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CONFIDENTIAL
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AMENDMENT TO AND RESTATEMENT OF THE
PLACEMENT AGREEMENT
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By and Among
Integrated Surgical Systems
000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000, XXX
("ISS" or the "Company")
Value Management & Research GmbH
Xxxxxxxxxxxx.00
00000 Xxx Xxxxxxxx/Xxxxxxxxxxxx
Xxxxxxx
("VMR")
and
Investmentbank Austria Aktiengesellschaft
Xxxxxxxxxxxxxxx 00
X-0000 Xxxxxx, Xxxxxxx
("IBA")
(ISS, VMR and IBA collectively the "Parties")
October_, 1997
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P R E A M B L E
Whereas, on July 8, 1997 ISS and VMR have entered into an agreement concerning
the co-ordination of the placement of shares of common stock of ISS at US $0.01
par value (the "Shares of Common Stock") and the listing of all Shares of Common
Stock of ISS on a European stock exchange (the "Former Placement Agreement");
Whereas, pursuant to the Former Placement Agreement VMR agreed, inter alia, to
be willing to find one or more underwriters who will subscribe for and
subsequently sell the Shares of Common Stock offered;
Whereas, VMR has found an underwriter, namely IBA, willing to place the Offer
Shares, as defined herein, and a listing sponsor, namely IBA, to arrange for the
listing of the Shares of Common Stock of the Company on the European Association
of Securities Dealers Automated Quotation ("EASDAQ");
Whereas, ISS, VMR and IBA wish and hereby agree that this Amendment to and
Restatement of the Placement Agreement (the "Restated Placement Agreement")
amends and completely restates and supersedes the Former Placement Agreement and
all other prior understandings, arrangements and promises of any form or nature
whatsoever, whether oral or in writing and whether explicit or implicit, with
respect to the Former Placement Agreement.
NOW, THEREFORE, the Parties agree to the following:
I.
Number of Offer Shares subject to the Placement
1. ISS hereby irrevocably agrees, subject to the terms of this Restated
Placement Agreement and an underwriting agreement to be entered into
between ISS and IBA (the "Purchase Agreement"), a draft of which is
enclosed hereto as Appendix A, to issue and sell to IBA and any of the
managers which may become a party to the Purchase Agreement, Shares of
Common Stock of ISS being not less than DM 40,000,000 divided by the lower
amount of the price range within which investors are invited to make an
offer to purchase the Shares of Common Stock during the bookbuilding
period (the "New Shares"). After the bookbuilding period has started the
number of the New Shares may only be increased, but not reduced, in
agreement with ISS, VMR and
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IBA and any of the managers which may become a party to the Purchase
Agreement.
2. ISS agrees, subject to the terms of this Restated Placement Agreement and
the Purchase Agreement, to issue and sell to IBA, at the election of IBA,
up to an additional 15% of the number of the New Shares actually purchased
by (i) IBA and (ii) any of the managers which may become a party to the
Purchase Agreement. These shares are referred to herein as the "Option
Shares". IBA may elect to purchase the Option Shares within a period of 30
calendar days from the Closing Date, as it will be defined in the Purchase
Agreement, for the sole purpose of covering over-allotments in the sale of
the New Shares, and the Option Shares shall be resold on the same terms as
those applicable to the New Shares.
The New Shares together with the Option Shares are referred to herein
collectively as the "Offer Shares".
II.
Confirmations
ISS hereby confirms that:
1. IBA was found and designated as underwriter and listing sponsor by VMR in
respect of the placement of the Offer Shares and the listing of all Shares
of Common Stock of ISS on EASDAQ and, subject to an agreement on the
Purchase Agreement to be concluded between ISS and IBA, ISS confirms that
it has accepted IBA as underwriter and listing sponsor all as contemplated
in the Former Placement Agreement;
2. VMR has fulfilled all and every of its obligations under and in connection
with the Former Placement Agreement and all such obligations of VMR are
now extinguished (erloschen und abgagolten);
3. it will issue, subject to section VII hereof, to VMR and IBA the Warrants
(as defined herein);
4. it will fully cooperate with and assist IBA to the greatest possible
extent, and undertakes to do whatever is necessary or expedient, to effect
the placement of the Offer Shares and the listing of its Shares of Common
Stock of the Company on EASDAQ as contemplated herein
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and subject to the Purchase Agreement to be concluded between ISS and IBA.
III.
Representations and Warranties of the Company
The Company hereby represents and warrants to both VMR and IBA severally that:
1. no person has been appointed, retained or mandated or has acted as a
finder in connection with the transaction contemplated herein;
2. it is duly organized and validly existing under the laws of the state
Delaware and duly qualified in any other jurisdiction where so required by
the laws thereof;
3. it is able to validly issue and sell and have registered the Shares of
Common Stock of the Company and the Warrants and the Warrant Shares (as
defined herein) as contemplated herein;
4. all corporate action necessary to validly issue and sell and have
registered the Offer Shares and Warrants and the Warrant Shares, as
contemplated herein, have been or will be taken; and
5. it will not agree to any changes to the wording of the Purchase Agreement
as attached hereto which may affect VMR's rights hereunder.
