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EXHIBIT 4.1
Registration Rights Agreement dated September 5, 1997 by and among the
Registrant and the holders of the outstanding capital stock of
Innovative Medical Machines International, S.A.
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REGISTRATION RIGHTS AGREEMENT
This Rights Agreement dated as of September 5, 1997 (the "Effective
Date") is entered into by and among Integrated Surgical Systems, Inc., a
Delaware corporation (the "Company") and the individuals and entities listed on
Exhibit A hereto (the "Sellers").
WHEREAS, the Company and the Sellers have entered into a Stock Purchase
Agreement of even date herewith (the "Purchase Agreement"); and
WHEREAS, the Company and the Sellers desire to provide for certain
rights to the shares of capital stock of the Company has proposed to issue to
the Sellers under the terms of the Purchase Agreement;
WHEREAS, the Company and the Sellers desire to provide for certain
arrangements with respect to the registration of shares of capital stock of the
Company under the Securities Act of 1933;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" means the Securities and Exchange Commission, or any
other Federal agency at the time administering the Securities Act.
"Common Stock" means the common stock, $.01 par value per share,
of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar Federal statute, and the rules and regulations of the
Commission issued under such Act, as they each may, from time to time, be in
effect.
"Registration Statement" means a registration statement filed by
the Company with the Commission for a public offering and sale of Common Stock
(other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation).
"Registration Expenses" means the expenses described in Section
2.4.
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"Registrable Shares" means (i) the Purchase Price Shares and (ii)
any other shares of Common Stock of the Company issued in respect of the
Purchase Price Shares (because of stock splits, stock dividends,
reclassifications, recapitalizations, or similar events).
"Securities Act" means the Securities Act of 1933, as amended, or
any similar Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Purchase Price Shares" shall have the meaning specified in
Section 1.2 of the Purchase Agreement.
"Stockholders" means the Sellers and any persons or entities to
whom the rights granted under this Agreement are transferred by any Sellers,
their successors or assigns pursuant to Section 3 hereof.
2. Registration Rights.
2.1. Required Registration. The Company shall use its best efforts to
become eligible to use Form S-3 (or any successor form relating to resale
registration) on November 21, 1997, or as soon as thereafter as is possible.
Upon becoming S-3 eligible, the Company shall then use its best efforts to
effect the registration on Form S-3, or such successor form, for all Registrable
Shares.
2.2. Incidental Registrations.
(a) Whenever the Company proposes to file a Registration Statement
(except for the Registration Statement the Company currently has on file as of
the Effective Date), prior to such filing it shall give written notice to all
Stockholders of its intention to do so, and upon the written request of a
Stockholder or Stockholders given within 20 days after the Company provides such
notice (which request shall state the intended method of disposition of such
Registrable Shares), the Company shall cause all Registrable Shares which the
Company has been requested to register to be registered under the Securities Act
to the extent necessary to permit their sale or other disposition in accordance
with the intended methods of distribution specified in the request of such
Stockholder(s); provided, however, the Stockholders rights under Section 2.2 of
this Agreement shall be subject and subordinate only to the registration rights
held by those certain security holders of the Company pursuant to Section 3 of
the Registration Rights Agreement dated December 21, 1995 (the "Existing Rights
Agreement") by and among the Company and such certain security holders of the
Company ("Existing Rights Holders").
(b) In connection with any offering under this Section 2.2
involving an underwriting, the Company shall not be required to include any
Registrable Shares in such
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underwriting unless the holders thereof accept the terms of the underwriting
agreement to be executed in connection with such registration, and then only in
such quantity as will not, in the opinion of the underwriters, jeopardize the
success of the offering by the Company or the Existing Rights Holders, as the
case may be, subject and subordinate only to the rights of the Existing Rights
Holders under Section 3 of the Existing Rights Agreement. If in the opinion of
the managing underwriter the registration of all, or part of, the Registrable
Shares which the Stockholders have requested to be included would materially and
adversely affect such public offering, then the Company shall be required to
include in the underwriting only that number of Registrable Shares, if any,
which the managing underwriter believes may be sold without causing such adverse
effect, subject only to the rights of the Existing Rights Holders under Section
3 of the Existing Rights Agreement. In the event of such a reduction in the
number of shares to be included in the underwriting, all Stockholders of
Registrable Shares who have requested registration shall participate in the
underwriting pro rata based upon their total ownership of Registrable Shares (or
in any other proportion as agreed upon by such Stockholders) and if any such
Stockholders would thus be entitled to include more shares than such
Stockholders requested to be registered, the excess shall be allocated among
such other requesting holders pro rata based on their ownership of Registrable
Shares, subject only to the rights of the Existing Rights Holders under Section
3 of the Existing Rights Agreement. No other securities requested to be included
in a registration for the account of anyone other than the Company or the
Existing Rights Holders, as the case may be, and the Stockholders shall be
included in a registration unless all Registrable Shares requested to be
included in such registration are also included, subject and subordinate only to
the rights of the Existing Rights Holders under Section 3 of the Existing Rights
Agreement.
