Top Image Systems Reaches Settlement with Debenture Holders

The new debt structure will support TIS in maintaining its positive business momentum

Tel Aviv, Israel – January 19, 2010 –Top Image Systems, Ltd. (Nasdaq: TISA; TASE: TISA), the leading innovator of intelligent document recognition, announced today that it has reached a settlement with the holders of its debentures (Series A).

Dr. Ido Schechter commented: “We are pleased that the settlement was accepted by our debenture holders. This is a significant stage in the company’s development. We have just finished an excellent 2009 and are confident about our prospects for 2010. The new debt structure better positions us to continue to execute according to our plan.”

According to the principles of the settlement, TIS paid approximately $2.1 million with an additional approximate $0.9 million due June 30, 2010. The remainder of the debentures will be paid in seven equal annual installments. Interest will be at 9% per annum.

The settlement agreement allows TIS to prepay the remainder of the unpaid debentures. Such prepayments will be made in exchange for 87% of the remainder of the debentures trust and the accumulated interest at the date of payment.

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