IV.
Purchase Price
The Parties agree that the purchase price of the Offer Shares to be placed by
IBA, being the price at which the Offer Shares shall be offered to investors in
the course of the placement of the Offer Shares, shall be determined by the
bookbuilding method to be conducted by IBA being the bookrunner.
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V.
Fees and Expenses
1. The Parties hereby agree that, upon the signing of the Purchase Agreement
and the closing of the transaction described therein:
(a) VMR shall be entitled to receive a fee for its services in the
amount of 3.5% of the total aggregate offer price of the Offer
Shares placed by IBA and the other managers, if any, being the gross
proceeds from the placement of the Offer Shares before deducting any
fees or expenses or concessions or any other amounts (such amount
the "Gross Proceeds").
(b) VMR shall receive a non-accountable expense allowance in the amount
of 0.75% of the Gross Proceeds.
The Company has already paid to VMR, and VMR hereby acknowledges to
have received, an amount of US $25,000 in respect of costs and
expenses incurred by VMR in connection with the arranging for the
placement of the Shares of Common Stock of the Company (the "Prepaid
VMR Costs"). Such Prepaid VMR Costs will be deducted from VMR's
non-accountable expense allowance in the amount of 0.75% of the
Gross Proceeds.
(c) IBA shall receive an underwriting commission for its services in the
amount of 6.0% of the Gross Proceeds.
(d) IBA shall receive a non-accountable expense allowance in the amount
of 2.0% of the Gross Proceeds.
The fee and the non-accountable expense allowance to be paid by ISS to VMR
in the total amount of 4.25% of the Gross Proceeds minus the Prepaid VMR
Costs is referred to herein as the "Fees and Expense Amount".
2. ISS hereby instructs IBA to withhold from the proceeds from the placement
of the Offer Shares the above Fees and Expense Amount and to pay the Fees
and Expense Amount, no later than on the date on which IBA is required to
pay the proceeds from the placement of the Offer Shares to ISS, to an
account to be designated by VMR in readily available clear funds
denominated in Deutsche xxxx, which shall be set
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forth explicitly in the Purchase Agreement to be concluded between IBA and
ISS.
3. VMR will bear and pay and hold IBA harmless against any transfer tax or
other tax, duties or fees imposed by the United States, the state of
Delaware, the United Kingdom, the Republic of Austria or any other
country, including any interest and penalties, which are or may be
required to be paid, and against any value added or similar taxes ("VAT")
payable in connection with the payment of the Fees and Expense Amount
withheld from the proceeds form the placement of the Offer Shares. IBA
shall inform VMR immediately when it learns that any such taxes, duties,
fees or VAT are (i) due, or (ii) purported to be due. VMR is not obliged
to pay and hold IBA harmless for any such penalty or interest incurring
after IBA has learned of any such taxes, duties, fees or VAT and did not
notify VMR immediately thereof.
4. In order to secure VMR's claims against it, ISS hereby assigns to VMR as
security and not in lieu of discharge and satisfaction a part of its
claims against IBA pursuant to the terms of the Purchase Agreement for the
payment of the proceeds from the placement of the Offer Shares in the
amount of 4.25% of the Gross Proceeds minus the Prepaid VMR Costs from the
Offer Shares placed with IBA (the "Assignment"). ISS hereby notifies IBA
of this Assignment and IBA hereby acknowledges such Assignment.
5. If the claims of ISS against IBA assigned to VMR pursuant to section V.4
hereof are, or will be, governed by laws other than German law, the
Assignment shall be interpreted in such a way that it creates as far as
possible a security interest under the law governing such claims which
corresponds as closely as possible to the economic aim pursued by this
Restated Placement Agreement. At the reasonable request of VMR, ISS shall
confirm or create and document and/or register such foreign security
interest at its own expense. ISS shall notify VMR as soon as reasonably
possible if the claims are not governed by German law.
6. If, for whatever reason, ISS, IBA or VMR is required by law or regulation
or otherwise (or by reason of a request by the NASD) to reduce, or accept
a reduction of, the fees owed by ISS to IBA and/or VMR, the respective
total reduction shall generally be divided between VMR and IBA in the
ratio of 50/50 unless either IBA or VMR requests for any reason whatsoever
a complete renegotiation of the fee split between VMR and IBA.
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VI.
Registration
1. The Company will use its best efforts to effectuate the registration of
the Company's Shares of Common Stock with the U.S. Securities and Exchange
Commission (the "Commission"), including the preparation and initial
filing of registration statements, together with any necessary exhibits.
