Exhibit
4.2


 


REGISTRATION
RIGHTS AGREEMENT


 


THIS REGISTRATION RIGHTS AGREEMENT, dated as of March
3, 2003, by and between Vista Medical Technologies, Inc. (the “Company”) and
the parties listed on Exhibit A hereto (each, a “Purchaser” and
collectively, the “Purchasers”).


 


WHEREAS, simultaneously with the execution and
delivery of this Agreement, pursuant to a Preferred Stock Purchase Agreement
dated the date hereof (the “Purchase Agreement”) the Purchasers have committed
to purchase up to 1,000,000 shares of the Company’s Series A Preferred Stock
(the “Preferred Shares”); and


 


WHEREAS, the Company desires to grant to the
Purchasers the registration rights set forth herein with respect to the
Preferred Shares.


 


NOW, THEREFORE, the parties hereto mutually agree as
follows:


 


Section 1.                                            Registrable
Securities.  As used herein the term
“Registrable Securities” means the shares of the Company’s Common Stock
issuable upon conversion of the Preferred Shares.  Such shares shall be considered Registrable Securities until (i)
all such shares have been disposed of pursuant to the Registration Statement,
(ii) all such shares have been sold under circumstances under which all of the
applicable conditions of Rule 144 (or any similar provision then in force)
(“Rule 144”) under the Securities Act of 1933, as amended (the “Securities
Act”) are met, (iii) all such shares have been otherwise transferred to persons
who may trade such shares without restriction under the Securities Act, and the
Company has delivered a new certificate or other evidence of ownership for such
shares not bearing a restrictive legend, or (iv) such time as, in the opinion
of counsel to the Company, all such shares may be sold without any time, volume
or manner limitations pursuant to Rule 144(k) (or any similar provision then in
effect) under the Securities Act.  In
the event of any merger, reorganization, consolidation, recapitalization or
other change in corporate structure affecting the Company’s Common Stock, such
adjustment shall be deemed to be made in the definition of “Registrable
Securities” as is appropriate in order to prevent any dilution or enlargement
of the rights granted pursuant to this Agreement.


 


Section 2.                                            Restrictions
on Transfer.  The Purchasers
acknowledge and understand that in the absence of an effective Registration
Statement authorizing the resale of the Registrable Securities as provided
herein, the Registrable Securities are “restricted securities” as defined in
Rule 144.  The Purchasers understand
that no disposition or transfer of the Registrable Securities may be made by a
Purchaser in the absence of (i) an opinion of counsel in form and substance
reasonably satisfactory to the Company, that such transfer may be made without
registration under the Securities Act or (ii) such registration.


 


With a view to making available to the Purchasers the
benefits of Rule 144, the Company agrees to:


 

















 


(a)                                  comply
with the provisions of paragraph (c)(1) of Rule 144; and


 


(b)                                 file
with the Securities and Exchange Commission (“SEC”) in a timely manner all
reports and other documents required to be filed by the Company pursuant to
Section 13 or 15(d) under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”); and, if at any time it is not required to file such reports
but in the past had been required to or did file such reports, it will, upon
the request of a Purchaser, make available other information as required by,
and so long as necessary to permit sales of, its Registrable Securities
pursuant to Rule 144.


 


Section 3.                                            Registration
Rights With Respect to the Securities.


 


(a)                                  The
Company agrees that, by the earlier of (i) within thirty (30) days following
receipt of a Purchaser Request (as defined below) or (ii) within four hundred
(400) days after the initial issuance of any Preferred Shares (as applicable,
the “Filing Deadline”), it will prepare and file with the SEC, a registration
statement (on Form S-3 and/or S-1, or other appropriate form of registration
statement) under the Securities Act (the “Registration Statement”), at the sole
expense of the Company (except as provided in Section 3(d) hereof), in respect
of a Purchaser(s), so as to permit a public offering and resale of the
Registrable Securities under the Securities Act by such Purchaser(s).  For purposes hereof, a “Purchaser Request”
means a written request to the Company, by Purchasers holding at least 50% of
the then-outstanding shares of Registrable Securities, requesting that the
Company effect a registration of Registrable Securities pursuant to the terms
of this Agreement.  A Purchaser Request
may only be delivered after September 30, 2003 if at least 36.8% of the
Preferred Shares (as adjusted for stock splits, stock dividends,
recapitalizations and the like) have been converted to Common Stock of the
Company; provided however, that a Purchaser Request may not be made if the
Company has disposed of its OEM endoscopic and 3D business lines.


