Document:

Amendment#1 to Third and Restated Credit Agreement

 
Exhibit 10.39

 
AMENDMENT NO. 1 TO 
 
THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 
This Amendment No. 1 to Third Amended and
Restated Credit Agreement (“Amendment”) dated as of October 29, 2002, is made by and between Datum Inc., a Delaware corporation (“Borrower”), and Wells Fargo Bank, National Association (“Bank”). 
 
RECITALS 
 
This Amendment is made with reference to the following facts:

 
A. Borrower is currently indebted to Bank
pursuant to the terms and conditions of that certain Third Amended and Restated Credit Agreement between Borrower and Bank dated as of October 1, 2002 (as amended, extended, renewed, supplemented or otherwise modified, the “Credit
Agreement”). Capitalized terms used herein and not otherwise defined shall have the meanings set forth for such terms in the Credit Agreement. 
 
B. On May 22, 2002, Borrower entered into a Merger Agreement (the “Merger Agreement”) with Symmetricom, Inc., a Delaware
corporation (“Symmetricom”), providing for the merger of a wholly-owned subsidiary of Symmetricom with and into Borrower (the “Merger”). The Merger is scheduled to occur during the fourth quarter of 2002. Following completion of
the Merger, should it occur, Borrower will be a wholly-owned subsidiary of Symmetricom. 
 
C. Subject to the terms and conditions set forth herein, Borrower and Bank have agreed to amend the Credit Agreement, and Bank has agreed to waive a provision of the Credit Agreement, in each case as
set forth below. 
 
AGREEMENT 
 
NOW, THEREFORE, in consideration of the mutual covenants and
benefits contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Borrower and Bank agree as follows: 
 
1. Section 1.1. 
 
(a) The following existing definitions in Section 1.1 of the Credit Agreement are amended to read in
full as set forth below: 
 
“Line of Credit Termination Date” means December 31, 2002. 
 
“Maximum Line of Credit Amount” means, subject to Section 2.9, (a) as of any date of determination
prior to the Merger, $10,000,000.00 and (b) as of any date from and after the date of the Merger, $3,500,000.00. 
 
(b) Section 1.1 of the Credit Agreement is amended by adding the following definitions in the appropriate alphabetical locations:

 

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“Merger” means the merger of Borrower into and with a
wholly-owned subsidiary of Symmetricom pursuant to a Merger Agreement dated as of May 22, 2002 between Borrower and Symmetricom. 
 
“Symmetricom” means Symmetricom, Inc., a Delaware corporation. 
 
2. Section 2.1(d). Section 2.1(d) of the Credit
Agreement is amended to read in full as follows: 
 
(d) Letter of Credit Subfeature. 
 
(i) As a subfeature under the Line of Credit, Bank agrees from time to time up to and including the Line of Credit Termination Date to issue standby letters of credit for the account of Borrower (each, a “Letter of
Credit” and collectively, “Letters of Credit”); provided, however, that the form and substance of each Letter of Credit shall be subject to approval by Bank, in its sole discretion, and provided further, that the aggregate undrawn
amount of all outstanding Letters of Credit under this subfeature (including, without limitation, the Systems Letter of Credit) shall not at any time exceed Three Million Five Hundred Thousand Dollars ($3,500,000.00). Each Letter of Credit shall be
issued for a term not to exceed three hundred sixty-five (365) days, as designated by Borrower; provided, however, that no Letter of Credit under this subfeature shall have an expiration date subsequent to the Line of Credit Termination Date unless
otherwise approved by Bank. In any event, should any Letter of Credit remain outstanding on the Line of Credit Termination Date, Borrower shall either (A) cause a financial institution reasonably acceptable to Bank to issue a back-up irrevocable
letter of credit, naming Bank as beneficiary, in form and substance as Bank may require with respect to each such outstanding Letter of Credit or (B) deposit with Bank an amount equal to one hundred ten percent (110%) of the then aggregate
outstanding undrawn amount of all such Letters of Credit, such amount to be held as cash collateral for Borrower’s obligations under the Loan Documents. 
 
3. Section 2.9. Section 2.9 of the Credit Agreement is deleted. 
 
4. Exhibit B. Exhibit B attached to the Credit Agreement is replaced in its entirety by Exhibit
B attached hereto as Annex 1. 
 
5.
Waiver of Section 6.5. Bank hereby waives the limitation in Section 6.5 of the Credit Agreement which provides that Borrower shall not merge into or consolidate with any other entity provided that such waiver shall extend and
apply solely to the Merger and shall not apply to any other transaction including without limitation any future merger or consolidation of Borrower into or with Symmetricom or any subsidiary of Symmetricom. 
 
6. Conditions Precedent. The effectiveness of this
Amendment and Bank’s agreements set forth herein are subject to the satisfaction of each of the following conditions precedent: 
 
6.1 Documentation. Borrower shall have delivered or caused to be delivered to Bank, at Borrower’s sole cost and expense, the
following, each of which shall be in form and substance satisfactory to Bank: 
 

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(a) The
executed original of this Amendment; 
 
(b) The
executed original of a First Amended and Restated Revolving Line of Credit Note in the form attached hereto as Annex 1; 
 
(c) Written consent of Guarantors attached hereto as Annex 2; and 
 
(d) Such authorization documents with respect to Guarantors as Bank shall reasonably require. 
 
6.2 Representations and Warranties. All of the
representations and warranties of Borrower contained herein shall be true and correct on and as of the date of execution hereof and no Event of Default shall have occurred and be continuing under the Credit Agreement or any of the other Loan
Documents, as modified hereby. 
 
7.
Representations And Warranties. Borrower makes the following representations and warranties to Bank as of the date hereof, which representations and warranties shall survive the execution, termination or expiration of this Amendment and shall
continue in full force and effect until the full and final satisfaction and discharge of all obligations of Borrower to Bank under the Credit Agreement and the other Loan Documents: 
 
7.1 Reaffirmation of Prior Representations and Warranties. Borrower hereby reaffirms and restates as
of the date hereof, all of the representations and warranties made by Borrower in the Credit Agreement and the other Loan Documents, except to the extent such representations and warranties specifically relate to an earlier date.

 
7.2 No Default. No Event of Default or
other default has occurred and remains continuing under any of the Loan Documents. 
 
7.3 Due Execution. The execution, delivery and performance of this Amendment and any instruments, documents or agreements executed in connection herewith are within the powers of Borrower and
the other Loan Parties party thereto, have been duly authorized by all necessary action, and do not contravene any law, the articles of incorporation, bylaws, articles of organization, operating agreement, partnership agreement or other
organizational documents of such parties, result in a breach of, or constitute a default under, any contractual restriction, indenture, trust agreement or other instrument or agreement binding upon any of such parties. 
 
7.4 No Further Consent. The execution, delivery and
performance of this Amendment and any documents or agreements executed in connection herewith do not require any consent or approval not previously obtained of any governmental agency, equity holder, beneficiary or creditor of Borrower.