2. The Company shall be responsible for the registration of the Offer Shares
with the Commission and the preparation of all documents necessary
therefor as well as for any action to be taken necessary to effect the
registration with any other relevant U.S. regulatory or market
authorities. Proposed registration statements will be submitted to IBA for
review and approval with a copy for the files of VMR as soon as possible
after they have been prepared. The Company shall provide IBA and its legal
counsel with all related materials they may reasonably request in a timely
and cooperative manner.
3. All documents to be filed with the Commission, in particular the financial
statements contained in the registration statements, shall be in
compliance with the rules and regulations of the Commission. The Company
is responsible for all costs relating to the preparation and filing of any
documents necessary to effect the registration of the Offer Shares with
the Commission.
VII.
Warrants
1. Issuance and Sale.
On the Closing Date, as defined in the Purchase Agreement, the Company
will issue and sell to VMR for an aggregate purchase price of US$5.00,
warrants entitling VMR to purchase at its option such number of Shares of
Common Stock equal to 5 percent of the number of New Shares purchased by
IBA and the other managers, if any, pursuant to the Purchase Agreement
(the "VMR Warrants"). Also on the Closing Date, the Company will issue and
sell to IBA for an aggregate purchase price of US$5.00, warrants entitling
IBA to purchase at its option such number of Shares of Common Stock equal
to 5 percent of the number of New Shares purchased by IBA and the other
manag-
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ers, if any, pursuant to the Purchase Agreement (the "IBA Warrants", the
VMR Warrants and the IBA Warrants, collectively, the "Warrants". The
shares issuable upon exercise of the Warrants, respectively, the "IBA
Warrant Shares"; the "VMR Warrant Shares"; collectively, the "Warrant
Shares"). The Company will issue such aggregate number of Warrants equal
to 10% of the number of New Shares, so that one Warrant initially shall be
exercisable for one Share of Common Stock. In addition, ISS agrees to
issue and sell to IBA upon the election of IBA made within one week
following the Closing Date, any and all Warrants that VMR was entitled to
purchase hereunder but did not elect to purchase on the Closing Date, and
ISS agrees to issue and sell to VMR upon the election of VMR made within
one week following the Closing Date, any and all Warrants that IBA was
entitled to purchase hereunder but did not elect to purchase on the
Closing Date. On the date that is eight days following the Closing Date,
the Company will present to each of VMR and IBA a warrant certificate
(each, a "Warrant Certificate") depicting thereon the number of Warrants
held by each of them.
2. Exercise; Transfer Restrictions.
(a) The Warrants will be exercisable, in whole or in part, for a period of
four years, such period (the "Exercise Period") to commence on the date
that is one year after the Closing Date (the "Exercise Commencement Date")
and terminate on the date that is five years after the Closing Date (the
"Exercise Termination Date"). Any Warrants not exercised prior to the
Exercise Termination Date shall automatically expire on that date. The
exercise price of a Warrant (the "Exercise Price") shall be 120 percent of
the price at which each New Share is offered and sold to investors in
connection with the placement of Offer Shares, and may be adjusted as
otherwise provided in Section VII.4 hereof. Upon presentation and
surrender of a Warrant Certificate, with the attached purchase form duly
executed, at the principal office of the Company, together with a
certified check payable to the Company in the amount of the Exercise Price
multiplied by the number of Warrants sought to be exercised, the Company
shall deliver to the holder of such Warrants, as promptly as possible,
certificates of Common Stock representing the number of Warrants exercised
and an amended Warrant Certificate of like tenor entitling the holder to
purchase the number of Shares of Common Stock for which the holder had not
exercised its Warrants.
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(b) The Warrants will not be freely transferable until the Exercise
Commencement Date, with the exception of transfers to officers or partners
of VMR, IBA, or of the other underwriters or selling group members, if
any. Thereafter, the Warrants will be transferrable in accordance with
applicable provisions of the Securities Act of 1933, as amended (the "1933
Act"), any other binding laws or regulations, and the requirements of any
stock exchanges on which the Company's shares are then listed.
3. Registration Rights.
(a) The Company agrees that, upon the joint written request of IBA and VMR,
made at any time during the Exercise Period, to file, at its sole expense,
the appropriate Registration Statement under the 1933 Act with respect to
the IBA Warrants and the VMR Warrants and the Company shall use its best
efforts to ensure that such Registration Statement becomes effective.
