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                                                                   EXHIBIT 2.1


                          CARDIAC PATHWAYS CORPORATION
            SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
                                  MAY 20, 1999
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                               TABLE OF CONTENTS



                                                                             PAGE
                                                                             ----
                                                                    
 1.   Sale of Stock......................................................       1
 2.   Closing Date.......................................................       1
 3.   Delivery...........................................................       2
 4.   Representations and Warranties of the Company......................       2
      (a)    Corporate Power.............................................       2
      (b)    Authorization...............................................       2
      (c)    Capital Structure...........................................       3
      (d)    Valid Issuance of Stock.....................................       3
      (e)    No Conflict; Required Filings and Consents..................       4
      (f)    Litigation..................................................       4
      (g)    Charter Documents; Subsidiaries.............................       4
      (h)    Absence of Certain Developments.............................       4
      (i)    Absence of Undisclosed Liabilities..........................       5
      (j)    Non-Contravention...........................................       5
      (k)    Filings.....................................................       5
      (l)    Employee Matters and Benefit Plans..........................       6
      (m)    Labor Matters...............................................       8
      (n)    Title to Property...........................................       8
      (o)    Taxes.......................................................       8
      (p)    Compliance with Laws........................................       9
      (q)    Environmental Matters.......................................       9
      (r)    Intellectual Property.......................................      10
      (s)    Personnel...................................................      10
      (t)    Year 2000 Compliance........................................      10
      (u)    No Brokers..................................................      10
      (v)    Chief Executive Officer.....................................      10
      (w)    Registration Rights.........................................      10
      (x)    Permits.....................................................      11
      (y)    Royalties...................................................      11
      (z)    Real Property Holding Corporation...........................      11
      (aa)   Investment Company Act......................................      11
      (bb)   Qualified Small Business....................................      11
      (cc)   Small Business Concern......................................      11
      (dd)   Broker's or Finder's Fee....................................      11
      (ee)   Vote Required...............................................      11
 5.   Representations and Warranties of the Purchasers...................      11
      (a)    Corporate Power.............................................      11
      (b)    Authorization...............................................      11
      (c)    Governmental Approvals......................................      12
      (d)    Non-Contravention...........................................      12
      (e)    Risk Factors................................................      12
      (f)    No Brokers..................................................      12


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                                                                             PAGE
                                                                             ----
                                                                    
      Compliance with Securities Laws and Restrictions on Transfer of
 6.   Securities.........................................................      13
             Additional Representations and Warranties and Agreements of
      (a)    Each Purchaser..............................................      13
      (b)    Agreement Not to Transfer...................................      14
      (c)    Stop Transfer Orders........................................      14
      (d)    Compliance with Section 6...................................      14
 7.   Additional Covenants of the Purchasers Regarding Securities........      14
      (a)    Forms 13D or 13G............................................      14
      (b)    Insider Trading Policy; Short Sales.........................      14
      (c)    Material Confidential Information...........................      15
      (d)    Reporting Obligations Pursuant to Section 16................      15
 8.   Additional Covenants of the Company................................      16
      (a)    Inspection..................................................      16
      (b)    Board of Directors..........................................      16
      (c)    Right of First Offer........................................      16
      (d)    Sonometrics License.........................................      18
      (e)    Chief Executive Officer.....................................      18
      (f)    Reverse Stock Split; Bylaws.................................      18
      (g)    Reservation of Common Stock.................................      18
      (h)    Proprietary Information and Inventions Agreement............      18
      (i)    Qualified Small Business....................................      18
      (j)    Small Business Administration Matters.......................      18
      (k)    Regulatory Compliance Cooperation...........................      19
      (l)    Proxy Statement.............................................      19
      (m)    Stockholder Approvals; Recommendations......................      20
      (n)    Notices of Certain Events...................................      20
      (o)    Efforts.....................................................      21
      (p)    No Solicitation.............................................      21
 9.   Closing Conditions.................................................      22
      (a)    Conditions to Purchaser's Obligations at the Closing........      22
      (b)    Conditions to Company's Obligations at the Closing..........      24
10.   General Provisions.................................................      24
      (a)    Notices.....................................................      24
      (b)    Governing Law...............................................      25
      (c)    Amendments..................................................      25
      (d)    Assignment..................................................      26
      (e)    Expenses....................................................      26
      (f)    Counterparts................................................      26
      (g)    Entire Agreement............................................      26
      (h)    Titles......................................................      26
      (i)    Termination.................................................      26
      (j)    Effect of Termination.......................................      27

      EXHIBITS
      A.     CERTIFICATE OF DESIGNATION..................................
      C.     REGISTRATION RIGHTS AGREEMENT...............................
      D.     VOTING AGREEMENT............................................



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                          CARDIAC PATHWAYS CORPORATION

            SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT

     THIS CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT (the "AGREEMENT") is
made as of May 20, 1999 between Cardiac Pathways Corporation, a Delaware
corporation having its principal executive office at 995 Benecia Avenue,
Sunnyvale, California 94086 (the "Company"), and the purchasers listed on
Schedule A hereto, each of which is herein referred to as a "PURCHASER" and
collectively, the "PURCHASERS".

                                    RECITALS

     A. The parties desire that the Purchasers make an equity investment of
between $25,000,000 and $40,000,000 in the Company pursuant to the terms and
conditions of this Agreement.

     B. The shares of Series B Convertible Preferred Stock issued to the
Purchasers pursuant to this Agreement shall have registration rights and other
rights as evidenced by the Registration Rights Agreement in the form attached
hereto as Exhibit C (the "RIGHTS AGREEMENT").

     C. In order to induce the Purchasers to enter into this Agreement, certain
directors, certain officers, and certain stockholders of the Company have
entered into a voting agreement in the form attached hereto as Exhibit D (the
"VOTING AGREEMENT") with the Company, pursuant to which they have agreed to vote
to approve the transaction contemplated hereunder.

     D. In partial consideration of the Purchasers' investment in the Company,
three nominees of the Purchasers shall be elected to the Board of Directors of
the Company pursuant to the terms and conditions set forth in the Rights
Agreement.

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and promises set forth in this Agreement, the parties agree as follows:

     1. Sale of Stock.

     (a) The Company hereby agrees to sell to the Purchasers or their designees,
and the Purchasers or their designees hereby agree to purchase from the Company
in the amounts listed on Schedule A hereto, which are inclusive of any Shares
(as defined below) issued upon cancellation of notes issued by the Company to
the Purchasers, for aggregate consideration of between $25.0 and $40.0 million,
up to 40,000 shares of the Company's Series B Convertible Preferred Stock (the
"SHARES") at the per share purchase price (the "PER SHARE PURCHASE PRICE") equal
to 1,000 times the lower of (i) $1.00 or (ii) average trading price of the
Company's common stock (the "COMMON STOCK") on the five (5) trading days
immediately prior to the date of the public announcement of this private
placement, as reported on the Nasdaq National Market. Additional Purchasers may
be added to Schedule A after the date of this Agreement at the sole discretion
of the majority in interest of the Purchasers as set forth on Schedule A.

     (b) The Shares shall have the respective rights, preferences and privileges
set forth in a certificate of designation attached hereto as Exhibit A (the
"CERTIFICATE OF DESIGNATION"), which shall be approved by the Purchasers and
filed on or prior to the Closing Date (as defined below) by the Company with the
Secretary of State of Delaware.

     2. Closing Date. The closing of the purchase and sale of the Shares
hereunder (the "CLOSING") will take place, upon the satisfaction of the
conditions to closing set forth in Section 9 hereof, at the offices of Wilson
Sonsini Goodrich & Rosati, Professional Corporation, 650 Page Mill Road, Palo
Alto, California, as soon as practicable but in any event, subject to applicable
law, no later than the earlier to occur of five (5) business days after the last
of the conditions set forth in Section 9 hereof have been satisfied or October
31, 1999. The date of the Closing is hereinafter referred to as the "Closing
Date."

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     3. Delivery. At the Closing, the Company will deliver a certificate
registered in each Purchaser's name representing the Shares to be purchased by
such Purchaser. Such delivery shall be against payment of the purchase price
therefor or by cancellation of notes delivered by the Purchasers to the Company,
or a combination of each of the foregoing, in an amount equal to the product of
the number of Shares and the Per Share Purchase Price (the "PURCHASE PRICE") by
wire transfer to the Company's bank account at:


                      
        Bank Name:       Citibank
        Bank Address:    111 Wall Street
                         New York, NY 10005
        Contact:         David L. Hayes (415-576-2148)
        ABA#:            021000089
        Account Name:    Morgan Stanley
        Account Number:  #3889-0774
                         FBO CPC #14-78247


     4. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Purchasers as follows, except as set forth on a
Disclosure Schedule (the "DISCLOSURE SCHEDULE") attached hereto as Exhibit B and
furnished to each Purchaser, which exceptions shall be deemed to be
representations and warranties as if made hereunder

     (a) Corporate Power. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
qualified to do business as a foreign corporation in each jurisdiction where
failure to qualify would not, individually or in the aggregate, (i) adversely
affect the legality, validity or enforceability of this Agreement, the Voting
Agreement or the Rights Agreement in any material respect, (ii) have or result
in a Material Adverse Effect on the results of operations, assets, prospects or
financial condition of the Company, taken as a whole or (iii) adversely impair
the Company's ability to perform fully on a timely basis its obligations under
this Agreement, the Voting Agreement or the Rights Agreement (any of (i), (ii)
or (iii), being a "MATERIAL ADVERSE EFFECT"). The Company has full corporate
power and authority to own its property, to carry on its business as presently
conducted and to carry out the transactions contemplated hereby.

     (b) Authorization. The Company has full corporate power to execute, deliver
and perform this Agreement, the Voting Agreement and the Rights Agreement, and
each such agreement has been duly executed and delivered by the Company and is
the legal, valid and, assuming due execution by the Purchaser, binding
obligation of the Company, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium, reorganization or similar laws
affecting creditors' rights generally, and to general equitable principles. The
execution, delivery and performance by the Company of this Agreement, the Voting
Agreement and the Rights Agreement, including the issuance (or reservation for
issuance), sale and delivery of the Shares contemplated by Section 1 hereof and
the Common Stock issuable upon conversion thereof, have been duly authorized by
all necessary corporate action on the part of the Company, its officers,
directors and stockholders; provided, however, that the Company makes no
representation or warranty as to the enforceability of the indemnification and
contribution provisions of Section 5 of the Rights Agreement to the extent that
the provisions thereof may be subject to limitations of public policy and the
effect of applicable statutes and judicial decisions. The Board of Directors of
the Company (at a meeting duly called and held) has (a) determined that the sale
of the Shares is advisable and fair and in the best interests of the Company and
its stockholders, and (b) recommended the approval and adoption of this
Agreement and approval of the sale of the Shares by the stockholders and
directed that this Agreement and the sale of the Shares by submitted for
consideration by the Company's stockholders. The Board of Directors of the
Company has taken all action necessary to render inapplicable, as it relates to
Purchasers, the provisions of Section 203 of the Delaware General Corporation
Law (the "DGCL"). No other corporate action on the part of the Company is
necessary to authorize the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby (other than, in the
case of this Agreement, the approval of the sale of the Shares by the holders of
at least a majority of the Common Stock voting at the meeting held to consider
sale of the Shares).


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     (c) Capital Structure.

          (i) The authorized capital stock of the Company consists of 30,000,000
     shares of Common Stock, $.001 par value per share, and 5,000,000 shares of
     Preferred Stock, $.001 par value per share, of which 30,000 shares have
     been designated Series A Participating Preferred Stock, 50,000 shares have
     been designated Series B Convertible Preferred Stock and 4,920,000 are
     undesignated. As of the date hereof, (i) 10,038,578 shares of Common Stock,
     all of which are validly issued, fully paid and nonassessable, no shares of
     Series A Participating Preferred Stock and no shares of Series B
     Convertible Preferred Stock were issued and outstanding; (ii) no shares
     were held in treasury by the Company or by any subsidiaries of the Company;
     (iii) 2,866,629 shares of Common Stock were reserved for issuance under the
     Company's stock plans (including (A) 1,442,440 shares of Common Stock
     reserved for issuance under the 1991 Stock Option Plan, 1,067,591 shares of
     which were subject to outstanding options and 374,849 of which were
     reserved for future grants, (B) 60,000 shares of Common Stock were reserved
     for issuance under the 1996 Director Option Plan, 33,000 shares of which
     were subject to outstanding options and 27,000 of which were reserved for
     future grants, (C) 400,000 shares of Common Stock were reserved for
     issuance under the 1998 Non-Statutory Stock Option Plan, 143,818 of which
     were subject to outstanding options and 256,182 shares of which were
     available for future grants, (D) 920,506 shares of Common Stock were
     reserved for issuance under the 1998 Employee Stock Purchase Plan, 40,506
     shares of which were available for future purchase in fiscal 1999 and
     880,000 of which may be purchased in maximum amounts of 200,000 shares per
     fiscal year commencing July 1, 1999 and (E) 43,683 shares were subject to
     an outstanding nonstatutory option granted outside of the plans);
     collectively the Company's "STOCK PLANS;" and (iv) 143,141 shares of Common
     Stock and related Preferred Stock Purchase Rights were subject to
     outstanding warrants to purchase such shares. All shares of the Company's
     Common Stock subject to issuance as specified above, on the terms and
     conditions specified in the instruments pursuant to which they are
     issuable, shall be duly authorized, validly issued, fully paid and
     nonassessable. There are no obligations, contingent or otherwise, of the
     Company or any of its subsidiaries to repurchase, redeem or otherwise
     acquire any shares of the Company's capital stock or the capital stock of
     any of the Company's subsidiaries or make any investment (in the form of a
     loan, capital contribution or otherwise) in any such subsidiary or any
     other entity other than as contemplated by this Agreement. All of the
     outstanding shares of capital stock of each subsidiary of the Company are
     duly authorized, validly issued, fully paid and nonassessable, and all such
     shares (other than directors' qualifying shares) are owned by the Company
     or another subsidiary of the Company free and clear of all security
     interests, liens, claims, pledges, agreements, limitations on the Company's
     voting rights, charges or other encumbrances of any nature. The Common
     Stock is quoted on the Nasdaq National Market.