 
7.5 Binding Agreement. This Amendment,
and each of the other instruments, documents and agreements executed in connection herewith constitute the legal, valid and binding obligation of Borrower or other Loan Parties party thereto and are enforceable against such parties in accordance
with their terms, except as such enforceability may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws or equitable principles relating to or limiting creditors’ rights generally. 
 

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7.6 Effect
of Merger. After giving effect to the Merger, Borrower will be a wholly-owned subsidiary of Symmetricom. 
 
8. Miscellaneous 
 
8.1 Recitals Incorporated. The Recitals set forth above are incorporated into and are made a part of this Amendment. 
 
8.2 Further Assurances. Borrower, at its sole cost and
expense, agrees to execute and deliver all documents and instruments and to take all other actions as may be specifically provided for herein and as may be required in order to consummate the purposes of this Amendment. Borrower shall diligently and
in good faith pursue the satisfaction of any conditions or contingencies in this Amendment. 
 
8.3 No Third Parties. Except as specifically provided herein, no third party shall be benefitted by any of the provisions of this Amendment; nor shall any such third party have the right to rely
in any manner upon any of the terms hereof, and none of the covenants, representations, warranties or agreements herein contained shall run in favor of any third party. 
 
8.4 Time is of the Essence. Time is of the essence for the performance of all obligations and the
satisfaction of all conditions of this Amendment. The parties intend that all time periods specified in this Amendment shall be strictly applied, without any extension (whether or not material) unless specifically agreed to in writing by all parties
hereto. 
 
8.5 Costs and Expenses. In
addition to the obligations of Borrower under the Credit Agreement, Borrower agrees to pay all costs and expenses (including without limitation reasonable attorneys’ fees) expended or incurred by Bank in connection with the negotiation,
documentation and preparation of this Amendment and any other documents executed in connection herewith, and in carrying out the terms of this Amendment, whether incurred before or after the effective date hereof. 
 
8.6 Integration; Interpretation. The Loan Documents,
including this Amendment and the documents, instruments and agreements executed in connection herewith, contain or expressly incorporate by reference the entire agreement of the parties with respect to the matters contemplated herein and supersede
all prior negotiations, discussions and correspondence. The Loan Documents shall not be modified except by written instrument executed by all parties thereto. 
 
8.7 Counterparts and Execution. This Amendment may be executed in counterparts, each of which shall be deemed an original, and all
of which together shall constitute one and the same instrument. However, this Amendment shall not be binding on Bank until all parties have executed it. 
 
8.8 Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of California.

 
8.9 Non-Impairment of Loan Documents. On
the date all conditions precedent set forth herein are satisfied in full, this Amendment shall be a part of the Credit Agreement. Except as expressly provided in this Amendment or in any other document, 
 

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instrument or agreement executed by Bank, all provisions of the Loan Documents shall remain in full force
and effect, and Bank shall continue to have all its rights and remedies under the Loan Documents. 
 
8.10 No Waiver. Nothing herein shall be deemed a waiver by Bank of any Event of Default, and nothing herein shall be deemed a
waiver by Bank of any other default under the Loan Agreement or any document executed in connection with the Loan Agreement. No delay or omission of Bank to exercise any right, remedy or power under any of the Loan Documents shall impair such right,
remedy or power or be construed to be a waiver of any default or an acquiescence therein, and single or partial exercise of any such right, remedy or power shall not preclude other or further exercise thereof or the exercise of any other right,
remedy or power. No waiver of any term, covenant, or condition shall be deemed to waive Bank’s right to enforce such term, covenant or condition at any other time. 
 
8.11 Successors and Assigns. The terms of this Amendment shall be binding upon and inure to the
benefit of the successors and assigns of the parties to this Amendment. 
 
[signature page follows] 
 

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IN WITNESS
WHEREOF, this Amendment has been duly executed as of the date first set forth above. 
 

	  DATUM INC.,
  a Delaware corporation
	  	  	  	  WELLS FARGO BANK, NATIONAL ASSOCIATION

	
	  By:
	  	  /s/ Robert J. Krist

	  	  	  	  By:
	  	  /s/ Stephen Amendt

	  	  	  Name: Robert J. Krist
  Title: CFO
	  	  	  	  	  	  Name: Stephen Amendt
  Title: Vice President

	
	  By:
	  	  /s/ Erik H. van der Kaay

	  	  	  	  	  	  
	  	  	  Name: Erik H. van der Kaay
  Title: President
	  	  	  	  	  	  

 

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Annex 1

 
SIXTH AMENDED AND RESTATED REVOLVING LINE OF
CREDIT NOTE 
 

	  $3,500,000.00
	  	  	  	  Irvine, California
 
October 29, 2002

 
FOR
VALUE RECEIVED, the undersigned DATUM INC., a Delaware corporation (“Borrower”), promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its office at Orange Coast Regional Commercial Banking Office,
2030 Main Street, Suite 900, Irvine, California 92614, or at such other place as the holder hereof may designate, in lawful money of the United States of America and in immediately available funds, the principal sum of Three Million Five Hundred
Thousand Dollars ($3,500,000.00), or so much thereof as may be advanced and be outstanding, with interest thereon, to be computed on each advance from the date of its disbursement as set forth herein. This Note amends and restates in its entirety
that certain Fifth Amended and Restated Revolving Line of Credit Note dated May 10, 2002 executed and delivered by Borrower to the order of Bank in the original principal amount of up to $10,000,000.00 (the “Prior Note”). Amounts
outstanding and committed under the Prior Note shall, upon the effectiveness of this Note be deemed to be outstanding and committed hereunder and evidenced hereby, subject, however, to all terms and conditions hereunder and under the Credit
Agreement referred to below. This Note is the “Line of Credit Note” referred to in the Credit Agreement. 
 
DEFINITIONS: 
 
As used herein, the following terms shall have the meanings set forth after each, and any other term defined in this Note shall have the
meaning set forth at the place defined: 
 
(a)
“Business Day” means any day except a Saturday, Sunday or any other day on which commercial banks in California are authorized or required by law to close. 
 
(b) “Credit Agreement” means that certain Third Amended and Restated Credit Agreement between
Borrower and Bank dated as of October 1, 2002, either as originally executed or as the same may from time to time be supplemented, modified, amended, restated, extended or supplemented. 
 
(c) “Fixed Rate Term” means a period commencing on a Business Day and continuing for (1) one month,
(2) months, (3) months or (6) months, as designated by Borrower, during which all or a portion of the outstanding principal balance of this Note bears interest determined in relation to LIBOR; provided however, that no Fixed Rate Term may be
selected for a principal amount less than Five Hundred Thousand Dollars ($500,000.00); and provided further, that no Fixed Rate Term shall extend beyond the scheduled maturity date hereof. If any Fixed Rate Term would end on a day which is not a
Business Day, then such Fixed Rate Term shall be extended to the next succeeding Business Day. 
 

