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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _______________)*
Endocardial Solutions, Inc.
------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
292962 10 7
------------------------------------------------------------------------------
(CUSIP Number)
Carol E. Malkinson, Esq.
Medtronic, Inc.
7000 Central Ave. N.E.
Minneapolis, Minnesota 55432
(612)514-4000
------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
January 30, 1998
------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes). <PAGE>
SCHEDULE 13D
- -------------------------------------------------------------------------------
CUSIP No. 292962 10 7 Page 2 of 7 Pages
- -------------------------------------------------------------------------------
- ---------- ---------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Medtronic, Inc.
41-0793183
- ---------- ---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) |_|
(b) |_|
- ---------- ---------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
WC
- ---------- ---------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
- ---------- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Minnesota
- ---------------------------------------------- -------- ------------------------
7 SOLE VOTING POWER 2,174,404
(includes 447,554 shares which may
be purchased upon exercise of
exercisable warrant)
NUMBER OF
----------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
----------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 2,174,404 (includes 447,554 shares
PERSON which may be purchased upon exercise
of exercisable warrant)
WITH
----------------------------------------------
10 SHARED DISPOSITIVE POWER
0
- ---------- ---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,174,404 (includes 447,554 shares which may be purchased upon
exercise of exercisable warrant)
- ---------- ---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(SEE INSTRUCTIONS) |_|
- ---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
23.14%
- ---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
HC
- ---------- ---------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
- --------------------------------------------------------------------------------
CUSIP No. 292962 10 7 Page 3 of 7 Pages
- --------------------------------------------------------------------------------
- ---------- ---------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Medtronic Asset Management, Inc.
41-1721127
- ---------- ---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) |_|
(b) |_|
- ---------- ---------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
AF
- ---------- ---------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
- ---------- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Minnesota
- ---------------------------------------------- -------- ------------------------
7 SOLE VOTING POWER
2,174,404 (includes 447,554 shares
which may be purchased pursuant to
NUMBER OF exercisable warrant)
------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 2,174,404 (includes 447,554 shares
which may be purchased pursuant to
PERSON exercisable warrant)
------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
0
- ---------- ---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,174,404 (includes 447,554 shares which may be purchased pursuant to
exercisable warrant)
- ---------- ---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(SEE INSTRUCTIONS) |_|
- ---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
23.14%
- ---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
- ---------- ---------------------------------------------------------------------
<PAGE>
Item 1. Security and Issuer
The class of equity security to which this statement relates is the Common
Stock, $.01 par value, of Endocardial Solutions, Inc. The name and address of
the principal executive offices of the issuer of such securities are Endocardial
Solutions, Inc., 1350 Energy Lane, Suite 110, St. Paul, Minnesota 55108.
Item 2. Identity and Background
(a), (b) and (c)
Medtronic, Inc., 7000 Central Ave. N.E., Minneapolis, Minnesota 55432, is a
Minnesota corporation, principally engaged in the business of therapeutic
medical technology, specializing in implantable and interventional therapies.
Medtronic Asset Management, Inc., 7000 Central Ave. N.E., Minneapolis, Minnesota
55432, a Minnesota corporation ("MAMI"), is a wholly-owned subsidiary of
Medtronic, Inc. through which Medtronic, Inc. holds certain investments.
Information is provided below with respect to persons who are directors and
executive officers of the reporting persons.
