WORKING CAPITAL FUNDING AGREEMENT

                            DATED AS OF JULY 13, 2000

                                 BY AND BETWEEN

                           OPHTHALMIC IMAGING SYSTEMS

                                       AND

                         MEDIVISION MEDICAL IMAGING LTD.


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                        WORKING CAPITAL FUNDING AGREEMENT

         This WORKING CAPITAL FUNDING AGREEMENT, dated as of July 13, 2000 (this
"Agreement"),  is entered  into by and between  Ophthalmic  Imaging  Systems,  a
California  corporation  ("OIS") and MediVision Medical Imaging Ltd., an Israeli
corporation ("MediVision").

                                   WITNESSETH:

         WHEREAS,  MediVision is willing to purchase from Premier Laser Systems,
Inc.  ("Premier") the Premier Debt and Premier Shares,  subject to the terms and
conditions of that certain Securities Purchase  Agreement,  dated July 13, 2000,
by and among OIS, Premier and MediVision (the "Purchase Agreement");

         WHEREAS,  subject  to the  terms  and  conditions  of  this  Agreement,
MediVision  wishes to convert the Premier Debt into shares of OIS common  stock,
and OIS wishes to retire the Premier Debt in exchange for OIS common stock;

         WHEREAS, OIS wishes to borrow from MediVision, and MediVision wishes to
lend to OIS,  funds for working  capital  purposes in a principal  amount of one
million five hundred thousand dollars ($1,500,000) (the "Working Capital Loan"),
which borrowings shall be convertible,  at MediVision's  option,  into shares of
OIS common stock;

         NOW, THEREFORE, the parties hereby agree as follows:

                                    ARTICLE I

                        PURCHASE AND SALE TERMS; CLOSING

         1.1  Defined  Terms.  All  initially  capitalized  terms  used  in this
Agreement but not otherwise  defined herein shall have the meanings  ascribed to
such terms in the Purchase Agreement, unless the context otherwise indicates. In
addition,  the masculine  form of words includes the feminine and the neuter and
vice versa,  and, unless the context  otherwise  requires,  the singular form of
words  includes  the  plural  and vice  versa.  The  words  "herein,"  "hereof,"
"hereunder,"  and other words of similar  import,  when used in this  Agreement,
refer  to this  Agreement  as a  whole,  and not to any  particular  section  or
subsection.

         1.2 Working  Capital Loan.  Subject to the terms and conditions of this
Agreement,  at the Closing (as defined  below),  OIS shall deliver to MediVision
the Secured  Convertible  Working  Capital  Note in the form  annexed  hereto as
Exhibit A (the "Working  Capital Note"),  and MediVision  shall advance funds to
OIS subject to, and in accordance with, the Working Capital Note.

         1.3 Premier Debt  Conversion.  Subject to the terms and  conditions  of
this  Agreement,  at the Closing,  MediVision  shall  convert the Premier  Debt,
having an assumed face value of two


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million one hundred  eight  thousand  dollars  ($2,108,000),  into shares of OIS
common  stock,  free  and  clear  of  any  and  all  restrictions,   other  than
restrictions  imposed by federal or state securities laws, at a conversion price
per share of $ 0.55. Such conversion shall be effected by MediVision's  delivery
of a written  request for  conversion at the Closing,  whereupon OIS shall issue
and deliver to MediVision at the Closing a certificate  for 3,832,727  shares of
OIS common stock (which number of shares shall be subject to adjustment upon the
occurrence of certain  events in accordance  with the provisions of Section 6(c)
of the Working Capital Note).

         1.4 Closing Deliveries. At the Closing, OIS shall deliver to MediVision
the following:  (i) the stock  certificate or certificates  representing the OIS
common stock being issued by OIS upon the  conversion of the Premier Debt;  (ii)
the Working  Capital Note,  duly executed by OIS;  (iii) a  registration  rights
agreement (the "Registration Rights Agreement") in the form of Exhibit C annexed
to the  Purchase  Agreement  granting  to  MediVision  the  registration  rights
described  therein with respect to the OIS common stock issuable upon conversion
of the Premier Debt and the Working Capital Loan;  (iv) a certificate,  dated as
of the date of the Closing and duly executed by an executive officer or director
of OIS,  certifying that each of the  representations  and warranties of OIS set
forth in Article III hereof is true,  correct and complete as of the date hereof
and as of the  Closing  date,  and  that OIS has  performed  and  satisfied  all
covenants,  agreements and  obligations  required  hereunder to be performed and
satisfied by it on or prior to the date of the Closing.  The initial drawdown on
the Working Capital Loan, to be applied to purchase the inventory referred to in
Section 1.5 hereof, shall be made by wire transfer on the date of the Closing to
an account  designated in writing by OIS,  subject to and in accordance with the
terms of the Working Capital Note.