Moreover, without prejudice to the foregoing registration rights, in the
event the Company files a Registration Statement pursuant to the 1933 Act
(other than a Registration on Form S-4 or Form S-8) at any time during the
Exercise Period, the Company shall, at its sole expense, offer to IBA,
VMR, and any other holders of the Warrants, the opportunity to register
their respective unregistered Warrants, if any. In the event the Company's
underwriter(s) in connection with such future offering object to the
inclusion of the Warrants sought to be included, the Company will
undertake to file at its sole expense a Registration Statement relating
to Warrants with respect to which such "piggyback" registration rights are
sought to be exercised within 6 months of the conclusion of such future
offering.
(b) The Company hereby agrees to indemnify and hold harmless each holder of
any Warrants and each person, if any, who controls such holder within the
meaning of Section 15 of the 1933 Act, from and against any and all
losses, claims, damages, expenses and liabilities caused by any untrue
statement of a material fact contained in any registration statement or
any prospectus furnished under the 1933 Act with respect to such Warrants
or by any omission to make a statement necessary to make the statements
contained therein not misleading.
4. Adjustments.
The Exercise Price and the number of Warrant Shares are subject to
adjustment from time to time during the period from the Closing Date
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until the Exercise Termination Date upon the occurrence of any of the
events enumerated in (a) through (e) hereof:
(a) Aggregation of Shares of Common Stock.
If, after the Closing Date, the number of Shares of Common Stock
outstanding (as calculated pursuant to subsection (f)(5) hereof, the
"Outstanding Shares") is decreased by a consolidation or reclassification
or otherwise (including by repurchase or cancellation), then, from and
after the record date for such event, the number of Warrant Shares
issuable upon exercise of the Warrants shall be decreased in proportion to
such decrease in Outstanding Shares and the then applicable Exercise Price
shall be proportionately increased;
(b) Stock Dividends.
If, after the Closing Date, the number of Outstanding Shares is increased
by a stock dividend payable in Shares of Common Stock or by an allotment
of Shares of Common Stock made to holders of Shares by way of a
capitalization of reserves or by a reclassification of Shares of Common
Stock, then, from and after the date following the record date for such
stock dividend or allotment or reclassification, the number of Warrant
Shares issuable upon exercise of the Warrants shall be increased in
proportion to such increase in Outstanding Shares and the then applicable
Exercise Price shall be proportionately decreased;
(c) Special Dividends.
If securities of the Company (other than Shares of Common Stock) or assets
(other than cash dividends payable out of retained earnings) are issued by
way of a dividend on Shares of Common Stock, then the Exercise Price shall
be adjusted so that it shall equal the price determined by multiplying the
Exercise Price in effect immediately prior to the close of business on
such record date by a fraction, the numerator of which shall be the market
price on such record date (which is hereby defined to equal the average of
the closing prices of the Shares on NASDAQ over the five trading days
preceding the applicable date; as so defined, the "Market Price") less the
then fair market value (as determined by the Board of Directors of the
Company in good faith) of the securities or assets distributed in respect
of one Outstanding Share, and the denominator of which shall be such
Market Price. Such adjustment shall become effective immediately prior to
the opening of business on the first business day following such record
date.
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(d) Merger, Reorganization, etc.
If there shall be effected any amalgamation or merger of the Company with
another corporation or other entity or any sale of all or substantially
all of the Company's assets to another entity in which holders of
Outstanding Shares shall receive in exchange for their Outstanding Shares
other securities or assets (each, a "Fundamental Transaction"), then, as a
condition to the closing of such Fundamental Transaction, lawful and fair
provision shall be made whereby the holder of each Warrant shall
thereafter have the right to purchase and receive, upon the basis and upon
the terms and conditions specified in the Warrants and in lieu of the
Warrant Shares issuable upon the exercise of the Warrants, such securities
or assets as may be issued or payable with respect to or in exchange for
that number of Warrant Shares issuable upon the exercise of the Warrants
immediately prior to such closing of such Fundamental Transaction. In any
such case appropriate provision shall be made with respect to the rights
and interests of the holders of the Warrants such that the provisions of
this Section IV (including, without limitation, provisions for the
adjustments of the Exercise Price and the number of Warrant Shares
purchasable upon the exercise of the Warrants) shall thereafter be
applicable, as nearly as may be practicable, in relation to any securities
or assets thereafter deliverable upon the exercise thereof. The Company
shall not effect any such Fundamental Transaction unless prior to the
consummation thereof the successor entity (if other than the Company)
resulting from such Fundamental Transaction or the entity purchasing such
assets, shall assume by written instrument executed and delivered to IBA
and VMR the obligation to deliver to the holders of the Warrants such
securities or assets as, in accordance with the foregoing provisions, such
holders may be entitled to purchase.
(e) issuance of Shares of Common Stock at Below Exercise Price.
