Document:

LOAN
      AGREEMENT

     

    AND

     

    SECURED
      PROMISSORY NOTE

     

    
      	
              $6,000,000

            	
              August
                4, 2006

            
	 	
              Irvine,
                California

            

    

     

    FOR
      VALUE RECEIVED, Integrated
      Surgical Systems, Inc.,
      a
      Delaware corporation (“Borrower”),
      hereby
      promises to pay, expressly subject to the terms and conditions contained in
      this
      Agreement, to the order of Novatrix
      Biomedical, Inc.,
      a
      California corporation (“Lender”),
      in
      lawful
      money of the United States of America and in immediately available funds, the
      principal sum of six million dollars ($6,000,000) together
      with accrued and unpaid interest thereon.

     

    RECITALS:

     

    A. The
      parties are simultaneously entering into an Asset Purchase Agreement pursuant
      to
      which Lender has agreed to purchase substantially all of the assets of Borrower
      (the “Asset Purchase Agreement”).

     

    B. The
      parties agree and acknowledge that a condition to consummation of the
      transactions contemplated by the Asset Purchase Agreement is the approval of
      the
      stockholders of Borrower beneficially owning not less than a majority of the
      issued and outstanding stock of Borrower at a meeting duly called for such
      purpose (“Stockholder Approval”).

     

    C. The
      parties wish to enter into this Agreement in order to fund the business of
      the
      Borrower.

     

    Borrower
      agrees to:

     

    (a) In
      the
      event that (i) Stockholder Approval is not obtained by June 30, 2007 or (ii)
      in
      the event the Asset Purchase Agreement is terminated by Borrower for any reason
      other than a default by Lender under this Agreement or the Asset Purchase
      Agreement, Borrower shall execute in favor of Lender an exclusive license to
      use, manufacture, market and sell the ROBODOC Surgical Assist System and
      ORTHODOC Pre-Surgical Planning Station, including any and all Licensed Software
      for the Robodoc surgical system substantially in the form annexed hereto as
      Exhibit A;

     

    (b) Use
      best
      efforts to settle not less than 80% of the debts currently listed in the Due
      Diligence Disclosure dated June 30, 2006; and 

     

    (c) Use
      best
      efforts to reinstate all previous insurance policies as soon as reasonably
      practicable after the date hereof. 

     

    (d) Work
      in
      good faith towards an expedient closing as set forth in the Asset Purchase
      Agreement (“Closing”). Borrower further agrees not to directly, or indirectly,
      from the date of the execution of this Agreement until the earlier of (i) June
      30, 2007 or (ii) the date of the meeting of stockholders called to vote on
      the
      Asset Purchase Agreement: (i) take any action to solicit, initiate, encourage,
      or assist the submission of any proposal, negotiation, or offer from any person
      or entity other than the Lender relating to the sale of any of the capital
      stock
      of the Borrower or the sale, lease, license, or other disposition of any
      Intellectual Property as defined in the License Agreement attached as Exhibit
      A,
      or any material part of the stock or assets of the Borrower as defined in
      Security Agreement, or (ii) engage in any discussions, negotiations, or
      agreements regarding financing with any third party, and (iii) shall notify
      the
      Lender within a reasonable time of any inquiries by any third parties in regard
      to the foregoing.

     

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

    This
      Agreement is referred to in and is executed and delivered in connection with
      that certain Security Agreement dated as of even date herewith and executed
      by
      Borrower in favor of Lender (as the same may from time to time be amended,
      modified or supplemented or restated, the “Security
      Agreement”).
      Additional
      rights of Lender are set forth in the Security Agreement. All capitalized terms
      used herein and not otherwise defined herein shall have the respective meanings
      given to them in the Security Agreement.

     

    1. Loan
      Tranches.
      Lender
      shall make borrowings to Borrower pursuant to this Agreement as
      follows:

     

    1.1. $2.7
      million immediately upon the execution of this Agreement.

     

    1.2. $1.0
      million upon the later to occur of (i) March 1, 2007 and (ii) five (5) patient
      clinical trials in respect of the ROBODOC and OTHODOC products having been
      conducted.

     

    1.3. $2.3
      million no later than August 1, 2007, unless there is a material default by
      Borrower of any of its obligations under the Asset Purchase Agreement, this
      Agreement or the Security Agreement, provided that,
      Lender
      shall provide Borrower with written notice of any such default and a reasonable
      opportunity to cure if such default is reasonably capable of cure.

     

    2. Principal
      Repayment. The
      outstanding principal amount of the Loan shall be due and payable on demand
      subject to the terms and conditions of this Agreement, including without
      limitation, “Termination of this Agreement” set forth below. Under
      no
      circumstances shall Borrower be liable to make repayments to Lender for any
      amounts not actually loaned by Lender to Borrower.

     

    3. Termination
      of this Agreement. The
      parties expressly agree that, upon the earlier to occur of (i) Stockholder
      Approval or (ii) a material default by Lender of any of its obligations under
      the Asset Purchase Agreement or this Agreement, (A) any and all obligations
      of
      Borrower to make any repayments hereunder shall immediately terminate with
      no
      further action of any party required in connection therewith, and (B) the
      Security Agreement shall immediately terminate and Lender shall have no rights
      whatsoever to any secured interest in the assets of Borrower.

     

    4. Conversion
      of Loans to Working Capital. Upon
      the
      Closing, Lender unconditionally agrees to convert any and all of Lender’s
      obligations to advance funds to Borrower as set forth in this Agreement into
      obligations of Lender to fund Lender’s working capital in equal amounts as set
      forth in “Loan Tranches” above, which funds shall expressly be used only for
      further development of the ROBODOC and OTHODOC products, unless otherwise agreed
      in writing by Borrower. 

     

    5. Interest
      Rate. Borrower
      further promises to pay interest on the outstanding principal amount hereof
      from
      the date hereof until payment in full, which interest shall be payable at the
      prime rate of interest as quoted by Wells Fargo Bank, N.T. & S.A from time
      to time plus one percent (Prime plus +1%) per annum or the maximum rate
      permissible by law (which under the laws of the State of California shall be
      deemed to be the laws relating to permissible rates of interest on commercial
      loans), whichever is less. Interest shall be due and payable on demand in the
      event of a default of the provisions set forth in the Security Agreement and
      shall be calculated on the basis of a 360 day year for the actual number of
      days
      elapsed.

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    6. Place
      of Payment. All
      amounts payable hereunder shall be payable at the office of Lender, 16259 Laguna
      Canyon Rd., Irvine, CA 92618, unless another place of payment shall be specified
      in writing by Lender.

     

    7. Application
      of Payments. Payment
      on this Note shall be applied first to accrued interest, and thereafter to
      the
      outstanding principal balance hereof. Any principal repayment or interest
      payment on the Loan hereunder not paid when due, whether at stated maturity,
      by
      acceleration or otherwise, shall bear interest at one and one-half percent
      (1-1/2%) per month or the maximum legal rate of interest, whichever is
      less.

     

    8. Secured
      Note. The
      full
      amount of this Note is secured by the Collateral identified and described in
      the
      Security Agreement executed by and delivered by Borrower. Borrower shall not,
      directly or indirectly, create, permit or suffer to exist, and shall defend
      the
      Collateral against and take such other action as is necessary to remove, any
      Lien on or in the Collateral, or in any portion thereof, except as permitted
      pursuant to the Security Agreement.

     

    9. Default.
      Each
      of
      the following events shall be an “Event
      of Default” hereunder:

     

    9.1. Borrower
      fails to pay timely any of the principal amount due under this Note or any
      accrued interest or other amounts due under this Note within six (6) months from
      the date of Stockholder Approval; or

     

    9.2. Borrower
      files any petition or action for relief under any bankruptcy, reorganization,
      insolvency or moratorium law or any other law for the relief of, or relating
      to,
      debtors, now or hereafter in effect, or makes any assignment for the benefit
      of
      creditors or takes any corporate action in furtherance of any of the foregoing;
      or

     

    9.3. An
      involuntary petition is filed against Borrower (unless such petition is
      dismissed or discharged within sixty (60) days) under any bankruptcy statute
      now
      or hereafter in effect, or a custodian, receiver, trustee, assignee for the
      benefit of creditors (or other similar official) is appointed to take
      possession, custody or control of any property of Borrower or

     

    9.4. An
“Event
      of Default” under the Security Agreement.

     

    Upon
      the
      occurrence of an Event of Default hereunder, all unpaid principal, accrued
      interest and other amounts owing hereunder shall, at the option of Lender,
      automatically become immediately due, payable and collectible by Lender pursuant
      to applicable law.

