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                                                                     EXHIBIT 4.7

                                ESCROW AGREEMENT

     THIS ESCROW AGREEMENT (this "Escrow Agreement"), effective as of ________,
2006, is entered into by and among ATS Medical, Inc., a Minnesota corporation
("Parent"), Boyd D. Cox, an individual resident of the state of Arkansas (the
"Stockholder Representative"), as agent for the holders of the capital stock of
3F Therapeutics, Inc., a Delaware corporation (the "Company", the holders of the
Company Capital Stock are the "Stockholders", who are listed on Schedule A,
attached hereto), and Wells Fargo Bank, N.A., a national banking association
principally located in Minneapolis, Minnesota (the "Escrow Agent"). Parent and
the Stockholder Representative are sometimes together referred to herein as the
"Parties" and each individually as a "Party."

     WHEREAS, pursuant to the Agreement and Plan of Merger, dated as of January
23, 2006, as amended by Amendment No. 1 to Agreement and Plan of Merger, dated
as of June 13, 2006, each entered into by and among Parent, Seabiscuit
Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
Parent ("Merger Subsidiary"), the Company and the Stockholder Representative
(the "Merger Agreement"), Merger Subsidiary will be merged with and into the
Company (the "Merger") and each share of the Company common stock, $0.001 par
value (the "Company Common Stock"), and the Company Preferred Stock (the Company
Common Stock and the Company Preferred Stock may be collectively referred to as
the "Company Capital Stock") issued and outstanding immediately prior to the
Effective Time will be converted into the right to receive that number of shares
of the common stock of the Parent, $0.01 par value per shares (the "Parent
Common Stock"), as is determined in accordance with the terms and subject to the
conditions of the Merger Agreement (all such shares of Parent Common Stock,
collectively, the "Merger Consideration");

     WHEREAS, Section 2.1(b) of the Merger Agreement provides that if one or
more of certain milestones are achieved, Parent will pay the Stockholders
additional shares of Parent Common Stock (constituting a portion of the Merger
Consideration), assuming there are no outstanding indemnification claims or
rights of set off by Parent at that time;

     WHEREAS, Article 9 of the Merger Agreement provides that, in certain
circumstances, shares of Parent Common Stock that would otherwise be required to
be issued by Parent to the Stockholders from time to time after the Merger upon
the achievement of one or more milestones may instead be deposited by Parent
with the Escrow Agent (the "Set-Off Shares") and held by the Escrow Agent in
escrow for the purpose described herein;

     WHEREAS, the Merger Agreement provides that a portion of the Merger
Consideration, equal to the number of shares of Merger Consideration to which
all holders of Outstanding Options would have been entitled had such holders
exercised such options prior to the date that was 10 days before the Effective
Time (the "Reserved Shares"), is to be reserved for issuance when and if such
Outstanding Options are exercised;

     WHEREAS, pursuant to the terms of the Merger Agreement and as part of the
transactions contemplated thereby, the Parties agreed to enter into this Escrow
Agreement and


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deposit with the Escrow Agent for the purposes set forth in the Merger Agreement
a portion of the (a) Initial Merger Consideration consisting of 1,400,000 fully
paid and nonassessable shares of Parent Common Stock (the "Escrow Shares") and
Distributions (as defined below) related thereto and (b) Milestone Shares as
Set-Off Shares and Distributions related thereto (both groups of shares and
Distributions related thereto may be collectively referred to as the "Escrow
Fund");

     WHEREAS, pursuant to the terms of the Merger Agreement, the Parties agreed
that the Escrow Shares and the Set-Off Shares shall provide security for Parent
and consideration for satisfaction of any (a) pending indemnification claims
that Parent may have against the Stockholders pursuant to the terms of the
Merger Agreement; (b) payment obligations of Stockholders required to satisfy
Parent's right to a net operating assets adjustment under Section 2.3 of the
Merger Agreement; and (c) set-off rights of Parent arising under Section 5.21 of
the Merger Agreement regarding recovery of the Edwards Holdback Amount.

