Document:

EXHIBIT 10.2

                        WARRANT TO PURCHASE COMMON STOCK

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE BEEN ACQUIRED FOR INVESTMENT
AND NOT FOR DISTRIBUTION, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED NEITHER THE WARRANT NOR THE SHARES MAY BE SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT
OR PURSUANT TO RULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED. THIS WARRANT
MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION
PRECEDENT TO THE SALE, PLEDGE OR OTHER TRANSFER OF ANY INTEREST IN THIS WARRANT
OR THE SHARES ISSUABLE HEREUNDER.

Issuer:  Integrated Surgical Systems, Inc.
Class of Stock: Common Stock
Issue Date: June 9, 2004
Expiration Date: June 9, 2006

     THIS WARRANT CERTIFICATE is being issued pursuant to that certain
Securities Purchase Agreement dated as of the date hereof (the "Securities
Purchase Agreement") between Integrated Surgical Systems, Inc., a Delaware
corporation (the "Company") and Golden Gate Investors, Inc., a California
corporation ("Holder"). Terms not defined herein shall have the meanings
ascribed to them in the Securities Purchase Agreement or the 6 3/4 % Convertible
Debenture ("Debenture").

          1.1 Warrants. The Company hereby grants to Holder the right to
purchase 1,500,000 shares of the Company's Common Stock (the "Shares" or
"Warrant Shares"). For avoidance of doubt, this Warrant may be exercised
concurrently with or subsequent to the issuance of a Conversion Notice under the
Debenture in accordance with the Securities Purchase Agreement. The date that
the Holder issues a Conversion Notice under the Debenture is hereafter referred
to as the "Conversion Date." Holder agrees that, beginning in the first full
calendar month after the Registration Statement is declared effective with the
SEC,

Beginning in the first full calendar month after the Registration Statement is
declared effective, Holder will exercise at least 4% of the Warrants per
calendar month, in conjunction with the issuance of Conversion Notices under the
Debenture, provided that the Common Shares are available, registered and freely
tradable. In the event Holder breaches this provision, Holder shall not be
entitled to collect interest on the Debenture for that month. In the event
Holder breaches this provision for two consecutive months, at the option of the
Company, this Agreement, the Registration Rights Agreement, the Securities
Purchase Agreement and the associated Debenture shall terminate, and the
outstanding principal of the Debenture, together with accrued but unpaid
interest thereon, shall mature one month after the end of such second
consecutive month.

Holder will exercise no more than 12% (such 12% maximum amount to be cumulative
from the Deadline), of the Warrants per calendar month. The 12% monthly maximum
amount shall not be applicable if the Current Market Price of the Common Stock
at anytime during the applicable month is higher than the Current Market Price
of the Common Stock on the Closing Date.

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Initials                                                                Initials

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This Warrant shall expire and Holder shall no longer be able to purchase the
Warrant Shares on June 9, 2006.

                                    ARTICLE 2
                                    EXERCISE

          2.1 Method of Exercise. Holder may exercise this Warrant Certificate
by delivering a duly executed warrant notice of exercise in substantially the
form attached hereto as Appendix A ("Warrant Notice of Exercise") to the
principal office of the Company.

          2.2 Delivery of Certificate and New Warrant. As promptly as
practicable after the receipt of the Warrant Notice of Exercise, but in any
event not more than three (3) Business Days after the Company's receipt of the
Warrant Notice of Exercise, the Company shall issue the Warrant Shares and cause
to be mailed for delivery by overnight courier, or if a Registration Statement
covering the Warrant Shares has been declared effective by the SEC cause to be
electronically transferred, to Holder a certificate representing the Warrant
Shares acquired and, if this Warrant has not been fully exercised and has not
expired, a new Warrant Certificate substantially in the form of this Warrant
representing the right to acquire the portion of the Warrant Shares not so
exercised shall be delivered to Holder.

          2.3 Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant Certificate and, in the case of loss, theft or destruction, on
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company or, in the case of mutilation, or surrender and cancellation of this
Warrant Certificate, the Company at its expense shall execute and deliver, in
lieu of this Warrant Certificate, a new warrant certificate of like tenor.

          2.4 Exercise Price. The Exercise Price of this Warrant shall be $1.00
per Share.

          2.5 Cashless Exercise. Notwithstanding anything to the contrary
contained in this Warrant Certificate, if the resale of the Warrant Shares by
the Holder is not then registered pursuant to an effective Registration
Statement, upon the expiration of one year from April 2, 2004 (the "Issue
Date"), this Warrant may be exercised by presentation and surrender of this
Warrant to the Company at its principal executive offices with a written notice
of Holder's intention to effect a cashless exercise, including a calculation of
the number of shares of Common Stock to be issued upon such exercise in
accordance with the terms hereof ( a "Cashless Exercise"). In the event of a
Cashless Exercise, in lieu of paying the Exercise Price in cash, Holder shall
surrender this Warrant for that number of Warrant Shares determined by
multiplying the number of Warrant Shares to which it otherwise would be entitled
by a fraction, the numerator of which shall be the difference between the then
current Market Price per share of the Common Stock and the Exercise Price, and
the denominator or which shall be the then Current Market Price per share of
Common Stock.

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          2.6 Mandatory Exercise. In accordance with the Securities Purchase
Agreement, at anytime Holder shall convert all or any part of the Debenture,
Holder shall simultaneously therewith exercise Warrants in a dollar amount equal
to ten times the dollar amount of the Debenture conversion.

                                    ARTICLE 3
                        ADJUSTMENT TO THE WARRANT SHARES

     The number of Warrant Shares purchasable upon the exercise of this Warrant
and the Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:

          3.1 Reclassification. In case of any reclassification or change of
outstanding securities of the class issuable upon exercise of this Warrant then,
and in any such case, the Holder, upon the exercise hereof at any time after the
consummation of such reclassification or change, shall be entitled to receive in
lieu of each Warrant Share theretofore issuable upon exercise of this Warrant,
the kind and amount of shares of stock, other securities, money and/or property
received upon such reclassification or change by a holder of one Warrant Share.
The provisions of this Section 2.1 shall similarly apply to successive
reclassifications or changes.

          3.2 Subdivision or Combination of Common Stock. If the Company at any
time while this Warrant remains outstanding and unexpired shall subdivide or
combine its Common Stock, the Exercise Price shall be proportionately decreased
in the case of a subdivision or increased in the case of a combination.

          3.3 Stock Dividends. If the Company, at any time while this Warrant is
outstanding shall pay a dividend payable in shares of Common Stock, or make any
other distribution of shares of Common Stock (except any distribution
specifically provided for in Section 2.1 and Section 2.2 above), then the
Exercise Price shall be adjusted, effective from and after the date of
determination of shareholders entitled to receive such dividend or distribution,
to that price determined by multiplying the Exercise Price in effect immediately
prior to such date of determination by a fraction, (a) the numerator of which
shall be the total number of shares of Common Stock outstanding immediately
prior to such dividend or distribution, and (b) the denominator of which shall
be the total number of shares of Common Stock outstanding immediately after such
dividend or distribution.

          3.4 Non-Cash Dividends. If the Company at any time while this Warrant
is outstanding shall pay a dividend payable in securities other than Common
Stock or other non-cash property, or make any other distribution of such
securities or property (except any distribution specifically provided for in
Section 2.1 and Section 2.2 above), then this Warrant shall represent the right
to acquire upon exercise of this Warrant such securities or property which the
Holder would have been entitled to receive upon such dividend or distribution
had such Warrant been exercised in full immediately prior thereto, without the
payment by the Holder of any additional consideration for such securities or
property.

