Exhibit 10.4

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

 

**WARRANT TO PURCHASE STOCK**

 

Corporation:  Endocardial Solutions, Inc., a DelawarecorporationNumber of Shares:  35,000Class of Stock:  Common StockInitial Exercise Price:  $5.29(equal to the average share price for the prior 10 days trading period).Issue Date:  June 28, 2001Expiration 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 andnonassessable shares of the class of securities (the "Shares") of thecorporation (the "Company") at the initial exercise price per Share(the "Warrant Price") all as set forth above and as adjusted pursuantto Article 2 of this Warrant, subject to the provisions and upon the termsand conditions set forth in this Warrant. 

ARTICLE 1. EXERCISE.

                        1.1        Methodof Exercise.  Holder may exercisethis Warrant by delivering a duly executed Notice of Exercise in substantiallythe form attached as Appendix 1 to the principal office of the Company.  Unless Holder is exercising the conversionright set forth in Section 1.2, Holder shall also deliver to the Company acheck for the aggregate Warrant Price for the Shares being purchased.

                        1.2        ConversionRight.  In lieu of exercising thisWarrant as specified in Section 1.1, Holder may from time to time convert thisWarrant, 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 otherwiseissuable upon exercise of this Warrant minus the aggregate Warrant Price ofsuch Shares by (b) the fair market value of one Share.  The fair market value of the Shares shall bedetermined pursuant to Section 1.3.

                        1.3        FairMarket Value.  If the Shares aretraded in a public market, the fair market value of the Shares shall be theclosing price of the Shares (or the closing price of the Company's stock intowhich the Shares are convertible) reported for the business day immediatelybefore Holder delivers its Notice of Exercise to the Company.  If the Shares are not traded in a publicmarket, the Board of Directors of the Company shall determine fair market valuein its reasonable good faith judgment.

                        1.4        Deliveryof Certificate and New Warrant. Promptly after Holder exercises or converts this Warrant, the Companyshall deliver to Holder certificates for the Shares acquired and, if thisWarrant has not been fully exercised or converted and has not expired, a newWarrant representing the Shares not so acquired.

                        1.5        Replacementof Warrants.  On receipt of evidencereasonably satisfactory to the Company of the loss, theft, destruction ormutilation of this Warrant and, in the case of loss, theft or destruction, ondelivery of an indemnity agreement reasonably satisfactory in form and amountto the Company or, in the case of mutilation, or surrender and cancellation ofthis Warrant, the Company shall execute and deliver, in lieu of this Warrant, anew warrant of like tenor.

                        1.6        Assumptionon 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 theCompany, or any reorganization, consolidation, or merger of the Company wherethe holders of the Company's securities before the transaction beneficially ownless than 50% of the outstanding voting securities of the surviving entityafter the transaction.

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

ARTICLE 2. ADJUSTMENTSTO THE SHARES.

                        2.1        StockDividends, Splits, Etc.  If theCompany declares or pays a dividend on its common stock (or the Shares if theShares are securities other than common stock) payable in common stock, orother securities, subdivides the outstanding common stock into a greater amountof common stock, or, if the Shares are securities other than common stock,subdivides the Shares in a transaction that increases the amount of commonstock into which the Shares are convertible, then upon exercise of thisWarrant, for each Share acquired, Holder shall receive, without cost to Holder,the total number and kind of securities to which Holder would have beenentitled had Holder owned the Shares of record as of the date the dividend orsubdivision occurred.  If theoutstanding shares are combined or consolidated, by reclassification orotherwise, into a lesser number of shares, the Initial Exercise Price shall beproportionately increased.

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

                        2.3        Adjustmentsfor Diluting Issuances.  The WarrantPrice and the number of Shares issuable upon exercise of this Warrant or, ifthe Shares are Preferred Stock, the number of shares of common stock issuableupon conversion of the Shares, shall be subject to adjustment, from time totime in the manner set forth in the Company’s Articles (Certificate) ofIncorporation.  The provisions set forthfor the Shares in the Company’s Articles (Certificate) of Incorporationrelating 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 suchamendment, modification or waiver affects Holder in the same manner as theyaffect all other shareholders of the same series of shares granted to the Holder.

                        2.4        NoImpairment.  The Company shall not,by amendment of its Articles of Incorporation or through a reorganization,transfer of assets, consolidation, merger, dissolution, issue, or sale ofsecurities or any other voluntary action, avoid or seek to avoid the observanceor performance of any of the terms to be observed or performed under thisWarrant by the Company, but shall at all times in good faith assist in carryingout of all the provisions of this Article 2 and in taking all such action asmay be necessary or appropriate to protect Holder's rights under this Articleagainst impairment. 