          (ii) Except as set forth in Section 4(c)(i), there are no equity
     securities of any class of capital stock of the Company, or any security
     exchangeable into or exercisable for such equity securities, issued,
     reserved for issuance or outstanding. Except as set forth in Section
     4(c)(i), there are no options, warrants, equity securities, calls, rights,
     commitments or agreements of any character to which the Company or any of
     its subsidiaries is a party or by which it is bound obligating the Company
     or any of its subsidiaries to issue, deliver or sell, or cause to be
     issued, delivered or sold, additional shares of capital stock of the
     Company or any of its subsidiaries to grant or enter into any such warrant,
     equity security, call, right, commitment or agreement, and except for the
     transactions contemplated by this Agreement, the Voting Agreement and the
     Rights Agreement, there are no voting trusts, proxies or other agreements
     or understandings with respect to the shares of capital stock of the
     Company to which the Company is a party.

     (d) Valid Issuance of Stock. The Shares will be duly authorized, validly
issued, fully paid and non-assessable and, based in part upon the
representations of the Purchaser in this Agreement, will be issued in compliance
with all applicable federal and state securities laws. The Common Stock issuable
upon conversion of the Shares (the "CONVERSION SHARES") has been duly and
validly reserved for issuance and, upon issuance in accordance with the terms of
the Certificate of Designation, will be duly and validly issued and fully paid
and nonassessable. The Shares and the Conversion Shares will be free of
restrictions on transfer other than the restrictions in this Agreement and the
Rights Agreement and under applicable state and/or federal securities

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laws, and will not be subject to any preemptive or other similar rights or any
liens or encumbrances (other than any liens or encumbrances created by the
Purchasers).

     (e) No Conflict; Required Filings and Consents.

          (i) The execution and delivery of this Agreement, the Voting Agreement
     and the Rights Agreement by the Company do not, and the performance of this
     Agreement, the Voting Agreement and the Rights Agreement by the Company
     shall not, (i) conflict with or violate the Amended and Restated
     Certificate of Incorporation (the "CERTIFICATE OF INCORPORATION"), the
     Certificate of Designation, the Company's Bylaws, as amended (the "BYLAWS")
     or equivalent organizational documents of the Company or any of its
     subsidiaries, (ii) conflict with or violate any law, rule, regulation,
     order, judgment or decree applicable to the Company or any of its
     subsidiaries or by which it or their respective properties are bound or
     affected, or (iii) result in any breach of or constitute a default (or an
     event that with notice or lapse of time or both would become a default)
     under, or impair the Company's or any such subsidiary's rights or alter the
     rights or obligations of any third party under, or give to others any
     rights of termination, amendment, acceleration or cancellation of, or
     result in the creation of a lien or encumbrance on any of the properties or
     assets of the Company or any of its subsidiaries pursuant to, any material
     note, bond, mortgage, indenture, contract, agreement, lease, license,
     permit, franchise or other instrument or obligation to which the Company or
     any of its subsidiaries is a party or by which the Company or any of its
     subsidiaries or its or any of their respective properties are bound or
     affected, except for any such breaches, defaults or other occurrences that
     do not have or result in, individually or in the aggregate, a Material
     Adverse Effect.

          (ii) The execution and delivery of this Agreement, the Voting
     Agreement and the Rights Agreement by the Company do not, and the
     performance of this Agreement, the Voting Agreement and the Rights
     Agreement by the Company shall not, require any consent, approval,
     authorization or permit of, or filing with or notification to, any
     governmental entity except for applicable requirements, if any, of the
     Securities Act, the Exchange Act, state securities laws, the rules and
     regulations of the Nasdaq National Market and the consent of a majority of
     the holders of the Common Stock of the Company subject to that certain
     Shareholder Rights Agreement dated as of June 13, 1995.

     (f) Litigation. There is no litigation or governmental proceeding or
investigation pending or, to the knowledge of the Company, threatened against
the Company that either (i) adversely affects or challenges the legality,
validity or enforceability of this Agreement, the Voting Agreement or the Rights
Agreement or (ii) could reasonably be expected to, individually or in the
aggregate, have a Material Adverse Effect.

     (g) Charter Documents; Subsidiaries. Except for Cardiac Pathways B.V., a
corporation organized under the laws of the Netherlands, and Cardiac Pathways
G.m.b.H., a corporation organized under the laws of Germany, the Company has no
active subsidiaries and does not otherwise directly or indirectly control any
other business entity. The Company has furnished counsel to the Purchasers with
true, correct and complete copies of its Amended and Restated Certificate of
Incorporation and Bylaws, together with any amendments thereto as of the date
hereof and the charter documents of each of its subsidiaries. Each of the
Company's subsidiaries is duly organized and existing under the laws of its
jurisdiction of organization and is in good standing under such laws. None of
the Company's subsidiaries owns or leases property or engages in any activity in
any jurisdiction that might require its qualification to do business as a
foreign corporation and in which the failure so to qualify would have a Material
Adverse Effect.

     (h) Absence of Certain Developments. Since the date of its most recent
report filed with the Commission pursuant to the Securities and Exchange Act of
1934, as amended from time to time (such act, together with the rules and
regulations promulgated thereunder, the "EXCHANGE ACT," and such report, the
"CURRENT SEC FILING"), except as disclosed therein, there has been no (i) change
in the condition, financial or otherwise, of the Company or its assets,
liabilities, properties, business, operations, intellectual property rights
owned or controlled by it, or prospects generally that would, individually or in
the aggregate, have a Material Adverse Effect; (ii) declaration, setting aside
or payment of any dividend or other distribution with respect to the capital
stock of the Company, or (iii) loss, destruction or damage to any property of
the Company, whether or not insured, which has or may have a Material Adverse
Effect.

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     (i) Absence of Undisclosed Liabilities. Except as and to the extent
reflected or stated in the Current SEC Filing, there has been no:

          (i) Material accrued or contingent liability of a type required to be
     reflected on a balance sheet in accordance with generally accepted
     accounting principles or described in the footnotes thereto.

          (ii) Resignation or termination of any key officers in the Company;
     and the Company, to the best of its knowledge, does not know of the
     impending resignation or termination of employment of any such officer;

          (iii) Material change, except in the ordinary course of business, in
     the contingent obligations of the Company by way of guaranty, endorsement,
     indemnity, warranty or otherwise;

          (iv) Damage, destruction or loss, whether or not covered by insurance,
     materially and adversely affecting the properties, business or prospects or
     financial condition of the Company;

          (v) Waiver by the Company of a valuable right or of a material debt
     owed to it;

          (vi) Direct or indirect loans made by the Company to any stockholder,
     employee, officer or director of the Company, other than advances made in
     the ordinary course of business;

          (vii) Material change in any compensation arrangement or agreement
     with any employee, officer, director or stockholder;

          (viii) Declaration or payment of any dividend or other distribution of
     the assets of the Company;

          (ix) Labor organization activity;

          (x) Debt, obligation or liability incurred, assumed or guaranteed by
     the Company, except those for immaterial amounts and for current
     liabilities incurred in the ordinary course of business;

          (xi) Sale, assignment or transfer of any patents, trademarks,
     copyrights, trade secrets or other intangible assets;

          (xii) Change in any material agreement to which the Company is a party
     or by which it is bound which has had a Material Adverse Effect; or

          (xiii) Any other event or condition of any character that, either
     individually or cumulatively, has had a Material Adverse Effect.

     (j) Non-Contravention. The execution, delivery and performance by the
Company of this Agreement, the Voting Agreement and the Rights Agreement do not
and will not (i) contravene or conflict with the Amended and Restated
Certificate of Incorporation, the Certificate of Designation or Bylaws of the
Company, or (ii) contravene or conflict with or constitute a violation of any
provision of any law, regulation, judgment, injunction, order or decree binding
upon or applicable to the Company or its property, or result in a breach of or
constitute a default under any material agreement of the Company (whether upon
notice or passage of time) binding upon or applicable to it or its property, in
any manner which would materially and adversely affect the Purchasers' rights or
their ability to realize the intended benefits under this Agreement, the Voting
Agreement or the Rights Agreement.

     (k) Filings.

          (i) The Company has filed in a timely manner, and has delivered to the
     Purchasers copies of, the following reports required to be filed with the
     Commission under the Exchange Act: (1) the Company's quarterly report on
     Form 10-Q for the quarter ended December 31, 1998 filed with the Commission
     on February 16, 1999 and (2) the Company's Annual Report on Form 10-K for
     the fiscal year ended June 30, 1998 filed with Commission on September 25,
     1998 (collectively the "SEC REPORTS"). As of its filing date, (i) each such
     report complied in all material respects with the applicable requirements
     of the Securities Act and the Exchange Act, as the case may be, (ii) no
     such report or statement filed pursuant to the Exchange Act contained any
     untrue statement of a material fact or omitted to state any material fact
     necessary in order to make the statements made therein, in the light of the
     circumstances under

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     which they were made, not misleading. None of the Company's subsidiaries is
     required to file any forms, reports or other documents with the Commission.

          (ii) Each of the consolidated financial statements (including in each
     case any related notes) contained in the SEC Reports complied as to form in
     all material respects with the applicable published rules and regulations
     of the Commission with respect thereto, was prepared in accordance with
     U.S. generally accepted accounting principles applied on a consistent basis
     throughout the periods involved (except as may be indicated in the notes to
     such financial statements or, in the case of unaudited statements, as
     permitted by Form 10-Q and the rules and regulations promulgated by the
     Commission), and fairly presented the consolidated financial position of
     the Company and its subsidiaries as of the respective dates and the
     consolidated results of operations and statements of cash flows for the
     periods indicated, except that the unaudited interim financial statements
     were subject to normal and recurring year-end adjustments which were not or
     are not expected to be material in amount.

     (l) Employee Matters and Benefit Plans.

          (i) Definitions. The following terms shall have the meanings set forth
     below:

             (1) "Affiliate," as used in this section shall mean any other
        person or entity under common control with the Company within the
        meaning of Section 414(b), (c), (m) or (o) of the Internal Revenue Code
        of 1986, as amended (the "CODE"), and regulations thereunder;

             (2) "Company Employee Plan" shall refer to any plan, program,
        policy, practice, contract, agreement or other arrangement providing for
        compensation, severance, termination pay, performance awards, stock or
        stock-related awards, fringe benefits or other employee benefits or
        remuneration of any kind, whether formal or informal, funded or
        unfunded, including without limitation, each "employee benefit plan,"
        within the meaning of Section 3(3) of the Employee Retirement Income
        Security Act of 1978, as amended ("ERISA"), which is or has been
        maintained, contributed to, or required to be contributed to, by the
        Company or any Affiliate for the benefit of any "Company Employee" (as
        defined below), and pursuant to which the Company or any Affiliate has
        or may have any material liability contingent or otherwise;

             (3) "Company Employee" shall mean any current, former, or retired
        employee, officer, or director of the Company or any Affiliate;

             (4) "Company Employee Agreement" shall refer to each management,
        employment, severance, consulting, relocation, repatriation,
        expatriation, visa, work permit or similar agreement or contact between
        the Company or any Affiliates and any Company Employee or consultant;
        and

             (5) "Company Pension Plan" shall refer to each Company Employee
        Plan which is an "employee pension benefit plan," within the meaning of
        Section 3(2) of ERISA.

