Exhibit 10.2

 

VIKING SYSTEMS, INC.
REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of the
15th day of April, 2004, by and among Viking Systems Inc., a Nevada corporation
(the “Company”), and Vista Medical Technologies, Inc., a Delaware corporation
(the “Holder”).

 

WHEREAS, Holder received shares of the Company’s Common Stock pursuant to the
terms of that certain Asset Purchase Agreement between the Company and Holder
dated December 22, 2003 (the “Asset Purchase Agreement”).

 

WHEREAS, in connection with the Asset Purchase Agreement and the transactions
contemplated therein, the Company has agreed to grant to Holder the rights
described herein.

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree hereto as follows:

 

1.                                       GENERAL.

 

1.1                                 Definitions.  As used in this Agreement the
following terms shall have the following respective meanings:

 

(A)                                  “EXCHANGE ACT” MEANS THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

(B)                                 “HOLDER” MEANS ANY PERSON OWNING OF RECORD
REGISTRABLE SECURITIES THAT HAVE NOT BEEN SOLD TO THE PUBLIC OR ANY ASSIGNEE OF
RECORD OF SUCH REGISTRABLE SECURITIES.

 

(C)                                  “REGISTER,” “REGISTERED,” AND
“REGISTRATION” REFER TO A REGISTRATION EFFECTED BY PREPARING AND FILING A
REGISTRATION STATEMENT IN COMPLIANCE WITH THE SECURITIES ACT, AND THE
DECLARATION OR ORDERING OF EFFECTIVENESS OF SUCH REGISTRATION STATEMENT OR
DOCUMENT.

 

(D)                                 “REGISTRABLE SECURITIES” MEANS (A) THE
SHARES AND (B) ANY COMMON STOCK OF THE COMPANY ISSUED AS (OR ISSUABLE UPON THE
CONVERSION OR EXERCISE OF ANY WARRANT, RIGHT OR OTHER SECURITY WHICH IS ISSUED
AS) A DIVIDEND OR OTHER DISTRIBUTION WITH RESPECT TO, OR IN EXCHANGE FOR OR IN
REPLACEMENT OF, THE SHARES.  NOTWITHSTANDING THE FOREGOING, REGISTRABLE
SECURITIES SHALL NOT INCLUDE ANY SECURITIES SOLD BY A PERSON TO THE PUBLIC
EITHER PURSUANT TO A REGISTRATION STATEMENT OR RULE 144 OR SOLD IN A PRIVATE
TRANSACTION IN WHICH THE TRANSFEROR’S RIGHTS UNDER SECTION 2 OF THIS AGREEMENT
ARE NOT ASSIGNED.

 

(E)                                  “REGISTRATION EXPENSES” SHALL MEAN THE FEES
AND EXPENSES OF A SINGLE COUNSEL FOR HOLDER SELECTED BY HOLDER (WITH THE
APPROVAL OF THE COMPANY, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD) AND
ALL EXPENSES INCURRED BY THE COMPANY IN COMPLYING WITH SECTION 2.1 HEREOF,
INCLUDING, WITHOUT LIMITATION, ALL REGISTRATION AND FILING FEES, PRINTING
EXPENSES, FEES AND DISBURSEMENTS OF COUNSEL FOR THE COMPANY, BLUE SKY FEES AND
EXPENSES AND

 

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THE EXPENSE OF ANY SPECIAL AUDITS INCIDENT TO OR REQUIRED BY ANY SUCH
REGISTRATION (BUT EXCLUDING THE COMPENSATION OF REGULAR EMPLOYEES OF THE COMPANY
WHICH SHALL BE PAID IN ANY EVENT BY THE COMPANY).

 

(F)                                    “SEC” OR “COMMISSION” MEANS THE
SECURITIES AND EXCHANGE COMMISSION.

 

(G)                                 “SECURITIES ACT” SHALL MEAN THE SECURITIES
ACT OF 1933, AS AMENDED.

 

(H)                                 “SELLING EXPENSES” SHALL MEAN UNDERWRITING
DISCOUNTS AND SELLING COMMISSIONS APPLICABLE TO THE SALE AND THE LEGAL FEES AND
EXPENSES OF SPECIAL COUNSEL TO HOLDER ABOVE AND BEYOND THE COUNSEL PROVIDED FOR
IN THE DEFINITION OF REGISTRATION EXPENSES.