     

    10. Subordination.
      The
      indebtedness evidenced by this Note is hereby expressly subordinated, to the
      extent and in the manner hereinafter set forth, in right of payment to the
      prior
      payment in full of the Senior Indebtedness.

     

    “Senior
      Indebtedness” shall
      mean, unless expressly subordinated to or made on a party with the amounts
      due
      under this Note, the principal of, unpaid interest on and amounts reimbursable,
      fees, expenses, costs of enforcement and other amounts due in connection with
      (a) indebtedness of Borrower to banks or commercial finance or other lending
      institutions regularly engaged in the business of lending money (including
      venture capital, investment banking or similar institutions and their affiliates
      which sometimes engage in lending activities but which are primarily engaged
      in
      investments in equity securities), whether or not secured, and (b) any such
      indebtedness or any debentures, notes or other evidence of indebtedness issued
      in exchange for such Senior Indebtedness, or any indebtedness arising from
      the
      satisfaction of such Senior Indebtedness by a guarantor, the total principal
      amount of such indebtedness described in (a) and (b) above not exceeding fifty
      thousand dollars ($50,000) in
      the
      aggregate.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    10.1. Insolvency
      Proceedings. If
      there
      shall occur any receivership, insolvency, assignment for the benefit of
      creditors, bankruptcy, reorganization, or arrangements with creditors (whether
      or not pursuant to bankruptcy or other insolvency laws), sale of all or
      substantially all of the assets, dissolution, liquidation, or any other
      marshaling of the assets and liabilities of Borrower, (a) no amount shall be
      paid by Borrower in respect of the principal of, interest on or other amounts
      due with respect to this Note at the time outstanding, unless and until the
      principal of and interest on the Senior Indebtedness then outstanding shall
      be
      paid in full, and (b) no claim or proof of claim shall be filed by or on behalf
      of Lender which shall assert any right to receive any payments in respect of
      the
      principal of and interest on this Note except subject to the payment in full
      of
      the principal of and interest on all of the Senior Indebtedness then
      outstanding.

     

    10.2. Default
      on Senior Indebtedness. If
      there
      shall occur an event of default which has been declared in writing with respect
      to any Senior Indebtedness, as defined therein, or in the instrument under
      which
      it is outstanding, permitting the holder to accelerate the maturity thereof
      and
      Lender shall have received written notice thereof from the holder of such Senior
      Indebtedness, then, unless and until such event of default shall have been
      cured
      or waived or shall have ceased to exist, or all Senior Indebtedness shall have
      been paid in full, no payment shall be made in respect of the principal of
      or
      interest on this Note unless within one hundred eighty (180) days after the
      happening of such event of default the maturity of such Senior Indebtedness
      shall not have been accelerated. Not more than one notice may be given to Lender
      pursuant to the terms of this Section 10.2
      during any 360 day period.

     

    10.3. Further
      Assurances. By
      acceptance of this Note Lender agrees to execute and deliver customary forms
      of
      subordination agreement requested from time to time by the holders of Senior
      Indebtedness and, as a condition to Lender’s rights hereunder, Borrower may
      require that Lender execute such forms of subordination agreement, provided
      that
      such forms shall not impose on Lender terms less favorable than those provided
      herein.

     

    10.4. Other
      Indebtedness. No
      indebtedness which does not constitute Senior Indebtedness shall be senior
      in
      any respect to the indebtedness represented by this Note.

     

    10.5. Subrogation.
      Subject
      to the payment in full of all Senior Indebtedness, Lender shall be subrogated
      to
      the rights of the holder(s) of such Senior Indebtedness (to the extent of the
      payments or distributions made to the holder(s) of such Senior Indebtedness
      pursuant to the provisions of this Section 10)
      to
      receive payments and distributions of assets of Borrower applicable to the
      Senior Indebtedness. No such payments or distributions applicable to the Senior
      Indebtedness shall, as between Borrower and its creditors, other than the
      holders of Senior Indebtedness and Lender, be deemed to be a payment by Borrower
      to or on account of this Note; and for purposes of such subrogation, no payments
      or distributions to the holders of Senior Indebtedness to which Lender would
      be
      entitled except for the provisions of this Section 10 shall, as between Borrower
      and its creditors, other than the holders of Senior Indebtedness and Lender,
      be
      deemed to be a payment by Borrower to or on account of the Senior
      Indebtedness.

     

    10.6. No
      Impairment. Subject
      to the rights, if any, of the holders of Senior Indebtedness under this Section
      10 to receive cash, securities or other properties otherwise payable or
      deliverable to Lender, nothing contained in this Section 10 shall impair, as
      between Borrower and Lender, the obligation of Borrower, subject to the terms
      and conditions hereof, to pay to Lender the principal hereof and interest hereon
      as and when the same become due and payable, or shall prevent Lender, upon
      default hereunder, from exercising all rights, powers and remedies otherwise
      provided herein or by applicable law.

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    10.7. Lien
      Subordination. Any
      lien
      or security interest of Lender, whether now or hereafter existing in connection
      with the amounts due under this Note, on any assets or property of Borrower
      or
      any proceeds or revenues therefrom which Lender may have at any time as security
      for any amounts due and obligations under this Note, including, without
      limitation, any Lien on or in the Collateral pursuant to the Security Agreement,
      shall be subordinate to all liens or security interests now or hereafter granted
      to a holder of Senior Indebtedness by Borrower or by law notwithstanding the
      date, order or method of attachment or perfection of any such lien or security
      interest or the provisions of any applicable law.

     

    10.8. Applicability
      of Priorities. The
      priority of the holder of the Senior Indebtedness provided for herein with
      respect to security interests and liens are applicable only to the extent that
      such security interests and liens are enforceable and perfected and have not
      been avoided; if a security interest or lien is judicially determined to be
      unenforceable or unperfected or is judicially avoided with respect to any claim
      of the holder of the Senior Indebtedness or any part thereof, the priority
      provided for herein shall not be available to such security interest or lien
      to
      the extent that it is avoided or determined to be unenforceable or unperfected.
      The foregoing notwithstanding, Lender covenants and agrees that it shall not
      challenge, attack or seek to avoid any security interest or lien to the extent
      that it secures any holder of the Senior Indebtedness. Nothing in this Section
      10.8 affects the operation of any subordination of indebtedness or turnover
      of
      payment provisions hereof, or of any other agreements among any of the parties
      hereto.

     

    11. Reliance
      of Holders of Senior Indebtedness. Lender,
      by its acceptance hereof, shall be deemed to acknowledge and agree that the
      foregoing subordination provisions are, and are intended to be, an inducement
      to
      and a consideration of each holder of Senior Indebtedness, whether such Senior
      Indebtedness was created or acquired before or after the creation of the
      indebtedness evidenced by this Note, and each such holder of Senior Indebtedness
      shall be deemed conclusively to have relied on such subordination provisions
      in
      acquiring and holding, or in continuing to hold, such Senior
      Indebtedness.

     

    12. Waiver.
      Borrower
      waives presentment and demand for payment, notice of dishonor, protest and
      notice of protest of this Note, and shall pay all costs of collection when
      incurred, including, without limitation, reasonable attorneys’ fees, costs and
      other expenses. The right to plead any and all statutes of limitations as a
      defense to any demands hereunder is hereby waived to the full extent permitted
      by law.

     

    13. Governing
      Law. This
      Note
      shall be governed by, and construed and enforced in accordance with, the laws
      of
      the State of California, excluding conflict of laws principles that would cause
      the application of laws of any other jurisdiction.

