Document:

INCENTIVE STOCK OPTION AGREEMENT

         THIS AGREEMENT is made effective as of January 3, 2000 between
CENTENNIAL BANCORP, an Oregon corporation (the "Company"), and THADDEUS (TED) R.
WINNOWSKI (the "Optionee").

         Pursuant to the Company's Restated 1995 Stock Incentive Plan (the
"Plan"), the Company has granted Optionee an incentive stock option to purchase
shares of the Company's Common Stock, without par value (the "Common Stock"), in
the amount indicated below.

         NOW, THEREFORE, in consideration of the promises and the mutual
covenants contained in this Option Agreement, the parties agree as follows:

         1. GRANT. The Company grants to Optionee, upon the terms and conditions
set forth below, the right and option (the "Option") to purchase 24,255 shares
of Common Stock at an exercise price of $10.75 per share (the "Exercise Price"),
subject to the terms and conditions of the Plan, which are incorporated herein
by reference. In the event of a conflict between the terms and conditions of the
Plan and the terms and conditions of this Option Agreement, the terms and
conditions of the Plan shall govern. The Option is intended to qualify as an
Incentive Stock Option under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code").

         2. TERM OF OPTION. Subject to reductions in the term of the Option as
provided in the Plan and this Option Agreement, the Option shall continue in
effect until 10 years from the date of this Option Agreement and may be
exercised during such term only in accordance with the provisions of the Plan
and this Option Agreement.

         3.       VESTING.

                  3.1 TIMING OF EXERCISE. The Option may be exercised in
accordance with the following schedule: (a) on the first anniversary of the date
hereof, one-third of the shares purchasable under the Option may be purchased,
in whole or in part, at any time thereafter until the Option expires; and (b)
continuing on each of the second and third anniversaries of the date hereof, an
additional one-third of the shares purchasable under the Option may be purchased
at any time thereafter until the Option expires.

                  3.2 SPECIAL VESTING PROVISIONS. Notwithstanding the foregoing,
in the event that Optionee's employment with the Company terminates on account
of (i) death; (ii) Disability; or (iii) termination of Optionee's Employment
Agreement with the Company, dated July 29, 1997 (the "Employment Agreement") by
the Company without Cause or by Optionee with Good Reason, Optionee shall have
the right to purchase all of the shares purchasable under the Option in
accordance with Section 4. Furthermore, in

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the event that the Company incurs a Change of Control, Optionee shall have the
right to purchase all of the shares purchasable under the Option. Employment by
a parent or subsidiary of the Company shall be deemed to be employment by the
Company. The definitions in the Employment Agreement apply for purposes of this
Section 3.2.

         4.       EXERCISE OF OPTION.

                  4.1 RIGHT TO EXERCISE. While Optionee is employed by the
Company, the Option is exercisable during its term in accordance with Section 3
and the applicable provisions of the Plan and this Option Agreement. In the
event that the Optionee's employment with the Company or a parent or subsidiary
of the Company terminates for any reason during the term of the Option, the
Option may be exercised at any time prior to the earlier of the expiration date
of the Option or the expiration of one year after the termination date, but only
to the extent that the Option was vested and exercisable under Section 3 at the
date of termination. In such event, to the extent that the Option was not
exercised within the applicable period, all further rights to purchase shares
pursuant to the Option shall cease and terminate at the expiration of such
period. Notwithstanding the Option's designation as an Incentive Stock Option,
the Option will not qualify for favorable tax treatment as an Incentive Stock
Option if the Option is exercised more than three months after the Optionee's
termination of service as an employee (or more than one year after termination
in the event of termination due to disability or death), or after the Optionee
has been on leave of absence for more than 90 days, unless the Optionee's
reemployment rights are guaranteed by statute or contract.

                  4.2 METHOD OF EXERCISE. The Option is exercisable by delivery
of an exercise notice, which notice shall state the election to exercise the
Option, the number of shares of Common Stock in respect of which the Option is
being exercised (the "Exercised Shares") and such other representations and
agreements as may be required by the Company pursuant to the provisions of the
Plan. In addition, Optionee agrees to execute, as a condition of Option
exercise, such agreements respecting the Exercised Shares as the Committee, in
its reasonable discretion, determines to be required under the terms of
agreements to which the Company is a party or otherwise advisable and in the
best interests of the Company. The exercise notice shall be signed by Optionee
and shall be delivered in person or by certified mail to the Chief Financial
Officer of the Company. The exercise notice shall be accompanied by payment of
the aggregate Exercise Price as to all the Exercised Shares. The Option shall be
deemed to be exercised upon receipt by the Company of such fully executed
exercise notice accompanied by such aggregate Exercise Price. For income tax
purposes the Exercised Shares shall be considered transferred to Optionee on the
date the Option is exercised with respect to such Exercised Shares.

