Document:

Prepared by MerrillDirect

Exhibit
10.3

             This LOAN
AND SECURITY AGREEMENT dated June 28, 2001, between SILICON VALLEY
BANK ("Bank"), whose address is 3003 Tasman Drive, Santa Clara,
California 95054 with a loan production office located at 5775 Wayzata Drive,
Suite 700, Minneapolis, Minnesota  55416
and ENDOCARDIAL SOLUTIONS, INC. ("Borrower"), whose address is 1350
Energy Lane, Suite 110, St. Paul, Minnesota 
55108 provides the terms on which Bank will lend to Borrower and
Borrower will repay Bank. The parties agree as follows:

             ACCOUNTING AND OTHER TERMS

             Accounting
terms not defined in this Agreement will be construed following GAAP.
Calculations and determinations must be made following GAAP.  The term "financial statements"
includes the notes and schedules.  The
terms "including" and "includes" always mean
"including (or includes) without limitation," in this or any Loan
Document.

             LOAN AND TERMS OF PAYMENT

             Promise to Pay.

             Borrower
promises to pay Bank the unpaid principal amount of all Credit Extensions and
interest on the unpaid principal amount of the Credit Extensions.

             Revolving Advances.

                           Bank
will make Advances not exceeding the lesser of (A) the Committed Revolving
Line or (B) the Borrowing Base. 
Amounts borrowed under this Section may be repaid and reborrowed during
the term of this Agreement.

                           To
obtain an Advance, Borrower must notify Bank by facsimile or telephone by 12:00
p.m. Pacific time on the Business Day the Advance is to be made.  Borrower must promptly confirm the
notification by delivering to Bank the Payment/Advance Form attached as
Exhibit B.  Bank will credit
Advances to Borrower's deposit account. 
Bank may make Advances under this Agreement based on instructions from a
Responsible Officer or his or her designee or without instructions if the
Advances are necessary to meet Obligations which have become due.  Bank may rely on any telephone notice given
by a person whom Bank believes is a Responsible Officer or designee. Borrower
will indemnify Bank for any loss Bank suffers due to such reliance.

                           The
Committed Revolving Line terminates on the Revolving Maturity Date, when all
Advances are immediately payable.

             Equipment Advances.

                           Through
May 31, 2002 (the "Equipment Availability End Date"), Bank will make
advances ("Equipment Advance" and, collectively, "Equipment
Advances") not exceeding the Committed Equipment Line.  The Equipment Advances may only be used to
finance or refinance Equipment purchased on or after 90 days before the date of
each Equipment Advance and may not exceed 100% of the equipment invoice
excluding taxes, shipping, warranty charges, freight discounts and installation
expense.  Software licenses, leasehold
improvements, or other soft costs may constitute up to 25% of the aggregate
Equipment Advances.  The initial
Equipment Advance, which shall take place at closing, shall allow for invoices
dated August 1, 2000 or later and shall not exceed $350,000 in the aggregate.

                           Interest
accrues from the date of each Equipment Advance at the rate in Section 2.4(a)
and is payable monthly until the Equipment Availability End Date occurs.  Equipment Advances outstanding on August 30,
2001 (the “1st Draw Period”) are payable in 33 equal monthly
installments of principal plus accrued interest, beginning on September 30,
2001 and all payments of principal plus interest are due on the same day of
each month thereafter.  The final
payment for the 1st Draw Period shall be due on June 30, 2004 and
includes all outstanding principal plus accrued unpaid interest thereon.  Equipment Advances outstanding on November
30, 2001 (the “2nd Draw Period”) are payable in 33 equal monthly
installments of principal plus interest beginning on December 30, 2001 and all
subsequent payments of principal plus interest are due on the same day of each
month thereafter.  The final payment for
the 2nd Draw Period shall be due on September 30, 2004 and includes all
outstanding principal plus accrued unpaid interest thereon.  Equipment Advances outstanding on February
28, 2002 (the “3rd Draw Period”) are payable in 33 equal monthly installments
of principal plus interest beginning on March 30, 2002 and all subsequent
payments of principal plus interest are due on the same day of each month
thereafter.  The final payment for the 3rd
Draw Period is due on December 30, 2004 and includes all outstanding principal
plus all accrued unpaid interest thereon. 
Equipment Advances outstanding on the May 30, 2002 (the “4th Draw
Period”) are payable in 33 equal monthly installments of principal
plus interest beginning on June 30, 2002 and all subsequent payments of
principal plus interest are due on the same day of each month thereafter. The
final payment for the 4th Draw Period is due on March 30, 2005 and includes all
outstanding principal plus all accrued unpaid interest thereon.  Equipment Advances when repaid may not be
reborrowed.

                           To
obtain an Equipment Advance, Borrower must notify Bank (the notice is
irrevocable) by facsimile no later than 12:00 p.m. Pacific time 1 Business Day
before the day on which the Equipment Advance is to be made.  The notice in the form of Exhibit B
(Payment/Advance Form) must be signed by a Responsible Officer or designee and
include a copy of the invoice, or invoices for the Equipment being financed.

             Overadvances.

             If
Borrower’s Obligations under Section 2.1.1 exceed the lesser of either
(i) the Committed Revolving Line or (ii) the Borrowing Base, Borrower
must immediately pay Bank the excess.

             Interest
Rate, Payments.

             (a) Interest Rate.  (i)
Advances accrue interest on the outstanding principal balance at a per annum
rate of 1.50 percentage points above the Prime Rate; and (ii) Equipment
Advances accrue interest on the outstanding principal balance at a per annum
rate of 1.50 percentage points above the Prime Rate.  After an Event of Default, Obligations accrue interest at 5
percent above the rate effective immediately before the Event of Default. The
interest rate increases or decreases when the Prime Rate changes.  Interest is computed on a 360 day year for
the actual number of days elapsed.

