EXHIBIT 10.5
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of April 11, 2008, by and between
INTEGRATED SURGICAL SYSTEMS, INC., a Delaware corporation (the "Company"), and
the party set forth on the signature page hereto ("Purchaser").
WHEREAS, the Company desires to issue to Purchaser, and Purchaser desires
to purchase from the Company, that number of shares set forth on the signature
page hereto (the "Shares") of common stock, par value $.01 per share, of the
Company ("Common Stock"); and
WHEREAS, the Company is issuing and selling to other purchasers additional
shares of Common Stock either simultaneously with the Closing (as hereinafter
defined) or as soon thereafter as practicable (collectively, the "Offering").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein set forth, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Purchase and Sale of Shares; Purchase Price.
a. Purchase of Shares. Purchaser hereby agrees to purchase the Shares
from the Company, and the Company hereby agrees to issue and deliver to
Purchaser, on the Closing Date (as hereinafter defined), the Shares.
b. Purchase Price. In consideration of the purchase of the Shares
hereunder, Purchaser hereby agrees to pay to the Company on the Closing Date an
amount equal to the amount set forth on the signature page hereto (the "Purchase
Price").
2. Closing; Deliverables.
a. Closing. Consummation of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Snow Xxxxxx Xxxxxx
P.C., 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., New York time,
as soon as practicable following the date hereof, or at such other time, date or
place as the parties hereto may agree upon (the "Closing Date").
b. Closing Deliverables. At the Closing, the Company shall issue and
deliver to Purchaser certificate(s) representing the Shares registered in the
name of Purchaser (or if so designated, a nominee thereof), and Purchaser shall
deliver to the Company the Purchase Price by wire transfer of immediately
available funds to such account or accounts as designated by the Company.
3. Representations and Warranties of the Company. The Company hereby
represents and warrants to Purchaser as follows:
a. Organization. The Company and each of its subsidiaries, if any
("Subsidiaries"), is duly organized and validly existing in good standing under
the laws of the jurisdiction of its organization. Each of the Company and its
Subsidiaries has full power and authority to own, operate and occupy its
properties and to conduct its business as presently conducted and is registered
or qualified to do business and in good standing in each jurisdiction in which
the nature of the business conducted by it or the location of the properties
owned or leased by it requires such qualification and where the failure to be so
qualified would have a material adverse effect upon the condition (financial or
otherwise), earnings, business, properties, prospects or operations of the
Company and its Subsidiaries, considered as one enterprise (a "Material Adverse
Effect"), and no proceeding has been instituted in any such jurisdiction,
revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such
power and authority or qualification.
b. Authority. The Company has full power and authority to execute, and
deliver this Agreement and that certain registration rights agreement in the
form of Exhibit A annexed hereto (the "Registration Rights Agreement"), and to
perform its obligations hereunder and thereunder. Each of this Agreement and the
Registration Rights Agreement constitutes the valid and legally binding
obligation of the Company, enforceable in accordance with its terms, except as
the same may be limited by applicable bankruptcy or insolvency statutes.
c. No Conflict. Neither the execution and delivery of this Agreement
or the Registration Rights Agreement by the Company, nor the consummation of the
transactions contemplated hereby or thereby, will result in (A) a conflict with
or constitute a violation of, or default (with the passage of time or otherwise)
under, (i) any material bond, debenture, note or other evidence of indebtedness,
lease, contract, indenture, mortgage, deed of trust, loan agreement, joint
venture or other agreement or instrument to which the Company or any Subsidiary
is a party or by which the Company or any of its Subsidiaries or their
respective properties are bound, (ii) the certificate of incorporation, by-laws
or other organizational documents of the Company or any Subsidiary, or (iii) any
law, administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority applicable to the Company or any
Subsidiary or their respective properties, except in the case of clauses (i) and
(iii) for any such conflicts, violations or defaults which are not reasonably
likely to have a Material Adverse Effect or (B) the creation or imposition of
any lien, encumbrance, claim, security interest or restriction whatsoever upon
any of the material properties or assets of the Company or any Subsidiary or an
acceleration of indebtedness pursuant to any obligation, agreement or condition
contained in any material bond, debenture, note or any other evidence of
indebtedness or any material indenture, mortgage, deed of trust or any other
agreement or instrument to which the Company or any Subsidiary is a party or by
which any of them is bound or to which any of the material property or assets of
the Company or any Subsidiary is subject.