         5. CONDITIONS. The obligations of the Company under this Option
Agreement shall be subject to the approval of such state or federal authorities
or agencies as may have jurisdiction in the matter. The Company will use its
best efforts to take such steps as may be required by state or federal law or
applicable regulations, including rules

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and regulations of the Securities and Exchange Commission and any national
securities exchange on which the Common Stock may then be listed, in connection
with the issuance or sale of any shares acquired pursuant to this Option
Agreement or the listing of such shares on any such exchange. The Company shall
not be obligated to issue or deliver shares of Common Stock under this Option
Agreement if, upon advice of its legal counsel, such issuance or delivery would
violate state or federal securities laws.

         6.       METHOD OF PAYMENT.  Payment of the aggregate Exercise Price
shall be by any of the following, or a combination thereof, at the election of
Optionee:

                  (a)      cash; or

                  (b)      check; or

                  (c) delivery of such documentation as the Committee and
                  Optionee's broker shall require to effect an exercise of the
                  Option and delivery to the Company of the sale or margin loan
                  proceeds required to pay the aggregate Exercise Price of the
                  Exercised Shares; or

                  (d) surrender of other shares of Common Stock which have a
                  Fair Market Value on the date of surrender equal to the
                  aggregate Exercise Price of the Exercised Shares.

No shares shall be issued until full payment has been made, and the Optionee
shall have none of the rights of a shareholder until shares are issued. Upon
notification of the amount due and prior to or concurrently with delivery of the
certificate representing the shares, the Optionee shall pay to the Company any
amounts necessary to satisfy applicable federal, state, and local withholding
tax requirements.

         7.       PROVISIONS RELATING TO TRANSFERABILITY.

                  7.1 RESTRICTION ON TRANSFER. The Option is not transferable by
Optionee other than by will or the laws of descent and distribution and, during
the Optionee's lifetime, may be exercised only by the Optionee.

                  7.2 EXERCISE BY LEGAL REPRESENTATIVE OR SUCCESSOR. Whenever
the word "Optionee" is used in any provision of this Option Agreement under
circumstances when the provision should logically be construed to apply to the
Optionee's guardian, legal representative, executor, administrator, or the
person or persons to whom the Option may be transferred by testamentary
disposition or by the laws of descent and distribution, the word "Optionee"
shall be deemed to include such person or persons.

         8. ADJUSTMENT IN OPTION SHARES. In the event any change is made after
May 1999 to the Company's outstanding Common Stock by reason of any stock split,
stock

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dividend, combination of shares, exchange of shares, or other change affecting
the outstanding Common Stock as a class without receipt of consideration, then
appropriate adjustments shall be made to (i) the total number of Option Shares
subject to this Option and (ii) the Exercise Price payable per share in order to
reflect such change and thereby preclude a dilution or enlargement of benefits
hereunder. Any such adjustment made by the Committee shall be conclusive. In the
event of the dissolution of the Company or a merger, consolidation, plan of
exchange or similar transaction affecting the Company, in lieu of adjusting the
Option as described above or in lieu of having the Option continue unchanged,
the Committee may, in its sole discretion, provide a 30-day period immediately
prior to such event during which the Optionee shall have the right to exercise
the Option in whole or in part without any limitation on exercisability.

         9.       LEGENDS.  Certificates representing the shares subject to this
Option Agreement shall bear such legends as the Company shall deem appropriate
to reflect any restrictions on transfer imposed by federal or applicable state
securities laws.

         10.      EMPLOYMENT.  Nothing in the Plan or in this Option Agreement
shall (i) confer upon the Optionee any right with respect to employment with the
Company or any affiliate of the Company or (ii) interfere in any way with the
right of the Company or any affiliate of the Company to terminate the Optionee's
employment. In all matters with respect to Optionee's employment, the terms and
conditions of the Employment Agreement shall control.

         11.      THE PLAN.  The Option is subject to the terms and conditions
of the Plan.

         12.      DEFINITIONS.  Any capitalized term in this Option Agreement
which is not defined herein and which is defined in the Plan shall have the same
definition as in the Plan.

         13.      GOVERNING LAW.  To the extent that federal laws (such as the
Code and the federal securities laws) do not otherwise control, the Plan and
this Option Agreement shall be construed in accordance with the laws of the
state of Oregon.

         14.      HEADINGS.  Headings contained in this Option Agreement are for
reference purposes and shall not affect the meaning or interpretation of this
Option Agreement.