         1.5 Use of Proceeds. By separate agreement,  OIS has agreed to purchase
up to six hundred and twenty five thousand dollars  ($625,000) of inventory from
Premier.  The  parties  hereto  agree that up to six  hundred  and  twenty  five
thousand  dollars  ($625,000)  of the Working  Capital  Loan  proceeds  shall be
applied as and to the extent necessary for such purchase, but that any remaining
amounts of not less than eight hundred seventy-five  thousand dollars ($875,000)
may be used by OIS for general working capital purposes.

         1.6 Closing. The closing of the Working Capital Loan and the conversion
of Premier Debt into  additional  shares of OIS common stock, as provided herein
(the  "Closing"),   shall  take  place  on  the  first  business  day  following
satisfaction of the conditions to Closing set forth in Article V and approval of
the  transactions  contemplated  herein  by the  U.S.  Bankruptcy  Court  having
jurisdiction over Premier's  proceeding under Chapter 11 of the U.S.  Bankruptcy
Code, at the principal business office of Premier or at such other place or date
hereafter as OIS, Premier and MediVision may agree in writing.

                                   ARTICLE II

                  REPRESENTATIONS AND WARRANTIES OF MEDIVISION

         MediVision hereby represents and warrants to OIS as follows:

         2.1 Power and Capacity; Authorization. MediVision is a corporation duly
organized,  validly  existing  and in good  standing  under the laws of  Israel.
MediVision  has full  corporate

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power and authority to conduct its business as presently  conducted by it and to
own, lease or operate its assets and properties as presently  owned,  leased and
operated by it and to execute and deliver this  Agreement and to consummate  the
transactions  contemplated  hereby. The execution and delivery of this Agreement
and the consummation of the transactions  contemplated hereby have been duly and
validly  authorized by  MediVision's  board of directors or other governing body
and no other corporate proceedings by MediVision are necessary to authorize this
Agreement or to consummate the transactions  contemplated hereby. This Agreement
has been duly and validly  executed and  delivered by MediVision  and,  assuming
this Agreement  constitutes a legal,  valid and binding  obligation of the other
party hereto,  constitutes a legal,  valid and binding  agreement of MediVision,
enforceable against MediVision in accordance with its terms (subject,  as to the
enforcement of remedies, to applicable bankruptcy,  reorganization,  insolvency,
moratorium and similar laws affecting  creditors'  rights,  and, with respect to
the remedy of specific performance, equitable doctrines applicable thereto).

         2.2 No  Conflicts.  The  execution,  delivery and  performance  of this
Agreement  by  MediVision  will not (a)  constitute a breach or violation of any
provisions of  MediVision's  articles of  incorporation  or bylaws or comparable
charter  documents,  (b)  result in a  violation  of any law,  rule,  ordinance,
regulation,  order,  judgment or decree  applicable to or by which MediVision or
any of its assets or  properties  is bound,  or (c) conflict with or result in a
breach of or default (or any event which,  with the giving of notice or lapse of
time or both,  would  constitute a breach or default) under any mortgage,  lien,
lease, license, permit, agreement, contract or instrument to which MediVision is
a party or by which  MediVision  or any of its  assets or  properties  is bound,
which  conflict,  breach or default would have a material  adverse effect on the
ability of MediVision to perform its obligations under this Agreement.

         2.3  Investigation and Economic Risk.  MediVision  acknowledges that it
has had an opportunity to discuss the business,  affairs,  financial  condition,
results of operations and current prospects of OIS with the officers,  directors
and employees of OIS and to conduct  reasonable  diligence  efforts.  MediVision
acknowledges that it is able to fend for itself in the transactions contemplated
by this  Agreement  and has  the  ability  to bear  the  economic  risks  of its
investment pursuant to this Agreement.

         2.4 Purchase for Own Account.  The shares of OIS common stock  issuable
upon  conversion of the Working  Capital Note and the shares of OIS common stock
acquired upon  conversion of the Premier Debt  (collectively,  the "OIS Shares")
are being acquired by MediVision for its own account, not as a nominee or agent,
and not with a view to or in  connection  with the sale or  distribution  of any
part thereof.

         2.5 Exempt from  Registration  and  Restricted  Securities.  MediVision
understands that, except as provided in the Registration  Rights Agreement,  the
OIS Shares will not be registered  under the Securities  Act, on the ground that
the sales provided for in this Agreement are exempt from registration  under the
Securities  Act, and that the reliance of OIS on such exemption is predicated in
part on MediVision's  representations  set forth in this  Agreement.  MediVision
understands  that  the OIS  Shares  being  purchased  hereunder  are  restricted
securities within the meaning of Rule 144 under the Securities Act and that they
are not registered and must be held  indefinitely  unless they are  subsequently
registered or an exemption from such  registration  is available.  It is further
understood  that  each  certificate   representing  OIS  Shares