             (b)
Payments.  Interest
due on the Committed Revolving Line is payable on the 28th of each month.  Interest due on the Equipment Advances is
payable on the 28th of each month until the Equipment Availability End Date
occurs.  Bank may debit any of
Borrower’s deposit accounts including Account Number ________________________
for principal and interest payments owing or any amounts Borrower owes
Bank.  Bank will promptly notify
Borrower when it debits Borrower's accounts. 
These debits are not a set-off. 
Payments received after 12:00 noon Pacific time are considered received
at the opening of business on the next Business Day.  When a payment is due on a day that is not a Business Day, the
payment is due the next Business Day and additional fees or interest accrue.  If Borrower elects to prepay an Equipment
Advance, Borrower will pay a prepayment fee equal to 1% of the outstanding
Equipment Advance.

             Fees.

             Borrower
will pay:

                           Facility
Fee.  A fully earned, non–refundable
Facility Fee of 1% of the total Committed Revolving Line and the Committed
Equipment Line due on the Closing Date; and

                           Bank
Expenses. All Bank Expenses (including reasonable attorneys' fees and
reasonable expenses) incurred through and after the date of this Agreement, are
payable when due.

             CONDITIONS OF LOANS

             Conditions Precedent to Initial Credit Extension.

             Bank’s
obligation to make the initial Credit Extension is subject to the condition
precedent that it receive the agreements, documents and fees it requires.

             Conditions Precedent to all Credit Extensions.

             Bank’s
obligations to make each Credit Extension, including the initial Credit
Extension, is subject to the following:

                           timely
receipt of any Payment/Advance Form; and

                           the
representations and warranties in Section 5 must be materially true on the
date of the Payment/Advance Form and on the effective date of each Credit
Extension except for representations and warranties which are made as of a
specific date, which are no longer true solely as a result of the passage of
time, and for which exceptions thereto which have been disclosed in writing to
Bank and which have been approved in writing by Bank and no Event of Default
may have occurred and be continuing, or result from the Credit Extension. Each
Credit Extension is Borrower’s representation and warranty on that date that
the representations and warranties of Section 5 remain true.

             CREATION OF SECURITY INTEREST

             Grant of Security Interest.

             Borrower
grants Bank a continuing security interest in all presently existing and later
acquired Collateral to secure all Obligations and performance of each of
Borrower’s duties under the Loan Documents. 
Except for Permitted Liens, any security interest will be a first
priority security interest in the Collateral. 
Bank may place a "hold" on any deposit account pledged as
Collateral, after an Event of Default has occurred and is continuing.  If this Agreement is terminated, Bank’s lien
and security interest in the Collateral will continue until Borrower fully
satisfies its Obligations.

      Concerning Revised Article 9 of the Uniform Commercial
Code.

             In
anticipation of the possible application of the Revised Article 9 of the
Uniform Commercial Code in the form or substantially in the form approved by
the American Law Institute and National Conference Commissioners on Uniform
State Law and contained in the 1999 Official Text of the Uniform Commercial
Code ("Revised Article 9"), it is agreed that applying the law of any
jurisdiction in which Revised Article 9 is in effect, the Collateral is all
assets of the Borrower whether or not within the scope of Revised Article
9.  The Collateral shall include,
without limitation, the following categories of assets as defined in the Code:
goods (including inventory, equipment and any accessions thereto), instruments
(including promissory notes), documents, accounts (including
health-care-insurance receivables, and license fees), chattel paper (whether
tangible or electronic), deposit accounts, letter-of-credit rights (whether or
not the letter of credit is evidenced by a writing), commercial tort claims,
securities and all other investment property, general intangibles (including
payment intangibles and software) supporting obligations and any and all
proceeds of any thereof, wherever located, whether now owned or hereafter acquired.

             REPRESENTATIONS
AND WARRANTIES

             Borrower
represents and warrants as follows:

             Due Organization and Authorization.

             Borrower
and each Subsidiary is duly existing and in good standing in its state of
formation and qualified and licensed to do business in, and in good standing
in, any state in which the conduct of its business or its ownership of property
requires that it be qualified, except where the failure to do so could not
reasonably be expected to cause a Material Adverse Change.

             The
execution, delivery and performance of the Loan Documents have been duly
authorized, and do not conflict with Borrower's formation documents, nor
constitute an event of default under any material agreement by which Borrower
is bound.  Borrower is not in default
under any agreement to which or by which it is bound in which the default could
reasonably be expected to cause a Material Adverse Change.

             Collateral.

             Borrower
has good title to the Collateral, free of Liens except Permitted Liens.  The Accounts are bona fide, existing
obligations, and the service or property has been performed or delivered to the
account debtor or its agent for immediate shipment to and unconditional
acceptance by the account debtor. 
Borrower has no notice of any actual or imminent Insolvency Proceeding
of any account debtor whose accounts are an Eligible Account in any Borrowing
Base Certificate.  All Inventory is in
all material respects of good and marketable quality, free from material
defects.

             Litigation.

             Except
as shown in the Schedule, there are no actions or proceedings pending or, to
the knowledge of Borrower’s Responsible Officers and legal counsel, threatened
by or against Borrower or any Subsidiary in which a likely adverse decision
could reasonably be expected to cause a Material Adverse Change.

             No Material Adverse Change in Financial Statements.

             All
consolidated financial statements for Borrower, and any Subsidiary, delivered
to Bank fairly present in all material respects Borrower's consolidated
financial condition and Borrower's consolidated results of operations.  There has not been any material
deterioration in Borrower’s consolidated financial condition since the date of
the most recent financial statements submitted to Bank.

             Solvency.

             The
fair salable value of Borrower's assets (including goodwill minus disposition
costs) exceeds the fair value of its liabilities; the Borrower is not left with
unreasonably small capital after the transactions in this Agreement; and
Borrower is able to pay its debts (including trade debts) as they mature.

             Regulatory Compliance.