         15. GENERAL. Optionee and the Company agree that the Option is granted
under and governed by the terms and conditions of the Plan and this Option
Agreement. Optionee has reviewed the Plan and this Option Agreement in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option Agreement and fully understands all provisions of the Plan
and Option Agreement. Optionee hereby agrees to accept as binding, conclusive
and final all decisions or interpretations of the Committee upon any questions
relating to the Plan and Option Agreement.

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<PAGE>

         The parties have signed this Agreement on the dates specified below,
with this Agreement to take effect as of the date first specified above.

OPTIONEE:                                            CENTENNIAL BANCORP

 /s/ Thaddeus R. Winnowski                  By  /s/ Rickard C. Williams
------------------------------------           ---------------------------------
Thaddeus R. Winnowski                       Title President & Chief Executive
                                                  Officer

                                       6COOPERATION AND PROJECT FUNDING AGREEMENT

PREAMBLE

                  Agreement made this 21st day of January, 2001, by and

                                     BETWEEN

                  The ISRAEL-UNITED  STATES BINATIONAL  INDUSTRIAL  RESEARCH AND
DEVELOPMENT  FOUNDATION,  a  legal  entity  created  by  Agreement  between  the
Government  of the State of Israel and the  Government  of the United  States of
America, and promulgated into law by the Israeli Knesset in 1978 under the title
of the Law of the BINATIONAL  INDUSTRIAL  RESEARCH AND  DEVELOPMENT  FOUNDATION,
effective May 18th, 1977, (hereinafter referred to as the "Foundation"),

                                       AND

                         Medivision Medical Imaging Ltd.

                                       AND

                        Ophthalmic Imaging Systems, Inc.

severally and jointly  (hereinafter  collectively  referred to as the "Proposer"
and separately as the "Participants").

                  WHEREAS the Foundation has been established under an Agreement
between the  Government of the State of Israel and the  Government of the United
States of America to promote and support joint  nondefense  industrial  research
and  development  activities of mutual  benefit to Israel and the United States,
and

                  WHEREAS  the   Proposer  has   heretofore   submitted  to  the
Foundation a proposal  (hereinafter the "Proposal"),  entitled  "Computer Guided
Laser  Therapy" and on the basis of said Proposal has applied to the  Foundation
for certain  funding  assistance  for the  development  of the products  therein
described (and hereinafter referred to collectively as the "Innovation"), and

                  WHEREAS the  Foundation  has  examined  and duly  approved the
Proposal and is willing to provide certain funding for the implementation of the
Proposal on the terms and conditions hereinafter set forth;

                  Now therefore the parties hereto agree as follows:

<PAGE>

         A.       GENERAL

         A.1.     The  preamble  to this  Agreement  shall be deemed an integral
                  part hereof.

         A.2.     The  Participants  shall  be bound  and  obliged  jointly  and
                  severally, as herein provided.

         A.3.     The Executive  Director of the  Foundation is empowered by its
                  Board of Governors to execute  this  Agreement  and to perform
                  all acts under the terms hereof on behalf of the Foundation.

         A.4.     The following document is incorporated by reference and made a
                  part of this Agreement:

                  The Proposal,  dated the 3rd day of November, 2000, as stamped
                  with the  Foundation's  approval  of the 6th day of  December,
                  2000.  Nonetheless,  should any  provision of said Proposal be
                  inconsistent  with any other provision of this Agreement,  the
                  provisions otherwise set forth in this document shall control.

         A.5      The following  document is referenced,  and is incorporated by
                  reference only as portions may be specifically referred to and
                  incorporated hereafter:

                  BIRD Foundation Procedures Handbook 1997.

         B.       PROJECT FINANCING

         B.1.     The Foundation  hereby agrees to fund, by  Conditional  Grant,
                  the  implementation  of the  Proposal  in the  maximum  sum of
                  $800,000 or 50% of the actual  expenditures on the project, as
                  contemplated in the Approved Project Budget set forth in Annex
                  A  hereto,  whichever  is less,  and at the  times  and as may
                  otherwise be set forth in Annex B hereto.

         B.1.1    The percentage of the actual expenditures on the project which
                  the Foundation  provides shall hereinafter be described as the
                  "Foundation's pro rata share".

         8.2.     The Proposer  shall  provide in timely  fashion all  budgetary
                  funds in excess of those provided hereunder by the Foundation.