          3.5 Effect of Reorganization and Asset Sales. If any (i)
reorganization or reclassification of the Common Stock (ii) consolidation or
merger of the Company with or into another corporation, or (iii) sale or all or
substantially all of the Company's operating assets to another corporation
followed by a liquidation of the Company (any such transaction shall be referred
to herein as an "Event"), is effected in such a way that holders of Common Stock
are entitled to receive securities and/or assets as a result of their Common
Stock ownership, the Holder, upon exercise of this Warrant, shall be entitled to
receive such shares of stock securities or assets which the Holder would have
received had it fully exercised this Warrant on or prior the record date for

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such Event. The Company shall not merge into or consolidate with another
corporation or sell all of its assets to another corporation for a consideration
consisting primarily of securities of such corporation, unless the successor or
acquiring corporation, as the case may be, shall expressly assume the due and
punctual observance and performance of each and every covenant and condition of
this Warrant Certificate to be performed or observed by the Company and all of
the obligations and liabilities hereunder, subject to such modification as shall
be necessary to provide for adjustments which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 2. The foregoing
provisions shall similarly apply to successive mergers, consolidations or sales
of assets.

          3.6 Adjustment of Number of Warrant Shares. Upon each adjustment in
the Exercise Price, the number of Warrant Shares shall be adjusted, to the
nearest whole share, to the product obtained by multiplying the number of
Warrant Shares, purchasable immediately prior to such adjustment by a fraction,
the numerator of which shall be the Exercise Price immediately prior to such
adjustment and the denominator of which shall be the Exercise Price immediately
thereafter.

          3.7 No Impairment. The Company shall not, by amendment of its articles
of incorporation or through a reorganization, transfer of assets, consolidation,
merger, dissolution, issue, or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed under this Warrant Certificate by the Company, but shall
at all times in good faith assist in carrying out all of the provisions of this
Warrant Certificate and in taking all such action as may be reasonably necessary
or appropriate to protect Holder's rights hereunder against impairment. If the
Company takes any action affecting its Common Stock other than as described
above that adversely affects Holder's rights under this Warrant Certificate, the
Exercise Price shall be adjusted downward and the number of Warrant Shares
issuable upon exercise of this Warrant shall be adjusted upward in such a manner
that the aggregate Exercise Price of this Warrant is unchanged.

          3.8 Fractional Warrant Shares. No fractional Warrant Shares shall be
issuable upon the exercise of this Warrant, and the number of Warrant Shares to
be issued shall be rounded down to the nearest whole Share.

          3.9 Certificate as to Adjustments. Upon any adjustment of the Exercise
Price, the Company, at its expense, shall compute such adjustment and furnish
Holder with a certificate of its Chief Financial Officer setting forth such
adjustment and the facts upon which such adjustment is based. The Company shall,
upon written request, furnish Holder a certificate setting forth the Exercise
Price in effect upon the date thereof and the series of adjustments leading to
such Exercise Price.

          3.10 No Rights of Shareholders. This Warrant does not entitle Holder
to any voting rights or any other rights as a shareholder of the Company prior
to the exercise of Holder's right to purchase Warrant Shares as provided herein.

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                                    ARTICLE 4
                  REPRESENTATIONS AND COVENANTS OF THE COMPANY

          4.1 Representations and Warranties. The Company hereby represents and
warrants to Holder that all Warrant Shares which may be issued upon the exercise
of the purchase right represented by this Warrant Certificate, shall, upon
issuance, be duly authorized, validly issued, fully paid and nonasessable, and
free of any liens and encumbrances.

          4.2 Notice of Certain Events. If the Company proposes at any time (a)
to declare any dividend or distribution upon its Common Stock, whether in cash,
property, stock, or other securities and whether or not a regular cash dividend;
(b) to offer for subscription pro rata to the holders of any class or series of
its stock any additional shares of stock of any class or series or other rights;
(c) to effect any reclassification or recapitalization of Common Stock; (d) to
merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate,
dissolve or wind up; or (e) offer holders of registration rights the opportunity
to participate in an underwritten public offering of the Company's securities
for cash, then, in connection with each such event, the Company shall give
Holder (1) at least 20 days prior written notice of the date on which a record
will be taken for such dividend, distribution, or subscription rights (and
specifying the date on which the holders of Common Stock will be entitled
thereto) or for determining rights to vote, if any, in respect of the matters
referred to in (c) and (d) above; (2) in the case of the matters referred to in
(c) and (d) above at least 20 days prior written notice of the date when the
same will take place (and specifying the date on which the holders of Common
Stock will be entitled to exchange their Common Stock for securities or other
property deliverable upon the occurrence of such event); and (3) in the case of
the matter referred to in (e) above, the same notice as is given to the holders
of such registration rights.

          4.3 Information Rights. So long as Holder holds this Warrant and/or
any of the Warrant Shares, the Company shall deliver to Holder (a) promptly
after mailing, copies of all notices or other written communications to the
shareholders of the Company, (b) within ninety (90) days of their availability,
the annual audited financial statements of the Company certified by independent
public accountants of recognized standing, and (c) within forty-five (45) days
after the end of each fiscal quarter or each fiscal year, the Company's
quarterly, unaudited financial statements.

          4.4 Reservation of Warrant Shares. The Company has reserved and will
keep available, out of the authorized and unissued Warrant Shares of Common
Stock, the full number of shares of Common Stock sufficient to provide for the
exercise of the rights of purchase represented by this Warrant.

          4.5 Registration Rights. If Holder exercises this Warrant and
purchases some or all of the Warrant Shares, Holder shall have the Registration
Rights set forth in that certain Registration Rights Agreement executed
concurrently therewith.

                                   ARTICLE 5
                   REPRESENTATIONS AND COVENANTS OF THE HOLDER

          5.1 Private Issue. Holder understands (i) that the Warrant Shares
issuable upon exercise of Holder's rights contained in this Warrant Certificate
are not registered under the Securities Act of 1933, as amended (the "Securities
Act") or qualified under applicable state securities laws on the ground that the
issuance contemplated by this Warrant Certificate will be exempt from the
registration and qualifications requirements thereof, and (ii) that the
Company's reliance on such exemption is predicated on Holder's representations
set forth in this Article 5.

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<PAGE>

          5.2 Financial Risk. Holder has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of its investment and has the ability to bear the economic risks of its
investment.

          5.3 Risk of No Registration. Holder understands that if the Company
does not register with the Securities and Exchange Commission pursuant to
Section 12 of the Securities Act, or file reports pursuant to Section 15(d), of
the Securities Exchange Act of 1934 , or if a registration statement covering
the securities under the Securities Act is not in effect when it desires to sell
(i) the right to purchase the Warrant Shares pursuant to the Warrant, or (ii)
the Warrant Shares issuable upon exercise of the right to purchase, it may be
required to hold such securities for an indefinite period.

          5.4 Accredited Investor. Holder is an "accredited investor," as such
term is defined in Rule 501(a) of Regulation D promulgated under the Securities
Act.

          5.5 Investment. Holder is purchasing the Warrant and the Warrant
Shares for its own account, for investment purposes only and not with a view
toward or in connection with the public sale or distribution thereof in
violation of the Securities Act.

                                    ARTICLE 6
                                  MISCELLANEOUS

          6.1 Term. This Warrant is exercisable, in whole or in part, at any
time and from time to time on or after the Conversion Date and on or before June
9, 2006.