     

    14. Entire
      Agreement.
      Except
      for the Nondisclosure Agreement entered into by the parties as of May 26, 2006
      (“NDA”), this Agreement sets forth all of the covenants, promises, agreements,
      warranties, representations, conditions and understandings between Lender and
      Borrower (individually “Party” and collectively “Parties”) hereto; constitutes
      and contains the complete, final, and exclusive understanding and agreement
      of
      the parties with respect to the subject matter herein; and cancels, supersedes
      and terminates all prior agreements and understanding between the Parties with
      respect to the subject matter hereof. Except for the NDA, there are no
      covenants, promises, agreements, warranties, representations conditions or
      understandings, whether oral or written, between the Parties other than as
      set
      forth herein. No subsequent alteration, amendment, change or addition to this
      Agreement shall be binding upon the Parties hereto unless reduced to writing
      and
      signed by the respective authorized officers of the Parties.

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    15. Successors
      and Assigns. The
      provisions of this Note shall inure to the benefit of and be binding on any
      successor to Borrower and shall extend to any holder hereof.

     

    
      	 	 	 
	 	
              INTEGRATED
                SURGICAL SYSTEMS, INC.
                (BORROWER)

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Ramesh
                Trivedi, CEO

              6220
                Belleau Wood Lane, Suite 4

              Sacramento,
                CA 95822

              Phone:
                (916) 391- 0200

              Fax:
                (916) 391- 0200

            

    

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    EXHIBIT
      A

     

    LICENSE
      AGREEMENT

     

    This
      License Agreement (“License Agreement”) is made and entered into as of this ____
      of _________ 2006 (the “Effective Date”) by and between Integrated
      Surgical Systems, Inc., a Delaware corporation (“Licensor”) and Novatrix
      Biomedical, Inc. (“Licensee”), a California corporation. 

     

    RECITALS

     

    WHEREAS,
      Licensor has certain proprietary rights in the form of patents, copyrights,
      trademarks, service marks, trade secrets, and licensing rights from third
      parties that are sublicenseable and other software rights in the area of robotic
      surgery; and 

     

    WHEREAS,
      Licensee desires to obtain an exclusive license to use and sublicense the
      Intellectual Property to third parties within the Territory, as defined below,
      in accordance with the terms and conditions of this License Agreement; and
      

     

    WHEREAS,
      Licensee also desires to use the Intellectual Property to manufacture, market,
      and sell the ROBODOC Surgical Assist System (“ROBODOC”) and the ORTHODOC
      Pre-Surgical Planning Workstation together with all associated Licensed Software
      and other Documentation to Licensee’s third party customers located within the
      Territory; and 

     

    WHEREAS,
      Licensee agrees to pay Licensor a one time licensing fee of one hundred thousand
      dollars ($100,000) for the rights granted herein in accordance with the terms
      and conditions of this License Agreement. 

     

    THEREFORE,
      in full
      and complete consideration and satisfaction the Parties agree as
      follows:

     

    AGREEMENT

     

    1. DEFINITIONS

     

    1.1. “Confidential
      Information”
      means
      trade secrets, inventions, ideas, processes, formulas, source and object codes,
      data programs, other works of authorship, know-how, improvements, discoveries,
      developments, designs and techniques, licenses, prices and costs, suppliers
      and
      customers, or any other information of a party identified as confidential at
      the
      time of disclosure. Confidential Information may also include property of third
      parties who have granted licenses to either party.

     

    1.2. “Derivative
      Works” means
      a
      work which is based upon the pre-existing Products and Licensed Software or
      Documentation such as a revision, modification, translation, abridgment,
      condensation, expansion, collection, compilation, or any other form in which
      such pre-existing item may be recast, transformed or adapted, or which, if
      prepared without authorization by the owner of the pre-existing works, would
      constitute a copyright infringement.

     

    1.3. “Documentation”
      means
      users’ manuals provided by Licensor in electronic form for use for the Products
      and Licensed Software. It shall be the responsibility of Licensee to reformat,
      copy, modify and provide to its customers documentation associated with
      Licensee’s Products.

     

    1.4. “Intellectual
      Property” means
      all
      patents, copyrights, trademarks, service marks listed in Exhibit A, including
      any patents, copyrights, trademarks, or service marks hereinafter acquired
      by
      the Licensor
      and
      shall also mean: (a) techniques and data relating to the research (to the extent
      included in the development plan), development, manufacture, use or sale of
      Products, including, but not limited to, inventions, practices, methods,
      knowledge, know-how, skill, experience, test data including pharmacological,
      orthopedic, toxicological and clinical test data, analytical and quality control
      data, regulatory submissions, correspondence and communications, marketing,
      pricing, distribution, cost, sales, manufacturing, patent and legal data or
      descriptions, and (b) compositions of matter, devices, software and source
      codes, articles of manufacture, assays and biological, chemical or physical
      materials relating to development, manufacture, use or sale of
      Product.

     

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

    1.5. “Licensed
      Software”
      means
      the ROBODOC Surgical System software, and the Research Modified Motion Control
      Software in binary or source form and including any Documentation delivered
      by
      Licensor to Licensee and whether as part of the initial delivery, or as
      delivered as part of a chargeable or non-chargeable modification, maintenance
      or
      update service.

     

    1.6. “Object
      Code” means
      a
      computer program in machine executable form and any modifications, enhancements,
      corrections, updates, translations, interpretations, listings, compilations
      or
      derivations thereof, and all copies and portions in any medium.

     

    1.7. “Product”
      means
      the ROBODOC Surgical Assist System (“ROBODOC”) and the ORTHODOC Pre-Surgical
      Planning Workstation (“ORTHODOC”) together with any and all associated
      consumable items (drill bits and machine tools, robot protectors, covers, etc.)
      and the Licensed Software in Object Code and Source Code form and including
      any
      Derivative Works developed by Licensee. 

     

    1.8. “Source
      Code”
      means a
      computer program in human readable form which would be reasonably necessary
      to
      enable an independent third-party programmer, with a high level of programming
      skills, to produce Object Code without the help of any other person and, any
      modifications, enhancements, corrections, updates, translations,
      interpretations, listings, compilations or derivations thereof, and all copies
      and portions in any medium of the program; and, further, shall include any
      tools
      and utilities necessary to build Object Code.

     

    1.9. “Updates”
      means
      any
      engineering patch intended to fix bugs and errors in the Licensed Software
      or
      any modifications to the Licensed Software as requested from time to time by
      Licensee. 

     

    1.10. “Territory”
      means
      all
      of the countries of Asia, including but not limited to China, Hong Kong,
      Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan, Thailand,
      and
      Vietnam.

     

    2. GRANT
      OF LICENSE.
      

     

    2.1. License
      Grant.
      Subject
      to the terms and conditions of this Agreement, Licensor hereby grants to
      Licensee an exclusive, transferable, right and license, with sublicensing
      rights, to modify, use, copy, prepare, and translate into other languages,
      Derivative Works based on the Source Code therefrom, including the right to
      distribute the Licensed Software in Object Code form, including any and all
      Documentation to its third party customers. Licensor further grants to Licensee
      the rights to use any and all Intellectual Property to manufacture, market
      and
      sell the Products bundled with the Licensed Software to its third party
      customers within the Territory. Licensee’s rights in the Intellectual Property
      shall also include the right to use and display any of Licensor’s trademarks,
      service marks, and logos solely in connection with and only to the extent
      reasonably necessary for marketing and branding the Products for sale in
      accordance with the terms and conditions of this License Agreement. Licensor
      shall not do or suffer to be done any act or thing that would impair Licensee’s
      rights in the Intellectual Property. Licensor has the right to take all action
      that it deems necessary to ensure that the advertising and promotional materials
      related to the Licensee’s business or any sublicenses granted by Licensor are
      consistent with the reputation and prestige of the Intellectual Property of
      Licensor and its third party Licensors. Licensee agrees not to contest
      Licensor’s trademarks or tradenames, or to make application for registration of
      any of Licensee’s trademarks or tradenames. The rights granted herein shall
      collectively be referred to as the “License.” Any sublicensing rights shall have
      provisions that are no less restrictive than the License rights granted herein.
      Licensee shall notify Licensor of any and all sublicenses granted to any third
      parties. Licensee agrees and understands that any breach of the terms and
      conditions of this License, including any sublicense shall be considered a
      breach of this License Agreement and the rights granted herein. 

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    2.2. Ownership.
      The
      License granted in Section 2.1 is not sold to Licensee. Licensor and its third
      party licensors shall have and retain all right, title, and interest in the
      License, including the goodwill pertaining thereto. Licensee acknowledges and
      agrees that the License and any Derivative Works created by Licensee shall
      be
      the sole and separate property of Licensor, including any modifications thereto
      expressly authorized by this Agreement. 