         B.3.     Proposer shall make payments to the Foundation  based on Gross
                  Sales  derived  from the sale,  leasing or other  marketing or
                  commercial  exploitation of the Innovation,  including service
                  or  maintenance  contracts,  commencing  with the  first  such
                  commercial  transaction.  Such  payments  shall be made on the
                  following basis: a) The Conditional  Grant referred to in Sub.
                  Sec. B.1.  above (plus any other sums actually  awarded to the
                  Proposer  by the  Foundation  in  connection  with the subject
                  matter of the Proposal ("Other Sums")) shall be repaid in U.S.
                  Dollars at the rate of 2.5% of the first  year's  Gross Sales,
                  and, in succeeding years, at the rate of
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                  5% of the Gross Sales until 100% of the Conditional  Grant and
                  Other Sums has been repaid, whereupon the repayment rate shall
                  decrease to 2.5% of the Gross Sales,  such repayments to be in
                  equivalent  dollars  valued at time of repayment.  The rate of
                  change of value shall be that designated in Annex C hereto. b)
                  When the  Proposer  shall have  repaid the  following  maximum
                  percentages  in  equivalent  dollars  valued  at the  time  of
                  repayment (Annex C) of the Conditional Grant and Other Sums in
                  any of the  following  years  following  the first  commercial
                  transaction,  no  additional  payments  to the  Foundation  on
                  account  of the  Conditional  Grant  and Other  Sums  shall be
                  required.
                  ----------------------------- ------------------------------
                   Years Following Termination     Maximum Percentage of
                         of this Agreement      Conditional Grantand Other
                                                     Sums to be Repaid
                  ----------------------------- ------------------------------
                  ----------------------------- ------------------------------
                                1                           100
                  ----------------------------- ------------------------------
                                2                           113
                  ----------------------------- ------------------------------
                                3                           125
                  ----------------------------- ------------------------------
                                4                           138
                  ----------------------------- ------------------------------
                           5 and more                       150
                  ----------------------------- ------------------------------

         B.3.1.   The term  "Gross  Sales"  shall  include all  specific  export
                  incentives  or bonuses paid the Proposer on account of sale of
                  the Innovation for export, but shall not include sums paid for
                  commissions,  brokerage,  value  added and sales  taxes on the
                  sale of the finished product, or transportation and associated
                  insurance costs, if same have been included in the gross sales
                  price.

         B.3.2.   The Innovation shall be deemed to have been sold,  marketed or
                  otherwise  commercially  exploited if the  Innovation,  or any
                  improvement,  modification  or  extension  of it is put to the
                  benefit of a third party, whether directly or indirectly,  and
                  whether  standing alone or incorporated  into or cojoined with
                  other  hardware or  processes,  and for which benefit the said
                  third party gives something of value. This provision shall not
                  apply to transactions  between the Participants or between the
                  Participants  and their parents or subsidiaries or affiliates.
                  An  "affiliate"  is herein  defined as any entity under common
                  control,   controlled   by  or   controlling   either  of  the
                  Participants.  Should such parent or  subsidiary  or affiliate
                  resell the Innovation separately identified or incorporated in
                  a system,  the sales price shall be the price to third parties
                  from the parent or  subsidiary  or affiliate  making the sale,
                  such sales price being  defined by the same  criteria as sales
                  are defined for purposes of "Gross Sales" in Sub. Sec. B. 3.1.
                  above.

                  If the  Innovation  is a part of a product  sold,  marketed or
                  otherwise commercially exploited, the sales price for purposes
                  of payments  according  to Sub.  Sec. B. 3. shall be the sales
                  price of that product

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<PAGE>

                  multiplied  by a factor whose  numerator is the  manufacturing
                  cost  of  the   Innovation   and  whose   denominator  is  the
                  manufacturing  cost of the  product.  If there shall have been
                  established  a market  price for the  Innovation,  such  price
                  shall be the basis for payments  according to Sub. Sec. B. 3.,
                  notwithstanding the incorporation of the Innovation in another
                  product.

         B.4.     All  payments  due the  Foundation  shall be  calculated  on a
                  semiannual  calendar basis,  and statements,  certified by the
                  companies'  auditors,  rendered  with payment in and within 90
                  calendar  days  following the end of each  semiannual  period.
                  Payments to the  Foundation per Sub. Sec. B. 3. shall commence
                  at the end of the  semiannual  period  during  which the first
                  sale was made.

                  All late  payments  shall  bear  interest  at 1% more than the
                  average  prime rate  prevailing at the Chase  Manhattan  Bank,
                  N.Y.C.  during the period from the date  payment was due until
                  actually made.