             Borrower
is not an "investment company" or a company "controlled" by
an "investment company" under the Investment Company Act.  Borrower is not engaged as one of its
important activities in extending credit for margin stock (under
Regulations T and U of the Federal Reserve Board of Governors).  Borrower has complied in all material
respects with the Federal Fair Labor Standards Act.  Borrower has not violated any laws, ordinances or rules, the
violation of which could reasonably be expected to cause a Material Adverse
Change.  None of Borrower's or any
Subsidiary's properties or assets has been used by Borrower or any Subsidiary
or, to the best of Borrower's knowledge, by previous Persons, in disposing,
producing, storing, treating, or transporting any hazardous substance other
than legally.  Borrower and each
Subsidiary has timely filed all required tax returns and paid, or made adequate
provision to pay, all material taxes, except those being contested in good faith
with adequate reserves under GAAP. 
Borrower and each Subsidiary has obtained all consents, approvals and
authorizations of, made all declarations or filings with, and given all notices
to, all government authorities that are necessary to continue its business as
currently conducted, except where the failure to do so could not reasonably be
expected to cause a Material Adverse Change.

             Subsidiaries.

             Borrower
does not own any stock, partnership interest or other equity securities except
for Permitted Investments.

             Full Disclosure.

             No
written representation, warranty or other statement of Borrower in any
certificate or written statement given to Bank (taken together with all such
written certificates and written statements to Bank) contains any untrue statement
of a material fact or omits to state a material fact necessary to make the
statements contained in the certificates or statements not materially
misleading.  It being recognized by Bank
that the projections and forecasts provided by Borrower in good faith and based
upon reasonable assumptions are not viewed as facts and that actual results
during the period or periods covered by such projections and forecasts may
differ from the projected and forecasted results.

             AFFIRMATIVE
COVENANTS

             Borrower
will do all of the following for so long as Bank has an obligation to lend, or
there are outstanding Obligations other than contingent indemnification
obligations:

             Government Compliance.

             Borrower
will maintain its and all Subsidiaries’ legal existence and good standing in
its jurisdiction of formation and maintain qualification in each jurisdiction
in which the failure to so qualify would reasonably be expected to cause a
material adverse effect on Borrower’s business or operations.  Borrower will comply, and have each
Subsidiary comply, with all laws, ordinances and regulations to which it is
subject, noncompliance with which could have a material adverse effect on
Borrower’s business or operations or would reasonably be expected to cause a
Material Adverse Change.

             Financial Statements, Reports, Certificates.

                           Borrower
will deliver to Bank:  (i) as soon as
available, but no later than 30 days after the last day of each month, a
company prepared consolidated balance sheet and income statement covering
Borrower's consolidated operations during the period certified by a Responsible
Officer and in a form acceptable to Bank; (ii) as soon as available, but no
later than 120 days after the last day of Borrower's fiscal year, audited
consolidated financial statements prepared under GAAP, consistently applied,
together with an unqualified opinion on the financial statements from an
independent certified public accounting firm reasonably acceptable to Bank;
(iii) a prompt report of any legal actions pending or threatened against
Borrower or any Subsidiary that could result in damages or costs to Borrower or
any Subsidiary of $100,000 or more; (iv) budgets, sales projections, operating
plans or other financial information Bank reasonably requests;

                           Within
20 days after the last day of each month, Borrower will deliver to Bank a
Borrowing Base Certificate signed by a Responsible Officer in the form of
Exhibit C, with aged listings of accounts receivable and accounts payable.

                           Within
30 days after the last day of each month, Borrower will deliver to Bank with
the monthly financial statements a Compliance Certificate signed by a
Responsible Officer in the form of Exhibit D.

                           Allow
Bank to audit Borrower's Collateral at Borrower's expense.  Such audits will be conducted no more often
than every year unless an Event of Default has occurred and is continuing.

             Inventory; Returns.

             Borrower
will keep all Inventory in good and marketable condition, free from material
defects.  Returns and allowances between
Borrower and its account debtors will follow Borrower’s customary practices as
they exist at execution of this Agreement. 
Borrower must promptly notify Bank of all returns, recoveries, disputes
and claims that involve more than $50,000.

             Taxes.

             Borrower
and each Subsidiary has timely filed all required tax returns and paid, or made
adequate provision to pay, all material taxes except those being contested in
good faith with adequate reserves under GAAP.

             Insurance.

             Borrower
will keep its business and the Collateral insured for risks and in amounts, as
Bank may reasonably request.  Insurance
policies will be in a form, with companies, and in amounts that are
satisfactory to Bank in Bank’s reasonable discretion.  All property policies will have a lender's loss payable endorsement
showing Bank as an additional loss payee and all liability policies will show
the Bank as an additional insured and provide that the insurer must give Bank
at least 20 days notice before canceling its policy.  At Bank's request, Borrower will deliver certified copies of
policies and evidence of all premium payments. 
Proceeds payable under any policy will, at Bank’s option, be payable to
Bank on account of the Obligations.

             Primary Accounts.

             Borrower
will maintain its primary operating accounts with Bank.  Borrower shall maintain a portion of excess
cash and investments balances with Bank.

             Financial Covenants.

             Borrower
will maintain as of the last day of each month:

                           (i)          Adjusted Quick Ratio.  A ratio of Quick Assets to Current
Liabilities (excluding Deferred Revenue) of at least 1.50 to 1.00.

                           (ii)         Tangible Net Worth.  A Tangible Net Worth of at least $7,500,000.

             Further Assurances.

             Borrower
will execute any further instruments and take further action as Bank reasonably
requests to perfect or continue Bank's security interest in the Collateral or
to effect the purposes of this Agreement.

             NEGATIVE
COVENANTS

             Borrower
will not do any of the following without Bank’s prior written consent, which
will not be unreasonably withheld, for so long as Bank has an obligation to
lend and there are any outstanding Obligations other than contingent
indemnification obligations:

             Dispositions.