 


(b)                                 The
Company shall cause the Registration Statement to become effective within sixty
(60) days of the applicable Filing Deadline (as applicable, the “Effectiveness
Deadline”).


 


(c)                                  The
Company will maintain the Registration Statement (or post-effective amendment
filed under this Section 3) effective under the Securities Act until the
earliest of (i) the date that all shares of Registrable Securities registered
on such Registration Statement have been sold or otherwise disposed of pursuant
to the Registration Statement, (ii) the date all shares of Registrable
Securities may be sold under the provisions of Rule 144 without limitation as
to volume, (iii) the date all shares of Registrable Securities have been
otherwise transferred to persons who may trade such shares without restriction
under the Securities Act, and the Company has delivered a new certificate or
other evidence of ownership for such securities not bearing a restrictive
legend, or (iv) the date all shares of Registrable Securities may be sold
without any time, volume or manner limitations pursuant to Rule 144(k) or any
similar provision then in


 


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effect under the
Securities Act (the “Effectiveness Period”).


 


(d)                                 If
(a) any Registration Statement is not filed on or prior to the Filing Deadline,
or (b) after a Registration Statement is filed with and declared effective by
the SEC, such Registration Statement ceases to be effective as to all
Registrable Securities to which it is required (pursuant to the provisions
hereof) to relate at any time prior to the expiration of the Effectiveness
Period without being succeeded within fifteen days by an amendment to such
Registration Statement or by a subsequent Registration Statement filed with and
declared effective by the SEC, or (c) any Registration Statement is not
declared effective by the SEC on or prior to the applicable Effectiveness
Deadline (any such failure or breach being referred to as a “Registration
Event”), then in addition to any other rights available to the Purchasers of
the Preferred Shares: (x) on the date triggering each such Registration Event,
the Company shall pay to each Purchaser an amount in cash, as liquidated
damages and not as a penalty, equal to 1% of the aggregate purchase price paid
by such Purchaser for such Purchaser’s Preferred Shares; and (y) on each
monthly anniversary of the date triggering each such Registration Event (if the
Registration Event shall not have been cured by such date) until the applicable
Registration Event is cured, the Company shall pay to each Purchaser an amount
in cash, as liquidated damages and not as a penalty, equal to 1% of the
aggregate purchase price paid by such Purchaser for such Purchaser’s Preferred
Shares.  If the Company fails to pay any
liquidated damages pursuant to this Section in full within seven days after the
date payable, the Company will pay interest thereon at a rate of 7% per annum
(or such lesser maximum amount that is permitted to be paid by applicable law)
to the Purchaser, accruing daily from the date such liquidated damages are due
until such amounts, plus all interest thereon, are paid in full.  The liquidated damages pursuant to the terms
hereof shall apply on a pro-rata basis for any portion of a month prior to the
cure of a Registration Event.


 


(e)                                  All
fees, disbursements and out-of-pocket expenses and costs incurred by the
Company in connection with the preparation and filing of the Registration
Statement under subparagraph 3(a) and in complying with applicable securities
and blue sky laws (including, without limitation, all attorneys’ fees of the
Company) shall be borne by the Company. 
The Purchasers shall bear the cost of underwriting and/or brokerage
discounts, fees and commissions, if any, applicable to the Registrable
Securities being registered and the fees and expenses of Purchasers’
counsel.  The Purchasers and their
counsel shall have a reasonable period, not to exceed three (3) business days,
to review the proposed Registration Statement or any amendment thereto, prior
to filing with the SEC, and the Company shall provide the Purchasers with
copies of any comment letters received from the SEC with respect thereto within
two (2) business days of receipt thereof. 
The Company shall make reasonably available for inspection by Purchasers
participating in any such registration, any underwriter participating in any
disposition pursuant to the Registration Statement, and any attorney,
accountant or other agent retained by the participating Purchasers or any such
underwriter all relevant financial and other records, pertinent corporate
documents and properties of the Company and its 


 