d. Authorized Capitalization; Shares Duly Issued. The authorized
capital stock of the Company consists of (i) 100,000,000 shares of Common Stock,
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4,578,500 of which are issued and outstanding, and (ii) 1,000,000 shares of
preferred stock, 168 of which are issued and outstanding. The Shares, when
issued in accordance with the terms and conditions of this Agreement, shall be
duly authorized, validly issued, fully-paid and non-assessable, subject to no
lien or encumbrance. The outstanding shares of capital stock of the Company have
been duly and validly issued and are fully paid and non-assessable, have been
issued in compliance with all federal and state securities laws, and were not
issued in violation of any preemptive rights or similar rights to subscribe for
or purchase securities. Except as set forth on Schedule 3(d), there are no
outstanding rights (including, without limitation, preemptive rights), warrants
or options to acquire, or instruments convertible into or exchangeable for, any
unissued shares of capital stock or other equity interest in the Company or any
Subsidiary, or any contract, commitment, agreement, understanding or arrangement
of any kind to which the Company or any Subsidiary is a party or of which the
Company has knowledge and relating to the issuance or sale of any capital stock
of the Company or any Subsidiary, any such convertible or exchangeable
securities or any such rights, warrants or options. No preemptive rights,
co-sale rights, rights of first refusal, registration rights (other than with
respect to the Purchaser) or other similar rights exist with respect to the
Shares or the issuance and sale thereof.
e. SEC Reports. The Company has filed with the Securities and Exchange
Commission (the "Commission") all reports, schedules, forms, statements and
other documents required to be filed by it, as applicable, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), for the last three (3)
fiscal years ("SEC Reports"). The SEC Reports, when filed, complied in all
material respects with the requirements of the Exchange Act, and to the
knowledge of the Company, contain no untrue statement of a material fact or omit
to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading.
f. Financial Statements. The financial statements of the Company
included in the SEC Reports ("Financial Statements") (i) comply in all material
respects with the requirements of the Exchange Act, (ii) fairly present the
financial condition of the Company for the periods represented thereby and (iii)
have been prepared in accordance with generally accepted accounting principles
("GAAP"). The capitalization table annexed hereto as Schedule 3(f) sets forth
the basis for the calculation of the Purchase Price and is true and correct in
all material respects as of the date hereof. There are no financial statements
(historical or pro forma) that are required to be included in the SEC Reports
that are not included as required; and the Company does not have any material
liabilities or obligations, direct or contingent (including any off-balance
sheet obligations) required to be disclosed in the SEC Reports that are not
disclosed in the SEC Reports. Except as disclosed in the SEC Reports and
Financial Statements, subsequent to the respective dates as of which information
is given in the Financial Statements, there has not been (i) any material
adverse change in the business, properties, management, financial condition or
results of operations of the Company, (ii) other than in the ordinary course of
business, any transaction which is material to the Company, (iii) any
obligation, direct or contingent (including any off-balance sheet obligations),
incurred by the Company which is material to the Company, (iv) any change in the
capital stock or
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outstanding indebtedness of the Company other than pursuant to the terms of
outstanding debt and equity securities, or (v) any dividend or distribution of
any kind declared, paid or made on the capital stock of the Company.
g. Legal Compliance. Neither the Company nor any Subsidiary is in
violation of its charter, bylaws, or other organizational document. Neither the
Company nor any Subsidiary has in the past been or currently is in violation of
any law, administrative regulation, ordinance or order of any court or
governmental agency, arbitration panel or authority applicable to the Company or
any Subsidiary, which violation, individually or in the aggregate, would be
reasonably likely to have a Material Adverse Effect, or is in default (and there
exists no condition which, with the passage of time or otherwise, would
constitute a default) in any material respect in the performance of any bond,
debenture, note or any other evidence of indebtedness in any indenture,
mortgage, deed of trust or any other material agreement or instrument to which
the Company or any Subsidiary is a party or by which the Company or any
Subsidiary is bound or by which the properties of the Company or any Subsidiary
are bound, which would be reasonably likely to have a Material Adverse Effect.
h. Litigation. Except as set forth on Schedule 3(h), there are no
actions, suits, claims, investigations or proceedings pending or, to the
Company's knowledge, threatened or contemplated to which the Company or any of
its directors or officers is or would be a party or of which any of the
properties of the Company is or would be subject at law or in equity, before or
by any governmental or regulatory commission, board, body, authority or agency,
or preventing consummation of the transactions contemplated hereby; there are no
legal or governmental proceedings pending before or by any governmental or
regulatory commission, board, body, authority or agency relating to the
Company's business practices and activities or to its securities, and, to the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or others. There has not been, and to the knowledge of
the Company, there is not pending any investigation by the Commission involving
the Company or any current or former director or officer of the Company (in his
or her capacity as such). The Commission has not issued any stop order or other
order suspending the effectiveness of any registration statement filed by the
Company or any Subsidiary.