             Convey,
sell, lease, transfer or otherwise dispose of (collectively
"Transfer"), or permit any of its Subsidiaries to Transfer, all or
any part of its business or property, except for Transfers
(i) of Inventory in the ordinary course of business; (ii) of
non-exclusive licenses and similar arrangements for the use of the property of
Borrower or its Subsidiaries in the ordinary course of business; or
(iii) of worn-out or obsolete Equipment, and (iv) involving joint
marketing arrangements with suppliers (including joint ventures resulting
therefrom).  To the extent any
Collateral is sold or otherwise disposed of as permitted by this Section 7.1,
such Collateral shall be sold or otherwise disposed of free and clear of the
Liens created by this Agreement, and Bank shall take any actions reasonably
requested by Borrower in order to effect the foregoing.

             Changes in
Business, Ownership, Management or Business Locations.

             Engage
in or permit any of its Subsidiaries to engage in any business other than the
businesses currently engaged in by Borrower or reasonably related thereto or
have a material change in its ownership or management of greater than 25%
(other than by the sale of Borrower’s equity securities in a public offering or
to venture capital investors so long as Borrower identifies the venture capital
investors prior to the closing of the investment).  Borrower will not, without at least 30 days prior written notice,
relocate its chief executive office or add any new offices or business
locations in which Borrower maintains or stores over $5,000 in Borrower’s
assets or property.

             Mergers or Acquisitions.

             Merge
or consolidate, or permit any of its Subsidiaries to merge or consolidate, with
any other Person, or acquire, or permit any of its Subsidiaries to acquire, all
or substantially all of the capital stock or property of another Person, except
where (i) no Event of Default has occurred and is continuing or would result
from such action during the term of this Agreement and (ii) such transaction
would not result in a decrease of more than 25% of Tangible Net Worth.  A Subsidiary may merge or consolidate into
another Subsidiary or into Borrower.

             Indebtedness.

             Create,
incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to
do so, other than Permitted Indebtedness.

             Encumbrance.

             Create,
incur, or allow any Lien on any of its property, or assign or convey any right
to receive income, including the sale of any Accounts, or permit any of its
Subsidiaries to do so, except for Permitted Liens, or permit any Collateral not
to be subject to the first priority security interest granted here, subject to
Permitted Liens.

             Distributions; Investments.

             Directly
or indirectly acquire or own any Person, or make any Investment in any Person,
other than Permitted Investments, or permit any of its Subsidiaries to do
so.  Pay any dividends or make any
distribution or payment or redeem, retire or purchase any capital stock, except
for the repurchases of stock from former employees and directors of Borrower
under terms of applicable repurchase agreements in an aggregate amount not to
exceed $500,000 in the aggregate of any fiscal year, provided that no Event of
Default has occurred, is continuing or would exist after giving effect to the
repurchase.

             Transactions with Affiliates.

             Directly
or indirectly enter into or permit to exist any material transaction with any
Affiliate of Borrower except for transactions that are in the ordinary course
of Borrower's business, upon fair and reasonable terms that are no less
favorable to Borrower than would be obtained in an arm's length transaction
with a non­affiliated Person, provided that the foregoing restrictions shall
not apply to (i) advances to officers or employees of Borrower to the extent
permitted by Section 7.6, (ii) redemptions or repurchases of Borrower’s stock
otherwise permitted under Section 7.6, and (iii) employement arrangements
(including arrangements made with respect to bonuses) entered into the ordinary
course of business with members of the Board of Directors and officers of
Borrower.

             Subordinated Debt.

             Make
or permit any payment on any Subordinated Debt, except under the terms of the
Subordinated Debt, or amend any provision in any document relating to the
Subordinated Debt without Bank's prior written consent.

             Compliance.

             Become
an "investment company" or a company controlled by an
"investment company," under the Investment Company Act of 1940 or
undertake as one of its important activities extending credit to purchase or
carry margin stock, or use the proceeds of any Credit Extension for that
purpose; fail to meet the minimum funding requirements of ERISA, permit a
Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail
to comply with the Federal Fair Labor Standards Act or violate any other law or
regulation, if the violation could reasonably be expected to have a material
adverse effect on Borrower’s business or operations or would reasonably be
expected to cause a Material Adverse Change, or permit any of its Subsidiaries
to do so.

             EVENTS OF DEFAULT

             Any
one of the following is an Event of Default:

             Payment Default.

             If
Borrower fails to pay any of the Obligations within 3 days after their due
date.  During the additional period the
failure to cure the default is not an Event of Default (but no Credit Extension
will be made during the cure period);

             Covenant Default.

             If
Borrower does not perform any obligation in Section 6 or violates any
covenant in Section 7 or does not perform or observe any other material
term, condition or covenant in this Agreement, any Loan Documents, or in any
agreement between Borrower and Bank and as to any default under a term,
condition or covenant that can be cured, has not cured the default within 10
days after it occurs, or if the default cannot be cured within 10 days or
cannot be cured after Borrower’s attempts within 10 day period, and the default
may be cured within a reasonable time, then Borrower has an additional period
(of not more than 30 days) to attempt to cure the default.  During the additional time, the failure to
cure the default is not an Event of Default (but no Credit Extensions will be
made during the cure period);

             Material Adverse Change.

             If
there (i) occurs a material adverse change in the business, operations, or
condition (financial or otherwise) of the Borrower, or (ii) is a material
impairment of the prospect of repayment of any portion of the Obligations; or
(iii) is a material impairment of the value or priority of Bank’s security
interests in the Collateral.

             Attachment.

             If
any material portion of Borrower's assets is attached, seized, levied on, or
comes into possession of a trustee or receiver and the attachment, seizure or
levy is not removed in 10 days, or if Borrower is enjoined, restrained, or
prevented by court order from conducting a material part of its business or if
a judgment or other claim becomes a Lien on a material portion of Borrower's
assets, or if a notice of lien, levy, or assessment is filed against any of
Borrower's assets by any government agency and not paid within 10 days after
Borrower receives notice.  These are not
Events of Default if stayed or if a bond is posted pending contest by Borrower
(but no Credit Extensions will be made during the cure period);

             Insolvency.