William W. George, Chairman, Chief Executive Officer and Director, Medtronic,
Inc., 7000 Central Avenue N.E., Minneapolis, MN 55432;
Arthur D. Collins, Jr., President, Chief Operating Officer and Director,
Medtronic, Inc., and President and Director, MAMI, 7000 Central Avenue N.E.,
Minneapolis, MN 55432;
Glen D. Nelson, M.D., Vice Chairman and Director, Medtronic, Inc., 7000 Central
Avenue N.E., Minneapolis, MN 55432;
William R. Brody, M.D., Ph.D., Director, Medtronic, Inc., President, The Johns
Hopkins University, 3400 North St. Charles St., 242 Garland Hall, Baltimore, MD
21218;
Paul W. Chellgren, Director, Medtronic, Inc., Chairman and Chief Executive
Officer, Ashland, Inc., 1000 Ashland Drive, Russell, KY 41114;
Antonio M. Gotto, Jr., M.D., Director, Medtronic, Inc., Dean, Cornell University
Medical College, Medical Affairs Provost, Cornell University Office of the Dean,
1300 York Avenue, New York, NY 10021;
Bernadine P. Healy, M.D., Director, Medtronic, Inc., Dean, College of Medicine,
Ohio State University, 254 Meiling Hall, 370 W. 9th Avenue, Columbus, OH 43210;
Thomas E. Holloran, Director, Medtronic, Inc., Professor, Graduate School of
Business, University of St. Thomas, 1000 LaSalle Avenue - Suite 343,
Minneapolis, MN 55403-2005;
Richard L. Schall, Director, Medtronic, Inc., Consultant, 4900 IDS Center, 80
South 8th Street, Minneapolis, MN 55402; Jack W. Schuler, Director, Medtronic,
Inc., Chairman, Stericycle, Inc., 1419 Lake Cook Road, Suite 410, Deerfield, IL
60015;
Gerald W. Simonson, Director, Medtronic, Inc., President and Chief Executive
Officer, Omnetics Connector Corporation, 7260 Commerce Circle East, Fridley, MN
55432;
Gordon M. Sprenger, Director, Medtronic, Inc., Executive Officer, Allina Health
System, 5601 Smetana Drive, Minneapolis, MN 55440;
Richard A. Swalin, Ph.D., Director, Medtronic, Inc., Professor Emeritus, The
University of Arizona, 4715 East Fort Lowell Road, Tucson, AZ 85712;
Bobby I. Griffin, Executive Vice President, Medtronic, Inc., 7000 Central Avenue
N.E., Minneapolis, MN 55432;
Bill K. Erickson, Senior Vice President and President, Americas, Medtronic,
Inc., 7000 Central Avenue N.E., Minneapolis, MN 55432;
<PAGE>
Janet S. Fiola, Senior Vice President, Human Resources, Medtronic, Inc., 7000
Central Avenue N.E., Minneapolis, MN 55432;
B. Kristine Johnson, Senior Vice President and Chief Administrative Officer,
Medtronic, Inc., 7000 Central Avenue N.E., Minneapolis, MN 55432;
Philip M. Laughlin, Senior Vice President and President, Cardiac Surgery,
Medtronic, Inc., 7000 Central Avenue N.E., Minneapolis, MN 55432;
Ronald E. Lund, Senior Vice President, General Counsel and Secretary, Medtronic,
Inc., and Vice President, Secretary and Director, MAMI, 7000 Central Avenue
N.E., Minneapolis, MN 55432;
Stephen H. Mahle, Senior Vice President and President, Pacing, Medtronic, Inc.,
7000 Central Avenue N.E., Minneapolis, MN 55432;
John A. Meslow, Senior Vice President and President, Neurological, Medtronic,
Inc., 7000 Central Avenue N.E., Minneapolis, MN 55432;
Robert L. Ryan, Senior Vice President and Chief Financial Officer, Medtronic,
Inc., and Chief Financial Officer and Director, MAMI, 7000 Central Avenue N.E.,
Minneapolis, MN 55432;
Barry Wilson, Senior Vice President and President, Europe, Middle East and
Africa, Medtronic, Inc., 7000 Central Avenue N.E., Minneapolis, MN 55432.
(d) and (e)
To the knowledge of the reporting persons, neither the reporting persons nor any
of the persons listed above has, during the last five years, been convicted in a
criminal proceeding or was, during the last five years, a party to a civil
proceeding as a result of which such person was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
(f) All of the individuals referred to above are United States citizens, except
Mr. Wilson, who is a dual citizen of the United Kingdom and South Africa.
