest extent authorized by the
provisions of Section 317 of the Code, as it may be amended from time to time.

 

Section 2.      Additional Indemnity.    Subject only to the limitations set
forth in Section 3 hereof, Corporation hereby further agrees to hold harmless
and indemnify Director:

 

(a)        against any and all expenses (including attorneys’ fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by
Director in connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (including
an action by or in the right of Corporation) to which Director is, was or at any
time becomes a party, or is threatened to be made a party, by reason of the fact
that Director is, was or at any time becomes a director, officer, employee or
agent of Corporation, or is or was serving or at any time serves at the request
of Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise; and

(b)       otherwise to the fullest extent as indemnification may be provided to
Director by Corporation under the provisions of Article V of the Articles and
Sections 204(a)(11) and 317 of the Code.

 

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Section 3.       Limitations on Additional Indemnity.

 

(a)       No indemnification pursuant to Section 2 hereof shall be paid by
Corporation for any of the following:

(i)          to the extent that Director is or has been indemnified or
reimbursed pursuant to Section 1 hereof or any Directors and Officers Liability
Insurance purchased and maintained by Corporation;

(ii)        with respect to remuneration paid to Director if it shall be
determined by a final judgment or other final adjudication that such
remuneration was in violation of applicable law;

(iii)       on account of any suit pursuant to the provisions of Section 16(b)
of the Securities Exchange Act of 1934, as amended, and amendments thereto or
similar provisions of any federal, state or local statutory law in which
judgment is rendered against Director for an accounting of profits made from the
purchase or sale by Director of securities of Corporation;

(iv)       if a final decision by a court having jurisdiction in the matter
shall determine that such indemnification is not lawful under applicable law; or

(v)        on account of any action, suit or proceeding (other than a proceeding
referred to in Section 8(b) hereof) commenced by the Director against
Corporation or against any officer, director or shareholder of Corporation
unless authorized in the specific case by action of the Board of Directors;

(b)       In addition to those limitations set forth above in paragraph (a) of
this Section 3, no indemnification pursuant to Section 2 hereof in an action
brought by or in the right of Corporation for breach of the Directors duties to
Corporation and its shareholders shall be paid by Corporation for any of the
following:

(i)         on account of Director’s acts or omissions that involve intentional
misconduct or a knowing and culpable violation of law, unless Director had
reasonable cause to believe his conduct was lawful or had no reasonable cause to
believe his conduct was unlawful;

(ii)        on account of acts or omissions that Director believes to be
contrary to the best interests of Corporation or its shareholders or that
involve the absence of good faith on the part of Director;

(iii)       to the extent prohibited by Section 310 of the Code (contracts in
which a director has material financial interest);

(iv)       to the extent prohibited by Section 316 of the Code (corporate
actions subjecting directors to joint and several liability for prohibited
distributions, loans and guarantees); or,

(v)        in any circumstances in which indemnity is expressly prohibited by
Section 317 of the Code;

(c)        Notwithstanding the foregoing, Corporation hereby acknowledges that
Director may have certain rights to indemnification, advancement of expenses
and/or insurance provided by AccelMed, L.P. or its affiliates (“AccelMed”)
Corporation hereby agrees that it (i) is, relative to AccelMed, the indemnitor
of first resort (i.e., Corporation’s obligations to Director under this
Agreement are primary and any duplicative, overlapping or corresponding
obligations of AccelMed are secondary), (ii) shall be required to make all
advances and other payments under this Agreement, and shall be fully liable
therefor, without regard to any rights Director may have against AccelMed, and
(iii) irrevocably waives, relinquishes and releases AccelMed from any and all
claims against AccelMed for contribution, subrogation or any other recovery of
any kind in respect thereof. Corporation further agrees that no advancement or
payment by AccelMed on behalf of Director with respect to any claim for which
Director has sought indemnification from Corporation shall affect the foregoing
and AccelMed shall have a right of contribution and/or be subrogated to the
extent of such advancement or payment to all of the rights of recovery of
Director against Corporation. Corporation and Director agree that AccelMed is an
express third party beneficiary of the terms of this Section 3(c).