             If
Borrower becomes insolvent or if Borrower begins an Insolvency Proceeding or an
Insolvency Proceeding is begun against Borrower and not dismissed or stayed
within 30 days (but no Credit Extensions will be made before any Insolvency
Proceeding is dismissed);

             Other Agreements.

             If
there is a default in any agreement between Borrower and a third party that
gives the third party the right to accelerate any Indebtedness exceeding
$250,000 or that could cause a Material Adverse Change;

             Judgments.

             If
a money judgment(s) in the aggregate of at least $50,000 is rendered against
Borrower and is unsatisfied and unstayed for 10 days (but no Credit Extensions
will be made before the judgment is stayed or satisfied); or

             Misrepresentations.

             If
Borrower or any Person acting for Borrower makes any material misrepresentation
or material misstatement now or later in any warranty or representation in this
Agreement or in any writing delivered to Bank or to induce Bank to enter this
Agreement or any Loan Document.

             BANK'S RIGHTS AND REMEDIES

             Rights and
Remedies.

             When
an Event of Default occurs and continues Bank may, using its best efforts to
provide written notice or demand with respect thereto, do any or all of the
following:

                           Declare
all Obligations immediately due and payable (but if an Event of Default
described in Section 8.5 occurs all Obligations are immediately due and
payable without any action by Bank);

                           Stop
advancing money or extending credit for Borrower’s benefit under this Agreement
or under any other agreement between Borrower and Bank;

                           Settle
or adjust disputes and claims directly with account debtors for amounts, on
terms and in any order that Bank considers advisable;

                           Make
any payments and do any acts it considers necessary or reasonable to protect
its security interest in the Collateral. 
Borrower will assemble the Collateral if Bank requires and make it
available as Bank designates.  Bank may
enter premises where the Collateral is located, take and maintain possession of
any part of the Collateral, and pay, purchase, contest, or compromise any Lien
which appears to be prior or superior to its security interest and pay all
expenses incurred. Borrower grants Bank a license to enter and occupy any of
its premises, without charge, to exercise any of Bank's rights or remedies;

                           Apply
to the Obligations any (i) balances and deposits of Borrower it holds, or
(ii) any amount held by Bank owing to or for the credit or the account of
Borrower and promptly thereafter notify Borrower of such application;

                           Ship,
reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise
for sale, and sell the Collateral.; and

                           Dispose
of the Collateral according to the Code.

             Power of Attorney.

             Effective
only when an Event of Default occurs and continues, Borrower irrevocably
appoints Bank as its lawful attorney to: 
(i) endorse Borrower's name on any checks or other forms of payment
or security; (ii) sign Borrower's name on any invoice or bill of lading
for any Account or drafts against account debtors, (iii) make, settle, and
adjust all claims under Borrower's insurance policies; (iv) settle and
adjust disputes and claims about the Accounts directly with account debtors,
for amounts and on terms Bank determines reasonable; and (v) transfer the
Collateral into the name of Bank or a third party as the Code permits.  Bank may exercise the power of attorney to
sign Borrower’s name on any documents necessary to perfect or continue the
perfection of any security interest regardless of whether an Event of Default
has occurred.  Bank’s appointment as
Borrower's attorney in fact, and all of Bank's rights and powers, coupled with
an interest, are irrevocable until all Obligations have been fully repaid and
performed and Bank's obligation to provide Credit Extensions terminates.

             Accounts Collection.

             When
an Event of Default occurs and continues, Bank may notify any Person owing
Borrower money of Bank's security interest in the funds and verify the amount
of the Account.  Borrower must collect
all payments in trust for Bank and, if requested by Bank, immediately deliver
the payments to Bank in the form received from the account debtor, with proper
endorsements for deposit.

             Bank Expenses.

             If
Borrower fails to pay any amount or furnish any required proof of payment to
third persons, Bank may make all or part of the payment or obtain insurance
policies required in Section 6.5, and take any action under the policies
Bank deems prudent.  Any amounts paid by
Bank are Bank Expenses and immediately due and payable, bearing interest at the
then applicable rate and secured by the Collateral.  No payments by Bank are deemed an agreement to make similar
payments in the future or Bank’s waiver of any Event of Default.

             Bank's Liability for Collateral.

             If
Bank complies with reasonable banking practices and Section 9-207 of the Code,
it is not liable for: (a) the safekeeping of the Collateral; (b) any loss
or damage to the Collateral; (c) any diminution in the value of the Collateral;
or (d) any act or default of any carrier, warehouseman, bailee, or other
person.  Borrower bears all risk of
loss, damage or destruction of the Collateral.
             Remedies Cumulative.

             Bank's
rights and remedies under this Agreement, the Loan Documents, and all other
agreements are cumulative.  Bank has all
rights and remedies provided under the Code, by law, or in equity. Bank’s
exercise of one right or remedy is not an election, and Bank’s waiver of any
Event of Default is not a continuing waiver. Bank’s delay is not a waiver,
election, or acquiescence. No waiver is effective unless signed by Bank and
then is only effective for the specific instance and purpose for which it was
given.

             Demand Waiver.

             Except
as expressly set forth herein, Borrower waives demand, notice of default or
dishonor, notice of payment and nonpayment, notice of any default, nonpayment
at maturity, release, compromise, settlement, extension, or renewal of
accounts, documents, instruments, chattel paper, and guarantees held by Bank on
which Borrower is liable.

             NOTICES

             All
notices or demands by any party about this Agreement or any other related
agreement must be in writing and be personally delivered or sent by an overnight
delivery service, by certified mail, postage prepaid, return receipt requested,
or by telefacsimile to the addresses set forth at the beginning of this
Agreement.  A party may change its
notice address by giving the other party written notice.