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(d)
“LIBOR” means the rate per annum (rounded upward, if necessary, to the nearest whole 1/8 of 1%) and determined pursuant to the following formula: 
 

	  LIBOR =
	  	  Base LIBOR

	  	  	  100% - LIBOR Reserve Percentage

 
(i)
“Base LIBOR” means the rate per annum for United States dollar deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the understanding that such rate is quoted by Bank for the purpose of calculating effective rates of
interest for loans making reference thereto, on the first day of a Fixed Rate Term for delivery of funds on said date for a period of time approximately equal to the number of days in such Fixed Rate Term and in an amount approximately equal to the
principal amount to which such Fixed Rate Term applies. Borrower understands and agrees that Bank may base its quotation of the Inter-Bank Market Offered Rate upon such offers or other market indicators of the Inter-Bank Market as Bank in its
discretion deems appropriate including, but not limited to, the rate offered for U.S. dollar deposits on the London Inter-Bank Market. 
 
(ii) “LIBOR Reserve Percentage” means the reserve percentage prescribed by the Board of Governors of the Federal Reserve System
(or any successor) for “Eurocurrency Liabilities” (as defined in Regulation D of the Federal Reserve Board, as amended), adjusted by Bank for expected changes in such reserve percentage during the applicable Fixed Rate Term. 
 
(e) “Prime Rate” means at any time the rate of
interest most recently announced within Bank at its principal office as its Prime Rate, with the understanding that the Prime Rate is one of Bank’s base rates and serves as the basis upon which effective rates of interest are calculated for
those loans making reference thereto, and is evidenced by the recording thereof after its announcement in such internal publication or publications as Bank may designate. 
 
INTEREST: 
 
(a) Interest. The outstanding principal balance of this Note shall bear interest (computed on the
basis of a 360-day year, actual days elapsed) either (i) at a fluctuating rate per annum equal to the Prime Rate in effect from time to time, or (ii) at a fixed rate per annum determined by Bank to be two and one half percent (2.50%) above LIBOR in
effect on the first day of the applicable Fixed Rate Term. When interest is determined in relation to the Prime Rate, each change in the rate of interest hereunder shall become effective on the date each Prime Rate change is announced within Bank.
With respect to each LIBOR selection hereunder, Bank is hereby authorized to note the date, principal amount, interest rate and Fixed Rate Term applicable thereto and any payments made thereon on Bank’s books and records (either manually or by
electronic entry) and/or on any schedule attached to this Note, which notations shall be prima facie evidence of the accuracy of the information noted. 
 
(b) Selection of Interest Rate Options. At any time any portion of this Note bears interest determined in relation to LIBOR, it may
be continued by Borrower at the end of the Fixed Rate Term applicable thereto so that all or a portion thereof bears interest determined in relation to the Prime Rate or to LIBOR for a new Fixed Rate Term designated by Borrower. At any time any
portion of this Note bears interest determined in relation to the Prime Rate, 
 

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Borrower may convert all or a portion thereof so that it bears interest determined in relation to LIBOR
for a Fixed Rate Term designated by Borrower. At such time as Borrower requests an advance hereunder or wishes to select a LIBOR option for all or a portion of the outstanding principal balance hereof, and at the end of each Fixed Rate Term,
Borrower shall give Bank notice specifying: (i) the interest rate option selected by Borrower; (ii) the principal amount subject thereto; and (iii) for each LIBOR selection, the length of the applicable Fixed Rate Term. Any such notice may be given
by telephone (or such other electronic method as Bank may permit) so long as, with respect to each LIBOR selection, (A) if requested by Bank, Borrower provides to Bank written confirmation thereof not later than three (3) Business Days after such
notice is given, and (B) such notice is given to Bank prior to 10:00 a.m. on the first day of the Fixed Rate Term, or at a later time during any Business Day if Bank, at it’s sole option but without obligation to do so, accepts Borrower’s
notice and quotes a fixed rate to Borrower. If Borrower does not immediately accept a fixed rate when quoted by Bank, the quoted rate shall expire and any subsequent LIBOR request from Borrower shall be subject to a redetermination by Bank of the
applicable fixed rate. If no specific designation of interest is made at the time any advance is requested hereunder or at the end of any Fixed Rate Term, Borrower shall be deemed to have made a Prime Rate interest selection for such advance or the
principal amount to which such Fixed Rate Term applied. 
 
(c) Limitation on LIBOR Portions. Unless Bank otherwise consents, no more than one (1) portion of the outstanding principal balance of this Note shall bear interest in relation to Bank’s LIBOR at any time. 
 
(d) Taxes and Regulatory Costs. Borrower shall pay to
Bank immediately upon demand, in addition to any other amounts due or to become due hereunder, any and all (i) withholdings, interest equalization taxes, stamp taxes or other taxes (except income and franchise taxes) imposed by any domestic or
foreign governmental authority and related in any manner to LIBOR, and (ii) future, supplemental, emergency or other changes in the LIBOR Reserve Percentage, assessment rates imposed by the Federal Deposit Insurance Corporation, or similar
requirements or costs imposed by any domestic or foreign governmental authority or resulting from compliance by Bank with any request or directive (whether or not having the force of law) from any central bank or other governmental authority and
related in any manner to LIBOR to the extent they are not included in the calculation of LIBOR. In determining which of the foregoing are attributable to any LIBOR option available to Borrower hereunder, any reasonable allocation made by Bank among
its operations shall be conclusive and binding upon Borrower. 
 
(e) Payment of Interest. Interest accrued on this Note shall be payable on the first day of each month, commencing November 1, 2002. 
 
(f) Default Interest. From and after the maturity date of this Note, or such earlier date as all principal owing hereunder becomes
due and payable by acceleration or otherwise, the outstanding principal balance of this Note shall bear interest until paid in full at an increased rate per annum (computed on the basis of a 360-day year, actual days elapsed) equal to four percent
(4%) above the rate of interest from time to time applicable to this Note. 
 

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BORROWING AND REPAYMENT: 
 
(a)
Borrowing and Repayment. Borrower may from time to time during the term of this Note borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of the limitations, terms and conditions of this Note and of any
document executed in connection with or governing this Note; provided however, that the total outstanding borrowings under this Note shall not at any time exceed the principal amount stated above. The unpaid principal balance of this obligation at
any time shall be the total amounts advanced hereunder by the holder hereof less the amount of principal payments made hereon by or for Borrower, which balance may be endorsed hereon from time to time by the holder. The outstanding principal balance
of this Note shall be due and payable in full on December 31, 2002. 
 
