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EXHIBIT 4
[CONFORMED COPY]
SECURITY AGREEMENT
AGREEMENT dated as of May 20, 1999, between CARDIAC PATHWAYS
CORPORATION, a Delaware corporation (together with its successors, the
"Company"), and BankAmerica Ventures, as Collateral Agent (the "Collateral
Agent") for the Purchasers referred to below.
W I T N E S S E T H :
WHEREAS the Company, and the purchasers listed therein (the
"Purchasers"), are parties to a Securities Purchase Agreement of even date
herewith (as the same may be amended from time to time, the Securities Purchase
Agreement"); and
WHEREAS, in order to induce said purchasers to enter into the Securities
Purchase Agreement, the Company has agreed to grant a continuing security
interest in and to the Collateral (as hereafter defined) to secure its
obligations under the Bridge Securities referred to in the Securities Purchase
Agreement;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions. Terms defined in the Securities Purchase
Agreement and not otherwise defined herein have, as used herein, the respective
meanings provided for therein. The following additional terms, as used herein,
have the following respective meanings:
"Accounts" means all "accounts" (as defined in the UCC) now owned or
hereafter acquired by the Company, and shall also mean and include all accounts
receivable, contract rights, book debts, notes, drafts and other obligations or
indebtedness owing to the Company arising from the sale, lease or exchange of
goods or other property by it and/or the performance of services by it
(including, without limitation, any such obligation which might be characterized
as an account, contract right or general intangible under the Uniform Commercial
Code in effect in any jurisdiction) and all of the Company's rights in, to and
under all purchase orders for goods, services or other property, and all of the
Company's rights to any goods, services or other property represented by any of
the foregoing (including returned or repossessed goods and unpaid sellers'
rights of rescission, replevin, reclamation and rights to stoppage in transit)
and all monies due to or to become due to the Company under all contracts for
the sale, lease or exchange of
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goods or other property and/or the performance of services by it (whether or not
yet earned by performance on the part of the Company), in each case whether now
existing or hereafter arising or acquired including, without limitation, the
right to receive the proceeds of said purchase orders and contracts and all
collateral security and guarantees of any kind given by any Person with respect
to any of the foregoing.
"Collateral" has the meaning specified in Section 3.
"Collateral Account" has the meaning specified in Section 5.
"Commodity Account" means an account maintained by a commodity
intermediary in which a commodity contract is carried for a commodity customer.
"Commodity Contract" means a commodity futures contract, an option on a
commodity futures contract, a commodity option, or other contract that, in each
case, is:
(i) traded on or subject to the rules of a board of trade that
has been designated as a contract market for such a contract pursuant to
the federal commodities laws; or
(ii) traded on a foreign commodity board of trade, exchange, or
market, and is carried on the books of a commodity intermediary for a
commodity customer.
"Copyright License" means, any agreement now or hereafter in existence
granting to the Company, or pursuant to which the Company has granted to any
other Person, any right to use, copy, reproduce, distribute, prepare derivative
works, display or publish any records or other materials on which a Copyright is
in existence or may come into existence, including, without limitation, any
agreement identified in Schedule 1 to a Copyright Security Agreement.
"Copyrights" means all the following: (i) all copyrights under the laws
of the United States or any other country (whether or not the underlying works
of authorship have been published), all registrations and recordings thereof,
all copyrightable works of authorship (whether or not published), and all
applications for copyrights under the laws of the United States or any other
country, including, without limitation, registrations, recordings and
applications in the United States Copyright Office or in any similar office or
agency of the United States, any State thereof or any other country or any
political subdivision thereof, including, without limitation, those described in
Schedule 1 to the Copyright Security Agreement, (ii) all renewals thereof, (iii)
all claims for, and rights to ▇▇▇ for, past
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or future infringements of any of the foregoing, and (iv) all income, royalties,
damages and payments now or hereafter due or payable with respect to any of the
foregoing, including, without limitation, damages and payments for past or
future infringements thereof.
"Copyright Security Agreement" means, with respect to the Company, a
Copyright Security Agreement, substantially in the form of Exhibit B hereto,
executed and delivered by the Company in favor of the Agent, for the benefit of
the Secured Parties, as amended from time to time.
"Credit Agreement" means the Loan and Security Agreement dated as of May
15, 1998 between the Company and Silicon Valley Bank, together with the related
documents thereto, including without limitation, any security documents, in each
case as in effect on May 17, 1999.
"Deposit Account" means a demand, time, savings, passbook or like
account maintained with a bank, savings and loan association, credit union or
like organization, other than an account evidenced by a negotiable certificate
of deposit.
"Documents" means all "documents" (as defined in the UCC) or other
receipts covering, evidencing or representing goods, now owned or hereafter
acquired by the Company.
"Equipment" means all "equipment" (as defined in the UCC) now owned or
hereafter acquired by the Company, including without limitation all motor
vehicles, trucks, trailers, railcars and barges, and all accessions thereto.
"Financial Asset" means:
(i) a Security;
(ii) an obligation of a person or a share, participation, or
other interest in a person or in property or an enterprise of a person,
which is, or is of a type, dealt in or traded on financial markets, or
which is recognized in any area in which it is issued or dealt in as a
medium for investment; or
(iii) any property that is held by a securities intermediary for
another person in a Securities Account if the securities intermediary
has expressly agreed with the other person that the property is to be
treated as a financial asset under Article 8 of the UCC.
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As context requires, the term means either the interest itself or the means by
which a person's claim to it is evidenced, including a certificated or
uncertificated Security, a Security certificate, or a Security Entitlement.
"General Intangibles" means all "general intangibles" (as defined in the
UCC) now owned or hereafter acquired by the Company, including, without
limitation, (i) all obligations or indebtedness owing to the Company (other than
Accounts) from whatever source arising, (ii) all Patents, Patent Licenses,
trademarks, trademark licenses, rights in intellectual property, goodwill, trade
names, service marks, trade secrets, copyrights, permits and licenses, (iii) all
rights or claims in respect of refunds for taxes paid and (iv) all rights in
respect of any pension plan or similar arrangement maintained for employees of
any member of the Controlled Group.
"Instruments" means all "instruments", "chattel paper" or "letters of
credit" (each as defined in the UCC) evidencing, representing, arising from or
existing in respect of, relating to, securing or otherwise supporting the
payment of, any of the Accounts, including (but not limited to) promissory
notes, drafts, bills of exchange and trade acceptances, now owned or hereafter
acquired by the Company.
"Investment Property" means all (i) Securities, whether certificated or
uncertificated, (ii) Security Entitlements, (iii) Securities Accounts, (iv)
Commodity Contracts and (v) Commodity Accounts now owned or hereafter acquired
by the Company.
"Inventory" means all "inventory" (as defined in the UCC), now owned or
hereafter acquired by the Company, wherever located, and shall also mean and
include, without limitation, all raw materials and other materials and supplies,
work-in-process and finished goods and any products made or processed therefrom
and all substances, if any, commingled therewith or added thereto.
"Liquid Investments" has the meaning specified in Section 5(d).
"Patent License" means, with respect to the Issuer, any agreement now or
hereafter in existence granting to the Issuer, or pursuant to which the Company
has granted to any other person, any right with respect to any Patent or any
invention now or hereafter in existence, whether patentable or not, whether a
patent or application for patent is in existence on such invention or not, and
whether a patent or application for patent on such invention may come into
existence.
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"Patents" means, with respect to the Issuer, all of the following: (i)
all letters patent and design letters patent of the United States or any other
country and all applications for letters patent and design letters patent of the
United States or any other country, including, without limitation, applications
in the United States Patent and Trademark Office or in any similar office or
agency of the United States, any state thereof, the District of Columbia or any
other country or any political subdivision of any of the foregoing, including,
without limitation, those described in the Perfection Certificate of the Issuer,
(ii) all reissues, divisions, continuations, continuations-in-part, renewals and
extensions of any of the foregoing, (iii) all claims for, and rights to ▇▇▇ for,
past or future infringements of any of the foregoing and (iv) all income,
royalties, damages and payments now or hereafter due or payable with respect to
any of the foregoing, including, without limitation, damages and payments for
past or future infringements thereof.