         B.5.     Should any portion of the  technology or Innovation  developed
                  in whole or in part under this Agreement be sold outright to a
                  third  party,  one-half  of all  proceeds of the sale shall be
                  applied as received until there has been full repayment to the
                  Foundation of a sum equal to the percentage  indicated in Sub.
                  Sec.  B. 3. b hereto of the  Conditional  Grant and Other Sums
                  actually received by Proposer hereunder, in equivalent dollars
                  valued at time of repayment (Annex C). If any such sale is (i)
                  in exchange for a non-cash asset or (ii) part of the sale of a
                  group of  assets  and no  separate  value is  assigned  by the
                  parties to the portion of the  technology or Innovation  sold,
                  the Proposer  and the  Foundation  shall seek to agree:  as to
                  clause (i) the value of the asset  received;  and as to clause
                  (ii) the portion of the consideration  reasonably allocable to
                  the sale. If no such  agreement is reached within a reasonable
                  time, the matter shall be resolved pursuant to Sub. Sec. M. 4.
                  Payments due and not made following  receipt of proceeds shall
                  bear   interest  at  1%  more  than  the  average  prime  rate
                  prevailing at Chase Manhattan Bank, N. Y. C.

         B.6.     License   agreements   involving   patented   invention(s)  or
                  technology   developed   in  whole  or  in  part  during  this
                  Foundation-supported project shall be subject to Annex F.

         C.       CONDUCT OF THE PROJECT

         C.1.     The Proposer  agrees to do the work set out in the Proposal in
                  accordance with good standards  relevant to such undertakings,
                  and shall expend funds  received  hereunder only in accordance
                  with such Proposal and the requirements of this Agreement.

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<PAGE>

         C.2.     The  Proposer  agrees to comply with the Program  Plan for the
                  Innovation as set forth in Annex D hereto.

         C.3.     The  Proposer  hereby  appoints  Ziv Popper as Israel  Project
                  Manager and Steve  Verdooner as U. S. Project  Manager for the
                  implementation  of the  project  during  the  period  of  this
                  Agreement and in accordance with the Program Plan, Annex D.

         C.4.     The  Proposer  shall not make  substantial  transfers of funds
                  from one budget item to another, change key personnel or their
                  duties and  responsibilities  or diminish their time allocated
                  to the proposed work hereunder  without prior written approval
                  by the  Foundation,  which approval shall not be  unreasonably
                  withheld.

         C.4.1    Should any key person be absent  from his work or should  such
                  absence be expected,  for 90 days or more,  or should there be
                  any  significant   reduction  in  the  total  personnel  force
                  assigned the project  under the Proposal,  the Proposer  shall
                  forthwith notify the Foundation.

         D.       REPORTING REQUIREMENTS

         D.1.     The Proposer shall submit to the Foundation,  in writing,  the
                  following reports:

                  a.       Interim  fiscal and technical  reports within 30 days
                           following the expiration of the first 6-month period;

                  b.       Interim  fiscal and technical  reports within 30 days
                           following  the   expiration  of  the  second  6-month
                           period;

                  c.       Interim  fiscal and technical  reports within 30 days
                           following the expiration of the third 6-month period;

                  d.       final  fiscal and  technical  reports  within 60 days
                           following termination of this Agreement.

         D.1.1.   Such  reports  shall be in form and  substance  as provided in
                  Formats for  Technical  and Fiscal  Reports,  BIRD  Foundation
                  Procedures Handbook 1997, Sections 1V.A. and B.

         D.2.     Proposer  shall  provide,  at its  expense,  briefings  on the
                  progress  of the  work  hereunder  within  45  days  following
                  request by the  Foundation.  Such briefings  shall accord with
                  the form and depth as the Foundation may reasonably request.

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<PAGE>

         E.       PUBLICATIONS

         E.1.     In any publication in scientific or technical journals of data
                  or other information  derived from the work hereunder,  or any
                  publication  related to the work,  but not  including  product
                  literature or manuals,  the support of the Foundation shall be
                  acknowledged.

         E.2.     To the  extent so  required  to  permit  the  Foundation  free
                  dissemination  of such  publications or information  which the
                  Foundation  is  privileged  to  disseminate   subject  to  the
                  limitation  of Sec. F.  below,  the  Proposer  shall be deemed
                  hereby to waive any claim with  respect to such  dissemination
                  for infringement of any Copyright it may have or may obtain.

         E.3.     The Proposer shall furnish to the Foundation two (2) copies of
                  all publications resulting from  Foundation-supported  work as
                  soon as possible after publication.