i. Material Contracts. Schedule 3(i) sets forth the material contracts
of the Company in effect as of the date hereof ("Contracts") together with a
list of consents, if any, requiring consent to the transactions contemplated
hereby. As of the date hereof, no party is in breach or default in any material
respect under any Contract, except for such breaches and defaults as to which
requisite waivers or consents have been obtained. Each Contract is valid,
binding and enforceable by the Company in accordance with its terms subject to:
(i) laws of general application relating to bankruptcy, insolvency and the
relief of debtors; and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.
j. Property; Lease. Except with respect to that certain leasehold for
the premises located at 0000 X. Xxxxxx Xxxx. #0, Xxxxxxxxxx, Xxxxxxxxxx 00000
(the
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"Lease") by and between the Company, as tenant, and JB Management LP, as
landlord, the Company is not party to any leasehold obligation and does not own
any real or intellectual property.
k. Benefit Plans. Set forth on Schedule 3(k) is a list of each
material bonus, deferred compensation, pension, profit-sharing, retirement,
stock purchase or stock option, hospitalization or other medical, life or other
insurance plan relating to the Company, including any policy, plan, program or
agreement that provides for the payment of severance benefits, salary
continuation, salary in lieu of notice or similar benefits, maintained,
sponsored or contributed to by the Company or under which the Company has any
present or future material obligations or material liability on behalf of the
Company's employees or former employees or their dependents or beneficiaries of
the Company (collectively, the "Employee Benefit Plans"). To the knowledge of
the Company, the Employee Benefit Plans that are subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the Internal
Revenue Code of 1986, as amended (the "Code"), are in compliance in all material
respects with the presently applicable provisions of ERISA and the Code.
l. Intellectual Property. To the knowledge of the Company, each of the
Company and its Subsidiaries, prior to selling substantially all of the
Company's assets to a third party, owned or possessed sufficient rights to
conduct its business in the ordinary course, including, without limitation,
rights to use all material patents, patent rights, industry standards,
trademarks, copyrights, licenses, inventions, trade secrets, trade names and
know-how (collectively, "Intellectual Property") that was necessary for the
conduct of its business as was conducted, except where the failure to have so
owned or possessed would not have resulted in a Material Adverse Effect. To the
knowledge of the Company, neither the Company nor any of its Subsidiaries
infringed any rights of a third party with respect to any Intellectual Property
that, individually or in the aggregate, would have had a Material Adverse
Effect, and neither the Company nor any of its Subsidiaries has received any
notice of, or has any knowledge of, any asserted infringement by the Company or
any of its Subsidiaries of any rights of a third party with respect to any
Intellectual Property that, individually or in the aggregate, would have a
Material Adverse Effect.
m. Taxes. All income tax returns required to be filed by the Company
have been filed and all such returns are true, complete, and correct in all
material respects and all taxes that are due or claimed to be due from the
Company have been paid other than those (x) currently payable without penalty or
interest or (y) being contested in good faith and by appropriate proceedings and
for which adequate reserves have been established in accordance with GAAP.
n. Investment Company Status. The Company is not and, after giving
effect to the Offering, will not be an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
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o. Private Placement. Assuming that all representations and warranties
of Purchaser set forth in Section 4 hereof are true and correct in all respects,
the offer and sale of Shares hereunder is exempt from registration under the
Securities Act (as hereinafter defined) and applicable state securities laws.
p. Internal Controls. At all times since first required by all
applicable Exchange Act rules, the Company has established disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for
the Company and designed such disclosure controls and procedures to ensure that
material information relating to the Company, including its Subsidiaries, is
made known to the certifying officers by others within those entities,
particularly during the period in which the Form 10-KSB or Form 10-QSB, as the
case may be, is being prepared. The Company's certifying officers have evaluated
the effectiveness of the Company's disclosure controls and procedures as of the
end of the period covered by each Form 10-KSB or Form 10-QSB for which such
evaluation was required by applicable Exchange Act rules, as the case may be
(each such date, the "Evaluation Date"). The Company presented in each such Form
10-KSB or Form 10-QSB, as the case may be, the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the most recent Evaluation
Date, there have been no significant changes in the Company's internal controls
(as such term is used in Item 308(c) of Regulations S-K and S-B under the
Exchange Act) or, to the Company's knowledge, in other factors that could
significantly affect the Company's internal controls.
q. No Employee Violations. To the Company's knowledge, no employee or
agent of the Company has made any payment of funds of the Company or received or
retained any funds in violation of any law, rule or regulation. Neither the
Company nor any of its directors, officers, or controlling persons has taken or
will take, directly or indirectly, any action designed, or which has constituted
or might reasonably be expected to cause or result in, under the Exchange Act or
otherwise, the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Shares in violation of
applicable law.
r. Foreign Corrupt Practices. Neither the Company, nor to the best
knowledge of the Company, any agent or other person acting on behalf of the
Company, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to
foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any foreign or
domestic political parties or campaigns from corporate funds, (iii) failed to
disclose fully any contribution made by the Company (or made by any person
acting on its behalf of which the Company is aware) which is in violation of
law, or (iv) violated in any material respect any provision of the Foreign
Corrupt Practices Act of 1977, as amended.
s. No Brokers. The Company is not subject to any valid claim of any
broker, investment banker, finder or other intermediary in connection with the
transactions contemplated by this Agreement.
