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EXHIBIT 10.7
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XXXXXX FINANCIAL
SECURITY AGREEMENT
THIS SECURITY AGREEMENT ("Agreement") is entered into as of the 20 day
of May, 1999, by and between INTUITIVE SURGICAL, INC., a Delaware corporation
("Debtor"), whose business address is 0000 X. Xxxxxxxxxxx Xx., Xxxxxxxx Xxxx, XX
00000 and XXXXXX FINANCIAL LEASING, INC., a Delaware corporation ("Secured
Party"), whose address is Commercial Equipment Finance Division, 000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
WITNESSETH:
1. Secure Payment. To secure payment of indebtedness in the principal sum of up
to One Million Five Hundred Thousand and 00/100 Dollars ($1,500,000.00) as
evidenced by a note or notes executed and delivered by Debtor to Secured Party
(the "Notes") and any obligations arising under this Agreement, and also to
secure any other indebtedness or liability of Debtor to Secured Party, direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising and no matter how acquired by Secured Party, including all
future advances or loans which may be made at the option of Secured Party (all
the foregoing hereinafter called the "Indebtedness"), Debtor hereby grants and
conveys to Secured Party a first priority continuing lien and security interest
in the personal property described on any schedule(s) now or hereafter attached
to or made a part hereof by reference hereto (the "Schedules"), all products and
proceeds (including insurance proceeds) thereof, if any, and all substitutions,
replacements, attachments, additions, and accessions thereto (all of the
foregoing hereinafter called the "Collateral.") The Schedules may be
supplemented from time to time to evidence the Collateral subject to this
Agreement.
Debtor shall request in writing each advance of principal under the Notes, which
request shall be satisfactory to Secured Party in form and substance. Each
advance shall be on and subject to the terms and conditions set forth in this
Agreement and shall otherwise be at Secured Party's sole discretion. Amounts
advanced and repaid may not be reborrowed.
2. Representations, Warranties and Covenants. Except as otherwise provided, each
representation and warranty made by Debtor in this
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Agreement shall be true, correct and complete as of the date of this Agreement
and as of the date of each advance of funds under a Note. Debtor hereby
represents, warrants and covenants as follows:
(a) Perform Obligations. Debtor shall pay as and when due all
Indebtedness secured by this Agreement and perform all of the obligations
contained in this Agreement according to its terms. Debtor shall use the loan
proceeds for business uses and not for personal, family, household, or
agricultural uses.
(b) Perfection. This Agreement and all necessary Uniform Commercial Code
filings together create a valid, perfected and first priority continuing lien
and security interest in the Collateral, securing the payment and performance of
the Indebtedness, and all filings and other actions necessary or desirable to
create, perfect and protect such security interest have been or will be duly
taken.
(c) Collateral Free and Clear. Except as may be set forth on a Schedule,
the Collateral is and shall remain free and clear of all liens, claims, charges,
encumbrances and other security interests of any kind (other than the security
interest granted hereby). Debtor shall defend the title to the Collateral
against all persons and against all claims and demands whatsoever.
(d) Possession and Operating Order of the Collateral. Debtor shall
retain possession of the Collateral at all times and shall not sell, exchange,
assign, loan, deliver, lease, mortgage, or otherwise dispose of the Collateral
or any part thereof without the prior written consent of Secured Party. Debtor
shall at all times keep the Collateral at the location[s] specified on the
Schedules (except for removals thereof in the usual course of business for
temporary periods). At Debtor's sole cost and expense, Debtor shall keep the
Collateral in good repair and condition and shall not misuse, abuse, waste or
otherwise allow it to deteriorate, except for normal wear and tear. Secured
Party may verify any Collateral in any reasonable manner which Secured Party may
consider appropriate, and Debtor shall furnish all reasonable assistance and
information and perform any acts which Secured Party may reasonably request in
connection therewith.
(e) Insurance. Debtor shall insure the Collateral against loss by fire
(including extended coverage), theft and other hazards, for its full insurable
value including replacement costs, with a deductible not to exceed Fifty
Thousand and 00/100 Dollars ($50,000.00) per occurrence and without
co-insurance. In addition, Debtor shall obtain liability insurance covering
liability for bodily injury, including death and property damage, in an
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amount of at least Five Million and 00/100 Dollars ($5,000,000.00) per
occurrence or such greater amount as may comply with general industry standards,
or in such other amounts as Secured Party may otherwise require. All policies of
insurance required hereunder shall be in such form, amounts, and with such
companies as Secured Party may approve; shall provide for at least thirty (30)
days prior written notice to Secured Party prior to any modification or
cancellation thereof; shall name Secured Party as loss payee or additional
insured, as applicable, and shall be payable to Debtor and Secured Party as
their interests may appear; shall waive any claim for premium against Secured
Party; and shall provide that no breach of warranty or representation or act or
omission of Debtor shall terminate, limit or affect the insurers' liability to
Secured Party. Certificates of insurance or policies evidencing the insurance
required hereunder along with satisfactory proof of the payment of the premiums
therefor shall be delivered to Secured Party. Debtor shall give immediate
written notice to Secured Party and to insurers of loss or damage to the
Collateral and shall promptly file proofs of loss with insurers. Debtor hereby
irrevocably appoints Secured Party as Debtor's attorney-in-fact, coupled with an
interest, for the purpose of obtaining, adjusting and canceling any such
insurance and endorsing settlement drafts. Debtor hereby assigns to Secured
Party, as additional security for the Indebtedness, all sums which may become
payable under such insurance.
In the event Debtor fails to provide Secured Party with evidence of the
insurance coverage required by this Agreement, Secured Party may purchase
insurance at Debtor's expense to protect Secured Party's interests in the
Collateral. This insurance may, but need not, protect Debtor's interests. The
coverage purchased by Secured Party may not pay any claim made by Debtor or any
claim that is made against Debtor in connection with the Collateral. Debtor may
later cancel any insurance purchased by Secured Party, but only after providing
Secured Party with evidence that Debtor has obtained insurance as required by
this Agreement. If Secured Party purchases insurance for the Collateral, Debtor
will be responsible for the costs of that insurance, including interest and
other charges imposed by Secured Party in connection with the placement of the
insurance, until the effective date of the cancellation or expiration of the
insurance. The costs of the insurance may be added to the Indebtedness. The
costs of the insurance may be more than the cost of insurance Debtor is able to
obtain on its own.
(f) If Collateral Attaches to Real Estate. If the Collateral or any part
thereof has been attached to or is to be attached to real estate, an accurate
description of the real estate and the name and address of the record owner is
set forth on the Schedules. Debtor shall, on demand of Secured Party, furnish
Secured Party with a disclaimer or waiver of any interest in any such
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Collateral satisfactory to Secured Party and signed by all persons having an
interest in the real estate. Notwithstanding the foregoing, the Collateral shall
remain personal property and shall not be affixed to realty without the prior
written consent of Secured Party.
(g) Financial Statements. Debtor shall furnish to Secured Party, as soon
as practicable, and in any event within thirty (30) days after the end of each
fiscal month Debtor's unaudited financial statements including in each instance,
balance sheets, income statements, and statements of cash flow, on a
consolidated and consolidating basis, as appropriate, and separate profit and
loss statements as of and for the quarterly period then ended and for the
respective person's fiscal year to date, prepared in accordance with generally
accepted accounting principles, consistently applied ("GAAP"). Debtor shall also
furnish to Secured Party, as soon as practicable, and in any event within one
hundred twenty (120) days after the end of each fiscal year, Debtor's annual
audited financial statements, including balance sheets, income statements and
statements of cash flow for the fiscal year then ended, on a consolidated and
consolidating basis, as appropriate, which have been prepared by its independent
accountants in accordance with GAAP. Such audited financial statements shall be
accompanied by the independent accountant's opinion, which opinion shall be in
form generally recognized as "unqualified".
(h) Authorization. Debtor is now, and will at all times remain, duly
licensed, qualified to do business and in good standing in every jurisdiction
where failure to be so licensed or qualified and in good standing would have a
material adverse effect on its business, properties or assets. The execution and
delivery of this Agreement, the Notes and any other documents and instruments
executed contemporaneously with or delivered pursuant to this Agreement and the
Notes, all as amended from time to time (collectively the "Loan Documents"),
have been duly authorized by Debtor and constitute the legal, valid, and binding
obligations of Debtor, enforceable against Debtor in accordance with their
respective terms. Debtor shall preserve and maintain its existence and shall not
wind up its affairs or otherwise dissolve. Debtor shall not, without thirty (30)
days prior written notice to Secured Party, (1) change its name or so change its
structure such that any financing statement or other record notice becomes
misleading or (2) change its principal place of business or chief executive or
accounting offices from the address stated herein.
(i) Litigation. Except as disclosed by Debtor on a Schedule, there are
no judgments outstanding against or affecting Debtor, its officers, directors or
affiliates or any part of the Collateral and there are no actions, charges,
claims, demands, suits, proceedings, or investigations pending or threatened
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against Debtor or otherwise affecting any part of the Collateral ("Litigation").
Debtor shall furnish to Secured Party all information regarding any material
Litigation as Secured Party shall reasonably request and in any event shall
promptly notify Secured Party in writing of any Litigation against it which if
decided against it would materially and adversely affect the finances or
operations of Debtor. For the purposes of this subsection 2(i), Five Hundred
Thousand and 00/100 Dollars ($500,000.00) shall be deemed material.
(j) No Conflicts. Debtor is not in violation of any material term or
provision of its by-laws, or of any material agreement or instrument, decree,
order, or any statute, rule, or governmental regulation applicable to it. The
execution, delivery, and performance of the Loan Documents do not and will not
violate, constitute a default under, or otherwise conflict with any such term or
provision or result in the creation of any security interest, lien, charge, or
encumbrance upon any of the properties or assets of Debtor, except for the
security interest created hereunder.
