Cardiac Pathways Announces Approval of Convertible Preferred Stock Financing.

SUNNYVALE, Calif.--(BW HealthWire)--July 22, 1999--

Cardiac Pathways Corporation (Nasdaq:CPWY) today announced that its stockholders have approved a convertible preferred stock financing (the "Financing") that, if closed, would result in a significant infusion of capital into the Company.

In addition to approving the Financing, the Company's stockholders also approved the following matters at the Company's special meeting of stockholders held July 20, 1999: (i) a one-for-five reverse stock split of all outstanding shares of the Company's common stock (stockholders will be contacted by the Company's transfer agent regarding exchanging their stock certificates and should not send their certificates until contacted); (ii) an amendment of the Company's certificate of incorporation to increase the number of authorized shares of common stock (that the Company does not intend to implement in light of the passage of the reverse stock split); and (iii) an amendment of the Company's 1991 Stock Plan to reserve 4.0 million additional shares (pre-split) of the Company's common stock for grant thereunder.

The Company anticipates that the Financing will close as soon as practicable, upon completion of the conditions to closing.

In addition, the company intends to file a Certificate of Amendment to its Certificate of Incorporation to effect the one-for-five reverse stock split. The Company's transfer agent will be contacting stockholders shortly and requesting that stockholders tender their certificates in exchange for certificates reflecting the post-split shares.

No fractional shares or cash payments will be issued. The number of post-split shares will be rounded up or down to the nearest whole share, as the case may be. Once the reverse split is effected, the Company's shares will trade under the symbol "CPWYD" for 30 days to indicate that a split has occurred.

The Financing has been led by BankAmerica Ventures and Morgan Stanley Venture Partners, and the other investors are certain accredited investors, including certain current shareholders of the Company. If the Financing closes, the Company will issue approximately 32,000 shares of Series B Preferred Stock at a purchase price of $1,000 per share raising approximately $32.0 million.

Approximately $32.0 million of the Financing is currently committed, subject to the satisfaction of certain closing conditions. Each share of Series B Preferred Stock will initially be convertible into 200 shares of the Company's common stock (after the proposed reverse stock split described below).

The conversion ratio of the Series B Preferred Stock will be subject to adjustment for price based anti-dilution. The Series B Preferred Stock will be entitled to a cumulative dividend of 11% of the purchase price per share per annum, and will have a liquidation preference in certain circumstances equal to the initial purchase price plus accrued but unpaid dividends. If the Financing closes, the holders of Series B Preferred Stock will vote on all matters presented to the stockholders on an as-converted to Common Stock basis.

In addition, certain matters, including a merger or acquisition of the Company, will require the approval of 50% of the holders of Series B Preferred Stock voting as a separate class.

The holders of the Series B Preferred Stock will have a right of first offer with respect to future financing by the Company and will be entitled to certain registration rights.

One or more current stockholders of the Company will participate in the Financing. The effect of the Financing on these stockholders will be different from the effects on other stockholders in that participation will increase their particular ownership in the Company.

Statements included in this release that are not historical or current facts and which relate to the Financing, are "forward-looking-statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. These risks and uncertainties include, but are not limited to, the completion of the Financing on substantially the same terms described in this release.

This letter is neither an offer to sell nor a solicitation of an offer to buy any securities of the company. The securities described in this notice have not been registered for sale by the company under the Securities Act of 1993 as amended (The "Act") or any state securities laws and may not be so offered or sold absent such registration and in accordance with applicable state securities laws or an exemption from the registration requirements thereof.