Exhibit 10.4
INTELLECTUAL PROPERTY SECURITY AGREEMENT
     This Intellectual Property Security Agreement is entered into as of
April 14, 2010, by and between PARTNERS FOR GROWTH III, L.P. (“PFG”) and
Cardiovascular Systems, Inc., a Delaware corporation (individually and
collectively, “Grantor”), with reference to the following facts:
     A. PFG and Grantor, as Borrower, are parties to that certain Loan and
Security Agreement of even date with this Agreement (as amended from time to
time, the “Loan Agreement”). (Capitalized terms used herein have the meaning
assigned in the Loan Agreement.)
     B. Pursuant to the Loan Agreement, Grantor has granted to PFG a security
interest in all of the Collateral. The Collateral includes without limitation
all Intellectual Property (including without limitation the Intellectual
Property described herein).
     Grantor agrees as follows:
     1. To secure performance of all of its “Obligations” as defined in the Loan
Agreement, Grantor grants to PFG a security interest in all of Grantor’s right,
title and interest in Grantor’s Intellectual Property, including without
limitation (i) the trademarks and servicemarks listed or required to be listed
from time to time on Schedule A hereto, whether registered or not, and all
applications to register and registrations of the same and like protections, and
the entire goodwill of the business of Borrower connected with and symbolized by
such trademarks, and (ii) the patents and patent applications listed or required
to be listed from time to time on Schedule B hereto and all like protections
including, without limitation, all improvements, divisions, continuations,
renewals, reissues, extensions and continuations-in-part of the same, (iii) all
copyrights, maskworks, software, computer programs and other works of authorship
listed or required to be listed from time to time on Schedule C hereto, and all
extensions and renewals thereof, (iv) all domain names and domain name rights
used in connection with its business and that of its Subsidiaries, all legal and
equitable rights in domain names and ownership thereof, domain registry, domain
servers, web hosting and related contracts, services and facilities
(collectively, “Domain Rights”) listed or required to be listed from time to
time on Schedule D hereto, and all extensions and renewals thereof, and (iv) all
rights to recover for past or future infringement of any of the foregoing, and
(v) all right, title and interest in and to any and all present and future
license agreements with respect to any of the foregoing, and (vi) all present
and future accounts, accounts receivable and other rights to payment arising
from, in connection with or relating to any of the foregoing.
     2. Grantor represents and warrants that (i) listed on Schedule A hereto are
all trademark

 

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registrations and pending registrations owned or controlled by Grantor,
(ii) listed on Schedule B are all patents and patent applications owned or
controlled by Grantor, (iii) listed on Schedule C are all copyrights, software,
computer programs, mask works, and other works of authorship owned or controlled
by Grantor which are registered with the United States Copyright Office, and
(iv) listed on Schedule D are all Domain Rights in which Grantor has any legal,
contractual or equitable right.
     3. Grantor shall: (a) protect, defend and maintain the validity and
enforceability of its intellectual property, other than intellectual property of
immaterial business and monetary value that Grantor’s executive management has
made a determination not to maintain; (b) promptly advise PFG in writing of
material infringements of its intellectual property; and (c) not allow any
intellectual property material to Grantor’s business to be abandoned, forfeited
or dedicated to the public without PFG’s written consent. If, before the
Obligations have been paid and/or performed in full, Grantor shall (i) adopt,
use, acquire or apply for registration of any trademark, service mark or trade
name, (ii) apply for registration of any patent or obtain any patent or patent
application; (iii) create or acquire any published or material unpublished works
of authorship material to the business that is or is to be registered with the
U.S. Copyright Office or any non-U.S. equivalent; or (iv) register or acquire
any domain name or domain name rights, then the provisions of Section 1 shall
automatically apply thereto, and Grantor shall use commercially reasonable
efforts to give PFG advance notice thereof in writing and in any event shall
thereafter give PFG prompt notice thereof in writing, in no event later than
five Business Days from the date of any such action. Grantor shall further
provide PFG with a copy of the foregoing and shall take such further actions as
PFG may reasonably request from time to time to perfect or continue the
perfection of PFG’s interest in such intellectual property.
     4. This Agreement is being executed and delivered pursuant to the Loan
Agreement; nothing herein limits any of the terms or provisions of the Loan
Agreement, and PFG’s rights hereunder and under the Loan Agreement are
cumulative. This Agreement, the Loan Agreement and the other Loan Documents set
forth in full all of the representations and agreements of the parties with
respect to the subject matter hereof and supersede all prior discussions, oral
representations, oral agreements and oral understandings between the parties.
This Agreement may not be modified or amended, nor may any rights hereunder be
waived, except in a writing signed by the parties hereto. In the event of any
litigation between the parties based upon, arising out of, or in any way
relating to this Agreement, the prevailing party shall be entitled to recover
all of its costs and expenses (including without limitation attorneys’ fees)
from the non-prevailing party. This Agreement and all acts, transactions,
disputes and controversies arising hereunder or relating hereto, and all rights
and obligations of PFG and Grantor shall be governed by, and construed in
accordance with the internal laws (and not the conflict of laws rules) of the
State of California.
     4. Grantor agrees that simultaneously with the execution of this Agreement,
and thereafter

 

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upon any amendment of Schedule A, Schedule B, Schedule C or Schedule D, the
appropriate entities constituting Grantor shall execute notices in the forms
appended hereto (each, a “Notice”), as appropriate, with respect to all of the
pledged Intellectual Property, now owned or hereafter acquired, and shall
deliver each Notice to PFG for the purpose of recordation at the U.S. Patent and
Trademark Office or the U.S. Copyright Office, or otherwise, as appropriate.
Whether or not Grantor executes such a Notice reflecting new Intellectual
Property, Grantor hereby irrevocably appoints PFG as its lawful attorney-in-fact
without any further authorization to file such notices, liens or other
instruments as may be customary from time to time for PFG to perfect security
interests in Grantor’s Intellectual Property. With respect to the power of
attorney granted in the attached Domain Rights Collateral Agreement and Notice,
so long as no default has occurred and is continuing under the Loan Documents,
PFG shall not take any action referenced therein in the name of Grantor.
[Signature Page Follows]

 

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          Address of Grantor: Cardiovascular Systems, Inc.   Cardiovascular
Systems, Inc.  By:   /s/ Laurence L. Betterley     651 Campus Drive    Name:  
Laurence L. Betterley     St. Paul, MN 55112    Title:   CFO     

          Address of PFG: PARTNERS FOR GROWTH III, L.P.   Partners for Growth
III, L.P.  By:   /s/ Lorraine Nield     180 Pacific Avenue    Name:   Lorraine
Nield    San Francisco, California 94111    Title:   Manager, Partners for
Growth III, LLC       Its:  General Partner