 

(I)                                     “SHARES” SHALL MEAN THE COMPANY’S COMMON
STOCK ISSUED PURSUANT TO THE ASSET PURCHASE AGREEMENT AND HELD BY HOLDER OR ITS
PERMITTED ASSIGNS.

 

(J)                                     “SPECIAL REGISTRATION STATEMENT” SHALL
MEAN (I) A REGISTRATION STATEMENT RELATING TO ANY EMPLOYEE BENEFIT PLAN OR
(II) WITH RESPECT TO ANY CORPORATE REORGANIZATION OR TRANSACTION UNDER RULE 145
OF THE SECURITIES ACT, INCLUDING ANY REGISTRATION STATEMENTS RELATED TO THE
RESALE OF SECURITIES ISSUED IN SUCH A TRANSACTION OR (III) A REGISTRATION
RELATED TO STOCK ISSUED UPON CONVERSION OF DEBT SECURITIES.

 

2.                                       REGISTRATION.

 

2.1                                 Piggyback Registrations.  The Company shall
notify the Holder in writing at least thirty (30) days prior to the filing of
any registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding Special Registration Statements) and will afford Holder
an opportunity to include in such registration statement all or part of the
Registrable Securities held by such Holder.  If Holder desires to include in any
such registration statement all or any part of its Registrable Securities,
Holder shall, within twenty (20) days after the above-described notice from the
Company, so notify the Company in writing.  Such notice shall state the intended
method of disposition of the Registrable Securities by Holder.  If Holder
decides not to include all of its Registrable Securities in any registration
statement thereafter filed by the Company, Holder shall nevertheless continue to
have the right to include any Registrable Securities in any subsequent
registration statement or registration statements as may be filed by the Company
with respect to offerings of its securities, all upon the terms and conditions
set forth herein.

 

(A)                                  UNDERWRITING.  IF THE REGISTRATION
STATEMENT UNDER WHICH THE COMPANY GIVES NOTICE UNDER THIS SECTION 2.1 IS FOR AN
UNDERWRITTEN OFFERING, THE COMPANY SHALL SO ADVISE HOLDER.  IN SUCH EVENT, THE
RIGHT OF ANY HOLDER TO BE INCLUDED IN A REGISTRATION PURSUANT TO THIS
SECTION 2.1 SHALL BE CONDITIONED UPON HOLDER’S PARTICIPATION IN SUCH
UNDERWRITING AND THE INCLUSION OF HOLDER’S REGISTRABLE SECURITIES IN THE
UNDERWRITING TO THE EXTENT PROVIDED HEREIN.  IF HOLDER PROPOSES TO DISTRIBUTE
ITS REGISTRABLE SECURITIES THROUGH SUCH UNDERWRITING, IT SHALL ENTER INTO AN
UNDERWRITING AGREEMENT IN CUSTOMARY FORM WITH THE UNDERWRITER OR UNDERWRITERS
SELECTED

 

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FOR SUCH UNDERWRITING BY THE COMPANY.  NOTWITHSTANDING ANY OTHER PROVISION OF
THIS AGREEMENT, IF THE UNDERWRITER DETERMINES IN GOOD FAITH THAT MARKETING
FACTORS REQUIRE A LIMITATION OF THE NUMBER OF SHARES TO BE UNDERWRITTEN, THE
NUMBER OF SHARES THAT MAY BE INCLUDED IN THE UNDERWRITING SHALL BE ALLOCATED,
FIRST, TO THE COMPANY; AND SECOND, TO ALL OTHER SELLING STOCKHOLDERS OF THE
COMPANY (INCLUDING HOLDER) ON A PRO RATA BASIS; PROVIDED, HOWEVER IN NO EVENT
SHALL THE NUMBER OF SHARES TO BE INCLUDED BY HOLDER BE REDUCED TO A NUMBER LESS
THAN 25% OF THE NUMBER OF SHARES INITIALLY PROPOSED TO BE INCLUDED BY HOLDER. 
IF HOLDER DISAPPROVES OF THE TERMS OF ANY SUCH UNDERWRITING, HOLDER MAY ELECT TO
WITHDRAW THEREFROM BY WRITTEN NOTICE TO THE COMPANY AND THE UNDERWRITER.  ANY
REGISTRABLE SECURITIES EXCLUDED OR WITHDRAWN FROM SUCH UNDERWRITING SHALL BE
EXCLUDED AND WITHDRAWN FROM THE REGISTRATION.  FOR ANY HOLDER WHICH IS A
PARTNERSHIP OR CORPORATION, THE PARTNERS, RETIRED PARTNERS AND STOCKHOLDERS OF
SUCH HOLDER, OR THE ESTATES AND FAMILY MEMBERS OF ANY SUCH PARTNERS AND RETIRED
PARTNERS AND ANY TRUSTS FOR THE BENEFIT OF ANY OF THE FOREGOING PERSON SHALL BE
DEEMED TO BE A SINGLE “HOLDER,” AND ANY PRO RATA REDUCTION WITH RESPECT TO SUCH
“HOLDER” SHALL BE BASED UPON THE AGGREGATE AMOUNT OF SHARES CARRYING
REGISTRATION RIGHTS OWNED BY ALL ENTITIES AND INDIVIDUALS INCLUDED IN SUCH
“HOLDER,” AS DEFINED IN THIS SENTENCE DIVIDED BY THE TOTAL NUMBER OF SHARES HELD
BY ALL STOCKHOLDERS PROPOSED TO BE INCLUDED AS SELLING STOCKHOLDERS IN THE
REGISTRATION STATEMENT.