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4. Representations and Warranties of Purchaser. Purchaser hereby represents and
warrants to the Company as follows:
a. Authority. Purchaser has full power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of Purchaser, enforceable
in accordance with its terms, except as the same may be limited by applicable
bankruptcy or insolvency statutes.
b. No Conflict. Neither the execution and delivery of this Agreement
by Purchaser, nor the consummation of the transactions contemplated hereby, will
result in a violation of any statute, regulation, rule, judgment, order, decree,
stipulation, injunction, charge, or other restriction of any government,
governmental agency, or court to which Purchaser is subject, or conflict with,
result in a breach of, constitute a default under, or result in the acceleration
of, any contract or agreement to which Purchaser is a party or by which it is
bound.
c. Review of SEC Reports and Financial Statements. Purchaser has fully
reviewed all of the SEC Reports and Financial Statements.
d. Accredited Investor. Purchaser qualifies as an accredited investor
as such term is defined under Regulation D promulgated under the Securities Act
of 1933, as amended (the "Securities Act"). Purchaser has provided a completed
and signed Investor Questionnaire in the form annexed to this Agreement.
e. Sophistication. Purchaser acknowledges that it is a sophisticated
investor, has such knowledge and experience in financial and business matters in
general and has full familiarity with the current business and future business
prospects of the Company and the financial and other affairs of the Company and
acknowledges that it has had access to and has received sufficient written and
oral information about the Company, including any and all such information
requested by Purchaser and including copies of all of the SEC Reports in order
to make an informed decision to purchase the Shares. In addition, Purchaser
acknowledges that it has had access to the officers, directors and employees of
the Company to discuss the business, affairs and prospects of the Company and
has had the opportunity to obtain additional information necessary to evaluate
the merits and risks of engaging in the transactions contemplated by this
Agreement. Purchaser has reached an independent decision with respect to the
advisability of the purchase of the Shares and, in arriving at its decision, has
considered both the value of the Shares as well as the present condition and
future prospects of the Company.
f. Economic Risk. Purchaser is able to bear the economic risks of the
investment in the Shares and, consequently, without limiting the generality of
the foregoing, is able to hold the Shares for an indefinite period of time and
has a sufficient net worth to sustain a loss of its entire investment in the
Company in the event such loss should occur.
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g. No Representations. Purchaser fully understands and acknowledges
that the Company makes no representations or warranties whatsoever with respect
to the business, operations, financial condition, prospects or other affairs of
the Company other than as explicitly set forth in this Agreement, and Purchaser
expressly represents and warrants that in connection with its decision to
purchase the Shares as contemplated hereunder, Purchaser is not relying upon any
statements made by the Company or any of its shareholders, directors, officers,
employees or agents, whether oral or written, concerning the Company, other than
those set forth in this Agreement.
h. Own Account. Purchaser is acquiring the Shares for its own account
for investment and not with a view to or for resale in connection with any
distribution of the Shares. It has not offered or sold any portion of the Shares
and has no present intention of dividing the Shares with others or of selling,
distributing or otherwise disposing of any portion of the Shares either
currently or after the passage of a fixed or determinable period of time or the
occurrence or non-occurrence of any predetermined event or circumstance.
i. Resale. Purchaser acknowledges that the Shares have not been
registered under the Securities Act and may not be offered or sold except
pursuant to an effective registration statement under the Securities Act or an
exemption from the registration requirements thereof. Purchaser agrees that it
shall not offer or sell any Shares except in accordance with Rule 144A, Rule 144
or other applicable exemption under the Securities Act, unless pursuant to an
effective registration statement.
j. Taxes. Any obligation or liability for taxes (state, federal or
otherwise) incurred by Purchaser in connection with this Agreement or the
transactions contemplated hereby shall be the sole responsibility of and be paid
for by Purchaser.
k. No Brokers. Purchaser is not subject to any valid claim of any
broker, investment banker, finder or other intermediary in connection with the
transactions contemplated by this Agreement.
l. Advice of Counsel. Purchaser acknowledges that it has been advised
to consult with its own attorney regarding the transactions contemplated hereby
and to consult with its tax advisor regarding the tax consequences of acquiring
the Shares.
m. Restrictive Legend. Certificates for the Shares shall contain a
restrictive legend substantially in the following form:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER
APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE REOFFERED, SOLD, ASSIGNED,
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TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO A TRANSACTION THAT IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
REGISTRATION REQUIREMENTS.