 

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Section 4.      Contribution.     If the indemnification provided in Sections 1
and 2 is unavailable and may not be paid to Director for any reason other than
those set forth in Section 3 (excluding Section 3(b)(v)), then in respect of any
threatened, pending or completed action, suit or proceeding in which Corporation
is jointly liable with Director (or would be if joined in such action, suit or
proceeding), Corporation shall contribute to the amount of expenses (including
attorneys’ fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred and paid or payable by Director in such proportion as is
appropriate to reflect (i) the relative benefits received by Corporation on the
one hand and Director on the other hand from the transaction from which such
action, suit or proceeding arose, and (ii) the relative fault of Corporation on
the one hand and of Director on the other in connection with the events which
resulted in such expenses, judgments, fines or settlement amounts, as well as
any other relevant equitable considerations. The relative fault of Corporation
on the one hand and of Director on the other shall be determined by reference
to, among other things, the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent the circumstances resulting in
such expenses, judgments, fines or settlement amounts. Corporation agrees that
it would not be just and equitable if contribution pursuant to this Section 4
were determined by pro rata allocation or any other method of allocation that
does not take account of the foregoing equitable considerations.

 

Section 5.      Continuation of Obligations.       All agreements and
obligations of Corporation contained herein shall continue during the period
Director is a director of Corporation (or is or was serving at the request of
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise) and shall continue
thereafter so long as Director shall be subject to any possible claim or
threatened, pending or completed action, suit or proceeding, whether civil,
criminal or investigative, by reason of the fact that Director was a director of
Corporation or serving in any other capacity referred to herein.

 

Section 6.      Notification and Defense of Claim.        Promptly after receipt
by Director of notice of the commencement of any action, suit or proceeding,
Director will, if a claim in respect thereof is to be made against Corporation
under this Agreement, notify Corporation of the commencement thereof; but the
omission so to notify Corporation will not relieve it from any liability which
it may have to Director otherwise than under this Agreement. With respect to any
such action, suit or proceeding as to which Director notifies Corporation of the
commencement thereof:

 

(a)    Corporation will be entitled to participate therein at its own expense;

 

(b)   Except as otherwise provided below, to the extent that it may wish,
Corporation jointly with any other indemnifying party similarly notified will be
entitled to assume the defense thereof, with counsel satisfactory to Director
(such consent not to be unreasonably withheld). After notice from  Corporation
to Director of its election to assume the defense thereof, Corporation will not
be liable to Director under this Agreement for any legal or other expenses
subsequently incurred by Director in connection with the defense thereof other
than reasonable costs of investigation or as otherwise provided below. Director
shall have the right to employ counsel in such action, suit or proceeding but
the fees and expenses of such counsel incurred after notice from Corporation of
its assumption of the defense thereof shall be at the expense of Director unless
(i) the employment of counsel by Director has been authorized by Corporation,
(ii) Director shall have reasonably concluded that there may be a conflict of
interest between Corporation and Director in the conduct of the defense of such
action, or (iii) Corporation shall not in fact have employed counsel to assume
the defense of such action, in each of which cases the fees and expenses of
counsel shall be at the expense of Corporation. Corporation shall not be
entitled to assume the defense of any action, suit or proceeding brought by or
on behalf of Corporation or as to which Director shall have made the conclusion
provided for in (ii) above; and

 

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(c)   Corporation shall not be liable to indemnify Director under this Agreement
for any amounts paid in settlement of any action or claim effected without its
written consent. Corporation shall not settle any action or claim in any manner
that would impose any penalty or limitation on Director without Director’s
written consent. Neither Corporation nor Director will unreasonably withhold or
delay its consent to any proposed settlement.

 

Section 7.       Advancement and Repayment of Expenses.