 

(B)                                 RIGHT TO TERMINATE REGISTRATION.  THE
COMPANY SHALL HAVE THE RIGHT TO TERMINATE OR WITHDRAW ANY REGISTRATION INITIATED
BY IT UNDER THIS SECTION 2.1 PRIOR TO THE EFFECTIVENESS OF SUCH REGISTRATION
WHETHER OR NOT ANY HOLDER HAS ELECTED TO INCLUDE SECURITIES IN SUCH
REGISTRATION.  THE REGISTRATION EXPENSES OF SUCH WITHDRAWN REGISTRATION SHALL BE
BORNE BY THE COMPANY IN ACCORDANCE WITH SECTION 2.2 HEREOF.

 

2.2                                 Expenses of Registration.  Except as
specifically provided herein, all Registration Expenses incurred in connection
with any registration, qualification or compliance pursuant to Section 2.1
herein shall be borne by the Company.  All Selling Expenses incurred in
connection with any registrations hereunder, shall be borne by Holder.

 

2.3                                 Obligations of the Company.  Whenever
required to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:

 

(A)                                  PREPARE AND FILE WITH THE SEC A
REGISTRATION STATEMENT WITH RESPECT TO SUCH REGISTRABLE SECURITIES AND USE ALL
REASONABLE EFFORTS TO CAUSE SUCH REGISTRATION STATEMENT TO BECOME EFFECTIVE AND
REMAIN EFFECTIVE FOR A PERIOD OF NINETY (90) DAYS OR UNTIL HOLDER HAS COMPLETED
THE DISTRIBUTION RELATED THERETO, WHICHEVER FIRST OCCURS.

 

(B)                                 PREPARE AND FILE WITH THE SEC SUCH
AMENDMENTS AND SUPPLEMENTS TO SUCH REGISTRATION STATEMENT AND THE PROSPECTUS
USED IN CONNECTION WITH SUCH REGISTRATION STATEMENT AS MAY BE NECESSARY TO
COMPLY WITH THE PROVISIONS OF THE SECURITIES ACT WITH RESPECT TO THE DISPOSITION
OF ALL SECURITIES COVERED BY SUCH REGISTRATION STATEMENT FOR THE PERIOD SET
FORTH IN SECTION 2.3(A) ABOVE.

 

(C)                                  FURNISH TO HOLDER SUCH NUMBER OF COPIES OF
A PROSPECTUS, INCLUDING A PRELIMINARY PROSPECTUS, IN CONFORMITY WITH THE
REQUIREMENTS OF THE SECURITIES ACT, AND SUCH

 

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OTHER DOCUMENTS AS HOLDER MAY REASONABLY REQUEST IN ORDER TO FACILITATE THE
DISPOSITION OF REGISTRABLE SECURITIES OWNED BY IT.

 

(D)                                 USE ITS REASONABLE EFFORTS TO REGISTER AND
QUALIFY THE SECURITIES COVERED BY SUCH REGISTRATION STATEMENT UNDER SUCH OTHER
SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTIONS AS SHALL BE REASONABLY
REQUESTED BY HOLDER; PROVIDED THAT THE COMPANY SHALL NOT BE REQUIRED IN
CONNECTION THEREWITH OR AS A CONDITION THERETO TO QUALIFY TO DO BUSINESS OR TO
FILE A GENERAL CONSENT TO SERVICE OF PROCESS IN ANY SUCH STATES OR
JURISDICTIONS.