(b) Advances. Advances hereunder, to the total amount of the principal sum stated above, may be made by the holder at the oral or written request of (i) Erik H. van der Kaay or Chris Felfe or Robert Krist, any one
acting alone, who are authorized to request advances and direct the disposition of any advances until written notice of the revocation of such authority is received by the holder at the office designated above, or (ii) any person, with respect to
advances deposited to the credit of any deposit account of Borrower, which advances, when so deposited, shall be conclusively presumed to have been made to or for the benefit of Borrower regardless of the fact that persons other than those
authorized to request advances may have authority to draw against such account. The holder shall have no obligation to determine whether any person requesting an advance is or has been authorized by Borrower. 
 
(c) Application of Payments. Each payment made on this
Note shall be credited first, to any interest then due and second, to the outstanding principal balance hereof. All payments credited to principal shall be applied first, to the outstanding principal balance of this Note which bears interest
determined in relation to the Prime Rate, if any, and second, to the outstanding principal balance of this Note which bears interest determined in relation to LIBOR, with such payments applied to the oldest Fixed Rate Term first. 
 
PREPAYMENT: 
 
(a) Prime Rate. Borrower may prepay principal on any
portion of this Note which bears interest determined in relation to the Prime Rate at any time, in any amount and without penalty. 
 
(b) LIBOR. Borrower may prepay principal on any portion of this Note which bears interest determined in relation to LIBOR at any
time and in the minimum amount of Two Hundred Fifty Thousand Dollars ($250,000.00); provided however, that if the outstanding principal balance of such portion of this Note is less than said amount, the minimum prepayment amount shall be the entire
outstanding principal balance thereof. In consideration of Bank providing this prepayment option to Borrower, or if any such portion of this Note shall become due and payable at any time prior to the last day of the Fixed Rate Term applicable
thereto by acceleration or otherwise, Borrower shall pay to Bank immediately upon demand a fee which is the sum of the discounted monthly differences for each month from the month of prepayment through the month in which such Fixed Rate Term
matures, calculated as follows for each such month: 
 

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(i) Determine the amount of interest which would have accrued each month on the
amount prepaid at the interest rate applicable to such amount had it remained outstanding until the last day of the Fixed Rate Term applicable thereto. 
 
(ii) Subtract from the amount determined in (i) above the amount of interest which would have accrued for the same month on the
amount prepaid for the remaining term of such Fixed Rate Term at LIBOR in effect on the date of prepayment for new loans made for such term and in a principal amount equal to the amount prepaid. 
 
(iii) If the result obtained in (ii) for any month is greater
than zero, discount that difference by LIBOR used in (ii) above. 
 
Borrower acknowledges that prepayment of such amount may result in Bank incurring additional costs, expenses and/or liabilities, and that it is difficult to ascertain the full extent of such costs, expenses and/or liabilities.
Borrower, therefore, agrees to pay the above-described prepayment fee and agrees that said amount represents a reasonable estimate of the prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to pay any prepayment fee when due,
the amount of such prepayment fee shall thereafter bear interest until paid at a rate per annum four percent (4.00%) above the Prime Rate in effect from time to time (computed on the basis of a 360-day year, actual days elapsed). Each change in the
rate of interest on any such past due prepayment fee shall become effective on the date each Prime Rate change is announced within Bank. 
 
EVENTS OF DEFAULT: 
 
This Note is made pursuant to and is subject to the terms and conditions of the Credit Agreement. Any default in the payment or
performance of any obligation under this Note, or any defined event of default under the Credit Agreement, shall constitute an “Event of Default” under this Note. 
 
MISCELLANEOUS: 
 
(a) Remedies. Upon the occurrence of any Event of Default, the holder of this Note, at the
holder’s option, may declare all sums of principal and interest outstanding hereunder to be immediately due and payable without presentment, demand, notice of nonperformance, notice of protest, protest or notice of dishonor, all of which are
expressly waived by Borrower, and the obligation, if any, of the holder to extend any further credit hereunder shall immediately cease and terminate. Borrower shall pay to the holder immediately upon demand the full amount of all payments, advances,
charges, costs and expenses, including reasonable attorneys’ fees (to include outside counsel fees and all allocated costs of the holder’s in-house counsel), expended or incurred by the holder in connection with the enforcement of the
holder’s rights and/or the collection of any amounts which become due to the holder under this Note, and the prosecution or defense of any action in any way related to this Note, including without limitation, any action for declaratory relief,
whether incurred at the trial or appellate level, in an arbitration proceeding or otherwise, and including any of the foregoing incurred in connection with any bankruptcy proceeding (including without limitation, any adversary proceeding, contested
matter or motion brought by Bank or any other person) relating to Borrower or any other person or entity. 
 

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(b)
Obligations Joint and Several. Should more than one person or entity sign this Note as a Borrower, the obligations of each such Borrower shall be joint and several. 
 
(c) Governing Law. This Note shall be governed by and construed in accordance with the laws of the
State of California. 
 
IN WITNESS WHEREOF, the
undersigned has executed this Note as of the date first written above. 
 

	  DATUM INC.,
  a Delaware corporation

	
	  By:
	  	  /s/ Robert J. Krist

	  	  	  Name: Robert J. Krist
  Title: CFO

	
	  By:
	  	  /s/ Erik H. van der Kaay

	  	  	  Name: Erik H. van der
Kaay            
  Title:
President

 

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Annex 2

 
Consent of Guarantors 
 
In order to induce Bank to agree to the terms of the
Amendment, each undersigned Guarantor (a) acknowledges receipt of a copy of the Amendment, (b) consents to Borrower entering into the Amendment and to Borrower and the other parties thereto entering into all of the other documents, instruments and
agreements now or hereafter executed in connection therewith, and (c) agrees that nothing contained in the Amendment, or in any other document, instrument or agreement executed in connection therewith, shall serve to diminish, alter, amend or affect
in any way such Guarantor’s obligations under that certain Second Amended and Restated Guaranty dated as of July 7, 2000 by the undersigned Guarantors in favor of Bank (as amended from time to time, the “Guaranty”). Each of the
undersigned Guarantors expressly and knowingly reaffirms its liability under the Guaranty and acknowledges that it has no defense, offset or counterclaim against Bank with respect to the Guaranty. 
 