             CHOICE OF LAW , VENUE AND JURY TRIAL WAIVER

             California
law governs the Loan Documents without regard to principles of conflicts of
law.  Borrower and Bank each submit to
the exclusive jurisdiction of the State and Federal courts in Santa Clara
County, California.

BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY
CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL
OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER
INTO THIS AGREEMENT.  EACH PARTY HAS
REVIEWED THIS WAIVER WITH ITS COUNSEL.

             GENERAL PROVISIONS

             Successors and Assigns.

             This
Agreement binds and is for the benefit of the successors and permitted assigns
of each party.  Borrower may not assign
this Agreement or any rights under it without Bank's prior written consent
which may be granted or withheld in Bank's discretion.  Bank has the right, without the consent of
or notice to Borrower, to sell, transfer, negotiate, or grant participation in
all or any part of, or any interest in, Bank's obligations, rights and benefits
under this Agreement.

             Indemnification.

             Borrower
will indemnify, defend and hold harmless Bank and its officers, employees, and
agents against:  (a) all obligations,
demands, claims, and liabilities asserted by any other party in connection with
the transactions contemplated by the Loan Documents; and (b) all losses or Bank
Expenses incurred, or paid by Bank from, following, or consequential to
transactions between Bank and Borrower (including reasonable attorneys fees and
expenses), except for losses caused by Bank's gross negligence or willful
misconduct.  A Person seeking to
be indemnified under this Section 12.2 shall notify Borrower of any event
requiring indemnification within ten Business Days following such Person’s
receipt of notice of commencement of any action or proceeding, or such Person’s
obtaining knowledge of the occurrence of any other event, giving rise to a
claim for indemnification hereunder.  In
any such proceeding, such Person shall keep the Borrower reasonably informed of
its defense and any settlement of any such action or proceeding and
negotiations to settle or otherwise resolve any claim, provided that such
Person shall have the exclusive right to decide to accept or reject any
settlement offer.

             Time of Essence.

             Time
is of the essence for the performance of all obligations in this Agreement.

             Severability of Provision.

             Each
provision of this Agreement is severable from every other provision in
determining the enforceability of any provision.

             Amendments in Writing, Integration.

             All
amendments to this Agreement must be in writing and signed by Borrower and
Bank.  This Agreement represents the
entire agreement about this subject matter, and supersedes prior negotiations
or agreements.  All prior agreements,
understandings, representations, warranties, and negotiations between the
parties about the subject matter of this Agreement merge into this Agreement
and the Loan Documents.

             Counterparts.

             This
Agreement may be executed in any number of counterparts and by different
parties on separate counterparts, each of which, when executed and delivered,
are an original, and all taken together, constitute one Agreement.

             Survival.

             All
covenants, representations and warranties made in this Agreement continue in
full force while any Obligations remain outstanding.  The obligations of Borrower in Section 12.2 to indemnify
Bank will survive until all statutes of limitations for actions that may be
brought against Bank have run.

             Confidentiality.

             In
handling any confidential information, Bank will exercise the same degree of
care that it exercises for its own proprietary information, but disclosure of
information may be made (i) to Bank’s subsidiaries or affiliates in
connection with their business with Borrower, (ii) to prospective
transferees or purchasers of any interest in the loans (provided, however, Bank
shall use commercially reasonable efforts in obtaining such prospective
transferee’s or purchaser’s written agreement of the terms of this provision),
(iii) as required by law, regulation, subpoena, or other order,
(iv) as required in connection with Bank’s examination or audit and
(v) as Bank considers appropriate exercising remedies under this
Agreement.  Confidential information
does not include information that either: (a) is in the public domain or in
Bank’s possession when disclosed to Bank, or becomes part of the public domain
after disclosure to Bank; or (b) is disclosed to Bank by a third party, if Bank
does not know that the third party is prohibited from disclosing the
information.

             Attorneys’ Fees, Costs and Expenses.

             In
any action or proceeding between Borrower and Bank arising out of the Loan
Documents, the prevailing party will be entitled to recover its reasonable
attorneys’ fees and other reasonable costs and expenses incurred, in addition
to any other relief to which it may be entitled.

             DEFINITIONS

             Definitions.

             In
this Agreement:

             "Accounts"
are all existing and later arising accounts, contract rights, and other
obligations owed Borrower in connection with its sale or lease of goods
(including licensing software and other technology) or provision of services,all
credit insurance, guaranties, other security and all merchandise returned or
reclaimed by Borrower and Borrower's Books relating to any of the foregoing, as
such definition may be amended from time to time according to the Code.

             "Advance"
or "Advances"
is a loan advance (or advances) under the Committed Revolving Line.

             "Affiliate"
of a Person is a Person that owns or controls directly or indirectly the
Person, any Person that controls or is controlled by or is under common control
with the Person, and each of that Person's senior executive officers,
directors, partners and, for any Person that is a limited liability company,
that Person’s managers and members.

             "Bank
Expenses" are all audit fees and expenses and reasonable costs
and expenses (including reasonable attorneys' fees and expenses) for preparing,
negotiating, administering, defending and enforcing the Loan Documents
(including appeals or Insolvency Proceedings).

             "Borrower's
Books" are all Borrower's books and records including ledgers,
records regarding Borrower's assets or liabilities, the Collateral, business
operations or financial condition and all computer programs or discs or any
equipment containing the information.

             "Borrowing
Base" is 75% of Eligible Accounts as determined by Bank from
Borrower’s most recent Borrowing Base Certificate; provided, however,
that Bank may lower the percentage of the Borrowing Base after performing an
audit of Borrower’s Collateral.

             "Business Day"
is any day that is not a Saturday, Sunday or a day on which the Bank is closed.

             "Closing Date"
is the date of this Agreement.

             "Code"
is the Uniform Commercial Code, as applicable.

             "Collateral"
is the property described on Exhibit A.