     WHEREAS, pursuant to Section 12.13 of the Merger Agreement, the Stockholder
Representative has authority to do, on behalf of the Stockholders, but is not
limited to doing, the following after the Effective Time: (a) amend this Escrow
Agreement or the Merger Agreement; (b) execute and deliver all documents and
instruments which may be executed and delivered pursuant to this Escrow
Agreement or the Merger Agreement; (c) make and receive notices and other
communications pursuant to this Escrow Agreement or the Merger Agreement; (d)
settle and dispute, any claim, action, suit or proceeding arising out of or
related to this Escrow Agreement or the Merger Agreement; and (e) pay expenses
incurred or which may be incurred on behalf of the Stockholders;

     WHEREAS, pursuant to the terms of the Merger Agreement, the Parties agreed
that Parent shall deposit Escrow Shares and Set-Off Shares, if any, with the
Escrow Agent to hold until instructed otherwise in accordance with the terms
hereof and the Merger Agreement, and that the Escrow Shares and Escrow Share
Distributions related thereto or Set-Off Shares and Set-Off Share Distributions
related thereto shall be distributed only in accordance with the terms of this
Agreement and the Merger Agreement;

     WHEREAS, the Parties and the Escrow Agent desire to more specifically set
forth their rights and obligations with respect to the Escrow Shares and Escrow
Share Distributions related thereto and the Set-Off Shares and Set-Off Share
Distributions related thereto and the distribution and release thereof;

     WHEREAS, Parent, the Company, and Wells Fargo Bank, N.A., have entered into
a separate agreement, dated as of the date hereof, pursuant to which Wells Fargo
Bank, N.A., acting in its capacity as exchange agent thereunder ("Exchange
Agent"), will, among other things, distribute to the Stockholders any Escrow
Shares and Escrow Share Distributions related thereto and any Set-Off Shares and
Set-Off Distributions related thereto that the Stockholders become entitled to
receive under the Merger Agreement or this Escrow Agreement (the "Exchange
Agreement"); and

     WHEREAS, the execution and delivery of this Escrow Agreement is a condition
precedent to the closing of the Merger under the Merger Agreement.


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     NOW, THEREFORE, in consideration of the premises and covenants contained
herein, and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

     1. Appointment of and Acceptance by the Escrow Agent. The Escrow Agent is
hereby appointed by the Parties as the Escrow Agent in accordance with the
instructions set forth herein. The Escrow Agent hereby accepts such appointment.

     2. Establishment of Escrow. On the date hereof, in consideration of the
transactions contemplated by the Merger Agreement, and in order to induce Parent
to consummate the transactions contemplated by the Merger Agreement, and in
order to secure the indemnification and payment obligations of the Stockholders
and the set-off rights of Parent as provided for under Sections 2.3 and 5.21 of
the Merger Agreement, Parent shall deposit or cause to be deposited into escrow
by issuing to the Escrow Agent, in the name of the Escrow Agent, a certificate
representing the Escrow Shares. Parent may also deposit or cause to be deposited
into escrow by issuing to the Escrow Agent, in the name of the Escrow Agent, a
certificate or certificates representing the Set-Off Shares pursuant to this
Escrow Agreement. As so deposited, the Escrow Shares and Set-Off Shares shall be
referred to as the "Deposited Shares" and shall include any dividends,
distributions, income, property or other rights distributed (including, without
limitation, upon a stock split, stock dividend or other recapitalization of
Parent) with respect to or in exchange for, or otherwise attaching or related
to, the Escrow Shares (which have not been released from the escrow established
by this Escrow Agreement) or the Set-Off Shares (which have not been released
from the escrow established by this Escrow Agreement) (the "Escrow Share
Distributions" and the "Set-Off Share Distributions", respectively; the Escrow
Share Distributions and the Set-Off Share Distributions may be collectively
referred to as the "Distributions"). The Deposited Shares, together with any
Distributions, shall be held by the Escrow Agent, for the account of Parent, in
order to satisfy any pending claims for indemnification made by Parent pursuant
to Article 9 of the Merger Agreement, to satisfy Parent's right to a net working
capital adjustment pursuant to Section 2.3 of the Merger Agreement, if any, and
to satisfy Parent's set off rights under Section 5.21 of the Merger Agreement
regarding recovery of the Edwards Holdback Amount, if any. The Escrow Agent
agrees to accept delivery of the Deposited Shares and the Distributions, and to
hold the Escrow Fund in escrow subject to the terms and conditions of this
Agreement. The Escrow Shares and the Escrow Share Distributions shall be held by
the Escrow Agent in Account # __________ (the "Escrow Shares Account"), and the
Set-Off Shares and the Set-Off Share Distributions shall be held by the Escrow
Agent in Account # __________ (the "Set-Off Shares Account" and, together with
the Escrow Shares Account (the "Escrow Accounts"). No portion of the Escrow Fund
shall be subject to any consensual lien, attachment, trustee process, or other
judicial process of any kind whatsoever of any creditor of any of the parties
hereto.