	  AUSTRON, INC.,
  a Texas corporation
	  	  	  	  EFRATOM TIME AND FREQUENCY PRODUCTS, INC.,

	
	  By:
	  	  /s/ Robert J. Krist

	  	  	  	  By:
	  	  /s/ Robert J. Krist

	  	  	  Name: Robert J. Krist
  Title: CFO
	  	  	  	  	  	  Name: Robert J. Krist
  Title: CFO

	
	  By:
	  	  /s/ Erik H. van der Kaay

	  	  	  	  By:
	  	  /s/ Erik H. van der Kaay

	  	  	  Name: Erik H. van der Kaay
  Title: Chairman
	  	  	  	  	  	  Name: Erik H. van der Kaay
  Title: Chairman

	
	  FREQUENCY & TIME SYSTEMS, INC.,
  a Delaware corporation
	  	  	  	  DIGITAL DELIVERY, INC.,
  a Massachusetts corporation

	
	  By:
	  	  /s/ Robert J. Krist

	  	  	  	  By:
	  	  /s/ Robert J. Krist

	  	  	  Name: Robert J. Krist
  Title: CFO
	  	  	  	  	  	  Name: Robert J. Krist
  Title: CFO

	
	  By:
	  	  /s/ Erik H. van der Kaay

	  	  	  	  By:
	  	  /s/ Erik H. van der Kaay

	  	  	  Name: Erik H. van der Kaay
  Title: Chairman
	  	  	  	  	  	  Name: Erik H. van der Kaay
  Title: Chairman

 

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	  AUSTIN-DATUM, LP,
  a Texas limited partnership
	  	  	  	  DATUM-AUSTIN HOLDINGS I, LLC,
  a California limited liability company

	
	  By:
	  	  DATUM-AUSTIN HOLDINGS I, LLC,
  a California limited liability company,
  its General Partner
	  	  	  	  	  	  
	
	  	  	  By:
	  	  /s/ Erik H. van der Kaay

	  	  	  	  By:
	  	  /s/ Erik H. van der Kaay

	  	  	  	  	  Name: Erik H. van der Kaay
  Title: President
	  	  	  	  	  	  Name: Erik H. van der Kaay
  Title: President

	
	  	  	  By:
	  	  /s/ Christopher N. Felfe

	  	  	  	  By:
	  	  /s/ Christopher N. Felfe

	  	  	  	  	  Name: Christopher N. Felfe
  Title: Secretary/CFO
	  	  	  	  	  	  Name: Christopher N. Felfe
  Title: Secretary/CFO

	
	  	  	  DATUM-AUSTIN HOLDINGS II, LLC,
  a California limited liability company
	  	  	  	  
	
	  	  	  By:
	  	  /s/ Robert J. Krist

	  	  	  	  	  	  
	  	  	  	  	  Name: Robert J. Krist
  Title: President
	  	  	  	  	  	  
	
	  	  	  By:
	  	  /s/ Michael J. Patrick

	  	  	  	  	  	  
	  	  	  	  	  Name: Michael J. Patrick
  Title: Secretary/CFO
	  	  	  	  	  	  

 

-14-Warrant issued to Gruntal & Co.

 
Exhibit
10.42 
 
Warrant No.
C-             
 
 
 
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THE SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS REGISTERED UNDER THE SECURITIES ACT AND
QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS OR UNLESS SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS AND
THE COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED. THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF HOLDERS THEREOF ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER AND OTHER RESTRICTIONS. 
 
WARRANT TO
PURCHASE SHARES 
OF COMMON STOCK OF CARDIMA, INC. 
 
This certifies that, for value received,
                                    . (the
“Holder”), is entitled, subject to the terms and conditions set forth below, to purchase from Cardima, Inc., a Delaware corporation (the “Company”) in whole or in part,
                                        
     fully paid and nonassessable shares of the Company’s Common Stock, par value $0.001 per share (the “Warrant Shares”) at a price of $1.20 per share (the “Stock Purchase Price”) at any time or from
time to time up to and including 5:00 p.m. (Pacific time) on the Expiration Date (as defined below), upon surrender to the Company at its principal office at 47266 Benicia Street, Fremont, California 94538 (or at such other location as the Company
may advise Holder in writing) of this Warrant properly endorsed with the Form of Subscription attached hereto duly filled in and signed and upon payment by cash, cashier’s check or wire transfer of immediately available funds of the aggregate
Stock Purchase Price for the number of shares for which this Warrant is being exercised determined in accordance with the provisions hereof or otherwise as hereinafter provided, such exercise to be conditioned upon the accuracy of all
representations and warranties contained in Section 7 hereof. The Stock Purchase Price and the number of shares purchasable hereunder are subject to adjustment as provided in Section 3 of this Warrant. “Expiration Date” means June 26,
2006. This Warrant is issued pursuant to the Letter Agreement between the Company and Holder dated as of June 26, 2001 (the “Agreement”). 
 
1.     Exercise of Warrant 
 
1.1     Issuance of Certificates. This Warrant is exercisable at
the option of Holder at any time or from time to time prior to or on the Expiration Date for all or a portion of the shares of Warrant Shares which may be purchased hereunder but if this Warrant is to be exercised only in part, not for less than (i)
five thousand (5,000) Warrant Shares or (ii) such lesser number of shares which may then constitute the maximum number purchasable (in either case as adjusted for any stock dividend, split, combination, recapitalization or the like with respect to
such shares). The Company agrees that the Warrant Shares purchased under this Warrant shall be and are deemed to be issued to Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares. Subject to the provisions of Section 2, certificates for the Warrant Shares so 
 

1 

 
purchased,
together with any other securities or property to which Holder is entitled upon such exercise, shall be delivered to Holder by the Company’s transfer agent at the Company’s expense within a reasonable time after this Warrant has been
exercised. Each stock certificate so delivered shall be in such denominations of Warrant Shares as may be requested by Holder and shall be registered in the name of Holder or such other name as shall be designated by Holder, subject to the
limitations contained in Section 2. If, upon exercise of this Warrant, fewer than all of the Warrant Shares evidenced by this Warrant are purchased prior to the date of expiration of this Warrant, one or more new warrants substantially in the form
of, and on the terms in, this Warrant will be issued for the remaining number of Warrant Shares not purchased upon exercise of this Warrant. 
 
1.2     Payment. Payment of the Stock Purchase Price shall be made at the option of the Holder
by surrender to the Company of this Warrant properly endorsed with the Form of Subscription attached hereto duly filled in and signed and (i) payment by cash, cashier’s check or wire transfer of immediately available funds or (ii) by surrender
of this Warrant to the Company, with a duly executed exercise notice marked to reflect “Net Issue Exercise,” and in either case specifying the number of Warrant Shares to be purchased, during normal business hours on any day that is not a
Saturday or Sunday or a day on which banks are required or permitted to be closed in the State of California. 
 
1.3     Net Issue Exercise. Upon a Net Issue Exercise, the Holder shall be entitled to receive
Warrant Shares equal to the value of this Warrant (or the portion thereof being exercised by Net Issue Exercise) by surrender of this Warrant to the Company together with notice of such election in which event, the Company shall issue to Holder a
number of Warrant Shares computed as of the date of surrender of this Warrant to the Company using the following formula: 
 

	  	   	  X=
	  	  Y(A-B)

	  	   	  	  	      A

	
	  Where:    
	   	  X=
	  	  the number of Warrant Shares to be issued to Holder under this Section 1.3;

	
	  	   	  Y=
	  	  the number of Warrant Shares otherwise purchasable under this Warrant (as adjusted to the date of such
calculation);

	
	  	   	  A=
	  	  the fair market value of one share of the Common Stock (at the date of calculation);

	
	  	   	  B=
	  	  the Stock Purchase Price (as adjusted to the date of such calculation).