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subsidiaries, and
cause the Company’s officers, directors and employees to supply all information
reasonably requested by such Purchasers or any such underwriter, attorney,
accountant or agent in connection with the Registration Statement, in each
case, as is customary for similar due diligence examinations; provided, however,
that all records, information and documents that are designated in writing by
the Company, in good faith, as confidential, proprietary or containing any
material non-public information shall be kept confidential by the Purchasers
and any such underwriter, attorney, accountant or agent (pursuant to an
appropriate confidentiality agreement in the case of the Purchasers,
underwriter, attorney, accountant or agent), unless such disclosure is made
pursuant to judicial process in a court proceeding (after first giving the
Company an opportunity promptly to seek a protective order or otherwise limit
the scope of the information sought to be disclosed) or is required by law, or
such records, information or documents become available to the public generally
or through a third party not in violation of an accompanying obligation of
confidentiality; and provided  further that, if the foregoing
inspection and information gathering would otherwise disrupt the Company’s
conduct of its business, such inspection and information gathering shall, to
the maximum extent possible, be coordinated on behalf of the Purchasers and the
other parties entitled thereto by one firm of counsel designed by and on behalf
of the majority in interest of Purchasers and other parties.  The Company shall qualify any of the
Registrable Securities for sale in such states as the participating Purchasers
reasonably designate and shall furnish indemnification in the manner provided
in Section 6 hereof.  However, the
Company shall not be required to qualify in any state which will require an
escrow or other restriction relating to the Company and/or the sellers, or
which will require the Company to qualify to do business in such state.  The Company at its expense will supply the
participating Purchasers with copies of the Registration Statement and the
final prospectus included therein (the “Prospectus”) and other related
documents in such quantities as may be reasonably requested by such Purchasers.


 


(f)                                    Notwithstanding
anything to the contrary contained herein, the Company shall not be required by
this Section 3 to include the Purchasers’ Registrable Securities in any
Registration Statement if, in the opinion of counsel for both the Purchasers
and the Company (or, should they not agree, in the opinion of another counsel
experienced in securities law matters acceptable to counsel for the Purchasers
and the Company) the proposed offering or other transfer as to which such
registration is requested is exempt from applicable federal and state
securities laws and would result in all purchasers or transferees obtaining
securities which are not “restricted securities”, as defined in Rule 144 under
the Securities Act.


 


If at any time or from time to time after the
effective date of the Registration Statement, the Company notifies the
Purchasers in writing of the existence of a Potential Material Event (as
defined in Section 3(g) below), the Purchasers shall not offer or sell any
Registrable Securities or engage in any other transaction involving or relating
to Registrable Securities, from the time of the giving of notice with respect
to a Potential Material Event until the Purchasers receive written notice from
the Company (to


 


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be delivered by the Company as soon as reasonably
practicable) that such Potential Material Event either has been disclosed to
the public or no longer constitutes a Potential Material Event (a “Suspension
Period”).  The Company may invoke a
Suspension Period only for a reasonable period of time not to exceed 45 days
(or such earlier time as such Potential Material Event is consummated or no
longer proposed or the applicable material information has been made
public).  There shall not be more than
two Suspension Periods declared by the Company.


 


(g)                                 “Potential
Material Event” means any of the following: (i) the possession by the Company
of material information that is not ripe for disclosure in a registration
statement, yet would be required to appear in a registration statement, as
determined in good faith by the Audit Committee of the Company; (ii) the
possession by the Company of material information, disclosure of which information
in the Registration Statement would be detrimental to the business and affairs
of the Company; or (iii) any material engagement or activity by the Company
which would, in the good faith determination of the Audit Committee of the
Company, be adversely affected by disclosure in a registration statement at
such time, which determination shall be accompanied by a good faith
determination by the Chief Executive Officer, Chief Financial Officer and the
Audit Committee of the Board of Directors of the Company that the Registration
Statement would be materially misleading absent the inclusion of such
information.


 


Section 4.                                            Cooperation
with Company.  The Purchasers will
cooperate with the Company in all respects in connection with this Agreement,
including timely supplying all information reasonably requested by the Company
(which shall include all information regarding the Purchasers and proposed
manner of sale of the Registrable Securities required to be disclosed in the
Registration Statement) and executing and returning all documents reasonably
requested in connection with the registration and sale of the Registrable
Securities and entering into and performing its obligations under any
underwriting agreement, if the offering is an underwritten offering, in usual
and customary form, with the managing underwriter or underwriters of such
underwritten offering. The participating Purchasers shall consent to be named
as an underwriter in the Registration Statement.  The Purchasers acknowledge that in accordance with current SEC
policy, the participating Purchasers will be named as the underwriter of the
Registrable Securities in the Registration Statement.