         F.       PROPRIETARY INFORMATION, INTELLECTUAL PROPERTY

         F.1.     Proprietary information, clearly identified as such, submitted
                  to the Foundation in the Proposal,  in any report or verbally,
                  or obtained by Foundation  personnel  observation  pursuant to
                  any request or briefing, shall be treated by the Foundation as
                  confidential.   At  the   request   of   Proposer   or  either
                  Participant,   a   confidential   disclosure   agreement   may
                  separately be entered into by the parties.

                  Nothing contained in the foregoing shall restrict the right of
                  the  Foundation  to make  public the fact of the  Foundation's
                  support  for  the  project,  and  the  identification  of  the
                  Participants  therein.  The  details of any such  publication,
                  however, shall be subject to approval by the Participants.

         F.2.     The Proposer  represents and warrants that, to the best of its
                  knowledge,  information  and belief,  the  Proposer  has good,
                  valid  and  enforceable  title  to  all  of  the  Intellectual
                  Property  necessary  for  purposes  of  implementation  of the
                  Proposal,  free and clear of all  third  party  interests,  or
                  otherwise  possesses  adequate  exclusive  rights  to use  the
                  Intellectual Property, (subject to the fact that no patent may
                  have been obtained).  To the best of the Proposer's knowledge,
                  information  and  belief,  no  Intellectual  Property  used or
                  Proposed  to be used with  respect to the  Proposal  infringes
                  upon any Intellectual  Property rights of others,  and the use
                  of such  Intellectual  Property  with  respect to the Proposal
                  does  not  constitute  an  infringement,  misappropriation  or
                  misuse of any intellectual property rights of any third party.

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<PAGE>

         G.       PATENTS AND ROYALTIES

         G.1.     If Proposer or either of the Participants  elects to apply for
                  letters patent on any or all inventions  resulting in whole or
                  in part from  performance  of  Foundation-supported  activity,
                  such  applicant  shall,  at his own  expense,  so apply in the
                  United States and in Israel,  and in such other  countries and
                  at such times as he may deem appropriate.

         G.2.     Unless  Proposer or either  Participant is making  payments to
                  the Foundation  under Sec. B or Annex F hereto,  a Participant
                  who retains  rights in an  invention  and who obtains a patent
                  thereon in  accordance  with Sub. Sec. G. l., shall pay to the
                  Foundation a royalty as set forth in Annex E hereto,  on sales
                  of any product  embodying the invention or any product made by
                  practicing the invention.  The  Foundation's  rights hereunder
                  shall  apply  whenever  such  patents are  obtained  and shall
                  survive termination of this Agreement.

         H.       RIGHTS OF THE GOVERNMENTS OF ISRAEL AND THE UNITED STATES

         H.1.     Regardless of the patent rights  acquired by  Participants  by
                  mutual   agreement  or  pursuant  to  Sub.  Sec.  G.  l.,  the
                  Governments of Israel and of the United States shall each have
                  a nonexclusive,  irrevocable,  royalty-free license to make or
                  have made,  to use or have used,  and to sell or have sold any
                  such  invention  specified,   throughout  the  world  for  all
                  governmental   purposes:   provided,   however,  that  in  any
                  contracting  situation  involving an invention made under this
                  Agreement,  the Government of Israel shall give  preference to
                  the  Participant   retaining  the  entire  right,  title,  and
                  interest  in  the  invention  in  Israel,  and  provided  that
                  "governmental  purposes" shall not include manufacture of such
                  invention  where it is  commercially  available at  reasonable
                  prices.  Notwithstanding  the  foregoing,  except for military
                  purposes or in emergency situations, neither the Government of
                  Israel  nor  the  Government  of the  United  States,  nor the
                  Foundation,  shall have the right to sell or otherwise dispose
                  of in any third country any product incorporating an invention
                  or made by practicing  an invention  without the prior written
                  permission  of the  Participant  which has acquired the entire
                  right and interest in the invention in third  countries.  Such
                  Participant  shall not withhold  permission where  appropriate
                  royalties  are  paid  by  the   Foundation  or   government(s)
                  concerned.

         H2.      In addition to the patent rights specified in Sub. Sec. H. l.,
                  the  Foundation  reserves  for itself and the  Governments  of
                  Israel and the United States the right to use the  Innovation,
                  technical  information,  data and know-how  arising out of, or
                  developed under, this Agreement for any noncommercial purpose,
                  and without charge.

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<PAGE>

         H.3.     In order that the rights of the Foundation and the Governments
                  of Israel  and the United  States  described  herein  shall be
                  exercisable,   the  Participants  agree  that  any  component,
                  element  or  other  part  of  the  system   described  as  the
                  "Innovation" in the Preamble to this  Agreement,  whose use is
                  necessary  to the full  enjoyment of the  Innovation,  will be
                  made  available,  at reasonable  prices,  by the  Participants
                  either  as a  commercially  purchasable  item,  or by  special
                  arrangement,  and will be sold to the  Foundation  and/or  the
                  Government  of Israel  and/or  the  Government  of the  United
                  States, also at reasonable prices.