2.3. Registration Procedures. If and whenever the Company is required
by the provisions of this Agreement to use its best efforts to effect the
registration of any of the Registrable Shares under the Securities Act, the
Company shall:
(a) file with the Commission a Registration Statement with respect
to such Registrable Shares and use its best efforts to cause that Registration
Statement to become and remain effective;
(b) with respect to the Registration Statement filed pursuant to
Section 2.1 of this Agreement, as expeditiously as possible prepare and file
with the Commission any amendments and supplements to the Registration Statement
and the prospectus included in the Registration Statement and use its best
efforts to keep such Registration Statement effective for the lesser of (i) a
period of time necessary to permit the Stockholders to dispose of all of their
Registrable Shares or (ii) September 5, 1999.
(c) with respect to a Registration Statement filed pursuant to
Section 2.2 of this Agreement, as expeditiously as possible prepare and file
with the Commission any amendments and supplements to such Registration
Statement and the prospectus included in the
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Registration Statement and use its best efforts to keep such Registration
Statement effective for the lesser of (i) a period of time necessary to permit
the Stockholders to dispose of all of their Registrable Shares or (ii) 90 days
after the effective date of such Registration Statement.
(d) as expeditiously as possible furnish to each selling
Stockholder such reasonable numbers of copies of the prospectus, including the
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as the selling Stockholder may reasonably request
in order to facilitate the public sale or other disposition of the Registrable
Shares owned by the selling Stockholder; and
(e) as expeditiously as possible use its best efforts to register
or qualify the Registrable Shares covered by the Registration Statement under
the securities or Blue Sky laws of such states as the selling Stockholder shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the selling Stockholder to consummate the
public sale or other disposition of the Registrable Shares owned by the selling
Stockholder in such jurisdictions; provided, however, that the Company shall not
be required in connection with this paragraph (d) to qualify as a foreign
corporation in any jurisdiction.
If the Company has delivered preliminary or final prospectuses to
selling Stockholders and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, the Company shall promptly
notify the selling Stockholders and, if requested, the selling Stockholders
shall immediately cease making offers of Registrable Shares and shall return all
prospectuses to the Company. The Company shall promptly provide the selling
Stockholders with revised prospectuses and, following receipt of the revised
prospectuses, the selling Stockholder shall be free to resume making offers of
the Registrable Shares.
2.4. Allocation of Expenses. The Company shall pay the Registration
Expenses for the registrations pursuant to Section 2.1 and Section 2.2. For
purposes of this Section, the term "Registration Expenses" shall mean all
expenses incurred by the Company in complying with this Section 2, including,
without limitation, all registration and filing fees, exchange listing fees,
printing expenses, fees and disbursements of counsel for the Company and one
counsel for the selling Stockholders, out-of-pocket expenses of the Company and
the underwriters, state Blue Sky fees and expenses, and the expense of any
special audits incident to or required by any such registration, but excluding
underwriting discounts and selling commissions and fees of more than one counsel
for the selling Stockholders. Such underwriting discounts and selling
commissions shall be borne pro rata by the selling Stockholders in accordance
with the number of their Registrable Shares included in such registration.
2.5. Indemnification. In the event of any registration of any of the
Registrable Shares under the Securities Act pursuant to this Agreement, then to
the extent permitted by law the Company shall indemnify and hold harmless the
seller of such Registrable Shares, each
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underwriter of such Registrable Shares and each other person, if any, who
controls such seller or underwriter within the meaning of the Securities Act or
the Exchange Act against any losses, claims, damages or liabilities, joint or
several, to which such seller, underwriter or controlling person may become
subject under the Securities Act, the Exchange Act, state securities laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to such Registration Statement, or
arise out of or are based upon the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Company shall reimburse each such seller,
underwriter and controlling person for reasonable legal or any other expenses
incurred by such seller, underwriter or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or omission made in such Registration Statement,
preliminary prospectus or final prospectus, or any such amendment or supplement,
in reliance upon and in conformity with information furnished to the Company, in
writing, by or on behalf of such seller, underwriter or controlling person
specifically for use in the preparation thereof.