"Patent Security Agreement" means, with respect to the Issuer, the
Patent Security Agreement executed and delivered by the Issuer in favor of the
Collateral Agent, for the benefit of the Secured Parties, substantially in the
form of Exhibit D hereto, as the same may be amended from time to time.
"Perfection Certificate" means a certificate substantially in the form
of Exhibit A hereto, completed and supplemented with the schedules and
attachments contemplated thereby to the satisfaction of the Collateral Agent,
and duly executed by the chief executive officer and the chief legal officer of
the Company.
"Permitted Liens" means the Security Interests and the Liens on the
Collateral permitted to be created, to be assumed or to exist pursuant to
Section 7.5 of the Credit Agreement.
"Proceeds" means all proceeds of, and all other profits, products, rents
or receipts, in whatever form, arising from the collection, sale, lease,
exchange, assignment, licensing or other disposition of, or other realization
upon, collateral, including without limitation all claims of the Company against
third parties for loss of, damage to or destruction of, or for proceeds payable
under, or unearned premiums with respect to, policies of insurance in respect
of, any collateral, and any condemnation or requisition payments with respect to
any collateral, in each case whether now existing or hereafter arising.
"Secured Obligations" means the obligations secured under this Agreement
including (a) all principal of and interest (including, without limitation, any
interest which accrues after the commencement of any case, proceeding or other
action relating to the bankruptcy, insolvency or reorganization
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of the Company, whether or not allowed or allowable as a claim in any such
proceeding) on the Bridge Securities, (b) all other amounts payable by the
Company hereunder or under the Credit Agreement and (c) any renewals or
extensions of any of the foregoing.
"Secured Parties" means the Purchasers and the Collateral Agent.
"Securities Account" means an account to which a Financial Asset is or
may be credited in accordance with an agreement under which the person
maintaining the account undertakes to treat the person for whom the account is
maintained as entitled to exercise the rights that comprise the Financial Asset.
"Security" means an obligation of an issuer or a share, participation,
or other interest in an issuer or in property or an enterprise of an issuer:
(i) which is represented by a Security certificate in bearer or
registered form, or the transfer of which may be registered upon books
maintained for that purpose by or on behalf of the issuer;
(ii) which is one of a class or series or by its terms is
divisible into a class or series of shares, participations, interests,
or obligations; and
(iii) which:
(A) is, or is of a type, dealt in or traded on
securities exchanges or securities markets; or
(B) is a medium for investment and by its terms
expressly provides that it is a security governed by Article 8
of the UCC.
"Security Entitlement" means the rights and property interest of an
entitlement holder with respect to a Financial Asset specified in Part 5 of
Article 8 of the UCC.
"Security Interests" means the security interests in the Collateral
granted hereunder securing the Secured Obligations.
"Trademark License" means, with respect to the Issuer, any agreement
now or hereafter in existence granting to the Issuer, or pursuant to which the
Issuer has granted to any other Person, any right to use any Trademark.
"Trademarks" means, with respect to the Issuer, all of the following:
(i) all trademarks, trade names, corporate names, company names,
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business names, fictitious business names, trade styles, service marks, logos,
brand names, trade dress, prints and labels on which any of the foregoing have
appeared or appear, package and other designs, and any other source or business
identifiers, and general intangibles of like nature, and the rights in any of
the foregoing which arise under applicable law, (ii) the goodwill of the
business symbolized thereby or associated with each of them, (iii) all
registrations and applications in the United States Patent and Trademark Office
or in a similar office or agency of the United States, any State thereof, the
District of Columbia or any other country or any political subdivision of any of
the foregoing, (iv) all reissues, extensions and renewals of any of the
foregoing, (v) all claims for, and rights to ▇▇▇ for, past or future
infringements of any of the foregoing and (vi) all income, royalties, damages
and payments now or hereafter due or payable with respect to any of the
foregoing, including, without limitation, damages and payments for past or
future infringements thereof.
"UCC" means the Uniform Commercial Code as in effect on the date hereof
in the State of California; provided that if by reason of mandatory provisions
of law, the perfection or the effect of perfection or non-perfection of the
Security Interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than California, "UCC" means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or effect of perfection or
non-perfection.
SECTION 2. Representations and Warranties. The Company represents and
warrants as follows:
(a) The Company has good and marketable title to all of the
Collateral, free and clear of any Liens other than Permitted Liens. The
Company has taken all actions necessary under the UCC to perfect its
interest in any Accounts purchased or otherwise acquired by it, as
against its assignors and creditors of its assignors.
(b) The Company has not performed any acts which might prevent
the Collateral Agent from enforcing any of the terms of this Agreement
or which would limit the Collateral Agent in any such enforcement. Other
than financing statements or other similar or equivalent documents or
instruments with respect to the Security Interests and Permitted Liens,
no financing statement, mortgage, security agreement or similar or
equivalent document or instrument covering all or any part of the
Collateral is on file or of record in any jurisdiction in which such
filing or recording would be effective to perfect a Lien on such
Collateral. No Collateral is in the possession of any Person (other than
the Company)
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asserting any claim thereto or security interest therein, except that
the Collateral Agent or its designee may have possession of Collateral
as contemplated hereby.
(c) On or before the Closing Date, the Company shall deliver the
Perfection Certificate to the Collateral Agent. The information
specified therein shall be correct and complete. Within 60 days after
the date of the first Borrowing, the Company shall furnish to the
Collateral Agent file search reports from each UCC filing office
specified in Schedule 7 to the Perfection Certificate confirming the
filing information set forth in such Schedule.
(d) The Security Interests constitute valid security interests
under the UCC securing the Secured Obligations. When UCC financing
statements in the form specified in Exhibit A shall have been filed in
the offices specified in the Perfection Certificate, the Security
Interests shall constitute perfected security interests in the
Collateral (except Inventory in transit) to the extent that a security
interest therein may be perfected by filing pursuant to the UCC, prior
to all other Liens and rights of others therein except for Permitted
Liens. When a Patent Security Agreement has been recorded with the
United States Patent and Trademark Office, the Security Interests shall
constitute perfected Security Interests in all right, title and interest
of the Issuer in the Patents listed in Schedule 1 to such Agreement,
prior to all other Liens and rights of others therein except for
Permitted Liens. When notice of the Security Interest in the Collateral
Account has been given to Citibank, N.A., the Security Interest in the
Collateral Account will constitute a perfected Security Interest in the
Collateral Account.
(e) If and when any Financial Asset or Security Entitlement is
held in the Collateral Account, the Collateral Agent will have "control"
(as defined in Article 8 of the UCC) thereof and will be a "protected
purchaser" (as defined in said Article 8) thereof.
(f) The Inventory and Equipment are insured in accordance with
the requirements of the Credit Agreement.
(g) All Inventory has or will have been produced in compliance
with the applicable requirements of the Fair Labor Standards Act, as
amended.
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SECTION 3. The Security Interests. (a) In order to secure the full and
punctual payment of the Secured Obligations in accordance with the terms
thereof, and to secure the performance of all the Company's obligations
hereunder and under the Bridge Securities, the Company grants to the Collateral
Agent for the ratable benefit of the Secured Parties a continuing security
interest in and to all of the following property of the Company, whether now
owned or existing or hereafter acquired or arising and regardless of where
located (all being collectively referred to as the "Collateral"):
(i) Accounts;
(ii) Documents;
(iii) Equipment;
(iv) General Intangibles;
(v) Instruments;
(vi) Inventory;
(vii) Investment Property;
(viii) All Deposit Accounts, including the Collateral Account,
all cash deposited therein from time to time, the Liquid Investments
made pursuant to Section 5(d) and other monies and property of any kind
of the Company in the possession or under the control of the Collateral
Agent;
(ix) All books and records (including, without limitation,
customer lists, credit files, computer programs, printouts and other
computer materials and records) of the Company pertaining to any of the
Collateral; and
(x) All Proceeds of the Collateral described in Clauses
3(a)(i) through 3(a)(ix) hereof.