5. Covenants.
a. Confidentiality. Purchaser agrees that it will not divulge,
communicate, use to the detriment of the Company or for the benefit of any other
person, firm or entity, or misappropriate in any way, any confidential
information or trade secrets relating to the Company or any of its businesses
including without limitation, business plans, systems and strategies, operating
plans, acquisition strategies (including the identities of and any other
information concerning possible acquisition candidates), financial information
(whether pro forma or otherwise), market analyses, procedures or strategies,
acquisition terms and conditions, personnel information, trade processes,
manufacturing methods, operational and equipment techniques, quality control
procedures and systems, projects and technological research or methods,
know-how, customer lists and relationships, supplier lists, or other non-public
proprietary and confidential information relating to the Company.
b. Board of Directors; Continuation of Offering. Simultaneously with
the Closing, and explicitly subject to purchasers in the Offering purchasing
shares of Common Stock for a purchase price not less than $1,750,000 on or
before the Closing, the Company agrees to appoint Xxxxxxxxxxx Xxxxxxx
("Xxxxxxx") as the Chief Executive Officer thereof and use its reasonable
efforts to cause the Board of Directors of the Company (the "Board") to be
established at a total of four (4) members, two of whom shall be the designees
of Xxxxxxx. Following the Closing, MDB Capital Group LLC ("MDB") shall use its
best efforts to arrange for an additional purchase or series of purchases of
Common Stock (the "Subsequent Offering") with an aggregate purchase price of not
less than $1,649,608 (the "Subsequent Offering Minimum"), it being the intent of
the parties that the total equity investment by all purchasers (including
Purchaser) in the Offering and the Subsequent Offering be an aggregate amount
not less than $3,399,608. In the event that additional purchases of Common Stock
in connection with the Subsequent Offering are completed in which the Company
receives proceeds of not less than the Subsequent Offering Minimum, the Company
agrees to use its reasonable efforts thereafter to cause the Board to be
established at a total of five (5) members, and, at Xxxxxxx'x option, cause a
designee to be elected as a member of the Board at the next annual meeting of
stockholders of the Company, or in the event that no such annual meeting has
taken place on or before 90 days following the Subsequent Offering, appointed by
the Board, provided that, such appointment does not violate any rules and
regulations of the Commission. The Company agrees to accept as a purchaser in
the Subsequent Offering any reasonable accredited investor introduced by MDB
that has no criminal, civil or regulatory sanctions in respect thereof.
c. Blue Sky. The Company shall make all necessary filings under the
Blue Sky laws of the State of New York related to the sale of the Shares and at
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Purchaser's request, provide evidence of filing and payment of all related
filing fees.
d. Lease. As soon as practicable after the Closing, the Company shall
use its best efforts to arrange for a release from any obligation of the Company
under the Lease except for a cash payment of up to $60,000 to a new tenant
leasing the leased premises. In the event that the Lease obligations are not so
released on or before July 31, 2008, the Company agrees to pay to each purchaser
in the Offering an amount in cash equal to $0.0355 per share of Common Stock
purchased by such purchaser in the Offering.
6. Conditions to Closing.
a. Both Parties. The obligations of the parties to consummate the
transactions contemplated hereby shall be subject to the following conditions:
(i) The representations and warranties of each of the Company and
Purchaser shall be true and correct in all material respects on the Closing Date
(except for representations and warranties that speak as of a specific date,
which representations and warranties shall be true and correct as of such date).
(ii) There shall not have occurred a suspension or material
limitation in trading in the Common Stock on any trading medium or exchange on
which the Common Stock was being traded prior to the consummation of the
purchase of the Shares.
(iii) The Registration Rights Agreement shall have been executed
and delivered by the parties.
(iv) All consents, approvals or authorizations of any person
required for the valid authorization, execution and delivery by the parties of
this Agreement or for the consummation of the transactions contemplated hereby
shall have been obtained.
(v) No action or proceeding by or before any court,
administrative body or governmental agency shall have been instituted or
threatened by a third party which seeks to enjoin, restrain or prohibit this
Agreement or consummation of the transactions contemplated hereby.
b. Purchaser. The obligations of Purchaser to consummate the
transactions contemplated hereby shall be subject to the following additional
conditions:
(i) The Company shall have delivered a secretary's certificate
attesting to the current certificate of incorporation and by-laws of the Company
and the resolutions approving the transactions contemplated by this Agreement.