In the event the Company issues any additional Shares of Common Stock
(other than as contemplated by paragraph (k) below) without consideration
or for a consideration per share less than both the "Market Price" (as
hereinafter defined) per Share of Common Stock on the trading day
immediately preceding such issuance or sale and the Exercise Price in
effect immediately before the issuance of such additional Shares of Common
Stock, then the Exercise Price in effect immediately before the issuance
of such additional Shares of Common Stock shall simultaneously be adjusted
to a price equal to the quotient ob-
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tained by dividing (i) an amount equal to (x) the number of Outstanding
Shares multiplied by the Exercise Price plus (y) the aggregate
consideration received by the Company for all additional Shares of Common
Stock proposed to be issued by (ii) an amount equal to the sum of the
number of Outstanding Shares plus the number of additional Shares of
Common Stock proposed to be issued. As used herein, the phrase "Market
Price" at any date shall be deemed to be the average of the last reported
sale price, or, in case no such reported sale takes place on such day, the
average of the last reported sale prices for the last three trading days,
in either case as officially reported by the principal securities exchange
on which the Common Stock is listed or admitted to trading or as reported
in the Nasdaq Stock Market, or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or quoted on the
Nasdaq Stock Market, the closing bid quotation as furnished by the
National Association of Securities Dealers, Inc. through Nasdaq or a
similar organization if Nasdaq is no longer reporting such information, or
if the Common Stock is not quoted on Nasdaq, as determined in good faith
by resolution of the Board of Directors of the Company, based on the best
information available to it for the day immediately preceding such
issuance or sale, the day of such issuance or sale and the day immediately
after such issuance or sale. If the Common Stock is listed or admitted to
trading on a national securities exchange and also quoted on the Nasdaq
Stock Market, the Market Price shall be determined as hereinabove provided
by reference to the prices reported in the Nasdaq Stock Market; provided
that if the Common Stock is listed or admitted to trading on the New York
Stock Exchange, the Market Price shall be determined as hereinabove
provided by reference to the prices reported by such exchange.
(f) For the purposes of any computations to be made in accordance with this
section VIII.4, the following provisions shall apply:
(1) in case of the issuance or sale of Shares of Common Stock for a
consideration part or all of which is cash, the amount of the cash
consideration therefor shall be deemed to be the amount of cash
received by the Company for such Shares of Common Stock (or if,
Shares of Common Stock are offered by the Company for subscription,
the subscription price, or, if such Shares of Common Stock are being
sold to underwriters or dealers for public offering without a
subscription offering, the public offering price) before deducting
therefrom any compensation paid or discount allowed in the sale or
underwriting or purchase
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thereof by underwriters or dealers or others performing similar
services, or any expenses incurred in connection therewith;
(2) In case of the issuance or sale (other than as a dividend or other
distribution on any class of equity securities of the Company) of
Shares of Common Stock for a consideration part or all of which
shall be other than in cash, the amount of the consideration
therefor other than cash shall be deemed to be the fair market value
of such consideration as determined in good faith by the Board of
Directors of the Company;
(3) Shares of Common Stock issued by way of dividend or other
distribution on the Shares of Common Stock shall be deemed to have
been issued immediately after the opening of business on the first
business day following the record date for the determination of
stockholders entitled to receive such dividend or other distribution
and shall be deemed to have been issued without consideration;
(4) The reclassification of securities of the Company other than Shares
of Common Stock into securities including Shares of Common Stock
shall be deemed to involve the issuance of Shares of Common Stock
for a consideration other than cash immediately prior to the close
of business on the date fixed for the determination of security
holders entitled to receive such Shares of Common Stock, and the
value of the consideration allocable to such Shares of Common Stock
shall be determined as in subsection 4(f)(2) hereof;
(5) The number of Shares of Common Stock at any one time outstanding
shall include the aggregate number of Shares of Common Stock issued
or issuable (subject to readjustment upon the actual issuance
thereof) upon the exercise of options, rights, warrants, and upon
the conversion or exchange of convertible or exchangeable
securities.
(g) Without prejudice to the foregoing provisions, the Company may, in its
discretion, at any time during the term of the Warrants, reduce the then
current Exercise Price to any amount and for any period of time deemed
appropriate by the Board of Directors of the Company.
(h) Upon any adjustment to the Exercise Price or the number of Warrant Shares
issuable upon exercise of the Warrants, in each case, the
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Company shall give written notice thereof to IBA and VMR, which notice
shall state the Exercise Price resulting from such adjustment and the
increase or decrease, if any, in the number of Warrant Shares purchasable
at such price upon the exercise of a Warrant, setting forth in reasonable
detail the method of calculation and the facts upon which such calculation
is based. Failure to give such notice, or any defect therein, shall not
affect the legality or validity of the subject adjustment(s).
(i) Any adjustments to the amount of Warrant Shares issuable upon exercise of
Warrants made pursuant to this Section VII.4 shall be made only to the
nearest whole Share.