 
For purposes of this Section 1.3, the fair market value of the Company’s Common Stock shall mean (A) the average closing bid price of the Company’s Common Stock quoted on any exchange, including the Nasdaq SmallCap Market,
on which the Common Stock is listed, as published in the Western Edition of the The Wall Street Journal for the five (5) consecutive trading days immediately prior to the date the Holder delivers its notice of Net Issue Exercise to the Company or
(B) the average of the closing bid prices of the Company’s Common Stock quoted in the Over-The-Counter Market Summary, if applicable, for the five (5) consecutive trading days immediately prior to the date the Holder delivers its notice of Net
Issue Exercise to the Company, or (C) if neither (A) nor (B) is applicable, the price determined by the Company’s Board of Directors, acting in good faith upon a review of all relevant factors. 
 
2.     Shares to be Fully Paid;
Reservation of Shares. The Company covenants and agrees that all Warrant Shares which may be issued upon the exercise of the rights represented by this Warrant will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable
and free from all preemptive rights of any stockholder and free of all taxes, liens and charges with respect to the issue thereof. The Company further covenants and agrees that during the period within which the rights represented by this Warrant
may 
 

2 

 
be exercised, the Company will
use its best efforts to at all times have authorized and reserved, for the purpose of issue or transfer upon exercise of this Warrant, a sufficient number of shares of authorized but unissued Common Stock. When and as required to provide for the
exercise of the rights represented by this Warrant, the Company will take all such action as may be necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of
any requirements of any domestic securities exchange or automated quotation system upon which the Common Stock may be listed. 
 
3.     Adjustment of Stock Purchase Price; Number of Shares. The Stock Purchase Price and the number of shares
of Warrant Shares purchasable upon the exercise of this Warrant shall be subject to adjustment from time to time upon the occurrence of certain events described in this Section 3. 
 
3.1     Adjustment of Purchase Price. In the event that the
Company at any time or from time to time after the issuance of this Warrant shall declare or pay, without consideration, any dividend on the Common Stock payable in Common Stock or in any right to acquire Common Stock for no consideration, or shall
effect a subdivision of the outstanding shares of Common Stock into a greater number of shares of Common Stock (by stock split, reclassification or otherwise than by payment of a dividend in Common Stock or in any right to acquire Common Stock), or
in the event the outstanding shares of Common Stock shall be combined or consolidated, by reclassification or otherwise, into a lesser number of shares of Common Stock, then the Stock Purchase Price in effect immediately prior to such event shall,
concurrently with the effectiveness of such event, be proportionately decreased or increased, as appropriate. In the event that the Company shall declare or pay, without consideration, any dividend on the Common Stock payable in any right to acquire
Common Stock for no consideration, then the Company shall be deemed to have made a dividend payable in Common Stock in an amount of shares equal to the maximum number of shares issuable upon exercise of such rights to acquire Common Stock. Upon each
adjustment of the Stock Purchase Price pursuant to this Section 3.1, the holder of this Warrant shall thereafter be entitled to purchase, at the Stock Purchase Price resulting from such adjustment, the number of shares of Common Stock obtained by
multiplying the Stock Purchase Price in effect immediately prior to such adjustment by the number of shares of Common Stock purchasable pursuant hereto immediately prior to such adjustment, and dividing the product thereof by the Stock Purchase
Price resulting from such adjustment. 
 
3.2     Adjustments for Reclassification and Reorganization. If the Common Stock shall be changed into the same or a different number of shares of any other class or classes of stock, whether by capital
reorganization, reclassification or otherwise (other than a subdivision or combination of shares provided for in Section 3.1), the Stock Purchase Price then in effect shall, concurrently with the effectiveness of such reorganization or
reclassification, be proportionately adjusted so that this Warrant shall represent the right to purchase, in lieu of the number of shares of Common Stock which this Warrant would otherwise represent the right to purchase, a number of shares of such
other class or classes of stock equivalent to the number of shares of Common Stock which this Warrant would have otherwise entitled the holder to purchase immediately before that change. 
 
3.3     Notice of Adjustment. Upon any adjustment of the Stock
Purchase Price or any increase or decrease in the number of shares of Common Stock purchasable upon the exercise of this Warrant, the Company shall within five business days give written notice thereof, by first class mail, postage prepaid, (or by
international delivery service, for international addresses) addressed to the registered holder of this Warrant at the address of such holder as shown on the books of the Company. The notice shall be signed by the Company’s chief financial
officer and shall state the Stock Purchase Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of this Warrant, setting forth in reasonable detail the method
of calculation and the facts upon which such calculation is based. 
 
3.4     Other Notices. If at any time the Company shall propose to: 
 

3 

 
(a)     declare any cash dividend upon its Common Stock; 
 
(b)     declare or make any dividend or other distribution to the holders of its Common Stock, whether
in cash, property or other securities; 
 
(c)     effect any reorganization or reclassification of the capital stock of the Company or any consolidation or merger of the Company with or into another corporation or any sale, lease or conveyance of all or
substantially all of the property of the Company; or 
 
(d)     effect a voluntary or involuntary dissolution, liquidation or winding-up of the Company; 
 
then, in any one or more of said cases, the Company shall give, by certified or registered mail, postage prepaid, or international
delivery service for international deliveries, addressed to the holder of this Warrant at the address of such holder as shown on the books of the Company, (i) at least fifteen (15) business days’ prior written notice of the date on which the
books of the Company shall close or a record shall be taken for such dividend or distribution or for determining rights to vote in respect of any such reorganization, reclassification, consolidation, merger, sale, lease, conveyance, dissolution,
liquidation or winding-up and (ii) in the case of any such reorganization, reclassification, consolidation, merger, sale, lease, conveyance, dissolution, liquidation or winding-up, at least fifteen (15) business days’ written notice of the date
when the same shall take place. Any notice given in accordance with clause (i) above shall also specify, in the case of any such dividend or distribution, the record date for such dividend or distribution. Any notice given in accordance with clause
(ii) above shall also specify the date on which the holders of Common Stock shall be entitled to exchange their Common Stock for securities or other property, if any, deliverable upon such reorganization, reclassification, consolidation/merger,
sale, lease, conveyance, dissolution, liquidation or winding-up, as the case may be. In the event that the Holder of the Warrant does not exercise this Warrant prior to the occurrence of an event described in clause (a) or (b) above, the Holder
shall not be entitled to receive the benefits accruing to existing holders of the Common Stock in such event. Upon the occurrence of an event described in clause (c), the Holder shall be entitled thereafter, upon payment of the Stock Purchase Price
in effect immediately prior to such action, to receive upon exercise of this Warrant, the class and number of shares which the Holder would have been entitled to receive after the occurrence of such event had this Warrant been exercised immediately
prior to such event. In connection with the transactions described in clause (c), the Company will require each person (other than the Company) that may be required to deliver any cash, stock, securities or other property upon the exercise of this
Warrant, as provided herein, to assume, by written instrument delivered to the Holder of this Warrant, (x) the obligations of the Company under this Warrant and (y) the obligation to deliver to such Holder such cash, stock, securities or other
property as such Holder may be entitled to receive in accordance with the provisions of this Section 3. Upon occurrence of an event the proposal of which is described in clause (d), this Warrant shall terminate. Notwithstanding any other provision
hereof, no Holder shall have the right to obtain an injunction or restraining order or otherwise interfere with or prevent the occurrence of any of the actions described in (a)-(d) above. 
 