     3. Investment of Cash Distributions.

          (a) The Escrow Agent shall be permitted to deposit, transfer, hold,
and invest any cash Distributions received by the Escrow Agent pursuant to this
Agreement in one or more Wells Fargo Advantage Money Market Funds (the "Wells
Fargo Advantage Funds") upon the completion by Parent of the Agency and Custody
Account Direction for Cash Balances, a form of which is attached hereto as
Appendix A. In the absence of written instructions from Parent,


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the Escrow Agent is hereby directed to invest cash Distributions in the Wells
Fargo Advantage 100% Treasury Money Market Fund, Service Class Shares. The
investments in the Wells Fargo Advantage Funds are not obligations of, or
endorsed or guaranteed by, the Escrow Agent or its affiliates and are not
insured by the Federal Deposit Insurance Corporation. All income earned on
invested funds, if any, shall be distributed to the Exchange Agent for
distribution to the Stockholders or to Parent, as the case may be, concurrently
with the release of the related shares held in the Escrow Fund.

          (b) The Escrow Agent shall be entitled to sell or redeem any such
investments as is necessary to make any distributions required under this
Agreement. The Escrow Agent shall have no responsibility or liability for any
loss which may result from any investment made pursuant to this Agreement, or
for any loss resulting from the sale of such investment. The Parties acknowledge
that the Escrow Agent is not providing investment supervision, recommendations,
or advice.

     4. Separate Accounts. The Escrow Agent shall keep a separate accounting for
the Escrow Shares and the Set-Off Shares such that, in the event Parent or the
Stockholders, as the case may be, become entitled to the Escrow Shares and
Escrow Share Distributions related thereto or Set-Off Shares and Set-Off Share
Distributions related thereto pursuant to the Merger Agreement, the appropriate
number of Escrow Shares or Set-Off Shares will be available for distribution, in
addition to the appropriate Distributions related thereto.

     5. Information Regarding Company Stockholders and Holders of Outstanding
Options. Schedule A attached hereto is a complete and correct list of the
Stockholders and the holders of Outstanding Options as of the Effective Time,
including their respective holdings of Company Capital Stock (assuming the full
exercise of all Outstanding Options), their percentage interest in the
outstanding shares of Company Capital Stock as of the Effective Time, and their
respective mailing addresses. Schedule A may be revised from time to time by
Parent to reflect any updates to information contained on such schedules. At the
time of such revision, a copy or copies of the revised schedule(s) shall be
provided by Parent to the Stockholder Representative. For purposes of
clarification, upon exercise of an Outstanding Option, the former holder thereof
shall be deemed to be a Stockholder hereunder and Schedule A of this Escrow
Agreement shall be revised accordingly.

     6. Company Stockholders' Escrow Account Interest. At the time any
distribution of all or any portion of the Escrow Shares and Escrow Share
Distributions related thereto or Set-Off Shares and Set-Off Share Distributions
related thereto is to be made by the Escrow Agent to the Exchange Agent for
distribution to the Stockholders, the Stockholders shall each be entitled to its
percentage interest of the Escrow Shares or Set-Off Shares or Distributions or
other property related thereto being so distributed in proportion to the ratio
by which the number of shares of Company Capital Stock held by each Company
Stockholder at time of any such distribution (assuming all Outstanding Options,
other than any such options that are terminated or have expired following the
Effective Time, are exercised in full) bears to the aggregate number of
outstanding shares of Company Capital Stock at time of any such distribution
(assuming all Outstanding Options, other than any such options that are
terminated or have expired following the Effective Time, are exercised in full)
(the "Escrow Account Interest" or collectively the "Escrow Account Interests");
provided, however, that if a Person has not exercised all of its