(j) The Company may retain a firm of independent public accountants of
recognized standing (which may be any such firm regularly employed by the
Company) to make any computation required under this section VII.4, and a
certificate signed by such firm shall be conclusive evidence of the
correctness of the computation made hereunder.
(k) Notwithstanding anything herein to the contrary, no adjustment of the
Exercise Price shall be made:
(i) Upon the issuance or sale of the Offer Shares; or
(ii) Upon the issuance or sale of the Warrant Shares;
(iii) Upon (A) the issuance of options pursuant to the Company's stock
option plan in effect on the date hereof or as hereafter amended in
accordance with the terms thereof or any other employee or executive
stock option plan existing as of the date hereof and approved by
stockholders of the Company or the sale by the Company of any Shares
of Common Stock pursuant to the exercise of any such options, or (B)
the issuance or sale by the Company of any Shares of Common Stock
pursuant to the exercise of any options or warrants issued and
outstanding on the Closing Date.
5. Covenants of the Company.
(a) The Company covenants and agrees that all Warrants delivered hereunder
will, upon delivery, be duly and validly authorized and issued, and free
from all stamp-taxes, liens, and charges with respect to the purchase
thereof. In addition, the Company agrees at all time to reserve
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and keep available an authorized number of Shares of Common Stock
sufficient to permit the exercise in full of all outstanding Warrants.
(b) The Company covenants and agrees that all Shares of Common Stock delivered
upon exercise of any and all of the Warrants shall, upon delivery, be duly
and validly authorized and issued, fully paid and non-assessable, and free
from all stamp taxes, charges, and liens with respect to the purchase
thereof.
VIII.
Undertakings
1. Undertakings of ISS
ISS undertakes that:
(a) on the closing of the offering related to the transaction described in the
Purchase Agreement it shall have outstanding capital consisting of not
more than approximately 13,000,000 (thirteen million) Shares of Common
Stock which for this purpose shall be computed on a "fully diluted" basis,
i.e. such number shall include all Shares of Common Stock outstanding,
Common Stock equivalents, any security similar to the Shares of Common
Stock and stock appreciation rights and will assume the conversion,
exchange and exercise of all existing securities and other rights that are
(or will be with the passage of time or the occurrence of any other
condition or circumstance, whether vested or not) convertible,
exchangeable or exercisable for Shares of Common Stock;
(b) it will take all necessary and desirable measures to ensure management
continuity;
(c) it will send to VMR for its information copies of all documents that the
Company or its public relations advisors intend to distribute prior to
such distribution:
(d) it will comply with all legal requirements and undertake all actions in
connection with its certificate of incorporation and by-laws necessary and
proper to effect the registration and the placement of the Shares of
Common Stock and the listing of its Shares of Common Stock on EASDAQ;
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(e) it will for so long as the Shares of Common Stock are registered under the
1933 Act hold an annual meeting of shareholders for the election of
directors within 180 days after the end of each of the Company's fiscal
year and, within 150 days after the end of each of the Company's fiscal
years, will provide the Company's shareholders with the audited financial
statements of the Company as of the end of the fiscal year just completed
prior thereto; such financial statements shall be those required by Rule
14a-3 under the Securities Exchange Act of 1934, as amended (the "1934
Act") and shall be included in an annual report pursuant to the
requirements of such rule;
(f) it will for a period of five years from the Closing Date, as defined in
the Purchase Agreement, at its expense, provide VMR and IBA with "DTC" or
equivalent transfer sheets for such five-year period; and
(g) it will not negotiate with, appoint, retain or mandate any other person as
finder with a view of selling, placing, offering or listing any securities
of the Company for as long as this Restated Placement Agreement is in
effect and not terminated.
2. Undertakings of ISS and IBA
IBA and ISS each severally undertake vis a vis VMR that any material or
document prepared in connection with the registration, purchase, offering,
placement and listing of shares of common stock of ISS as contemplated
hereunder will be prepared in such manner that it is clear beyond any
doubts that (i) VMR does not and will not participate and has not
participated in any manner whatsoever in the registration of the Offer
Shares or in the listing of the shares of common stock of ISS on EASDAQ,
and that VMR does not and will not participate in and/or contribute to and
has not participated in and/or contributed to, in any manner whatsoever,
the preparation of any prospectus (including in particular the Preliminary
Prospectus and the Final Prospectus and the listing prospectus as those
terms are defined in the hereto attached Purchase Agreement), or in any
registration statement or any other material (including any Offering
Documents as this term is defined in the hereto attached Purchase
Agreement) in connection with the purchase, offering, placement,
registration and listing of shares of common stock of ISS as contemplated
herein (all such prospectuses, documents and material collectively the
"Placement Material"), and (ii) VMR has no responsibility whatsoever for
the preparation or the contents of any such Placement Material and (iii)
VMR's role in connection with the registration, purchase, offering,
placement and
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listing of shares of common stock of ISS as contemplated hereunder was
only to find an underwriter and a listing sponsor willing to purchase and
place and offer and have listed ISS shares of common stock as contemplated
under the Former Placement Agreement.