(ii) If applicable, appropriate "blue sky" filings shall have
been made under the Blue Sky laws of the State of New York relating to the sale
of the Shares.
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7. Indemnification. Each of the parties hereby agrees to indemnify and hold
harmless the other party and each of its respective officers, directors,
employees, affiliates and agents, from and against any and all losses, costs,
claims, damages, expenses, obligations and liabilities of any nature whatsoever,
including, without limitation, court costs and reasonable attorneys' fees
(specifically including court costs and reasonable attorneys' fees incurred in
enforcing this Section 7 or in recovering damages or pursuing other remedies
with respect to any breach of this Section 7), incurred by such party as a
result of or in connection with any breach of any representation, warranty,
covenant or other obligation of the other party contained in this Agreement.
Notwithstanding anything to the contrary contained in this Agreement, the
Company shall only be liable to indemnify Purchaser up to a maximum aggregate
indemnification amount equal to the Purchase Price.
8. Expenses. The Company shall pay the expenses of Purchaser and the other
purchasers in connection with the Offering, including without limitation,
reasonable legal fees, expenses of registration, and other out-of-pocket
expenses, up to an aggregate maximum for all purchasers of $50,000. Purchaser
agrees to provide written evidence to the Company reasonably satisfactory
thereby of any expense in excess of $500.
9. Miscellaneous.
a. Waiver. No right or obligation under this Agreement will be deemed
to have been waived unless evidenced by a writing signed by the party against
which the waiver is asserted or by its duly authorized representative. Any
waiver will be effective only with respect to the specific instance involved,
and will not impair or limit the right of the waiving party to insist upon
strict performance of the right or obligation in any other instance, in any
other respect, or at any other time.
b. Notices. All notices and other communications required or permitted
to be made or given hereunder (all of the foregoing hereinafter collectively
referred to as "Communications") shall be in writing, signed by or on behalf of
the notifying party, and shall be deemed to have been duly made or given when
(i) delivered personally, (ii) five (5) business days after being sent by
registered or certified mail or equivalent, return receipt requested, or (iii)
one (1) business day after being sent by recognized overnight courier for next
business day delivery, in each case as set forth below or to such other or
additional address as either party shall hereafter specify by Communication to
the other party:
If to the Company:
Integrated Surgical Systems, Inc.
000 Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Chief Executive Officer
With a copy to:
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Snow Xxxxxx Xxxxxx P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
If to Purchaser:
to the address as set forth on the signature page hereto
With a copy to:
Golenbock Xxxxxxx Xxxxx Xxxx & Xxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
c. Modifications to Be in Writing. To be effective, any modification
to this Agreement must be in writing signed by all parties to this Agreement.
d. Agreement Binding upon Successors and Assigns. This Agreement shall
bind both parties and their respective successors and assigns. All rights,
privileges and powers granted to each party under this Agreement shall benefit
such party and its successors and assigns.
e. Assignment of Agreement. This Agreement shall not be assigned by
either party without the prior written consent of the other party.
f. Further Assurances. Both parties agree to take any further actions
and to make, execute and deliver any further written instruments which may be
reasonably required to carry out the terms, provisions, intentions and purposes
of this Agreement.
g. Governing Law. This Agreement shall be governed by and construed
and interpreted in accordance with the laws of the State of New York, without
giving effect to principles of conflicts or choice of laws thereof.
h. Severability. If any provision of this Agreement or any application
of any provision is determined to be unenforceable, the remainder of this
Agreement shall be unaffected. If the provision is found to be unenforceable
when applied to particular persons or circumstances, the application of the
provision to other persons or circumstances shall be unaffected.
i. Headings. Headings used in this Agreement have been included for
convenience and ease of reference only and will not in any manner influence the
construction or interpretation of any provision of this Agreement.
12
j. Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original and all of which
together will constitute a single agreement.
[The rest of this page is intentionally left blank]
13
IN WITNESS WHEREOF, the undersigned parties have executed and delivered
this Agreement as of the date first written above.