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and any other securities  issued in respect of the any of the foregoing upon any
stock split, stock dividend, recapitalization, merger, or similar event shall be
stamped or otherwise  imprinted with an  appropriate  restrictive  legend.  Each
certificate  representing  the purchased shares may be endorsed with any legends
required by any state blue sky laws and/or the following legend:

         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
         UNDER THE  SECURITIES  ACT OF 1933,  AS  AMENDED  (THE  "ACT")  AND ARE
         "RESTRICTED  SECURITIES" AS DEFINED IN RULE 144  PROMULGATED  UNDER THE
         ACT.  THE  SECURITIES  MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE
         DISTRIBUTED  EXCEPT (i) IN CONJUNCTION  WITH AN EFFECTIVE  REGISTRATION
         STATEMENT FOR THE SHARES UNDER THE ACT,  (ii) IN  COMPLIANCE  WITH RULE
         144, OR (iii)  PURSUANT TO AN OPINION OF COUNSEL,  SATISFACTORY  TO THE
         CORPORATION, THAT SUCH REGISTRATION OR COMPLIANCE IS NOT REQUIRED AS TO
         SAID SALE, OFFER OR DISTRIBUTION.

         2.6 Accredited Investor. MediVision is an "accredited investor" as such
term is defined in Regulation D promulgated under the Securities Act.

                                   ARTICLE III

                      REPRESENTATIONS AND WARRANTIES OF OIS

         OIS hereby  represents and warrants to MediVision  that,  except as set
forth in the  schedule  (the  "Disclosure  Schedule")  attached to the  Purchase
Agreement (which Disclosure Schedule shall be deemed to constitute part of these
representations  and  warranties),  the  representations  and  warranties in the
following paragraphs of this Article III are all true and correct:

         3.1  Power  and  Capacity;  Authorization.  OIS is a  corporation  duly
organized,  validly existing and in good standing under the laws of the State of
California.  OIS has full corporate  power and authority to conduct its business
as  presently  conducted  by it and to own,  lease or  operate  its  assets  and
properties  as  presently  owned,  leased and  operated by it and to execute and
deliver this Agreement and to consummate the transactions  contemplated  hereby.
The  execution  and  delivery  of this  Agreement  and the  consummation  of the
transactions  contemplated  hereby have been duly and validly  authorized by the
Board  of  Directors  of OIS,  and no  other  corporate  proceedings  by OIS are
necessary  to  authorize  this  Agreement  or  to  consummate  the  transactions
contemplated  hereby.  This  Agreement  has been duly and validly  executed  and
delivered by OIS, and,  assuming this Agreement  constitutes a legal,  valid and
binding  obligation  of the other party hereto,  constitutes a legal,  valid and
binding agreement of OIS,  enforceable  against OIS in accordance with its terms
(subject,  as  to  the  enforcement  of  remedies,  to  applicable   bankruptcy,
reorganization,  insolvency,  moratorium and similar laws  affecting  creditors'
rights,  and,  with  respect to the remedy of  specific  performance,  equitable
doctrines applicable thereto).

         3.2 No  Conflicts.  The  execution,  delivery and  performance  of this
Agreement by OIS will not (a) constitute a breach or violation of any provisions
of Articles of  Incorporation or Bylaws of OIS, (b) result in a violation of any
law, rule, ordinance,  regulation, order, judgment

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or  decree  applicable  to or by which  any of them or any of  their  respective
assets or properties is bound,  or (c) conflict with or result in a breach of or
default (or any event which, with the giving of notice or lapse of time or both,
would constitute a breach or default) under any mortgage,  lien, lease, license,
permit, agreement,  contract or instrument to which any of them is a party or by
which  any of them or any of their  respective  assets or  properties  is bound,
which  conflict,  breach or default would have a material  adverse effect on the
ability of OIS to perform its respective obligations under this Agreement.

         3.3  Capitalization.  The authorized  capital stock of OIS, on the date
hereof, consists of 20,000,000 shares of common stock, of which 4,305,428 shares
are issued and outstanding, 100,000 shares of Series A Preferred Stock, of which
none is outstanding,  and 2,000 shares of Series B Preferred Stock, of which 150
shares are  outstanding.  The rights,  preferences and privileges of such shares
are as set forth in the  Articles  of  Incorporation,  as  amended,  and certain
Certificates of Designations  thereto.  All issued and outstanding shares of the
Company's  capital stock (i) have been duly authorized and validly issued,  (ii)
are fully paid and  nonassessable,  and (iii) were issued in compliance with all
applicable state and federal laws concerning the registration and  qualification
of the issuance of securities. OIS has reserved an aggregate of 1,544,345 shares
of its common stock for issuance upon exercise of currently  outstanding options
granted to employees,  consultants  and others.  Except as set forth on Schedule
3.3,  there  are no  other  outstanding  options,  warrants,  rights  (including
conversion  or  preemptive  rights  and  rights  of  first  refusal),  proxy  or
shareholder  agreements,   or  agreements  of  any  kind  for  the  purchase  or
acquisition  from  OIS of any OIS  securities,  other  than as set  forth in the
Purchase Agreement between OIS and Premier.