     

    2.3. Source
      Code Limitations. Licensee
      may use the Source Code subject to the following limitations:

     

    (a) Licensor
      grants to Licensee an exclusive license within the Territory and right to use
      and prepare Derivative Works based on the Source Code for the purpose of
      performing maintenance, making enhancements, and creating Object Code for use
      in
      the Products.

     

    (b) Licensee
      has the right to keep up to three copies, including backups, of the Source
      Code
      for use internally.

     

    (c) Licensee
      acknowledges that the Source Code contains Licensor’s valuable and proprietary
      trade secrets, copyrights, and patents and shall treat the Source Code as
      Confidential Information as defined in this Agreement. Further, Licensee shall
      restrict access to Source Code to only those persons who are employees of
      Licensee, and strictly for the purposes of performing the rights and licenses
      granted in this Agreement.

     

    (d) Licensee
      shall keep reasonable records identifying the location of each copy of Source
      Code and access list of personnel who have access to those copies.

     

    (e) Licensee
      agrees to retain all copyright notices in any form on all copies and Derivative
      Works.

     

    (f) Licensor
      shall retain all ownership rights to the Source Code as delivered to
      Licensee.

     

    (g) However,
      Licensee shall have the right to use the Source Code to create Derivative Works
      and Licensee shall retain all ownership rights of such Derivative Works created
      by Licensee.

     

    (h) Licensor’s
      Source Code and any rights and licenses granted in this Section may not be
      assigned or otherwise transferred in any way. Licensee may not use, print,
      copy,
      disclose, display, sublicense, decompile, loan, rent, market, distribute, or
      otherwise transfer the Source Code, or any Derivative Works of such Source
      Code
      in any form, in whole or in part, to any person or entity, except as expressly
      provided in this Agreement.

     

    3. TERM.
      

     

    The
      term
      of this License Agreement shall be for ten (10) years from the Effective Date
      or
      for the life of the patents listed in Exhibit A, whichever is longer.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    4. LICENSE
      FEES AND OFFSET. 

     

    In
      consideration for the License granted herein, Licensee has entered into an
      Asset
      Purchase Agreement and a Loan Agreement (“Loan”) dated August 4, 2006, to obtain
      all right, title, and interest in and to the Products, including all
      Intellectual Property and Licensed Software. In the event that Licensor is
      unable to obtain shareholder approval prior to June 30, 2007 for the Asset
      Purchase Agreement, Licensee has agreed to pay Licensor one hundred thousand
      dollars ($100,000) for the License granted herein (“License Fees”). In the event
      that Licensor is unable to get shareholder approval, the principal amount owing
      under the Loan shall be offset by the amount of the License Fees. 

     

    5. MAINTENANCE
      AND SUPPORT

     

    In
      the
      event that Licensee or its customers request maintenance, any software issued
      to
      Licensee in the form of a revision, bug fixes and/or new release by Licensor
      shall be subject to the same terms and conditions of this Agreement. Licensor
      agrees to provide Licensee with revisions, bug-fixes and new releases to the
      Licensed Software as reasonably required, provided that, Licensee pays to
      Licensor an annual maintenance fee of $10,000 per annum.

     

    6. WARRANTY

     

    Licensor
      warrants that it has all the necessary right, title and interest in and to
      the
      Intellectual Property, including the Licensed Software, Product, and
      Documentation to enter into this License Agreement. Licensor
      represents and warrants to Licensee that: (i) Licensor has developed or will
      develop the Intellectual Property entirely through its own efforts for its
      own
      account or as a work for hire, and the Intellectual Property will be free and
      clear of all liens, claims and encumbrances, (ii) Licensor has full and complete
      rights to license the Intellectual Property and that such actions do not and
      will not infringe upon any intellectual property rights of any third party,
      (iii) Licensor has the right to license the Intellectual Property to Licensee
      and the use of all Intellectual Property by Licensee and/or Licensee’s
      sublicensees will not breach any terms of any contract between Licensor and
      any
      third party, and (iv) that the
      Licensed Software is free from all material defects. In the event of any
      defects, Licensor agrees to repair all such defects. 

     

    7. INDEMNIFICATION

     

    Licensor
      agrees to indemnify, defend and hold Licensee, its agents and employees harmless
      from any and all costs, liabilities and damages (including reasonable attorneys’
fees) finally awarded by a court of competent jurisdiction directly caused
      by or
      arising out of a claim brought against Licensee, its agents and employees that
      the Intellectual Property, including all Licensed Software, infringes or
      misappropriates any patent right, copyright, trademark or other intellectual
      property right of any third party; provided that (a) Licensor is notified in
      writing within 30 calendar days of any statement or claim against Licensee;
      (b)
      Licensee permits Licensor sole control to defend, compromise or settle the
      said
      claim; and (c) Licensee gives Licensor all available information, assistance
      and
      authority, at Licensor’s reasonable expense, to enable Licensor to do so.
      Notwithstanding the foregoing, Licensor shall have no liability for, nor shall
      it indemnify Licensee, its agents or employees against any infringement claim
      based on: (i) use of an old, superseded version of the Licensed Software or
      Documentation therefore if such infringement would have been avoided by the
      use
      of the current version made available by Licensor; (ii) use of the Licensed
      Software or Documentation in connection with or in combination with any other
      equipment, devices or software if the Licensed Software or Documentation, if
      used without such equipment devices or software, would not be infringing; (iii)
      any modification of the Licensed Software or documentation by Licensee or any
      third party where, in the absence of such modification, the Licensed Software
      or
      Documentation would not be infringing; (iv) continued allegedly infringing
      activity by Licensee after Licensee has been notified of such possible
      infringement. If use of the Licensed Software is permanently enjoined for any
      reason, Licensor’s, at its option and in its sole discretion, may modify the
      License Software so as to avoid infringement or procure the right for Licensee
      to continue to use, reproduce and distribute the Licensed Software and
      Documentation. If neither of such alternatives is reasonably possible, Licensor
      may at its option, and without any obligation or liability, terminate this
      Agreement with respect to that portion of the Licensed Software actually used
      in
      the country where the infringement claim arose, and Licensee shall return such
      copies of Licensed Software to Licensor. 

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    8. TRANSFER
      OF ROBOT PARTS AND MATERIALS

     

    Within
      thirty (30) days after the execution of this Licensing Agreement, or less if
      the
      Parties mutually agree, Licensor will make available and deliver to Licensee,
      all parts and materials of the Robot required to fully effectuate the License
      granted herein. Costs associated with the delivery of such materials and parts
      shall be paid by Licensee.

     

    9. TERMINATION

     

    9.1. Termination
      for Cause.
      Either
      Party, as applicable, shall have the right, in addition and without prejudice
      to
      any other rights or remedies, to terminate this License Agreement as follows:
      

     

    (a) except
      as
      set forth in (a) above, by either Party, effective immediately if the breaching
      Party fails to cure its breach within thirty (30) days written notice by the
      non-breaching Party; or

     

    (b) by
      either
      Party effective immediately upon written notice if (i) all or a substantial
      portion of the assets of the other Party are transferred to an assignee for
      the
      benefit of creditors, to a receiver or to a trustee in bankruptcy, (ii) a
      proceeding is commenced by or against the other Party for relief under
      bankruptcy or similar laws and such proceeding is not dismissed within 60 days,
      or (iii) the other Party is adjudged bankrupt.

     

    9.2. Termination
      of Licensing Rights.
      Immediately upon termination of this License Agreement for any reason
      whatsoever, Licensee shall have a right to use the Intellectual Property,
      including any Licensed Software for the limited purpose of completing the sale
      and delivery of all Product orders currently in place at the time of
      termination. Further, all Licensed Software to Licensee’s third party customers
      shall be perpetual. Further, it shall be Licensee’s responsibility and at
      Licensee’s sole cost to remove Intellectual Property in the possession of
      Licensee or related to the sale of Products provided by Licensee or in which
      Licensee has any control. 