Item 3. Source and Amount of Funds or Other Consideration
On January 30, 1998, a License Agreement was entered into between Endocardial
Solutions, Inc. ("ESI") and Medtronic, Inc. Pursuant to the License Agreement,
Medtronic, Inc. licensed certain technology to ESI and, in consideration
therefor, (i) cash was paid by ESI to Medtronic, Inc., (ii) a warrant (the
"Initial Warrant") was issued to MAMI and (iii) ESI agreed to issue, at some
time in the future subject to certain conditions and contingencies, an
additional warrant (the "Additional Warrant"). In connection with execution of
the License Agreement, ESI and MAMI also entered into a Registration Rights
Agreement which gives MAMI certain demand and piggy-back registration rights
with respect to the shares obtained on exercise of the Initial and Additional
Warrants.
The Initial Warrant authorizes MAMI to purchase, at any time and from time to
time to and including January 30, 2002, 447,554 shares of ESI Common Stock at a
price of $11.1125 per share.
The Additional Warrant will be a five-year warrant to purchase 223,777 shares of
ESI's Common Stock and will be issued to Medtronic, Inc. or to a subsidiary
designated by it, generally upon the earlier of (i) the date of the first
commercial introduction of a product using the licensed technology (the "Product
Introduction"), (ii) the 24-month anniversary of the License Agreement or (iii)
a change of control of ESI; provided, that if the Product Introduction has not
occurred on or prior to the 24-month anniversary of the License Agreement and
ESI elects not to issue the Additional Warrant until the Product Introduction,
<PAGE>
the technology license becomes nonexclusive. The exercise price of the
Additional Warrant generally will be 1.25 times the average closing price of
ESI's Common Stock for the 20 trading days prior to issuance of the Additional
Warrant; provided, however, if the issuance is due to a change of control of
ESI, the exercise price will be the average closing price of such Common Stock
for the 20 trading days prior to the announcement of the proposed change of
control. The Additional Warrant will become exercisable one year after its
issuance or immediately prior to the earlier change of control of ESI.
If any shares are purchased pursuant to the exercise of the Initial Warrant or
the Additional Warrant, the funds for the purchase will be provided out of the
working capital of MAMI following a capital contribution in like amount made by
Medtronic, Inc., which owns all the issued and outstanding shares of MAMI.
Item 4. Purpose of Transaction
MAMI has acquired the Warrants and shares of ESI Common Stock solely for
investment purposes. Based upon its evaluation of ESI's financial condition,
market conditions and other factors it may deem material, the reporting persons
may seek to acquire additional shares of ESI Common Stock in the open market or
in private transactions, or may dispose of all or any portion of the shares
currently owned or which may be acquired upon exercise of the Warrants. The
reporting persons presently do not have any definitive plans or proposals that
relate to or would result in transactions of the kind described in paragraphs
(a) through (j) of Item 4 of Schedule 13D, but may, at any time and from time to
time, review, reconsider and discuss with ESI or others the reporting persons'
positions with respect to ESI which could thereafter result in the adoption of
such plans or proposals.
Item 5. Interest in Securities of the Issuer
(a) Medtronic, Inc., through MAMI, is the beneficial owner of 2,174,404 shares
of Common Stock of ESI (including 447,554 shares which are not outstanding but
which may be purchased upon exercise of a currently exercisable warrant), which
represents approximately 23.14% of the outstanding Common Stock of ESI (assuming
exercise of the warrant). To the knowledge of the reporting persons, no other
person named in Item 2 beneficially owns any ESI shares.
(b) Medtronic, Inc., through MAMI, has the sole power to vote and the sole power
to dispose of all shares of ESI Common Stock beneficially owned by it.
(c) The only transaction in the Common Stock of ESI that was effected by any
person named in paragraph (a) above during the past 60 days is the acquisition
of a warrant to purchase 447,554 shares as reported in Item 3 above.
(d) No other person is known to have the right to receive or the power to direct
the receipt of dividends from, or the proceeds of the sale of, the subject
securities.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
Pursuant to a License Agreement dated January 30, 1998, ESI has issued a warrant
to MAMI to purchase 447,554 shares of ESI Common Stock. See Item 3.
<PAGE>
Item 7. Material to Be Filed as Exhibits
Exhibit A -Agreement by the persons filing this Form 13D to make a joint filing.
Exhibit B - Warrant to purchase 447,554 shares of Endocardial Solutions, Inc.