         3.4 Issuance of Stock.  The OIS Shares are reserved for issuance , have
been duly  authorized  by all  necessary  corporate  action and,  when issued in
accordance  with the terms hereof and the terms of the Working Capital Note, the
OIS Shares shall be validly issued, fully paid and nonassessable.

         3.5 Commission Documents; Financial Statements. The common stock of OIS
is registered  pursuant to Section 12(b) or 12(g) of the Securities Exchange Act
of  1934,  as  amended  (the  "Exchange  Act"),  and OIS has  timely  filed  all
Commission  Documents.  As of their respective dates, the Form 10-K for the year
ended August 31, 1999 and the Forms 10-Q for the fiscal  quarters ended November
30, 1999,  February 29, 2000 and May 31, 2000 (the "Financial  Statements")  and
all other  Commission  Documents  filed by OIS with the  Securities and Exchange
Commission  (the  "Commission")  complied  in all  material  respects  with  the
requirements of the Exchange Act and the rules and regulations of the Commission
promulgated  thereunder  and other  federal,  state and  local  laws,  rules and
regulations  applicable to such documents,  and, as of their  respective  dates,
neither the Form 10-K nor the Forms 10-Q referred to above  contained any untrue
statement of a material  fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the  circumstances  under which they were made,  not  misleading.  The Financial
Statements have been prepared in accordance with generally  accepted  accounting
principles  ("GAAP")  applied on a consistent  basis during the periods involved
(except (i) as may be otherwise  indicated in such  financial  statements or the
notes thereto or (ii) in the case of unaudited interim statements, to the extent
they may not include  footnotes or may be condensed)  and fairly  present in all
material respects the financial  position of OIS as of the dates thereof and the
results of operations and

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cash  flows  for the  periods  then  ended  (subject,  in the case of  unaudited
statements, to normal year-end audit adjustments).

         3.6 Subsidiaries.  OIS has no subsidiaries,  either partially or wholly
owned.

         3.7 No  Undisclosed  Liabilities.  Except as disclosed in the Financial
Statements  or on Schedule 3.7 hereto,  to its  knowledge,  OIS has not incurred
since February 29, 2000 any liabilities,  obligations, claims or losses (whether
liquidated or unliquidated,  secured or unsecured, absolute, accrued, contingent
or otherwise) that would have a Material Adverse Effect.

         3.8 Indebtedness.  Schedule 3.8 hereto sets forth as of the date hereof
all outstanding secured and unsecured  Indebtedness of OIS, or for which OIS has
commitments,  other than the Premier Debt.  For the purposes of this  Agreement,
"Indebtedness" shall mean (a) any liabilities for borrowed money or amounts owed
in excess of $10,000 (other than trade accounts payable incurred in the ordinary
course of  business),  (b) all  guaranties,  endorsements  and other  contingent
obligations in respect of Indebtedness of others, whether or not the same are or
should be reflected in the balance sheet of OIS (or the notes  thereto),  except
guaranties by endorsement of negotiable instruments for deposit or collection or
similar  transactions  in the ordinary  course of business;  and (c) the present
value of any lease payments in excess of $5,000 due under leases  required to be
capitalized in accordance with GAAP. Except as disclosed on Schedule 3.8, OIS is
not in default with respect to any Indebtedness other than Premier Debt.

         3.9 Certain  Fees.  No brokers,  finders or financial  advisory fees or
commissions will be payable by OIS with respect to the transactions contemplated
by this Agreement.

         3.10  Disclosure.  Neither this Agreement nor the Schedules  hereto nor
any of the Commission  Documents  furnished to MediVision by or on behalf of OIS
in connection with the transactions  contemplated by this Agreement  contain any
untrue  statement of a material fact or omits to state a material fact necessary
in order to make the  statements  made  herein or  therein,  in the light of the
circumstances  under and at the time at which they were made  herein or therein,
not misleading.

         3.11   Employees.   OIS  does  not  have  any   collective   bargaining
arrangements or agreements covering any of its employees, except as set forth on
Schedule 3.11 hereto.

         3.12 Title to Assets.  Except as set forth on  Schedule  3.12,  OIS has
good and  marketable  title to all of its real and  personal  property  having a
value in  excess  of  $1,000,  free and  clear of any  Liens,  except  for those
indicated on Schedule 3.12 hereto.