 


Section 5.                                            Registration
Procedures.  If and whenever the
Company is required by any of the provisions of this Agreement to effect the
registration of any of the Registrable Securities under the Securities Act, the
Company shall (except as otherwise provided in this Agreement), as
expeditiously as possible, subject to the Purchasers’ assistance and
cooperation as reasonably required:


 


(a)                                  prepare
and file with the SEC such amendments and supplements to the Registration
Statement and the Prospectus as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act


 


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with respect to
the sale or other disposition of all securities covered by such registration
statement whenever the Purchasers of such Registrable Securities shall desire
to sell or otherwise dispose of the same (including prospectus supplements with
respect to the sales of securities from time to time in connection with a
registration statement pursuant to Rule 415 promulgated under the Securities
Act) and (ii) take all lawful action such that each of (A) the Registration
Statement and any amendment thereto does not, when it becomes effective,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and (B) the Prospectus, and any amendment or supplement thereto,
does not at any time during the Effectiveness Period include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;


 


(b)                                 prior
to the filing with the SEC of any Registration Statement (including any
amendments thereto) and the distribution or delivery of the Prospectus (including
any supplements thereto), provide draft copies thereof to the participating
Purchasers and reflect in such documents all such comments as the participating
Purchasers (and their counsel) reasonably may propose and (ii) furnish to the
Purchasers such numbers of copies of the Prospectus including a preliminary
prospectus or any amendment or supplement to the Prospectus, as applicable, in
conformity with the requirements of the Securities Act, and such other
documents, as the Purchaser may reasonably request in order to facilitate the
public sale or other disposition of the Registrable Securities;


 


(c)                                  register
and qualify the Registrable Securities covered by the Registration Statement
under the applicable blue sky laws (subject to the limitations set forth in
Section 3(c) above), and do any and all other acts and things which may be
reasonably necessary or advisable to enable the Purchasers to consummate the
public sale or other disposition in such jurisdiction of the Registrable
Securities, except that the Company shall not for any such purpose be required
to qualify to do business as a foreign corporation in any jurisdiction wherein
it is not so qualified;


 


(d)                                 list
such Registrable Securities on the market or exchange on which the Common Stock
of the Company is then listed, if the listing of such Registrable Securities is
then permitted under the rules of such market or exchange;


 


(e)                                  notify
the Purchasers at any time when  the
Prospectus is required to be delivered under the Securities Act, of the happening
of any event of which it has knowledge as a result of which the Prospectus, 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, and the Company shall prepare
and file a curative amendment or curative supplement under Section 5(a) as
quickly as commercially possible and the period beginning on the date of notice
until the curative amendment is effective or curative


 


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supplement is
provided to the Purchasers shall be deemed a Suspension Period;


 


(f)                                    as
promptly as practicable after becoming aware of such event, notify the
participating Purchasers who hold Registrable Securities being sold (or, in the
event of an underwritten offering, the managing underwriters) of the issuance
by the SEC or any state authority of any stop order or other suspension of the
effectiveness of the Registration Statement at the earliest possible time and
take all lawful action to effect the withdrawal, rescission or removal of such
stop order or other suspension;


 


(g)                                 take
all such other lawful actions reasonably necessary to expedite and facilitate
the disposition by the Purchasers of their Registrable Securities in accordance
with the intended methods therefor provided in the Prospectus which are
customary for issuers to perform under the circumstances;


 


(h)                                 in
the event of an underwritten offering, promptly include or incorporate in a
prospectus supplement or post-effective amendment to the Registration Statement
such information as the managing underwriters reasonably agree should be
included therein and to which the Company does not reasonably object and make
all required filings of such prospectus supplement or post-effective amendment
as soon as practicable after it is notified of the matters to be included or
incorporated in such prospectus supplement or post-effective amendment; and


 


(i)                                     maintain
a transfer agent for its Common Stock.


 


Section 6.                                            Indemnification.