INTEGRATED SURGICAL SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Executive Officer
Purchaser:
Xxxxxxx Xxxxxx XXX
By: /s/ Xxxxxxx Xxxxxx, XXX
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Investor
Address:
0000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxx 00000
Number of Shares: 24,827
Purchase Price: $15,000
Purchase Price per Share: $0.6042
14
SCHEDULE 3(D)
Outstanding Rights
1. Reference is made to Schedule 3(j)
2. Series G Convertible Preferred Stock
SCHEDULE 3(F)
Capitalization Table
INTEGRATED SURGICAL SYSTEMS
CAP TABLE
SUMMARY
AS OF MARCH 14, 2008
COMMON STOCK OUTSTANDING 4,578,500
WARANTS 30,000
STOCK OPTIONS 63,050
---------
FULLY-DILUTED SHARES O/S 3-14-08 4,671,550
WARRANTS
SBK 30,000 @ $0.625
---------
Total Warrants 30,000
STOCK OPTIONS ex price exp date
-------- ---------
Xxxxx 3,000 $ 0.4000 00-Xxx-00
Xxxxxxx 3,000 $ 0.4000 01-Nov-11
Xxxxxxx 2,000 $ 0.4000 01-Nov-11
Xxxxx 25,000 $ 0.3275 13-Aug-12
Xxxxxxx 25,000 $ 0.3275 13-Aug-12
Various Doctors 5,050 see below
------
63,050
VARIOUS DOCTOR STOCK OPTIONS
Xxxxxx, Dr. 500 $27.5000 03-Oct-09
Xxxxx, Dr. 650 $36.8800 11-Nov-08
Xxxxxxx, Dr. 650 $36.8800 00-Xxx-00
Xxxxxx, Dr. 1,000 $30.0000 13-Mar-10
Lahmer, Dr. 650 $36.8800 11-Nov-08
Xxxx, Dr. K. 50 $10.0000 14-Sep-08
Xxxx, Dr. K. 500 $36.2500 04-Jan-09
Xxxx, Dr. M. 500 $35.6300 25-Jul-09
Xxxxx, Xx. Xxxxx 50 $36.2500 14-Sep-08
Xxxxxxxxx, R 500 $ 0.3100 01-May-12
------
5,050
BASIS FOR CALCULATION OF PURCHASE PRICE
fully-diuted common shares 4,671,550 low price last 5 days = $ 0.2900
plus: adjusted series G 734,548 80% of low price last 5 days $ 0.2300
----------
adjusted fully-diluted shares 5,406,098 # series G shares 168,946
--------
CS equivalent series G 734,548
ISS cash less liabs 2,866,290
shell value 400,000 per term sheet
----------
value ISS 3,266,290
Amount required for 51% 3,399,608 51%
# shares required for 51% 5,626,755 51% B6/.49-B6
price per share $ 0.6042
ISS cash @ 3-14 3,078,452 actual @ 3-13-08 per Xxxxx
All liabilities (212,162) total AP accrued liabs per worksheet
----------
Adjusted net cash @ 2-29-08 2,866,290
17
SCHEDULE 3(H)
Litigation
The Company is aware of a potential matter involving Energex Systems ("Energex")
and its Chief Executive Officer, Xxxxxx X. Xxxxx. Energex has instituted a
demand for a list of the stockholders of the Company in connection with a
potential transaction involving Energex and the Company.
1. Any claims or actions relating to the demand for the list of
stockholders.
2. Any claims or actions relating to the potential transaction with
Energex.
SCHEDULE 3(I)
Material Contracts
1. Agreement to pay $25,000 per annum to each of Xxxxx Xxxxx and Xxxxxxx
Xxxxxxx.
2. Options to purchase 3,000 shares of Common Stock granted in 2006 to each
Messrs. Xxxxx and Xxxxxxx.
3. Agreement to grant 25,000 stock options to each of Messrs. Xxxxx and
Xxxxxxx.
4. Leasehold for the premises located at 0000 X. Xxxxxx Xxxx. #0, Xxxxxxxxxx,
Xxxxxxxxxx 00000 by and between the Company, as tenant, and JB Management
LP, as landlord.
5. Advisory Services Agreement dated as of November 28, 2007 by and between
MDB Capital Group LLC and the Company.
SCHEDULE 3(K)
Benefit Plans
See Schedule 3(h)
EXHIBIT A
Registration Rights Agreement
EXHIBIT B
Investor Questionnaire
INTEGRATED SURGICAL SYSTEMS, INC.
INVESTOR QUESTIONNAIRE
(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)
To: Integrated Surgical Systems, Inc.
0000 Xxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
This Investor Questionnaire ("Questionnaire") must be completed by each
potential investor in connection with the offer and sale of the shares of the
common stock, par value $.01 per share, of Integrated Surgical Systems, Inc.
(the "Securities"). The Securities are being offered and sold by Integrated
Surgical Systems, Inc. (the "Corporation") without registration under the
Securities Act of 1933, as amended (the "Act"), and the securities laws of
certain states, in reliance on the exemptions contained in Section 4(2) of the
Act and on Regulation D promulgated thereunder and in reliance on similar
exemptions under applicable state laws. The Corporation must determine that a
potential investor meets certain suitability requirements before offering or
selling Securities to such investor. The purpose of this Questionnaire is to
assure the Corporation that each investor will meet the applicable suitability
requirements. The information supplied by you will be used in determining
whether you meet such criteria, and reliance upon the private offering exemption
from registration is based in part on the information herein supplied.