          (ii) Schedule. The Company does not have any plan or commitment to
     establish any new Company Employee Plan or Company Employee Agreement, to
     modify any Company Employee Plan or Company Employee Agreement (except to
     the extent required by law or to conform any such Company Employee Plan or
     Company Employee Agreement to the requirements of any applicable law, in
     each case as previously disclosed to the Purchasers in writing, or as
     required by this Agreement), or to enter into any Company Employee Plan or
     Company Employee Agreement, nor does it have any intention or commitment to
     do any of the foregoing.

          (iii) Documents. The Company has provided to the Purchasers (i)
     correct and complete copies of all documents embodying or relating to each
     Company Employee Plan and each Company Employee Agreement including all
     amendments thereto and written interpretations thereof, (ii) the most
     recent annual actuarial valuations, if any, prepared for each Company
     Employee Plan; (iii) the three most recent annual reports (Series 5500 and
     all schedules thereto), if any, required under ERISA or the Code in
     connection with each Company Employee Plan or related trust; (iv) if any
     Company Employee Plan is funded, the most recent annual and periodic
     accounting of Company Employee Plan assets; (v) the most recent summary
     plan description together with the most recent summary of material
     modifications, if

                                       6
   10

     any, required under ERISA with respect to each Company Employee Plan; (vi)
     all IRS determination letters and rulings relating to Company Employee
     Plans and copies of all applications and correspondence to or from the
     Internal Revenue Service (the "IRS") or the Department of Labor (the "DOL")
     with respect to any Company Employee Plan; (vii) all communications
     material to any Company Employee or Company Employees relating to any
     Company Employee Plan and any proposed Company Employee Plans, in each
     case, relating to any amendments, terminations, establishments, increases
     or decreases in benefits, acceleration of payments or vesting schedules or
     other events which would result in any material liability to the Company;
     and (viii) all registration statements and prospectuses prepared in
     connection with each Company Employee Plan.

          (iv) Company Employee Plan Compliance. (i) The Company has performed
     in all material respects all obligations required to be performed by it
     under each Company Employee Plan and each Company Employee Plan has been
     established and maintained in all material respects in accordance with its
     terms and in compliance with all applicable laws, statutes, orders, rules
     and regulations, including but not limited to ERISA or the Code; (ii) to
     the Company's knowledge no "prohibited transaction," within the meaning of
     Section 4975 of the Code or Section 406 of ERISA, has occurred with respect
     to any Company Employee Plan; (iii) there are no actions, suits or claims
     pending, or, to the knowledge of the Company, threatened or anticipated
     (other than routine claims for benefits) against any Company Employee Plan
     or against the assets of any Company Employee Plan; (iv) each Company
     Employee Plan can be amended, terminated or otherwise discontinued after
     the closing in accordance with its terms, without liability to the Company
     or any Affiliates (other than ordinary administration expenses typically
     incurred in a termination event); (v) there are no inquiries or proceedings
     pending or, to the knowledge of the Company or any Affiliates, threatened
     by the IRS or DOL with respect to any Company Employee Plan; and (vi) to
     the Company's knowledge neither the Company nor any Affiliate is subject to
     any penalty or tax with respect to any Company Employee Plan under Section
     402(i) of ERISA or Section 4975 through 4980 of the Code.

          (v) Company Pension Plans. The Company does not now, nor has it ever,
     maintained, established, sponsored, participated in, or contributed to, any
     Company Pension Plan which is subject to Part 3 of Subtitle B of Title I of
     ERISA, Title IV of ERISA or Section 412 of the Code.

          (vi) Multiemployer Plans. At no time has the Company contributed to or
     been requested to contribute to any Multiemployer Plan.

          (vii) No Post-Employment Obligations. No Company Employee Plan
     provides, or has any liability to provide, life insurance, medical or other
     employee benefits to any Company Employee upon his or her retirement or
     termination of employment for any reason, except as may be required by
     statute, and the Company has never represented, promised or contracted
     (whether in oral or written form) to any Company Employee (either
     individually or to Company Employees as a group) that such Company
     Employee(s) would be provided with life insurance, medical or other
     employee welfare benefits upon their retirement or termination of
     employment, except to the extent required by statute.

          (viii) Effect of Transaction.

             (1) The execution of this Agreement and the consummation of the
        transactions contemplated hereby will not (either alone or upon the
        occurrence of any additional or subsequent events) constitute an event
        under any Company Employee Plan, Company Employee Agreement, trust or
        loan that will or may result in any payment (whether of severance pay or
        otherwise), acceleration, forgiveness of indebtedness, vesting,
        distribution, increase in benefits or obligation to fund benefits with
        respect to any Company Employee.

          (ix) Employment Matters. The Company and each of its subsidiaries (i)
     is in compliance in all material respects with all applicable foreign,
     federal, state and local laws, rules and regulations respecting employment,
     employment practices, terms and conditions of employment and wages and
     hours, in each case, in each location in which the Company or any of its
     subsidiaries employs persons; (ii) has withheld all amounts required by law
     or by agreement to be withheld from the wages, salaries and other payments

                                       7
   11

     to Company Employees; (iii) is not liable for any material arrears of wages
     or any material taxes or any material penalty for failure to comply with
     any of the foregoing; and (iv) is not liable for any material payment to
     any trust or other fund or to any governmental or administrative authority,
     with respect to unemployment compensation benefits, social security or
     other benefits or obligations for Company Employees (other than routine
     payments to be made in the normal course of business and consistent with
     past practice).

          (x) Violations. To the Company's knowledge, no employee of the Company
     has violated any employment contract, patent disclosure agreement or non
     competition agreement between such employee and any former employer of such
     employee due to such employee being employed by the Company and disclosing
     to the Company trade secrets or proprietary information of such employer.
     The Company is not, and has never been, a party to any collective
     bargaining agreement. The Company and its subsidiaries are in compliance in
     all material respects with all applicable laws regarding employment
     practices, terms and conditions of employment, and wages and hours
     (including, without limitation, ERISA, the Worker Adjustment and Retaining
     Notification Act or any similar state or local law).

     (m) Labor Matters. (i) There are no controversies pending or, to the best
knowledge of each of the Company and its respective subsidiaries, threatened,
between the Company or any of its subsidiaries and any of their respective
employees, which controversies have or could reasonably be expected to have a
Material Adverse Effect; (ii) as of the date of this Agreement, neither the
Company nor any of its subsidiaries is a party to any collective bargaining
agreement or other labor union contract applicable to persons employed by the
Company or its subsidiaries nor does the Company or its subsidiaries know of any
activities or proceedings of any labor union to organize any such employees (A)
as of the date of this Agreement and (B) which, as of the Closing, have or could
reasonably be expected to have a Material Adverse Effect; and (iii) as of the
date of this Agreement, neither the Company nor any of its subsidiaries has any
knowledge of any strikes, slowdowns, work stoppages or lockouts, or threats
thereof, by or with respect to any employees of the Company or any of its
subsidiaries (A) as of the date of this Agreement and (B) which, as of the
closing, have or could reasonably be expected to have a Material Adverse Effect.

     (n) Title to Property. The Company owns no material real property. The
Company and each of its subsidiaries have good and defensible title to all of
their material properties and assets, free and clear of all liens, charges and
encumbrances except liens for taxes not yet due and payable and such liens or
other imperfections of title, if any, as do not materially detract from the
value of or interfere with the present use of the property affected thereby or
which, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect; and all leases pursuant to which the Company or
any of its subsidiaries lease from others material amounts of real or personal
property are in good standing, valid and effective in accordance with their
respective terms, and there is not, under any of such leases, any existing
material default or event of default (or any event which with notice or lapse of
time, or both, would constitute a material default and in respect of which the
Company or its subsidiary has not taken adequate steps to prevent such default
from occurring) except where the lack of such good standing, validity and
effectiveness or the existence of such default or event of default could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. All the plants, structures and equipment of the Company and its
subsidiaries, except such as may be under construction, are in good operating
condition and repair, except where the failure of such plants, structures and
equipment to be in such good operating condition and repair could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

     (o) Taxes. The Company and each of its subsidiaries, and any consolidated,
combined, unitary or aggregate group for tax purposes of which the Company or
any of its subsidiaries is or has been a member, have timely filed all tax
returns required to be filed by them and have paid all taxes shown thereon to be
due. These returns and reports are true and complete in all material respects.
The Company has paid all taxes and other assessments due. The Company has
provided adequate accruals in accordance with generally accepted accounting
principles in its financial statements for any taxes that have not been paid,
whether or not shown as being due on any tax returns. There is (i) no material
claim for taxes that is a lien against the property of the Company or any of its
subsidiaries or is being asserted against the Company or any of its subsidiaries
other than liens for taxes not yet due and payable, (ii) no audit of any tax
return of the Company or any of its

                                       8
   12

subsidiaries being conducted by a tax authority, (iii) no extension of the
statute of limitations on the assessment of any taxes granted by the Company or
any of its subsidiaries and currently in effect, and (iv) no agreement, contract
or arrangement to which the Company or any of its subsidiaries is a party that
may result in the payment of any amount that would not be deductible by reason
of Sections 162(m), 280G or 404 of the Code. Neither the Company nor any of its
subsidiaries has ever been a member of any combined, controlled, consolidated or
affiliated group (other than the group of which the Company is the parent) for
tax purposes. Neither the Company nor any of its subsidiaries is a party to any
tax sharing or tax allocation agreement nor does the Company or any of its
subsidiaries owe any amount under any such agreement. Neither the Company nor
any of its subsidiaries has been at any time, a "United States real property
holding corporation" with the meaning of Section 897(c)(2) of the Code.

     (p) Compliance with Laws. Except with respect to environmental matters
(which are covered by Section 4(q) below), the Company and its Subsidiaries are,
and at all times since January 1, 1996 have been, in compliance with all
applicable laws, regulations, orders, judgments and decrees, except where the
failure to so comply would not have a Material Adverse Effect on the condition
of the Company and its Subsidiaries taken as a whole. Neither the Company nor
any of its subsidiaries has received any notice or other communication from any
governmental entity or other person regarding any actual or possible material
violation of, or material failure to comply with, any law, regulation, order,
judgment or decree.

     (q) Environmental Matters.

          (i) Hazardous Material. Except as would result in any material
     liability to the Company under Environmental Laws (as defined below), no
     underground storage tanks and no amount of any substance that has been
     designated by any Governmental Entity or by applicable Environmental Laws
     to be radioactive, toxic, hazardous or otherwise a danger to health or the
     environment, including, without limitation, PCBs, asbestos, petroleum,
     urea-formaldehyde and all substances listed as hazardous substances
     pursuant to the Comprehensive Environmental Response, Compensation, and
     Liability Act of 1980, as amended, or defined as a hazardous waste pursuant
     to the Resource Conservation and Recovery Act of 1976, as amended, and the
     regulations promulgated pursuant to Environmental Laws, but excluding
     office and janitorial supplies maintained in accordance with Environmental
     Laws (a "HAZARDOUS MATERIAL") are present, as a result of the actions of
     the Company or any of its subsidiaries or any affiliate of the Company, or,
     to the Company's knowledge, as a result of any action of any third party or
     otherwise, in, on or under any property, including the land and the
     improvements, ground water and surface water thereof, that the Company or
     any of its subsidiaries has at any time owned, operated, occupied or
     leased. For the purposes of this Agreement, "ENVIRONMENTAL LAWS" shall mean
     all federal, state, local and foreign laws, ordinances, treaties, rules,
     regulations, guidelines and permit conditions relating to contamination,
     pollution or the environment (including ambient air, surface water, ground
     water, land surface or subsurface strata) or the protection of human health
     and worker safety, including, without limitation, laws and regulations
     relating to Hazardous Materials Activities (as hereinafter defined) or
     emissions, discharges, releases or threatened releases of Hazardous
     Materials.

          (ii) Hazardous Materials Activities. Neither the Company nor any of
     its subsidiaries has (i) transported, stored, used, manufactured, disposed
     of, released or exposed its employees or others to Hazardous Materials in
     violation of Environmental Laws, or (ii) disposed of, transported, sold,
     used, released, exposed its employees or others to or manufactured any
     product contained a Hazardous Material (collectively "HAZARDOUS MATERIALS
     ACTIVITIES") in violation of any Environmental Laws in effect prior to or
     as of the date hereof except for which violation has not heretofore been
     cured or for which there is any remaining liability.

          (iii) Permits. The Company and its subsidiaries hold all environmental
     approvals, permits, licenses, clearances and consents (the "ENVIRONMENTAL
     PERMITS") necessary for the conduct of the Company's and its subsidiaries'
     Hazardous Material Activities and other businesses of the Company and its
     subsidiaries as such activities and businesses are currently being
     conducted. The Company and its subsidiaries are and at all times have been
     in compliance in all material respects with the terms of the

                                       9
   13

     Environmental Permits except for which noncompliance has heretofore been
     cured or for which there is any remaining liability.