(k) Compliance with Laws. Debtor shall use and maintain the Collateral
in accordance with all applicable laws, regulations, ordinances, and codes and
shall otherwise comply in all material respects with all applicable laws, rules,
and regulations and duly observe all valid requirements of all governmental
authorities, and all statutes, rules and regulations relating to its business as
now in effect and which may be imposed in the future.
(l) Taxes. Debtor has timely filed all tax returns (federal, state,
local, and foreign) required to be filed by it and has paid or established
reserves for all taxes, assessments, fees, and other governmental charges in
respect of its properties, assets, income and franchises. Debtor shall promptly
file, pay and discharge all taxes, assessments, license fees (related to the
Collateral) and other governmental charges prior to the date on which penalties
are attached thereto, establish adequate reserves for the payments of such
taxes, assessments, and other governmental charges and make all required
withholding and other tax deposits, and, upon request, provide Secured Party
with receipts or other proof that any or all of such taxes, assessments, license
fees or governmental charges have been paid in a timely fashion; provided,
however, that nothing contained herein shall require the payment of any tax,
assessment, or other governmental charge so long as its validity is being
diligently contested in good faith and by appropriate proceedings diligently
conducted and Debtor has established cash reserves therefor in accordance with
GAAP. Should any stamp, excise, or other tax, including mortgage, conveyance,
deed, intangible, or recording taxes become payable in connection with or
respect of any of the Loan Documents, Debtor shall pay the same (including
interest and penalties, if any) and shall hold Secured Party harmless with
respect thereto.
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(m) Environmental Laws/Compliance. Except as disclosed by Debtor on a
Schedule, Debtor (1) has not received any claim, summons, complaint, order, or
other notice that it is not in compliance with, or that any public authority is
investigating its compliance with, any federal, state, and local laws, rules,
regulations, orders, and decrees relating to pollution, hazardous substances,
waste, disposal or the protection of human health or safety, plant life or
animal life, natural resources or the environment, all as amended from time to
time (collectively, "Environmental Laws"), (2) has no knowledge of any material
violation of any Environmental Laws on or about its assets or property, and (3)
is not under any current clean up or other remediation program or order. Debtor
has obtained all environmental, health and safety permits necessary for the
operation of Debtor's business. Debtor is and shall remain in compliance, in all
respects, with the terms and conditions of all permits and with all applicable
Environmental Laws. Debtor shall provide Secured Party, promptly following
receipt, copies of any correspondence, notice, complaint, order, or other
document that it receives asserting or alleging a circumstance or condition
which requires or may require a cleanup, removal, remedial action or other
response by or on the part of Debtor under any Environmental Laws, or which
seeks damages or civil, criminal or punitive penalties from Debtor for an
alleged violation of any Environmental Laws. Debtor will promptly notify Secured
Party of any release, spill or material change in the nature or extent of any
hazardous substances or contaminants used, transported or stored by Debtor or
any subsidiary of Debtor, and allow no material change in the use thereof or of
Debtor's operations that would increase in any material amount the risk of
violation of any Environmental Laws without the express prior written approval
of Secured Party.
(n) Regulations. No proceeds of the loans or any other financial
accommodation hereunder will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin security, as that term is defined in
Regulations G, T, U, X of the Board of Governors of the Federal Reserve System.
(o) Books and Records. Debtor shall maintain, at all times, true and
complete books and records in accordance with GAAP and consistent with those
applied in the preparation of Debtor's financial statements. At all reasonable
times, upon reasonable notice, and during normal business hours, Debtor shall
permit Secured Party or its agents to audit, examine and make extracts from or
copies of any of its books, ledgers, reports, correspondence, and other records
relating to the Collateral.
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(p) Setoff. Without limiting any other right of Secured Party, whenever
Secured Party has the right to declare any Indebtedness to be immediately due
and payable (whether or not it has so declared), Secured Party is hereby
authorized at any time and from time to time to the fullest extent permitted by
law, but shall not be obligated to, set off and apply against any and all
Indebtedness, any and all monies then or thereafter owed to Debtor by Secured
Party, whether or not the obligation to pay such monies owed by Secured Party is
then due. An election by Secured Party to exercise its right of setoff shall be
effective immediately upon such election even though any charge therefor is made
or entered on Secured Party's records subsequent thereto.
(q) Standard of Care; Notice of Claims. Debtor acknowledges and agrees
that Secured Party shall not be liable for any acts or omissions nor for any
error of judgment or mistake of fact or law other than as a sole and direct
result of Secured Party's gross negligence or willful misconduct. Debtor shall
give Secured Party written notice of any action or inaction by Secured Party or
any agent or attorney of Secured Party that may give rise to a claim against
Secured Party or any agent or attorney of Secured Party or that may be a defense
to payment of the Indebtedness or performance hereunder for any reason,
including commission of a tort (subject, in any event, to the first sentence of
this paragraph) or violation of any contractual duty or duty implied by law.
Debtor agrees that unless such notice is fully given as promptly as possible
(and in any event within thirty (30) days) after Debtor has knowledge, or with
the exercise of reasonable diligence should have had knowledge, of any such
action or inaction, Debtor shall not assert, and Debtor shall be deemed to have
waived, any claim or defense arising therefrom.
(r) Indemnity. Debtor shall indemnify, defend and hold Secured Party,
its parent, affiliates, officers, directors, agents, employees, consultants,
persons engaged by Secured Party to evaluate or monitor the Collateral, auditors
and attorneys harmless from and against any loss, cost, expense (including
reasonable attorneys' fees and costs and any consultants' or other experts' fees
and expenses), damage, penalty, fine, claim, lien, suit, judgment or liability
of every kind and nature arising directly or indirectly out of (i) any Loan
Document, (ii) the ownership, possession, lease, operation, use, condition,
sale, return, or other disposition of the Collateral, except to the extent the
loss, expense, damage or liability arises solely and directly from Secured
Party's gross negligence or willful misconduct, (iii) any Environmental Laws,
and (iv) the enforcement by Secured Party of its rights or remedies hereunder.
Any payments required to be made hereunder shall be due and payable on demand.
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(s) Payments Set Aside. If any payment is made to Secured Party or
Secured Party enforces its security interest or exercises its right of set off,
and such payment or part, or any proceeds of such enforcement or set off are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then to the
extent of such recovery, the Indebtedness or part thereof originally intended to
be satisfied, and all liens, security interests, rights and remedies therefor,
shall be revived and continued in full force and effect as if such payment had
not been made or such enforcement or set off had not occurred.
(t) Expenses and Attorneys' Fees. Debtor shall be liable for all
charges, costs, expenses and attorneys' fees incurred by Secured Party
(including allocated costs of internal counsel): (i) in perfecting, defending,
protecting or terminating its security interest in the Collateral, or any part
thereof; (ii) in the negotiation, execution, delivery, administration, amendment
or enforcement of the Loan Documents or the collection of any amounts due under
any Note or other Loan Document; (iii) in any lawsuit or other legal proceeding
in any way connected with any of the Loan Documents, including any contract or
tort or other actions, any arbitration or other alternative dispute resolution
proceeding, all appeals and judgment enforcement actions and any bankruptcy
proceeding (including any relief from stay and/or adequate protection motions,
cash collateral disputes, assumption/rejection motions and disputes or
objections to any proposed disclosure statement or reorganization plan).
(u) Complete Information. No representation or warranty made by Debtor
in any Loan Document and no other document or statement now or hereafter
furnished to Secured Party by or on behalf of Debtor contains or will contain
any misstatement of a material fact or omit to state any material fact which
would make the statements contained therein misleading. Except as expressly set
forth in the Schedules, there is no fact known to Debtor that has or could have
a materially adverse affect on the business, operation, condition (financial or
otherwise), performance, properties or prospects of Debtor or Debtor's ability
to timely pay all of the Indebtedness and perform all of its other obligations
contained in or secured by this Agreement.
(v) Collateral Documentation. Debtor shall deliver to Secured Party
prior to any advance, satisfactory documentation regarding the Collateral to be
financed, including such invoices, canceled checks evidencing payments, or other
documentation as may be reasonably requested by Secured Party. Additionally,
Debtor shall satisfy Secured Party that Debtor's business and
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financial information is as has been represented and there has been no material
change in Debtor's business, financial condition, or operations.
(w) Year 2000 Compliance. Debtor has made an assessment of the microchip
and computer-based systems and the software used in its business and based upon
such assessment believes that it will be "Year 2000 Compliant" by January 1,
2000. For purposes of this paragraph, "Year 2000 Compliant" means that all
software, embedded microchips and other processing capabilities utilized by, and
material to the business operations or financial condition of, Debtor are able
to interpret, store, transmit, receive and manipulate data on and involving all
calendar dates correctly and without causing any abnormal ending scenarios in
relation to dates in and after the Year 2000. From time to time, at the request
of Secured Party, Debtor shall provide to Secured Party such updated information
as is requested regarding the status of its efforts to become Year 2000
Compliant.
3. Prepayment. Upon forty-five (45) days prior written notice to Secured
Party, Debtor may prepay in whole, but not in part, the then entire unpaid
principal balance of any Note, together with all accrued and unpaid interest
thereon to the date of such prepayment, provided that in addition to such
prepayment, Debtor shall pay (i) any and all other sums then due under any of
the Loan Documents, and (ii) a prepayment fee as liquidated damages and not as a
penalty, in a sum equal to one percent (1%) of the principal balance prepaid for
each full or partial twelve (12) month period by which the date of the
prepayment precedes the scheduled date of the final installment of principal
under the Note. The prepayment fee described in clause (ii) above shall also be
due upon the acceleration of the maturity date of any Note following the
occurrence of any Event of Default.