IX.
Failure of Placement; Termination
1. Should for whatever reason the placement of the Offer Shares fail to occur
with IBA by July 8, 1998, in particular if (i) ISS and IBA fail to agree
on the terms of the Purchase Agreement by July 8, 1998, or (ii) IBA or ISS
makes a Declaration of Withdrawal, the following shall apply:
(a) VMR shall be reimbursed for its actual costs and out-of-pocket
expenses (including lawyers' fees) in connection with the finding of
an underwriter willing and able to place the Offer Shares of up to
US $150,000, from which amount the Prepaid VMR Costs shall be
deducted, payable ten days after the earlier of (i) July 8, 1998 or
(ii) at such time that IBA or ISS declares that it will not proceed
with the transaction and place the Offer Shares as contemplated
hereunder and under the Purchase Agreement (the "Declaration of
Withdrawal").
(b) IBA shall be reimbursed for all its actual costs and expenses
related to the contemplated offering and listing of the Shares of
Common Stock of the Company on EASDAQ (including, without
limitation, costs of IBA's legal advisors and costs and expenses
incurred in connection with press conferences, roadshows and any
other public relations activities, the printing and delivery of the
offering documents and the research report regarding the Company)
payable ten days after the earlier of (i) July 8, 1998 or (ii) IBA
or ISS made the Declaration of Withdrawal.
ISS and VMR hereby acknowledge that IBA has the right to make at its sole
discretion a Declaration of Withdrawal at any time and for any reason.
2. Should either IBA or ISS make a Declaration of Withdrawal before July 8,
1998, then this Restated Placement Agreement shall be terminated as of the
date of such Declaration of Withdrawal and the Former
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Placement Agreement shall be set in full force and effect as if it was not
amended and restated by this Restated Placement Agreement.
3. If the Restated Placement Agreement is terminated in accordance with the
provisions of section IX.2 hereof, such termination shall be without
liability of any Party to any other Party, except that (i) the Company
shall remain liable to pay to (x) VMR the actual costs and out of pocket
expenses mentioned in section IX.1.(a), and (y) IBA the actual costs and
expenses mentioned in section IX.1.(b), and (ii) sections X, XII and XIII
shall remain in full force and effect.
X.
Indemnification
1. The Company shall indemnify and hold harmless each of VMR and IBA
severally against any and all losses, liabilities, claims and law suits,
including but not limited to any and all awards and/or judgments, joint or
several, to which they may become subject under 1933 Act, the 1934 Act,
any other federal or state statute, at common law or otherwise, and the
laws of any other jurisdiction, in particular under the German Stock
Exchange Act or the German Securities Sales Prospectus Act or the German
general civil law prospectus liability, insofar as said losses,
liabilities, claims and lawsuits (including awards and/or judgments) arise
out of or are in connection with the registration statement filed by the
Company in the United States and therewith related exhibits filed under
the 1933 Act in connection with this Restated Placement Agreement, any
offering prospectus or other offering material prepared in connection with
the offering of the Offer Shares and the listing of all Shares of Common
Stock of the Company on EASDAQ, in particular by reason of an untrue
statement or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact, except that (i) VMR may not
be indemnified and held harmless for any liabilities, claims and lawsuit
(including awards and/or judgments), arising out of VMR's grossly
negligent acts or omissions or its willful misconduct and (ii) IBA may not
be indemnified and held harmless for liabilities, claims and lawsuit
(including awards and/or judgments), arising out of IBA's grossly
negligent acts or omissions or its willful misconduct unless such section
X.1.(ii) is modified by the Purchase Agreement. In addition, the Company
shall also indemnify and hold harmless each of VMR and IBA severally
against any and all costs and expenses, including reasonable counsel fees,
incurred or relating to the foregoing.
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2. Each of VMR and IBA shall give the Company prompt notice of any such loss,
liability, claim or lawsuit that VMR and/or IBA contend is the subject
matter of the Company's indemnification and the Company thereupon shall be
granted the right to take any and all necessary and proper action, at its
sole cost and expense, with respect to such liability, claim or lawsuit,
including the right to settle, compromise and dispose of such liability,
claim or lawsuit.