(b) The Security Interests are granted as security only and shall not
subject the Collateral Agent or any Secured Party to, or transfer or in any way
affect or modify, any obligation or liability of the Company with respect to
any of the Collateral or any transaction in connection therewith.
SECTION 4. Further Assurances; Covenants. (a) The Company will not
change its name, identity or corporate structure in any manner unless it shall
have
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given the Collateral Agent at least 30 days' prior notice thereof and delivered
an opinion of counsel with respect thereto in accordance with Section 4(l). The
Company will not change the location of (i) its chief executive office or chief
place of business or (ii) the locations where it keeps or holds any Collateral
or any records relating thereto from the applicable location described in the
Perfection Certificate unless it shall have given the Collateral Agent at least
30 days' prior notice thereof and delivered an opinion of counsel with respect
thereto in accordance with Section 4(l). The Company shall not in any event
change the location of any Collateral if such change would cause the Security
Interests in such Collateral to lapse or cease to be perfected.
(b) The Company will, from time to time, at its expense, execute,
deliver, file and record any statement, assignment, instrument, document,
agreement or other paper and take any other action, (including, without
limitation, any filings of financing or continuation statements under the UCC)
that from time to time may be necessary or desirable, or that the Collateral
Agent may request, in order to create, preserve, perfect, confirm or validate
the Security Interests or to enable the Secured Parties to obtain the full
benefits of this Agreement, or to enable the Collateral Agent to exercise and
enforce any of its rights, powers and remedies hereunder with respect to any of
the Collateral. To the extent permitted by applicable law, the Company hereby
authorizes the Collateral Agent to execute and file financing statements or
continuation statements without the Company's signature appearing thereon. The
Company agrees that a carbon, photographic, photostatic or other reproduction of
this Agreement or of a financing statement is sufficient as a financing
statement. The Company shall pay the costs of, or incidental to, any recording
or filing of any financing or continuation statements concerning the Collateral.
(c) If any Collateral is at any time in the possession or control of any
warehouseman, bailee or any of the Company's agents or processors, the Company
shall notify such warehouseman, bailee, agent or processor of the Security
Interests created hereby and to hold all such Collateral for the Collateral
Agent's account subject to the Collateral Agent's instructions.
(d) The Company shall keep full and accurate books and records relating
to the Collateral, and stamp or otherwise ▇▇▇▇ such books and records in such
manner as the Required Lenders may reasonably require in order to reflect the
Security Interests.
(e) The Company will immediately deliver and pledge each Instrument to
the Collateral Agent, appropriately endorsed to the Collateral Agent, provided
that so long as no Event of Default (as defined in the Bridge Securities) shall
have occurred and be continuing, the Company may retain for collection in the
ordinary
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course any Instruments (other than checks and drafts constituting payments in
respect of Accounts, as to which the provisions of Section 5(b) shall apply)
received by it in the ordinary course of business and the Collateral Agent
shall, promptly upon request of the Company, make appropriate arrangements for
making any other Instrument pledged by the Company available to it for purposes
of presentation, collection or renewal (any such arrangement to be effected, to
the extent deemed appropriate to the Collateral Agent, against trust receipt or
like document).
(f) The Company shall use its best efforts to cause to be collected from
its account debtors, as and when due, any and all amounts owing under or on
account of each Account (including, without limitation, Accounts which are
delinquent, such Accounts to be collected in accordance with lawful collection
procedures) and shall apply forthwith upon receipt thereof all such amounts as
are so collected to the outstanding balance of such Account. Subject to the
rights of the Secured Parties hereunder if an Event of Default shall have
occurred and be continuing, the Company may allow in the ordinary course of
business as adjustments to amounts owing under its Accounts (i) an extension or
renewal of the time or times of payment, or settlement for less than the total
unpaid balance, which the Company finds appropriate in accordance with sound
business judgment and (ii) a refund or credit due as a result of returned or
damaged merchandise, all in accordance with the Company's ordinary course of
business consistent with its historical collection practices. The costs and
expenses (including, without limitation, attorney's fees) of collection, whether
incurred by the Company or the Collateral Agent, shall be borne by the Company.
(g) Upon the occurrence and during the continuance of any Event of
Default, upon request of the Required Purchasers through the Collateral Agent,
the Company will promptly notify (and the Company hereby authorizes the
Collateral Agent so to notify) each account debtor in respect of any Account or
Instrument that such Collateral has been assigned to the Collateral Agent
hereunder, and that any payments due or to become due in respect of such
Collateral are to be made directly to the Collateral Agent or its designee.
(h) The Company shall, (i) on or prior to the date of the first
Borrowing, in the case of Equipment now owned and (ii) within 10 days of
acquiring any other Equipment, deliver to the Collateral Agent any and all
certificates of title, applications for title or similar evidence of ownership
of such Equipment and shall cause the Collateral Agent to be named as lienholder
on any such certificate of title or other evidence of ownership. The Company
shall promptly inform the Collateral Agent of any additions to or deletions from
the Equipment and shall not permit any such items to become a fixture to real
estate or an accession to other personal property.
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(i) Without the prior written consent of the Required Lenders, the
Company will not sell, lease, exchange, assign or otherwise dispose of, or grant
any option with respect to, any Collateral except that, subject to the rights of
the Secured Parties hereunder if an Event of Default shall have occurred and be
continuing, the Company may sell, lease or exchange Inventory and surplus or
worn-out Equipment in the ordinary course of business, whereupon, in the case of
such a sale or exchange, the Security Interests created hereby in such item (but
not in any Proceeds arising from such sale or exchange) shall cease immediately
without any further action on the part of the Collateral Agent.
(j) Prior to the Closing Date under the Securities Purchase Agreement,
the Company will cause the Collateral Agent to be named as an insured party and
loss payee on each insurance policy covering risks relating to any of its
Inventory and Equipment. The Company will deliver to the Collateral Agent, upon
request of the Collateral Agent, the insurance policies for such insurance or
certificates of insurance evidencing such coverage. Each such insurance policy
shall include effective waivers by the insurer of all claims for insurance
premiums against the Secured Parties, provide for coverage to the Collateral
Agent regardless of any breach by the Company of any warranty or representation
made therein, not be subject to co-insurance, provide that all insurance
proceeds in excess of $50,000 per claim shall be adjusted with and payable to
the Collateral Agent and provide that no cancellation, termination or material
modification thereof shall be effective until at least 30 days after receipt by
the Collateral Agent of notice thereof. The Company hereby appoints the
Collateral Agent as its attorney-in-fact to make proof of loss, claim for
insurance and adjustments with insurers, and to execute or endorse all
documents, checks or drafts in connection with payments made as a result of any
insurance policies.
(k) The Company will, promptly upon request, provide to the Collateral
Agent all information and evidence it may reasonably request concerning the
Collateral to enable the Collateral Agent to enforce the provisions of this
Agreement.
(l) Not more than six months nor less than 30 days prior to each date on
which the Company proposes to take any action contemplated by Section 4(a), the
Company shall, at its cost and expense, cause to be delivered to the Purchasers
an opinion of counsel, satisfactory to the Collateral Agent, substantially in
the form of Exhibit B hereto, to the effect that all financing statements and
amendments or supplements thereto, continuation statements and other documents
required to be recorded or filed in order to perfect and protect the Security
Interests for a period, specified in such opinion, continuing until a date not
earlier than eighteen months from the date of such opinion, against all
creditors of and purchasers from the
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Company have been filed in each filing office necessary for such purpose and
that all filing fees and taxes, if any, payable in connection with such filings
have been paid in full.