          (iv) Environmental Liabilities. No action, proceeding, revocation
     proceeding, amendment procedure, writ, claim or injunction is pending, and
     to the Company's knowledge, no action, proceeding, revocation proceeding,
     amendment procedure, writ, claim or injunction has been threatened by any
     governmental entity against the Company or any of its subsidiaries
     concerning any Environmental Permit, Hazardous Material or any Hazardous
     Materials Activities of the Company or any of its subsidiaries.

     (r) Intellectual Property. The Company or its subsidiaries owns each of the
patents and patent applications referred to in the SEC Reports and, except as
disclosed in the SEC Reports, (i) the Company owns or possesses adequate and
enforceable rights to use all other patent applications, patents, trademarks,
trademark applications, trade names, service marks, copyrights, copyright
applications, licenses, know-how and other similar rights and proprietary
knowledge (collectively with the patents and patent applications described in
the SEC Reports, the "INTANGIBLES") necessary for the conduct of the Company's
current, former and anticipated activities and (ii) neither the Company nor any
subsidiary, to its knowledge, has infringed, is infringing, or has received any
notice of infringement of any Intangible of any other person that, if the
subject of an unfavorable decision, ruling or finding, could reasonably be
expected to have a Material Adverse Effect and the Company knows of no basis
therefor. The expiration of any Intangibles would not have a Material Adverse
Effect on the Company and its subsidiaries taken as a whole. Except as set forth
in the SEC Reports, the Company has received no notice of potential indemnity
claims from customers based upon a notice of infringement any such customer has
received from a patent owner relating to an assertion of infringement of a
patent other than potential indemnity claims which individually or in the
aggregate would not reasonably be expected to have a Material Adverse Effect on
the Company.

     (s) Personnel. All personnel, including employees, agents, consultants and
contractors, who have contributed to or participated in the conception and
development of the Intangibles on behalf of the Company have executed
nondisclosure agreements in the form set forth on the Disclosure Schedule and
either (i) have been a party to a "work-for-hire" arrangement or agreements with
the Company in accordance with applicable national and state law that has
accorded the Company full, effective, exclusive and original ownership of all
tangible and intangible property thereby arising, or (ii) have executed
appropriate instruments of assignment in favor of the Company as assignee that
have conveyed to the Company effective and exclusive ownership of all tangible
and intangible property thereby arising.

     (t) Year 2000 Compliance. Except as would not reasonably be expected to
have a Material Adverse Effect on the Company, all of the Company's Information
Technology (as defined below) effectively addresses the Year 2000 issue, and
will not cause an interruption in the ongoing operations of the Company's
business on or after January 1, 2000. For purposes of the foregoing, the term
"INFORMATION TECHNOLOGY" shall mean and include all software, hardware,
firmware, telecommunications systems, network systems, embedded systems and
other systems, components and/or services that are owned or used by the Company
in the conduct of its business, or purchased by the Company from third party
suppliers.

     (u) No Brokers. The Company has not directly or indirectly employed any
broker, finder or other person (including any employee) that might be entitled
to a fee, commission or other compensation upon the execution of this Agreement,
the Voting Agreement or the Rights Agreement or the consummation of the
transactions contemplated by this Agreement, the Voting Agreement or the Rights
Agreement for which the Purchasers or the Company is or may be liable.

     (v) Chief Executive Officer. The Company has entered into an employment
agreement with a new Chief Executive Officer acceptable to the Purchasers.

     (w) Registration Rights. Except as provided in the Rights Agreement, the
Company is presently not under any obligation and has not granted any rights to
register under the Securities Act any of its presently outstanding securities or
any of its securities that may subsequently be issued.

                                       10
   14

     (x) Permits. The Company has all franchises, permits, licenses, and any
similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which could have a Material Adverse Effect on the
business, properties, prospects, or financial condition of the Company, and
believes it can obtain, without undue burden or expense, any similar authority
for the conduct of its business as presently planned to be conducted. The
Company is not in default in any material respect under any such franchises,
permits, licenses or other similar authority.

     (y) Royalties. Except as set forth in the Disclosure Schedule, there are no
royalties, fees, honoraria or other payments payable by the Company to any
person or entity by reason of the ownership, development, use, license, sale or
disposition of the Intangibles, other than salaries and sales commissions paid
to employees and sales agents in the ordinary course of business.

     (z) Real Property Holding Corporation. The Company is not a real property
holding corporation within the meaning of Section 897(c)(2) of the Internal
Revenue Code of 1986, as amended (the "Code") and any regulations promulgated
thereunder.

     (aa) Investment Company Act. The Company is not an "investment company", or
a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.

     (bb) Qualified Small Business. The Company is a "qualified small business"
within the meaning of Section 1202(d) of the Code as of the date hereof and the
Series B Preferred should qualify as "qualified small business stock" as defined
in Section 1202(c) of the Code as of the date hereof. The Company further
represents and warrants that, as of the date hereof, it meets the "active
business requirement" of Section 1202(e) of the Code and it has made no
"significant redemptions" within the meaning of Section 1202(c)(3)(B) of the
Code.

     (cc) Small Business Concern. The Company, together with its "affiliates"
(as that term is defined in Section 121.103 of Title 13 of the Code of Federal
Regulations (the "FEDERAL REGULATIONS")), is a "small business concern" within
the meaning of the Small Business Investment Act of 1958, as amended (the "SMALL
BUSINESS ACT"), and Part 121 of Title 13 of the Federal Regulations. The
information delivered by the Company to Purchaser on SBA Forms 480, 652 and 1031
of the Small Business Administration (the "SBA") delivered in connection
herewith is accurate and complete. The Company is not ineligible for financing
by any SBIC Investor pursuant to Section 107.720 of Title 13 of the Federal
Regulations. The Company acknowledges that BankAmerica Ventures is a Federal
licensee under the Small Business Act.

     (dd) Broker's or Finder's Fee. No agent, broker, person or firm acting on
behalf of the Company or any of its subsidiaries is, or will be, entitled to any
fee, commission or brokers or finder's fees from any of the parties hereto, or
from any person controlling, controlled by, or under common control with any of
the parties hereto, in connection with this Agreement or any of the transactions
contemplated hereby.

     (ee) Vote Required. The approval of the sale of the Shares by the
affirmative vote of a majority of the shares of Common Stock voting is the only
vote of the holders of any class or series of the Company's capital stock
necessary to approve the transactions contemplated hereby. Holders of Common
Stock will not have any appraisal rights or similar rights in connection with
the sale of the Shares or any of the other transactions contemplated hereby.

     5. Representations and Warranties of the Purchasers. Each of the
Purchasers, severally and not jointly, hereby represents and warrants to the
Company as follows:

          (a) Corporate Power. Each Purchaser is a corporation duly incorporated
     or a limited partnership duly formed, validly existing and in good standing
     under the laws of the jurisdiction of its incorporation or formation with
     the requisite power and authority, corporate or otherwise, to enter into
     and to consummate the transactions contemplated hereby and otherwise to
     carry out its obligations hereunder and thereunder.

          (b) Authorization. Each Purchaser has full power to execute, deliver
     and perform this Agreement, the Voting Agreement and the Rights Agreement,
     and each such agreement has been duly executed and delivered by such
     Purchaser and is the legal, valid and, assuming due execution by the
     Company, binding

                                       11
   15

     obligation of such Purchaser, enforceable in accordance with its terms,
     subject to applicable bankruptcy, insolvency, moratorium, reorganization or
     similar laws affecting creditors' rights generally, and to general
     equitable principles. The execution, delivery and performance by such
     Purchaser of this Agreement, the Voting Agreement and the Rights Agreement,
     including the payment of the Purchase Price, have been duly authorized by
     all necessary corporate action of such Purchaser.

          (c) Governmental Approvals. No authorization, consent, approval,
     license, exemption of or filing or registration with any court or
     governmental department, commission, board, bureau, agency or
     instrumentality, domestic or foreign, under any applicable laws, rules or
     regulations presently in effect, other than a Control Certificate to be
     filed with the SBA by BankAmerica Ventures within thirty (30) days of the
     Closing Date, is or will be necessary to be made or obtained by such
     Purchaser or any of its Affiliates (as such term is defined below) for, or
     in connection with, the execution and delivery of this Agreement, the
     Voting Agreement or the Rights Agreement, the consummation of the
     transactions contemplated hereby or thereby or performance by such
     Purchaser of its obligations hereunder or thereunder. For purposes of this
     Agreement, the term "AFFILIATE" means, when used with respect to any
     specified person, any other person directly or indirectly controlling or
     controlled by or under direct or indirect common control with such
     specified person. For the purposes of this definition, "control," when used
     with respect to any person, means the power to direct the management and
     policies of such person, directly or indirectly, whether through the
     ownership of voting securities, by contract or otherwise and the terms
     "affiliated," "controlling" and "controlled" have meanings correlative to
     the foregoing.

          (d) Non-Contravention. The execution, delivery and performance by the
     Company of this Agreement, the Voting Agreement and the Rights Agreement do
     not and will not (i) contravene or conflict with the charter documents or
     bylaws of such Purchaser, or (ii) contravene or conflict with or constitute
     a violation of any provision of any law, regulation, judgment, injunction,
     order or decree binding upon or applicable to such Purchaser, or result in
     a breach of or constitute a default under any material agreement of such
     Purchaser.

          (e) Risk Factors. Each such Purchaser acknowledges that an investment
     in the Company involves known and unknown risks, uncertainties and other
     factors which may result in such Purchaser's loss of its entire investment.
     The Company is an early stage medical device company that develops and
     intends to commercialize medical devices for the treatment of certain
     cardiovascular and circulatory disorders. The Company's product candidates
     are at an early stage of development and have not been approved for
     marketing by any regulatory agencies. In addition, significant investment
     in research and development, preclinical and clinical testing, regulatory
     and sales and marketing activity will be necessary for the Company to
     commercialize its product candidates. There can be no assurance that any of
     the Company's product candidates can be successfully developed. If
     successfully developed, there can be no assurance that the Company's
     product candidates will be approved for marketing by regulatory agencies,
     will result in any meaningful benefits to patients, will be accepted by the
     medical community for use in treatment or will generate sufficient or
     sustainable revenues to enable the Company to be profitable.

          Each Purchaser acknowledges that such Purchaser has received a copy of
     the SEC Reports and reviewed the section captioned "Factors Affecting
     Future Operation Results" contained therein, which such factors are deemed
     incorporated by reference into this Agreement.

          (f) No Brokers. The Purchasers have not directly or indirectly
     employed any broker, finder or other person (including any employee) that
     might be entitled to a fee, commission or other compensation upon the
     execution of this Agreement, the Voting Agreement or the Rights Agreement
     or the consummation of the transactions contemplated by this Agreement, the
     Voting Agreement or the Rights Agreement for which the Purchasers or the
     Company is or may be liable.

                                       12
   16

     6. Compliance with Securities Laws and Restrictions on Transfer of
Securities.

     (a) Additional Representations and Warranties and Agreements of Each
Purchaser. Each Purchaser, severally and not jointly, hereby represents and
warrants to, and agrees with, the Company as follows:

          (i) The Purchaser (A) is purchasing the Shares for its own account for
     investment only and not with a view to any resale or distribution thereof,
     except pursuant to an effective registration statement under the Securities
     Act of 1933, as amended from time to time (such act, together with the
     rules and regulations promulgated thereunder, herein the "Securities Act"),
     covering the sale, assignment or transfer or an opinion of counsel
     reasonably satisfactory to the Company, concurred in by counsel to the
     Company, that such registration is not required; provided, however, that
     BankAmerica Ventures shall be permitted to transfer its Shares to Bank of
     America Ventures, L.P. without such requirements.

          (ii) Such Purchaser has received and carefully reviewed the Current
     SEC Filing, and has had the opportunity to obtain and receive such other
     information as it deems necessary to understand the business and financial
     condition of the Company and to make the investment decision to purchase
     the Shares.

          (iii) As an investor in companies in the medical device industry, such
     Purchaser has such knowledge and experience in financial and business
     matters that it is capable of evaluating the merits and risks of the
     investment represented by the Shares, and it is able to bear the economic
     risk of such investment.

          (iv) Such Purchaser is an "accredited investor" as such term is
     defined in Rule 501(a) of Regulation D under the Securities Act. If other
     than an individual, the Purchaser also represents it has not been organized
     for the purpose of acquiring the Shares.

          (v) Such Purchaser understands that the Shares are being issued in a
     transaction which is exempt from the registration requirements of the
     Securities Act by reason of the provisions of Section 4(2) of the
     Securities Act and that the Shares will be subject to transfer restrictions
     and must be held indefinitely unless subsequently registered under the
     Securities Act or an exemption from such registration is available.