4. Events of Default. If any one of the following events (each of which
is herein called an "Event of Default") shall occur: (a) Debtor fails to pay any
part of the Indebtedness within ten (10) calendar days of its due date, or (b)
any warranty or representation of Debtor in any Loan Document is materially
untrue, misleading or inaccurate, or (c) Debtor breaches or defaults in the
performance of any other agreement or covenant under any Loan Document, or (d)
Debtor breaches or defaults in the payment or performance of any debt or other
obligation owed by it to Secured Party or any affiliate of Secured Party, and
Secured Party has (without being obligated to do so) declared such event, an
Event of Default hereunder, or (e) Debtor breaches or defaults in the payment or
performance of any debt or other obligation, whether now or hereafter existing,
with an outstanding principal balance in excess of One Million and 00/100
Dollars ($1,000,000.00), and the same is subsequently accelerated, or (f) there
shall be a change in the beneficial ownership and control, directly or
indirectly, of the majority of the
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outstanding voting securities or other interests entitled (without regard to the
occurrence of any contingency) to elect or appoint members of the board of
directors or other managing body of Debtor (a "change of control"), or there is
any merger, consolidation, dissolution, liquidation, winding up or sale or other
transfer of all or substantially all of the assets of Debtor pursuant to which
there is a change of control or cessation of Debtor or the business of Debtor,
or (g) any money judgment is entered or filed against Debtor in excess of One
Million and 00/100 Dollars ($1,000,000.00), or (h) Debtor shall file a voluntary
petition in bankruptcy, shall apply for or permit the appointment by consent or
acquiescence of a receiver, conservator, administrator, custodian or trustee for
itself or all or a substantial part of its property, shall make an assignment
for the benefit of creditors or shall be unable, fail or admit in writing its
inability to pay its debts generally as such debts become due, or (i) there
shall have been filed against Debtor an involuntary petition in bankruptcy or
Debtor shall suffer or permit the involuntary appointment of a receiver,
conservator, administrator, custodian or trustee for all or a substantial part
of its property or the issuance of a warrant of attachment, diligence, execution
or similar process against all or any substantial part of its property; unless,
in each case, such petition, appointment or process is fully bonded against,
vacated or dismissed within forty-five (45) days from its effective date, but no
later than ten (10) days prior to any proposed disposition of any assets
pursuant to any such proceeding, or (j) if there is a material adverse change in
the business or financial condition or prospects of Debtor or (k) if any of the
events or circumstances described on the attached Exhibit A, which is hereby
incorporated herein, shall occur or exist, then, and in any such event, Secured
Party shall have the right to exercise any one or more of the remedies
hereinafter provided.
5. Remedies. Upon the occurrence of an Event of Default, in addition to
all rights and remedies of a secured party under the Uniform Commercial Code,
Secured Party may, at its option, at any time (a) declare the Indebtedness to be
immediately due and payable; (b) without demand or legal process, enter the
premises where the Collateral may be found and take possession of and remove the
Collateral, all without charge to or liability on the part of Secured Party; or
(c) require Debtor to assemble the Collateral, render it unusable, and crate,
pack, ship, and deliver the Collateral to Secured Party in such manner and at
such place as Secured Party may require, all at Debtor's sole cost and expense.
DEBTOR HEREBY EXPRESSLY WAIVES ITS RIGHTS, IF ANY, TO (1) PRIOR NOTICE OF
REPOSSESSION AND (2) A JUDICIAL OR ADMINISTRATIVE HEARING PRIOR TO SUCH
REPOSSESSION. Secured Party may, at its option, ship, store and repair the
Collateral so removed and sell any or all of the Collateral at a public or
private sale or sales. Unless the Collateral is perishable or threatens to
decline speedily in
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value or is of a type customarily sold on a recognized market, Secured Party
will give Debtor reasonable notice of the time and place of any public sale
thereof or of the time after which any private sale or any other intended
disposition thereof is to be made, it being understood and agreed that Secured
Party may be a buyer at any such sale and Debtor may not, either directly or
indirectly, be a buyer at any such sale. The requirements, if any, for
reasonable notice will be met if such notice is mailed postage prepaid to Debtor
at its address shown above, at least five (5) days before the time of sale or
disposition. After any such sale or disposition, Debtor shall be liable for any
deficiency of the Indebtedness remaining unpaid, with interest thereon at the
rate set forth in the related Notes.
6. Cumulative Remedies/Marshaling. All remedies of Secured Party
hereunder are cumulative, are in addition to any other remedies provided for by
law or in equity, or under any other provision of any of the Loan Documents, or
under the provisions of any other document, instrument or other writing executed
by Debtor or any third party in favor of Secured Party, all of which may, to the
extent permitted by law, be exercised concurrently or separately, and the
exercise of any one remedy shall not be deemed an election of such remedy or to
preclude the exercise of any other remedy. No failure on the part of Secured
Party to exercise, and no delay in exercising any right or remedy, shall operate
as a waiver thereof or in any way modify or be deemed to modify the terms of
this Agreement or any other Loan Document or the Indebtedness, nor shall any
single or partial exercise by Secured Party of any right or remedy preclude any
other or further exercise of the same or any other right or remedy. Secured
Party shall not be under any obligation to marshal any assets in favor of Debtor
or any other person or against or in payment of any or all of the Indebtedness.
7. Assignment. Secured Party may transfer or assign all or any part of
the Indebtedness and the Loan Documents without releasing Debtor or the
Collateral, and upon such transfer or assignment the assignee or holder shall be
entitled to all the rights, powers, privileges and remedies of Secured Party to
the extent assigned or transferred. The obligations of Debtor shall not be
subject, as against any such assignee or transferee, to any defense, set-off, or
counter-claim available to Debtor against Secured Party and any such defense,
set-off, or counter-claim may be asserted only against Secured Party.
8. Time is of the Essence. Time and manner of performance by Debtor of
its duties and obligations under the Loan Documents is of the essence. If Debtor
shall fail to comply with any provision of any of the Loan Documents, Secured
Party shall have the right, but shall not be obligated, to take action to
address such non-compliance, in whole or in part, and all moneys spent and
expenses and obligations incurred or assumed by Secured Party shall be
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paid by Debtor upon demand and shall be added to the Indebtedness. Any such
action by Secured Party shall not constitute a waiver of Debtor's default.
9. ENFORCEMENT. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF THE STATE OF ILLINOIS,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. AT SECURED PARTY'S ELECTION
AND WITHOUT LIMITING SECURED PARTY'S RIGHT TO COMMENCE AN ACTION IN ANY OTHER
JURISDICTION, DEBTOR HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION AND VENUE OF
ANY COURT (FEDERAL, STATE OR LOCAL) HAVING SITUS WITHIN THE STATE OF ILLINOIS,
EXPRESSLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO SERVICE BY
CERTIFIED MAIL, POSTAGE PREPAID, DIRECTED TO THE LAST KNOWN ADDRESS OF DEBTOR,
WHICH SERVICE SHALL BE DEEMED COMPLETED WITHIN TEN (10) DAYS AFTER THE DATE OF
MAILING THEREOF.
10. Further Assurance; Notice. Debtor shall, at its expense, execute and
deliver such documents and do such further acts as Secured Party may from time
to time reasonably require to assure and confirm the rights created or intended
to be created hereunder, to carry out the intention or facilitate the
performance of the terms of the Loan Documents or to assure the validity,
perfection, priority or enforceability of any security interest created
hereunder. Debtor agrees to execute any instrument or instruments necessary or
expedient for filing, recording, perfecting, notifying, foreclosing, and/or
liquidating of Secured Party's interest in the Collateral upon request of, and
as determined by, Secured Party, and Debtor hereby specifically authorizes
Secured Party to prepare and file Uniform Commercial Code financing statements
and other documents and to execute same for and on behalf of Debtor as Debtor's
attorney-in-fact, irrevocably and coupled with an interest, for such purposes.
All notices, required or otherwise given by either party shall be in writing and
shall be delivered by hand, by registered or certified first class United States
mail, return receipt requested, or by overnight courier to the other party at
its address stated herein or at such other address as the other party may from
time to time designate by written notice. All notices shall be deemed given when
received, when delivery is refused or when returned for failure to be called
for. Each provision of this Agreement shall remain in full force and effect
until all of the Indebtedness is fully, finally and indefeasibly satisfied and,
notwithstanding anything in this Agreement or implied by law to the contrary,
the agreements of Debtor and Secured Party set forth in Sections 2(p), 2(r),
2(s), 2(t), 9 and 12 shall survive the full, final and indefeasible satisfaction
of the Indebtedness.
11. Joint and Several Obligation. If this Agreement is executed by more
than one person as Debtor, each such Debtor hereby acknowledges it is jointly
and severally liable for and unconditionally guarantees the prompt
12
13
and full payment and performance of all obligations of each other Debtor
hereunder and under the other Loan Documents.
12. WAIVER OF JURY TRIAL. DEBTOR AND SECURED PARTY HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING IN
CONNECTION WITH ANY OF THE LOAN DOCUMENTS. DEBTOR AND SECURED PARTY ACKNOWLEDGE
THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP,
THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THE LOAN DOCUMENTS,
AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE
DEALINGS. DEBTOR AND SECURED PARTY FURTHER WARRANT AND REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.
13. Complete Agreement. The Loan Documents embody the entire agreement
among the parties hereto superseding all prior commitments, agreements,
representations, and understandings, whether written or oral relating to the
subject matter hereof, and may not be contradicted or varied by evidence of
prior, contemporaneous, or subsequent oral agreements or discussions of the
parties hereto. The Loan Documents may not be altered, modified or terminated in
any manner except by a writing duly signed by the parties thereto. Debtor and
Secured Party intend the Loan Documents to be valid and binding and no
provisions hereof and thereof which may be deemed unenforceable shall in any way
invalidate any other provisions of the Loan Documents, all of which shall remain
in full force and effect. The Loan Documents shall be binding upon the
respective successors, legal representatives, and assign, s of the parties. The
Schedules are incorporated herein by this reference and made a part hereof.
IN WITNESS WHEREOF, Secured Party and Debtor have each signed this
Agreement as of the day and year first above written.