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: February 6, 1998
MEDTRONIC, INC.
By /s/ Ronald E. Lund
Ronald E. Lund
Senior Vice President, General Counsel and
Secretary
MEDTRONIC ASSET MANAGEMENT, INC.
By /s/ Ronald E. Lund
Ronald E. Lund
Vice President and Secretary
<PAGE>
EXHIBIT INDEX
Exhibit Description
A Agreement as to Joint Filing
B Warrant to Purchase 447,554 shares of Endocardial Solutions, Inc.
<PAGE>
EXHIBIT A
The undersigned hereby agree to file a joint Schedule 13D with respect to
the interests of the undersigned in Endocardial Solutions, Inc. and that the
Schedule 13D to which this Exhibit A is attached has been filed on behalf of
each of the undersigned.
February 6, 1998 MEDTRONIC, INC.
By /s/ Ronald E. Lund
Ronald E. Lund
Its Senior Vice President, General Counsel
and Secretary
MEDTRONIC ASSET MANAGEMENT, INC.
By /s/ Ronald E. Lund
Ronald E. Lund
Vice President and Secretary
<PAGE>
EXHIBIT B
THIS WARRANT, AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF, HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS AND MAY NOT BE REOFFERED OR SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO (1) REGISTRATION OR
(2) AN OPINION OF COUNSEL FOR THE COMPANY OR OTHER COUNSEL REASONABLY ACCEPTABLE
TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT
To Purchase 447,554
Shares of Common Stock of
ENDOCARDIAL SOLUTIONS, INC.
January 30, 1998
Endocardial Solutions, Inc., a Delaware corporation (the "Company"), for
value received, hereby certifies that Medtronic Asset Management, Inc., a
Minnesota corporation, or its registered assigns (the "Holder"), is entitled,
subject to the terms set forth below, upon exercise of this Warrant to purchase
from the Company, at any time or from time to time on or after the date hereof
and on or before 11:59 p.m. (Minneapolis, Minnesota time) on the four-year
anniversary of the date hereof, up to Four Hundred Forty-seven Thousand Five
Hundred Fifty-four (447,554) shares of Common Stock, $.01 par value, of the
Company ("Common Stock") at a purchase price per share equal to $11.1125
(subject to adjustment in accordance with Section 4 hereof), which number of
shares the Company hereby represents and warrants to equal five percent (5%) of
the total number of shares of Common Stock issued and outstanding on the date
hereof, and which per share purchase price the Company hereby represents and
warrants to equal the average closing price of Common Stock for the twenty (20)
trading days ending on and including the trading day immediately preceding the
date hereof. The shares issuable upon exercise or conversion of this Warrant,
and the purchase price per share, each as adjusted from time to time pursuant to
the provisions of this Warrant, are hereinafter referred to as the "Warrant
Shares" and the "Exercise Price," respectively.
This Warrant is further subject to the following provisions, terms and
conditions:
Exercise of Warrant. This Warrant may be exercised by the Holder, in whole or in
part (but not as to any fraction of a share of Common Stock), by
surrendering this Warrant, with the Exercise Form attached hereto as
Exhibit A filled-in and duly executed by such Holder or by such Holder's
duly authorized attorney, to the Company at its principal office
accompanied by payment of the Exercise Price in the form of a check or wire
transfer in the amount of the Exercise Price multiplied by the number of
shares as to which the Warrant is being exercised.
<PAGE>
Conversion of Warrant.
The Holder shall also have the right (the "Conversion Right") to convert
all or any portion of this Warrant into such number of shares (rounded
to the nearest whole share) of Company Common Stock equal to the
quotient obtained by dividing (i) the "Aggregate Warrant Spread" as of
the date the Conversion Right is exercised, by (ii) the "Market Price
of the Common Stock" as of the date the Conversion Right is exercised.
The Conversion Right shall be exercisable at any time or from time to
time prior to expiration of this Warrant by surrendering this Warrant
with the Conversion Form attached hereto as Exhibit B filled-in and
duly executed by such Holder or by such Holder's duly authorized
attorney to the Company at its principal office.