         H.4.     Notwithstanding  the above  provisions  of this Sec. H., it is
                  understood  and  agreed  that,  so long as any  software  that
                  comprises  part  or all  of  the  Innovation  is  marketed  by
                  Proposer, by either Participant,  or by others with the rights
                  to market such software,  neither the Government of Israel nor
                  the  Government  of the United  States shall have the right to
                  obtain a license to use such  software  unless the license fee
                  normally  imposed in the ordinary course of business by either
                  the  Participants  or by others with the rights to market such
                  software  is  paid,  and the  standard  license  agreement  is
                  executed.

         I.       REVOCATION OF AGREEMENT

         I.1.     The Foundation may revoke any award,  in whole or in part, for
                  fundamental  breach  as  defined  in the laws of the  State of
                  Israel.

         I.2.     Upon receipt of notice of revocation for  fundamental  breach,
                  the  Proposer  may  cure  the  default  in and  within  thirty
                  calendar days after the date of receipt of the notice.

         I.3.     Notwithstanding  any other  provision in this Agreement to the
                  contrary,  the Foundation  shall not be obliged to provide any
                  further funding after notice until and unless the said default
                  is cured and so demonstrated to the reasonable satisfaction of
                  the Foundation.

         I.4.     Should  the  Agreement  terminate  for  reason of  fundamental
                  breach, in addition to the Foundation's rights under Sub. Sec.
                  l.5.,  the  Foundation  and the  Governments of Israel and the
                  United States shall be entitled to all its rights  pursuant to
                  Sec.  H. as may have  vested on the date when all sums due the
                  Foundation under Sub. Sec. l.5. are fully paid.

         I.5.     If the Foundation  shall revoke as aforesaid,  all funds given
                  Proposer per Sub. Sec. B.1. above shall become due immediately
                  without need for demand.  Such funds which do not, by terms of
                  this Agreement,  bear interest,  shall be repaid with interest
                  at 1% more than the  average  prime rate  prevailing  at Chase
                  Manhattan Bank, N.Y.C., from date of notice of revocation.

                                       8
<PAGE>

         I.6.     The Proposer may not terminate  this  Agreement or abandon the
                  project  without the prior written  consent of the Foundation,
                  which consent shall not be unreasonably withheld.

         I.7.     If upon  termination  of this  Agreement  for any reason,  the
                  entire budgeted sum has not been expended,  the Proposer shall
                  forthwith  return to the Foundation its pro rata share of such
                  unexpended  portion.  If not repaid forthwith,  such sum shall
                  bear interest as per Sec. l.5.

         J.       SURVIVAL OF PROVISIONS

                  Notwithstanding   revocation  or  other  termination  of  this
                  Agreement,  the following provisions shall survive termination
                  of this  Agreement:  Sections  B., D.,  E., F., G., H.,  1.4.,
                  l.5., 1.7., K., L., N., Annex C, Annex E and Annex F.

         K.       FINANCIAL RECORDS

         K.1.     The Proposer shall maintain business and financial records and
                  books of account  for the work  hereunder  separate  and apart
                  from other  business  records of the Proposer.  Such books and
                  records shall be in usual and accepted form.

         K.2.     Books and records of the work hereunder  shall show Proposer's
                  contribution.  Upon  request by the  Foundation,  the Proposer
                  shall provide evidence of his compliance hereunder.

         K.3.     The  Foundation  may  examine,  or cause to be  examined,  the
                  financial books, vouchers,  records and any other documents of
                  the Proposer  relating to this  Agreement at reasonable  times
                  and  intervals  during  the term of this  Agreement  and for a
                  period of one (1) year following  termination,  or for so long
                  as payments per Sub. Sec. B.3., Sub. Sec. B.3., or Annex F, or
                  of patent royalties are due, or may become due the Foundation,
                  whichever shall be the later.

         L.       SUITS AGAINST THE FOUNDATION

         L.1.     The  Proposer  shall  defend  all suits  brought  against  the
                  Foundation, its officers or personnel,  indemnify them for all
                  liabilities  and costs and  otherwise  hold them  harmless  on
                  account of any and all claims, actions, suits, proceedings and
                  the like arising out of, or connected  with or resulting  from
                  the performance of this Agreement by the Proposer, or from the
                  manufacture, sales, distribution or use by the Proposer of the
                  Innovation, whether brought by Proposer or its personnel or by
                  third parties.