 


(a)                                  The
Company agrees to indemnify and hold harmless the Purchasers and each person,
if any, who controls the Purchasers within the meaning of the Securities Act
(“Distributing Purchaser”) against any losses, claims, damages or liabilities,
joint or several (which shall, for all purposes of this Agreement, include, but
not be limited to, all reasonable costs of defense and investigation and all
reasonable attorneys’ fees), to which the Distributing Purchaser may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, or any related preliminary
prospectus, the Prospectus or amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration  Statement, preliminary prospectus, the
Prospectus or amendment  or supplement
thereto in reliance upon, and in conformity with, written information furnished
to the Company by the Distributing Purchaser specifically for use in the
preparation thereof. This Section 6(a) shall not inure to the benefit of any
Distributing Purchaser with respect to any person 


 


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asserting such
loss, claim, damage or liability who purchased the Registrable Securities which
are the subject thereof if the Distributing Purchaser failed to send or give
(in violation of the Securities Act or the rules and regulations promulgated
thereunder) a copy of the Prospectus to such person at or prior to the written
confirmation to such person of the sale of such Registrable Securities, where
the Distributing Purchaser was obligated to do so under the Securities Act or
the rules and regulations promulgated thereunder.  This indemnity agreement will be in addition to any liability
which the Company may otherwise have.


 


(b)                                 Each
Distributing Purchaser agrees that it will indemnify and hold harmless the
Company, and each officer, director of the Company or person, if any, who
controls the Company within the meaning of the Securities Act, against any
losses, claims, damages or liabilities (which shall, for all purposes of this
Agreement, include, but not be limited to, all reasonable costs of defense and
investigation and all reasonable attorneys’ fees) to which the Company or any
such officer, director or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, or any related preliminary prospectus, the
Prospectus or amendment or supplement thereto, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, preliminary prospectus, the Prospectus or amendment or
supplement thereto in reliance upon, and in conformity with, written
information furnished to the Company by such Distributing Purchaser
specifically for use in the preparation thereof. This indemnity agreement will
be in addition to any liability which the Distributing Purchaser may otherwise
have.


 


(c)                                  Promptly
after receipt by an indemnified party under this Section 6 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 6,
notify the indemnifying party of the commencement thereof; but the omission so
to notify the indemnifying party will not relieve the indemnifying party from
any liability which it may have to any indemnified party except to the extent
of actual prejudice demonstrated by the indemnifying party.  In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
in, and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, assume the defense thereof, subject to the provisions
herein stated and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying party
will not be liable to such indemnified party under this Section 6 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation, unless
the indemnifying party shall not


 


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pursue the action
to its final conclusion.  The
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses of
such counsel shall not be at the expense of the indemnifying party if the
indemnifying party has assumed the defense of the action with counsel
reasonably satisfactory to the indemnified party; provided that if the
indemnified party is the Distributing Purchaser, the fees and expenses of such
counsel shall be at the expense of the indemnifying party if (i) the employment
of such counsel has been specifically authorized in writing by the indemnifying
party, or (ii) the named parties to any such action (including any impleaded
parties) include both the Distributing Purchaser and the indemnifying party and
the Distributing Purchaser shall have been advised by such counsel that there
may be one or more legal defenses available to the indemnifying party different
from or in conflict with any legal defenses which may be available to the
Distributing Purchaser (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the Distributing
Purchaser, it being understood, however, that the indemnifying party shall, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable only for the reasonable fees and
expenses of one separate firm of attorneys for the Distributing Purchaser,
which firm shall be designated in writing by the Distributing Purchaser and be
approved by the indemnifying party).  No
settlement of any action against an indemnified party shall be made without the
prior written consent of the indemnified party, which consent shall not be
unreasonably withheld.


 


All fees and expenses of the indemnified party
(including reasonable costs of defense and investigation in a manner not
inconsistent with this Section 6 and all reasonable attorneys’ fees and
expenses) shall be paid to the indemnified party, as incurred, within ten (10)
business days of written notice thereof to the indemnifying party; provided,
that the indemnifying party may require such indemnified party to undertake to
reimburse all such fees and expenses to the extent it is finally judicially
determined that such indemnified party is not entitled to indemnification
hereunder.