          The certificate representing the Shares will be affixed with the
     following legends:

        "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
        SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, OFFERED FOR
        SALE, PLEDGED, HYPOTHECATED, ASSIGNED OR OTHERWISE TRANSFERRED IN THE
        ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT COVERING
        THE TRANSFER OR AN OPINION OF COUNSEL OR OTHER EVIDENCE IN FORM AND
        SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
        IS NOT REQUIRED."

          The restrictions on sale, assignment and transfer of the Shares
     contained in this Section 6(a)(v) shall terminate at such time as there
     shall be delivered to the Company and such Purchaser an opinion of counsel
     to such Purchaser, in form and substance reasonably satisfactory to the
     Company, to the effect that, due to the lapse of time or otherwise, no
     registration of such securities is required under the Securities Act in
     connection with any distribution of such securities to the public in the
     United States. In addition, at any time after (A) the delivery of such
     opinion; or (B) such securities are sold pursuant to and in accordance with
     an effective registration statement under the Securities Act covering such
     sale, the Purchaser shall be entitled to exchange its certificate
     representing such securities (or any portion thereof as to which (A) or (B)
     above applies) for a new certificate not bearing the first legend set forth
     in Section 6(a)(v).

          (vi) Such Purchaser understands that the Shares constitute "restricted
     securities" within the meaning of Rule 144, promulgated under the
     Securities Act. Purchaser is aware that Rule 144, in substance, except as
     otherwise provided in subsection (k) of such rule, permits limited public
     resale of "restricted securities" acquired, directly or indirectly, from
     the issuer thereof (or from an affiliate of such issuer), in a non-public
     offering subject to the satisfaction of certain conditions, including,
     among other

                                       13
   17

     things: (A) the availability of certain public information about the
     Company; (B) the resale occurring not earlier than the expiration of the
     applicable holding period stated therein; (C) the sale being made through a
     broker in an unsolicited "broker's transaction" or in transactions directly
     with a market maker (as said term is defined under the Exchange Act) and
     (D) the amount of securities being sold during any three-month period not
     exceeding the specified limitations stated therein. Such Purchaser also
     understands that the holding period under Rule 144 will commence on the
     Closing Date.

          (vii) Such Purchaser further understands that in the event all of the
     applicable requirements of Rule 144 are not satisfied, registration under
     the Securities Act, compliance with Regulation A, or some other
     registration exemption will be required; and that, notwithstanding the fact
     that Rule 144 is not exclusive, the staff of the Commission has expressed
     its opinion that persons proposing to sell private placement securities
     other than in a registered offering and otherwise than pursuant to Rule 144
     will have a substantial burden of proof in establishing that an exemption
     from registration is available for such offers or sales, and that such
     persons and their respective brokers who participate in such transactions
     do so at their own risk.

     (b) Agreement Not to Transfer.

          (i) Prior to twelve months after the Closing, the Purchasers shall
     not, directly or indirectly, Transfer or offer to Transfer any Shares,
     unless the Company consents to such Transfer and the transferee agrees to
     be bound by this Agreement; provided however, that BankAmerica Ventures
     shall be permitted to transfer its Shares to Bank of America Ventures, L.P.
     without such requirements.

          (ii) As used in this Section 6(b), the term "TRANSFER" shall mean any
     sale, transfer, assignment, hypothecation, encumbrance or other
     disposition, whether voluntary or involuntary, of Shares. In the case of a
     hypothecation, the Transfer shall be deemed to occur both at the time of
     the initial pledge and at any pledgee's sale or a sale by any secured
     creditor or a retention by the secured creditor of the pledged Shares in
     complete or partial satisfaction of the indebtedness for which the Shares
     are security.

     (c) Stop Transfer Orders. Such Purchaser understands that notations
restricting the transfer of the Shares will be made on the transfer records of
the Company and that a stop transfer order will be entered with the Company's
transfer agent.

     (d) Compliance with Section 6. None of the Shares (nor any interest
therein) shall be sold, assigned or offered except in accordance with the
provisions of this Section 6.

     7. Additional Covenants of the Purchasers Regarding Securities.

     (a) Forms 13D or 13G. Promptly following the Closing, the Purchasers shall
file with the Commission any reports regarding their ownership of the Company's
Common Stock as required by Section 13(d) of the Exchange Act and the rules and
regulations.

     (b) Insider Trading Policy; Short Sales.

          (i) For so long as a representative of the Purchasers is a member of
     the Board of Directors of the Company, the Purchasers and their Affiliates
     who have access to Material Confidential Information (as defined below) of
     the Company shall agree to comply with the Insider Trading Compliance
     Program of the Company including, but not limited to, trade pre-clearance
     requirements and trading blackout periods as may be in effect from time to
     time. In addition, the Purchasers hereby acknowledge that each Purchaser is
     aware, and that each Purchaser will advise such directors, officers,
     employees, representatives, agents and advisors who are informed as to the
     matters concerning the Company or who have access to the Company's Material
     Confidential Information, that United States securities laws prohibit any
     person who has received from an issuer material nonpublic information
     concerning the issuer from communicating such information to any other
     person under circumstances in which it is reasonably foreseeable that such
     person is likely to purchase or sell the securities of such issuer, make
     investment recommendations based on such material nonpublic information or
     otherwise affect the trading price of such issuer's securities. The
     limitations set forth in the immediately preceding sentence are not
     intended to preclude the brokerage, investment advisory, financial
     advisory, financing, money management,

                                       14

   18

     trading, arbitrage or other similar activities conducted on the Purchasers'
     behalf by only those directors, officers, representatives and agents and
     advisors who do not have access to the Company's Material Confidential
     Information or are not aware of the content of such Material Confidential
     Information.

          (ii) The Purchasers and their Affiliates shall not make any short sale
     of, loan, or grant any option for the purchase of, any equity securities of
     the Company held by the Purchasers at any time.

     (c) Material Confidential Information.

          (i) In connection with the Purchasers' decision-making with respect to
     their acquisition of the Shares, the Company has furnished to the
     Purchasers and their officers, directors, employees and agents
     (collectively referred to as "PURCHASERS AND AGENTS") financial and other
     information which has not theretofore been made available to the public
     ("MATERIAL CONFIDENTIAL INFORMATION"). The Purchasers and Agents may also
     receive Material Confidential Information of the Company in the future.
     Pursuant to a Nondisclosure Agreement dated March 5, 1999, the Purchasers
     have agreed to refrain from disclosing such information pursuant to the
     terms and conditions of such agreement. The Company and the Purchasers wish
     to replace the confidentiality obligations of the parties set forth in such
     agreement with those provided herein. Therefore, the Purchasers and Agents
     shall treat all such Material Confidential Information in accordance with
     the provisions of this agreement and to take or abstain from taking certain
     other actions herein set forth. The term "Material Confidential
     Information" does not include information which (i) was already in the
     Purchasers' or Agents' possession prior to the disclosure by the Company of
     the Material Confidential Information, provided that such information is
     not known by the Purchasers and Agents to be subject to another
     confidentiality agreement with or other obligation of secrecy to the
     Company or another party, (ii) becomes generally available to the public
     other than as a result of disclosure by the Purchasers or Agents or (iii)
     becomes available to you on a non-confidential basis from a source other
     than the Company or its advisors, provided that such source is not known to
     the Purchasers or Agents to be bound by a confidentiality agreement with or
     other obligation of secrecy to the Company or another party. The Purchasers
     agree that the Company's Material Confidential Information will be used
     solely for the purpose of monitoring the Purchasers' holdings of the
     Shares. The Purchasers also agree that the Purchasers and Agents will not
     disclose any of the Company's Material Confidential Information now or
     hereafter received or obtained from the Company or its representatives to
     any third party or otherwise use or permit the use of the Material
     Confidential Information, except as required by applicable law or legal
     process, without the prior written consent of the Company; provided,
     however, that any such Material Confidential Information of the Company may
     be disclosed to such of the Purchasers' representatives who need to know
     such information for the purpose of monitoring the Purchasers' investment
     in the Shares; in which case it is understood that the Purchasers'
     representatives, directors, officers, employees, agents and advisors shall
     be informed by the Purchasers of the confidential nature of such
     information and shall be directed by the Purchasers to treat such
     information confidentially. In the event that the Purchasers and Agents or
     any of their representatives becomes legally compelled (by deposition,
     interrogatory, request for documents, subpoena, civil investigative demand,
     other demand or rules and regulations under the federal securities laws or
     similar process, but not pursuant to laws and regulations which Purchasers
     and Agents are subject to as a result of being an affiliate of a national
     bank) to disclose any of the Material Confidential Information, the
     Purchasers and Agents shall provide the Company with prompt prior written
     notice of such requirement prior to such disclosure. In the event that a
     protective order or other remedy is not obtained, or that the Company
     waives compliance with the provisions hereof, each Purchaser agrees to
     furnish only that portion of the Material Confidential Information which
     such Purchaser is legally required to furnish and, where appropriate, to
     exercise the Purchasers' and Agents' reasonable efforts to obtain
     assurances that confidential treatment will be accorded such Material
     Confidential Information.

     (d) Reporting Obligations Pursuant to Section 16. The Purchasers agree to
file with the Commission any reports required to be filed pursuant to Section
16(a) of the Exchange Act and the rules and regulations promulgated thereunder
by such Purchasers, their officers, directors, employees or affiliates or by
such Purchasers' nominee to the Company's Board of Directors within the time
such filings are required to be made and to provide the Company with a copy of
all such filings promptly thereafter.

                                       15

   19

     8. Additional Covenants of the Company.

     (a) Inspection. For so long as a Purchaser holds at least 500 shares of
Series B Convertible Preferred Stock (or the Common Stock issuable or issued
upon conversion of 500 shares of Series B Convertible Preferred Stock), the
Company shall permit each the Purchaser, at such Purchaser's expense, to visit
and inspect the Company's properties, to examine its books of account and
records and to discuss the Company's affairs, finances and accounts with its
officers, all at such reasonable times as may be requested by the Investor;
provided, however, that the Company shall not be obligated pursuant to this
Section 8(a) to provide access to any information that it reasonably considers
to be a competitively sensitive information unless such Purchaser has executed a
non-disclosure agreement in a form reasonably acceptable to the Company.

     (b) Board of Directors. The following actions will be taken with respect to
the Company's Board of Directors.

          (i) The existing Board of Directors will resign effective as of the
     Closing Date.

          (ii) At or prior to the Closing the Company shall amend its Bylaws, if
     required, to fix the number of directors to five (5) members with a
     provision that the number of directors may be increased to seven (7)
     members with the consent of the directors who are representatives of the
     Purchasers.

          (iii) The holders of the Series B Convertible Preferred shall have the
     right to nominate three (3) members of the Company's Board of Directors,
     two (2) of which shall be representatives of BankAmerica Ventures and one
     (1) of which shall be a representative of Morgan Stanley Dean Witter
     Venture Partners ("MSDW"). In the event that the number of the Company's
     directors exceeds five (5), the holders of Series B Convertible Preferred
     shall have the right to nominate one (1) additional director. All members
     of the Company's Board of Directors nominated by holders of Series B
     Convertible Preferred shall have the right to be members of all committees
     of the Board of Directors. The Company shall not file any proxy or other
     materials with the SEC opposed to the re-election of such persons as
     directors of the Company unless such director has committed any actions
     giving the stockholders of the Company the right to remove such director
     for cause and shall use all reasonable efforts to secure the election of
     such persons as directors.

          (iv) The remaining directors will include (i) one (1) representative
     of the Company's management, who shall be the Company's Chief Executive
     Officer and (ii) one (1) outside representative appointed by a majority of
     the Board of Directors.

          (v) As of the execution of this Agreement and in the event that
     BankAmerica Ventures, the State of Wisconsin Investment Board ("SWIB") or
     MSDW do not have a representative on the Company's Board of Directors, or
     any committee thereof then the Company shall invite a representative of
     BankAmerica Ventures, SWIB or MSDW, as the case may be, to attend all
     meetings of its Board of Directors or any committee thereof in a nonvoting
     observer capacity and, in this respect, shall give such representative
     copies of all notices, minutes, consents, and other materials (the "BOARD
     MATERIALS") that it provides to its directors at the same time as such
     Board Materials are provided to any of its directors; provided, however,
     that the Company reserves the right to withhold any information and to
     exclude such representative of BankAmerica Ventures, SWIB or MSDW from any
     meeting or portion thereof if the disclosure of such material or
     discussion, in the opinion of counsel to the Company, would jeopardize the
     Company's attorney client privilege. The right granted to BankAmerica
     Ventures, SWIB and MSDW to attend meetings of the Company's Board of
     Directors and to receive Board Materials shall not be assignable.