     

    10. LIMITATION
      OF LIABILITY

     

    EXCEPT
      FOR THE BREACH OF ANY WARRANTY BY LICENSOR UNDER SECTION 6 OR ANY BREACH BY
      LICENSEE OF SECTIONS 2 OR 10, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR
      ANY
      INDIRECT, INCIDENTAL, EXEMPLARY, SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING
      WITHOUT LIMITATION ANY LOSS OF INCOME, PROFITS OR DATA, OR COST OF PROCUREMENT
      OF SUBSTITUTE GOODS, EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY
      OF SUCH DAMAGES, ARISING OUT OF OR IN CONNECTION WITH THE GRANT OF THE LICENSE
      HEREUNDER.

     

    11. CONFIDENTIALITY

     

    11.1. Licensee
      acknowledges that the Intellectual Property rights of Licensor, including but
      not limited to, any modifications, Derivative Works or revisions thereto, and
      any Documentation or information relating thereto, are the valuable confidential
      and proprietary property of Licensor (“Confidential Information”) and are
      protected by the copyright, trade secret and/or other laws of the United States
      and within the laws of each of the individual states as it may apply to the
      License Agreement. The Confidential Information of each Party shall be
      safeguarded by the other to the same extent that it safeguards its own
      Confidential Information, methods or data relating to its own business, but
      using not less than a reasonable amount of care. 

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    11.2. Exceptions.
      The
      obligations of confidentiality will not apply to the extent that a Party can
      establish by competent proof that such Confidential Information: 

     

    (a) was
      already known to it, other than under an obligation of confidentiality, at
      the
      time of its disclosure by the disclosing Party;

     

    (b) was
      generally available to the public or otherwise part of the public domain at
      the
      time of its disclosure to the receiving Party;

     

    (c) became
      generally available to the public or otherwise part of the public domain after
      its disclosure and other than through any act or omission of the receiving
      Party
      in breach of this License Agreement;

     

    (d) was
      disclosed to it, other than under an obligation of confidentiality, by a third
      party who had no obligation to the disclosing Party not to disclose such
      information to others.

     

    11.3. Licensee
      and Licensor each agree that in the event of any breach of the provisions of
      this Section 11,
      the
      non-breaching Party shall have the rights to obtain an injunction to be issued
      by any tribunal of competent jurisdiction restricting Licensee or Licensor
      as
      the case may be, from continuing to breach the provisions of this Section
      11.
      The
      provisions of this Section 11
      shall
      survive termination (for whatever reason) of this License
      Agreement.

     

    12. MISCELLANEOUS

     

    12.1. Assignment.
      Neither
      party may assign this Agreement or any of its rights, duties or obligations
      hereunder to any third party without the other party’s prior written consent,
      which consent shall not be unreasonably withheld. Notwithstanding the foregoing,
      either party may assign its rights and delegate its obligations under this
      Agreement without the consent of the other party to a purchaser of all or
      substantially all of its voting stock or capital assets or to an entity with
      which such party merges or is consolidated.

     

    12.2. Governing
      Law.
      This
      License Agreement shall be governed by and interpreted in accordance with the
      laws of the United States and the State of California applicable to agreements
      made and to be performed within the State of California. Both Licensor and
      Licensee agree that the State and Federal Courts in San Diego County shall
      have
      exclusive jurisdiction over all disputes arising from or pertaining to this
      License Agreement and hereby waive any objections to the jurisdiction and venue
      of such courts. 

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    12.3. Notices.
      Any
      notice, request or other communication required or permitted under this License
      Agreement shall be in writing and shall be given or made by physical delivery
      or
      by registered or certified mail, postage prepaid, return receipt requested
      or by
      overnight courier addressed to the appropriate Party. All such notices shall
      be
      addressed as follows:

     

    
      	
              If
                to Licensor:

               

              Integrated
                Surgical Systems, Inc.

              6220
                Belleau Wood Lane, Suite 4

              Sacramento,
                CA 95882

              Phone:
                (916) 391-0420

              Fax:
                (916) 391-0200

               

              With
                a copy to:

              Snow
                Becker Krauss P.C.

              605
                Third Avenue

              New
                York, NY 10158

              Attention:
                Jack Becker, Esq.

            	
              If
                to Licensee:
                

               

              Novatrix
                Biomedical, Inc.

              16259
                Laguna Canyon Rd.

              Irvine,
                CA 92618

              Attention:
                Dr. Soonkap Hahn

              Fax: (949)
                502-6786

               

              With
                Copy to General Counsel:

              Soden
                & Steinberger, LLP

              550
                West C Street, Suite 1710

              San
                Diego, CA 92101

            

    

     

    12.4. Entire
      Agreement.
      This
      License Agreement constitutes the entire agreement between the parties hereto
      with respect to the subject matter hereof and supersedes all prior letters
      and
      agreements with respect to the subject matter hereof. Except as otherwise
      provided herein, this License Agreement may not be amended, supplemented,
      canceled or discharged except by written instrument executed by each of the
      parties hereto.

     

    12.5. Severability.
      If any
      provision of this License Agreement, as applied to any Party or to any
      circumstances, shall be finally determined by a court or arbitrator to be void
      or unenforceable, the same shall be stricken from this License Agreement and
      shall in no way affect any other provision of this License Agreement or the
      validity or enforceability of this License Agreement.

     

    12.6. Waiver.
      The
      waiver by any Party to this License Agreement of the breach of any provision
      of
      this License Agreement by the other Party shall not operate or be construed
      as a
      waiver of any subsequent breach by the other Party.

     

    12.7. Section
      Headings.
      The
      Section headings contained in this License Agreement are for convenient
      reference only and shall not affect the construction of any provision of this
      License Agreement.

     

    12.8. Counterparts.
      This
      License Agreement may be executed in one or more counterparts, each of which
      shall be deemed an original, but all of which together shall constitute one
      and
      the same instrument.

     

    12.9. No
      Agency or Partnership.
      Each
      Party is acting as an independent contractor. This License Agreement does not
      create, nor is it intended to create any agency relationship between the parties
      or a partnership or other joint venture or business relationship. Each Party
      shall be responsible for all of its own Federal, State and local taxes of any
      kind or nature.

     

    12.10. No
      Franchise.
      This
      License Agreement is a license of a copyright and intellectual property only,
      and is not a franchise. The parties intend and acknowledge that their
      relationship created by this License Agreement or otherwise is not subject
      to
      the franchise laws of any state.

     

    12.11. Attorneys’
      Fees.
      If
      either Party shall bring any proceedings to enforce the terms and provisions
      hereof, to recover damages for breach, or to declare rights hereunder, the
      Prevailing Party shall be entitled to recover from the other Party all costs,
      expenses and attorneys’ fees incurred in connection with the exercise by the
      Prevailing Party of its rights and remedies hereunder. Such costs, expenses
      and
      attorneys’ fees shall include, but not be limited to, reasonable attorneys’
fees, paralegal fees, expert witness fees, costs of tests and analyses, trial
      and accommodation expenses, deposition and trial transcript copies, and costs
      of
      court. For purposes of this paragraph, the term “Prevailing Party” shall mean
      (i) with respect to the claimant, one who is successful in obtaining
      substantially all of the relief sought, and (ii) with respect to the defendant
      or respondent, one who is successful in denying substantially all of the relief
      sought by the claimant.

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

     

    
      
        IN WITNESS
          WHEREOF,
          the
          Parties hereto have caused this agreement to be duly executed the day and
          year
          first above written.

      

    

     

    
      	
              LICENSOR:

               

              By:  

              
                

              

              Ramesh
                Travedi, Chief Executive Officer

            	 	
              LICENSEE
                

               

              By:
                

              
                

              

              Dr.
                Soonkap Hahn, Chief Executive
                Officer

            

    

    

    
      
         

      

      
        -8-SECURITY
      AGREEMENT

     

    THIS
      SECURITY AGREEMENT dated
      as
      of August 4, 2006 (“Security
      Agreement”),
      is
      made
      by
Integrated
      Surgical Systems, Inc., a Delaware corporation
      (“Debtor”),
      in
      favor
      of Novatrix
      Biomedical, Inc., a
      California corporation (“Secured
      Party”).

     

    RECITALS

     

    A. Secured
      Party has made and has agreed to make certain advances of money and to extend
      certain financial accommodation to Debtor as evidenced by that certain Secured
      Promissory Note (the “Note”)
      dated
      August 4, 2006 executed by Debtor in favor of Secured Party (collectively,
      the
“Loans”).