(m) The Issuer agrees to notify the Collateral Agent immediately upon
filing any application for, or otherwise acquiring ownership of or a
registration relating to, any copyright, Patent or Trademark. At any time and
from time to time thereafter, the Collateral Agent may (and shall upon
instruction from the Required Lenders) require either Company to, at its expense
and upon the request of the Collateral Collateral Agent, file (as appropriate)
the Patent Security Agreement and the Trademark Security Agreement with the
United States Patent and Trademark Office and a copyright security agreement (in
form and substance satisfactory to the Collateral Agent) with the United States
Copyright Office, and take such other actions as may be necessary or reasonably
desirable, or that the Collateral Agent may reasonably request, in order to
create and perfect the security interests in such Patents, Trademarks or
copyrights, as the case may be. The Issuer shall notify the Collateral Agent
immediately if it knows that any application or registration relating to any
Patent or Trademark may become abandoned or dedicated to the public (other than
applications or registrations (x) with respect to any such Patents or Trademarks
that are no longer used or useful in the business of the Issuer or whose minimal
value does not reasonably justify the cost of maintaining such registration or
application, or (y) that have been refused by the applicable patent or trademark
registry) or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, or any court) regarding the
Issuer's ownership of any Patent or Trademark, its right to register the same,
or to keep and maintain the same. In the event that any right to any Patent,
Patent License, Trademark or Trademark License of either Company is infringed,
misappropriated or diluted by a third party, the Issuer shall notify the
Collateral Agent promptly after it learns thereof and shall, unless the Issuer
shall reasonably determine that any such action would be of negligible economic
value, promptly ▇▇▇ for infringement, misappropriation or dilution and to
recover any and all damages for such infringement, misappropriation or dilution,
and take such other actions as the Issuer shall reasonably deem appropriate
under the circumstances to protect such Patent, Patent License, Trademark or
Trademark License. In no event shall either Company, either by itself or through
any agent, employee or licensee, file an application for the registration of any
Patent or Trademark with the United States Patent and Trademark Office, or with
any similar office or agency of the United States, any State thereof, the
District of Columbia or with any similar office or agency in any other country
or any political subdivision thereof, unless not less than 10 days prior thereto
it informs the Collateral Agent, and, upon request of the Collateral Agent,
executes and delivers any and all agreements, instruments,
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documents and papers the Collateral Agent may request to evidence the Security
Interests in such Patent or Trademark and the goodwill and general intangibles
of the Issuer relating thereto or represented thereby, and the Issuer hereby
constitutes the Collateral Agent its attorney-in-fact to execute and file all
such writings for the foregoing purposes, all acts of such attorney being hereby
ratified and confirmed; such power being coupled with an interest, shall be
irrevocable until the Secured Obligations are paid in full.
(n) From time to time upon request by the Collateral Agent, the Company
shall, at its cost and expense, cause to be delivered to the Purchasers an
opinion of counsel satisfactory to the Collateral Agent as to such matters
relating to the transactions contemplated hereby as the Required Purchasers may
reasonably request.
SECTION 5. Collateral Account. (a) There is hereby established with the
Collateral Agent a collateral account (the "Collateral Account") in the name and
under the control of the Collateral Agent into which there shall be deposited
(i) from time to time the cash proceeds of the Collateral required to be
delivered to the Collateral Agent pursuant to subsection 5(b) hereof or any
other provision of this Agreement and (ii) the cash proceeds of the Securities
issued and sold pursuant to the Securities Purchase Agreement. Any income
received by the Collateral Agent with respect to the balance from time to time
standing to the credit of the Collateral Account, including any interest or
capital gains on Liquid Investments, shall remain, or be deposited, in the
Collateral Account. All right, title and interest in and to the cash amounts on
deposit from time to time in the Collateral Account together with any Liquid
Investments from time to time made pursuant to subsection 5(d) hereof shall vest
in the Collateral Agent, shall constitute part of the Collateral hereunder and
shall not constitute payment of the Secured Obligations until applied thereto as
hereinafter provided.
(b) The Company shall instruct all account debtors and other Persons
obligated in respect of all Accounts to make all payments in respect of the
Accounts either (i) directly to the Collateral Agent (by instructing that such
payments be remitted to a post office box which shall be in the name and under
the control of the Collateral Agent) or (ii) to one or more other banks in any
state (other than Louisiana) in the United States (by instructing that such
payments be remitted to a post office box which shall be in the name and under
the control of such bank) under a Lockbox Letter substantially in the form of
Exhibit C hereto duly executed by the Company and such bank or under other
arrangements, in form and substance satisfactory to the Collateral Agent,
pursuant to which the Company shall have irrevocably instructed such other bank
(and such other bank shall have agreed) to remit all proceeds of such payments
directly to the Collateral Agent for deposit into the Collateral Account or as
the Collateral Agent may
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15
otherwise instruct such bank. All such payments made to the Collateral Agent
shall be deposited in the Collateral Account. In addition to the foregoing, the
Company agrees that if the proceeds of any Collateral hereunder (including the
payments made in respect of Accounts) shall be received by it, the Company shall
as promptly as possible deposit such proceeds into the Collateral Account. Until
so deposited, all such proceeds shall be held in trust by the Company for and as
the property of the Secured Parties and shall not be commingled with any other
funds or property of the Company.
(c) The balance from time to time standing to the credit of the
Collateral Account shall, except upon the occurrence and continuation of an
Event of Default, be distributed to the Company upon the order of the Company.
If immediately available cash on deposit in the Collateral Account is not
sufficient to make any distribution to the Company referred to in the previous
sentence of this Section 5(c), the Collateral Agent shall liquidate as promptly
as practicable Liquid Investments as required to obtain sufficient cash to make
such distribution and, notwithstanding any other provision of this Section 5,
such distribution shall not be made until such liquidation has taken place. Upon
the occurrence and continuation of an Event of Default, the Collateral Agent
shall, if so instructed by the Required Lenders, apply or cause to be applied
(subject to collection) any or all of the balance from time to time standing to
the credit of the Collateral Account in the manner specified in Section 9.
(d) Amounts on deposit in the Collateral Account shall be invested and
re-invested from time to time in such Liquid Investments as the Company shall
determine, which Liquid Investments shall be held in the name and be under the
control of the Collateral Agent, provided that, if an Event of Default has
occurred and is continuing, the Collateral Agent shall, if instructed by the
Required Lenders, liquidate any such Liquid Securities and apply or cause to be
applied the proceeds thereof to the payment of the Secured Obligations in the
manner specified in Section 9. For this purpose, "Liquid Investments" means the
investments listed in clauses (b) and (c) of the definition of "Permitted
Investments" in the Credit Agreement; provided that (x) each Liquid Investment
shall mature within 30 days after it is acquired by the Collateral Agent and (y)
in order to provide the Collateral Agent, for the benefit of the Secured
Parties, with a perfected security interest therein, each Liquid Investment
shall be either:
(i) evidenced by negotiable certificates or instruments, or if
non-negotiable then issued in the name of the Collateral Agent, which
(together with any appropriate instruments of transfer) are delivered
to, and held by, the Collateral Agent or an agent thereof (which shall
not be the Company or any of its Affiliates) in the State of New York;
or
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(ii) in book-entry form and issued by the United States and
subject to pledge under applicable state law and Treasury regulations
and as to which (in the opinion of counsel to the Collateral Agent)
appropriate measures shall have been taken for perfection of the
Security Interests.
SECTION 6. General Authority. The Company hereby irrevocably appoints
the Collateral Agent its true and lawful attorney, with full power of
substitution, in the name of the Company, the Collateral Agent, the Secured
Parties or otherwise, for the sole use and benefit of the Secured Parties, but
at the Company's expense, to the extent permitted by law to exercise, at any
time and from time to time while an Event of Default has occurred and is
continuing, all or any of the following powers with respect to all or any of the
Collateral:
(a) to demand, ▇▇▇ for, collect, receive and give acquittance
for any and all monies due or to become due thereon or by virtue
thereof,
(b) to settle, compromise, compound, prosecute or defend any
action or proceeding with respect thereto,
(c) to sell, transfer, assign or otherwise deal in or with the
same or the proceeds or avails thereof, as fully and effectually as if
the Collateral Agent were the absolute owner thereof, and
(d) to extend the time of payment of any or all thereof and to
make any allowance and other adjustments with reference thereto;
provided that the Collateral Agent shall give the Company not less than ten
days' prior notice of the time and place of any sale or other intended
disposition of any of the Collateral, except any Collateral which is perishable
or threatens to decline speedily in value or is of a type customarily sold on a
recognized market. The Collateral Agent and the Company agree that such notice
constitutes "reasonable notification" within the meaning of Section 9-504(3) of
the UCC.