     (c) Right of First Offer. Subject to the terms and conditions specified in
this Section 8(c), the Company hereby grants to each Purchaser a right of first
offer to purchase its Pro Rata Share (as hereinafter defined) (in whole or in
part) with respect to future sales by the Company of its Future Shares (as
hereinafter defined). Each Purchaser shall be entitled to assign or apportion
the right of first offer hereby granted it among itself and its partners and
affiliates (including in the case of a venture capital fund other venture
capital funds affiliated with such fund) in such proportions as it deems
appropriate. For purposes of this Section 8(c), a Purchaser's "PRO RATA SHARE"
of Future Shares shall mean that number of Future Shares that equals the

                                       16

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proportion that (x) the number of shares of Common Stock issued and held, or
issuable upon conversion of the Shares then held, by such Purchaser bears to (y)
the total number of shares of Common Stock of the Company then outstanding
(assuming full conversion of all convertible securities).

          (i) Each time the Company proposes to offer any shares of, or
     securities convertible into or exercisable for any shares of, any class of
     its capital stock, including any debt securities convertible into equity
     (collectively, "FUTURE SHARES"), the Company shall first make an offering
     of such Future Shares to each Purchaser in accordance with the following
     provisions:

          (ii) The Company shall deliver a notice by confirmed facsimile
     transmission, certified mail or a nationally recognized overnight courier
     service ("NOTICE") to each of the Purchasers stating (i) its bona fide
     intention to offer such Future Shares, (ii) the number of such Future
     Shares to be offered, and (iii) the price and a summary of the terms, if
     any, upon which it proposes to offer such Future Shares.

          (iii) By written notification to the Company within ten (10) calendar
     days after receipt of the Notice, each Purchaser may elect to purchase or
     obtain, at the price and on the terms specified in the Notice, up to its
     Pro Rata Share of such Future Shares. The Company shall promptly, in
     writing, inform each Purchaser that elects to purchase all the shares
     available to it (a "FULLY-EXERCISING PURCHASER") of any other Purchaser's
     failure to do likewise. During the ten (10) day period commencing after
     such information is given, each Fully-Exercising Purchaser may elect to
     purchase that portion of the Future Shares for which Purchasers were
     entitled to subscribe but that were not subscribed for by the Purchasers
     that is equal to the proportion that the number of shares of Common Stock
     issued and held, or issuable upon conversion of Shares then held, by such
     Fully-Exercising Purchaser bears to the total number of shares of Common
     Stock issued and held, or issuable upon conversion of the Shares then held,
     by all Fully-Exercising Purchasers who wish to purchase some of the
     unsubscribed Future Shares.

          (iv) If all Future Shares that the Purchasers are entitled to obtain
     pursuant to Section 8(c) are not elected to be obtained as provided herein,
     the Company may, during the sixty (60) day period following the expiration
     of the period provided in Section 8(c)(iii) hereof, offer the remaining
     unsubscribed portion of such Future Shares to any person or persons at a
     price not less than, and upon terms no more favorable to the offeree than
     those specified in the Notice. If the Company does not enter into an
     agreement for the sale of the Future Shares within such period, or if such
     agreement is not consummated within sixty (60) days of the execution
     thereof, the right provided hereunder shall be deemed to be revived and
     such Future Shares shall not be offered unless first reoffered to the
     Purchasers in accordance herewith.

          (v) The right of first offer in this Section 8(c) shall not be
     applicable (i) to any shares of Common Stock (including shares issued upon
     exercise of stock options outstanding as of the date of this Agreement)
     issuable or issued to employees, consultants or directors directly or
     pursuant to stock option plans or arrangements approved by the Board of
     Directors, including each board representative of the Purchasers, (ii) to
     shares of Common Stock issued or issuable in a firm commitment underwritten
     public offering, (iii) to shares of Common Stock issued or issuable upon
     conversion of shares of Series A Participating Preferred Stock or Series B
     Convertible Preferred Stock or as a dividend or distribution on the shares
     of Series A Participating Preferred Stock or Series B Convertible Preferred
     Stock, (iv) to securities issued or issuable to banks or equipment lessors,
     provided such issuances are for other than primarily equity financing
     purposes and provided such issuances are approved by the Board of
     Directors, including each board representative of the Purchasers, (v) to
     securities issued in connection with business combinations or corporate
     partnering agreements approved by the Board of Directors, including each
     board representative of the Purchasers, or (vi) to securities issued in
     strategic financings accompanies by commercial development, joint ventures
     or other related agreements approved by the Board of Directors, including
     each board representative of the Purchasers.

          (vi) The rights granted to the Purchasers under Section 8(c) hereof
     may be assigned to any transferee or assignee who is (a) a subsidiary,
     parent, general partner, limited partner, retired partner, member or
     retired member of a Purchaser, (b) a Purchaser's ancestors, descendants or
     spouse or to trusts for the benefit of such persons or such Purchaser or
     (c) a client, employee or member of a Purchaser,

                                       17

   21

     provided that (i) such transfer may otherwise be effected in accordance
     with applicable securities laws, (ii) the Company is given written notice
     of any such transfer five (5) Business Days prior to the date of said
     transfer, stating the name and address of said transferee or assignee and
     identifying the securities with respect to which such registration rights
     are being assigned and (iii) the transferee or assignee of such rights is
     not deemed by the Board of Directors of the Company, in its reasonable
     judgment, to be a competitor of the Company and provided further that the
     transferee or assignee of such rights assumes in writing in a form
     reasonably acceptable to the Company the obligations of the Purchasers
     under this Agreement.

     (d) Sonometrics License. The Company will use its best efforts to execute
an agreement to exclusively license or acquire, for an aggregate purchase price
no greater than $1,500,000, Sonometric's patent portfolio relating to technology
and methods for three dimensional digital ultrasound tracking. The Patent
Portfolio will include, but not be limited to the following: Patent Numbers
5,515,853, 5,779,638, 5,795,298, 5,797,849, 5,817,022 and 5,868,673 and all
currently active applications that are continuations, continuations-in-part, or
divisional properties, and all corresponding foreign-filed patents and patent
applications.

     (e) Chief Executive Officer. In the event that a new Chief Executive
Officer, (who shall be acceptable to the Purchasers) shall have commenced
employment with the Company prior to the Closing, the Company shall use it best
efforts to retain such Chief Executive Officer through the Closing Date.

     (f) Reverse Stock Split; Bylaws. The Company shall use its best efforts to
obtain stockholder approval to amend (i) the Certificate of Incorporation to
effect a five for one reverse stock split of the Company's Common Stock; and
(ii) the Bylaws to require the affirmative vote of the holders of at least a
majority of the voting power of all of the then outstanding shares entitled to
vote, voting together as a single class, to (I) increase the number of shares
reserved for issuance under the Company's Stock Plans, such that the quotient of
(A) the shares outstanding issued pursuant to the Company's Stock Plans plus the
shares available for issuance under the Company's Stock Plans plus additional
shares proposed to be issued under the Company's Stock Plans; divided by (B) the
total outstanding capital stock of the Company, including any outstanding
convertible preferred stock, on an as converted basis, is not greater than
thirty percent (30%); and (II) reprice any options granted after May 20, 1999 to
purchase shares of Common Stock under the Company's Stock Plans, provided that
the Company shall only reprice each options outstanding prior to May 20, 1999
one time.

     (g) Reservation of Common Stock. The Company will at all times reserve and
keep available, solely for issuance and delivery upon the conversion of the
Shares and all Common Stock issuable from time to time upon such conversion.

     (h) Proprietary Information and Inventions Agreement. The Company shall
require all employees and consultants to execute and deliver a Proprietary
Information and Inventions Agreement in a form which is acceptable to the
Purchasers.

     (i) Qualified Small Business. The Company will use its best efforts to
comply with the reporting and recordkeeping requirements of Section 1202 of the
Code, any regulations promulgated thereunder and any similar state laws and
regulations, and agrees not to repurchase any stock of the Company if such
repurchase would cause the Shares not to so qualify as "Qualified Small Business
Stock." The Company further covenants to submit to its shareholders and to state
and federal taxation authorities such form and filings as may be required to
document such compliance, including the California Franchise Tax Board Form
3565, Small Business Stock Questionnaire, with its franchise or income tax
return for the current income year.

     (j) Small Business Administration Matters.

           (i) The proceeds from the issuance and sale of the Shares will be
     used by the Company for working capital and other general corporate
     purposes. The Company will provide to each Purchaser identified as a
     licensed Small Business Investment Company on Schedule A hereto (each an
     "SBIC INVESTOR"), and to the Small Business Administration (the "SBA"),
     reasonable access to the Company's books and records for the purpose of
     confirming the use of proceeds by the Company.

                                       18

   22

           (ii) For a period of one (1) year following the Closing (as defined
     in the Purchase Agreement), the Company will not change the nature of its
     business activity if such change would render the Company "ineligible" as
     provided in Section 107.720 of Title 13 of the Federal Regulations.

           (iii) So long as any SBIC Investor holds any securities of the
     Company, the Company will at all times comply with the non-discrimination
     requirements of Sections 112, 113 and 117 of Title 13 of the Federal
     Regulations.

           (iv) Within forty-five (45) days after the end of each fiscal year of
     the Company, and at such other times as an SBIC Investor may reasonably
     request in writing to the Company, the Company will deliver to such SBIC
     Investor a written assessment in form and substance reasonably satisfactory
     to such SBIC Investor, as to the economic impact of such SBIC Investor's
     financing of the Company, specifying the full-time equivalent jobs created
     or retained in connection with such investment, and the impact of such
     financing on the Company's business in terms of profits and with respect to
     taxes paid by the Company and its employees. The Company will promptly
     provide each SBIC Investor who so requests in writing to the Company,
     specifying in such written request the nature of such required information
     in reasonable detail, such information as such SBIC Investor requests, in
     order to permit such SBIC Investor to comply with such SBIC Investor's
     obligations under the Small Business Act of 1958, as amended (the "SMALL
     BUSINESS ACT"), and the regulations promulgated thereunder and related
     thereto. Any submission of financial information pursuant to this Section
     8(j) shall be under cover of a certificate executed by the Company's
     President, Chief Executive Officer Chief Financial Officer or Treasurer,
     certifying that such information (i) relates to the Company, (ii) to the
     best of the Company's knowledge is accurate and (iii) if applicable, has
     been audited by the Company's independent auditors.

     (k) Regulatory Compliance Cooperation. In the event that any SBIC Investor
determines that it has a Regulatory Problem (as defined below), it shall have
the right to transfer its Shares in compliance with applicable state and federal
securities laws, but without regard to any other restrictions on transfer set
forth in this Agreement or the Rights Agreement (provided that the transferee
agrees to become a party to each such agreement), and the Company shall take all
such actions as are reasonably requested by such SBIC Investor in order to (i)
effectuate and facilitate any transfer by it of any securities of the Company
then held by it to any person designated by such SBIC Investor, (ii) permit such
SBIC Investor (or any of its affiliates) to exchange all or any portion of any
voting security then held by it on a share-for-share basis for shares of a
nonvoting security of the Company, which nonvoting security shall be identical
in all respects to the voting security exchanged for it, except that it shall be
nonvoting and shall be convertible into a voting security on such terms as are
requested by it in light of regulatory considerations then prevailing, and (iii)
amend this Agreement, as amended from time to time, to effectuate and reflect
the foregoing. The parties to this Agreement agree to vote all of the Company's
securities held by them in favor of such amendments and actions. For purposes of
this Agreement, a "REGULATORY PROBLEM" means any set of facts or circumstances
wherein it has been asserted by any governmental regulatory agency that an SBIC
Investor is not entitled to hold, or exercise any significant right with respect
to, the underlying securities into which the Shares are convertible.

     (l) Proxy Statement. As promptly as practicable after the execution of this
Agreement, the Company shall prepare and file with the Commission preliminary
proxy materials which shall constitute the preliminary Proxy Statement in
connection with the sale of the Shares. As promptly as practicable after
comments are received from the Commission with respect to the preliminary proxy
materials, the Company shall file with the Commission the definitive Proxy
Statement, which Proxy Statement shall comply in all material respects with the
applicable requirements of the Exchange Act and Securities Act, respectively,
and the applicable rules and regulations of the Commission thereunder.

           (i) The Company shall cause the Proxy Statement to be mailed to its
     stockholders and, if necessary, after the Proxy Statement shall have been
     so mailed, promptly circulate amended, supplemental or supplemented proxy
     material and, if required in connection therewith, resolicit proxies.

