Exhibit 10.4

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED OR ANY APPLICABLE STATE SECURITIES LAW,
AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION THEREOF UNDER SUCH ACT OR PURSUANT TO RULE 144 AND AN EXEMPTION
UNDER APPLICABLE STATE LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE CORPORATION AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.

 

WARRANT TO PURCHASE STOCK

 

Corporation:  Endocardial Solutions, Inc., a Delaware corporation
Number of Shares:  35,000
Class of Stock:  Common Stock
Initial Exercise Price:  $5.29 (equal to the average share price for the prior
10 days trading period).
Issue Date:  June 28, 2001
Expiration Date:  June 28, 2006

 

            THIS WARRANT CERTIFIES THAT, for the agreed upon value of $1.00 and
for other good and valuable consideration, SILICON VALLEY BANK ("Holder") is
entitled to purchase the number of fully paid and nonassessable shares of the
class of securities (the "Shares") of the corporation (the "Company") at the
initial exercise price per Share (the "Warrant Price") all as set forth above
and as adjusted pursuant to Article 2 of this Warrant, subject to the provisions
and upon the terms and conditions set forth in this Warrant.

ARTICLE 1. EXERCISE.

                        1.1        Method of Exercise.  Holder may exercise this
Warrant by delivering a duly executed Notice of Exercise in substantially the
form attached as Appendix 1 to the principal office of the Company.  Unless
Holder is exercising the conversion right set forth in Section 1.2, Holder shall
also deliver to the Company a check for the aggregate Warrant Price for the
Shares being purchased.

                        1.2        Conversion Right.  In lieu of exercising this
Warrant as specified in Section 1.1, Holder may from time to time convert this
Warrant, in whole or in part, into a number of Shares determined by dividing (a)
the aggregate fair market value of the Shares or other securities otherwise
issuable upon exercise of this Warrant minus the aggregate Warrant Price of such
Shares by (b) the fair market value of one Share.  The fair market value of the
Shares shall be determined pursuant to Section 1.3.

                        1.3        Fair Market Value.  If the Shares are traded
in a public market, the fair market value of the Shares shall be the closing
price of the Shares (or the closing price of the Company's stock into which the
Shares are convertible) reported for the business day immediately before Holder
delivers its Notice of Exercise to the Company.  If the Shares are not traded in
a public market, the Board of Directors of the Company shall determine fair
market value in its reasonable good faith judgment.

                        1.4        Delivery of Certificate and New Warrant. 
Promptly after Holder exercises or converts this Warrant, the Company shall
deliver to Holder certificates for the Shares acquired and, if this Warrant has
not been fully exercised or converted and has not expired, a new Warrant
representing the Shares not so acquired.

                        1.5        Replacement of Warrants.  On receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant and, in the case of loss, theft or destruction, on
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company or, in the case of mutilation, or surrender and cancellation of this
Warrant, the Company shall execute and deliver, in lieu of this Warrant, a new
warrant of like tenor.

                        1.6        Assumption on Sale, Merger, or Consolidation
of the Company.

                                    1.6.1     "Acquisition".  For the purpose of
this Warrant, "Acquisition" means any sale, license, or other disposition of all
or substantially all of the assets of the Company, or any reorganization,
consolidation, or merger of the Company where the holders of the Company's
securities before the transaction beneficially own less than 50% of the
outstanding voting securities of the surviving entity after the transaction.

                                    1.6.2     Assumption of Warrant.  Upon the
closing of any Acquisition, the successor entity shall assume the obligations of
this Warrant, and this Warrant shall be exercisable for the same securities,
cash, and property as would be payable for the Shares issuable upon exercise of
the unexercised portion of this Warrant as if such Shares were outstanding on
the record date for the Acquisition and subsequent closing.  The Initial
Exercise Price and/or number of Shares shall be adjusted accordingly.

ARTICLE 2. ADJUSTMENTS TO THE SHARES.

                        2.1        Stock Dividends, Splits, Etc.  If the Company
declares or pays a dividend on its common stock (or the Shares if the Shares are
securities other than common stock) payable in common stock, or other
securities, subdivides the outstanding common stock into a greater amount of
common stock, or, if the Shares are securities other than common stock,
subdivides the Shares in a transaction that increases the amount of common stock
into which the Shares are convertible, then upon exercise of this Warrant, for
each Share acquired, Holder shall receive, without cost to Holder, the total
number and kind of securities to which Holder would have been entitled had
Holder owned the Shares of record as of the date the dividend or subdivision
occurred.  If the outstanding shares are combined or consolidated, by
reclassification or otherwise, into a lesser number of shares, the Initial
Exercise Price shall be proportionately increased.