          6.2 Compliance with Securities Laws on Transfer. This Warrant may not
be transferred or assigned in whole or in part without compliance with
applicable federal and state securities laws by the transferor and the
transferee (including, without limitation, the delivery of investment
representation letters and legal opinions reasonably satisfactory to the
Company, as reasonably requested by the Company). The Company shall not require
Holder to provide an opinion of counsel if the transfer is to an affiliate of
Holder.

          6.3 Transfer Procedure. Holder shall have the right without the
consent of the Company to transfer or assign in whole or in part this Warrant
and the Warrant Shares issuable upon exercise of this Warrant, provided such
transfer is in compliance with Federal and state securities laws. Holder agrees
that unless there is in effect a registration statement under the Securities Act
covering the proposed transfer of all or part of this Warrant, prior to any such
proposed transfer the Holder shall give written notice thereof to the Company (a
"Transfer Notice"). Each Transfer Notice shall describe the manner and
circumstances of the proposed transfer in reasonable detail and, if the Company
so requests, shall be accompanied by an opinion of legal counsel, in a form
reasonably satisfactory to the Company, to the effect that the proposed transfer
may be effected without registration under the Securities Act; provided that the
Company will not require opinions of counsel for transactions involving
transfers to affiliates or pursuant to Rule 144 promulgated by the Securities
and Exchange Commission under the Securities Act, except in unusual
circumstances.

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<PAGE>

          6.4 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be delivered personally, or
sent by telecopier machine or by a nationally recognized overnight courier
service, and shall be deemed given when so delivered personally, or by
telecopier machine or overnight courier service as follows:

         if  to the Company, to:

         Integrated Surgical Systems, Inc.
         1850 Research Park Drive
         Davis, CA 95616
         Telephone:        530-792-2600
         Facsimile:        530-792-2690

         With a copy to:

         Snow Becker Krauss P.C.
         605 3rd Avenue
         New York, NY 10158
         Telephone:        212-687-3860
         Facsimile:        212-949-7052
         Attn:     Jack Becker, Esq.

         if to the Holder, to:

         Golden Gate Investors, Inc.
         7817 Herschel Avenue, Suite 200
         La Jolla, CA 92037
         Telephone:        858-551-8789
         Facsimile:        858-551-8779

or at such other address as the Company shall have furnished to the Holder. Each
such notice or other communication shall for all purposes of this agreement be
treated as effective or having been given when delivered if delivered
personally, or, if sent by mail, at the earlier of its receipt or five days
after the same has been deposited in a regularly maintained receptacle for the
deposit of the United States mail, addressed and mailed as aforesaid.

          6.5 Counterparts. This Warrant Certificate may be executed in any
number of counterparts, each of which shall be enforceable against the parties
actually executing such counterparts, and all of which together shall constitute
one instrument. Facsimile execution shall be deemed originals.

          6.6 Waiver. This Warrant Certificate and any term hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought.

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<PAGE>

          6.7 Attorneys Fees. In the event of any dispute between the parties
concerning the terms and provisions of this Warrant Certificate, the party
prevailing in such dispute shall be entitled to collect from the other party all
costs incurred in such dispute, including reasonable attorneys fees.

          6.8 Governing Law; Jurisdiction. This Warrant Certificate shall be
governed by and construed in accordance with the laws of the State of
California, without giving effect to its principles regarding conflicts of law.
Each of the parties hereto consents to the jurisdiction of the federal courts
whose districts encompass any part of the City of San Diego or the state courts
of the State of California sitting in the City of San Diego in connection with
any dispute arising under this Warrant Certificate and hereby waives, to the
maximum extent permitted by law, any objection including any objection based on
forum non conveniens, to the bringing of any such proceeding in such
jurisdictions.

          6.9 Remedies. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holder, by vitiating
the intent and purpose of the transactions hereby. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this
Warrant Certificate will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Warrant Certificate,
that the Holder shall be entitled, in addition to all other available remedies
at law or in equity, and in addition to the penalties assessable herein, to an
injunction or injunctions restraining, preventing or curing any breach of this
Warrant Certificate and to enforce specifically the terms and provisions hereof,
without the necessity of showing economic loss and without any bond or other
security being required.

     IN WITNESS WHEREOF, the parties hereto have duly caused this Warrant
Certificate to be executed and delivered on the first date set forth above.

Integrated Surgical Systems, Inc.             Golden Gate Investors, Inc.

By: /s/ RAMESH C. TRIVEDI                     By: /s/ TRAVIS W. HUFF
    -------------------------                     -------------------------
    Ramesh C. Trivedi,                            Travis W. Huff,
    President and CEO                             Portfolio Manager

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Initials                                                                Initials

<PAGE>

                                   APPENDIX 1

                           WARRANT NOTICE OF EXERCISE

     1. The undersigned hereby elects to purchase _____ shares of the Common
Stock of Integrated Surgical Systems, Inc. pursuant to the terms of the Warrant
Certificate dated June ___, 2004.

     2. Please issue a certificate or certificates representing said shares in
the name of the undersigned or in such other name as is specified below:

                              ---------------------
                              ---------------------
                              ---------------------
                               (Name and Address)

     3. The undersigned makes the representations and covenants set forth in
Article 5 of the Warrant Certificate.

--------------------------------
(Signature)

--------------------------------
(Date)

<PAGE>

                      ADDENDUM TO CONVERTIBLE DEBENTURE AND
                        WARRANT TO PURCHASE COMMON STOCK

This Addendum to Convertible Debenture and Warrant tp Purchase Stock
("Addendum") is entered into on the 9th day of June 2004 by and between
Integrated Surgical Systems, Inc., a Delaware corporation ("Integratede"), and
Golden Gate Investors, Inc., a California Corporation ("GGI").

WHEREAS, GGI and Integrated are parties to that certain 6 3/4 % Convertible
Debenture dated as of June 9, 2004 ("Debenture"); and

WHEREAS, GGI and Integrated are parties to that certain Warrant to Purchase
Common Stock dated as of June9, 2004 ("Warrant"); and

WHEREAS, the parties desire to amend the Debenture and Warrants in certain
respects.

NOW, THEREFORE, in consideration of mutual promises and convenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Integrated and GGI, agree as
follows:

1.   All terms used herein and not otherwise defined herein shall have the
     definitions se forth in the debenture

2.   When the Debenture Principle Amount declines below $50,000, LJCI shall be
     permitted, for a period of 90 days, to add up to $100,000 of additional
     pricipal to the Debenture, on the same terms and conditions as the
     Debenture.

3.   Except as specifically amended herein, all other terms and conditions of
     the Debenture and Warrant shall remain in full force and effect.

IN WITNESS WHEREOF, Integrated and GGI have caused this Addendum to be signed by
its duly authorized officers on the date first set forth above.

Integrated Surgical Systems, Inc.             Golden Gate Investors, Inc.

By: /s/ RAMESH C. TRIVEDI                     By: /s/ TRAVIS W. HUFF
    -------------------------------               ------------------------------
    Ramesh C. Trivedi                             Travis W. Huff,
    President and CEO                             Portfolio ManagerEHIBIT 10.3

                          SECURITIES PURCHASE AGREEMENT

     Securities Purchase Agreement dated as of June 9, 2004 (this "Agreement")
by and between Integrated Surgical Systems, Inc., a Delaware corporation, with
principal executive offices located at 1850 Research Park Drive, Davis, CA 95616
(the "Company"), and Golden Gate Investors, Inc., a California corporation, with
principal executive offices at 7817 Herschel Avenue, Suite 200, La Jolla, CA
92037 ("Buyer").