 

(a)   In the event that Director employs his or her own counsel pursuant to
Section 6(b)(i) through (iii) above, Corporation shall advance to Director,
prior to any final disposition of any threatened or pending action, suit or
proceeding, whether civil, criminal, administrative or investigative, any and
all reasonable expenses (including legal fees and expenses) incurred in
investigating or defending any such action, suit or proceeding within ten (10)
days after receiving copies of invoices presented to Director for such expenses;
and

 

(b)   Director agrees that Director will reimburse Corporation for all
reasonable expenses paid by Corporation in defending any civil or criminal
action, suit or proceeding against Director in the event and only to the extent
it shall be ultimately determined by a final judicial decision (from which there
is no right of appeal) that Director is not entitled, under applicable law, the
Articles or the Corporation’s Bylaws or this Agreement, to be indemnified by
Corporation for such expenses.

 

Section 8.       Enforcement

 

(a)   Corporation expressly confirms and agrees that it has entered into this
Agreement and assumed the obligations imposed on Corporation hereby in order to
induce Director to serve as a director of Corporation, and acknowledges that
Director is relying upon this Agreement in serving in such capacity.

 

(b)   In the event Director is required to bring any action to enforce rights or
to collect moneys due under this Agreement and is successful in such action,
Corporation shall reimburse Director for all of Director’s reasonable fees and
expenses in bringing and pursuing such action.

 

Section 9.     Severability.      Each of the provisions of this Agreement is a
separate and distinct agreement and independent of the others, so that if any
provision hereof shall be held to be invalid or unenforceable for any reason,
such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof.

 

 

 

 

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Section 10.   Non-Exclusivity of Rights.         The rights conferred on
Director by this Agreement shall not be exclusive of any other right which
Director may have or hereafter acquire under any statute, provision of the
Articles, Corporation’s Bylaws, agreement, vote of shareholders or directors, or
otherwise, both as to action in Director’s official capacity and as to action in
another capacity while holding office; provided, that this Agreement shall
supersede any prior agreements or understandings, both written and oral, between
Director and Corporation, with respect to the subject matter hereof; provided,
further, that, notwithstanding the foregoing proviso, and in light of the fact
that this Agreement is generally intended to provide for indemnification to the
fullest extent possible except as prohibited by law, this Agreement shall not be
construed to deprive Director of any indemnification permitted by applicable law
with respect to an act or omission to which Director would otherwise have been
entitled under any such prior agreement. To the extent that a change in the
California Code permits greater indemnification by agreement than would be
afforded currently under Corporation’s Articles of Incorporation and Bylaws and
this Agreement, it is the intent of the parties hereto that Director shall enjoy
by this Agreement the greater benefits so afforded by such change. Corporation
will not adopt any amendment to any of the corporate documents the effect of
which would be to deny, diminish or encumber Directors’s right to
indemnification under this Agreement.

 

Section 11.   Effective Date.   This Agreement shall apply beginning on
Director’s first date of being elected as a director of Corporation.

 

Section 12.   Governing Law.  This Agreement shall be interpreted and enforced
in accordance with the laws of the State of California.

 

Section 13.   Binding Effect.  This Agreement shall be binding upon Director and
upon Corporation, and their respective successors and assigns, and shall inure
to the benefit of Director, his or her heirs, personal representatives and
assigns and to the benefit of Corporation, its successors and assigns.

 

Section 14.   Amendment and Termination.    No amendment, modification,
termination or cancellation of this Agreement shall be effective unless in
writing signed by both parties hereto.

 

Section 15.   Subrogation.     In the event of payment under this Agreement,
Corporation shall be subrogated to the extent of such payment to any right
Director may have for recovery of the amounts so paid from any third party.
Director agrees to execute all documents required and do all other acts
necessary to effect the foregoing provisions and permit Corporation to enforce
the rights so subrogated.

 

 

 

 

 

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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first set forth above.

 

OPHTHALMIC IMAGING SYSTEMS

 

 

By:

  

Name:

 

Title:

By:    Name: Title:

 

 

DIRECTOR:

 

 

Name

 

 

 

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