3. (a) VMR shall indemnify and hold the Company harmless against any and
all losses, liabilities, claims and lawsuits, including any and all
awards and/or judgement(s), to which it may become subject under the
1933 Act, the 1934 Act, any other federal or state statute, at
common law or otherwise, and the laws of any other jurisdiction in
which the Offer Shares will be offered to the public in the course
of the placement of the Offer Shares, insofar as said losses,
liabilities, claims, and lawsuits (including awards and/or
judgement(s)) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact or omission of a
material fact, which statement or omission was made in reliance upon
information furnished in writing to the Company by VMR or on VMR's
behalf with the explicit request by VMR to include such information
in any material to be distributed or otherwise disclosed to the
public and shall also indemnify and hold the Company harmless
against any and all costs and expenses, including reasonable counsel
fees, incurred or relating to the foregoing.
(b) VMR had made certain oral presentations to four investment houses,
not including IBA, where VMR presented ISS with data based on
figures provided by ISS together with an analysis of the strategic
outlook of ISS' position in the market prepared by VMR which was
also based on ISS figures specifically for the purpose of presenting
ISS to such investment houses in order to find an underwriter and
listing sponsor for shares of common stock of ISS as contemplated
under the Former Placement Agreement (the "Presentations"). VMR
agrees to indemnify and hold IBA harmless against any and all
losses, liabilities, claims and lawsuits, including any and all
awards and/or judgement(s) to which it may become subject, provided
that insofar as said losses, liabilities, claims and lawsuits,
including any and all awards and/or judgement(s) to which it may
become subject, are based upon any untrue statement or alleged
untrue statement of a material fact or omission of a material fact,
which statement or omission was
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made in the Presentations before IBA was designated by VMR as
underwriter and listing sponsor to ISS as contemplated under the
Former Placement Agreement and shall also indemnify and hold IBA
harmless against any and all costs and expenses, including
reasonable counsel fees, incurred or relating to the foregoing.
4. Each of the Company and IBA shall give the VMR prompt notice of any such
loss, liability, claim or lawsuit that the Company and/or IBA contend is
the subject matter of VMR's indemnification and VMR thereupon shall be
granted the right to take any and all necessary and proper action, at its
sole cost and expense, with respect to such loss, liability, claim and
lawsuit, including the right to settle, compromise or dispose of such
liability, claim or lawsuit, excepting therefrom any and all proceedings
or hearings before any regulatory bodies and/or authorities.
5. The Company shall indemnify each of VMR and IBA with respect to any claim
for any finder's fees in connection with the placement of the Offer
Shares.
XI.
Consulting Fee
The Company hereby retains VMR for a duration of one year for consulting and M&A
services for a monthly fee of US$ 2,000, a total consideration of US$ 24,000,
commencing the first month after the Closing Date, as defined in the Purchase
Agreement.
XII.
Governing Law and Jurisdiction
1. This Restated Placement Agreement shall be governed by and interpreted and
enforced in accordance with the laws of the Federal Republic of Germany,
except that the Assignment of the claims pursuant to section V.4 hereof
shall be governed by English laws if the Purchase Agreement is governed by
English laws.
2. ISS hereby irrevocably consents and submits to the exclusive jurisdiction
of the courts of Frankfurt/Main, Germany. Each of VMR and IBA, however, is
entitled at its discretion to pursue its claims also before any competent
court in the United States of America, the
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Republic of Austria and in any other country. In any such courts the laws
of the Federal Republic of Germany shall likewise be applied.
XIII.
Miscellaneous
1. If any of the provisions of this Restated Placement Agreement should be or
become invalid, unenforceable or impractical in whole or in part, the
validity of the other provisions hereof shall not be affected thereby. In
that case the invalid, unenforceable or impractical provision is deemed to
be replaced by such valid and enforceable provision or arrangement, which
corresponds as closely as possible to the invalid, unenforceable or
impractical provision and to the Parties' economic aims pursued by and
reflected in this Restated Placement Agreement. The same applies in the
event that this Restatement of the Placement Agreement does not contain a
provision which it needs to contain in order to achieve the economic
purpose as expressed herein (Regelungslucke).
2. This Restated Placement Agreement amends and completely restates the
Former Placement Agreement entered into between ISS and VMR of 8 July 1997
in its entirety.
3. This Restated Placement Agreement terminates on July 8, 1998 unless
terminated earlier by Declaration of Withdrawal of either IBA or ISS.
4. IBA, ISS and VMR undertake and covenant to each other to fully cooperate
and do whatever is necessary or expedient to effect the placement of the
Offer Shares and the listing of the Shares of Common Stock as contemplated
hereunder. However such obligation to cooperate does not affect, limit,
qualify or reduce IBA's rights in any way whatsoever to make, within IBA's
sole discretion, at any time and for any reason whatsoever, a Declaration
of Withdrawal.
5. This Restated Purchase Agreement may be executed in counterparts and, when
a counterpart has been executed by each party, all such counterparts taken
together shall constitute one and the same agreement.
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This ____ day of September 1997 at_____________________________________________.
By: By: By:
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Integrated Surgical Value Management Investmentbank
Systems Research GmbH Austria
Aktiengesellschaft
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