     WHEREAS, Buyer desires to purchase from the Company, and the Company
desires to issue and sell to Buyer, upon the terms and subject to the conditions
of this Agreement, the Convertible Debenture of the Company in the aggregate
principal amount of $150,000 (the "Debenture"); and

     WHEREAS, in conjunction with the Debenture, the Company has issued a
Warrant to Purchase Common Stock to the Buyer (the "Warrant or Conversion
Warrant"); and

     WHEREAS, upon the terms and subject to the conditions set forth in the
Debenture and the Warrant, the Debenture and Warrant are convertible and
exercisable, respectively, into shares of the Company's common stock, $0.01 par
value per share (the "Common Stock");

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto, intending to be legally bound, hereby
agree as follows:

     I.   PURCHASE AND SALE OF DEBENTURE AND WARRANT

     A. Transaction. Buyer hereby agrees to purchase from the Company, and the
Company has offered and hereby agrees to issue and sell to Buyer in a
transaction exempt from the registration and prospectus delivery requirements of
the Securities Act of 1933, as amended (the "Securities Act"), the Debenture and
Warrant.

Purchase Price; Form of Payment. The purchase price for the Debenture to be
purchased by Buyer hereunder shall be $150,000 for the Debenture and $250 for
the Warrant (the "Purchase Price"). Simultaneously with the execution of this
Agreement, Buyer shall pay $100,000 of the Purchase Price (the "Initial Purchase
Price") by wire transfer of immediately available funds to the Company.
Simultaneously with the execution of this Agreement, the Company shall deliver
the Convertible Debenture and the Conversion Warrants (which shall have been
duly authorized, issued and executed I/N/O Buyer or, if the Company otherwise
has been notified, I/N/O Buyer's nominee).

     II.  BUYER'S REPRESENTATIONS AND WARRANTIES

     Buyer represents and warrants to and covenants and agrees with the Company
as follows:

     B. Buyer is purchasing the Debenture and the Common Stock issuable upon
conversion or redemption of the Debenture (the "Conversion Shares") and the
Warrant and the shares issuable upon exercise of the Warrant (the "Warrant
Shares") for its own account, for investment purposes only and not with a view
towards or in connection with the public sale or distribution thereof in
violation of the Securities Act. The Debenture, Conversion Shares, Warrant and
Warrant Shares are collectively referred to as the "Securities".

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Initials                                                                Initials
<PAGE>

     C. Buyer is (i) an "accredited investor" within the meaning of Rule 501(a)
of Regulation D promulgated under the Securities Act, (ii) experienced in making
investments of the kind contemplated by this Agreement, (iii) capable, by reason
of its business and financial experience, of evaluating the relative merits and
risks of an investment in the Securities, and (iv) able to afford the loss of
its investment in the Securities.

     D. Buyer understands that the Securities are being offered and sold by the
Company in reliance on an exemption from the registration requirements of the
Securities Act and equivalent state securities and "blue sky" laws, and that the
Company is relying upon the accuracy of, and Buyer's compliance with, Buyer's
representations, warranties and covenants set forth in this Agreement to
determine the availability of such exemption and the eligibility of Buyer to
purchase the Securities;

     E. Buyer understands that the Securities have not been approved or
disapproved by the SEC or any state or provincial securities commission.

     F. This Agreement has been duly and validly authorized, executed and
delivered by Buyer and is a valid and binding agreement of Buyer enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and except as rights to
indemnity and contribution may be limited by federal or state securities laws or
the public policy underlying such laws.

     II.  THE COMPANY'S REPRESENTATIONS

The Company represents and warrants to Buyer that:

     A.   Capitalization.

          1. The capitalization of the Company is accurately set forth on
Schedule III.A.1.

          2. The Conversion Shares and the Warrant Shares have been duly and
validly authorized and reserved for issuance by the Company, and, when issued by
the Company upon conversion of the Debenture and exercise of the Warrant, will
be duly and validly issued, fully paid and nonassessable and will not subject
the holder thereof to personal liability by reason of being such holder.

          3. Except as disclosed on Schedule III.A.3., there are no preemptive,
subscription, "call," right of first refusal or other similar rights to acquire
any capital stock of the Company or other voting securities of the Company that
have been issued or granted to any person and no other obligations of the
Company to issue, grant, extend or enter into any security, option, warrant,
"call," right, commitment, agreement, arrangement or undertaking with respect to
any of their respective capital stock.

     B.   Organization; Reporting Company Status.

          1. The Company is a corporation duly organized, validly existing and
in good standing under the laws of the state or jurisdiction in which it is
incorporated and is duly qualified as a foreign corporation in all jurisdictions
in which the failure so to qualify would reasonably be expected to have a
material adverse effect on the business, properties, prospects, condition
(financial or otherwise) or results of operations of the Company or on the
consummation of any of the transactions contemplated by this Agreement (a
"Material Adverse Effect").

                                       2
<PAGE>

          2. The Company is subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Common
Stock is listed on the National Association of Securities Dealers, Inc.
Over-The-Counter Bulletin Board ("OTCBB") and the Company has not received any
notice regarding, and to its knowledge there is no threat of, the termination or
discontinuance of the eligibility of the Common Stock for such listing.

     C. Authorization. The Company (i) has duly and validly authorized and
reserved for issuance shares of Common Stock, which is a number sufficient for
the conversion of the Debenture and the exercise of the Warrant and (ii) at all
times from and after the date hereof shall have a sufficient number of shares of
Common Stock duly and validly authorized and reserved for issuance to satisfy
the conversion of the Debenture in full and the exercise of the Warrant. The
Company understands and acknowledges the potentially dilutive effect on the
Common Stock of the issuance of the Conversion Shares and the Warrant Shares.
The Company further acknowledges that its obligation to issue Conversion Shares
upon conversion of the Debenture and Warrant Shares upon exercise of the Warrant
in accordance with this Agreement is absolute and unconditional regardless of
the dilutive effect that such issuance may have on the ownership interests of
other stockholders of the Company and notwithstanding the commencement of any
case under 11 U.S.C. ss. 101 et seq. (the "Bankruptcy Code"). In the event the
Company is a debtor under the Bankruptcy Code, the Company hereby waives to the
fullest extent permitted any rights to relief it may have under 11 U.S.C. ss.
362 in respect of the conversion of the Debenture and Warrants. The Company
agrees, without cost or expense to Buyer, to take or consent to any and all
action necessary to effectuate relief under 11 U.S.C. ss. 362.

     Authority; Validity and Enforceability. The Company has the requisite
corporate power and authority to enter into the Documents (as such term is
hereinafter defined) and to perform all of its obligations hereunder and
thereunder (including the issuance, sale and delivery to Buyer of the
Securities). The execution, delivery and performance by the Company of the
Documents and the consummation by the Company of the transactions contemplated
hereby and thereby (including, without limitation, the issuance of the Debenture
and the Warrant and the issuance and reservation for issuance of the Conversion
Shares and the Warrant Shares) have been duly and validly authorized by all
necessary corporate action on the part of the Company. Each of the Documents has
been duly and validly executed and delivered by the Company and each Document
constitutes a valid and binding obligation of the Company enforceable against it
in accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and except as rights to indemnity and
contribution may be limited by federal or state securities laws or the public
policy underlying such laws. The Securities have been duly and validly
authorized for issuance by the Company and, when executed and delivered by the
Company, will be valid and binding obligations of the Company enforceable
against it in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally. For purposes of
this Agreement, the term "Documents" means (i) this Agreement, including
schedules; (ii) the Registration Rights Agreement dated as of even date herewith
between the Company and Buyer substantially in the form attached hereto as
Exhibit C (the "Registration Rights Agreement"), (iii) the Debenture
substantially in the form attached hereto as Exhibit A; and (iv) the Warrant,
substantially in the form attached hereto as Exhibit B.