SECTION 7. Remedies upon Event of Default. (a) If any Event of Default
has occurred and is continuing, the Collateral Agent may exercise on behalf of
the Secured Parties all rights of a secured party under the UCC (whether or not
in effect in the jurisdiction where such rights are exercised) and, in addition,
the Collateral Agent may, without being required to give any notice, except as
herein provided or as may be required by mandatory provisions of law, (i)
withdraw all cash and Liquid Investments in the Collateral Account and apply
such cash and Liquid Investments and other cash, if any, then held by it as
Collateral as specified in Section 9 and (ii) if there shall be no such cash or
Liquid Investments or if such cash and Liquid Investments shall be insufficient
to pay all the Secured
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Obligations in full, sell the Collateral or any part thereof at public or
private sale, for cash, upon credit or for future delivery, and at such price or
prices as the Collateral Agent may deem satisfactory. Any Secured Party may be
the purchaser of any or all of the Collateral so sold at any public sale (or, if
the Collateral is of a type customarily sold in a recognized market or is of a
type which is the subject of widely distributed standard price quotations, at
any private sale). The Company will execute and deliver such documents and take
such other action as the Collateral Agent deems necessary or advisable in order
that any such sale may be made in compliance with law. Upon any such sale the
Collateral Agent shall have the right to deliver, assign and transfer to the
purchaser thereof the Collateral so sold. Each purchaser at any such sale shall
hold the Collateral so sold to it absolutely and free from any claim or right of
whatsoever kind, including any equity or right of redemption of the Company
which may be waived, and the Company, to the extent permitted by law, hereby
specifically waives all rights of redemption, stay or appraisal which it has or
may have under any law now existing or hereafter adopted. The notice (if any) of
such sale required by Section 6 shall (A) in the case of a public sale, state
the time and place fixed for such sale, and (B) in the case of a private sale,
state the day after which such sale may be consummated. Any such public sale
shall be held at such time or times within ordinary business hours and at such
place or places as the Collateral Agent may fix in the notice of such sale. At
any such sale the Collateral may be sold in one lot as an entirety or in
separate parcels, as the Collateral Agent may determine. The Collateral Agent
shall not be obligated to make any such sale pursuant to any such notice. The
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be made at any time
or place to which the same may be so adjourned. In the case of any sale of all
or any part of the Collateral on credit or for future delivery, the Collateral
so sold may be retained by the Collateral Agent until the selling price is paid
by the purchaser thereof, but the Collateral Agent shall not incur any liability
in the case of the failure of such purchaser to take up and pay for the
Collateral so sold and, in the case of any such failure, such Collateral may
again be sold upon like notice. The Collateral Agent, instead of exercising the
power of sale herein conferred upon it, may proceed by a suit or suits at law or
in equity to foreclose the Security Interests and sell the Collateral, or any
portion thereof, under a judgment or decree of a court or courts of competent
jurisdiction.
(b) For the purpose of enforcing any and all rights and remedies under
this Agreement the Collateral Agent may (i) require the Company to, and the
Company agrees that it will, at its expense and upon the request of the
Collateral Agent, forthwith assemble all or any part of the Collateral as
directed by the Collateral Agent and make it available at a place designated by
the Collateral
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Agent which is, in its opinion, reasonably convenient to the Collateral Agent
and the Company, whether at the premises of the Company or otherwise, (ii) to
the extent permitted by applicable law, enter, with or without process of law
and without breach of the peace, any premise where any of the Collateral is or
may be located, and without charge or liability to it seize and remove such
Collateral from such premises, (iii) have access to and use the Company's books
and records relating to the Collateral and (iv) prior to the disposition of the
Collateral, store or transfer it without charge in or by means of any storage or
transportation facility owned or leased by the Company, process, repair or
recondition it or otherwise prepare it for disposition in any manner and to the
extent the Collateral Agent deems appropriate and, in connection with such
preparation and disposition, use without charge any trademark, trade name,
copyright, patent or technical process used by the Company. The Collateral Agent
may also render any or all of the Collateral unusable at the Company's premises
and may dispose of such Collateral on such premises without liability for rent
or costs.
SECTION 8. Limitation on Duty of Collateral Agent in Respect of
Collateral. Beyond the exercise of reasonable care in the custody thereof, the
Collateral Agent shall have no duty as to any Collateral in its possession or
control or in the possession or control of any agent or bailee or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody of the Collateral in its possession if
the Collateral is accorded treatment substantially equal to that which it
accords its own property, and shall not be liable or responsible for any loss or
damage to any of the Collateral, or for any diminution in the value thereof, by
reason of the act or omission of any warehouseman, carrier, forwarding agency,
consignee or other agent or bailee selected by the Collateral Agent in good
faith.
SECTION 9. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, the proceeds of any sale of, or other
realization upon, all or any part of the Collateral and any cash held in the
Collateral Account shall be applied by the Collateral Agent in the following
order of priorities:
first, to pay the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the
Collateral Agent, and all expenses, liabilities and advances incurred or
made by the Collateral Agent in connection therewith, and any other
unreimbursed expenses for which any Secured Party is to be reimbursed
pursuant to the Securities Purchase Agreement or Section 12 hereof;
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second, to pay ratably the unpaid principal of the Secured
Obligations;
third, to pay ratably the unpaid interest accrued on the Secured
Obligations in accordance with the provisions of the Bridge Securities
and this Agreement;
fourth, to pay ratably all other Secured Obligations, until all
Secured Obligations shall have been paid in full; and
finally, to pay to the Company or its successors or assigns, or
as a court of competent jurisdiction may direct, any surplus then
remaining from such proceeds.
The Collateral Agent may make distributions hereunder in cash or in kind or, on
a ratable basis, in any combination thereof.
SECTION 10. Concerning the Collateral Agent. (a) The Collateral Agent is
authorized to take all such action as is provided to be taken by it as
Collateral Agent hereunder and all other action reasonably incidental thereto.
As to any matters not expressly provided for herein (including, without
limitation, the timing and methods of realization upon the Collateral) the
Collateral Agent shall act or refrain from acting in accordance with written
instructions from the Required Purchasers or, in the absence of such
instructions, in accordance with its discretion.
(b) The Collateral Agent shall not be responsible for the
existence, genuineness or value of any of the Collateral or for the
validity, perfection, priority or enforceability of the Security
Interests in any of the Collateral, whether impaired by operation of law
or by reason of any action or omission to act on its part hereunder. The
Collateral Agent shall have no duty to ascertain or inquire as to the
performance or observance of any of the terms of this Agreement by the
Company.
(c) BankAmerica Ventures and its affiliates may accept deposits
from, lend money to, and generally engage in any kind of business with
the Company or any subsidiary or affiliate of the Company as if it were
not the Collateral Agent hereunder.
(d) The obligations of the Collateral Agent hereunder are only
those expressly set forth herein. without limiting the generality of the
foregoing, the Collateral Agent shall not be required to take any action
with respect to any Event of Default, except as expressly provided
herein.
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(e) The Collateral Agent may consult with legal counsel,
independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts.
(f) Neither the Collateral Agent nor any director, officer,
agent, or employee of the Collateral Agent shall be liable for any
action taken or not taken by it in connection herewith (i) with the
consent or at the request of any Purchaser of any requests made in
accordance with Section 10(a), the Required Purchaser or (ii) in the
absence of its own gross negligence or willful misconduct. Neither the
Collateral Agent, nor any of its affiliates, nor any of their respective
directors, officers, agents or employees, shall be responsible for or
have any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with this Agreement; (ii)
the performance or observance of any of the covenants or agreements of
the Company; or (iii) the validity, effectiveness or genuiness of this
Agreement or any instrument or writing furnished in connection herewith.
The Collateral Agent shall not incur any liability by acting in reliance
upon any notice, consent, certificate, statement, or other writing
(which may be a bank wire, telex or similar writing) believed by it to
be genuine or to be signed by the proper party or parties. The
Collateral Agent shall not be responsible for the existence, genuiness
or value of any of the Collateral. The Collateral Agent shall have no
duty to ascertain or inquire as to the performance or observance of any
of the terms of this Agreement by the Company.