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Outstanding Options at the time of distribution of Escrow Shares or Set-Off
Shares, Parent shall notify the Escrow Agent and direct the Escrow Agent to
issue to Parent the number of Escrow Shares or Set-Off Shares equal to the
difference between the number of Escrow Shares or Set-Off Shares to which the
Person would be entitled to receive if all of its Outstanding Options were
exercised less the number of Escrow Shares or Set-Off Shares to which the Person
is entitled to receive on the date of distribution of such Escrow Shares of
Set-Off Shares. Parent shall hold these Escrow Shares or Set-Off Shares in
reserve and continue to keep such shares available for issuance until and upon
such time as the Person exercises its Outstanding Options at which time Parent
shall distribute the appropriate number of shares held by it in reserve to the
Exchange Agent for distribution to such Person. Upon the termination,
expiration, or exercise of the last Outstanding Option such that there are no
longer any Outstanding Options, Parent shall deliver to Exchange Agent for
distribution to the Stockholders in accordance with the Exchange Agreement any
remaining Escrow Shares and Set-Off Shares held in reserve by Parent if such
Escrow Shares and Set-Off shares would otherwise be issuable to the
Stockholders.

     7. Distributions, Voting and Rights of Ownership regarding Escrow Shares
and Set-Off Shares. Any Distributions with respect to the Escrow Shares or the
Set-Off Shares will be issued or distributed by Parent to the Escrow Fund as an
additional contribution to the Escrow Fund by the Parent with such dividends or
distributions retained by the Escrow Agent pursuant to the terms of this Escrow
Agreement. The Stockholders, the Stockholder Representative, and the Escrow
Agent shall not have any voting rights with respect to the Escrow Shares and
Escrow Share Distributions related thereto, or the Set-Off Shares and the
Set-Off Share Distributions related thereto while such shares or Distributions
related thereto are held in escrow by the Escrow Agent. The Stockholders and the
Stockholder Representative disclaim any right to such voting rights and agree
not to attempt to exercise or claim a right to exercise any such voting rights
with respect to such Escrow Shares and Escrow Share Distributions related
thereto, or Set-Off Shares and Set-Off Share Distributions related thereto.
Unless and until distributed to the Stockholders through the Exchange Agent, or
distributed to Parent, as the case may be, in accordance with the provisions
hereof, the Escrow Shares and Escrow Share Distributions related thereto and the
Set-Off Shares and the Set-Off Share Distributions related thereto shall be
registered in the name of Wells Fargo Bank, N.A., in its sole capacity as Escrow
Agent. Except for distributions of the Escrow Shares to Parent or to the
Exchange Agent for distribution to the Stockholders as herein required, the
Escrow Agent shall not sell, transfer, pledge, assign, encumber, or otherwise
attempt to dispose or transfer any (i) Escrow Shares and Escrow Share
Distributions related thereto or (ii) Set-Off Shares and Set-Off Share
Distributions related thereto held pursuant to this Escrow Agreement.

     8. No Transfer of Escrow Shares and Set-Off Shares. Each Stockholder shall
not sell, transfer, pledge, assign, encumber, or otherwise attempt to dispose or
transfer of their Escrow Account Interest, or the underlying shares or property
related thereto, any portion thereof, or any interest therein, unless and until
such Escrow Account Interest or the underlying shares or property related
thereto, portion thereof, or interest therein is delivered by the Exchange Agent
to such Stockholder pursuant to the terms of the Exchange Agreement. Each
Stockholder shall not allow its Escrow Account Interest or the underlying shares
or property related thereto, a portion thereof, or any interest therein to be
taken or reached by any legal or equitable process in satisfaction of any debt
or other liability of the Stockholder unless and until such Escrow Account
Interest or the underlying shares or property related thereto, portion


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thereof, or interest therein is delivered by the Exchange Agent to such
Stockholder pursuant to the terms of the Exchange Agreement. Any purported
transfer in violation of any of the foregoing restrictions in this Section 8
shall be null, void and of no force or effect and the Escrow Agent shall not
recognize any request for such purported transfer.