XXXXXX FINANCIAL LEASING, INC., INTUITIVE SURGICAL, INC.
a Delaware corporation a Delaware corporation
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxx Xxxxxx
-------------------------------- ----------------------------------
Name: Xxxxxxxx X. Xxxxxx Name: Xxxxx Xxxxxx
------------------------------ --------------------------------
Title: Senior Vice President Title: CFO & Assistant Secretary
----------------------------- -------------------------------
13
14
SCHEDULE
DESCRIPTION OF COLLATERAL
Description of Collateral (Full description including make, model and serial
number):
SEE SCHEDULE A ATTACHED HERETO AND MADE A PART HEREOF
Place where Collateral is to be kept:
INTUITIVE SURGICAL, INC.
0000 XXXX XXXXXXXXXXX XXXX
XXXXXXXX XXXX, XX 00000
Other liens, encumbrances or security interests to which Collateral is or may be
subject, if any:
NONE.
Other Collateral
NONE.
Other:
If Collateral is attached or to be attached to real estate, set forth:
Address of Real Estate (Including County, block number, lot number, etc.):
N/A
Record Owner of Real Estate (Name and Address):
N/A
If the real estate at which the Collateral is to be kept is leased:
Name and Address of Lessor of Real Estate:
N/A
SB
-------------
Initials
14
15
16
EXHIBIT A
TO
SECURITY AGREEMENT
(ADDITIONAL EVENTS OF DEFAULT)
The following shall constitute Events of Default under the Security
Agreement between Secured Party and Debtor, and upon its occurrence, Secured
Party shall have the right to exercise any one or more of the remedies provided
in the Security Agreement:
1. At any time (i) Debtor's net income before interest expense, income taxes,
depreciation, amortization and extraordinary gains, as determined in accordance
with GAAP ("EBITDA") as at the end of the most recent fiscal quarter of Debtor,
is less than $2,500,000, and (ii) Debtor's cash and cash equivalents on hand,
net of funded debt, is less than $10,000,000, and (iii) within thirty (30) days
thereof, Debtor fails to provide Secured Party a cash security deposit (on terms
satisfactory to Secured Party in its reasonable discretion) or stand-by letter
of credit in form and substance and issued by a financial institution acceptable
to Secured Party, in its reasonable discretion. (Secured Party agrees to review
(in its sole discretion) any request from Debtor to release any pledged amounts
or letter of credit provided by Debtor if Debtor's EBITDA exceeds $2,500,000 in
any two consecutive fiscal quarters or Debtor's cash and cash equivalents on
hand, net of funded debt, is more than $10,000,000.)
2. At any time Debtor's right to use any intellectual property licensed or
otherwise provided to Debtor by International Business Machines, Inc. or
Stanford Research Institute, or any successor thereto, shall be amended on
material adverse terms or cease, whether by termination, expiration or
cancellation or otherwise.
SB
15
17
SCHEDULE A
PAGE 1 OF 1
Schedule annexed to and made a part of a certain Security Agreement dated the
20th day of May, 1999, or related documentation by and between the undersigned.
Description of Collateral (Quantity; New/Used; Model; General Description; and
if applicable, Engine and/or Serial Number), together with all products and
proceeds (including insurance proceeds) thereof, any, and if all increases,
substitutions, replacements, attachments, additions, and accessions thereto:
EQUIPMENT LOCATION: 0000 Xxxxxxxxxxx Xxxx, Xxxxxxxx Xxxx, XX 00000
Qty. General Description Serial Number
------------- --------------------------------------------------- -------------------------------
5 Intuitive Surgical Development Surgical Systems D1-10298, D2-10391, D3-10393,
D4-10453, D5-10457
------------- --------------------------------------------------- -------------------------------
XXXXXX FINANCIAL LEASING, INC., INTUITIVE SURGICAL, INC.
Secured Party Debtor
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxx Xxxxxx
--------------------------------- ---------------------------------
Name: Xxxxxxxx X. Xxxxxx Name: Xxxxx Xxxxxx
------------------------------- -------------------------------
Title: Senior Vice President Title: CFO and Assistant Secretary
------------------------------ ------------------------------
16
18
Loan No: 1910193
FIRST AMENDMENT
TO
SECURITY AGREEMENT
1. Parties and Date. This First Amendment to Security Agreement (the
"Amendment") is entered into effective as of September 23, 1999, by and between
INTUITIVE SURGICAL, INC., a Delaware corporation ("Debtor"), and XXXXXX
FINANCIAL LEASING, INC., a Delaware corporation ("Secured Party").
2. Facts. Debtor and Secured Party have entered into a certain Security
Agreement dated May 20, 1999 (the "Security Agreement"). Debtor has requested
and Secured Party has agreed that the Security Agreement be amended on the terms
and conditions set forth in this Amendment. Capitalized terms used herein and
not otherwise defined shall have the meaning given to such terms in the Security
Agreement. Therefore, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows.
3. Amendment to Security Agreement. Debtor and Secured Party hereby agree that
the Security Agreement shall be and hereby is amended, as follows:
(i) The amount of One Million Five Hundred Thousand and 00/100 Dollars
($1,500,000.00) set forth in the second line of the first
paragraph of Section 1 of the Security Agreement is hereby deleted
and in place thereof is inserted the amount of Two Million Five
Hundred Thousand and 00/100 ($2,500,000.00);
(ii) Addition of Collateral. Debtor hereby grants to Secured Party a
valid and continuing first priority security interest in the
equipment described on the attached Schedule A-2, which is hereby
incorporated herein by this reference (the "New Collateral"), and
Debtor and Secured Party agree that the New Collateral shall be
covered by the Agreement as if the New Collateral were described
on Schedule A to the Security Agreement dated May 20, 1999. Debtor
shall, at its expense, do, execute and deliver such further acts
and documents as Secured Party may from time to time reasonably
require to assure and confirm the rights created or intended to be
created hereunder and under the Agreement to carry out the
intention or facilitate the performance of the terms of this
Amendment, the Agreement and the Loan Documents (as defined in the
Agreement) or to assure the validity, perfection, priority or
enforceability of any title created thereunder. Debtor agrees to
execute any instrument or instruments necessary or expedient for
filing, recording, perfecting, notifying, foreclosing, and/or
liquidating of Secured Party's title the equipment (including the
New Collateral) upon request of, and as determined by Secured
Party.
17
19
6. Acknowledgments, Ratifications and Reaffirmations by Debtor. Debtor hereby
acknowledges, ratifies and reaffirms that (i) as of the date hereof no Event of
Default has occurred or exists, (ii) Debtor has no defense, offset or
counterclaim to any of Debtor's obligations under the Loan Documents, and (iii)
the Notes, Security Agreement (as amended by this Amendment) and other Loan
Documents are in full force and effect and are fully enforceable against Debtor
in accordance with their respective terms.
7. Effectiveness of Loan Documents. Except as expressly amended by this
Amendment, the Security Agreement, as well as the Notes and all of the other
Loan Documents shall remain in full force and effect.
8. Entire Agreement. The parties acknowledge and agree that there are no other
agreements or representations, either oral or written, express or implied, in
connection with the Loans, that are not embodied in this Amendment, the Notes,
the Security Agreement and the other Loan Documents, which, together represent a
complete integration of all prior and contemporaneous agreements and
understandings of Debtor and Secured Party in any way related to the Loans. The
Security Agreement (as amended by this Amendment) may not be altered, modified
or terminated in any manner except by a writing duly executed by Debtor and
Secured Party. If any provision of the Security Agreement (as amended by this
Amendment) is held to be invalid or unenforceable, the remaining provisions
shall remain in effect without impairment.
IN WITNESS WHEREOF, Debtor and Secured Party have each executed this Agreement
to be effective as of the day and year first above written.
"DEBTOR" "SECURED PARTY"
INTUITIVE SURGICAL, INC., XXXXXX FINANCIAL LEASING, INC., a
a Delaware corporation Delaware corporation
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------- --------------------------------
Name: Name: Xxxxxxxx X. Xxxxxx
----------------------------- ------------------------------
Title: Title: Senior Vice President
---------------------------- -----------------------------
18
20
SCHEDULE A-2
PAGE 1 OF 9
Schedule annexed to and made a part of a certain First Amendment to Security
Agreement, dated the _________ day of September, 1999, to that certain Security
Agreement No. 1910193, dated the 20th day of May, 1999, or related documentation
by and between the undersigned.
Description of Collateral:
-------------------------------------------------------------------------------------------------
VENDOR INVOICE # ASSET DESCRIPTION
-------------------------------------------------------------------------------------------------
LAB EQUIPMENT:
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
Newark Electronics AMP Handtool Kit
-------------------------------------------------------------------------------------------------
X-Ray Connection 505 Lifepak 6S w/internal paddles
-------------------------------------------------------------------------------------------------
VWR Scientific 23105581, 23105590, 25524720 Utrasonic Pipette Cleaner
-------------------------------------------------------------------------------------------------
Test Equity 17038 Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Test Equity 17038 Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Test Equity 17038 Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Test Equity 17038 Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Test Equity 17038 Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Test Equity 17038 Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Test Equity 17038 Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Test Equity 17038 Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Test Equity 16140 Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Test Equity 16140 Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Test Equity 25889 Xantrex Power Supply
-------------------------------------------------------------------------------------------------
International Light 56582 Radiometer-4798
-------------------------------------------------------------------------------------------------
Alpha Marketing Services 00983951 Bookler Laproscopic Holder
-------------------------------------------------------------------------------------------------
Alpha Marketing Services 983918 Bookler Laproscopic Holder
-------------------------------------------------------------------------------------------------
Genzyme Surgical Products 98055106 Retractor, 80mm ang
-------------------------------------------------------------------------------------------------
Genzyme Surgical Products 98060953 Retractor, 80mm ang
-------------------------------------------------------------------------------------------------
Heartport IN5519 Forceps, 25 Degree
-------------------------------------------------------------------------------------------------
Heartport IN5519 Forceps, Str, Dbl Act
-------------------------------------------------------------------------------------------------
XxXxxxxx-Xxxx 5881613 Precision Drill Press, Belt Drive
-------------------------------------------------------------------------------------------------
Momentum Data Systems, Inc. 912216 ADSP-2181x EZ-ICE
-------------------------------------------------------------------------------------------------
Premier Vet Supply 289015 Vaporizer VIP 3000
-------------------------------------------------------------------------------------------------
Tektronix MP417105, MP416556 Current Probe and Calibrator
-------------------------------------------------------------------------------------------------
Premier Vet Supply 288619 Anesthesia Machine
-------------------------------------------------------------------------------------------------
Digital and Analog Concepts 042299 7506660 Sentry 50
-------------------------------------------------------------------------------------------------
Momentum Data Systems, Inc. 912269 In Circuit Emulator
-------------------------------------------------------------------------------------------------
VWR Scientific Products 46015440 Over, Hafo, Medium
-------------------------------------------------------------------------------------------------
Xxxxxx, Inc. XXX000000 M10-Ultra Torq Analyzer 110V
-------------------------------------------------------------------------------------------------
21
SCHEDULE A-2
PAGE 2 OF 9
-------------------------------------------------------------------------------------------------
VENDOR INVOICE # ASSET DESCRIPTION
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
Xxxxxx, Inc. INV127062 S-320Z Torque Analyzer U.S. vers.