     

    B. Secured
      Party is willing to make the Loans to Debtor, but only upon the condition,
      among
      others, that Debtor shall have executed and delivered to Secured Party this
      Security Agreement.

     

    AGREEMENT

     

    NOW,
      THEREFORE,
      in
      order
      to induce Secured Party to make the Loans and for other good and valuable
      consideration, the receipt and adequacy of which are hereby acknowledged, and
      intending to be legally bound, Debtor hereby represents, warrants, covenants
      and
      agrees as follows:

     

    1. DEFINED
      TERMS. When
      used
      in this Security Agreement the following terms shall have the following meanings
      (such meanings being equally applicable to both the singular and plural forms
      of
      the terms defined):

     

    “Collateral”
      shall
      have the meaning assigned to such term in Section 2 of this Security
      Agreement.

     

    “Contracts”
      means
      all
      contracts, undertakings, franchise agreements or other agreements in or under
      which Debtor now holds or hereafter acquires any right, title or interest,
      including, without limitation, with respect to an Account, any agreement
      relating to the terms of payment or the terms of performance
      thereof.

     

    “Copyright
      License” means
      any
      written agreement, in which Debtor now holds or hereafter acquires any interest,
      granting any right in or to any Copyright or Copyright registration (whether
      Debtor is the licensee or the licensor thereunder) including, without
      limitation, licenses pursuant to which Debtor has obtained the exclusive right
      to use a copyright owned by a third party.

     

    “Copyrights”
      means
      all
      of the following in which Debtor now holds or hereafter acquires any interest:
      (a) all copyrights, whether registered or unregistered, held pursuant to the
      laws of the United States, any State thereof or any other country; (b)
      registrations, applications, recordings and proceedings in the United States
      Copyright Office or in any similar office or agency of the United States, any
      State thereof or any other country; (c) any continuations, renewals or
      extensions thereof; (d) any registrations to be issued in any pending
      applications; (e) prior versions of works covered by copyright and all works
      based upon, derived from or incorporating such works; (f) income, royalties,
      damages, claims and payments now and hereafter due and/or payable with respect
      to copyrights, including, without limitation, damages, claims and recoveries
      for
      past, present or future infringement; (g) rights to sue for past, present and
      future infringements of any copyright; and (h) any other rights corresponding
      to
      any of the foregoing rights throughout the world.

     

    
      
         

      

      
        -A-1-

        
          

        

      

      
         

      

    

    “Event
      of Default”
      means
      (i) any failure by Debtor forthwith to pay or perform any of the Secured
      Obligations and (ii) any “Event of Default” as defined in the Note.

     

    “License”
      means
      any
      Copyright License, Patent License, Trademark License or other license of rights
      or interests now held or hereafter acquired by Debtor.

     

    “Lien”
      means
      any
      mortgage, lien, deed of trust, charge, pledge, security interest or other
      encumbrance.

     

    “Patent
      License”
      means
      any written agreement, in which Debtor now holds or hereafter acquires any
      interest, granting any right with respect to any invention on which a Patent
      is
      in existence (whether Debtor is the licensee or the licensor
      thereunder).

     

    “Patents”
      means
      all
      of the following in which Debtor now holds or hereafter acquires any interest:
      (a) all letters patent of the United States or any other country, all
      registrations and recordings thereof and all applications for letters patent
      of
      the United States or any other country, including, without limitation,
      registrations, recordings and applications in the United States Patent and
      Trademark Office or in any similar office or agency of the United States, any
      State thereof or any other country; (b) all reissues, divisions, continuations,
      renewals, continuations-in-part or extensions thereof; (c) all petty patents,
      divisionals and patents of addition; (d) all patents to issue in any such
      applications; (e) all Technical Disclosures and Trade Secrets; (f) all
      information and data, including, but not limited to, preclinical and clinical
      study data, engineering drawings and specifications, models and renderings,
      computer and machine tool programming code, that Debtor considers proprietary
      in
      nature; (g) income, royalties, damages, claims and payments now and hereafter
      due and/or payable with respect to patents, including, without limitation,
      damages, claims and recoveries for past, present or future infringement; and
      (h)
      rights to sue for past, present and future infringements of any
      patent.

     

    “Secured
      Obligations” means
      (a)
      the obligation of Debtor to repay Secured Party all of the unpaid principal
      amount of, and accrued interest on (including any interest that accrues after
      the commencement of bankruptcy), the Loans, (b) the obligation of Debtor to
      pay
      any fees, costs and expenses of the Secured Party under the Note or under
      Section 6(b) hereof and (c) all other indebtedness, liabilities and obligations
      of Debtor to Secured Party, whether now existing or hereafter incurred, and
      whether created under, arising out of or in connection with any written
      agreement or otherwise.

     

    “Technical
      Disclosure”
      means
      all Technical Disclosures (Schedule A).

     

    “Trademark
      License” means
      any
      written agreement, in which Debtor now holds or hereafter acquires any interest,
      granting any right in and to any Trademark or Trademark registration (whether
      Debtor is the licensee or the licensor thereunder).

     

    
      
         

      

      
        -A-2-

        
          

        

      

      
         

      

    

    “Trademarks”
      means
      any
      of the following in which Debtor now holds or hereafter acquires any interest:
      (a) any trademarks, tradenames, corporate names, company names, business names,
      trade styles, service marks, logos, other source or business identifiers, prints
      and labels on which any of the foregoing have appeared or appear, designs and
      general intangibles of like nature, now existing or hereafter adopted or
      acquired, all registrations and recordings thereof and any applications in
      connection therewith, including, without limitation, registrations, recordings
      and applications in the United States Patent and Trademark Office or in any
      similar office or agency of the United States, any Sate thereof or any other
      country (collectively, the “Marks”); (b) any reissues, extensions or renewals
      thereof; (c) the goodwill of the business symbolized by or associated with
      the
      Marks; (d) income, royalties, damages, claims and payments now and hereafter
      due
      and/or payable with respect to the Marks, including, without limitation,
      damages, claims and recoveries for past, present or future infringement; and
      (e)
      rights to sue for past, present and future infringements of the
      Marks.

     

    “Trade
      Secret” means
      any
      and all information pertaining to the filing of any patents, technical data,
      customer lists, and technical know-how necessary to design manufacture, market
      and sell any and all products developed by Debtor. 

     

    “UCC”
      means
      the
      Uniform Commercial Code as the same may, from time to time, be in effect in
      the
      State of California; provided, however, in the event that, by reason of
      mandatory provisions of law, any or all of the attachment, perfection or
      priority of Secured Party’s security interest in any Collateral is governed by
      the Uniform Commercial Code as in effect in a jurisdiction other than the State
      of California, the term “UCC” shall mean the Uniform Commercial Code as in
      effect in such other jurisdiction for purposes of the provisions hereof relating
      to such attachment, perfection of priority and for purposes of definitions
      related to such provisions.

     

    2. GRANT
      OF SECURITY INTEREST. As
      collateral security for the prompt and complete payment and performance when
      due
      (whether at stated maturity, by acceleration or otherwise) of all the Secured
      Obligations and in order to induce Secured Party to cause the Loans to be made,
      Debtor hereby assigns, conveys, mortgages, pledges, hypothecates and transfers
      to Secured Party, and hereby grants to Secured Party, a security interest in
      all
      of Debtor’s right, title and interest in, to and under the following (all of
      which being collectively referred to herein as the “Collateral”):

     

    (a) All
      Accounts of Debtor;

     

    (b) All
      Chattel Paper of Debtor;

     

    (c) All
      Contracts and License Agreements of Debtor;

     

    (d) All
      Deposit Accounts of Debtor;

     

    (e) All
      Documents of Debtor;

     

    (f) All
      Equipment of Debtor;

     

    (g) All
      Financial Assets of Debtor;

     

    
      
         

      

      
        -A-3-

        
          

        

      

      
         

      

    

    (h) All
      Fixtures of Debtor;

     

    (i) All
      General Intangibles of Debtor, including, without limitation, all Copyrights,
      Patents, Trademarks, Licenses, designs, drawings, technical information,
      marketing plans, customer lists, trade secrets, proprietary or confidential
      information, inventions (whether or not patentable), procedures, know-how,
      models and data;

     

    (j) All
      Instruments of Debtor;

     

    (k) All
      Inventory of Debtor;

     

    (l) All
      Investment Property of Debtor;

     

    (m) All
      property of Debtor held by Secured Party, or any other party for whom Secured
      Party is acting as agent hereunder, including, without limitation, all property
      of every-description now or hereafter in the possession or custody of or in
      transit to Secured Party or such other party for any purpose, including, without
      limitation, safekeeping, collection or pledge, for the account of Debtor, or
      as
      to which Debtor may have any right or power;

     

    (n) All
      other
      goods and personal property of Debtor, wherever located, whether tangible or
      intangible, and whether now owned or hereafter acquired, existing, leased or
      consigned by or to Debtor; 

     

    (o) All
      Insurance Proceeds to Debtor; and

     

    (p) To
      the
      extent not otherwise included, all Proceeds of each of the foregoing and all
      accessions to, substitutions and replacements for and rents, profits and
      products of each of the foregoing.