 

(E)                                  IN THE EVENT OF ANY UNDERWRITTEN PUBLIC
OFFERING, ENTER INTO AND PERFORM ITS OBLIGATIONS UNDER AN UNDERWRITING
AGREEMENT, IN USUAL AND CUSTOMARY FORM, WITH THE MANAGING UNDERWRITER(S) OF SUCH
OFFERING.  IF HOLDER PARTICIPATES IN SUCH UNDERWRITING, IT SHALL ALSO ENTER INTO
AND PERFORM ITS OBLIGATIONS UNDER SUCH AN AGREEMENT.

 

(F)                                    NOTIFY HOLDER OF REGISTRABLE SECURITIES
COVERED BY SUCH REGISTRATION STATEMENT AT ANY TIME WHEN A PROSPECTUS RELATING
THERETO IS REQUIRED TO BE DELIVERED UNDER THE SECURITIES ACT OF THE HAPPENING OF
ANY EVENT AS A RESULT OF WHICH THE PROSPECTUS INCLUDED IN SUCH REGISTRATION
STATEMENT, AS THEN IN EFFECT, INCLUDES AN UNTRUE STATEMENT OF A MATERIAL FACT OR
OMITS TO STATE A MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO
MAKE THE STATEMENTS THEREIN NOT MISLEADING IN THE LIGHT OF THE CIRCUMSTANCES
THEN EXISTING.

 

(G)                                 USE ITS REASONABLE EFFORTS TO FURNISH, ON
THE DATE THAT SUCH REGISTRABLE SECURITIES ARE DELIVERED TO THE UNDERWRITERS FOR
SALE, IF SUCH SECURITIES ARE BEING SOLD THROUGH UNDERWRITERS, (I) AN OPINION,
DATED AS OF SUCH DATE, OF THE COUNSEL REPRESENTING THE COMPANY FOR THE PURPOSES
OF SUCH REGISTRATION, IN FORM AND SUBSTANCE AS IS CUSTOMARILY GIVEN TO
UNDERWRITERS IN AN UNDERWRITTEN PUBLIC OFFERING, ADDRESSED TO THE UNDERWRITERS,
IF ANY, AND (II) A LETTER, DATED AS OF SUCH DATE, FROM THE INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS OF THE COMPANY, IN FORM AND SUBSTANCE AS IS CUSTOMARILY GIVEN
BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS TO UNDERWRITERS IN AN UNDERWRITTEN
PUBLIC OFFERING ADDRESSED TO THE UNDERWRITERS.

 

2.4                                 Termination of Registration Rights.  All
registration rights granted under this Section 2 shall terminate and be of no
further force and effect upon the earlier of (i) seven (7) years from the date
hereof or (ii) at such time as SEC Rule 144 or another similar exemption under
the Securities Act is available for the sale, without registration, of all of
Holder’s Registrable Securities during a three (3) month period.

 

2.5                                 Furnish Information..  It shall be a
condition precedent to the obligations of the Company to take any action
pursuant to Section 2.1 that the selling Holders shall furnish to the Company
such information regarding themselves, the Registrable Securities held by them
and the intended method of disposition of such securities as shall be required
to effect the registration of their Registrable Securities.

 

2.6                                 Indemnification.  In the event any
Registrable Securities are included in a registration statement under
Section 2.1:

 

(A)                                  TO THE EXTENT PERMITTED BY LAW, THE COMPANY
WILL INDEMNIFY AND HOLD HARMLESS HOLDER, THE PARTNERS, OFFICERS AND DIRECTORS OF
HOLDER, ANY UNDERWRITER (AS DEFINED

 