-------------------------------------------------------------------------------------------------
Ceibo 98013162 Circuit Emulator Development Sys.
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
MANUF. EQUIPMENT:
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
Xxxxxx Engineering 193826-00 Panduit Pneum Crimper
-------------------------------------------------------------------------------------------------
Servicor 34353 Cleanroom Upgrades
-------------------------------------------------------------------------------------------------
Xxxxxxx Associates 227138 MPC Control Digital Dispenser
-------------------------------------------------------------------------------------------------
Danco Machine I-44937 Inverse Clevis Align Xxxxxx Assy
-------------------------------------------------------------------------------------------------
Danco Machine I-45014 Dist, Inv Fixture
-------------------------------------------------------------------------------------------------
Computer Modules, Inc. 21183 Cable Matrox
-------------------------------------------------------------------------------------------------
Test Equity 23670 Xantrex Power Supply
-------------------------------------------------------------------------------------------------
Servicor 34390 Cleanroom Upgrades
-------------------------------------------------------------------------------------------------
Intermec 1320059 Decoded Wired Wedge
-------------------------------------------------------------------------------------------------
Intermec 1320059 Decoded Wired Wedge
-------------------------------------------------------------------------------------------------
Intermec 1320059 Decoded Wired Wedge
-------------------------------------------------------------------------------------------------
Intermec 1320059 Decoded Wired Wedge
-------------------------------------------------------------------------------------------------
ArrK Product Development 6704702-DA Part #311092/311884
-------------------------------------------------------------------------------------------------
Xxxxxxx Corporation 53310 Custom Riveting Fixture
-------------------------------------------------------------------------------------------------
Quadravox 8889 Power Supply #QV402P
-------------------------------------------------------------------------------------------------
Ronnigen R&D 060544 Engineering Change Samples
-------------------------------------------------------------------------------------------------
Van Drielen Machine 81015.1 Body, 7075 aluminum
-------------------------------------------------------------------------------------------------
Xxxxxxx Corporation 52735 Xxxxxxx Radial Riveter
-------------------------------------------------------------------------------------------------
Thermal Technologies 0010131-IN Machining Fixture
-------------------------------------------------------------------------------------------------
Nexlogic Technologies 4478 6 Layers Fabrication-720225-01
-------------------------------------------------------------------------------------------------
Danco Machine I-45218 Base Plate, Cube, Carrier
-------------------------------------------------------------------------------------------------
Almar Manufacturing & Eng 013443 Base Plate, Bearing Press, SUJ
-------------------------------------------------------------------------------------------------
Westcor c/o Taarcom 128478 Power Supply-PM1-02-514
-------------------------------------------------------------------------------------------------
Nextlogic Technologies 4513 6 Layer Fabrication #720255/NRE
-------------------------------------------------------------------------------------------------
Acme Scale Co. 0987957-IN Torque Gauge w/Sensor
-------------------------------------------------------------------------------------------------
Ronnigen R&D 061838 Engineering Change
-------------------------------------------------------------------------------------------------
Xxxxxx Engineering 283064-00 Panduit Cimpring Tool
-------------------------------------------------------------------------------------------------
Xxxxxx Engineering 193826-00 Panduit Pneum Crimper
-------------------------------------------------------------------------------------------------
Precision Interconnect 438061 Eng change for new crimp contacts
-------------------------------------------------------------------------------------------------
National Instruments 517157 DAQPAD for USB Cable
-------------------------------------------------------------------------------------------------
Danco Machine I-44238 Dance Part 720195
-------------------------------------------------------------------------------------------------
Danco Machine I-44238 720157 Assy
-------------------------------------------------------------------------------------------------
22
SCHEDULE A-2
PAGE 3 OF 9
-------------------------------------------------------------------------------------------------
VENDOR INVOICE # ASSET DESCRIPTION
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
White Mountain DSP 3264 MTN-ICE JTAG EMU & POD
-------------------------------------------------------------------------------------------------
White Mountain DSP 3264 MTN-ICE JTAG EMU & POD
-------------------------------------------------------------------------------------------------
Xxxxxxxxx R&D 060039 Eng. Change for Chassis
-------------------------------------------------------------------------------------------------
Foam Molders & Specialties 00095600 Single Cav Mold M1298-502
-------------------------------------------------------------------------------------------------
Acme Scale Co. 0989844-IN Motorized Test Stand
-------------------------------------------------------------------------------------------------
Danco Machine 1-43305 Dance Part #720132-720134
-------------------------------------------------------------------------------------------------
Dependable Plastics DEP09-02 Cover Tooling
-------------------------------------------------------------------------------------------------
Dependable Plastics 21077 Cover Tooling
-------------------------------------------------------------------------------------------------
Bay Area Shelving, Inc. 49264 Rivetier Shelf
-------------------------------------------------------------------------------------------------
Axiom Medical, Inc. 0523911-IN Mold Part #330179 & 330183
-------------------------------------------------------------------------------------------------
Xxxxxxxxx R&D 62153 Eng Change part #340000-07
-------------------------------------------------------------------------------------------------
Data I/O 207024 Optima S120/S207L
-------------------------------------------------------------------------------------------------
Xxxxxxx Corporation 52379/prepayment Xxxxxxx Radial Riveter
-------------------------------------------------------------------------------------------------
General Foundry 08778 Cover Base/Top Link ECM
-------------------------------------------------------------------------------------------------
Thermal Technology 0010089-IN Production Mold
-------------------------------------------------------------------------------------------------
Thermal Technology, Inc. 0010146, 0010112 Production Mold for part #330000
-------------------------------------------------------------------------------------------------
Dependable Plastics DEP09-01 Cover Tooling
-------------------------------------------------------------------------------------------------
General Foundry 08697 Footpad, console
-------------------------------------------------------------------------------------------------
Thermal Technology, Inc. 0010170/0010126 Tooling for part #330122-05
-------------------------------------------------------------------------------------------------
Thermal Technology, Inc. 0010169-IN Production Mold for part #330001
-------------------------------------------------------------------------------------------------
Thermal Technology 0010088-IN Production Mold
-------------------------------------------------------------------------------------------------
Dependable Plastics 21108 Cover Tooling
-------------------------------------------------------------------------------------------------
Thermal Technology 0010078-IN Production Mold
-------------------------------------------------------------------------------------------------
Thermal Technology, Inc. 0010147-IN Production Mold for part #330133
-------------------------------------------------------------------------------------------------
Precision Tool Distributors 204775 Ram Sprint 200, Z-Axis scale
-------------------------------------------------------------------------------------------------
General Foundry 08779 Link Vertical/Base ECM
-------------------------------------------------------------------------------------------------
Freetech Plastics 31293 Cover HRSV Mold
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
COMP. EQUIPMENT
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 051535 17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 051535 17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 46466 17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 46466 17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 46466 17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 48373 17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 48373 17" Color Monitor
-------------------------------------------------------------------------------------------------
23
SCHEDULE A-2
PAGE 4 OF 9
-------------------------------------------------------------------------------------------------
VENDOR INVOICE # ASSET DESCRIPTION
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 48373 17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 48373 17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 48370 17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 48370 17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 48370 17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 48370 17" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 48370 17" Color Monitor
-------------------------------------------------------------------------------------------------
Octave Systems Inc. Yamaha CDR400T
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 050797 Laserjet 6PXI 8 PPM
-------------------------------------------------------------------------------------------------
Fry's Electronics HP C3980A Laserjet 6P Printer
with Cable
-------------------------------------------------------------------------------------------------
Office Max HP Laserjet 6P Printer with Cable
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 051535 19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 051535 19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 049056 19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 050797 19" Color Monitor
-------------------------------------------------------------------------------------------------
The Mac Zone - France Sony Monitor
-------------------------------------------------------------------------------------------------
Global Network Resources 981145 19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 45566 19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 46420 19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 46420 19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 46421 19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 46422 19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 46422 19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 46466 19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 46776, 46820 Okidata printer w/tractor
-------------------------------------------------------------------------------------------------
Global Network Resources 980430 Sony 20"Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 049208 Laserjet 4000N w/Enet
-------------------------------------------------------------------------------------------------
Total Xxxxxxxxx Xxxx 00000 Xxxxxxxxx Xxxxxxx MMX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 46110 20" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 46569 20" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 44370 19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 44370 19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 44370 19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 44370 19" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 49399 ML395 24-pin Printer
-------------------------------------------------------------------------------------------------
Int'l Computing Sys 3354 Xxxxxxxxx XX00 00" Monitor
-------------------------------------------------------------------------------------------------
24
SCHEDULE A-2
PAGE 5 OF 9
-------------------------------------------------------------------------------------------------
VENDOR INVOICE # ASSET DESCRIPTION
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 47188 Laserjet 4000N w/ENET
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 47188 Laserjet 4000N w/ENET
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 47188 Laserjet 4000N w/ENET
-------------------------------------------------------------------------------------------------
Total Corporate Services Total Corporate Services
Computer Workstation - X. Xxxxx
-------------------------------------------------------------------------------------------------
Dell Catalog Sales Dell DIS, MSCN, CLR, 20, D, D
2026T-HS, US
-------------------------------------------------------------------------------------------------
Global Source Line Viewsonic PT813 Monitor
-------------------------------------------------------------------------------------------------
Global Source Line Viewsonic PT813 Monitor
-------------------------------------------------------------------------------------------------
Global Source Line Viewsonic PT813 Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 48373 21" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 48373 21" Color Monitor
-------------------------------------------------------------------------------------------------
International Computing System Pentium 166MHz Computer System
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 46059 21" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 46466 20" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 45878 20" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 45878 20" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 46466 20" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 44370 21" Color Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 43653 Color Monitor 20"
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 37312 Color Monitor 20"
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 33010 Color Monitor 20"
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 33010 Color Monitor 20"
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 33010 Color Monitor 20"
-------------------------------------------------------------------------------------------------
Total Xxxxxxxxx Xxxx 00000 Xxxxxxx Xxxxxxx II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 48258 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 48258 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 48258 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 34699 Color Monitor 20"