                                       3
<PAGE>

     Validity of Issuance of the Securities. The Securities will be validly
issued and outstanding, fully paid and nonassessable, and not subject to any
preemptive rights, rights of first refusal, tag-along rights, drag-along rights
or other similar rights.

     Non-contravention. The execution and delivery by the Company of the
Documents, the issuance of the Securities, and the consummation by the Company
of the other transactions contemplated hereby and thereby do not, and compliance
with the provisions of this Agreement and other Documents will not, conflict
with, or result in any violation of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a material benefit under, or result in
the creation of any Lien (as such term is hereinafter defined) upon any of the
properties or assets of the Company or any of its Subsidiaries (as such term is
defined in the Debenture) under, or result in the termination of, or require
that any consent be obtained or any notice be given with respect to (i) the
Articles or Certificate of Incorporation or By-Laws of the Company or the
comparable charter or organizational documents of any of its Subsidiaries, in
each case as amended to the date of this Agreement, (ii) any loan or credit
agreement, debenture, bond, mortgage, indenture, lease, contract or other
agreement, instrument or permit applicable to the Company or any of its
Subsidiaries or their respective properties or assets or (iii) any Law (as such
term is hereinafter defined) applicable to, or any judgment, decree or order of
any court or government body having jurisdiction over, the Company or any of its
Subsidiaries or any of their respective properties or assets.

     Approvals. No authorization, approval or consent of any court or public or
governmental authority is required to be obtained by the Company for the
issuance and sale of the Securities to Buyer as contemplated by this Agreement,
except such authorizations, approvals and consents as have been obtained by the
Company prior to the date hereof.

     D. SEC Filings. The Company has properly and timely filed with the SEC all
reports, proxy statements, forms and other documents required to be filed with
the SEC under the Securities Act and the Exchange Act since becoming subject to
such Acts (the "SEC Filings"). As of their respective dates, (i) the SEC Filings
complied in all material respects with the requirements of the Securities Act or
the Exchange Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to such SEC Filings and (ii) none of the SEC
Filings contained at the time of its filing any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The financial statements of the
Company included in the SEC Filings, as of the dates of such documents, were
true and complete in all material respects and complied with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with generally accepted accounting
principles in the United States ("GAAP") (except in the case of unaudited
financial statements permitted by Form 10-QSB under the Exchange Act) applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly presented the consolidated financial position of
the Company and its Subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments that
in the aggregate are not material and to any other adjustment described
therein).

                                       4
<PAGE>

     E. Full Disclosure. Buyer hereby acknowledges receipt of the Company's
annual report on From 10-KSB for its fiscal year ended December 31, 2003 and its
quarterly reports on Form 10-QSB for the last three quarters ended March 31,
2003, June 30, 2003 and September 30, 2003. Since September 30, 2033, there is
no fact known to the Company (other than general economic or industry conditions
known to the public generally) that has not been fully disclosed in the SEC
Filings (including the aforementioned annual report and quarterly reports) that
(i) reasonably could be expected to have a Material Adverse Effect or (ii)
reasonably could be expected to materially and adversely affect the ability of
the Company to perform its obligations pursuant to the Documents, except as set
forth on Schedule III.B.I.

     F. Absence of Events of Default. No "Event of Default" (as such term
isdefined in the Debenture) and no event which, with notice, lapse of time or
both, would constitute an Event of Default (as so defined), has occurred and is
continuing.

     G. Securities Law Matters. Assuming the accuracy of the representations and
warranties of Buyer set forth in Article II, the offer and sale by the Company
of the Securities is exempt from (i) the registration and prospectus delivery
requirements of the Securities Act and the rules and regulations of the SEC
thereunder and (ii) the registration and/or qualification provisions of all
applicable state and provincial securities and "blue sky" laws. The Company
shall not directly or indirectly take, and shall not permit any of its
directors, officers or affiliates, as such term is defined in Rule 501(b) of
Regulation D under the Securities Act ("Affiliate")directly or indirectly to
take, any action (including, without limitation, any offering or sale to any
person or entity of any security similar to the Debenture) which will make
unavailable the exemption from Securities Act registration being relied upon by
the Company for the offer and sale to Buyer of the Debenture, the Conversion
Shares, the Warrant and the Warrant Shares as contemplated by this Agreement. No
form of general solicitation or advertising has been used or authorized by the
Company or any of its officers, directors or Affiliates in connection with the
offer or sale of the Securities as contemplated by this Agreement or any other
agreement to which the Company is a party.

     H. Registration Rights. Except as set forth on Schedule III.L., no Person
(as such term is defined in the Debenture) has, and as of the Closing Date (as
such term is hereinafter defined), no Person shall have, any demand,
"piggy-back" or other rights to cause the Company to file any registration
statement under the Securities Act relating to any of its securities or to
participate in any such registration statement.

     I. Interest. The timely payment of interest on the Debenture is not
prohibited by the Articles or Certificate of Incorporation or By-Laws of the
Company, in each case as amended to the date of this Agreement, or any
agreement, contract, document or other undertaking to which the Company is a
party.

     J. No Misrepresentation. No representation or warranty of the Company
contained in this Agreement or any of the other Documents, any schedule, annex
or exhibit hereto or thereto or any agreement, instrument or certificate
furnished by the Company to Buyer pursuant to this Agreement contains any untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.

     K. Finder's Fee. There is no finder's fee, brokerage commission or like
payment in connection with the transactions contemplated by this Agreement for
which Buyer is liable or responsible.

                                       5
<PAGE>

     III. CERTAIN COVENANTS AND ACKNOWLEDGMENTS

     A. Filings. The Company shall make all necessary SEC Filings and "blue sky"
filings required to be made by the Company in connection with the sale of the
Securities to Buyer as required by all applicable Laws, and shall provide a copy
thereof to Buyer promptly after such filing.

     B. Reporting Status. So long as Buyer beneficially owns any of the
Securities, the Company shall timely file all reports required to be filed by it
with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.

     C. Listing. Except to the extent the Company lists its Common Stock on The
New York Stock Exchange, The American Stock Exchange or The Nasdaq Stock Market,
the Company shall use its best efforts to maintain its listing of the Common
Stock on the OTCBB. If the Common Stock is delisted from OTCBB, the Company will
use its best efforts to list the Common Stock on the most liquid national
securities exchange or quotation system that the Common Stock is qualified to be
listed on.

     D. Reserved Conversion Common Stock. The Company at all times from and
after the date hereof shall have such number of shares of Common Stock duly and
validly authorized and reserved for issuance as shall be sufficient for the
conversion in full of the Debenture and the exercise of the Warrant.

     E. Information. Each of the parties hereto acknowledges and agrees that
Buyer shall not be provided with, nor be given access to, any material
non-public information relating to the Company.

     F. Accounting and Reserves. The Company shall maintain a standard and
uniform system of accounting and shall keep proper books and records and
accounts in which full, true, and correct entries shall be made of its
transactions, all in accordance with GAAP applied on consistent basis through
all periods, and shall set aside on such books for each fiscal year all such
reserves for depreciation, obsolescence, amortization, bad debts and other
purposes in connection with its operations as are required by such principles so
applied.