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IN THE SECURITIES ACT) FOR HOLDER AND EACH PERSON, IF ANY, WHO CONTROLS HOLDER
OR UNDERWRITER WITHIN THE MEANING OF THE SECURITIES ACT OR THE EXCHANGE ACT,
AGAINST ANY LOSSES, CLAIMS, DAMAGES, OR LIABILITIES (JOINT OR SEVERAL) TO WHICH
THEY MAY BECOME SUBJECT UNDER THE SECURITIES ACT, THE EXCHANGE ACT OR OTHER
FEDERAL OR STATE LAW, INSOFAR AS SUCH LOSSES, CLAIMS, DAMAGES OR LIABILITIES (OR
ACTIONS IN RESPECT THEREOF) ARISE OUT OF OR ARE BASED UPON ANY OF THE FOLLOWING
STATEMENTS, OMISSIONS OR VIOLATIONS (COLLECTIVELY A “VIOLATION”) BY THE COMPANY:
(I) ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT
CONTAINED IN SUCH REGISTRATION STATEMENT, INCLUDING ANY PRELIMINARY PROSPECTUS
OR FINAL PROSPECTUS CONTAINED THEREIN OR ANY AMENDMENTS OR SUPPLEMENTS THERETO,
(II) THE OMISSION OR ALLEGED OMISSION TO STATE THEREIN A MATERIAL FACT REQUIRED
TO BE STATED THEREIN, OR NECESSARY TO MAKE THE STATEMENTS THEREIN NOT
MISLEADING, OR (III) ANY VIOLATION OR ALLEGED VIOLATION BY THE COMPANY OF THE
SECURITIES ACT, THE EXCHANGE ACT, ANY STATE SECURITIES LAW OR ANY RULE OR
REGULATION PROMULGATED UNDER THE SECURITIES ACT, THE EXCHANGE ACT OR ANY STATE
SECURITIES LAW IN CONNECTION WITH THE OFFERING COVERED BY SUCH REGISTRATION
STATEMENT; AND THE COMPANY WILL PAY AS INCURRED TO SUCH HOLDER, PARTNER,
OFFICER, DIRECTOR, UNDERWRITER OR CONTROLLING PERSON ANY LEGAL OR OTHER EXPENSES
REASONABLY INCURRED BY THEM IN CONNECTION WITH INVESTIGATING OR DEFENDING ANY
SUCH LOSS, CLAIM, DAMAGE, LIABILITY OR ACTION; PROVIDED HOWEVER, THAT THE
INDEMNITY AGREEMENT CONTAINED IN THIS SECTION 2.6(A) SHALL NOT APPLY TO AMOUNTS
PAID IN SETTLEMENT OF ANY SUCH LOSS, CLAIM, DAMAGE, LIABILITY OR ACTION IF SUCH
SETTLEMENT IS EFFECTED WITHOUT THE CONSENT OF THE COMPANY, WHICH CONSENT SHALL
NOT BE UNREASONABLY WITHHELD, NOR SHALL THE COMPANY BE LIABLE IN ANY SUCH CASE
FOR ANY SUCH LOSS, CLAIM, DAMAGE, LIABILITY OR ACTION TO THE EXTENT THAT IT
ARISES OUT OF OR IS BASED UPON A VIOLATION WHICH OCCURS IN RELIANCE UPON AND IN
CONFORMITY WITH WRITTEN INFORMATION FURNISHED EXPRESSLY FOR USE IN CONNECTION
WITH SUCH REGISTRATION BY SUCH HOLDER, PARTNER, OFFICER, DIRECTOR, UNDERWRITER
OR CONTROLLING PERSON OF SUCH HOLDER.

 