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 34699 Color Monitor 20"
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 34699 Color Monitor 20"
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 48257 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
I-O Solutions 18575 105SE w/rewind
-------------------------------------------------------------------------------------------------
Int'l Computing Sys 3378 Pent 166 Computer, 15" Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 051531 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 051531 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 051531 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 051531 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
25
SCHEDULE A-2
PAGE 6 OF 9
-------------------------------------------------------------------------------------------------
VENDOR INVOICE # ASSET DESCRIPTION
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 051543 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 060668 PII 230 SE440BX2 (no monitor)
-------------------------------------------------------------------------------------------------
ComputerWare (Svetcov) Power Mac G3/266
-------------------------------------------------------------------------------------------------
International Computing System International Computing System
Workstation
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 060088 PII 230 SE440BX2 (no monitor)
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 45992 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 47014 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 45992 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 45992 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 45992 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 46270 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 46270 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 47014 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 47014 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 47014 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 47014 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Int'l Computing Sys 3366 Pent 166 Computer, 17" Monitor
-------------------------------------------------------------------------------------------------
Dell Catalog Sales Dell Dimension XPS 200MHz
Workstation
-------------------------------------------------------------------------------------------------
Dell Catalog Sales Dell Dimension XPS 200MHz
Workstation
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 051475 Seattle Pentium II SE440BX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 46288 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 45993 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 46288 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 46288 Atlanta Pentium II AL440LX
-------------------------------------------------------------------------------------------------
XXX Xxxxxxxx Xxxxxxx XX00000 Toshiba Tecra 8000 6GB 64MB
-------------------------------------------------------------------------------------------------
Total Xxxxxxxxx Xxxx 00000 Xxxxxxx Xxxxxxx II AL440FX
-------------------------------------------------------------------------------------------------
XXX Xxxxxxxx Xxxxxxx XX00000 Toshiba Tecra 8000 6GB 64MB
-------------------------------------------------------------------------------------------------
XXX Xxxxxxxx Xxxxxxx XX00000 Toshiba Tecra 8000 6GB 64MB
-------------------------------------------------------------------------------------------------
XXX Xxxxxxxx Xxxxxxx XX00000 Toshiba Tecra 8000 6GB 64MB
-------------------------------------------------------------------------------------------------
Office Depot 7540482 UPS, Backup, Pro 650, lot of 10
-------------------------------------------------------------------------------------------------
Fry's Electronics, Svetcov Svetcov Video Tape Header/Cleaner
-------------------------------------------------------------------------------------------------
XXX Xxxxxxxx Xxxxxxx XX00000 Toshiba Tecra 8000 6GB 64MB
-------------------------------------------------------------------------------------------------
XXX Xxxxxxxx Xxxxxxx XX00000, AF40345, AI15157 Toshiba Tecra 8000 6GB 64MB
-------------------------------------------------------------------------------------------------
Dell Catalog Sales Dell Dimension XPS H266MHz
Computer System
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 059932 Tecra8000 PII266
-------------------------------------------------------------------------------------------------
26
SCHEDULE A-2
PAGE 7 OF 9
-------------------------------------------------------------------------------------------------
VENDOR INVOICE # ASSET DESCRIPTION
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 059353 Nightshade Dual PII N440BX
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 061553 Laserjet 8100 DN
-------------------------------------------------------------------------------------------------
Xxx Xxx Xxxx - Xxxxxx XX/XX000000 Toshiba Tecra 550CDT P266
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 38301 Toshiba 660CD 20" Monitor
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 051766 550CDT P266MMX System
-------------------------------------------------------------------------------------------------
CDW Computer Centers 9524248 Toshiba 32MB 4000
-------------------------------------------------------------------------------------------------
Powercom 9709 USA & FRANCE Intraport 2
-------------------------------------------------------------------------------------------------
XXX Xxxxxxxx Xxxxxxx XX00000 Toshiba Tecra 8000 6GB 64MB
-------------------------------------------------------------------------------------------------
NetPower 6617 Symetra Work Station
-------------------------------------------------------------------------------------------------
XXX Xxxxxxxx Xxxxxxx XX00000/XX00000/XX00000 Toshiba 8000 6GB 64MB
-------------------------------------------------------------------------------------------------
Dell 251037610 Dell Dimension 433MHZ 8MB
-------------------------------------------------------------------------------------------------
Netpower 6060 Symetra Workstation
-------------------------------------------------------------------------------------------------
Total Corporate Svcs 6403 Symetra Workstation
-------------------------------------------------------------------------------------------------
Netpower 6060 Symetra Workstation
-------------------------------------------------------------------------------------------------
Netpower 6060 Symetra Workstation
-------------------------------------------------------------------------------------------------
Network Appliance 20051 Dual-Channel SCSI adapter
-------------------------------------------------------------------------------------------------
Dell 232233817 Dell Power Edge 4300
-------------------------------------------------------------------------------------------------
Total Corporate Services 31204 Toshiba Computer System (2 of
3) 660CDT
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
OFFICE FURNITURE:
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
Smart Interiors, Inc. Xxxxxxxx Double Pedestal Desk,
30" x 60"
-------------------------------------------------------------------------------------------------
Smart Interiors, Inc. Xxxxxxxx Double Pedestal Desk -
X. Xxxxxx
-------------------------------------------------------------------------------------------------
Smart Interiors, Inc. Xxxxxxxx Double Pedestal Desk,
30" x 60"
-------------------------------------------------------------------------------------------------
Xxxxx Sales & Manufacturing 5729 Xxx Xxxxx Task Chair, lot of 4
-------------------------------------------------------------------------------------------------
Levenger P21249540101 Barrister, medium oak w/lock
-------------------------------------------------------------------------------------------------
Office Depot Safco Five Drawer Flat File -
lot of 2 @ $664.61 each
-------------------------------------------------------------------------------------------------
Smart Interiors 81790 Marketing Area Workspace
-------------------------------------------------------------------------------------------------
CB Technical Sources 2478 Shelves, lot of 2
-------------------------------------------------------------------------------------------------
Office Depot United Troubador Chair in AM51
Blue - lot of 10 @ $162.00 each
-------------------------------------------------------------------------------------------------
Xxxxx Sales & Manufacturing 5636 Mid Height Chair w/Castors, lot
of 6
-------------------------------------------------------------------------------------------------
Office Depot FireKing 4-Drawer Lateral Fire
Resistant File
-------------------------------------------------------------------------------------------------
27
SCHEDULE A-2
PAGE 8 OF 9
-------------------------------------------------------------------------------------------------
VENDOR INVOICE # ASSET DESCRIPTION
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
Smart Interiors, Inc. U-Shaped Desk Configuration -
X. Xxxxxx
-------------------------------------------------------------------------------------------------
Smart Interiors, Inc. U-Shaped Desk Configuration -
X. Xxxxx
-------------------------------------------------------------------------------------------------
Office Depot 214179 Troubabour Chair, lot of 15
-------------------------------------------------------------------------------------------------
Office Depot United Altura Chairs in AM25
Wine Color - lot of 8 @ $315.00
each
-------------------------------------------------------------------------------------------------
Xxxxx Sales & Manufacturing 5642 Xxx Xxxxx Task Chair, lot of 10
-------------------------------------------------------------------------------------------------
Xxxxx Sales & Manufacturing 5704 Four leg bench w/ESD, lot of 4
-------------------------------------------------------------------------------------------------
Smart Interiors 81074 Acoustical Panels for Eng
Bullpen
-------------------------------------------------------------------------------------------------
Xxxxx Sales & Manufacturing 5629 Four leg bench w/ESD, lot of 10
-------------------------------------------------------------------------------------------------
Smart Interiors 80816 Cubicles, lot of 2
-------------------------------------------------------------------------------------------------
Office Depot United Altura Chair in AM51
Blue - lot of 22 @ $315.00 each
-------------------------------------------------------------------------------------------------
Inside Source 16511 Bullpen area for 8 people
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
OFFICE EQUIPMENT:
-------------------------------------------------------------------------------------------------
Office Depot 3M Overhead Projector
-------------------------------------------------------------------------------------------------
Fry's Electronics (Svetcov) Epson Photo PC Color Digital
Camera
-------------------------------------------------------------------------------------------------
Selectric Signs S1176803.003 Message Sign Board
-------------------------------------------------------------------------------------------------
Xxxxxxxx'x TV & Stereo 2784 40" Television
-------------------------------------------------------------------------------------------------
Office Depot Quartet Ovonics Electronic Copy
Board
-------------------------------------------------------------------------------------------------
A2Z Business Sys 04370A Xerox 735 Faxcentre w/Aux tray
-------------------------------------------------------------------------------------------------
Castelle 144235 FP 3500 XXX 0X XX NDS
-------------------------------------------------------------------------------------------------
Minnesota Western 408207A S-VGA Multimedia Projector
-------------------------------------------------------------------------------------------------
Exhibit Group/Giltspur A1194 Marketing booth equipment
-------------------------------------------------------------------------------------------------
Exhibit group A1970, A1971 Trade Show Nat'l
-------------------------------------------------------------------------------------------------
Wiltel Prepay Telephone Equipment
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
TEST EQUIPMENT:
-------------------------------------------------------------------------------------------------
Tektronic Inc. MP335584 34 Channel Mass Term. Probe
-------------------------------------------------------------------------------------------------
Tektronic Inc. MP335584 34 Channel Mass Term. Probe
-------------------------------------------------------------------------------------------------
Associated Research 0000434-IN AC Hypot 0 to 5000V, S/N:1778
-------------------------------------------------------------------------------------------------
Optimum Design Associates 99-247 VSD2 Extender Board
-------------------------------------------------------------------------------------------------
Digital and Analog Concepts 042298 Sentry 50 Tester
-------------------------------------------------------------------------------------------------
Sunin Precision Inc. 12276, 12279 Part #311401-409
-------------------------------------------------------------------------------------------------
Xxx Xxxx XXX 00000 32-bit PCI Support
-------------------------------------------------------------------------------------------------
19
28
SCHEDULE A-2
PAGE 2 OF 9
-------------------------------------------------------------------------------------------------
VENDOR INVOICE # ASSET DESCRIPTION
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
Western Servo Design 131356 Offset Tester
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
VENDOR INVOICE # ASSET DESCRIPTION
-------------------------------------------------------------------------------------------------
------------------------------- ------------------------------- ---------------------------------
AMP Packaging 103855 Text Fixture
-------------------------------------------------------------------------------------------------
Dynamic Details 96129 Part VSD2 Extender
-------------------------------------------------------------------------------------------------
QRS Medical Mktg 99482 QA-90 Electrical Safety Analyzer
-------------------------------------------------------------------------------------------------
Xxxxxx X. XxxXxx 72998 ARM TesterPCB Design
-------------------------------------------------------------------------------------------------
QRS Medical Marketing 99369 QA-90 Electrical Safety Analyzer
-------------------------------------------------------------------------------------------------
Xxxxxx 0135378 Xxxxx TPG-21 Test Pattern
Generator
------------------------------- ------------------------------- ---------------------------------
together with all additions, attachments, accessories and accessions thereto,
replacements or substitutions therefor and all products and proceeds thereof, if
any, including insurance proceeds and any and all accounts, chattel paper,
contract rights and general intangibles arising from the sale, lease or other
disposition thereof or thereto.