(g) Each Secured Party shall, ratably in accordance with the
amount of its Obligations, indemnify the Collateral Agent, its
affiliates and their respective directors, officers, agents and
employees (to the extent not reimbursed by the Assignor) against any
cost, expense (including counsel fees and disbursements), claim, demand,
action, loss or liability (except such as result from the indemnitees'
gross negligence or willful misconduct) that such indemnitees may suffer
or incur in connection with this Agreement or any action taken or
omitted by such indemnitees hereunder or thereunder.
(h) The Collateral Agent may resign at any time by giving
written notice of its resignation to the Secured Parties and the
Company. Upon any such resignation, the Purchasers shall have the right
to appoint a successor Collateral Agent (a "Successor Agent"). If no
Successor Agent shall have been so appointed by the Purchasers, and
shall have accepted such appointment, within 30 days after the retiring
Security Agent's giving
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of notice of resignation, then the retiring Collateral Agent may, on
behalf of the Secured Parties, appoint a Successor Agent. Upon the
acceptance of its appointment as Collateral Agent hereunder by a
Successor Agent, such Successor Agent shall thereupon succeed to and
become vested with all the rights and duties of the retiring Collateral
Agent, and the retiring Security Agent shall be discharged from its
duties and obligations hereunder. After any retiring Collateral Agent's
resignation hereunder as Collateral Agent, the provisions of this
Section shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Collateral Agent.
(i) In order to comply with any legal requirement in any
jurisdiction, the Collateral Agent may at any time appoint another bank
or trust company or one or more other persons, either to act as co-agent
or co-agents, jointly with the Collateral Agent, or to act as separate
agent or agents on behalf of the Secured Parties with such power and
authority as may be necessary for the effectual operation of the
provisions hereof and may be specified in the instrument of appointment
(which may, in the discretion of the Collateral Agent, include
provisions for the protection of such co-agent or separate agent similar
to the provisions of this Section 10).
(j) Each Purchaser irrevocably appoints and authorizes the
Collateral Agent to enter into and act as its agent in connection with
the Financing Documents and to take such action as agent on its behalf
and to exercise such powers under the Financing Documents as are
delegated to it by the terms hereof or thereof, together with such
powers as are incidental thereto.
SECTION 11. Expenses. If the Company fails to comply with the provisions
of the Bridge Securities or this Agreement, such that the value of any
Collateral or the validity, perfection, rank or value of any Security Interest
is thereby diminished or potentially diminished or put at risk, the Collateral
Agent if requested by the Required Purchasers may, but shall not be required to,
effect such compliance on behalf of the Company, and the Company shall reimburse
the Collateral Agent for the costs thereof on demand. All insurance expenses and
all expenses of protecting, storing, warehousing, appraising, insuring,
handling, maintaining, and shipping the Collateral, any and all excise,
property, sales, and use taxes imposed by any state, federal, or local authority
on any of the Collateral, or in respect of periodic appraisals and inspections
of the Collateral to the extent the same may be requested by the Required
Purchasers from time to time, or in respect of the sale or other disposition
thereof shall be borne and paid by the Company; and if the Company fails to
promptly pay any portion thereof when
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due, any Secured Party may, at its option, but shall not be required to, pay the
same and charge the Company's account therefor, and the Company agrees to
reimburse such Secured Party therefor on demand. All sums so paid or incurred by
any Secured Party for any of the foregoing and any and all other sums for which
the Company may become liable hereunder and all costs and expenses (including
attorneys' fees, legal expenses and court costs) reasonably incurred by any
Secured Party in enforcing or protecting the Security Interests or any of their
rights or remedies under this Agreement, shall, together with interest thereon
until paid at the rate otherwise applicable to the Bridge Securities plus 5%, be
additional Secured Obligations hereunder.
SECTION 12. Termination of Security Interests; Release of Collateral.
Upon the repayment in full of all Secured Obligations, the Security Interests
shall terminate and all rights to the Collateral shall revert to the Company. At
any time and from time to time prior to such termination of the Security
Interests, the Collateral Agent may release any of the Collateral with the prior
written consent of the Required Purchasers. Upon any such termination of the
Security Interests or release of Collateral, the Collateral Agent will, at the
expense of the Company, execute and deliver to the Company such documents as the
Company shall reasonably request to evidence the termination of the Security
Interests or the release of such Collateral, as the case may be.
SECTION 13. Notices. All notices, communications and distributions
hereunder shall be given in accordance with Section 9.01 of the Securities
Purchase Agreement.
SECTION 14. Waivers, Non-Exclusive Remedies. No failure on the part of
the Collateral Agent to exercise, and no delay in exercising and no course of
dealing with respect to, any right under this Agreement shall operate as a
waiver thereof; nor shall any single or partial exercise by the Collateral Agent
of any right under the Credit Agreement or this Agreement preclude any other or
further exercise thereof or the exercise of any other right. The rights in this
Agreement and the Credit Agreement are cumulative and are not exclusive of any
other remedies provided by law.
SECTION 15. Successors and Assigns. This Agreement is for the benefit of
the Secured Parties and their successors and assigns, and in the event of an
assignment of all or any of the Secured Obligations, the rights hereunder, to
the extent applicable to the indebtedness so assigned, shall be automatically
transferred with such indebtedness. This Agreement shall be binding on the
Company and its successors and assigns.
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SECTION 16. Changes in Writing. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally, but only in
writing signed by the Company and the Collateral Agent with the consent of the
Required Purchasers.
SECTION 17. California Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of California, except as
otherwise required by mandatory provisions of law and except to the extent that
remedies provided by the laws of any jurisdiction other than California are
governed by the laws of such jurisdiction.
SECTION 18. Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Secured Parties in
order to carry out the intentions of the parties hereto as nearly as may be
possible; and (ii) the invalidity or unenforceability of any provision hereof in
any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
CARDIAC PATHWAYS
CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Title: President and CEO
BANKAMERICA VENTURES, as
Collateral Agent
By: /s/ Anchie ▇. ▇▇▇
-------------------------------------
Title: Managing Director
PURCHASERS
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ VENTURE PARTNERS III, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Partners III, L.L.C.
its General Partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Capital III, Inc.,
its Institutional Managing Member
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Title: General Partner
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ VENTURE INVESTORS III, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Partners III, L.L.C.
its General Partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Capital III, Inc.,
its Institutional Managing Member
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Title: General Partner
THE ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ VENTURE PARTNERS
ENTREPRENEUR FUND, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Partners III, L.L.C.
its General Partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Venture Capital III, Inc.,
its Institutional Managing Member
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Title: General Partner
BANKAMERICA VENTURES
By: /s/ Anchie ▇. ▇▇▇
---------------------------------------------
Title: Managing Director
STATE OF WISCONSIN INVESTMENT BOARD
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------------
Title: Investment Director
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EXHIBIT A
PERFECTION CERTIFICATE
The undersigned, the chief executive officer and chief legal officer of
CARDIAC PATHWAYS CORPORATION, a Delaware corporation (the "Company"), hereby
certify with reference to the Security Agreement dated as of __________ __, 19__
between the Company and [______________________________], as Collateral Agent
(terms defined therein being used herein as therein defined), to the Secured
Parties as follows:
1. Names. (a) The exact corporate name of the Company as it appears in
its certificate of incorporation is as follows:
(b) Specified below is each other corporate name the Company has had
since its organization, together with the date of the relevant change:
(c) Except as specified in Schedule 1, the Company has not changed its
identity or corporate structure in any way within the past five years.
[Changes in identity or corporate structure would include mergers,
consolidations and acquisitions, as well as any change in the form,
nature or jurisdiction of corporate organization. If any such change has
occurred, include in Schedule 1 the information required by paragraphs
1, 2 and 3 of this certificate as to each acquiree or constituent party
to a merger or consolidation.]
