EXHIBIT 10.3

Amendment
to
Loan and Security Agreement

THIS AMENDMENT to Loan and Security Agreement (this “Amendment”) is entered as
of June 30, 2008 by and between Silicon Valley Bank (“Bank”) and ATS Medical,
Inc., a Minnesota corporation (the “Borrower”) whose address is 3905 Annapolis
Lane, Suite 105, Minneapolis, Minnesota 55447.

Recitals

A. Bank and Borrower have entered into that certain Loan and Security Agreement
dated as of July 28, 2004 (as amended, modified, supplemented or restated from
time to time, the “Loan Agreement”).

B. Bank has extended credit to Borrower for the purposes permitted in the Loan
Agreement.

C. Borrower has requested that Bank amend the Loan Agreement to (i) modify the
Liquidity Ratio Financial Covenant and (ii) make certain other revisions to the
Loan Agreement, as more fully set forth herein.

D. Bank has agreed to so amend certain provisions of the Loan Agreement, but
only to the extent, in accordance with the terms, subject to the conditions and
in reliance upon the representations and warranties set forth below.

Agreement

Now, Therefore, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:

1. Definitions. Capitalized terms used but not defined in this Amendment shall
have the meanings given to them in the Loan Agreement.

2. Amendments to Loan Agreement.

2.1 Modified Liquidity Ratio Financial Covenant. Section 6.7 of the Loan
Agreement currently reads as follows:

Borrower will maintain at all times, on a consolidated basis:

(i) Liquidity Ratio. A ratio of (y) the sum of (1) unrestricted cash (and
equivalents) of Borrower on deposit with Bank plus (2) 50% of Borrower’s
accounts receivable arising from the sale or lease of goods, or provision of
services, in the ordinary course of business, (z) divided by Indebtedness of
Borrower to Bank for borrowed money, of equal to or greater than 1.40 to 1.00.
Notwithstanding the foregoing, if the amount of Borrower’s Eligible Accounts
ever becomes less than 50% of Borrower’s accounts receivable arising from the
sale or lease of goods, or provision of services, in the ordinary course of
business, then part “2” above shall be deemed to read “(2) the lesser of the
amount of Borrower’s Eligible Accounts or 50% of Borrower’s accounts receivable
arising from the sale or lease of goods, or provision of services, in the
ordinary course of business”, unless the Bank shall consent in writing
otherwise.”

Said Section 6.7 is amended to read as follows:

Borrower will maintain at all times, on a consolidated basis:

(i) Liquidity Ratio.

Commencing with the month ending June 30, 2008 and each month ending thereafter
through December 31, 2008:

(A) As of the end of each of the first two months of each fiscal quarter, a
ratio of (y) the sum of (1) unrestricted cash (and equivalents) of Borrower on
deposit with Bank plus (2) 50% of Borrower’s accounts receivable arising from
the sale or lease of goods, or provision of services, in the ordinary course of
business, (z) divided by Indebtedness of Borrower to Bank for borrowed money, of
equal to or greater than 1.10 to 1.00; and

(B) As of the end of the third month of each fiscal quarter, a ratio of (y) the
sum of (1) unrestricted cash (and equivalents) of Borrower on deposit with Bank
plus (2) 50% of Borrower’s accounts receivable arising from the sale or lease of
goods, or provision of services, in the ordinary course of business, (z) divided
by Indebtedness of Borrower to Bank for borrowed money, of equal to or greater
than 1.40 to 1.00.

Notwithstanding the foregoing, if the amount of Borrower’s Eligible Accounts
ever becomes less than 50% of Borrower’s accounts receivable arising from the
sale or lease of goods, or provision of services, in the ordinary course of
business, then part “2” above (of each of clause (A) and (B)) shall be deemed to
read “(2) the lesser of the amount of Borrower’s Eligible Accounts or 50% of
Borrower’s accounts receivable arising from the sale or lease of goods, or
provision of services, in the ordinary course of business”, unless the Bank
shall consent in writing otherwise.

Commencing January 1, 2009 and each month ending thereafter:

A ratio of (y) the sum of (1) unrestricted cash (and equivalents) of Borrower on
deposit with Bank plus (2) 50% of Borrower’s accounts receivable arising from
the sale or lease of goods, or provision of services, in the ordinary course of
business, (z) divided by Indebtedness of Borrower to Bank for borrowed money, of
equal to or greater than 1.40 to 1.00. Notwithstanding the foregoing, if the
amount of Borrower’s Eligible Accounts ever becomes less than 50% of Borrower’s
accounts receivable arising from the sale or lease of goods, or provision of
services, in the ordinary course of business, then part “2” above shall be
deemed to read “(2) the lesser of the amount of Borrower’s Eligible Accounts or
50% of Borrower’s accounts receivable arising from the sale or lease of goods,
or provision of services, in the ordinary course of business”, unless the Bank
shall consent in writing otherwise.”