In the event of any registration of any of the Registrable Shares under
the Securities Act pursuant to this Agreement, then to the extent permitted by
law, each seller of Registrable Shares, severally and not jointly, shall
indemnify and hold harmless the Company, each of its directors and officers and
each underwriter (if any) and each person, if any, who controls the Company or
any such underwriter within the meaning of the Securities Act or the Exchange
Act, against any losses, claims, damages or liabilities, joint or several, to
which the Company, such directors and officers, underwriter or controlling
person may become subject under the Securities Act, Exchange Act, state
securities laws or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement under which such Registrable Shares were registered under
the Securities Act, any preliminary prospectus or final prospectus contained in
the Registration Statement, or any amendment or supplement to the Registration
Statement, or arise out of or are based upon any omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, if the statement or omission was made solely
in reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of such seller, specifically for use in connection with
the preparation of such Registration Statement, prospectus, amendment or
supplement; and such seller shall reimburse the Company for reasonable legal or
other expenses incurred by the Company in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the obligations of any seller of Registrable Shares hereunder shall not
exceed an amount
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equal to the proceeds to such seller of the Registrable Shares sold pursuant to
the Registration Statement.
An underwriter shall not be entitled to indemnification pursuant to
this subsection in the event that it fails to deliver to any selling Stockholder
any preliminary or final or revised prospectus, as required by the rules and
regulations of the Commission. Finally, no indemnification shall be provided
pursuant to this subsection in the event that any error in a preliminary
prospectus of the Company is subsequently corrected in the final prospectus of
the Company for a particular offering, and such final prospectus is delivered to
all Sellers in the offering prior to the date of purchase of the securities.
Each party entitled to indemnification under this Section 2.5 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, provided, further, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 2.5. The Indemnified Party may participate in
such defense at such party's expense; provided, however, that the Indemnifying
Party shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no Indemnified Party shall
consent to entry of any judgment or settle such claim or litigation without the
prior written consent of the Indemnifying Party.
2.6. Indemnification with Respect to Underwritten Offerings. In the
event that Registrable Shares are sold pursuant to a Registration Statement in
an underwritten offering, the Company agrees to enter into an underwriting
agreement containing customary representations and warranties with respect to
the business and operations of an issuer of the securities being registered and
customary covenants and agreements to be performed by such issuer, including
without limitation customary provisions with respect to indemnification by the
Company of the underwriters of such offering.
2.7. Information by Holder. Each holder of Registrable Shares included
in any registration shall furnish to the Company such information regarding such
holder and the distribution proposed by such holder as the Company may request
in writing and as shall be
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required in connection with any registration, qualification or compliance
referred to in this Section 2.
2.8. Rule 144 Requirements. With a view to making available to the
Stockholders the benefits of Rule 144 promulgated under the Securities Act and
any other rule or regulation of the Commission that may at any time permit a
Stockholder to sell securities of the Company to the public without
registration, the Company agrees to use its best efforts to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act (at any time after
it has become subject to the reporting requirements of the Exchange Act);
(b) file with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements); and
(c) furnish to any holder of Registrable Shares upon request a
written statement by the Company as to its compliance with the reporting
requirements of said Rule 144 (at any time after 90 days after the closing of
the first sale of securities by the Company pursuant to a Registration
Statement), and of the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
of the Company as such holder may reasonably request to avail itself of any
similar rule or regulation of the Commission allowing it to sell any such
securities without registration.
2.9. Termination. The provisions of this Section 2 shall terminate on
the earlier of (i) the second anniversary of the Effective Date; or (ii) such
time as all the Stockholders shall have disposed of their Registrable Shares.
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3. Transfers of Certain Rights.
3.1. The rights granted to the Sellers may be transferred or succeeded
to only by (i) any general or limited partner, officer or other affiliate of
such Seller, or (ii) another Seller; provided, however, that the Company is
given written notice by the transferee at the time of such transfer stating the
name and address of the transferee and identifying the securities with respect
to which such rights are being assigned; and, provided, further, as a condition
precedent to any such transfer, the transferee agrees in writing to be bound by
and subject to all of the terms and conditions of this Agreement.
3.2. A transferee to whom rights are transferred pursuant to this
Section 3 may not again transfer such rights to any other person or entity,
other than as provided in paragraph (a) above.
4. General.
4.1. Notices. All notices, requests, consents and other communications
under this Agreement shall be in writing and shall be delivered by hand, by
telecopier, by overnight mail or mailed by first class certified or registered
mail, return receipt requested, postage prepaid:
If to the Company:
Integrated Surgical Systems, Inc.
829 West Stadium Lane
Sacramento, California 95834
(or at such other address as may have been furnished in writing to the Sellers
by the Company) with a copy to:
Jack Becker, Esq.
Snow Becker Krauss P.C.
605 Third Avenue
New York, New York 10158-0125
If to a Seller, at its address set forth on Exhibit A to this
Agreement (or at such other address as may have been furnished in writing to the
Company by such Seller) with copy to:
Michael Lytton, Esq.
Palmer & Dodge LLP
One Beacon Street
Boston, Massachusetts 02108
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Notices provided in accordance with this Section 4 shall be deemed
delivered upon personal delivery, receipt by telecopy or overnight mail, or 72
hours after deposit in the mail in accordance with the above.