         3.13 Actions Pending. Except as set forth on Schedule 3.13, there is no
action, suit, claim, investigation or proceeding pending or, to the knowledge of
OIS,  threatened  against OIS which  questions the validity of this Agreement or
the transactions contemplated hereby or any action taken or to be taken pursuant
hereto or thereto. Except as disclosed in the Commission Documents filed by OIS,
there is no action, suit, claim,  investigation or proceeding pending or, to the
knowledge of OIS,  threatened,  against or  involving  OIS,  its  properties  or
assets.  Except as disclosed in the Commission Documents filed by OIS, there are
no outstanding orders,

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judgments,   injunctions,   awards  or  decrees  of  any  court,  arbitrator  or
Governmental Body against OIS which could result in a Material Adverse Effect.

         3.14  Compliance with Law. Except as set forth on Schedule 3.14 hereto,
the business of OIS has been and is presently being conducted in accordance with
all applicable  federal,  state and local governmental laws, rules,  regulations
and ordinances,  domestic and foreign,  except where the conduct of the business
of OIS in violation of any of such laws, rules, regulations and ordinances could
not reasonably result in a Material Adverse Effect.

         3.15  Taxes.  Except  as set forth on  Schedule  3.15  hereto,  OIS has
accurately prepared and filed all federal,  state and other tax returns required
by law, domestic and foreign, to be filed by it, has paid or made provisions for
the payment of all taxes  shown to be due and all  additional  assessments,  and
adequate  provisions have been and are reflected in the financial  statements of
OIS for all  current  taxes and other  charges to which OIS is subject and which
are not currently due and payable.  Except as disclosed on Schedule 3.15 hereto,
none of the federal income tax returns of OIS for the years subsequent to fiscal
year 1996 have been audited by the Internal Revenue Service or other domestic or
foreign governmental tax agency.  Except as disclosed in Commission Filings, OIS
has no knowledge of any  additional  assessments,  adjustments or contingent tax
liability  (whether federal or state) pending or threatened  against OIS for any
period that would have a Material Adverse Effect,  nor of any basis for any such
assessment, adjustment or contingency.

         3.16  Intellectual  Property.  Except as set forth on Schedule 3.16, in
the conduct of its business as now conducted, OIS owns or possesses all patents,
know how, licenses and authorizations  from third parties that are necessary for
OIS to conduct its  business  ("Intellectual  Property"),  free and clear of all
liens,  charges  or  encumbrances.  OIS has not  received a notice of a claim of
infringement  relating  to the  Intellectual  Property  and does not know of any
reasonable basis for a claim that such an infringement or violation exists.

                                   ARTICLE IV

               ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES

         4.1      Covenants of OIS.

                  (a) Notice of Breach. OIS agrees to promptly notify in writing
MediVision of any events,  facts or occurrences which would constitute or result
in a breach of any  representation  or warranty  made by OIS  contained  in this
Agreement or a breach of any covenant, agreement or obligation of OIS under this
Agreement; provided, however, that no such disclosure shall be deemed to cure or
relieve any such breach or default.

                  (b)  Conduct of  Business.  During  the  period  from the date
hereof  through the Closing,  OIS shall not,  except as MediVision may otherwise
consent to in writing:

                  (i)      amend its articles of incorporation or bylaws;

                  (ii) authorize for issuance,  issue, sell, deliver or agree or
         commit to issue,  sell or deliver  (whether  through  the  issuance  or
         granting of options, warrants,  commitments,

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<PAGE>

         subscriptions,  rights to purchase or otherwise) any stock of any class
         or any other securities;

                  (iii) split,  combine or reclassify  any shares of its capital
         stock,  declare,  set aside or pay any  dividend or other  distribution
         (whether in cash, stock or property or any combination  thereof) to any
         stockholder  or otherwise in respect of its capital  stock or redeem or
         otherwise  acquire  any of its  securities,  or make  any  payments  or
         distributions  to  shareholders  or to any  Person to which OIS has any
         liability (other than trade accounts payable),  or make any payments to
         any  officer or  director of OIS,  except  compensation  or payments to
         consultants consistent with past practice;

                  (iv) (1) incur or assume any  indebtedness in excess of $5,000
         in the  aggregate  other than the  $260,000  Loan  contemplated  by the
         Purchase  Agreement and other than trade payables  (including,  but not
         limited to, legal fees);  (2) assume,  guarantee,  endorse or otherwise
         become  liable  or  responsible  (whether  directly,   contingently  or
         otherwise) for any  obligations of any other Person in excess of $5,000
         in  the  aggregate;   or  (3)  make  any  loans,  advances  or  capital
         contributions to, or investments in, any other Person (other than loans
         or advances to employees) in excess of $3,000 in the aggregate;

                  (v) enter  into,  adopt or amend any  bonus,  profit  sharing,
         compensation,  severance, termination, stock option, stock appreciation
         right,  restricted  stock,   performance  unit,  pension,   retirement,
         deferred compensation,  employment, severance or other employee benefit
         agreements,  trusts,  plans,  funds or other arrangements of or for the
         benefit or  welfare  of any  employee,  or  increase  in any manner the
         compensation  or fringe benefits of any employee or pay any benefit not
         required  by any  existing  plan and  arrangement  (including,  without
         limitation,  the granting of stock options,  stock appreciation rights,
         shares of restricted stock or performance units);