                        2.2        Reclassification, Exchange, Combinations or
Substitution.  Upon any reclassification, exchange, substitution, or other event
that results in a change of the number and/or class of the securities issuable
upon exercise or conversion of this Warrant, Holder shall be entitled to
receive, upon exercise or conversion of this Warrant, the number and kind of
securities and property that Holder would have received for the Shares if this
Warrant had been exercised immediately before such reclassification, exchange,
substitution, or other event.  Such an event shall include any automatic
conversion of the outstanding or issuable securities of the Company of the same
class or series as the Shares to common stock pursuant to the terms of the
Company's Articles of Incorporation upon the closing of a registered public
offering of the Company's common stock.  The Company or its successor shall
promptly issue to Holder a new Warrant for such new securities or other
property.  The new Warrant shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article 2 including, without limitation, adjustments to the Initial Exercise
Price and to the number of securities or property issuable upon exercise of the
new Warrant.  The provisions of this Section 2.2 shall similarly apply to
successive reclassifications, exchanges, substitutions, or other events.

                        2.3        Adjustments for Diluting Issuances.  The
Warrant Price and the number of Shares issuable upon exercise of this Warrant
or, if the Shares are Preferred Stock, the number of shares of common stock
issuable upon conversion of the Shares, shall be subject to adjustment, from
time to time in the manner set forth in the Company’s Articles (Certificate) of
Incorporation.  The provisions set forth for the Shares in the Company’s
Articles (Certificate) of Incorporation relating to the above in effect as of
the Issue Date may not be amended, modified or waived, without the prior written
consent of Holder unless such amendment, modification or waiver affects Holder
in the same manner as they affect all other shareholders of the same series of
shares granted to the Holder.

                        2.4        No Impairment.  The Company shall not, by
amendment of its Articles of Incorporation or through a reorganization, transfer
of assets, consolidation, merger, dissolution, issue, or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms to be observed or performed under this Warrant by the
Company, but shall at all times in good faith assist in carrying out of all the
provisions of this Article 2 and in taking all such action as may be necessary
or appropriate to protect Holder's rights under this Article against impairment.

                        2.5        Fractional Shares.  No fractional Shares
shall be issuable upon exercise or conversion of the Warrant and the number of
Shares to be issued shall be rounded down to the nearest whole Share.  If a
fractional share interest arises upon any exercise or conversion of the Warrant,
the Company shall eliminate such fractional share interest by paying Holder the
amount computed by multiplying the fractional interest by the fair market value
of a full Share.

                        2.6        Certificate as to Adjustments.  Upon each
adjustment of the Warrant Price, the Company shall promptly notify Holder in
writing, and, at the Company’s expense, promptly compute such adjustment, and
furnish Holder with a certificate of its Chief Financial Officer setting forth
such adjustment and the facts upon which such adjustment is based. The Company
shall, upon written request, furnish Holder a certificate setting forth the
Warrant Price in effect upon the date thereof and the series of adjustments
leading to such Warrant Price.

ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.

                        3.1        Representations and Warranties.  The Company
represents and warrants to the Holder that all Shares which may be issued upon
the exercise of the purchase right represented by this Warrant, and all
securities, if any, issuable upon conversion of the Shares, shall, upon
issuance, be duly authorized, validly issued, fully paid and nonassessable, and
free of any liens and encumbrances except for restrictions on transfer provided
for herein or under applicable federal and state securities laws.

                        3.2        Registration of Securities.  The Company
agrees that if, in the 12 months following the Issue Date, it files a
registration statement with the Securities and Exchange Commission to register
the sale of shares of the Company's equity securities and if shares owned by
selling shareholders are able to be included in such registration statement, it
will, to the extent possible, include the Shares in such registration statement.

ARTICLE 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER.  The Holder represents and
warrants to the Company as follows:

                        4.1        Purchase for Own Account.  Except for
transfers to Holder’s affiliates, this Warrant and the securities to be acquired
upon exercise of this Warrant by the Holder will be acquired for investment for
the Holder’s account, not as a nominee or agent, and not with a view to the
public resale or distribution within the meaning of the 1933 Act, and the Holder
has no present intention of selling, granting any participation in, or otherwise
distributing the same.  If not an individual, the Holder also represents that
the Holder has not been formed for the specific purpose of acquiring this
Warrant or the Shares.

                        4.2        Disclosure of Information.  The Holder has
received or has had full access to all the information it considers necessary or
appropriate to make an informed investment decision with respect to the
acquisition of this Warrant and its underlying securities.  The Holder further
has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of this Warrant and its
underlying securities and to obtain additional information (to the extent the
Company possessed such information or could acquire it without unreasonable
effort or expense) necessary to verify any information furnished to the Holder
or to which the Holder has access.

                        4.3        Investment Experience.  The Holder
understands that the purchase of this Warrant and its underlying securities
involves substantial risk.  The Holder:  (i) has experience as an investor in
securities of companies in the development stage and acknowledges that the
Holder is able to fend for itself, can bear the economic risk of such Holder’s
investment in this Warrant and its underlying securities and has such knowledge
and experience in financial or business matters that the Holder is capable of
evaluating the merits and risks of its investment in this Warrant and its
underlying securities and/or (ii) has a preexisting personal or business
relationship with the Company and certain of its officers, directors or
controlling persons of a nature and duration that enables the Holder to be aware
of the character, business acumen and financial circumstances of such persons.

                        4.4        Accredited Investor Status.  The Holder is an
“accredited investor” within the meaning of Regulation D promulgated under the
1933 Act.

ARTICLE 5. MISCELLANEOUS.