     G. Transactions with Affiliates. So long as the Debenture is outstanding,
neither the Company nor any of its Subsidiaries shall, directly or indirectly,
enter into any material transaction or agreement with any stockholder, officer,
director or Affiliate of the Company or family member of any officer, director
or Affiliate of the Company, unless the transaction or agreement is (i) reviewed
and approved by a majority of Disinterested Directors (as such term is
hereinafter defined) and (ii) on terms no less favorable to the Company or the
applicable Subsidiary than those obtainable from a nonaffiliated person. A
"Disinterested Director" shall mean a director of the Company who is not and has
not been an officer or employee of the Company and who is not a member of the
family of, controlled by or under common control with, any such officer or
employee.

     H. Certain Restrictions. So long as the Debenture is outstanding, no
dividends shall be declared or paid or set apart for payment nor shall any other
distribution be declared or made upon any capital stock of the Company, nor
shall any capital stock of the Company be redeemed, purchased or otherwise
acquired (other than a redemption, purchase or other acquisition of shares of
Common Stock made for purposes of an employee incentive or benefit plan
(including a stock option plan) of the Company or pursuant to any of the
security agreements listed on Schedule III.A, for any consideration by the
Company, directly or indirectly, nor shall any moneys be paid to or made
available for a sinking fund for the redemption of any Common Stock of any such
stock.

                                       6
<PAGE>

     I. Short Selling. So long as the Debenture is outstanding, Buyer agrees and
covenants on its behalf and on behalf of its Affiliates that neither Buyer nor
its Affiliates shall at any time engage in any short sales with respect to the
Company's Common Stock, or sell put options or similar instruments with respect
to the Company's Common Stock.

     IV.  ISSUANCE OF COMMON STOCK

     A. The Company undertakes and agrees that no instruction other than the
instructions referred to in this Article V and customary stop transfer
instructions prior to the registration and sale of the Common Stock pursuant to
an effective Securities Act registration statement shall be given to its
transfer agent for the Conversion Shares and the Warrant Shares and that the
Conversion Shares and the Warrant Shares shall otherwise be freely transferable
on the books and records of the Company as and to the extent provided in this
Agreement, the Registration Rights Agreement and applicable law. Nothing
contained in this Section V.A. shall affect in any way Buyer's obligations and
agreement to comply with all applicable securities laws upon resale of such
Common Stock.

     B. Buyer shall have the right to convert the Debenture and exercise the
Warrant by telecopying an executed and completed Conversion Notice (as such term
is defined in the Debenture) or Warrant Notice of Exercise (as such term is
defined in the Warrant) to the Company. Each date on which a Conversion Notice
or Warrant Notice of Exercise is telecopied to and received by the Company in
accordance with the provisions hereof shall be deemed a Conversion Date (as such
term is defined in the Debenture or the Warrant, as the case may be). The
Company shall cause the transfer agent to transmit the certificates evidencing
the Common Stock issuable upon conversion of the Debenture (together with a new
debenture, if any, representing the principal amount of the Debenture not being
so converted) or exercise of the Warrant (together with a new Warrant, if any,
representing the amount of the Warrant not being so exercised) to Buyer via
express courier, or if a Registration Statement covering the Common Stock has
been declared effective by the SEC by electronic transfer, within three (3)
business days after receipt by the Company of the Conversion Notice or Warrant
Notice of Exercise (the "Delivery Date").

     C. Upon the conversion of the Debenture or exercise of the Warrant or part
thereof, the Company shall, at its own cost and expense, take all necessary
action (including the issuance of an opinion of counsel) to assure that the
Company's transfer agent shall issue stock certificates in the name of Buyer (or
its nominee) or such other persons as designated by Buyer and in such
denominations to be specified at conversion or exercise, as the case may be,
representing the number of shares of Common Stock issuable upon such conversion
or exercise. The Company warrants that the Conversion Shares and Warrant Shares
will be unlegended, free-trading, and freely transferable, and will not contain
a legend restricting the resale or transferability of the Company Common Stock
provided the Conversion Shares and Warrant Shares are being sold pursuant to an
effective Registration Statement covering the Common Stock to be sold or is
otherwise exempt from registration when sold.

     D. The Company understands that a delay in the delivery of the Common Stock
in the form required pursuant to this section, or the Mandatory Redemption
Amount described in Section E hereof, beyond the Delivery Date or Mandatory
Redemption Payment Date (as hereinafter defined) could result in economic loss
to the Buyer. As compensation to the Buyer for such loss, the Company agrees to
pay late payments to the Buyer for late issuance of Common Stock in the form

                                       7
<PAGE>

required pursuant to Section C hereof upon conversion of the Debenture or late
payment of the Mandatory Redemption Amount, in the amount of $100 per business
day after the Delivery Date or Mandatory Redemption Payment Date, as the case
may be, for each $10,000 of Debenture principal amount being converted or
redeemed. The Company shall pay any payments incurred under this Section D in
immediately available funds upon demand. Furthermore, in addition to any other
remedies which may be available to the Buyer, in the event that the Company
fails for any reason to effect delivery of the Common Stock by the Delivery Date
or make payment by the Mandatory Redemption Payment Date, the Buyer will be
entitled to revoke all or part of the relevant Notice of Conversion or rescind
all or part of the notice of Mandatory Redemption by delivery of a notice to
such effect to the Company whereupon the Company and the Buyer shall each be
restored to their respective positions immediately prior to the delivery of such
notice, except that late payment charges described above shall be payable
through the date notice of revocation or rescission is given to the Company.

     E. Mandatory Redemption. In the event the Company is prohibited from
issuing Common Stock, or fails to timely deliver Common Stock on a Delivery
Date, or upon the occurrence of an Event of Default (as defined in the
Debenture) or for any reason other than pursuant to the limitations set forth
herein, then at the Buyer's election, the Company must pay to the Buyer ten (10)
business days after request by the Buyer or on the Delivery Date (if requested
by the Buyer) a sum of money determined by multiplying up to the outstanding
principal amount of the Debenture designated by the Buyer by 130%, together with
accrued but unpaid interest thereon ("Mandatory Redemption Payment"). The
Mandatory Redemption Payment must be received by the Buyer on the same date as
the Company Common Stock otherwise deliverable or within ten (10) business days
after request, whichever is sooner ("Mandatory Redemption Payment Date"). Upon
receipt of the Mandatory Redemption Payment, the corresponding Debenture
principal and interest will be deemed paid and no longer outstanding.

     F. Buy-In. In addition to any other rights available to the Buyer, if the
Company fails to deliver to the Buyer such Common Stock issuable upon conversion
of a Debenture by the Delivery Date and if ten (10) days after the Delivery Date
the Buyer purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by the Buyer of the Common
Stock which the Buyer anticipated receiving upon such conversion (a "Buy-In"),
then the Company shall pay in cash to the Buyer (in addition to any remedies
available to or elected by the Buyer) the amount by which (A) the Buyer's total
purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (B) the aggregate principal and/or interest
amount of the Debenture for which such conversion or exercise was not timely
honored, together with interest thereon at a rate of 15% per annum, accruing
until such amount and any accrued interest thereon is paid in full (which amount
shall be paid as liquidated damages and not as a penalty). For example, if the
Buyer purchases shares of Common Stock having a total purchase price of $11,000
to cover a Buy-In with respect to an attempted conversion of $10,000 of
Debenture principal and/or interest, the Company shall be required to pay the
Buyer $1,000, plus interest. The Buyer shall provide the Company written notice
indicating the amounts payable to the Buyer in respect of the Buy-In.