                  (vi) except to the extent  required by applicable  law, change
         any accounting principle or method or make any election for purposes of
         foreign, federal, state or local income taxes;

                  (vii)  acquire,  sell,  lease,  transfer  or  dispose  of  any
         material property or assets except in the ordinary course of business;

                  (viii)  take or suffer  any action  that  would  result in the
         creation,  or  consent  to the  imposition,  of any  lien on any of the
         properties or assets of OIS;

                  (ix)  make  or  incur  any  capital   expenditure,   lease  or
         commitment for additions to property, plant, equipment or other capital
         assets in excess of $10,000 in the aggregate; or

                  (x)  enter  into any  agreement  to do,  or take,  or agree in
         writing  or  otherwise  to take or  consent  to,  any of the  foregoing
         actions.

         (c)  Maintenance  of  Existence.  OIS shall  preserve  and maintain its
corporate  existence and good standing in the jurisdiction of its  incorporation
and qualify and remain qualified as a foreign  corporation in each  jurisdiction
in which qualification is required either

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<PAGE>

(1) to own, lease, license or use its properties now owned, leased,  licensed or
used and proposed to be owned,  leased,  licensed or used or (2) to carry on its
business as now conducted or proposed to be conducted,  except where the failure
to effect or obtain such qualification,  individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.

         (d) Compliance with Regulations.  OIS shall comply in all respects with
all  Regulations of any  Governmental  Body if a failure to comply with any such
Regulations,  individually or in the aggregate,  could reasonably be expected to
have a Material Adverse Effect.

         4.2      Covenants of MediVision.

                  (a) MediVision  acknowledges  and agrees that neither  Premier
nor OIS has made any  representations  or warranties to MediVision in connection
with the  transactions  contemplated  hereby  regarding the business,  condition
(financial or otherwise),  results of operations,  prospects or any other aspect
of the operations of OIS.

                  (b) MediVision agrees to promptly notify in writing OIS of any
events, facts or occurrences which would constitute or result in a breach of any
representation  or warranty made by MediVision  contained in this Agreement or a
breach of any  covenant,  agreement  or  obligation  of  MediVision  under  this
Agreement; provided, however, that no such disclosure shall be deemed to cure or
relieve any such breach or default.

                  (c)  Appointment  of Directors,  CEO. The parties hereto shall
take  commercially  reasonable  steps, in compliance with applicable law and the
bylaws and articles of OIS, to cause the  following to occur upon  Closing:  (i)
the  resignation  of the current  directors of OIS, (ii) the  appointment,  upon
designation by MediVision,  of new directors, who shall constitute a majority of
directors of OIS, and (iii) those MediVision  directors shall appoint a designee
of MediVision as acting Chief Executive Officer of OIS.

         4.3 Further  Assurances.  Subject to the terms and conditions  provided
herein,  MediVision and OIS agree to use all commercially  reasonable efforts to
take,  or cause to be taken,  all  actions,  and to do, or cause to be done,  as
promptly  as  practicable,  all  things  necessary,  proper or  advisable  under
applicable  laws and  regulations  or otherwise to consummate and make effective
the transactions contemplated by this Agreement.

                                    ARTICLE V

                               CLOSING CONDITIONS

         5.1 Conditions to Each Party's Obligation. The respective obligation of
each party to consummate the transactions  contemplated  hereby shall be subject
to the  satisfaction  at or  prior  to the  Closing  of  each  of the  following
conditions:

                  (a) Bankruptcy  Court Approval.  The federal  bankruptcy court
administering  Premier's  reorganization under Chapter 11 of the U.S. Bankruptcy
Code  (Case No.  SA00-12031RA)  has  approved  the  Purchase  Agreement  and the
Transactions contemplated hereby and thereby.

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<PAGE>

                  (b) No  Injunctions,  Restraints or  Litigation.  No temporary
restraining order,  preliminary or permanent injunction or other order issued by
any court of competent  jurisdiction  or other legal  restraint  or  prohibition
preventing  consummation of the transactions  contemplated  hereby is in effect.
There  is no  pending  or  threatened,  claim,  action,  suit  or  other  legal,
administrative, investigative or arbitration proceeding in which it is sought to
restrain,  enjoin or prohibit the consummation of the transactions  contemplated
hereby or to obtain damages or other monetary or equitable  relief in connection
therewith.

                  (c)  Representations  and Warranties.  The representations and
warranties  of the other party  hereto  contained  in this  Agreement  are true,
accurate and complete in all material respects as of the Closing Date.