         L.2.     The Proposer agrees that persons  employed by it in connection
                  with the research project shall be deemed to be solely its own
                  employees and that

                                       9
<PAGE>

                  no relationship of master and servant shall be created between
                  such employees and the Foundation, either for purposes of tort
                  liability,  social  benefits,  or for any other  purpose.  The
                  Proposer  shall  indemnify the Foundation and hold it harmless
                  from court costs and legal fees, and for any payment which the
                  Foundation  may be obliged to make on a cause of action  based
                  upon an employee-employer relationship as aforesaid.

         M.       MISCELLANEOUS CONDITIONS

         M.1.     The  Foundation  makes no  representation,  by  virtue  of its
                  funding  the work  hereunder,  or  receiving  any  payments or
                  royalties  as a result of this  Agreement,  as to the  safety,
                  value or utility of the Innovation or the work undertaken, nor
                  shall the fact of participation of the Foundation, its funding
                  or exercise of its rights  hereunder be deemed an  endorsement
                  of the  Innovation or of the  Proposer,  nor shall the name of
                  the  Foundation  be used  for  any  commercial  purpose  or be
                  publicized in any way by the Proposer except within the strict
                  limits of this Agreement.

         M.2.     The Proposer may not assign this  Agreement or any of the work
                  undertaken pursuant to it without the prior written consent of
                  the  Foundation,  which  consent  shall  not  be  unreasonably
                  withheld.

         M.3.     This Agreement  shall be construed under the laws of the State
                  of Israel. The forum for the resolution of any dispute arising
                  from  this   Agreement   shall  be  the  State  of  Israel  or
                  Washington,  D.C. in the U.S.,  as the moving party may elect.
                  Execution of this  Agreement  shall be taken as  submission to
                  the forum selected pursuant to this Section.

         M.4.     Unless the  parties to a dispute  shall agree  otherwise,  the
                  dispute  shall be referred to  arbitration  under rules of the
                  Israel  Arbitration Law if the forum is Israel,  and under the
                  rules of the American Arbitration  Association if the forum is
                  the U.S.

         M.5.     Proposer  undertakes to comply with all applicable laws, rules
                  and  regulations  of the State of Israel and the United States
                  of  America,  and will  apply  for and  obtain  all  necessary
                  licenses and permits for the  carrying out of its  obligations
                  hereunder.

         M.6.     Under   Israeli  law,  no  stamp  duty  is  required  on  BIRD
                  Foundation Cooperation and Project Funding Agreements.

         M.7.     Notices, communications and reports shall be hand-delivered or
                  mailed by prepaid  first-class  mail  (airmail if  transmitted
                  internationally) addressed to:

                  a.       The Israel-U.  S. Binational  Industrial Research and
                           Development Foundation

                                       10
<PAGE>

                             Office Address:                    Mailing Address:
                             --------------                     ---------------
                             3 Tevuot Ha'aretz Street           P.O. Box 39104
                             Tel Aviv 69546                     Tel Aviv 61390
                             Israel                             Israel

                  b.       Medivision Medical Imaging Ltd.

                             Office Address:                    Mailing Address:
                             --------------                     ---------------
                             Industrial Park                    P.O. Box 45
                             Yokneam Elite 20692                Yokneam Elite
                             Israel                             Israel

                  c.       Ophthalmic Imaging Systems, Inc.

                             Office Address:
                             --------------
                             221 Lathrop Way
                             Suite I
                             Sacramento, CA 95815
                             U.S.A.

         N.       LIMITATION ON PAYMENTS

                  Notwithstanding any other  interpretation of this Agreement or
                  the  Annexes   hereto  to  the  contrary,   Proposer's   total
                  obligation  hereunder for payments to the Foundation shall not
                  exceed the percentages  indicated in Sub. Sec. B. 3. b) hereto
                  of  the  total  funds  actually  provided  by  the  Foundation
                  hereunder,  in equivalent  dollars valued at time of repayment
                  (Annex C).

         O.       EFFECTIVE DATE

                  The effective date of this  Agreement  shall be the 1st day of
                  November, 2000. Unless sooner terminated by the Foundation per
                  Sec. l., this Agreement  shall  terminate 24 months  following
                  the effective date.

Signed the dat and date above first given

---------------------------------
Executive Director
(for the BIRD Foundation)

---------------------------------
Authorized Company Official
(for Medivision Medical Imaging Ltd.)

---------------------------------
Authorized Company Official
(for Ophthalmic Imaging Systems, Inc.

                                       11

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