 


Section 7.                                            Contribution.  In order to provide for just and equitable
contribution under the Securities Act in any case in which (i) the indemnified
party makes a claim for indemnification pursuant to Section 6 hereof but is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that the express provisions of Section 6 hereof
provide for indemnification in such case, or (ii) contribution under the
Securities Act may be required on the part of any indemnified party, then the
Company and the applicable Distributing Purchaser shall contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(which shall, for all purposes of this Agreement, include, but not be limited
to, all reasonable costs of defense and investigation and all reasonable
attorneys’ fees), in either such case (after contribution from others) on the
basis of relative fault as well as any other relevant equitable
considerations.  The relative fault
shall be determined by reference to, among other things,


 


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whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company on the one hand or the applicable Distributing Purchaser on the other
hand, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.  The Company and the Distributing Purchaser
agree that it would not be just and equitable if contribution pursuant to this
Section 7 were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to in this
Section 7.  The amount paid or payable
by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this Section 7
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.


 


Section 8.                                            Notices.  All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be delivered as set forth
in the Purchase Agreement.


 


Section 9.                                            Assignment.  Neither this Agreement nor any rights of the
Purchasers or the Company hereunder may be assigned by either party to any
other person.


 


Section 10.                                      Counterparts/Facsimile.  This Agreement may be executed in two or
more counterparts, each of which shall constitute an original, but all of
which, when together shall constitute but one and the same instrument, and
shall become effective when one or more counterparts have been signed by each
party hereto and delivered to the other party. 
In lieu of the original, a facsimile transmission or copy of the
original shall be as effective and enforceable as the original.


 


Section 11.                                      Remedies and
Severability.  The remedies provided
in this Agreement are cumulative and not exclusive of any remedies provided by
law.  If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction.  It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of those that may
be hereafter declared invalid, illegal, void or unenforceable.


 


Section 12.                                      Conflicting
Agreements.  The Company shall not
enter into any agreement with respect to its securities that is inconsistent
with the rights granted to the Purchasers in this Agreement or otherwise
prevents the Company from complying with all of its


 


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obligations
hereunder.


 


Section 13.                                      Headings.  The headings in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.


 


Section 14.                                      Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts made in California by persons domiciled in California and without
regard to its principles of conflicts of laws. 
The Company and the Purchaser agree to submit themselves to the in personam
jurisdiction of the state and federal courts situated within the County of San
Diego, California with regard to any controversy arising out of or relating to
this Agreement. Any party shall have the right to seek injunctive relief from
any court of competent jurisdiction in any case where such relief is
available.  Any party shall have the
right to seek injunctive relief from any court of competent jurisdiction in any
case where such relief is available. 
The prevailing party in such injunctive action shall be awarded its
costs, including attorney’s fees, from the non-prevailing party.


 


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[REGISTRATION RIGHTS AGREEMENT SIGNATURE
PAGE]


 


IN WITNESS WHEREOF, the parties hereto have caused
this Registration Rights Agreement to be duly executed as of the date set forth
above.


 


	
   

  	
  VISTA MEDICAL TECHNOLOGIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John R. Lyon

  	
   

  
	
   

  	
    John
  R. Lyon, President & CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VECTRA PARTNERS, LLC

  	
   

  
	
   

  	
  P.O. Box 675161

  	
   

  
	
   

  	
  Rancho Santa Fe, CA 92067

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Scott
  Pancoast

  	
   

  
	
   

  	
    Name:

  	
  Scott Pancoast

  	
   

  
	
   

  	
    Title:

  	
  Manager

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SBIC PARTNERS, L.P.

  	
   

  
	
   

  	
  201 Main Street

  	
   

  
	
   

  	
  Suite 2700

  	
   

  
	
   

  	
  Fort Worth, Texas  76102

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Forrest Binkley & Brown L.P.,

  	
   

  
	
   

  	
   

  	
  General Partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: Forrest Binkley & Brown Venture Co.,

  
	
   

  	
   

  	
  General Partner

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Nicholas B. Binkley

  	
   

  
	
   

  	
   

  	
  Nicholas B. Binkley

  	
   

  
	
   

  	
   

  	
  Office of the President

  	
   

  
								



 


12

















 


EXHIBIT
A


 


SCHEDULE
OF PURCHASERS


 


Vectra Partners,
LLC


 


SBIC Partners,
L.P.


 


13