     9. Procedure for Making Claims Against the Escrow Shares or Set-Off Shares.
If Parent may make a claim pursuant to the terms of the Merger Agreement,
Parent, either on behalf of itself or on behalf of Company, or its agent, may
make, by delivering to the Stockholder Representative with a copy provided to
the Escrow Agent, a written notice (a "Claim Notice"), one or more claims (each
such claim, a "Claim") against either: (a) the Escrow Shares or Distributions
related thereto up to eighteen (18) months after the Effective Date (the "Escrow
Shares Cut-Off Period"), or (b) the Set-Off Shares or Distributions related
thereto (including any Escrow Shares remaining in the Escrow Fund that have not
been previously distributed to Parent or to the Exchange Agent for distribution
to the Stockholders pursuant to the terms of the Exchange Agreement) until the
earlier of: (i) the date on which all Milestone Consideration has been issued or
paid or set-off against to create Set-Off Shares as provided in the Merger
Agreement, or (ii) the expiration of the Contingent Period (the "Final Cut-Off
Period"). Each Claim Notice, a form of which is attached hereto as Exhibit A,
shall (i) describe in reasonable detail the basis of each Claim asserted by
Parent, (ii) provide an estimate of the total amount of the Claim(s) described
in the Claim Notice, and (iii) state that a copy of the Claim Notice has been
provided by Parent to the Stockholder Representative in a timely manner and in
accordance with the Escrow Agreement. It is expressly agreed that Claims shall
include indemnification claims brought by Parent during the applicable periods
against either the Escrow Shares or the Set-Off Shares. As contemplated in the
Merger Agreement, Parent, either on behalf of itself or on behalf of Company, or
its agent, may make one or more Claims using Set-Off Shares or Distributions
related thereto prior to December 31, 2013 or the final Milestone Date,
whichever occurs first, so long as the Claim Notice was delivered to the
Stockholder Representative by the end of the Final Cut-Off Period. Parent may
make any such Claims before the certificates representing Escrow Shares and
Escrow Share Distributions related thereto are delivered to the Escrow Agent,
but Parent must make any such Claims before the certificates representing the
Set-Off Shares and Set-Off Share Distributions related thereto are delivered to
the Escrow Agent. If on [INSERT DATE 18 MONTHS FROM THE EFFECTIVE TIME OF
MERGER] Parent has no then pending Claim and Parent has not given notice to the
Escrow Agent directing the Escrow Agent not to distribute the Escrow Shares and
the Escrow Distributions, the parties agree that the Escrow Agent shall
distribute all of the then remaining Escrow Shares and Escrow Distributions to
the Exchange Agent for distribution to the Stockholders. Nothing herein shall be
deemed to modify, supersede, or amend the provisions of the Merger Agreement as
to the time periods, limits, methodology, or the like of making Claims for which
indemnification may be sought.

     10. Disputed Claims. Within twenty (20) days of the Stockholder
Representative receiving a Claim Notice, the Stockholder Representative, acting
on behalf of the Stockholders, may dispute or object to any Claim, in whole or
in part, by delivering to the Escrow Agent a copy of Parent's Claim Notice and a
written notice of objection, a form of which is attached hereto as Exhibit B,
(an "Objection Notice") stating:

          (a) that the Stockholder Representative disputes or objects to such
Claim;


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          (b) that the Stockholder Representative has delivered a copy of the
Objection Notice to Parent in a timely manner and in accordance with this Escrow
Agreement; and

          (c) the portion of the Claim set forth in the Claim Notice, if any,
that is not disputed or objected to.

     If an Objection Notice is not delivered in a timely manner in accordance
with this Section 10, the Stockholder Representative shall be deemed to have
given its consent to the entire amount of the Claim. In that case, both Parent
and the Stockholder Representative authorize the Escrow Agent to release
promptly to Parent the number of Deposited Shares required to satisfy the Claim.
The number of Deposited Shares to be released shall be calculated in accordance
with this Escrow Agreement.

     Parent and the Stockholder Representative agree that all disputed Claims
shall be resolved in accordance with the procedures set forth in Article 10 of
the Merger Agreement.