For purposes of this Section 2, the "Aggregate Warrant Spread" of all or a
portion of this Warrant as of a particular date shall equal (i) the
Market Price of the Common Stock multiplied by the number of shares of
Common Stock purchasable upon exercise of all or such portion of this
Warrant on such date, minus (ii) the Exercise Price multiplied by the
number of shares of Common Stock purchasable upon exercise of all or
such portion of this Warrant on such date. For purposes of this
Section 2, the "Market Price of the Common Stock" as of a particular
date shall equal: (i) if the Common Stock is traded on an exchange or
is quoted on either the Nasdaq National Market or Small-Cap Market,
then the average of the closing or last sale prices, respectively,
reported for the ten (10) trading days immediately preceding such
date, or (ii) if the Common Stock is not traded on an exchange, the
Nasdaq National Market, or the Nasdaq Small-Cap Market but is traded
in the local over-the-counter market, then the average of the
mid-points between the highest bid and lowest asked quotations for
each of the ten (10) trading days immediately preceding such date.
Effective Date of Exercise or Conversion. Each exercise or conversion of this
Warrant shall be deemed effective as of the close of business on the day on
which this Warrant is surrendered to the Company as provided in Section 1
or Section 2(a) above. At such time, the person or persons in whose name or
names any certificates for Warrant Shares shall be issuable upon such
exercise or conversion shall be deemed to have become the holder or holders
of record of the Warrant Shares represented by such certificates. Within
ten (10) days after the exercise or conversion of this Warrant in full or
in part, the Company will, at its expense, cause to be issued in the name
of and delivered to the Holder or such other person as the Holder may (upon
payment by such Holder of any applicable transfer taxes) direct: (i) a
certificate or certificates for the number of full Warrant Shares to which
such Holder is entitled upon such exercise or conversion, and (ii) unless
this Warrant has expired, a new Warrant or Warrants (dated the date hereof
and in form identical hereto) representing the right to purchase the
remaining number of shares of Common Stock, if any, with respect to which
this Warrant has not then been exercised or converted.
<PAGE>
Adjustments to Exercise Price. The above provisions are, however, subject to the
following:
(i) If the Company shall at anytime after the date of this Warrant
subdivide or combine the outstanding shares of Common Stock or declare a
dividend payable in Common Stock, then the number of shares of Common Stock
for which this Warrant may be exercised as of immediately prior to the
subdivision, combination or record date for such dividend payable in Common
Stock shall forthwith be proportionately decreased, in the case of
combination, or increased, in the case of subdivision or dividend payable
in Common Stock.
(ii) If the Company shall at anytime after the date of this Warrant
subdivide or combine the outstanding shares of Common Stock or declare a
dividend payable in Common Stock, the Exercise Price in effect immediately
prior to the subdivision, combination or record date for such dividend
payable in Common Stock shall forthwith be proportionately increased, in
the case of combination, or decreased, in the case of subdivision or
dividend payable in Common Stock.
If any capital reorganization or reclassification of the capital stock of the
Company, or share exchange, combination, consolidation or merger of the
Company with another corporation, or the sale of all or substantially all
of its assets to another corporation shall be effected in such a way that
holders of Common Stock shall be entitled to receive stock, securities or
assets with respect to or in exchange for Common Stock, then, as a
condition of such reorganization, reclassification, share exchange,
combination, consolidation, merger or sale, lawful and adequate provision
shall be made whereby the Holder shall thereafter have the right to receive
upon exercise of this Warrant upon the basis and upon the terms and
conditions specified in this Warrant and in lieu of the shares of the
Common Stock of the Company into which this Warrant was immediately
theretofore exercisable or convertible, such shares of stock, securities or
assets as may be issued or payable with respect to or in exchange for a
number of outstanding shares of such Common Stock equal to the number of
shares of such stock into which this Warrant was immediately theretofore
exercisable had such reorganization, reclassification, share exchange,
combination, consolidation, merger or sale not taken place, and in any such
case appropriate provisions shall be made with respect to the rights and
interests of Holder to the end that the provisions hereof (including
without limitation provisions for adjustments of the Exercise Price and of
the number of shares purchasable upon exercise or conversion of this
Warrant) shall thereafter be applicable, as nearly as may be, in relation
<PAGE>
to any shares of stock, securities or assets thereafter deliverable upon
the exercise or conversion hereof. The Company shall not effect any such
share exchange, combination, consolidation, merger or sale, unless prior to
the consummation thereof the successor corporation (if other than the
Company) resulting from such share exchange, combination, consolidation or
merger or the corporation purchasing such assets shall assume by written
instrument executed and mailed to the Holder at the last address of such
Holder appearing on the books of the Company, the obligation to deliver to
such Holder such shares of stock, securities or assets which, in accordance
with the foregoing provisions, such Holder may thereafter be entitled to
receive upon exercise or conversion of this Warrant.