(B)                                 TO THE EXTENT PERMITTED BY LAW, HOLDER WILL,
IF REGISTRABLE SECURITIES HELD BY HOLDER ARE INCLUDED IN THE SECURITIES AS TO
WHICH SUCH REGISTRATION, QUALIFICATIONS OR COMPLIANCE IS BEING EFFECTED,
INDEMNIFY AND HOLD HARMLESS THE COMPANY, EACH OF ITS DIRECTORS, ITS OFFICERS AND
EACH PERSON, IF ANY, WHO CONTROLS THE COMPANY WITHIN THE MEANING OF THE
SECURITIES ACT AND ANY UNDERWRITER, AGAINST ANY LOSSES, CLAIMS, DAMAGES OR
LIABILITIES (JOINT OR SEVERAL) TO WHICH THE COMPANY OR ANY SUCH DIRECTOR,
OFFICER, CONTROLLING PERSON OR UNDERWRITER MAY BECOME SUBJECT UNDER THE
SECURITIES ACT, THE EXCHANGE ACT OR OTHER FEDERAL OR STATE LAW, INSOFAR AS SUCH
LOSSES, CLAIMS, DAMAGES OR LIABILITIES (OR ACTIONS IN RESPECT THERETO) ARISE OUT
OF OR ARE BASED UPON ANY VIOLATION, IN EACH CASE TO THE EXTENT (AND ONLY TO THE
EXTENT) THAT SUCH VIOLATION OCCURS IN RELIANCE UPON AND IN CONFORMITY WITH
WRITTEN INFORMATION FURNISHED BY HOLDER UNDER AN INSTRUMENT DULY EXECUTED BY
HOLDER AND STATED TO BE SPECIFICALLY FOR USE IN CONNECTION WITH SUCH
REGISTRATION; AND HOLDER WILL PAY AS INCURRED ANY LEGAL OR OTHER EXPENSES
REASONABLY INCURRED BY THE COMPANY OR ANY SUCH DIRECTOR, OFFICER, CONTROLLING
PERSON OR UNDERWRITER IN CONNECTION WITH INVESTIGATING OR DEFENDING ANY SUCH
LOSS, CLAIM, DAMAGE, LIABILITY OR ACTION; PROVIDED, HOWEVER, THAT THE INDEMNITY
AGREEMENT CONTAINED IN THIS SECTION 2.6(B) SHALL NOT APPLY TO AMOUNTS PAID IN
SETTLEMENT OF ANY SUCH LOSS, CLAIM, DAMAGE, LIABILITY OR ACTION IF SUCH
SETTLEMENT IS EFFECTED WITHOUT THE CONSENT OF HOLDER, WHICH CONSENT SHALL NOT BE
UNREASONABLY WITHHELD; PROVIDED FURTHER, THAT IN NO EVENT SHALL ANY INDEMNITY
UNDER THIS SECTION 2.6 EXCEED THE GROSS PROCEEDS FROM THE OFFERING RECEIVED BY
HOLDER.

 

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(C)                                  PROMPTLY AFTER RECEIPT BY AN INDEMNIFIED
PARTY UNDER THIS SECTION 2.6 OF NOTICE OF THE COMMENCEMENT OF ANY ACTION
(INCLUDING ANY GOVERNMENTAL ACTION), SUCH INDEMNIFIED PARTY WILL, IF A CLAIM IN
RESPECT THEREOF IS TO BE MADE AGAINST ANY INDEMNIFYING PARTY UNDER THIS
SECTION 2.6, DELIVER TO THE INDEMNIFYING PARTY A WRITTEN NOTICE OF THE
COMMENCEMENT THEREOF AND THE INDEMNIFYING PARTY SHALL HAVE THE RIGHT TO
PARTICIPATE IN, AND, TO THE EXTENT THE INDEMNIFYING PARTY SO DESIRES, JOINTLY
WITH ANY OTHER INDEMNIFYING PARTY SIMILARLY NOTICED, TO ASSUME THE DEFENSE
THEREOF WITH COUNSEL MUTUALLY SATISFACTORY TO THE PARTIES; PROVIDED, HOWEVER,
THAT AN INDEMNIFIED PARTY SHALL HAVE THE RIGHT TO RETAIN ITS OWN COUNSEL, WITH
THE REASONABLE FEES AND EXPENSES TO BE PAID BY THE INDEMNIFYING PARTY, IF
REPRESENTATION OF SUCH INDEMNIFIED PARTY BY THE COUNSEL RETAINED BY THE
INDEMNIFYING PARTY WOULD BE INAPPROPRIATE DUE TO ACTUAL OR POTENTIAL DIFFERING
INTERESTS BETWEEN SUCH INDEMNIFIED PARTY AND ANY OTHER PARTY REPRESENTED BY SUCH
COUNSEL IN SUCH PROCEEDING.  THE FAILURE TO DELIVER WRITTEN NOTICE TO THE
INDEMNIFYING PARTY WITHIN A REASONABLE TIME OF THE COMMENCEMENT OF ANY SUCH
ACTION, IF MATERIALLY PREJUDICIAL TO ITS ABILITY TO DEFEND SUCH ACTION, SHALL
RELIEVE SUCH INDEMNIFYING PARTY OF ANY LIABILITY TO THE INDEMNIFIED PARTY UNDER
THIS SECTION 2.6, BUT THE OMISSION SO TO DELIVER WRITTEN NOTICE TO THE
INDEMNIFYING PARTY WILL NOT RELIEVE IT OF ANY LIABILITY THAT IT MAY HAVE TO ANY
INDEMNIFIED PARTY OTHERWISE THAN UNDER THIS SECTION 2.6.