             "Committed
Equipment Line” is a Credit Extension of up to $1,500,000.

             "Committed
Revolving Line" is an Advance of up to $2,000,000.

             "Contingent
Obligation" is, for any Person, any direct or indirect
liability, contingent or not, of that Person for (i) any indebtedness,
lease, dividend, letter of credit or other obligation of another such as an
obligation directly or indirectly guaranteed, endorsed, co–made,
discounted or sold with recourse by that Person, or for which that Person is
directly or indirectly liable; (ii) any obligations for undrawn letters of
credit for the account of that Person; and (iii) all obligations from any
interest rate, currency or commodity swap agreement, interest rate cap or
collar agreement, or other agreement or arrangement designated to protect a
Person against fluctuation in interest rates, currency exchange rates or
commodity prices;  but "Contingent
Obligation" does not include endorsements in the ordinary course of
business.  The amount of any Contingent
Obligation shall not, in any event, exceed the amount, which, in light of the
facts and circumstances, represents the amount that can reasonably be expected
to become an actual or matured liability in accordance with GAAP.

             "Credit
Extension" is each Advance, Equipment Advance, or any other
extension of credit by Bank for Borrower’s benefit.

             "Current
Liabilities" are the aggregate amount of Borrower’s Total Liabilities
which mature within one (1) year.

             “Deferred
Revenue” is all amounts received in advance of performance and not
yet recognized as revenue.

             "Eligible
Accounts" are Accounts in the ordinary course of Borrower's
business that meet all Borrower's representations and warranties in
Section 5; but Bank may change eligibility standards by giving
Borrower notice.  Unless Bank agrees
otherwise in writing, Eligible Accounts will not include:

(a)         Accounts that the account debtor has
not paid within 90 days of invoice date;

(b)        Accounts for an account debtor, 50% or
more of whose Accounts have not been paid within 90 days of invoice date;

(c)         Credit balances over 90 days from
invoice date;

(d)        Accounts for an account debtor,
including Affiliates, whose total obligations to Borrower exceed 25% of all
Accounts, for the amounts that exceed that percentage, unless the Bank approves
in writing except for those certain Accounts from, for which the percentage may
be 25%;

(e)         Accounts for which the account debtor
does not have its principal place of business in the United States, or Canada
in which Bank has a first priority perfected security interest (or local
equivalent thereto) to the Bank’s satisfaction;

(f)         Accounts for which the account debtor
is a federal, state or local government entity or any department, agency, or
instrumentality;

(g)        Accounts for which Borrower owes the
account debtor, but only up to the amount owed (sometimes called
"contra" accounts, accounts payable, customer deposits or credit
accounts);

(h)        Accounts for demonstration or
promotional equipment, or in which goods are consigned, sales guaranteed, sale
or return, sale on approval, bill and hold, or other terms if account debtor’s
payment may be conditional;

(i)          Accounts for which the account debtor
is Borrower’s Affiliate, officer, employee, or agent;

(j)          Accounts in which the account debtor
disputes liability or makes any claim and Bank believes there may be a basis
for dispute (but only up to the disputed or claimed amount), or if the Account
Debtor is subject to an Insolvency Proceeding, or becomes insolvent, or goes
out of business;

(k)         Accounts for which Bank reasonably
determines collectionto be doubtful.

             "Equipment"
is all present and future machinery, equipment, tenant improvements, furniture,
fixtures, vehicles, tools, parts and attachments in which Borrower has any
interest.

             "Equipment
Advance" is defined in Section 2.1.2.

             "Equipment
Availability End Date" is defined in Section 2.1.2.

             "ERISA"
is the Employment Retirement Income Security Act of 1974, and its regulations.

             "GAAP"
is generally accepted accounting principles.

             "Indebtedness”
is (a) indebtedness for borrowed money or the deferred price of property or
services, such as reimbursement and other obligations for surety bonds and
letters of credit, (b) obligations evidenced by notes, bonds, debentures or
similar instruments, (c) capital lease obligations and (d) Contingent
Obligations.

             "Insolvency
Proceeding" are proceedings by or against any Person under the
United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.

             "Inventory"
is present and future inventory in which Borrower has any interest, including
merchandise, raw materials, parts, supplies, packing and shipping materials,
work in process and finished products intended for sale or lease or to be
furnished under a contract of service, of every kind and description now or
later owned by or in the custody or possession, actual or constructive, of
Borrower, including inventory temporarily out of its custody or possession or
in transit and including returns on any accounts or other proceeds (including
insurance proceeds) from the sale or disposition of any of the foregoing and
any documents of title.

             "Investment"
is any beneficial ownership of (including stock, partnership interest or other
securities) any Person, or any loan, advance or capital contribution to any
Person.

             "Lien"
is a mortgage, lien, deed of trust, charge, pledge, security interest or other
encumbrance.

             "Loan
Documents" are, collectively, this Agreement, any note, or
notes or guaranties executed by Borrower or Guarantor, and any other present or
future agreement between Borrower and/or for the benefit of Bank in connection
with this Agreement, all as amended, extended or restated.

             "Material
Adverse Change" is defined in Section 8.3.

             "Obligations"
are debts, principal, interest, Bank Expenses and other amounts Borrower owes
Bank now or later, including cash management services, letters of credit and
foreign exchange contracts, if any and including interest accruing after
Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower
assigned to Bank.

             "Permitted
Indebtedness" is:

	(a)	Borrower’s
  indebtedness to Bank under this Agreement or any other Loan Document;
	 	 
	(b)	Indebtedness
  existing on the Closing Date and shown on the Schedule and any extensions or
  renewals thereof;
	 	 
	(c)	Subordinated
  Debt;
	 	 
	(d)	Indebtedness
  to trade creditors incurred in the ordinary course of business; and
	 	 
	(e)	Indebtedness
  secured by Permitted Liens; and
	 	 
	(f)	Other
  indebtedness not to exceed $100,000 in the aggregate at any time.