If at anytime after the date of this Warrant the Company distributes to all
holders of Common Stock any assets (excluding ordinary cash dividends),
debt securities, or any rights or warrants to purchase debt securities,
assets or other securities (including Common Stock), the Exercise Price
shall be adjusted in accordance with the formula:
E1 = E x (O x M) - F
---------------
O x M
where:
E1 = the adjusted Exercise Price.
E = the current Exercise Price.
M = the average market price of Common Stock for the 30
consecutive trading days commencing 45 trading days before
the record date mentioned below.
O = the number of shares of Common Stock outstanding on the
record date mentioned below.
F = the fair market value on the record date of the
aggregate of all assets, securities, rights or warrants
distributed. The Company's Board of Directors shall
determine the fair market value in the exercise of its
reasonable judgment.
The adjustment shall be made successively whenever any such distribution is
made and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution.
(d) Upon any adjustment of the Exercise Price, then and in each such
case, the Company shall give written notice thereof, by first class mail,
postage prepaid, addressed to the Holder of this Warrant at the address of
such Holder as shown on the books of the Company, which notice shall state
the Exercise Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares for which this Warrant may be
exercised, setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based.
Common Stock. As used herein, the term "Common Stock" shall mean and include the
Company's presently authorized shares of common stock and shall also
include any capital stock of any class of the Company hereafter authorized
which shall not be limited to a fixed sum or percentage in respect of the
rights of the holders thereof to participate in dividends or in the
distribution, dissolution or winding up of the Company.
No Voting Rights. This Warrant shall not entitle the Holder to any voting
rights or other rights as a shareholder of the Company unless and until
exercised or converted pursuant to the provisions hereof.
<PAGE>
Exercise or Transfer of Warrant or Resale of Common Stock. The Holder, by
acceptance hereof, agrees to give written notice to the Company before
transferring this Warrant, in whole or in part, or transferring any shares
of Common Stock issued upon the exercise or conversion hereof, of such
Holder's intention to do so, describing briefly the manner of any proposed
transfer. Such notice shall include an opinion of counsel reasonably
satisfactory to the Company that (i) the proposed exercise or transfer may
be effected without registration or qualification under the Securities Act
of 1933, as amended (the "Act") and any applicable state securities or blue
sky laws, or (ii) the proposed exercise or transfer has been registered
under such laws. Upon delivering such notice, such Holder shall be entitled
to transfer this Warrant or such Warrant Shares, all in accordance with the
terms of the notice delivered by such Holder to the Company, provided that
an appropriate legend may be endorsed on the certificates for such shares
respecting restrictions upon transfer thereof necessary or advisable in the
opinion of counsel to the Company to prevent further transfer which would
be in violation of Section 5 the Act and applicable state securities or
blue sky laws.
If in the opinion of counsel to the Company or other counsel reasonably
acceptable to the Company the proposed transfer or disposition of this Warrant
or the Warrant Shares described in the written notice given pursuant to this
Section 7 may not be effected without registration of this Warrant or the
Warrant Shares, the Company shall promptly give written notice thereof to the
Holder within 10 days after the Company receives such notice, and such holder
will limit its activities in respect to such as, in the opinion of such counsel,
is permitted by law.