 

(D)                                 IF THE INDEMNIFICATION PROVIDED FOR IN THIS
SECTION 2.6 IS HELD BY A COURT OF COMPETENT JURISDICTION TO BE UNAVAILABLE TO AN
INDEMNIFIED PARTY WITH RESPECT TO ANY LOSSES, CLAIMS, DAMAGES OR LIABILITIES
REFERRED TO HEREIN, THE INDEMNIFYING PARTY, IN LIEU OF INDEMNIFYING SUCH
INDEMNIFIED PARTY HEREUNDER, SHALL TO THE EXTENT PERMITTED BY APPLICABLE LAW
CONTRIBUTE TO THE AMOUNT PAID OR PAYABLE BY SUCH INDEMNIFIED PARTY AS A RESULT
OF SUCH LOSS, CLAIM, DAMAGE OR LIABILITY IN SUCH PROPORTION AS IS APPROPRIATE TO
REFLECT THE RELATIVE FAULT OF THE INDEMNIFYING PARTY ON THE ONE HAND AND OF THE
INDEMNIFIED PARTY ON THE OTHER IN CONNECTION WITH THE VIOLATION(S) THAT RESULTED
IN SUCH LOSS, CLAIM, DAMAGE OR LIABILITY, AS WELL AS ANY OTHER RELEVANT
EQUITABLE CONSIDERATIONS.  THE RELATIVE FAULT OF THE INDEMNIFYING PARTY AND OF
THE INDEMNIFIED PARTY SHALL BE DETERMINED BY A COURT OF LAW BY REFERENCE TO,
AMONG OTHER THINGS, WHETHER THE UNTRUE OR ALLEGED UNTRUE STATEMENT OF A MATERIAL
FACT OR THE OMISSION TO STATE A MATERIAL FACT RELATES TO INFORMATION SUPPLIED BY
THE INDEMNIFYING PARTY OR BY THE INDEMNIFIED PARTY AND THE PARTIES’ RELATIVE
INTENT, KNOWLEDGE, ACCESS TO INFORMATION AND OPPORTUNITY TO CORRECT OR PREVENT
SUCH STATEMENT OR OMISSION; PROVIDED, THAT IN NO EVENT SHALL ANY CONTRIBUTION BY
HOLDER HEREUNDER EXCEED THE NET PROCEEDS FROM THE OFFERING RECEIVED BY HOLDER
EXCEPT IN THE CASE OF WILLFUL FRAUD OF HOLDER.

 

(E)                                  THE OBLIGATIONS OF THE COMPANY AND HOLDER
UNDER THIS SECTION 2.6 SHALL SURVIVE COMPLETION OF ANY OFFERING OF REGISTRABLE
SECURITIES IN A REGISTRATION STATEMENT AND THE TERMINATION OF THIS AGREEMENT. 
NO INDEMNIFYING PARTY, IN THE DEFENSE OF ANY SUCH CLAIM OR LITIGATION, SHALL,
EXCEPT WITH THE CONSENT OF EACH INDEMNIFIED PARTY, CONSENT TO ENTRY OF ANY
JUDGMENT OR ENTER INTO ANY SETTLEMENT WHICH DOES NOT INCLUDE AS AN UNCONDITIONAL
TERM THEREOF THE GIVING BY THE CLAIMANT OR PLAINTIFF TO SUCH INDEMNIFIED PARTY
OF A RELEASE FROM ALL LIABILITY IN RESPECT TO SUCH CLAIM OR LITIGATION.

 

Notwithstanding the foregoing, to the extent the indemnification provisions
contained in the underwriting agreement entered into in connection with the

 

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underwritten public offering are in conflict with the foregoing provisions, the
provisions in the underwriting agreement shall control.

 

2.7                                 Limitation on Subsequent Registration
Rights.  After the date of this Agreement, the Company shall not, without the
prior written consent of Holder, enter into any agreement with any holder or
prospective holder of any securities of the Company that would grant such holder
rights senior to those granted to Holder hereunder with respect to the
allocation of shares in an underwriting agreement.

 

3.                                       MISCELLANEOUS.

 

3.1                                 Governing Law.  This Agreement shall be
governed by and construed under the laws of the State of California as applied
to agreements among California residents entered into and to be performed
entirely within California.

 

3.2                                 Survival.  The representations, warranties,
covenants, and agreements made herein shall survive any investigation made by
Holder or the Company and the closing of the transactions contemplated hereby. 
All statements as to factual matters contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant hereto in
connection with the transactions contemplated hereby shall be deemed to be
representations and warranties by the Company hereunder solely as of the date of
such certificate or instrument.