                  (d)  Performance  of  Agreement.  The other  party  hereto has
performed  and  satisfied  in all  material  respects  each  of  the  covenants,
agreements  and  obligations  required to be performed and satisfied by it under
this Agreement and the Purchase Agreement on or prior to the Closing Date.

                  (e) Purchase Agreement.  The transactions  contemplated by the
Purchase Agreement shall be consummated contemporaneously with the Closing.

                  (f)  Rights  Agreement.  OIS shall  have  amended  the  Rights
Agreement,  dated as of December 31, 1997,  as amended from time to time, by and
between OIS and American Securities Transfer, Inc. (the "Rights Agreement"),  to
provide that (i) none of the  transactions  contemplated  by this Agreement will
trigger a Distribution  Date and (ii) MediVision will not be deemed an Acquiring
Person thereunder, as those terms are defined in the Rights Agreement.

                                   ARTICLE VI

                                   TERMINATION

         6.1      Termination. This Agreement may be terminated at any time:

                  (a)      by mutual written consent of MediVision and OIS;

                  (b) by either party hereto if the Purchase  Agreement has been
terminated  or the  Closing  has not  occurred  by October  31,  2000,  and this
Agreement  has not  previously  been  terminated;  provided,  however,  that the
failure  to  consummate  the  Closing by such date is not a result of either the
failure by the party so electing to terminate  this  Agreement to perform any of
its  obligations  hereunder  or the  breach  by the  party  so  electing  of its
representations and warranties;

                  (c) by  MediVision  or OIS if OIS  enters  into  an  agreement
constituting a Superior Proposal;

                  (d) by any party hereto if the  Bankruptcy  Court  approves an
Overbid by any person or entity other than  MediVision or any of its Affiliates;
and

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<PAGE>

                  (e) by any party hereto in the event any court or governmental
agency of competent  jurisdiction has issued an order, decree or ruling or taken
any  other  action   restricting,   enjoining  or  otherwise   prohibiting   the
transactions  contemplated hereby and such order, decree, ruling or other action
shall have become final and unappealable.

         6.2 Effect of  Termination.  In the event that this Agreement  shall be
terminated  pursuant to this Article VI, all further  obligations of the parties
under this Agreement  other than the  obligations  set forth in this Section 6.2
shall  terminate,  and there shall be no liability of any party to another party
except  for a  party's  breach  of any of its  obligations,  representations  or
warranties under this Agreement prior to the termination of this Agreement.

                                   ARTICLE VII

                                  MISCELLANEOUS

         7.1 Governing Law. This  Agreement  shall be governed by, and construed
in accordance  with, the laws of the State of California  (without giving effect
to conflicts of law principles thereof).

         7.2 Remedies  Cumulative.  Except as may otherwise be provided  herein,
the  remedies  provided  herein  shall be  cumulative  and  shall  not  preclude
assertion by either party hereto of any other rights or the seeking of any other
remedies against either party hereto.

         7.3  Brokerage.  Each party hereto will indemnify and hold harmless the
other  party  against  and in  respect  of any  claim  for  brokerage  or  other
commission  relative  to  this  Agreement  or to the  transactions  contemplated
hereby,  based in any way on agreements,  arrangements or understandings made or
claimed to have been made by such party with any third party.

         7.4 Severability.  Whenever possible,  each provision of this Agreement
shall be  interpreted  in such a  manner  as to be  effective  and  valid  under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provisions shall be ineffective to the extent
of such  prohibition or invalidity,  without  invalidating the remainder of such
provision or the remaining provisions of this Agreement.

         7.5 Notices.  Notices  required under this Agreement shall be deemed to
have been  adequately  given if delivered in person or sent to the  recipient at
its address (or facsimile number, as the case may be) set forth on the signature
page hereto or such other address as such party may from time to time  designate
in writing by certified mail (return receipt requested),  facsimile or overnight
courier in the manner provided in this Section 7.5.

         7.6      Amendments and Waivers.

                  (a) Any provision of this  Agreement  and the Working  Capital
Note may be amended or waived if, but only if,  such  amendment  or waiver is in
writing and signed, in the case of an amendment,  by each of the parties hereto,
or in the case of a  waiver,  by the  party  against  whom the  waiver  is to be
effective.

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<PAGE>

                  (b) No waiver by a party of any default,  misrepresentation or
breach of a warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation or breach
of a warranty or covenant  hereunder or affect in any way any rights  arising by
virtue of any prior or  subsequent  occurrence.  No  failure or delay by a party
hereto in exercising any right, power or privilege  hereunder shall operate as a
waiver  thereof nor shall any single or partial  exercise  thereof  preclude any
other or further exercise  thereof or the exercise of any other right,  power or
privilege.

         7.7 Survival.  All  representations  and warranties made by the parties
contained  in  this  Agreement  and the  respective  covenants,  agreements  and
obligations of the parties under this Agreement  shall survive the execution and
delivery of this Agreement for a period of three years following the Closing.