           (ii) The Company warrants that the information provided (or
     incorporated by reference to filings made with the Commission by the
     Company) in the Proxy Statement, on the date the Proxy Statement is

                                       19

   23

     filed with the Commission and on the date it is first mailed to the
     Company's stockholders, shall not contain any untrue statement of a
     material fact or omit to state any material fact necessary in order to make
     the statements therein, in light of the circumstances under which they were
     made, not misleading. The Company shall notify Purchasers promptly of the
     receipt of any comments by the Commission and of any request by the
     Commission for amendments or supplements to the Proxy Statement, or for
     additional information, and shall supply one another with copies of all
     correspondence with the Commission with respect to any of the foregoing. If
     at any time prior to the meeting of Stockholders to consider sale of the
     Shares, any event should occur relating to the Company, its subsidiaries or
     any of their respective affiliates, directors or officers which should be
     described in an amendment or supplement to the Proxy Statement, the Company
     shall promptly inform Purchasers. Whenever any event occurs which should be
     described in an amendment or supplement to the Proxy Statement, the Company
     shall, upon learning of such event, cooperate promptly to file and clear
     with the Commission and, if applicable, mail such amendment or supplement
     to the stockholders of the Company.

           (iii) The Company shall use its best efforts to obtain approval for
     quotation on the Nasdaq National Market, upon official notice of issuance,
     of the Common Stock to be issued upon conversion of the Shares.

           (iv) The Company shall make all necessary filings with respect to the
     sale of Shares under the Securities Act and the Exchange Act and the rules
     and regulations thereunder and under applicable blue sky or similar laws
     and shall use their reasonable efforts to obtain required approvals and
     clearances with respect thereto.

     (m) Stockholder Approvals; Recommendations. The Company, acting through its
Board of Directors, shall (i) call, give notice of, convene and hold a special
meeting of the holders of Company Common Stock for the purpose of voting upon
the sale of the Shares (the "SPECIAL MEETING") and (ii) include in the Proxy
Statement the recommendation of its Board of Directors that holders of Common
Stock approve the sale of Shares at the Special Meeting. The Special Meeting
will be held as promptly as practicable. The Company shall ensure that the
Special Meeting is called, noticed, convened, held and conducted, and that all
proxies solicited, in connection with the Special Meeting are solicited in
compliance with all applicable laws, regulations, orders, judgments and decrees.
The Company shall not be permitted to delay, adjourn, postpone or reschedule the
Special Meeting, or delay the vote of the Company's stockholders on the sale of
Shares, without Purchasers' prior written consent (which consent will not be
unreasonably withheld or delayed if the need for the delay, adjournment,
postponement or rescheduling of the Special Meeting or the delay in such vote is
attributable solely to factors outside the Company's control). Notwithstanding
anything to the contrary contained in this Section 8(m), the Company's Board of
Directors shall not be permitted to withdraw or modify its recommendation in
favor of the sale of Shares.

     (n) Notices of Certain Events. The Company hereto shall promptly notify
Purchasers of:

           (i) the receipt by the Company of any notice or other communication
     from any person alleging that the consent of such person is or may be
     required in connection with the transactions contemplated by this
     agreement;

           (ii) the receipt by the Company of any notice or other communication
     from any governmental entity in connection with the transactions
     contemplated by this agreement;

           (iii) the Company obtaining knowledge of any actions, suits, claims
     investigations or proceedings commenced or threatened against, relating to
     or involving or otherwise affecting the Company or Purchasers, as the case
     may be, or any of their respective subsidiaries which relate to the
     consummation of the transactions contemplated by this agreement; and

           (iv) the Company obtaining knowledge of the occurrence, or failure to
     occur, of any event which occurrence or failure to occur will be likely to
     cause (A) any representation or warranty contained in this Agreement to be
     untrue or inaccurate in any material respect, or (B) any material failure
     of any party to comply with or satisfy any covenant, condition or agreement
     to be complied with or satisfied by it under

                                       20

   24

     this Agreement; provided, however, that no such notification shall affect
     the representations, warranties or obligations of the parties or the
     conditions to the obligations of the parties hereunder.

     (o) Efforts. The Company shall, and shall cause its respective subsidiaries
to, cooperate and use their reasonable efforts to take, or cause to be taken,
all appropriate action, and to make, or cause to be made, all filings necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, including, without
limitation, their reasonable efforts to (i) obtain, prior to the Closing Date,
all licenses, permits, consents, approvals, authorizations, qualifications and
orders of governmental authorities and parties to contracts with the Company and
its subsidiaries and (ii) defend against and respond to any action, suit,
proceeding or investigation relating to the transactions contemplated by this
Agreement, in each case as are necessary for consummation of the transactions
contemplated by this Agreement and to fulfill the conditions to the sale of
Shares.

     (p) No Solicitation.

           (i) The Company agrees that until the Closing Date, the Company shall
     not, directly or indirectly, and the Company shall ensure that its
     Representatives (as defined below) do not, directly or indirectly: (i)
     solicit, initiate, encourage or induce the making, submission or
     announcement of any Acquisition (as defined below) or take any action that
     could reasonably be expected to lead to an Acquisition Proposal (as defined
     below); (ii) furnish any information regarding the Company or any direct or
     indirect subsidiary of the Company to any Person in connection with or in
     response to an Acquisition Proposal or potential Acquisition Proposal; or
     (iii) engage in discussions with any Person (as defined below) with respect
     to any Acquisition Proposal. The Company shall immediately cease and
     discontinue, and the Company shall ensure that its Representatives
     immediately cease and discontinue, any existing discussions with any Person
     that relate to any Acquisition Proposal. For purposes of this Section 8(p):

             (1) "ACQUISITION PROPOSAL" shall mean any offer, proposal or
        inquiry contemplating or otherwise relating to any Acquisition
        Transaction.

             (2) "ACQUISITION TRANSACTION" shall mean any transaction (other
        than as contemplated by the Purchase Agreement) involving:

                (a) any merger, consolidation, amalgamation, share exchange,
           business combination, issuance of securities, acquisition of
           securities, tender offer, exchange offer or other similar transaction
           (i) in which the Company is a constituent company, (ii) in which a
           person or "group" (as defined in the Exchange Act of 1934, as amended
           and the rules promulgated thereunder) of persons directly or
           indirectly acquires the Company or more than 15% of the Company's
           business or directly or indirectly acquires beneficial or record
           ownership of securities representing, or exchangeable for or
           convertible into, more than 15% of the outstanding securities of any
           class of voting securities of the Company, or (iii) in which the
           Company issues securities representing more than 15% of the
           outstanding securities of any class of voting securities of the
           Company;

                (b) any sale, lease, exchange, transfer, license, acquisition or
           disposition of more than 15% of the assets of the Company; or

                (c) any liquidation or dissolution of the Company.

             (3) "PERSON" shall mean any (i) individual, (ii) corporation,
        limited liability company, partnership or other entity, or (iii)
        governmental authority.

             (4) "REPRESENTATIVES" shall mean officers, directors, employees,
        agents, attorneys, accountants, advisors and representatives.

           (ii) Neither the Board of Directors of the Company nor any committee
     thereof shall (i) withdraw or modify, or propose or resolve to withdraw or
     modify, in a manner adverse to Purchasers, the approval or recommendation
     by such Board of Directors or any such committee of this Agreement or the
     sale of

                                       21

   25

     Shares, (ii) approve or recommend, or propose to approve or recommend, any
     Acquisition Proposal or (iii) enter into any agreement or letter of intent
     with respect to any Acquisition Proposal.

           (iii) In addition to the obligations of the Company set forth in
     Sections 8(p)(i) and 8(p)(ii) above, the Company shall promptly advise
     Purchasers orally and in writing of any request for information or of any
     Acquisition Proposal, or any inquiry with respect to or which could
     reasonably be expected to lead to any Acquisition Proposal, the material
     terms and conditions of such request, Acquisition Proposal or inquiry, and
     the identify of the person making any such Acquisition Proposal or inquiry.
     The Company shall use its best efforts to keep Purchasers fully informed of
     the status and details of any such request, Acquisition Proposal or
     inquiry.

           (iv) Notwithstanding the foregoing, if the Company receives a bona
     fide, written, unsolicited offer to acquire all of the equity of the
     Company or substantially all of the assets of the Company at a higher
     valuation than that implied for the Company by this Agreement (a "HIGHER
     OFFER") the Company may enter into a confidentiality agreement with,
     provide non-public information to, or enter into discussions with, such
     offeror. The Company shall inform the Purchasers immediately upon receipt
     of the Higher Offer in writing of the identity of the offeror and the terms
     and conditions of the Higher Offer. In the event that the Company shall
     receive a Higher Offer prior to the Closing Date and consummate a sale of
     securities or material assets to, or merge with or be acquired by, any
     Person other than the Purchasers, then the Company shall pay to the
     Purchasers, in proportion to the Purchaser's participation in the Bridge
     Financing (as defined in Section 9(xvi) below, $1 million in cash upon the
     closing of such transaction.

     9. Closing Conditions.

     (a) Conditions to Purchaser's Obligations at the Closing. The Purchaser's
obligation to purchase the Shares at the Closing is subject to the fulfillment
on or prior to the Closing of the following conditions, any one or more of which
may be waived in whole or in part by the Purchaser:

          (i) Compliance with Laws. At the Closing, the sale and issuance of the
     Shares shall be legally permitted by all laws and regulations to which the
     Purchaser or the Company is subject.

          (ii) Representations and Warranties. Each of the representations and
     warranties of the Company set forth in Section 4 shall be true and correct
     as if made on the Closing Date.

          (iii) Performance. The Company shall have performed and complied with
     all agreements, obligations and conditions contained in this Agreement that
     are required to be performed or complied with by it on or before the
     Closing Date.

          (iv) Compliance Certificate. The Chief Executive Officer of the
     Company shall deliver to the Purchaser on the Closing Date a certificate
     certifying that the conditions set forth in clauses (ii), (iii), (v) -
     (vii), (x) - (xiii), (xiv), (xv) and (xviii) of this Section 9(a) have been
     fulfilled.

          (v) Stockholder Approval. The Company shall have satisfied the
     stockholder approval requirement provisions of the Nasdaq Stock Market, or
     any other exchange or market on which the Common Stock is then listed or
     traded, with respect to the issuance of 20% or more of a company's capital
     stock.

          (vi) Increased Option Pool. The Company shall have received
     stockholder approval to reserve an additional 4,000,0000 shares of Common
     Stock to be available for grant to management and employees under the
     Company's 1991 Stock Option Plan.

          (vii) Certificate of Designation. The Certificate of Designation shall
     have been duly filed with the Secretary of State of Delaware, and the
     Company shall have delivered a copy thereof to the Purchasers certified as
     filed by the office of the Secretary of State of Delaware.

          (viii) Rights Agreement. The Company shall have executed and delivered
     to the Purchasers the Rights Agreement.

                                       22
   26

          (ix) Voting Agreement. The Company and certain officers, directors,
     and holders of the Company's outstanding Common Stock holding a minimum of
     40% of the outstanding Common Stock shall have executed and delivered to
     the Purchasers the Voting Agreement.

          (x) Shareholders Rights Agreement. The Company shall have terminated
     the existing Shareholders Rights Agreement dated June 13, 1995.

          (xi) Preferred Shares Rights Agreement. Prior to the earlier of thirty
     (30) days from the date hereof or the Closing Date, the Company shall have
     taken all actions required under the Preferred Shares Rights Agreement
     between the Company and Norwest Bank Minnesota, N.A. dated as of April 22,
     1997 (the "RIGHTS PLAN") to permit the issuance of the Shares and the
     consummation of the transactions contemplated by this Agreement, the
     Certificate of Designation, the Voting Agreement and the Rights Agreement,
     without the triggering of any rights thereunder. In addition the Company
     shall have amended the Rights Plan to provide that the Shares held by the
     Purchasers shall receive upon issuance of the Shares the same rights as the
     holders of Common Stock under the Rights Plan.

          (xii) Adverse Change. Since the date of the financial statements
     included in the Company's Quarterly Report on Form 10-Q last filed prior to
     the date of this Agreement, no event which had a Material Adverse Effect
     and no material adverse change in the financial condition or prospects of
     the Company shall have occurred.

          (xiii) Absence of Litigation. There shall be no action, suit,
     investigation or proceeding pending or threatened in any court or before an
     arbitrator or governmental authority that could have a Material Adverse
     Effect on the Company or the purchase of the Shares.

          (xiv) Opinion of Counsel. The Company shall have delivered to the
     Purchasers an opinion of counsel for the Company, dated as of the Closing
     Date, in form and substance reasonably acceptable to the Purchasers.

          (xv) Consents. The Company and the Purchasers shall have obtained all
     consents (including all governmental and regulatory consents, approvals, or
     authorizations required in connection with the valid execution and delivery
     of this Agreement, the Voting Agreement and the Rights Agreement), permits
     and waivers necessary or required to be obtained on or prior to the Closing
     Date for consummation of the transactions contemplated hereby.

          (xvi) Bridge Financing. The Company shall have obtained interim
     financing of $3 million to fund its operations by May 21, 1999 (the "BRIDGE
     FINANCING").

          (xvii) Chief Executive Officer. The new Chief Executive Officer
     acceptable to the Purchasers remains employed by the Company in such
     capacity on the Closing Date.