EQUIPMENT LOCATION: 0000 Xxxxxxxxxxx Xxxx, Xxxxxxxx Xxxx, XX 00000
XXXXXX FINANCIAL LEASING, INC., INTUITIVE SURGICAL, INC.
Secured Party Debtor
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxx Xxxxxx
-------------------------------- ----------------------------------
Name: Xxxxxxxx X. Xxxxxx Name: Xxxxx Xxxxxx
------------------------------ --------------------------------
Title: Senior Vice President Title: CFO and Assistant Secretary
----------------------------- -------------------------------
29
Loan No: 1910193-0001
--------------------------------------------------------------------------------
XXXXXX FINANCIAL
PROMISSORY NOTE
$1,500,000.00 May 20, 1999
FOR VALUE RECEIVED, INTUITIVE SURGICAL, INC., a Delaware corporation
("Maker"), promises to pay to the order of XXXXXX FINANCIAL LEASING, INC., a
Delaware corporation (together with any holder of this Note, "Payee"), at its
office located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such
other place as Payee may from time to time designate, the principal sum of One
Million Five Hundred Thousand and 00/100 Dollars ($1,500,000.00), together with
interest thereon at a fixed rate equal to Nine and 47/100 percent (9.47%) per
annum. Principal and interest shall be payable in thirty-six (36) consecutive
monthly installments commencing July 1, 1999, and continuing on the same day of
each consecutive calendar month thereafter until this Note is fully paid, each
such installment in the amount of Forty-eight Thousand Twenty-eight and 39/100
Dollars ($48,028.39); provided, however, that in any and all events the final
installment payment hereunder shall be in the amount of the entire then
outstanding principal balance hereunder, plus all accrued and unpaid interest,
charges and other amounts owing hereunder or under the Security Agreement
(defined below). All payments shall be applied first to interest and then to
principal. Interest shall be computed on the basis of a 360 day year comprised
of 30-day months. Maker shall make an interest only initial payment on June 1,
1999 of accrued interest from the loan disbursement date through May 31, 1999.
Notwithstanding the foregoing, if at any time implementation of any
provision hereof shall cause the interest contracted for or charged herein or
collectable hereunder to exceed the applicable lawful maximum rate, then the
interest shall be limited to such applicable lawful maximum.
This Note is secured by the collateral described in the Security
Agreement dated May 20, 1999, between Maker and Payee (the "Security Agreement;"
and together with all related documents and instruments, the "Loan Documents")
to which reference is made for a statement of the nature and extent of
protection and security afforded, certain rights of Payee and certain rights and
obligations of Maker, including Maker's rights, if any, to prepay the principal
balance hereof; provided, however, that in addition to any other sum payable
hereunder, under the Security Agreement or any of the other Loan Documents, in
the event of a prepayment of the principal balance hereunder, whether voluntary,
following acceleration or otherwise, Maker shall pay to Payee together with such
prepayment a Breakage Fee (defined below), which Breakage Fee, together with the
amounts payable under Section 3(ii) of the Security Agreement, if any,
represents liquidated damages to Payee for the loss of its bargain and not a
penalty. As used herein, the term "Breakage Fee" shall mean the amount, if any,
by which (A) the present value, in the aggregate, of the then remaining
installments of principal and interest due hereunder, absent the prepayment,
using a discount rate equal to (i) the yield to maturity as of the date two (2)
days prior to the date of the prepayment on United States Treasury securities
with a final maturity approximately equal to the remaining term hereof, absent
the prepayment, as published in The Wall Street Journal, plus (ii) three percent
(3.00%), exceeds (B) the then outstanding principal balance hereunder, absent
the prepayment.
Time is of the essence hereof. If payment of any installment or any
other sum due under this Note or the Loan Documents is not paid when due, Maker
agrees to pay a late charge equal to the lesser of (i) five cents (5 cents) per
dollar on, and in addition to, the amount of each such payment, or (ii) the
maximum amount Payee is permitted to charge by law. In the event of the
occurrence of an Event of Default (as defined in the Security Agreement), then
the entire unpaid principal balance hereof with accrued and unpaid interest
thereon, together with all other sums payable under this Note or the Loan
Documents, shall, at the option of Payee and without notice or demand, become
1
30
immediately due and payable, such accelerated balance bearing interest until
paid at the rate of three percent (3%) per annum above the fixed rate set forth
in the first paragraph of this Note.
Maker and all endorsers, guarantors or any others who may at any time
become liable for the payment hereof hereby consent to any and all extensions of
time, renewals, waivers and modifications of, and substitutions or release of
security or of any party primarily or secondarily liable on, or with respect to,
this Note or any of the Loan Documents or any of the terms and provisions
thereof that may be made, granted or consented to by Payee, and agree that suit
may be brought and maintained against any one or more of them, at the election
of Payee, without joinder of the others as parties thereto, and that Payee shall
not be required to first foreclose, proceed against, or exhaust any security
herefor, in order to enforce payment of this Note by any one or more of them.
Maker and all endorsers, guarantors or any others who may at any time become
liable for the payment hereof hereby severally waive presentment, demand for
payment, notice of nonpayment, protest, notice of protest, notice of dishonor,
and all other notices in connection with this Note, filing of suit and diligence
in collecting this Note or enforcing any of the security herefor, and, without
limiting any provision of any of the Loan Documents, agree to pay, if permitted
by law, all expenses incurred in collection, including reasonable attorneys'
fees, and hereby waive all benefits of valuation, appraisement and exemption
laws.
If there be more than one Maker, all the obligations, promises,
agreements and covenants of Maker under this Note are joint and several.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS AND DECISIONS OF THE STATE OF ILLINOIS WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. AT PAYEE'S ELECTION AND WITHOUT LIMITING PAYEE'S
RIGHT TO COMMENCE AN ACTION IN ANY OTHER JURISDICTION, MAKER HEREBY SUBMITS TO
THE EXCLUSIVE JURISDICTION AND VENUE OF ANY COURT (FEDERAL, STATE OR LOCAL)
HAVING SITUS WITHIN THE STATE OF ILLINOIS, EXPRESSLY WAIVES PERSONAL SERVICE OF
PROCESS AND CONSENTS TO SERVICE BY CERTIFIED MAIL, POSTAGE PREPAID, DIRECTED TO
THE LAST KNOWN ADDRESS OF MAKER, WHICH SERVICE SHALL BE DEEMED COMPLETED WITHIN
TEN (10) DAYS AFTER THE DATE OF MAILING THEREOF.
MAKER HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS NOTE. THIS WAIVER IS INFORMED AND
FREELY MADE. MAKER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT PAYEE HAS ALREADY RELIED ON THE WAIVER
IN MAKING THE LOAN EVIDENCED BY THIS NOTE, AND THAT PAYEE WILL CONTINUE TO RELY
ON THE WAIVER IN ITS RELATED FUTURE DEALINGS. MAKER FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.
Witness/Attest: INTUITIVE SURGICAL, INC.