 

 

             "Permitted
Investments” are:

	(a)	Investments
  shown on the Schedule and existing on the Closing Date;
	 	 
	(b)	(i)
  marketable direct obligations issued or unconditionally guaranteed by the
  United States or its agency or any State maturing within 1 year from its
  acquisition, (ii) commercial paper maturing no more than 1 year after
  its creation and having the highest rating from either Standard &
  Poor's Corporation or Moody's Investors Service, Inc., and (iii) Bank’s
  certificates of deposit issued maturing no more than 1 year after issue;
	 	 
	(c)	Investments
  consisting of the endorsement of negotiable instruments for deposits or
  collection of similar transactions in the ordinary course of Borrower.
	 	 
	(d)	Investments
  accepted in connection with Transfers permitted by Section 7.1.
	 	 
	(e)	Investments
  of Subsidiaries in or to the other Subsidiaries or Borrower and Investments
  by Borrower in Subsidiaries not to exceed $50,000 in the aggregate in any
  fiscal year.
	 	 
	(f)	Investments
  consisting of (i) travel advances and employee relocation loans and other
  employee loans and advances in the ordinary course of business, and (ii)
  loans to employees, officers or directors relating to the purchase of equity
  securities of Borrower or its Subsidiaries pursuant to the employee stock
  purchase plans or agreements approved by Borrower’s Board of Directors.
	 	 
	(g)	Investments
  (including debt obligations) received in connection with the bankruptcy or
  reorganization of customers or suppliers and in settlement of delinquent
  obligations of, and other disputes with, customers or suppliers arising in
  the ordinary course of business.
	 	 
	(h)	Investments
  consisting of notes receivable of, or prepaid royalties and other credit
  extensions, to customers and suppliers who are not Affiliates, in the
  ordinary course of business; provided that this paragraph (h) shall not apply
  to Investments of Borrower in any Subsidiary;
	 	 
	(i)	Joint
  ventures or strategic alliances in the ordinary course of Borrower’s business
  consisting of the non-exclusive licensing of technology, the development of
  technology or the providing of technical support, provided that any cash
  investments by Borrower do not exceed $250,000 in the aggregate in any fiscal
  year; and

             "Permitted
Liens" are:

             (a)         Liens existing on the Closing Date and
shown on the Schedule or arising under this Agreement or other Loan Documents;

             (b)        Liens for taxes, fees, assessments or
other government charges or levies, either not delinquent or being contested in
good faith and for which Borrower maintains adequate reserves on its Books, if
they have no priority over any of Bank's security interests;

             (c)         Purchase money Liens (i) on
Equipment acquired or held by Borrower or its Subsidiaries incurred for
financing the acquisition of the Equipment, or (ii) existing on equipment
when acquired, if the Lien is confined to the property and improvements
and the proceeds of the equipment;

             (d)        Licenses or sublicenses granted in the
ordinary course of Borrower's business and any interest or title of a licensor
or under any license or sublicense, if the licenses and sublicenses
permit granting Bank a security interest;

             (e)
Leases or subleases granted in the ordinary course of Borrower's business,
including in connection with Borrower’s leased premises or leased property;

             (f)         Liens incurred in the extension,
renewal or refinancing of the indebtedness secured by Liens described in (a)
through (c), but any extension, renewal or replacement Lien must be
limited to the property encumbered by the existing Lien and the principal
amount of the indebtedness may not increase.

             (g)        Liens arising from judgments, decrees or
attachments in circumstances not constituting and Event of Default under
Section 8.4 or 8.7;

             (h)        Liens in favor of other financial institutions
arising in connection with Borrower’s deposit accounts held at such
institutions, provided that Bank has a perfected security interest in the
amounts held in such deposit accounts; and

             (i)          Other Liens not described above
arising in the ordinary course of business and not having or not reasonably
likely to have a material adverse effect on Borrower and its Subsidiaries taken
as a whole.

             "Person"
is any individual, sole proprietorship, partnership, limited liability company,
joint venture, company association, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or government agency.

             "Prime Rate"
is Bank’s most recently announced "prime rate," even if it is not
Bank’s lowest rate.

             "Quick Assets"
is, on any date, the Borrower’s consolidated, unrestricted cash, cash
equivalents, plus net billed trade accounts receivable determined according to
GAAP.

             "Responsible
Officer"
is each of the Chief Executive Officer, the President, the Chief Financial
Officer and the Controller of Borrower.

             "Revolving
Maturity Date" is June 30, 2002.

             "Schedule"
is any attached schedule of exceptions.

             "Subordinated
Debt" is debt incurred by Borrower subordinated to Borrower’s
indebtedness owed to Bank and which is reflected in a written agreement in a
manner and form acceptable to Bank and approved by Bank in writing.

             "Subsidiary"
is for any Person, or any other business entity of which more than 50% of the
voting stock or other equity interests is owned or controlled, directly or
indirectly, by the Person or one or more Affiliates of the Person.

             "Tangible Net
Worth" is, on any date, the consolidated total assets of
Borrower and its Subsidiaries minus, (i) any amounts attributable
to (a) goodwill, (b) intangible items such as unamortized debt discount and
expense, Patents, trade and service marks and names, Copyrights and research
and development expenses except prepaid expenses, and (c) reserves not already
deducted from assets, and (ii) Total Liabilities.

             "Total
Liabilities"
is on any day, obligations that should, under GAAP, be classified as
liabilities on Borrower’s consolidated balance sheet, including all
Indebtedness, and current portion Subordinated Debt allowed to be paid, but
excluding all other Subordinated Debt.

BORROWER:

ENDOCARDIAL SOLUTIONS, INC.

By: /s/ Michael Fredrick

Title: Controller

BANK:

SILICON VALLEY BANK

By: /s/ Jay McNeil

Title: Vice PresidentPrepared by MerrillDirect

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)

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