Covenants of the Company. The Company covenants and agrees that all shares which
may be issued upon conversion of this Warrant will, upon issuance, be duly
authorized and issued, fully paid, nonassessable and free from all taxes,
liens and charges with respect to the issue thereof. The Company further
covenants and agrees that the Company will at all times have authorized,
and reserved for the purpose of issue upon exercise hereof, a sufficient
number of shares of its Common Stock to provide for the exercise of this
Warrant.
Certain Notices. The Holder shall be entitled to receive from the Company
immediately upon declaration thereof and at least thirty (30) days prior to
the record date for determination of shareholders entitled thereto or to
vote thereon (or if no record date is set, prior to the event), written
notice of any event which could require an adjustment pursuant to Section 4
hereof or of the dissolution or liquidation of the Company. All notices
hereunder shall be in writing and shall be delivered personally or by
telecopy (receipt confirmed) to such party (or, in the case of an entity,
to an executive officer of such party) or shall be sent by a reputable
express delivery service or by certified mail, postage prepaid with return
receipt requested, addressed as follows:
<PAGE>
if to Medtronic, to:
Medtronic, Inc.
Corporate Center
7000 Central Avenue N.E.
Minneapolis, MN 55432
with separate copies thereof addressed to:
Attention: General Counsel
FAX (612) 572-5459
Attention: Vice President, Corporate Development and
Associate General Counsel
FAX (612) 572-5404
if to the Company to:
Endocardial Solutions, Inc.
1350 Energy Lane, Suite 110
St. Paul, MN 55108-5254
Attention: President and Chief Executive Officer
FAX (612) 644-7897
Any party may change the above-specified recipient and/or mailing address
by notice to all other parties given in the manner herein prescribed. All
notices shall be deemed given on the day when actually delivered as provided
above (if delivered personally or by telecopy) or on the day shown on the return
receipt (if delivered by mail or delivery service).
Registration Rights. The Holders of this Warrant and the Warrant Shares are
entitled to the rights and benefits of all of the terms, provisions and
conditions of that certain Registration Rights Agreement dated January 30,
1998 between Medtronic, Inc. and the Company, provided an express sharing
or assignment of such rights and benefits is made to each such Holder by
such Holder's transferor.
Miscellaneous.
No amendment, modification or waiver of any provision of this Warrant
shall be effective unless he same shall be in writing and signed by
the holder hereof.
This Warrant shall be governed by and construed in accordance with the laws
of the State of Minnesota.
(Signatures on the following page)
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
authorized officer and dated as of the date stated above.
ENDOCARDIAL SOLUTIONS, INC.
By:
James W. Bullock, President and Chief
Executive Officer
<PAGE>
Exhibit A
NOTICE OF EXERCISE OF WARRANT -- To Be Executed by the Registered Holder in
Order to Exercise the Warrant
The undersigned hereby irrevocably elects to exercise the attached Warrant
to purchase, for cash pursuant to Section 1 thereof, ________________ shares of
Common Stock issuable upon the exercise of such Warrant. The undersigned
requests that certificates for such shares be issued in the name of
__________________________________. If this Warrant is not fully exercised, the
undersigned requests that a new Warrant to purchase the balance of shares
remaining purchasable hereunder be issued in the name of ____________________.
Date: _________, ______ ______________________________________
[name of registered Holder]
______________________________________
[signature]
______________________________________
[street address]
______________________________________
[city, state, zip]
______________________________________
[tax identification number]
<PAGE>
Exhibit B
NOTICE OF CONVERSION OF WARRANT -- To Be Executed by the Registered Holder in
Order to Convert the Warrant on a Cashless Basis
The undersigned hereby irrevocably elects to convert, on a cashless basis,
a total of ______________ shares of Common Stock otherwise purchasable upon
exercise of the attached Warrant into such lesser number of shares of Common
Stock as determined by Section 2 of the Warrant. The undersigned requests that
certificates for such shares be issued in the name of
__________________________________. If this Warrant is not fully converted, the
undersigned requests that a new Warrant to purchase the balance of shares
remaining purchasable hereunder be issued in the name of ____________________.
Date: _________, ______ _________________________________
[name of registered Holder]
_________________________________
[signature]
_________________________________
[street address]
_________________________________
[city, state, zip]
_________________________________
[tax identification number]