     11. Payment of Claims. If the Escrow Agent receives from the Stockholder
Representative written notice of consent or agreement to all or part of a Claim,
or receives notice of a Final Decision (as defined below) in favor of Parent,
the Escrow Agent shall thereupon promptly deliver to Parent from the Deposited
Shares a number of Deposited Shares having a value equal to the aggregate amount
of such Claim as specified in such written notice of consent or agreement from
the Stockholder Representative or in the Final Decision, as the case may be,
such value to be determined as hereinafter prescribed. If the Deposited Shares
are not sufficient to satisfy in full such Claim (as consented or agreed to by
Stockholder Representative or as finally determined by a Final Decision), the
Escrow Agent shall deliver to Parent such Deposited Shares as are available and
satisfy the remainder of such Claim from Distributions to the extent of such
Distributions and/or from any subsequently Deposited Shares. Claims satisfied by
payment in the form of Deposited Shares shall be satisfied by returning to
Parent from the Deposited Shares the number of whole shares of Parent Common
Stock equal to the quotient of the aggregate Claim(s) being so satisfied divided
by the Average Market Price (as defined below), so adjusted, if appropriate, in
the event that there occurs any stock dividend, stock split, or similar event
with respect to the Parent Common Stock after the Effective Time. "Average
Market Price" means (i) with respect to Escrow Shares, the average of the
closing sale price (such closing price as reported by The NASDAQ Stock Market at
the end of regular trading) of one share of Parent Common Stock on the NASDAQ
National Market System (or such other national securities trading system as
Parent Common Stock is approved and listed for trading) on each of the sixty
(60) trading days ending on (and including) the Distribution Date, and (ii) with
respect to Set-Off Shares, the Parent Milestone Share Price. Such Average Market
Price and the number of Deposited Shares to satisfy such Claim shall be provided
in writing to the Escrow Agent by Parent and the Stockholder Representative,
which notice shall be provided promptly following consent or agreement by the
Stockholder Representative of the Claim or the Final Decision, as the case may
be.

     12. Distribution of Escrow Fund to Exchange Agent for Distribution to
Stockholders.

          (a) After the expiration of the Escrow Shares Cut-Off Period or Final
Cut-Off Period, as the case may be and which date shall be provided in writing
to the Escrow Agent by


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Parent, but only after disbursements have been made to Parent with respect to
all resolved Claims and only after resolution of all pending unresolved Claims
made prior to expiration of the Escrow Shares Cut-Off Period or the Final
Cut-Off Period, as the case may be, and subject to Section 15 and Section 16 of
this Agreement, the Escrow Agent shall, after taking the actions described in
this Section 12, remit the balance of the Escrow Fund (excluding any shares that
are returned, or required to be returned, back to Parent pursuant to the terms
of this Escrow Agreement) then remaining to the Exchange Agent for distribution
to the Stockholders. In addition, prior to such proposed distribution to the
Exchange Agent, the Escrow Agent shall notify Parent and the Stockholder
Representative of the pending distribution(s) and the proposed number of
Deposited Shares to be remitted to the Exchange Agent for distribution to the
Stockholders. In the event that there exists as of the date of the proposed
distribution any Claim that has not been satisfied in full or if Parent has
provided written notice to the Escrow Agent and to the Stockholder
Representative that states the reasons why pursuant to the Merger Agreement or
by law that the Escrow Agent should not distribute all or any portion of the
Escrow Fund to the Exchange Agent for distribution to the Stockholders, Parent
and the Stockholder Representative shall endeavor in good faith to determine a
reasonable estimate of the maximum amount of such Claim and shall jointly
instruct the Escrow Agent to deliver any excess amount in the Escrow Fund to the
Exchange Agent for distribution to the Stockholders. The Escrow Agent shall
continue to hold such portion of the Escrow Fund in dispute until the Escrow
Agent receives written instructions signed by each of Parent and the Stockholder
Representative directing the Escrow Agent to deliver the Escrow Fund (or any
portion thereof) or until there is a Final Decision (as hereinafter defined)
with respect to a disputed Claim directing delivery of the Escrow Fund (or any
portion thereof), in which case the Escrow Agent shall deliver the Escrow Fund
(or such portion thereof) in accordance with the Final Decision. "Final
Decision" means a decision, order, judgment or decree of an arbitrator or court
having jurisdiction that is either not subject to appeal or as to which notice
of appeal has not been timely filed or served. Upon the issuance of a Final
Decision, an authorized representative of Parent and Stockholders Representative
agree to provide a joint written instruction to the Escrow Agent directing the
Escrow Agent to deliver the Escrow Fund (or such portion thereof) in accordance
with the Final Decision. Notwithstanding anything herein to the contrary, the
Escrow Agent is authorized to take any action with respect to the Escrow Fund
upon receipt of a joint instructions notice signed by an authorized
representative of Parent and the Stockholder Representative, provided the Escrow
Agent has prior to such time received an incumbency certificate satisfactory to
it for such representative of Parent.