3. Limitation of Amendments.

3.1 The amendments and waivers set forth in Section 2, above, are effective for
the purposes set forth herein and shall be limited precisely as written and,
except as set forth in Section 2, above, shall not be deemed to (a) be a consent
to any amendment, waiver or modification of any other term or condition of any
Loan Document, or (b) otherwise prejudice any right or remedy which Bank may now
have or may have in the future under or in connection with any Loan Document.

3.2 This Amendment shall be construed in connection with and as part of the Loan
Documents and all terms, conditions, representations, warranties, covenants and
agreements set forth in the Loan Documents, except as herein amended, are hereby
ratified and confirmed and shall remain in full force and effect.

4. Representations and Warranties. To induce Bank to enter into this Amendment,
Borrower hereby represents and warrants to Bank as follows:

4.1 Immediately after giving effect to this Amendment (a) the representations
and warranties contained in the Loan Documents are true, accurate and complete
in all material respects as of the date hereof (except to the extent such
representations and warranties relate to an earlier date, in which case they are
true and correct as of such date), and (b) no Event of Default has occurred and
is continuing;

4.2 Borrower has the power and authority to execute and deliver this Amendment
and to perform its obligations under the Loan Agreement, as amended by this
Amendment;

4.3 The Third Restated Articles of Incorporation of ATS Medical, Inc. filed with
the Minnesota Secretary of State on June 11, 2008, a copy of which was provided
to Bank via email on June 18, 2008, remain true, accurate and complete and have
not been amended, supplemented or restated and are and continue to be in full
force and effect;

4.4 The execution and delivery by Borrower of this Amendment and the performance
by Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, have been duly authorized;

4.5 The execution and delivery by Borrower of this Amendment and the performance
by Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, do not and will not contravene (a) any law or regulation binding on
or affecting Borrower, (b) any contractual restriction with a Person binding on
Borrower, (c) any order, judgment or decree of any court or other governmental
or public body or authority, or subdivision thereof, binding on Borrower, or
(d) the organizational documents of Borrower;

4.6 The execution and delivery by Borrower of this Amendment and the performance
by Borrower of its obligations under the Loan Agreement, as amended by this
Amendment, do not require any order, consent, approval, license, authorization
or validation of, or filing, recording or registration with, or exemption by any
governmental or public body or authority, or subdivision thereof, binding on
Borrower, except as already has been obtained or made; and

4.7 This Amendment has been duly executed and delivered by Borrower and is the
binding obligation of Borrower, enforceable against Borrower in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium or other similar laws of
general application and equitable principles relating to or affecting creditors’
rights.

5. Counterparts. This Amendment may be executed in any number of counterparts
and all of such counterparts taken together shall be deemed to constitute one
and the same instrument.

6. Fees and Expenses. Without limitation on the terms of the Loan Documents,
Borrower agrees to reimburse Bank for all its costs and expenses (including
reasonable attorneys’ fees) incurred in connection with this Amendment. Bank is
authorized to charge said fees, costs and expenses to Borrower’s loan account or
any of Borrower’s deposit accounts maintained with Bank.

7. Effectiveness. This Amendment shall be deemed effective upon (a) the due
execution and delivery to Bank of this Amendment by each party hereto and
(b) Bank’s receipt of the Acknowledgment of Amendment and Reaffirmation of
Guaranty substantially in the form attached hereto as Schedule 1, duly executed
and delivered by each Guarantor.

[Signature page follows]

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In Witness Whereof, the parties hereto have caused this Amendment to be duly
executed and delivered as of the date first written above.

      BANK   BORROWER
Silicon Valley Bank
By:  /s/ Nick Honigman
  ATS Medical, Inc.
By:  /s/ Michael Kramer
 
   
Name:  Nick Honigman
  Name:  Michael Kramer
 
   
Title:   Relationship Manager
  Title:   Chief Financial Officer
 
   

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Schedule 1

ACKNOWLEDGMENT OF AMENDMENT
AND REAFFIRMATION OF GUARANTY

Section 1. Guarantor hereby acknowledges and confirms that it has reviewed and
approved the terms and conditions of the Amendment to Loan and Security
Agreement dated as of even date herewith (the “Amendment”).

Section 2. Guarantor hereby consents to the Amendment and agrees that the
Guaranty relating to the Obligations of Borrower under the Loan Agreement shall
continue in full force and effect, shall be valid and enforceable and shall not
be impaired or otherwise affected by the execution of the Amendment or any other
document or instrument delivered in connection herewith.

Section 3. Guarantor represents and warrants that, after giving effect to the
Amendment, all representations and warranties contained in the Guaranty are
true, accurate and complete as if made the date hereof.

Dated as of June 30, 2008

GUARANTOR: 3F Therapeutics, Inc.

By:  /s/ Michael Dale
Name:  Michael Dale
Title:   Director

GUARANTOR: ATS Acquisition Corp.

By:  /s/ Michael Dale
Name:  Michael Dale
Title:   Director

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