4.2. Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
4.3. Amendments and Waivers. Except as otherwise expressly set forth in
this Agreement, any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), with the written consent of
the Company and the holders of not less than two-thirds of the Registrable
Shares. No waivers of or exceptions to any term, condition or provision of this
Agreement, in any one or more instances, shall be deemed to be, or construed as,
a further or continuing waiver of any such term, condition or provision.
4.4. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
4.5. Captions. The captions of the sections, subsections and paragraphs
of this Agreement have been added for convenience only and shall not be deemed
to be a part of this Agreement.
4.6. Severability. Each provision of this Agreement shall be
interpreted in such manner as to validate and give effect thereto to the fullest
lawful extent, but if any provision of this Agreement is determined by a court
of competent jurisdiction to be invalid or unenforceable under applicable law,
such provision shall be ineffective only to the extent so determined and such
invalidity or unenforceability shall not affect the remainder of such provision
or the remaining provisions of this Agreement.
4.7. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.
[The remainder of this page intentionally left blank.]
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IN WITNESS WHEREOF, the Company and the Sellers have executed and
delivered this Agreement as an instrument under seal as of the date first above
written.
THE COMPANY:
INTEGRATED SURGICAL SYSTEMS, INC.
By: /s/ Ramesh Trivedi
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Name: Ramesh Trivedi
Title: President and Chief Executive
Officer
THE SELLERS:
FARIDEH DANEL
By: /s/ Farideh Danel
------------------------------------
FRANCIOS DANEL
By: /s/ Francois Danel
------------------------------------
GERARD HASCOET
By: Gerard Hascoet
------------------------------------
JEROME LEBON
By: /s/ Jerome Lebon
------------------------------------
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JEAN-LUC BOULNOIS
By: /s/ Jean-Luc Boulnois
------------------------------------
FERNAND BADANO
By: /s/ Fernand Badano
------------------------------------
PIERRE WUERGLER
By: /s/ Pierre Wuergler
------------------------------------
(By Power of Attorney)
GEORGES-HENRI MEYLAN
By: /s/ Georges-Henri Meylan
------------------------------------
ENZO FILIPINI
By: /s/ Enzo Filipini
------------------------------------
PIERRE ANGELO BOTTINELLI
By: /s/ Pierre Angelo Bottinelli
------------------------------------
(By Power of Attorney)
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GIULIO MERLANI
/s/ Giulio Merlani
By:____________________________________
(By Power of Attorney)
SERGE TSCHOPP
/s/ Serge Tschopp
By:____________________________________
(By Power of Attorney)
RAYMOND BORNAND
/s/ Raymond Bornand
By:____________________________________
(By Power of Attorney)
JACQUES-LOUIS AUDEMARS
/s/ Jacques-Louis Audemars
By:____________________________________
(By Power of Attorney)
MOHAMMED DIAB
/s/ Mohammed Diab
By:____________________________________
GEMED S.A.
/s/ Georges-Henri Meylan
By:____________________________________
Name: Georges-Henri Meylan
Title: President Directeur General
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EXHIBIT A
Seller Name Number of
and Address Registrable Shares
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Farideh Danel 80,643
Chemin des Bouts
38330 SAINT ISMIER
FRANCE
Francios Danel 63,155
Chemin des Bouts
38330 SAINT ISMIER
FRANCE
Gerard Hascoet 194,028
10 Avenue du Colonel Bonnet
75016 PARIS
FRANCE
Jerome Lebon 33,917
6 rue Emile Zola
69002 LYON
FRANCE
Jean-Luc Boulnois 28,717
17 Scott Road
Lexington, MA 02173
UNITED STATES
Fernand Badano 5,431
4 allee Marcel Achard
69100 VILLEURBANNE
FRANCE
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Pierre Wuergler 27,003
c/o Credit Suisse
Paradeplatz 8
8070 ZURICH
SUISSE
Georges-Henri Meylan 11,845
Route du Ruisseau 1
1348 LE BRASSUS
SUISSE
Enzo Filipini 10,478
6803 CAMIGNOLO
SUISSE
Pierre Angelo Bottinelli 10,478
Chemin des Trembles
1261 GENOLIER
SUISSE
Giulio Merlani 10,478
Via Alla Chiesa
6932 BREGANZONA
SUISSE
Serge Tschopp 10,478
Avenue des Cerisiers 45
1009 PULLY
SUISSE
Raymond Bornand 10,478
Chemin du Cret 12
1110 MORGES
SUISSE
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Jacques-Lois Audemars 6,279
Valneige
1348 LE BRASSUS
SUISSE
Mohammed Diab 2,619
11 Chemin des pecheurs
VOUVRY
SUISSE
GEMED S.A. 113,328
Route de France 16
1348 LE BRASSUS
SUISSE
TOTAL: 619,355
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