          (xviii) SBA Matters. The Company shall have executed and delivered to
     the BankAmerica Ventures a Size Status Declaration on SBA Form 480 and an
     Assurance of Compliance on SBA Form 652, and shall have provided to
     BankAmerica Ventures, the information requested by BankAmerica Ventures
     necessary for the preparation by BankAmerica Ventures of a Portfolio
     Financing Report on SBA Form 1031.

          (xix) Proceedings and Documents. All corporate and other proceedings
     in connection with the transactions contemplated in connection with each
     Purchaser's purchase of the Shares and all documents incident thereto shall
     be reasonably satisfactory in form and substance to the Purchasers and the
     Purchasers' counsel, and they shall have received all such counterpart
     original and certified or other copies of such documents as they may
     reasonably request.

          (xx) Delivery of Stock Certificate. The Company shall have caused the
     delivery to the Purchasers of a stock certificate representing the
     Purchasers' ownership of the Shares.

                                       23
   27

     (b) Conditions to Company's Obligations at the Closing. The Company's
obligation to sell and issue the Shares at the Closing is subject to the
fulfillment on or prior to the Closing of the following conditions, any one or
more of which may be waived in whole or in part by the Company:

          (i) Compliance with Laws. At the Closing, sale and issuance of the
     Shares shall be legally permitted by all laws and regulations to which the
     Purchasers or the Company are subject.

          (ii) Representations and Warranties. Each of the representations and
     warranties of the Purchasers set forth in Sections 5 and 6 shall be true
     and correct as if made on the Closing Date.

          (iii) The Purchase Price. The Purchasers shall have delivered to the
     Company the Purchase Price in accordance with Section 3 hereof.

          (iv) Performance. The Purchasers shall have performed and complied
     with all agreements, obligations and conditions contained in this Agreement
     that are required to be performed or complied with on or before the Closing
     Date.

          (v) Other Agreements. The Purchasers shall have executed and delivered
     to the Company the Rights Agreement.

          (vi) Consents. The Company and the Purchasers shall have obtained all
     consents (including all governmental and regulatory consents, approvals, or
     authorizations required in connection with the valid execution and delivery
     of this Agreement, the Voting Agreement and the Rights Agreement), permits
     and waivers necessary or required to be obtained on or prior to the Closing
     Date for consummation of the transactions contemplated hereby.

          (vii) Proceedings and Documents. All corporate and other proceedings
     in connection with the transactions contemplated in connection with the
     sale and issuance of the Shares and all documents incident thereto shall be
     reasonably satisfactory in form and substance to the Company and the
     Company's counsel, and they shall have received all such counterpart
     original and certified or other copies of such documents as they may
     reasonably request.

     10. General Provisions.

     (a) Notices. All notices and other communication required or appropriate to
be given hereunder shall be in writing and shall be delivered by hand or mailed
by certified mail, return receipt requested, or sent by telex or facsimile (in
which case a confirming copy shall also be sent by certified mail or courier),
to the following respective addresses or to such other addresses as may be
specified in any notice delivered or mailed as above provided:

        (i)  If to the Purchasers, to:

           BankAmerica Ventures
           950 Tower Lane, Suite 700
           Foster City, California 94404
           Telephone: (650) 378-6000
           Facsimile: (650) 378-6040

           Attention: Mark Brooks and Robert S. Fore

           and

           Morgan Stanley Dean Witter Venture Partners
           1221 Avenue of America, 33rd floor
           New York, NY 10020
           Phone: 212-762-8683
           Fax: 212-762-8424

           Attention: Fazle Husain

                                       24
   28

             with a copy to:

             Cooley Godward LLP
           Five Palo Alto Square
           Palo Alto, CA 94306-2155
           Telephone: (650) 843-5000
           Facsimile: (650) 857-0663

           Attention: Julia L. Davidson, Esq.

           and

           Davis, Polk, Wardwell
           450 Lexington Ave.
           New York, NY 10017
           Telephone 212-450-4350
           Facsimile: 212-450-5515

           Attention: John Bick, Esq.

        (ii) If to the Company to:

           Cardiac Pathways Corporation
           995 Benecia Avenue
           Sunnyvale, California 94086
           Telephone: (408) 737-0505
           Facsimile: (408) 737-1700

           Attention: G. Michael Latta, Chief Financial Officer

           with a copy to:

           Wilson Sonsini Goodrich & Rosati
           650 Page Mill Road
           Palo Alto, CA 94304-1050
           Telephone: (650) 493-9300
           Facsimile: (650) 845-5000

           Attention: Chris F. Fennell, Esq.

Any notice or other communication delivered by hand or mailed shall be deemed to
have been delivered on the date on which such notice or communication is
delivered by hand, or in the case of certified mail deposited with the
appropriate postal authorities on the date when such notice or communication is
actually received, and in any other case shall be deemed to have been delivered
on the date on which such notice or communication is actually received.

     (b) Governing Law. The parties have agreed that this Agreement will be
governed by and construed in accordance with the laws of the State of
California.

     (c) Amendments. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the holders of a majority of the Shares and
Conversion Shares then outstanding. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each holder of any
securities purchased under this Agreement at the time outstanding (including
securities into which such securities are convertible), each future holder of
all such securities, and the Company.

                                       25
   29

     (d) Assignment.

          (i) Except as set forth in this Section 10(d), none of the rights or
     obligations of the Company and each Purchaser may be assigned or
     transferred without the prior written consent of the other party hereto.

          (ii) The Company and each Purchaser may assign all of its rights and
     obligations under this Agreement in connection with a merger or similar
     reorganization or the sale of all or substantially all of its assets. This
     Agreement shall survive any such merger or reorganization of the Company or
     a Purchaser with or into, or such sale of assets to, another party and no
     consent for such merger, reorganization or sale shall be required
     hereunder.

          (iii) Each Purchaser may assign its rights and obligations to a
     subsidiary, parent, LLC, general partner, limited partner, retired partner,
     member or retired member of a Purchaser, provided the assignee is not
     deemed by the Board of Directors of the Company, in its reasonable
     judgment, to be a competitor of the Company and provided further such
     assignee agrees, prior to the transfer, in writing with the Company to
     comply with all the provisions of this Agreement applicable to such
     Purchaser.

          (iv) This Agreement shall be binding upon and inure to the benefit of
     the successors and permitted assigns of the parties. Any assignment not in
     accordance with this Agreement shall be void.

     (e) Expenses. The Company shall reimburse the Purchasers for all reasonable
legal, accounting and due diligence expenses incurred in connection with this
Agreement and the transactions contemplated hereby, regardless of whether or not
the Closing occurs.

     (f) Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

     (g) Entire Agreement. This Agreement, the Voting Agreement and the Rights
Agreement, together with the Exhibits and other documents attached hereto and
thereto, constitute the entire contract between the parties with respect to the
subject matter hereof and thereof, and no party will be liable or bound to the
other in any manner by any representations, warranties or covenants except as
specifically set forth herein and therein.

     (h) Titles. The titles of the Sections of this Agreement are inserted for
reference only, and are not to be considered as part of this Agreement in
construing this Agreement.

     (i) Termination. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned, at any time prior to the Closing, whether
before or after approval of the sale of Shares by the stockholders of the
Company:

          (i) by mutual consent of the Company and of a majority in interest of
     Purchasers as set forth on Schedule A;

          (ii) by either a majority in interest of Purchasers as set forth on
     Schedule A or the Company, if the Closing shall not have occurred by
     October 31, 1999 (unless the failure to consummate the sale of Shares is
     attributable to a failure on the part of the party seeking to terminate
     this Agreement to perform any material obligation required to be performed
     by such party at or prior to the Closing);

          (iii) by a majority in interest of Purchasers as set forth on Schedule
     A, if the required approval of the Company's stockholders shall not have
     been obtained by reason of the failure to obtain the required vote at a
     duly held meeting of stockholders or at any adjournment thereof;

          (iv) by either a majority in interest of Purchasers as set forth on
     Schedule A or the Company, if there shall be any law or regulation of any
     Governmental Entity that makes consummation of the purchase of the Shares
     illegal or otherwise prohibited or if any judgment, injunction, order or
     decree of any governmental entity prohibiting such transaction is entered
     and such judgment, injunction, order or decree shall have become final and
     nonappealable;

          (v) by a majority in interest of Purchasers as set forth on Schedule
     A, if there has been a breach of any covenant or a breach of any
     representation or warranty on the part of the Company, such that the

                                       26
   30

     closing conditions set forth in Section 9 would not be satisfied or if the
     Company has not secured interim financing as specified in Section 9(xvi) by
     May 21, 1999.

     (j) Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 10(i) hereof by the Company, or a majority in
interest of Purchasers, written notice thereof shall forthwith be given to the
other party or parties specifying the provision hereof pursuant to which such
termination is made, and this Agreement shall become void and have no effect,
and there shall be no liability hereunder on the part of Purchasers. Nothing in
this Section 10(j) shall relieve any party to this Agreement of liability for
breach of this Agreement or for representations which were incorrect when made.

                                       27
   31

     IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first set forth above.

                                          "COMPANY"

                                          CARDIAC PATHWAYS CORPORATION

                                          By: /s/ WILLIAM N. STARLING

                                            ------------------------------------
                                              William N. Starling
                                            President and Chief Executive
                                              Officer

                                          "PURCHASERS"

                                          BANKAMERICA VENTURES


                                          By: /s/ ANCHIE Y. KUO

                                            ------------------------------------
                                            Title: President and Managing
                                              Director

                                          MORGAN STANLEY VENTURE PARTNERS III,
                                          L.P.

                                          By: Morgan Stanley Venture Partners
                                              III, L.L.C.
                                            its General Partner

                                          By: Morgan Stanley Venture Capital
                                              III, Inc.,
                                            its Institutional Managing Member

                                          By: /s/ FAZLE HUSAIN
                                            ------------------------------------
                                          Name: Fazle Husain
                                          Title: General Partner
                                          Address: 1221 Avenue of the Americas
                                               New York, New York 10020
                                               Fax: (212) 762-8424

                                          MORGAN STANLEY VENTURE INVESTORS III,
                                          L.P.

                                          By: Morgan Stanley Venture Partners
                                              III, L.L.C.
                                            its General Partner

                                          By: Morgan Stanley Venture Capital
                                              III, Inc.,
                                            its Institutional Managing Member

                                          By: /s/ FAZLE HUSAIN
                                            ------------------------------------
                                          Name: Fazle Husain
                                          Title: General Partner
                                          Address: 1221 Avenue of the Americas
                                               New York, New York 10020
                                               Fax: (212) 762-8424

                                       28
   32

                                          MORGAN STANLEY VENTURE PARTNERS
                                          ENTREPRENEUR FUND, L.P.

                                          By: Morgan Stanley Venture Partners
                                              III, L.L.C.
                                            its General Partner
                                          By: Morgan Stanley Venture Capital
                                              III, Inc.,
                                            its Institutional Managing Member

                                          By: /s/ FAZLE HUSAIN
                                            ------------------------------------
                                          Name: Fazle Husain
                                          Title: General Partner
                                          Address: 1221 Avenue of the Americas
                                               New York, New York 10020
                                               Fax: (212) 762-8424

                                          VAN WAGONER CAPITAL MANAGEMENT

                                          By: /s/ GARRETT R. VAN WAGONER
                                            ------------------------------------
                                          Name: Garrett R. Van Wagoner
                                          Title: President
                                          Address: 345 California Street
                                               San Francisco, CA
                                               Fax: (415) 835-5050

                                          STATE OF WISCONSIN INVESTMENT BOARD

                                          By: /s/ JOHN F. NELSON
                                            ------------------------------------
                                          Name: John Nelson
                                          Title: Investment Director
                                          Address:
                                               Fax:

                                          /s/ THOMAS FOGARTY
                                          --------------------------------------
                                          THOMAS FOGARTY

                                       29
   33

                                   SCHEDULE A

                             SCHEDULE OF PURCHASERS



                                                              NUMBER OF
                         PURCHASERS                            SHARES
                         ----------                           ---------
                                                           
BankAmerica Ventures........................................   10,000
Morgan Stanley Venture Partners III, L.P....................    8,773
Morgan Stanley Venture Investors III, L.P...................      842
Morgan Stanley Venture Partners Entrepreneurs Fund, L.P.....      385
Van Wagoner Capital Management..............................    5,000
State of Wisconsin Investment Board.........................    6,000
Thomas Fogarty..............................................      500


                                      -30-
   34
                                   Exhibit A




                           Certificate of Designation





                               [See Exhibit 3.3]
   35
                                   Exhibit C




                         Registration Rights Agreement




                               [See Exhibit 4.2]
   36
                                   Exhibit D




                                Voting Agreement




                              [See Exhibit 2.1.1]