/s/ By: /s/ Xxxxx Xxxxxx
---------------------- ------------------------------------
Name: Xxxxx Xxxxxx
----------------------------------
Title: CFO and Assistant Secretary
---------------------------------
2
31
Loan No.: 1910193-0002
--------------------------------------------------------------------------------
XXXXXX FINANCIAL
PROMISSORY NOTE
$500,000.00 September 23, 1999
FOR VALUE RECEIVED, INTUITIVE SURGICAL, INC., a Delaware corporation
("Maker"), promises to pay to the order of XXXXXX FINANCIAL LEASING, INC., a
Delaware corporation (together with any holder of this Note, "Payee"), at its
office located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such
other place as Payee may from time to time designate, the principal sum of Five
Hundred Thousand and 00/100 Dollars ($500,000.00), together with interest
thereon at a fixed rate equal to Nine and 78/100 percent (9.78%) per annum.
Principal and interest shall be payable in thirty-six (36) consecutive monthly
installments commencing November 1, 1999, and continuing on the same day of each
consecutive calendar month thereafter until this Note is fully paid, each such
installment in the amount of Sixteen Thousand Eighty-two and 00/100 Dollars
($16,082.00); provided, however, that in any and all events the final
installment payment hereunder shall be in the amount of the entire then
outstanding principal balance hereunder, plus all accrued and unpaid interest,
charges and other amounts owing hereunder or under the Security Agreement
(defined below). All payments shall be applied first to interest and then to
principal. Interest shall be computed on the basis of a 360 day year comprised
of 30-day months. Maker shall make an interest only initial payment on October
1, 1999 of accrued interest from the loan disbursement date through September
30, 1999.
Notwithstanding the foregoing, if at any time implementation of any
provision hereof shall cause the interest contracted for or charged herein or
collectable hereunder to exceed the applicable lawful maximum rate, then the
interest shall be limited to such applicable lawful maximum.
This Note is secured by the collateral described in the Security
Agreement dated May 20, 1999, between Maker and Payee (the "Security Agreement;"
and together with all related documents and instruments, the "Loan Documents")
to which reference is made for a statement of the nature and extent of
protection and security afforded, certain rights of Payee and certain rights and
obligations of Maker, including Maker's rights, if any, to prepay the principal
balance hereof; provided, however, that in addition to any other sum payable
hereunder, under the Security Agreement or any of the other Loan Documents, in
the event of a prepayment of the principal balance hereunder, whether voluntary,
following acceleration or otherwise, Maker shall pay to Payee together with such
prepayment a Breakage Fee (defined below), which Breakage Fee, together with the
amounts payable under Section 3(ii) of the Security Agreement, if any,
represents liquidated damages to Payee for the loss of its bargain and not a
penalty. As used herein, the term "Breakage Fee" shall mean the amount, if any,
by which (A) the present value, in the aggregate, of the then remaining
installments of principal and interest due hereunder, absent the prepayment,
using a discount rate equal to (i) the yield to maturity as of the date two (2)
days prior to the date of the prepayment on United States Treasury securities
with a final maturity approximately equal to the remaining term hereof, absent
the prepayment, as published in The Wall Street Journal, plus (ii) three percent
(3.00%), exceeds (B) the then outstanding principal balance hereunder, absent
the prepayment.
Time is of the essence hereof. If payment of any installment or any
other sum due under this Note or the Loan Documents is not paid when due, Maker
agrees to pay a late charge equal to the lesser of (i) five cents (5 cents) per
dollar on, and in addition to, the amount of each such payment, or (ii) the
maximum amount Payee is permitted to charge by law. In the event of the
occurrence of an Event of Default (as defined in the Security Agreement), then
the entire unpaid principal balance hereof with accrued and unpaid interest
thereon, together with all other sums payable under this Note or the Loan
Documents, shall, at the option of Payee and without notice or demand, become
1
32
immediately due and payable, such accelerated balance bearing interest until
paid at the rate of three percent (3%) per annum above the fixed rate set forth
in the first paragraph of this Note.
Maker and all endorsers, guarantors or any others who may at any time
become liable for the payment hereof hereby consent to any and all extensions of
time, renewals, waivers and modifications of, and substitutions or release of
security or of any party primarily or secondarily liable on, or with respect to,
this Note or any of the Loan Documents or any of the terms and provisions
thereof that may be made, granted or consented to by Payee, and agree that suit
may be brought and maintained against any one or more of them, at the election
of Payee, without joinder of the others as parties thereto, and that Payee shall
not be required to first foreclose, proceed against, or exhaust any security
herefor, in order to enforce payment of this Note by any one or more of them.
Maker and all endorsers, guarantors or any others who may at any time become
liable for the payment hereof hereby severally waive presentment, demand for
payment, notice of nonpayment, protest, notice of protest, notice of dishonor,
and all other notices in connection with this Note, filing of suit and diligence
in collecting this Note or enforcing any of the security herefor, and, without
limiting any provision of any of the Loan Documents, agree to pay, if permitted
by law, all expenses incurred in collection, including reasonable attorneys'
fees, and hereby waive all benefits of valuation, appraisement and exemption
laws.
If there be more than one Maker, all the obligations, promises,
agreements and covenants of Maker under this Note are joint and several.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS AND DECISIONS OF THE STATE OF ILLINOIS WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. AT PAYEE'S ELECTION AND WITHOUT LIMITING PAYEE'S
RIGHT TO COMMENCE AN ACTION IN ANY OTHER JURISDICTION, MAKER HEREBY SUBMITS TO
THE EXCLUSIVE JURISDICTION AND VENUE OF ANY COURT (FEDERAL, STATE OR LOCAL)
HAVING SITUS WITHIN THE STATE OF ILLINOIS, EXPRESSLY WAIVES PERSONAL SERVICE OF
PROCESS AND CONSENTS TO SERVICE BY CERTIFIED MAIL, POSTAGE PREPAID, DIRECTED TO
THE LAST KNOWN ADDRESS OF MAKER, WHICH SERVICE SHALL BE DEEMED COMPLETED WITHIN
TEN (10) DAYS AFTER THE DATE OF MAILING THEREOF.
MAKER HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS NOTE. THIS WAIVER IS INFORMED AND
FREELY MADE. MAKER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT PAYEE HAS ALREADY RELIED ON THE WAIVER
IN MAKING THE LOAN EVIDENCED BY THIS NOTE, AND THAT PAYEE WILL CONTINUE TO RELY
ON THE WAIVER IN ITS RELATED FUTURE DEALINGS. MAKER FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.
Witness/Attest: INTUITIVE SURGICAL, INC.
/s/ By: /s/ Xxxxx Xxxxxx
---------------------- ------------------------------------
Name: Xxxxx Xxxxxx
----------------------------------
Title: CFO and Assistant Secretary
---------------------------------
2
33
Loan No: 1910193
SECOND AMENDMENT
TO
SECURITY AGREEMENT
1. Parties and Date. This First Amendment to Security Agreement (the
"Amendment") is entered into effective as of March 2, 2000, by and between
INTUITIVE SURGICAL INC., a Delaware corporation ("Debtor"), and XXXXXX FINANCIAL
LEASING, INC., a Delaware corporation ("Secured Party").
2. Facts. Debtor and Secured Party have entered into a certain Security
Agreement dated May 20, 1999 (the "Security Agreement"). Debtor has requested
and Secured Party has agreed that the Security Agreement be amended on the terms
and conditions set forth in this Amendment. Capitalized terms used herein and
not otherwise defined shall have the meaning given to such terms in the Security
Agreement. Therefore, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows.
3. Amendment to Security Agreement. Debtor and Secured Party hereby agree that
the Security Agreement shall be and hereby is amended, as follows:
(i) Item 1(ii) of Exhibit A to the Security Agreement shall be
restated to read: "(ii) Debtor's cash and cash equivalents plus
short-term investments on hand, net of funded debt, is less than
$10,000,000, and";
(ii) The final sentence Item 1 of Exhibit A to the Security Agreement
shall be restated to read: "(Secured Party agrees to review (in
its sole discretion) any request from Debtor to release any
pledged amounts or letter of credit provided by Debtor if Debtor's
EBITDA exceeds $2,500,000 in any two consecutive fiscal quarters
or Debtor's cash and cash equivalents plus short-term investments
on hand, net of funded debt, is more than $10,000,000.)"
4. Acknowledgments, Ratifications and Reaffirmations by Debtor. Debtor hereby
acknowledges, ratifies and reaffirms that (i) as of the date hereof no Event of
Default has occurred or exists, (ii) Debtor has no defense, offset or
counterclaim to any of Debtor's obligations under the Loan Documents, and (iii)
the Notes, Security Agreement (as amended by this Amendment) and other Loan
Documents are in full force and effect and are fully enforceable against Debtor
in accordance with their respective terms.
5. Effectiveness of Loan Documents. Except as expressly amended by this
Amendment, the Security Agreement, as well as the Notes and all of the other
Loan Documents shall remain in full force and effect.
1
34
6. Entire Agreement. The parties acknowledge and agree that there are no other
agreements or representations, either oral or written, express or implied, in
connection with the Loans, that are not embodied in this Amendment, the Notes,
the Security Agreement and the other Loan Documents, which, together represent a
complete integration of all prior and contemporaneous agreements and
understandings of Debtor and Secured Party in any way related to the Loans. The
Security Agreement (as amended by this Amendment) may not be altered, modified
or terminated in any manner except by a writing duly executed by Debtor and
Secured Party. If any provision of the Security Agreement (as amended by this
Amendment) is held to be invalid or unenforceable, the remaining provisions
shall remain in effect without impairment.
IN WITNESS WHEREOF, Debtor and Secured Party have each executed this Agreement
to be effective as of the day and year first above written.
"DEBTOR" "SECURED PARTY"
INTUITIVE SURGICAL, INC., XXXXXX FINANCIAL LEASING, INC., a
a Delaware corporation Delaware corporation
By: /s/ XXXXX XXXXXX By: /s/ Xxxxxxx Xxxxxxxx
----------------------------- ------------------------------------
Name: Xxxxx Xxxxxx Name: Xxxxxxx Xxxxxxxx
--------------------------- ----------------------------------
Title: CFO Title: AVP
-------------------------- ---------------------------------
2