     G. The Securities shall be delivered by the Company to the Buyer pursuant
to Section I.B. hereof on a "delivery-against-payment basis" on the Closing
Date.

                                       8
<PAGE>

     V.   CLOSING DATE

     The Closing shall occur by the delivery: (i) to the Buyer of the
certificate evidencing the Debenture and all other Agreements, and (ii) to the
Company the Purchase Price.

     VI.  CONDITIONS TO THE COMPANY'S OBLIGATIONS

     Buyer understands that the Company's obligation to sell the Debenture and
Warrant on the Closing Date to Buyer pursuant to this Agreement is conditioned
upon:

     A. Delivery by Buyer to the Company and any other Person as indicated
herein, of the Purchase Price;

     B. The accuracy on the Closing Date of the representations and warranties
of Buyer contained in this Agreement as if made on the Closing Date (except for
representations and warranties which, by their express terms, speak as of and
relate to a specified date, in which case such accuracy shall be measured as of
such specified date) and the performance by Buyer in all material respects on or
before the Closing Date of all covenants and agreements of Buyer required to be
performed by it pursuant to this Agreement on or before the Closing Date; and

     C. There shall not be in effect any Law or order, ruling, judgment or writ
of any court or public or governmental authority restraining, enjoining or
otherwise prohibiting any of the transactions contemplated by this Agreement.

     VII. CONDITIONS TO BUYER'S OBLIGATIONS

     The Company understands that Buyer's obligation to purchase the Securities
on the Closing Date pursuant to this Agreement is conditioned upon:

     A. Delivery by the Company of the Debenture, the Warrant and the other
ancillary agreements (I/N/O Buyer or I/N/O Buyer's nominee);

     B. The accuracy on the Closing Date of the representations and warranties
of the Company contained in this Agreement as if made on the Closing Date
(except for representations and warranties which, by their express terms, speak
as of and relate to a specified date, in which case such accuracy shall be
measured as of such specified date) and the performance by the Company in all
respects on or before the Closing Date of all covenants and agreements of the
Company required to be performed by it pursuant to this Agreement on or before
the Closing Date, all of which shall be confirmed to Buyer by delivery of the
certificate of the chief executive officer of the Company to that effect;

     C. There not having occurred (i) any general suspension of trading in, or
limitation on prices listed for, the Common Stock on the NASD OTCBB, (ii) the
declaration of a banking moratorium or any suspension of payments in respect of
banks in the United States, (iii) the commencement of a war, armed hostilities
or other international or national calamity directly or indirectly involving the
United States or any of its territories, protectorates or possessions or (iv) in
the case of the foregoing existing at the date of this Agreement, a material
acceleration or worsening thereof;

     D. There not having occurred any event or development, and there being in
existence no condition, having or which reasonably and foreseeably could have a
Material Adverse Effect, except as set forth on Schedule VIII.D.;

                                       9
<PAGE>

     E. There shall not be in effect any Law, order, ruling, judgment or writ of
any court or public or governmental authority restraining, enjoining or
otherwise prohibiting any of the transactions contemplated by this Agreement;

     F. The Company shall have obtained all consents, approvals or waivers from
governmental authorities and third persons necessary for the execution, delivery
and performance of the Documents and the transactions contemplated thereby, all
without material cost to the Company;

     G. Buyer shall have received such additional documents, certificates,
payment, assignments, transfers and other deliveries as it or its legal counsel
may reasonably request and as are customary to effect a closing of the matters
herein contemplated;

     I. Delivery by the Company of an enforceability opinion from its outside
counsel in form and substance satisfactory to Buyer

     VIII. SURVIVAL; INDEMNIFICATION

     A. The representations, warranties and covenants made by each of the
Company and Buyer in this Agreement, the annexes, schedules and exhibits hereto
and in each instrument, agreement and certificate entered into and delivered by
them pursuant to this Agreement shall survive the Closing Date and the
consummation of the transactions contemplated hereby. In the event of a breach
or violation of any of such representations, warranties or covenants, the party
to whom such representations, warranties or covenants have been made shall have
all rights and remedies for such breach or violation available to it under the
provisions of this Agreement or otherwise, whether at law or in equity,
irrespective of any investigation made by or on behalf of such party on or prior
to the Closing Date.

     B. The Company hereby agrees to indemnify and hold harmless Buyer, its
Affiliates and their respective officers, directors, partners and members
(collectively, the "Buyer Indemnitees") from and against any and all losses,
claims, damages, judgments, penalties, liabilities and deficiencies
(collectively, "Losses") and agrees to reimburse Buyer Indemnitees for all
out-of-pocket expenses (including the fees and expenses of legal counsel), in
each case promptly as incurred by Buyer Indemnitees and to the extent arising
out of or in connection with:

          1. any misrepresentation, omission of fact or breach of any of the
     Company's representations or warranties contained in this Agreement or the
     other Documents, or the annexes, schedules or exhibits hereto or thereto or
     any instrument, agreement or certificate entered into or delivered by the
     Company pursuant to this Agreement or the other Documents;

          2. any failure by the Company to perform any of its covenants,
     agreements, undertakings or obligations set forth in this Agreement or the
     other Documents or any instrument, certificate or agreement entered into or
     delivered by the Company pursuant to this Agreement or the other Documents;

          3. the purchase of the Debenture, the conversion of the Debenture, the
     payment of interest on the Debenture, the purchase of the Warrants, the
     issuance of the Warrant Shares, the consummation of the transactions
     contemplated by this Agreement and the other Documents, the use of any of
     the proceeds of the Purchase Price by the Company, the purchase or
     ownership of any or all of the Securities, the performance by the parties
     hereto of their respective obligations hereunder and under the Documents or
     any claim, litigation, investigation, proceedings or governmental action
     relating to any of the foregoing, whether or not Buyer is a party thereto;
     or

                                       10
<PAGE>

          4. resales of the Common Stock by Buyer in the manner and as
     contemplated by this Agreement and the Registration Rights Agreement.

     C. Buyer hereby agrees to indemnify and hold harmless the Company, its
Affiliates and their respective officers, directors, partners and members
(collectively, the "Company Indemnitees") from and against any and all Losses,
and agrees to reimburse the Company Indemnitees for all out-of-pocket expenses
(including the fees and expenses of legal counsel), in each case promptly as
incurred by the Company Indemnitees and to the extent arising out of or in
connection with:

          1. any misrepresentation, omission of fact or breach of any of Buyer's
     representations or warranties contained in this Agreement or the other
     Documents, or the annexes, schedules or exhibits hereto or thereto or any
     instrument, agreement or certificate entered into or delivered by Buyer
     pursuant to this Agreement or the other Documents; or

          2. any failure by Buyer to perform in any material respect any of its
     covenants, agreements, undertakings or obligations set forth in this
     Agreement or the other Documents or any instrument, certificate or
     agreement entered into or delivered by Buyer pursuant to this Agreement or
     the other Documents.