4.     Issue Tax. The issuance of certificates for the Warrant Shares upon the
exercise of the Warrant shall be made without charge to the Holder of the Warrant for any issue tax in respect thereof; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name other than that of the then Holder of the Warrant being exercised. 
 
5.     No Voting or Dividend Rights; Limitation of Liability. Nothing contained in this Warrant shall be
construed as conferring upon the Holder hereof the right to vote or to consent or to receive notice as a stockholder in respect of meetings of stockholders for the election of directors of the Company or any other matters or any rights whatsoever as
a stockholder of the Company. Except for the adjustment to the 
 

4 

 
Stock Purchase Price pursuant
to Section 3.1 in the event of a dividend on the Common Stock payable in shares of Common Stock, no dividends or interest shall be payable or accrued in respect of this Warrant or the interest represented hereby or the shares purchasable hereunder
until, and only to the extent that, this Warrant shall have been exercised. No provisions hereof, in the absence of affirmative action by the Holder to purchase shares of Warrant Shares, and no mere enumeration herein of the rights or privileges of
the Holder hereof, shall give rise to any liability of such Holder for the Stock Purchase Price or as a stockholder of the Company whether such liability is asserted by the Company or by its creditors. 
 
6.     Restrictions on Transferability
of Securities: Compliance With Securities Act. 
 
6.1     Restrictions on Transferability. The Warrant and the Warrant Shares (collectively, the “Securities”) shall not be transferable in the absence of a registration under the
Securities Act or an exemption therefrom, or in the absence of compliance with any term of the Warrant. Without limiting the foregoing, (i) the Securities may be offered, resold, pledged or otherwise transferred only (A) in a transaction meeting the
requirements of Rule 144 of the SEC (“Rule 144”), or in accordance with another exemption from the registration requirements of the Securities Act (and based upon an opinion of counsel if the Company so requests) or (B) pursuant to an
effective registration statement under the Securities Act, in each case in accordance with the applicable securities laws of any state of the United States or any other applicable jurisdiction and (ii) Purchaser will be required to notify any
subsequent purchaser of the resale restrictions set forth above. The Company shall be entitled to give stop transfer instructions to the transfer agent with respect to the Securities in order to enforce the foregoing restrictions. 
 
6.2     Restrictive
Legend. Unless otherwise received in a transaction registered under the Securities Laws and qualified (if necessary) under applicable state securities laws, each certificate representing the Securities or any other securities issued in respect
of the Securities upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event, shall (unless otherwise permitted by the provisions of the Purchase Agreement) be stamped or otherwise imprinted with a legend
substantially in the following form (in addition to any legend required under applicable state securities laws): 
 
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”). THE SECURITIES MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS REGISTERED UNDER THE SECURITIES ACT AND QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS OR UNLESS SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND THE QUALIFICATION REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED. THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE RIGHTS OF HOLDERS THEREOF ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER. 
 
6.3     Exchange of Warrant. Subject to the terms and conditions
hereof, including the restrictions on transfer in this Section 6, upon surrender of this Warrant to the Company with a duly executed Assignment Form in the form attached hereto and funds sufficient to pay any transfer tax, the Company shall,
without charge, execute and deliver a new Warrant or Warrants of like tenor in the name of the assignee named in such Assignment Form and this Warrant shall promptly be canceled; provided, however, that if the transfer is for less than
all of this Warrant, the transferor shall pay all reasonable costs of the Company in connection with a transfer of Warrants to purchase less than five thousand (5,000) Warrant Shares (in either case as adjusted for any stock dividend, split,
combination, recapitalization or the like with respect to such 
 

5 

 
shares). The
term “Warrant” as used herein shall be deemed to include any Warrants issued in exchange for this Warrant. 
 
6.4     Ownership of Warrant. The Company may deem and treat the person in whose name this
Warrant is registered as the holder and owner hereof (notwithstanding any notations of ownership or writing hereon made by anyone other than the Company) for all purposes and shall not be affected by any notice to the contrary, until presentation of
this Warrant for registration of transfer as provided in Section 6.3. 
 
7.     Representations and Warranties. 
 
7.1     Representations and Warranties of Holders The Holder hereby represents and warrants to
the Company as follows: 
 
7.1.1
    Investment Intent. The Holder is acquiring the Warrants for investment for its own account only, not as a nominee or agent, and not with a view to, or for resale in connection with, any “distribution” of any
part thereof within the meaning of the Securities Act. The Holder has no present intention of selling, granting any participation in, or otherwise distributing the same. The Holder does not have any contract, undertaking, agreement or arrangement
with any person to sell, transfer or grant any participation to such person or to any third person with respect to any of the Securities. The Holder understands that the Securities have not been registered under the Securities Act or registered or
qualified under any state securities law in reliance on specific exemptions therefrom, which exemptions may depend upon, among other things, the bona fide nature of Holder’s investment intent as expressed herein. 
 
7.1.2     Investment
Experience. The Holder (i) has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of acquiring the Warrant and Warrant Shares; (ii) has received all of the information that the
Holder has requested from the Company and that the Holder considers necessary or appropriate for deciding whether to acquire the Warrant and Warrant Shares; (iii) has the ability to bear the economic risks of the prospective investment; and (iv) is
able, without materially impairing its financial condition, to hold the Warrant and Warrants Shares for an indefinite period of time and to suffer complete loss on the investment therein. The Holder is aware of the Company’s business affairs
and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities. The Holder has such business and financial experience, including without limitation,
investment is technology and biotechnology companies, as will enable the Holder to fend for itself, make an informed investment decision and protect its own interests in connection with the purchase of the Securities. 
 
7.1.3     The Holder
understands that the Securities it is acquiring are characterized as “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that
under such laws and applicable regulations such securities may be resold without registration under the Securities Act only in certain limited circumstances. In this connection, the Holder represents that it is familiar with Rule 144 promulgated by
the SEC under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act. 
 
7.2     Survival of Representations and Warranties. The representations and warranties made in
Section 7.1 of this Warrant will survive the date of this Warrant and will expire on the earlier of (i) the Expiration Date or (ii) the exercise of this Warrant in full. 
 
8.     Modification and Waiver. Except as otherwise provided herein, this Warrant
and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought. 
 