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

                        2.6        Certificateas to Adjustments.  Upon eachadjustment of the Warrant Price, the Company shall promptly notify Holder inwriting, and, at the Company’s expense, promptly compute such adjustment, andfurnish Holder with a certificate of its Chief Financial Officer setting forthsuch adjustment and the facts upon which such adjustment is based. The Companyshall, upon written request, furnish Holder a certificate setting forth theWarrant Price in effect upon the date thereof and the series of adjustmentsleading to such Warrant Price.

ARTICLE 3. REPRESENTATIONSAND COVENANTS OF THE COMPANY.

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

                        3.2        Registrationof Securities.  The Company agreesthat if, in the 12 months following the Issue Date, it files a registrationstatement with the Securities and Exchange Commission to register the sale ofshares of the Company's equity securities and if shares owned by sellingshareholders 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.  TheHolder represents and warrants to the Company as follows:

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

                        4.2        Disclosureof Information.  The Holder hasreceived or has had full access to all the information it considers necessaryor appropriate to make an informed investment decision with respect to theacquisition of this Warrant and its underlying securities.  The Holder further has had an opportunity toask questions and receive answers from the Company regarding the terms andconditions of the offering of this Warrant and its underlying securities and toobtain additional information (to the extent the Company possessed suchinformation or could acquire it without unreasonable effort or expense)necessary to verify any information furnished to the Holder or to which theHolder has access.

                        4.3        InvestmentExperience.  The Holder understandsthat the purchase of this Warrant and its underlying securities involvessubstantial risk.  The Holder:  (i) has experience as an investor insecurities of companies in the development stage and acknowledges that theHolder is able to fend for itself, can bear the economic risk of such Holder’sinvestment in this Warrant and its underlying securities and has such knowledgeand experience in financial or business matters that the Holder is capable ofevaluating the merits and risks of its investment in this Warrant and itsunderlying securities and/or (ii) has a preexisting personal or businessrelationship with the Company and certain of its officers, directors orcontrolling persons of a nature and duration that enables the Holder to beaware of the character, business acumen and financial circumstances of suchpersons.

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

ARTICLE5. MISCELLANEOUS.

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

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

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIESACT OF 1933, AS AMENDED OR UNDER ANY APPLICABLE STATE LAWS, AND MAY NOT BESOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT AND AN EXEMPTION UNDER APPLICABLE STATE LAW OR PURSUANT TORULE 144 OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATIONAND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

                        5.3        Compliancewith Securities Laws on Transfer. This Warrant and the Shares issuable upon exercise of this Warrant (andthe securities issuable, directly or indirectly, upon conversion of the Shares,if any) may not be transferred or assigned in whole or in part withoutcompliance with applicable federal and state securities laws by the transferorand the transferee (including, without limitation, the delivery of investmentrepresentation letters and legal opinions reasonably satisfactory to theCompany, as reasonably requested by the Company).  The Company shall not require Holder to provide an opinion ofcounsel if the transfer is to an affiliate of Holder or if there is no materialquestion as to the availability of current information as referenced in Rule144(c), Holder represents that it has complied with Rule 144(d) and (e) inreasonable detail, the selling broker represents that it has complied with Rule144(f), and the Company is provided with a copy of Holder's notice of proposedsale.

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

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

Silicon Valley BankAttn:  Treasury Department3003 Tasman Drive, HG 110Santa Clara, CA 95054

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

                        5.7        Attorney’sFees.  In the event of any disputebetween the parties concerning the terms and provisions of this Warrant, theparty prevailing in such dispute shall be entitled to collect from the otherparty 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 theexercise hereof) as determined in accordance with Section 1.4 above is greaterthan the Exercise Price in effect on such date, then this Warrant shallautomatically be deemed on and as of such date to be converted pursuant to Section1.2 above as to all Shares (or such other securities) for which it shall notpreviously have been exercised or converted, and the Company shall promptlydeliver a certificate representing the Shares (or such other securities) issuedupon such conversion to the Holder.

                        5.9        GoverningLaw.  This Warrant shall be governedby 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.         Holderelects to purchase ___________ shares of the Common/Series ______ Preferred[strike one] Stock of Endocardial Solutions, Inc. pursuant to the terms of theattached Warrant, and tenders payment of the purchase price of the shares infull.

            1.         Holderelects to convert the attached Warrant into Shares/cash [strike one] in themanner specified in the Warrant.  Thisconversion is exercised for _____________________ of the Shares covered by theWarrant.

            [Strike paragraph that does not apply.]

            2.         Pleaseissue a certificate or certificates representing the shares in the namespecified below:

 

                                                                                                Holders Name

                                                                                    

                                                                                                (Address)

            3.         The undersigned represents it isacquiring the shares solely for its own account and not as a nominee for anyother party and not with a view toward the resale or distribution except incompliance with applicable securities laws.

 

 

HOLDER:

                                                            

 

 

By:                                                       

Name:                                                   Title:                                                     

 

                                    

            (Date)