     D. Promptly after receipt by either party hereto seeking indemnification
pursuant to this Article VIII (an "Indemnified Party") of written notice of any
investigation, claim, proceeding or other action in respect of which
indemnification is being sought (each, a "Claim"), the Indemnified Party
promptly shall notify the party against whom indemnification pursuant to this
Article VIII is being sought (the "Indemnifying Party") of the commencement
thereof, but the omission so to notify the Indemnifying Party shall not relieve
it from any liability that it otherwise may have to the Indemnified Party except
to the extent that the Indemnifying Party is materially prejudiced and forfeits
substantive rights or defenses by reason of such failure. In connection with any
Claim as to which both the Indemnifying Party and the Indemnified Party are
parties, the Indemnifying Party shall be entitled to assume the defense thereof.
Notwithstanding the assumption of the defense of any Claim by the Indemnifying
Party, the Indemnified Party shall have the right to employ separate legal
counsel and to participate in the defense of such Claim, and the Indemnifying
Party shall bear the reasonable fees, out-of-pocket costs and expenses of such
separate legal counsel to the Indemnified Party if (and only if): (x) the
Indemnifying Party shall have agreed to pay such fees, out-of-pocket costs and
expenses, (y) the Indemnified Party and the Indemnifying Party reasonably shall
have concluded that representation of the Indemnified Party and the Indemnifying
Party by the same legal counsel would not be appropriate due to actual or, as
reasonably determined by legal counsel to the Indemnified Party, potentially
differing interests between such parties in the conduct of the defense of such
Claim, or if there may be legal defenses available to the Indemnified Party that
are in addition to or disparate from those available to the Indemnifying Party
or (z) the Indemnifying Party shall have failed to employ legal counsel
reasonably satisfactory to the Indemnified Party within a reasonable period of
time after notice of the commencement of such Claim. If the Indemnified Party
employs separate legal counsel in circumstances other than as described in
clauses (x), (y) or (z) above, the fees, costs and expenses of such legal
counsel shall be borne exclusively by the Indemnified Party. Except as provided
above, the Indemnifying Party shall not, in connection with any Claim in the
same jurisdiction, be liable for the fees and expenses of more than one firm of
legal counsel for the Indemnified Party (together with appropriate local
counsel). The Indemnifying Party shall not, without the prior written consent of
the Indemnified Party (which consent shall not unreasonably be withheld), settle
or compromise any Claim or consent to the entry of any judgment that does not
include an unconditional release of the Indemnified Party from all liabilities
with respect to such Claim or judgment.

                                       11
<PAGE>

     E. In the event one party hereunder should have a claim for indemnification
that does not involve a claim or demand being asserted by a third party, the
Indemnified Party promptly shall deliver notice of such claim to the
Indemnifying Party. If the Indemnified Party disputes the claim, such dispute
shall be resolved by mutual agreement of the Indemnified Party and the
Indemnifying Party or by binding arbitration conducted in accordance with the
procedures and rules of the American Arbitration Association. Judgment upon any
award rendered by any arbitrators may be entered in any court having competent
jurisdiction thereof.

     IX.  GOVERNING LAW

     This Agreement shall be governed by and interpreted in accordance with the
laws of the State of California, without regard to the conflicts of law
principles of such state.

     X.   SUBMISSION TO JURISDICTION

     Each of the parties hereto consents to the exclusive jurisdiction of the
federal courts whose districts encompass any part of the City of San Diego or
the state courts of the State of California sitting in the City of San Diego in
connection with any dispute arising under this Agreement and the other
Documents. Each party hereto hereby irrevocably and unconditionally waives, to
the fullest extent it may effectively do so, any defense of an inconvenient
forum or improper venue to the maintenance of such action or proceeding in any
such court and any right of jurisdiction on account of its place of residence or
domicile. Each party hereto irrevocably and unconditionally consents to the
service of any and all process in any such action or proceeding in such courts
by the mailing of copies of such process by registered or certified mail (return
receipt requested), postage prepaid, at its address specified in Article XVII.
Each party hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.

     XI.  WAIVER OF JURY TRIAL

     TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ITS RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OTHER DOCUMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT AND OTHER DOCUMENTS. EACH PARTY HERETO (i)
CERTIFIES THAT NEITHER OF THEIR RESPECTIVE REPRESENTATIVES, AGENTS OR ATTORNEYS
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (ii) ACKNOWLEDGES THAT
IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS HEREIN.

                                       12
<PAGE>

     XII. COUNTERPARTS; EXECUTION

     This Agreement may be executed in counterparts, each of which when so
executed and delivered shall be an original, but both of which counterparts
shall together constitute one and the same instrument. A facsimile transmission
of this signed Agreement shall be legal and binding on both parties hereto.

     XIII. HEADINGS

     The headings of this Agreement are for convenience of reference and shall
not form part of, or affect the interpretation of, this Agreement.

     XIV. SEVERABILITY

     In the event any one or more of the provisions contained in this Agreement
or in the other Documents should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein or therein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions,
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.

     XV.  ENTIRE AGREEMENT; REMEDIES, AMENDMENTS AND WAIVERS

     This Agreement and the Documents constitute the entire agreement between
the parties hereto pertaining to the subject matter hereof and supersede all
prior agreements, understandings, negotiations and discussions, whether oral or
written, of such parties. No supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by both parties. No waiver
of any of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof (whether or not similar), nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided.

     XVI. NOTICES

     Except as may be otherwise provided herein, any notice or other
communication or delivery required or permitted hereunder shall be in writing
and shall be delivered personally, or sent by telecopier machine or by a
nationally recognized overnight courier service, and shall be deemed given when
so delivered personally, or by telecopier machine or overnight courier service
as follows:

     A.   if to the Company, to:

          Integrated Surgical Systems, Inc.
          1850 Research Park Drive
          Davis, CA 95616
          Telephone:        530-792-2600
          Facsimile:        530-792-2690

          With a copy to:

          Snow Becker Krauss P.C.
          605 Third Avenue
          New York, NY 10158
          Telephone:        212-687-3860
          Facsimile:        212-455-0331

                                       13
<PAGE>

     B.   if to Buyer, to:

          Golden Gate Investors, Inc.
          7817 Herschel Avenue, Suite 200
          La Jolla, California 92037
          Telephone:        858-551-8789
          Facsimile:        858-551-8779

The Company or Buyer may change its foregoing address by notice given pursuant
to this Article XVII.

     XVII. CONFIDENTIALITY

     Each of the Company and Buyer agrees to keep confidential and not to
disclose to or use for the benefit of any third party the terms of this
Agreement or any other information which at any time is communicated by the
other party as being confidential without the prior written approval of the
other party; provide, however, that this provision shall not apply to
information which, at the time of disclosure, is already part of the public
domain (except by breach of this Agreement) and information which is required to
be disclosed by law (including, without limitation, pursuant to Item 601(b)(10)
of Regulation S-K under the Securities Act and the Exchange Act).

     XVIII. ASSIGNMENT

     This Agreement shall not be assignable by either of the parties hereto
prior to the Closing without the prior written consent of the other party, and
any attempted assignment contrary to the provisions hereby shall be null and
void; provided, however, that Buyer may assign its rights and obligations
hereunder, in whole or in part, to any Affiliate of Buyer.

     IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement to
be executed and delivered on the date first above written.

Integrated Surgical Systems, Inc.               Golden Gate Investors, Inc.

By: /s/ RAMESH C. TRIVEDI                       By: /s/ TRAVIS W. HUFF
    ---------------------------                     ---------------------------
    Ramesh C. Trivedi                               Travis W. Huff,
    President and CEO                               Portfolio Manager

                                       14
------------------------                               -------------------------
Initials                                                                Initials

<PAGE>

                                 SCHEDULE III.L.

                               REGISTRATION RIGHTS

     Name

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