6 

 
9.
    Notices. Except as otherwise provided herein, any notice, request or other document required or permitted to be given or delivered to the holder hereof or the Company shall be delivered or shall be sent by United
States certified or registered mail, postage prepaid, (or international delivery service for international deliveries) to Holder at its address as shown on the books of the Company or to the Company at the address indicated therefor in the first
paragraph of this Warrant. 
 
10.
    Descriptive Headings and Governing Law. The descriptive headings of the several sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. This Warrant shall
be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of California (without regard to its conflicts of law provisions). The Holder hereby irrevocably submits to the jurisdiction of
any State or United States Federal court sitting in the Alameda or San Francisco counties in the State of California over any action or proceeding arising out of or relating to this Warrant or any agreement contemplated hereby, and the Holder
irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such State or Federal court. The Holder further waives any objection to venue in such State and any objection to an action or proceeding in
such State based on non-convenient forum. The Holder further agrees that any action or proceeding brought against the Company shall be brought only in the State or United States Federal courts sitting in Alameda or San Francisco counties in the
State of California. THE HOLDER AGREES TO WAIVE ITS RIGHTS TO A JURY TRIAL OR ANY CLAIM FOR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS WARRANT. 
 
11.     Lost Warrants or Stock Certificates. The Company represents and warrants to Holder that upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction, or mutilation of any Warrant or stock certificate and, in the case of any such loss, theft or destruction, upon receipt of an indemnity and, if requested, bond
reasonably satisfactory to the Company, or, in the case of any such mutilation, upon surrender and cancellation of such Warrant or stock certificate, the Company at its expense will make and deliver a new Warrant or stock certificate, of like tenor,
in lieu of the lost, stolen, destroyed or mutilated Warrant or stock certificate. 
 
12.     Amendment. This Warrant may be amended only with the written approval of the Company and the Holder of this Warrant. 
 
13.     Binding Effect; Benefits.
This Warrant shall inure to the benefit of and shall be binding upon the Company and the Holder and their respective heirs, legal representatives, successors and assigns. Nothing in this Warrant, expressed or implied, is intended to or shall confer
on any person other than the Company and the Holder, or their respective heirs, legal representatives, successors or assigns, any rights, remedies, obligations or liabilities under or by reason of this Warrant. 
 
14.     Fractional Shares. No
fractional shares shall be issued upon exercise of this Warrant. The Company shall, in lieu of issuing any fractional share, pay the Holder entitled to such fraction a sum in cash equal to such fraction multiplied by the market price of the Common
Stock on such exercise date, which shall be, on such date, the closing price for the Common Stock or the closing bid if no sales were reported, as quoted on the exchange or market that is the primary trading market for the Company. 
 
[REMAINDER LEFT INTENTIONALLY BLANK] 
 

7 

 
IN WITNESS WHEREOF, the
Company has caused this Warrant to be executed by its officers, thereunto duly authorized as of the 26th day of
June, 2001. 
 
 

	  	  	  	  	  	  	  	  	  CARDIMA, INC., a Delaware corporation

	
	  	  	  	  	  	  	  	  	  By:
	   	   

	  	  	  	  	  	  	  	  	  	   	      Name:   Ronald E.
Bourquin

	  	  	  	  	  	  	  	  	  	   	      Title:     Chief Financial
Officer

	
	  ACKNOWLEDGED AND ACCEPTED:
	  	  	  	  	   	  
	
	  By:
	  	   

	  	  	  	  	   	  
	
	  	  	  Name:
	  	   

	  	  	  	  	   	  

 

8 

 
FORM OF
SUBSCRIPTION 
 
(To be signed only upon exercise
of Warrant) 
 
To:     Cardima, Inc.

 
The undersigned, the holder of the within
Warrant, hereby irrevocably elects to exercise such Warrant for, and to purchase thereunder,
                                    
(                    ) shares of Common Stock of Cardima, Inc. (the “Company”), and 
 
 ̈     tenders herewith payment in the amount of
$                     therefor or 
 
 ̈
    elects to exercise such Warrant pursuant to the net issuance provisions provided for in Section 1.3 thereof. (PLEASE CHECK THE APPROPRIATE FORM OF PAYMENT). 
 
The certificates for such shares should be issued in the name of, and delivered to,
                                        
                             whose address
is                                       
                                        
                                        
                                        
                     
                                        
                . 
 
The undersigned represents, unless the exercise of this Warrant has been registered under the Securities Act of 1933, as amended (the
“Securities Act”), that (i) the undersigned is acquiring such Common Stock for his or its own account for investment and not with a view to or for sale in connection with any distribution thereof (except for any resale pursuant to a
registration statement under the Securities Act), (ii) the undersigned has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the undersigned’s investment in the shares of
Common Stock, (iii) the undersigned has received all of the information the undersigned requested from the Company and the undersigned considers necessary or appropriate for deciding whether to purchase the shares, (iv) the undersigned has the
ability to bear the economic risks of the undersigned’s prospective investment and (v) the undersigned is able, without materially impairing his financial condition, to hold the shares of Common Stock for an indefinite period of time and to
suffer complete loss on the undersigned’s investment. 
 
Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned or in such other name as is specified here
                                        
                                    . 
 
 

	  DATED:
	  	   

	  	  	  	  
	
	  	  	  	  	
  (Signature must conform in all respects to name
of
  holder as specified on the face of the Warrant)
	  	  
	
	  	  	  	  	
	  	  
	
	  	  	  	  	
  (Address)
	  	  

 

9 

 
THIS WARRANT AND ANY SHARES
ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER SUCH ACT OR PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT. 
 
ASSIGNMENT FORM 
 
(To be
executed only upon transfer of this Warrant) 
 
For
value received, the undersigned registered holder of the within Warrant hereby sells, assigns and transfers unto
                                        
(the “Assignee”) the right represented by such Warrant to purchase                      Warrant Shares and all other rights of the
Holder with respect thereto under the within Warrant, and appoints
                                        
as Attorney to make such transfer on the books of Cardima, Inc. maintained for such purpose, with full power of substitution in the premises. 
 
The undersigned also represents that, by assignment hereof, the Assignee acknowledges that this Warrant and the Warrant Shares to be
issued upon exercise hereof are being acquired for investment and that the Assignee will not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in
a violation of the Securities Act of 1933, as amended, or any state securities laws. Further, the Assignee has acknowledged that upon exercise of this Warrant, the Assignee shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the Warrant Shares so purchased are being acquired for investment and not with a view toward distribution or resale. 
 
 

	  Dated
	  	   

	  	  	  	  
	
	  	  	  	  	
  (Signature)
	  	  
	
	  	  	  	  	
  (Print Name)
	  	  
	
	  	  	  	  	
  (Street Address)
	  	  
	
	  	  	  	  	
  (City)                        (State)           
     (Zip Code)
	  	  

 

10

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