(d) The following is a list of all other names (including trade names or
similar appellations) used by the Company or any of its divisions or other
business units at any time during the past five years:
2. Current Locations. (a) The chief executive office of the Company is
located at the following address:
Mailing Address County State
-------------------------------------------- -------------------- --------------
27
(b) The following are all the locations where the Company maintains any
books or records relating to any Accounts:
Mailing Address County State
-------------------------------------------- -------------------- --------------
(c) The following are all the places of business of the Company not
identified above:
Mailing Address County State
-------------------------------------------- -------------------- --------------
(d) The following are all the locations where the Company maintains any
Inventory not identified above:
Mailing Address County State
-------------------------------------------- -------------------- --------------
(e) The following are the names and addresses of all Persons other than
the Company which have possession of any of the Company's Inventory:
Mailing Address County State
-------------------------------------------- -------------------- --------------
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3. Prior Locations. (a) Specified below is the information required by
subparagraphs 2(a), 2(b) and 2(c) above with respect to each location or place
of business maintained by the Company at any time during the past five years:
(b) Specified below is the information required by subparagraphs 2(d)
and 2(e) above with respect to each location or bailee where or with whom
Inventory has been lodged at any time during the past four months:
4. Unusual Transactions. Except as specified in Schedule 4, all Accounts
have been originated by the Company and all Inventory and Equipment has been
acquired by the Company in the ordinary course of its business.
5. File Search Reports. Attached hereto as Schedule 5(A) is a true copy
of a file search report from the Uniform Commercial Code filing officer in each
jurisdiction identified in paragraph 2 or 3 above with respect to each name
specified in paragraph 1 above. Attached hereto as Schedule 5(B) is a true copy
of each financing statement or other filing identified in such file search
reports.
6. UCC Filings. A duly signed financing statement on Form UCC-1 in
substantially the form of Schedule 6(A) hereto has been duly filed in the
Uniform Commercial Code filing office in each jurisdiction identified in
paragraph 2 hereof. Attached hereto as Schedule 6(B) is a true copy of each such
filing duly acknowledged by the filing officer.
7. Schedule of Filings. Attached hereto as Schedule 7 is a schedule
setting forth filing information with respect to the filings described in
paragraph 6 above.
8. Filing Fees. All filing fees and taxes payable in connection with the
filings described in paragraph 6 above have been paid.
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IN WITNESS WHEREOF, we have hereunto set our hands this __ day of
__________, 19__.
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
4
30
SCHEDULE 6(A)
DESCRIPTION OF COLLATERAL
All accounts, chattel paper, contract rights, documents, equipment,
deposit accounts, general intangibles, inventory and investment property, now
owned or hereafter acquired, wherever located, and all proceeds thereof.
31
SCHEDULE 7
SCHEDULE OF FILINGS
Debtor Filing Officer File Number Date of Filing(1)
---------------- ------------------------ ----------- ----------------------
--------------
(1) Indicate lapse date, if other than fifth anniversary.
32
EXHIBIT B
OPINION OF COUNSEL FOR COMPANY
1. The Security Agreement creates a valid security interest, for the
benefit of the Secured Parties, in all the Company's right, title and interest
in all Collateral to the extent the UCC is applicable thereto (the "Security
Interest").
2. UCC financing statements and amendments thereto (collectively, the
"Financing Statements") have been filed in the filing offices listed in Schedule
7 to the Perfection Certificate (the "Filing Jurisdictions"), which are all of
the offices in which filings are required to perfect the Security Interest, to
the extent the Security Interest may be perfected by filing under the UCC, and
no further filing or recording of any document or instrument or other action
will be required so to perfect the Security Interest, except that (i)
continuation statements with respect to each Financing Statement must be filed
within the respective time periods specified in Schedule 7 to the Perfection
Certificate; (ii) additional filings may be necessary if the Company changes its
name, identity or corporate structure or the jurisdiction in which its places of
business, its chief executive office or the Collateral are located; and (iii) we
express no opinion on the perfection of, or need for further filing or recording
to perfect, the Security Interest in goods now or hereafter located in any
jurisdiction other than the Filing Jurisdictions.
3. There are
(a) no UCC financing statements which name the Company as debtor
or seller and cover any of the Collateral, other than the Financing
Statements, [and the financing statements with respect to Permitted
Liens annexed as Schedule 5(A) to the Perfection Certificate], listed in
the available records in the UCC filing offices specified in paragraphs
2 and 3 of the Perfection Certificate, which include all of the offices
prescribed under the UCC as the offices in which filings should have
been made to perfect security interests in the Collateral; and
(b) no notices of the filing of any federal tax lien (filed
pursuant to Section 6323 of the Internal Revenue Code) or any lien of
the Pension Benefit Guaranty Corporation (filed pursuant to Section 4068
of ERISA) covering any of the Collateral listed in the available records
in the [UCC filing office in state of Company's chief executive office],
which is the only office having files which must be searched in order to
fully determine
33
the existence of notices of the filing of federal tax liens (filed
pursuant to Section 6323 of the Internal Revenue Code) and liens of the
Pension Benefit Guaranty Corporation (filed pursuant to Section 4068 of
ERISA) on the Collateral.
4. The Security Interest validly secures the payment of all future Loans
made by the Lenders to the Company, whether or not at the time such Loans are
made an Event of Default or other event not within the control of the Lenders
has relieved or may relieve the Lenders from their obligations to make such
Loans, and is perfected to the extent specified in paragraph 7 above with
respect to such future Loans. Insofar as the priority thereof is governed by the
UCC, the Security Interest has the same priority with respect to such future
Loans as it does with respect to Loans made on the date hereof.
2
34
EXHIBIT C
[FORM OF LOCKBOX LETTER]
_____________ __, 19__
[Name and Address of Lockbox Bank]
Re: Cardiac Pathway Corporation
Gentlemen:
We hereby notify you that effective ___________, 19__, we have
transferred exclusive ownership and control of our lock-box account[s] No[s].
_________________ (the "Lockbox Account[s]") maintained with you under the terms
of the [Lockbox Agreement] attached hereto as Exhibit A (the "Lockbox
Account[s]") to [______________________________], as Collateral Agent (the
"Collateral Agent").
We hereby irrevocably instruct you to make all payments to be made by
you out of or in connection with the Lockbox Account[s] (i) to the Collateral
Agent for credit to account no. ___________ maintained by it at its office at
[___________________] or (ii) as you may otherwise be instructed by the
Collateral Agent.
We also hereby notify you that the Collateral Agent shall be irrevocably
entitled to exercise any and all rights in respect of or in connection with the
Lockbox Account[s], including, without limitation, the right to specify when
payments are to be made out of or in connection with the Lockbox Account[s].
All funds deposited into the Lockbox Account[s] will not be subject to
deductions, set-off, banker's lien or any other right in favor of any other
person than the Collateral Agent, except that you may set-off against the
Lockbox Account[s] the face amount of any check deposited in and credited to
such Lockbox Account[s] which is subsequently returned for any reason. Your
compensation for providing the services contemplated herein shall be as mutually
agreed between you and us from time to time and we will continue to pay such
compensation.
35
Please confirm your acknowledgment of and agreement to the foregoing
instructions by signing in the space provided below.
Very truly yours,
CARDIAC PATHWAYS CORPORATION
By:
-------------------------------------
Name:
Title:
Acknowledged and agreed to as of
this ____ day of ______, 19__.