                        5.1        Term:  This Warrant is exercisable in whole
or in part at any time and from time to time on or before the Expiration Date.

                        5.2        Legends.  This Warrant and the Shares (and
the securities issuable, directly or indirectly, upon conversion of the Shares,
if any) shall be imprinted with a legend in substantially the following form:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED OR UNDER ANY APPLICABLE STATE LAWS, AND MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THERE OF UNDER SUCH ACT
AND AN EXEMPTION UNDER APPLICABLE STATE LAW OR PURSUANT TO RULE 144 OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED.

                        5.3        Compliance with Securities Laws on Transfer. 
This Warrant and the Shares issuable upon exercise of this Warrant (and the
securities issuable, directly or indirectly, upon conversion of the Shares, if
any) may not be transferred or assigned in whole or in part without compliance
with applicable federal and state securities laws by the transferor and the
transferee (including, without limitation, the delivery of investment
representation letters and legal opinions reasonably satisfactory to the
Company, as reasonably requested by the Company).  The Company shall not require
Holder to provide an opinion of counsel if the transfer is to an affiliate of
Holder or if there is no material question as to the availability of current
information as referenced in Rule 144(c), Holder represents that it has complied
with Rule 144(d) and (e) in reasonable detail, the selling broker represents
that it has complied with Rule 144(f), and the Company is provided with a copy
of Holder's notice of proposed sale.

                        5.4        Transfer Procedure.  Subject to the
provisions of Section 5.3, Holder may transfer all or part of this Warrant or
the Shares issuable upon exercise of this Warrant (or the securities issuable,
directly or indirectly, upon conversion of the Shares, if any) to Silicon Valley
Bancshares, or The Silicon Valley Bank Foundation, or to any affiliate of Holder
at any time without prior notice to Company; provided, however, if Holder
transfers this warrant to any other transferee, Holder will give the Company
notice of the portion of the Warrant being transferred with the name, address
and taxpayer identification number of the transferee and surrendering this
Warrant to the Company for reissuance to the transferee(s) (and Holder if
applicable).  The Company may refuse to transfer this Warrant to any person who
directly competes with the Company unless the Company’s stock is publicly
traded.

                        5.5        Notices.  All notices and other
communications from the Company to the Holder, or vice versa, shall be deemed
delivered and effective when given personally or mailed by first-class
registered or certified mail, postage prepaid, at such address as may have been
furnished to the Company or the Holder, as the case may be, in writing by the
Company or such holder from time to time.  All notices to the Holder shall be
addressed as follows:

Silicon Valley Bank
Attn:  Treasury Department
3003 Tasman Drive, HG 110
Santa Clara, CA 95054

                        5.6        Waiver.  This Warrant and any term hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought.

                        5.7        Attorney’s Fees.  In the event of any dispute
between the parties concerning the terms and provisions of this Warrant, the
party prevailing in such dispute shall be entitled to collect from the other
party all costs incurred in such dispute, including reasonable attorney’s fees.

                        5.8        Automatic Conversion upon Expiration.  In the
event that, upon the Expiration Date, the fair market value of one Share (or
other security issuable upon the exercise hereof) as determined in accordance
with Section 1.4 above is greater than the Exercise Price in effect on such
date, then this Warrant shall automatically be deemed on and as of such date to
be converted pursuant to Section 1.2 above as to all Shares (or such other
securities) for which it shall not previously have been exercised or converted,
and the Company shall promptly deliver a certificate representing the Shares (or
such other securities) issued upon such conversion to the Holder.

                        5.9        Governing Law.  This Warrant shall be
governed by and construed in accordance with the laws of the State of
California, without giving effect to its principles regarding conflicts of law.

"COMPANY"
Endocardial Solutions, Inc.

By: /s/ James W. Bullock

 

Name: James W. Bullock
            (Print)
            Title:   President

 

By: /s/ Michael Fredrick

 

Name: Michael Fredrick
            (Print)
            Title:   Controller

 

“HOLDER”
Silicon Valley Bank

 

By:  /s/ Jay McNeil

Name: Jay McNeil

Title: Vice President

 

 

 

APPENDIX 1

 

NOTICE OF EXERCISE

 

            1.         Holder elects to purchase ___________ shares of the
Common/Series ______ Preferred [strike one] Stock of Endocardial Solutions, Inc.
pursuant to the terms of the attached Warrant, and tenders payment of the
purchase price of the shares in full.

            1.         Holder elects to convert the attached Warrant into
Shares/cash [strike one] in the manner specified in the Warrant.  This
conversion is exercised for _____________________ of the Shares covered by the
Warrant.

            [Strike paragraph that does not apply.]

            2.         Please issue a certificate or certificates representing
the shares in the name specified below:

 

                                                                                   
            Holders Name

                                                                                   

                                                                                   
            (Address)

            3.         The undersigned represents it is acquiring the shares
solely for its own account and not as a nominee for any other party and not with
a view toward the resale or distribution except in compliance with applicable
securities laws.

 

 

HOLDER:

                                                           

 

 

By:                                                      

Name:                                                  

Title:                                                    

 

                                   

            (Date)