 

3.3                                 Successors and Assigns.  Except as otherwise
expressly provided herein, the provisions hereof shall inure to the benefit of,
and be binding upon, the successors, assigns, heirs, executors, and
administrators of the parties hereto and shall inure to the benefit of and be
enforceable by each person who shall be a holder of Registrable Securities from
time to time; provided, however, that prior to the receipt by the Company of
adequate written notice of the transfer of any Registrable Securities specifying
the full name and address of the transferee, the Company may deem and treat the
person listed as the holder of such shares in its records as the absolute owner
and holder of such shares for all purposes.

 

3.4                                 Entire Agreement.  This Agreement, the Asset
Purchase Agreement and the other documents delivered pursuant thereto constitute
the full and entire understanding and agreement between the parties with regard
to the subjects hereof and no party shall be liable or bound to any other in any
manner by any representations, warranties, covenants and agreements except as
specifically set forth herein and therein.

 

3.5                                 Severability.  In the event one or more of
the provisions of this Agreement should, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provisions of this Agreement, and
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein.

 

3.6                                 AMENDMENT AND WAIVER.

 

(A)                                  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED,
THIS AGREEMENT MAY BE AMENDED OR MODIFIED ONLY UPON THE WRITTEN CONSENT OF THE
COMPANY AND HOLDER SECURITIES.

 

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(B)                                 EXCEPT AS OTHERWISE EXPRESSLY PROVIDED, THE
OBLIGATIONS OF THE COMPANY AND THE RIGHTS OF HOLDER UNDER THIS AGREEMENT MAY BE
WAIVED ONLY WITH THE WRITTEN CONSENT OF HOLDER.

 

3.7                                 Delays or Omissions.  It is agreed that no
delay or omission to exercise any right, power, or remedy accruing to Holder,
upon any breach, default or noncompliance of the Company under this Agreement
shall impair any such right, power, or remedy, nor shall it be construed to be a
waiver of any such breach, default or noncompliance, or any acquiescence
therein, or of any similar breach, default or noncompliance thereafter
occurring.  It is further agreed that any waiver, permit, consent, or approval
of any kind or character on Holder’s part of any breach, default or
noncompliance under the Agreement or any waiver on Holder’s part of any
provisions or conditions of this Agreement must be in writing and shall be
effective only to the extent specifically set forth in such writing.  All
remedies, either under this Agreement, by law, or otherwise, shall be cumulative
and not alternative.

 

3.8                                 Notices.  All notices required or permitted
hereunder shall be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, (b) when sent by confirmed
electronic mail or facsimile if sent during normal business hours of the
recipient; if not, then on the next business day, (c) five (5) days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid, or (d) one (1) day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt. 
All communications shall be sent to the party to be notified at the address as
set forth on the signature pages hereof or at such other address as such party
may designate by ten (10) days advance written notice to the other parties
hereto.

 

3.9                                 Attorneys’ Fees.  In the event that any suit
or action is instituted to enforce any provision in this Agreement, the
prevailing party in such dispute shall be entitled to recover from the losing
party all fees, costs and expenses of enforcing any right of such prevailing
party under or with respect to this Agreement, including without limitation,
such reasonable fees and expenses of attorneys and accountants, which shall
include, without limitation, all fees, costs and expenses of appeals.

 

3.10                           Titles and Subtitles.  The titles of the sections
and subsections of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.

 

3.11                           Counterparts.  This Agreement may be executed in
any number of counterparts and by facsimile, each of which shall be an original,
but all of which together shall constitute one instrument.

 

REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

 

8

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IN WITNESS WHEREOF, the parties hereto have executed this REGISTRATION RIGHTS
AGREEMENT as of the date set forth in the first paragraph hereof.

 

“Company”

“Holder”

 

 

Viking Systems, Inc.

Vista Medical Technologies, Inc.

 

 

 

 

By:

/s/ Thomas B. Marsh

 

By

/s/ Stephen A. Gorgol

 

Name:

Thomas B. Marsh

 

Name:

Stephen A. Gorgol

 

Title:

CEO

 

Title:

CFO

 

Address

7514 Girard Avenue

 

Address:

2101 Faraday Avenue

 

 

La Jolla, CA  92037

 

 

Carlsbad, CA  92008

 

 

 

SIGNATURE PAGE TO VIKING SYSTEMS, INC.
REGISTRATION RIGHTS AGREEMENT

 

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