[LOCKBOX BANK]
By:
-------------------------------------
Name:
Title:
2
36
EXHIBIT D
PATENT SECURITY AGREEMENT
(PATENTS, PATENT APPLICATIONS AND PATENT LICENSES)
WHEREAS, Cardiac Pathways Corporation, a Delaware corporation (herein
referred to as "Grantor"), owns the Patents listed on Schedule 1 annexed hereto,
and is a party to the Patent Licenses listed on Schedule 1 annexed hereto;
WHEREAS, the Grantor and the purchasers listed therein are parties to a
Securities Purchase Agreement of even date herewith (as the same may be amended
and in effect from time to time among said parties and such lenders (the
"Lenders") as may from time to time be parties thereto, the "Securities Purchase
Agreement"), pursuant to which the Grantor has agreed to issue certain Senior
Convertible Floating Rate Bridge Notes (the "Bridge Securities");
WHEREAS, pursuant to the terms of the Security Agreement of even date
herewith (as said Agreement may be amended and in effect from time to time, the
"Security Agreement") between Grantor, and BankAmerica Ventures, as collateral
agent for the secured parties referred to therein (in such capacity, together
with its successors in such capacity pursuant to the terms of such Security
Agreement, the "Grantee"), Grantor has granted to Grantee for the ratable
benefit of such secured parties a security interest in substantially all the
assets of the Grantor including all right, title and interest of Grantor in, to
and under all Grantor's Patents (as defined in the Security Agreement), together
with any reissue, continuation, continuation-in-part or extension thereof, all
Grantor's Patent applications and all Grantor's Patent Licenses (as defined in
the Security Agreement), whether presently existing or hereafter arising or
acquired, and all products and proceeds thereof, including any and all causes of
action which may exist by reason of infringement thereof for the full term of
the Patents, to secure the payment of all amounts owing by the Grantor under the
Bridge Securities issued pursuant to Securities Purchase Agreement and the other
Financing Documents referred to therein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor does hereby grant to
Grantee a continuing security interest in all of Grantor's right, title and
interest in, to and under the following (all of the following items or types of
property being herein collectively referred to as the "Patent Collateral"),
whether presently existing or hereafter arising or acquired:
3
37
(i) each Patent and Patent application, including each Patent
and Patent application referred to in Schedule 1 annexed hereto;
(ii) each Patent License, including each Patent License listed
on Schedule 1 annexed hereto; and
(iii) all products and proceeds of the foregoing, including any
claim by Grantor against third parties for past, present or future in
Schedule 1 annexed hereto, and any Patent licensed under any Patent
License, including any Patent License listed on Schedule 1 annexed
hereto.
This security interest is granted in conjunction with the security
interests granted to the Grantee pursuant to the Security Agreement. Grantor
does hereby further acknowledge and affirm that the rights and remedies of
Grantee with respect to the security interest in the Patent Collateral made and
granted hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth
herein.
IN WITNESS WHEREOF, Grantor has caused this Patent Security Agreement to
be duly executed by its officer thereunto duly authorized as of the _______th
day of ____________, ____.
CARDIAC PATHWAYS CORPORATION
By:
-------------------------------------
Name:
Title:
Acknowledged:
BANKAMERICA VENTURES,
as Collateral Agent
By:
-------------------------------------
Name:
Title:
4
38
STATE OF________________)
):ss.:
COUNTY OF______________ )
On the ___th day of ____________, ____ before me personally came
____________, to me personally known and known to me to be the person described
in and who executed the foregoing instrument as _____________ of Cardiac
Pathways Corporation, who being by me duly sworn, did depose and say that he
resides at ____________, ____________; that he is ________________ of Cardiac
Pathways Corporation, the corporation described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that the said instrument was
signed and sealed on behalf of said corporation by order of its Board of
Directors; that he signed his name thereto by like order; and that he
acknowledged said instrument to be the free act and deed of said corporation.
----------------------------------------
Notary Public
Notary Public, State of New York
My commission expires:
-------------------------
5
39
SCHEDULE 1
INTELLECTUAL PROPERTY RIGHTS
40
EXHIBIT E
TRADEMARK SECURITY AGREEMENT
(TRADEMARKS, TRADEMARK APPLICATIONS
AND TRADEMARK LICENSES)
WHEREAS, Cardiac Pathways Corporation, a Delaware corporation
(herein referred to as "Grantor"), owns the Trademarks listed on Schedule 1
annexed hereto, and is a party to the Trademark Licenses listed on Schedule 1
annexed hereto;
WHEREAS, the Grantor and the purchasers listed therein are
parties to a Securities Purchase Agreement of even date herewith (as the same
may be amended and in effect from time to time among said parties and such
lenders (the "Lenders") as may from time to time be parties thereto, the
"Securities Purchase Agreement"), pursuant to which the Grantor has agreed to
issue certain Senior Convertible Floating Rate Bridge Notes (the "Bridge
Securities");
WHEREAS, pursuant to the terms of the Security Agreement of even
date herewith (as said Agreement may be amended and in effect from time to time,
the "Security Agreement") between Grantor, and BankAmerica Ventures, as
collateral agent for the secured parties referred to therein (in such capacity,
together with its successors in such capacity pursuant to the terms of such
Security Agreement, the "Grantee"), Grantor has granted to Grantee for the
ratable benefit of such secured parties a security interest in substantially all
the assets of the Grantor including all right, title and interest of Grantor in,
to and under all Grantor's Trademarks (as defined in the Security Agreement),
together with any reissue, continuation, continuation-in-part or extension
thereof, all Grantor's Trademark applications and all Grantor's Trademark
Licenses (as defined in the Security Agreement), whether presently existing or
hereafter arising or acquired, together with the goodwill of the business
connected with the use of, or symbolized by, the Trademarks and the applications
therefor and the registrations thereof, and all products and proceeds thereof,
including any and all causes of action which may exist by reason of infringement
or dilution thereof or injury to the associated goodwill, for the full term of
the Trademarks, to secure the payment of all amounts owing by the Grantor under
the Financing Documents;
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Grantor does hereby grant to
Grantee a continuing security interest in all of Grantor's right, title and
2
41
interest in, to and under the following (all of the following items or types of
property being herein collectively referred to as the "Trademark Collateral"),
whether presently existing or hereafter arising or acquired:
(i) each Trademark, including each Trademark application
referred to in Schedule 1 annexed hereto, and all of the goodwill of the
business connected with the use of, or symbolized by, each such
Trademark;
(ii) each Trademark License, including each Trademark License
listed on Schedule 1 annexed hereto, and all of the goodwill of the
business connected with the use of, or symbolized by, each such
Trademark licensed pursuant thereto; and
(iii) all products and proceeds of the foregoing, including any
claim by Grantor against third parties for past, present or future
infringement or dilution of any Trademark, including any Trademark
referred to in Schedule 1 annexed hereto, and any Trademark licensed
under any Trademark License, including any Trademark License listed on
Schedule 1 annexed hereto, or for injury to the goodwill associated with
any of the foregoing.
This security interest is granted in conjunction with the security
interests granted to the Grantee pursuant to the Security Agreement. Grantor
does hereby further acknowledge and affirm that the rights and remedies of
Grantee with respect to the security interest in the Trademark Collateral made
and granted hereby are more fully set forth in the Security Agreement, the terms
and provisions of which are incorporated by reference herein as if fully set
forth herein.
3
42
IN WITNESS WHEREOF, Grantor has caused this Trademark Security Agreement
to be duly executed by its officer thereunto duly authorized as of the __th day
of __________ __, ____.
CARDIAC PATHWAYS CORPORATION
By:
-------------------------------------
Name:
Title:
Acknowledged:
BANKAMERICA VENTURES,
as Collateral Agent
By:
-------------------------------------
Name:
Title:
4
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
): ss.:
COUNTY OF NEW YORK )
On the __th day of ___________, ____ before me personally came _______
________, to me personally known and known to me to be the person described in
and who executed the foregoing instrument as [_____________] of Cardiac Pathways
Corporation, who being by me duly sworn, did depose and say that he resides at
________________, _______________; that he is [____________] of Cardiac Pathways
Corporation, the corporation described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that the said instrument was signed and
sealed on behalf of said corporation by order of its Board of Directors; that he
signed his name thereto by like order; and that he acknowledged said instrument
to be the free act and deed of said corporation.
----------------------------------------
Notary Public
Notary Public, State of New York
My commission expires:
----------------------
5
44
Schedule 1 to
Trademark Security Agreement
TRADEMARKS AND TRADEMARK REGISTRATIONS
Trademark Reg. No. Reg. Date
TRADEMARK APPLICATIONS
▇▇▇▇ Date Filed Serial No.
---- ---------- ----------
TRADEMARK LICENSES
Agreement Parties Date of Agreement Subject Matter
--------- ------- ----------------- --------------
As Licensee
-----------
As Licensor
-----------