     

    3. RIGHTS
      OF SECURED PARTY; COLLECTION OF ACCOUNTS.

     

    (a) Notwithstanding
      anything contained in this Security Agreement to the contrary, Debtor expressly
      agrees that it shall remain liable under each of its Contracts and each of
      its
      Licenses to observe and perform all the conditions and obligations to be
      observed and performed by it thereunder and that it shall perform all of its
      duties and obligations thereunder, all in accordance with and pursuant to the
      terms and provisions of each such Contract or License. Secured Party shall
      not
      have any obligation or liability under any Contract or License by reason of
      or
      arising out of this Security Agreement or the granting to Secured Party of
      a
      lien therein or the receipt by Secured Party of any payment relating to any
      Contract or License pursuant hereto, nor shall Secured Party be required or
      obligated in any manner to perform or fulfill any of the obligations of Debtor
      under or pursuant to any Contract or License, or to make any payment, or to
      make
      any inquiry as to the nature or the sufficiency of any payment received by
      it or
      the sufficiency of any performance by any party under any Contract or License,
      or to present or file any claim, or to take any action to collect or enforce
      any
      performance or the payment of any amounts which may have been assigned to it
      or
      to which it may be entitled at any time or times.

     

    (b) Secured
      Party authorizes Debtor to collect its Accounts, provided that such collection
      is performed in a prudent and businesslike manner, and Secured Party may, upon
      the occurrence and during the continuation of any Event of Default and without
      notice, limit or terminate said authority at any time. Upon the occurrence
      and
      during the continuance of any Event of Default, at the request of Secured Party,
      Debtor shall deliver all original and other documents evidencing and relating
      to
      the performance of labor or service which created such Accounts, including,
      without limitation, all original orders, invoices and shipping
      receipts.

     

    
      
         

      

      
        -A-4-

        
          

        

      

      
         

      

    

    (c) Secured
      Party may at any time, upon the occurrence and during the continuance of any
      Event of Default, without notifying Debtor of its intention to do so, notify
      Account Debtors of Debtor, parties to the Contracts of Debtor, obligors in
      respect of Instruments of Debtor and obligors in respect of Chattel Paper of
      Debtor that the Accounts and the right, title and interest of Debtor in and
      under such Contracts, Instruments and Chattel Paper have been assigned to
      Secured Party and that payments shall be made directly to Secured Party. Upon
      the request of Secured Party, Debtor shall so notify such Account Debtors,
      parties to such Contracts, obligors in respect of such Instruments and obligors
      in respect of such Chattel Paper. Upon the occurrence and during the continuance
      of any Event of Default, Secured Party may, in its name or in the name of
      others, communicate with such Account Debtors, parties to such Contracts,
      obligors in respect of such Instruments and obligors in respect of such Chattel
      Paper to verify with such parties, to Secured Party’s satisfaction, the
      existence, amount and terms of any such Accounts, Contracts, Instruments or
      Chattel Paper.

     

    4. REPRESENTATIONS
      AND WARRANTIES. Debtor
      hereby represents and warrants to Secured Party that:

     

    (a) Except
      for the security interest granted to Secured Party under this Security
      Agreement, Debtor is the sole legal and equitable owner of each item of the
      Collateral in which it purports to grant a security interest hereunder, having
      good and marketable title thereto, free and clear of any and all
      Liens.

     

    (b) No
      effective security agreement, financing statement, equivalent security or lien
      instrument or continuation statement covering all or any part of the Collateral
      exists, except such as may have been filed by Debtor in favor of Secured Party
      pursuant to this Security Agreement.

     

    (c) This
      Security Agreement creates a legal and valid security interest on and in all
      of
      the Collateral in which Debtor now has rights and all filings and other actions
      necessary or desirable to perfect and protect such security interest have been
      duly taken. Accordingly, Secured Party has a fully perfected first priority
      security interest in all of the Collateral in which Debtor now has rights.
      This
      Security Agreement will create a legal and valid and fully perfected first
      priority security interest in the Collateral in which Debtor later acquires
      rights, when Debtor acquires those rights and additional filings to be made
      with
      the United States Copyright Office and/or Patent and Trademark Office as are
      necessary to perfect Secured Party’s security interest in subsequent ownership
      rights and interests of Debtor in Copyrights, Patents, Trademarks and
      Licenses.

     

    (d) Debtor’s
      chief executive office, principal place of business and the place where Debtor
      maintains its records concerning the Collateral are presently located at the
      address set forth on the signature page hereof. The Collateral is presently
      located at the address of the Debtor.

     

    
      
         

      

      
        -A-5-

        
          

        

      

      
         

      

    

    (e) All
      Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks and
      Trademark Licenses now owned, held or in which Debtor otherwise has any interest
      are listed on Schedule A attached hereto.

     

    5. COVENANTS.
      Debtor
      covenants and agrees with Secured Party that from and after the date of this
      Security Agreement and until the Secured Obligations have been performed and
      paid in full:

     

    5.1 Disposition
      of Collateral. Debtor
      shall not sell, lease, transfer, license or otherwise dispose of any of the
      Collateral, or attempt or contract to do so.

     

    5.2 Relocation
      of Business or Collateral. Debtor
      shall not relocate its chief executive office, principal place of business
      or
      its records, or allow the relocation of any Collateral (except as allowed
      pursuant to Section 5.1 immediately above) from such address(es) provided to
      Secured Party pursuant to Section 4(d) above without twenty (20) days prior
      written notice to Secured Party.

     

    5.3 Limitation
      on Liens on Collateral. Debtor
      shall not, directly or indirectly, create, permit or suffer to exist, and shall
      defend the Collateral against and take such other action as is necessary to
      remove, any Lien on the Collateral, except the Lien granted to Secured Party
      under this Security Agreement.

     

    5.4 Insurance.
      Maintain
      insurance policies insuring the Collateral against loss or damage from such
      risks and in such amounts and forms and with such companies as are customarily
      maintained by businesses similar to Debtor.

     

    5.5 Taxes,
      Assessments, Etc. Debtor
      shall pay promptly when due all property and other taxes, assessments and
      government charges or levies imposed upon, and all claims (including claims
      for
      labor, materials and supplies) against, the Equipment, Fixtures or Inventory,
      except to the extent the validity thereof is being contested in good faith
      and
      adequate reserves are being maintained in connection therewith.

     

    5.6 Maintenance
      of Records. Debtor
      shall keep and maintain at its own cost and expense satisfactory and complete
      records of the Collateral.

     

    5.7 Registration
      and maintenance of Intellectual Property Rights. After
      consultation with Secured Party, Debtor shall promptly register or cause to
      be
      registered (to the extent not already registered) the most recent version of
      any
      Copyright and any Copyright License and any Patent, Patent License, Trademark
      or
      Trademark License, which, individually or in the aggregate, is material to
      the
      conduct of Debtor’s business, with the United States Copyright Office or Patent
      and Trademark Office or appropriate overseas patent, copyright, or trademark
      office, as applicable, including, without limitation, in all such cases, the
      filing of applications for renewal, affidavits of use, affidavits of
      noncontestability and opposition and interference and cancellation proceedings.
      Debtor shall register or cause to be registered with the United States Copyright
      Office or Patent and Trademark Office, as applicable, those additional rights
      and interests developed or acquired by Debtor after the date of this Security
      Agreement, including, without limitation, any additions to the rights and
      interests of Debtor listed on Schedule A hereto 

     

    
      
         

      

      
        -A-6-

        
          

        

      

      
         

      

    

    5.8 Notification
      Regarding Changes in Intellectual Property. Debtor
      shall promptly advise Secured Party of any subsequent ownership right or
      interest of the Debtor in or to any Copyright, Patent, Trademark, Technical
      Disclosure, Trade Secret or License not specified on Schedule A hereto and
      shall
      permit Secured Party to amend such Schedule, as necessary, to reflect any
      addition or deletion to such ownership rights.