         7.8 Entire  Understanding.  This  Agreement  and the  agreements  to be
executed in connection herewith at the Closing, express the entire understanding
of the  parties  and  supersede  all prior and  contemporaneous  agreements  and
undertakings  of the  parties  with  respect to the  subject  matter  hereof and
thereof.

         7.9 Expenses.  Each party will pay all of its own  expenses,  including
attorney's  fees,  incurred in connection with the negotiation of this Agreement
and the Working Capital Note, the  performance of its obligations  hereunder and
under  the  Working  Capital  Note  and  the  consummation  of the  transactions
contemplated  by this  Agreement.  In the event of any  action  at law,  suit in
equity or  arbitration  proceeding in relation to this  Agreement or the Working
Capital Note, the prevailing party shall be paid by the other party a reasonable
sum for attorneys' fees and expenses incurred therein.

         7.10  Counterparts.  This Agreement may be executed in counterparts and
the signatures delivered by telecopy in the manner provided in Section 7.5, each
of which  shall be  deemed to be an  original  but which  taken  together  shall
constitute one agreement with the same effect as if the signatures were upon the
same instrument and delivered in person.

         7.11     Assignment; No Third-Party Beneficiaries.

                  (a)  Except  as  otherwise  expressly  provided  herein,  this
Agreement and the rights  hereunder  shall not be  assignable  or  transferable,
except to an Affiliate, by either party without the prior written consent of the
other party hereto;  provided that, if such  assignment or transfer is consented
to, such  assignee or  transferee  expressly  assumes in writing all of the such
party's obligations hereunder. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns.

                  (b) This  Agreement  is for the sole  benefit  of the  parties
hereto and their respective  successors and permitted assigns and nothing herein
expressed or implied  shall give or be  construed  to give to any Person,  other
than the parties hereto and such successors and permitted assigns,  any legal or
equitable rights hereunder.

         7.12 Interpretation.  This Agreement,  including any exhibits, addenda,
schedules  and  amendments,  has been  negotiated  at arm's  length and  between
persons  sophisticated  and

                                       13
<PAGE>

knowledgeable  in the matters dealt with in this Agreement.  Each party has been
represented by experienced and  knowledgeable  legal counsel.  Accordingly,  any
rule  of  law  or  legal  decision  that  would  require  interpretation  of any
ambiguities  in this  Agreement  against  the party  that has  drafted it is not
applicable and is waived.

         7.13  Titles  and  Subtitles.  The titles  and  subtitles  used in this
Agreement  are  used  for  convenience  only  and  are not to be  considered  in
construing or interpreting this Agreement.

         7.14 Jurisdiction; Service of Process. Each party hereto agrees that in
any action or proceeding  brought on or in connection with this Agreement or the
Working  Capital  Note:  (a) the  California  Superior  Court for the  County of
Sacramento,  or (in a case involving diversity of citizenship) the United States
District Court of the Northern District of California shall have jurisdiction of
any such action or  proceeding;  and (b) service of any summons and complaint or
other process in any such action or proceeding  may be made by either party upon
the other by  registered  or  certified  mail  directed to the  recipient at its
address  referenced  on the  signature  page hereto,  each party hereby  waiving
personal service thereof.

         7.15 WAIVER OF THE RIGHT TO TRIAL BY JURY. EACH PARTY HERETO WAIVES THE
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING, WHETHER IN CONTRACT OR TORT,
AT LAW OR IN EQUITY, ARISING OUT OF OR RELATING TO THIS AGREEMENT.

              (THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK.)


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<PAGE>


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

OPHTHALMIC IMAGING SYSTEMS

By:
   -----------------------------
Name:
     ---------------------------
Title:
      --------------------------

Address:                   221 Lathrop Way, Suite I
                           Sacramento, CA  95815
                           Attention:  President
                           Facsimile No.  (916) 646-0207
                           Telephone No.  (916) 646-2020

With a copy to:            Gibson, Dunn & Crutcher, LLP
                           1530 Page Mill Road
                           Palo Alto, CA  94304
                           Attention:  Lawrence Calof, Esq.
                           Facsimile No.  (650) 849-5333
                           Telephone No.  (650) 849-5300

MEDIVISION MEDICAL IMAGING LTD.

By:
   -----------------------------
Name:
     ---------------------------
Title:
      --------------------------

Address: P.O. Box 45
                           Industrial Park
                           Yokneam Elit
                           20692 Israel

With a copy to:            Parker Chapin LLP
                           The Chrysler Building
                           405 Lexington Avenue
                           New York, New York 10174
                           Attention:  Henry I. Rothman, Esq.
                           Tel. No.: (212) 704-6000
                           Fax No.: (212) 704-6288


                      {SIGNATURE PAGE TO FUNDING AGREEMENT}

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