This Questionnaire does not constitute an offer to sell or a solicitation
of an offer to buy any security. Your answers will be kept strictly
confidential. However, by signing this Questionnaire you will be authorizing the
Corporation to provide a completed copy of this Questionnaire to such parties as
the Corporation deems appropriate in order to ensure that the offer and sale of
the Securities will not result in a violation of the Act or the securities laws
of any state and that you otherwise satisfy the suitability standards applicable
to purchasers of the Securities. All potential investors must answer all
applicable questions and complete, date and sign this Questionnaire. Please
print or type your responses and attach additional sheets of paper if necessary
to complete your answers to any item.
A. BACKGROUND INFORMATION
Name: __________________________________________________________________________
Business
Address: _______________________________________________________________________
(Number and Street)
___________________________ ______________________ __________________________
(City) (State) (Zip Code)
Telephone
Number: (___) __________________________________________________________________
Residence
Address: _______________________________________________________________________
(Number and Street)
___________________________ ______________________ __________________________
(City) (State) (Zip Code)
Telephone
Number: (___) __________________________________________________________________
If an individual:
Where
registered to
Age:___________ Citizenship: __________________ vote: _______________
If a corporation, partnership, limited liability company, trust or other entity:
Type of entity: ________________________________________________________________
State of incorporation: ________________________________________________________
Social Security or
Taxpayer Identification
No. _______________________________________________________
Send all correspondence to (check Residence
one): _______Address __________Business Address
Current ownership of securities of the Corporation:
______shares of common stock, par value $.01 per share (the "Common Stock")
______options to purchase shares of common stock
Name(s) of persons with voting
and selling authority of the above
listed Common Stock and the
Common Stock being purchased: __________________________________________________
ii
B. STATUS AS ACCREDITED INVESTOR
The undersigned is an "accredited investor" as such term is defined in
Regulation D under the Act, as at the time of the sale of the Securities the
undersigned falls within one or more of the following categories (Please initial
one or more, as applicable):
____ (1) a bank as defined in Section 3(a)(2) of the Act, or a savings and
loan association or other institution as defined in Section 3(a)(5)(A) of the
Act whether acting in its individual or fiduciary capacity; a broker or dealer
registered pursuant to Section 15 of the Securities Exchange Act of 1934; an
insurance company as defined in Section 2(13) of the Act; an investment company
registered under the Investment Corporation Act of 1940 or a business
development company as defined in Section 2(a)(48) of that Act; a Small Business
Investment Corporation licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of 1958; a plan
established and maintained by a state, its political subdivisions, or any agency
or instrumentality of a state or its political subdivisions for the benefit of
its employees, if such plan has total assets in excess of $5,000,000; an
employee benefit plan within the meaning of the Employee Retirement Income
Security Act of 1974 if the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of such Act, which is either a bank, savings and loan
association, insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of $5,000,000 or, if a
self-directed plan, with the investment decisions made solely by persons that
are accredited investors;
____ (2) a private business development company as defined in Section
202(a)(22) of the Investment Adviser Act of 1940;
____ (3) an organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986, as amended, corporation, Massachusetts or similar business
trust, or partnership, not formed for the specific purpose of acquiring the
Securities offered, with total assets in excess of $5,000,000;
____ (4) a natural person whose individual net worth(1), or joint net worth
with that person's spouse, at the time of such person's purchase of the
Securities exceeds $1,000,000;
____ (5) a natural person who had an individual income in excess of
$200,000 in each of the two most recent years or joint income with that person's
spouse in excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year;
____ (6) a trust, with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the Securities offered, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii) of
Regulation D; and
____ (7) an entity in which all of the equity owners are accredited
investors (as defined above).
----------
(1) As used in this Questionnaire, the term "net worth" means the excess of
total assets over total liabilities. In computing net worth for the purpose
of subsection (4), the principal residence of the investor must be valued
at cost, including cost of improvements, or at recently appraised value by
an institutional lender making a secured loan, net of encumbrances. In
determining income, the investor should add to the investor's adjusted
gross income any amounts attributable to tax exempt income received, losses
claimed as a limited partner in any limited partnership, deductions claimed
for depiction, contributions to an XXX or XXXXX retirement plan, alimony
payments, and any amount by which income from long-term capital gains has
been reduced in arriving at adjusted gross income.
iii
IN WITNESS WHEREOF, the undersigned has executed this Questionnaire this
____ day of ________________, 2008, and declares under oath that it is truthful
and correct.
________________________________________
Print Name
By:
------------------------------------
Signature
Title: _________________________________
(required for any purchaser that is a
corporation, partnership, trust or other
entity)
iv