     

    5.9 Defense
      of Intellectual Property. Debtor
      shall (i) protect, defend and maintain the validity and enforceability of the
      Copyrights, Patents and Trademarks, (ii) use its best efforts to detect
      infringements of the Copyrights, Patents and Trademarks and promptly advise
      Secured Party in writing of material infringements detected and (iii) diligently
      pay maintenance and registration fees and not allow any Copyrights, Patents
      or
      Trademarks to be abandoned, forfeited or dedicated to the public without the
      written consent of Secured Party.

     

    5.10 Further
      Assurances; Pledge of Instruments. At
      any
      time and from time to time, upon the written request of Secured Party, and
      at
      the sole expense of Debtor, Debtor shall promptly and duly execute and deliver
      any and all such further instruments and documents and take such further action
      as Secured Party may reasonably deem necessary or desirable to obtain the full
      benefits of this Security Agreement, including, without limitation, facilitating
      the filing of UCC-1 Financing Statements in all applicable jurisdictions and
      this Security Agreement (and any amendment hereto) with the United States
      Copyright Office and/or Patent and Trademark Office, as applicable.

     

    6. RIGHTS
      AND REMEDIES UPON DEFAULT.

     

    (a) Beginning
      on the date which is thirty (30) business days after any Event of Default shall
      have occurred and while such Event of Default is continuing, Secured Party
      may
      exercise in addition to all other rights and remedies granted to it under this
      Security Agreement, all rights and remedies of a secured party under the
      UCC.

     

    (b) Debtor
      also agrees to pay all fees, costs and expenses of Secured Party, including,
      without limitation, reasonable attorneys fees, incurred in connection with
      the
      enforcement of any of its rights and remedies hereunder.

     

    (c) Debtor
      hereby waives presentment, demand, protest or any notice (to the maximum extent
      permitted by applicable law) of any kind in connection with this Security
      Agreement or any Collateral.

     

    (d) The
      Proceeds of any sale, disposition or other realization upon all or any part
      of
      the Collateral shall be distributed by Secured Party in the following order
      of
      priorities:

     

    FIRST,
      to
      Secured Party in an amount sufficient to pay in full the reasonable costs of
      Secured Party in connection with such sale, disposition or other realization,
      including all fees, costs, expenses, liabilities and advances incurred or made
      by Secured Party in connection therewith, including, without limitation,
      reasonable attorneys’ fees;

     

    SECOND,
      to
      Secured Party in an amount equal to the then unpaid Secured Obligations;
      and

     

    
      
         

      

      
        -A-7-

        
          

        

      

      
         

      

    

    FINALLY,
      upon
      payment in full of the Secured Obligations, to Debtor or its representatives,
      in
      accordance with the UCC or as a court of competent jurisdiction may
      direct.

     

    7. INDEMNITY.
      Debtor
      agrees to defend, indemnify and hold harmless Secured Party and its officers,
      employees, and agents against (a) all obligations, demands, claims, and
      liabilities claimed or asserted by any other party in connection with the
      transactions contemplated by this Security Agreement and (b) all losses or
      expenses in any way suffered, incurred, or paid by Secured Party as a result
      of
      or in any way arising out of, following or consequential to transactions between
      Secured Party and Debtor, whether under this Security Agreement or otherwise
      (including without limitation, reasonable attorneys fees and expenses), except
      for losses arising from or out of Secured Party’s gross negligence or willful
      misconduct.

     

    8. LIMITATION
      ON SECURED PARTY’S
      DUTY IN RESPECT OF COLLATERAL. Secured
      Party shall be deemed to have acted reasonably in the custody, preservation
      and
      disposition of any of the Collateral if it takes such action as Debtor requests
      in writing, but failure of Secured Party to comply with any such request shall
      not in itself be deemed a failure to act reasonably, and no failure of Secured
      Party to do any act not so requested shall be deemed a failure to act
      reasonably.

     

    9. REINSTATEMENT.
      This
      Security Agreement shall remain in full force and effect and continue to be
      effective should any petition be filed by or against Debtor for liquidation
      or
      reorganization, should Debtor become insolvent or make an assignment for the
      benefit of creditors or should a receiver or trustee be appointed for all or
      any
      significant part of Debtor’s property and assets, and shall continue to be
      effective or be reinstated, as the case may be, if at any time payment and
      performance of the Secured Obligations, or any part thereof, is, pursuant to
      applicable law, rescinded or reduced in amount, or must otherwise be restored
      or
      returned by any obligee of the Secured Obligations, whether as a “voidable
      preference,” “fraudulent conveyance,” or otherwise, all as though such payment
      or performance had not been made. In the event that any payment, or any part
      thereof, is rescinded, reduced, restored or returned, the Secured Obligations
      shall be reinstated and deemed reduced only by such amount paid and not so
      rescinded, reduced, restored or returned.

     

    10. MISCELLANEOUS.

     

    10.1 No
      Waiver; Cumulative Remedies.

     

    (a) Secured
      Party shall not by any act, delay, omission or otherwise be deemed to have
      waived any of its respective rights or remedies hereunder, nor shall any single
      or partial exercise of any right or remedy hereunder on any one occasion
      preclude the further exercise thereof or the exercise of any other right or
      remedy.

     

    (b) The
      rights and remedies hereunder provided are cumulative and may be exercised
      singly or concurrently, and are not exclusive of any rights and remedies
      provided by law.

     

    (c) None
      of
      the terms or provisions of this Security Agreement may be waived, altered,
      modified or amended except by an instrument in writing, duly executed by Debtor
      and Secured Party.

     

    
      
         

      

      
        -A-8-

        
          

        

      

      
         

      

    

    10.2 Termination
      of this Security Agreement. Subject
      to Section 9 hereof, this Security Agreement shall terminate upon the payment
      and performance in full of the Secured Obligations.

     

    10.3 Successor
      and Assigns. This
      Security Agreement and all obligations of Debtor hereunder shall be binding
      upon
      the successors and assigns of Debtor, and shall, together with the rights and
      remedies of Secured Party hereunder, inure to the benefit of Secured Party,
      any
      future holder of any of the indebtedness and their respective successors and
      assigns. No sales of participations, other sales, assignments, transfers or
      other dispositions of any agreement governing or instrument evidencing the
      Secured Obligations or any portion thereof or interest therein shall in any
      manner affect the lien granted to Secured Party hereunder.

     

    10.4 Governing
      Law. In
      all
      respects, including all matters of construction, validity and performance,
      this
      Security Agreement and the Secured Obligations arising hereunder shall be
      governed by, and construed and enforced in accordance with, the laws of the
      State of California applicable to contracts made and performed in such state,
      without regard to the principles thereof regarding conflict of
      laws.

     

    IN
      WITNESS WHEREOF, each
      of
      the parties hereto has caused this Security Agreement to be executed and
      delivered by its duly authorized officer on the date first set forth
      above.

     

    
      	 	 	 
	 	
              INTEGRATED
                SURGICAL SYSTEMS, INC.
                (DEBTOR)

            
	 
 	 
 	 
 
	
            	/s/
              Dr. Ramesh Trivedi
	 	
              

              By:
                Dr. Ramesh Trivedi, CEO

            

    

    
       

      
        	 	 	 
	 	
                
                  ACCEPTED
                    AND ACKNOWLEDGED BY: 

                   

                  NOVATRIX
                    BIOMEDICAL, INC. (SECURED
                    PARTY)

                

              
	 
 	 
 	 
 
	
              	
                /s/
                  Dr. Soonkap Hahn

              
	 	
                

                
                  By:
                    Dr. Soonkap Hahn, CEO

                

              

      

       

      
        
           

        

        
          -A-9-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00125-of-00352.parquet"}]]