          (b) Deposited Shares issued to the Stockholders shall be bifurcated
into shares deemed to represent Merger Consideration and shares deemed to
represent imputed interest, with separate share certificates with respect to
Merger Consideration and imputed interest issued to each Stockholder. If the
Stockholder Representative agrees to such allocation of Deposited Shares then
remaining in the applicable Escrow Account, the Stockholder Representative shall
so notify Parent and Parent shall provide the Escrow Agent with such necessary
stock certificates in the name of each such Stockholder (with separate
certificates for the Merger Consideration and the imputed interest) representing
such number of Deposited Shares, and the Escrow Agent shall remit such number of
Deposited Shares to the Exchange Agent for distribution to each such
Stockholder.


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     13. Duration of Escrow. The Escrow Agent shall hold all Escrow Shares and
Set-Off Shares and other property constituting a part thereof until the Escrow
Shares or Set-Off Shares, or other property constituting a part thereof that
corresponds to the Distribution(s), is delivered to the Exchange Agent for
distribution to the Stockholders or to Parent, as the case may be, pursuant to
the terms of this Escrow Agreement.

     14. Fractional Shares. Notwithstanding any other provision of this Escrow
Agreement to the contrary, no certificates representing fractional shares of
Parent Common Stock shall be remitted to the Exchange Agent for conveyance to
the Stockholders upon distribution from the Escrow Shares and Escrow Share
Distributions related thereto or Set-Off Shares and Set-Off Share Distributions
related thereto. In lieu of any fractional shares of Parent Common Stock to
which any Stockholder may be entitled or which would otherwise be held as shares
in escrow, Parent shall remit to the Exchange Agent for payment to such
Stockholder or to the escrow account an amount of cash (without interest)
determined by multiplying the fair market value of one share of Parent Common
Stock on the Escrow Distribution Date (as defined below) by the fractional share
interest to which such Stockholder would otherwise be entitled or which would
otherwise be delivered to the escrow account (determined after taking into
account all shares of Company Common Stock held by each such Stockholder
immediately prior to the Effective Time). Parent will make available to the
Escrow Agent all cash necessary for this purpose. If Parent becomes entitled to
receive from each Stockholder any fraction of a share of Parent Common Stock
from any Stockholder pursuant hereto, then Parent will receive the next higher
whole number of shares and pay to such Stockholder an amount of cash (without
interest) determined by multiplying the Average Market Price by the fractional
share interest received by Parent as a result of the rounding up of the shares
transferred by the Stockholder(s).

     15. Release and Return of Deposit Shares to Parent for Recovery of Edwards
Holdback Amount. Pursuant to Section 5.21 of the Merger Agreement, Parent shall
be entitled to all or any portion of the Edwards Holdback Amount not received on
or prior to January 15, 2007 by Parent or the Surviving Corporation, which may
be the entire Edwards Holdback Amount of Two Million Dollars ($2,000,000). If
the Edwards Holdback Amount is not paid in full by January 15, 2007, then in
accordance with Section 5.21 of the Merger Agreement, Parent shall have the
right to, in its sole and absolute discretion, immediately notify the Escrow
Agent in writing to return to Parent the number of Escrow Shares as provided
herein or, in its sole and absolute discretion, the number of Set-Off Shares
from shares of Parent Common Stock that may be issued to the Stockholders as
Milestone Shares. The number of such Escrow Shares (or Set-Off Shares, as the
case may be) that shall be used to satisfy the Edwards Holdback Amount that was
not paid to Parent or the Surviving Corporation shall be equal to: (a) the
portion of the Edwards Holdback Amount (which may be the entire amount) not
received on or prior to January 15, 2007, divided by (b) the average of the
closing sale prices (such closing price as reported by the Nasdaq Stock Market
at the end of regular trading) of one share of Parent Common Stock on the NASDAQ
National Market System (or such other national securities trading system as the
Parent Common Stock is approved and listed for trading) on each of the sixty
(60) trading days ending on (and including) January 15, 2007. If Parent
exercises its right to set-off pursuant to Section 5.21 of the Merger Agreement
and so notifies the Escrow Agent to return the applicable number of Escrow
Shares (or Set-Off Shares, as the case may be) to Parent as recovery of the
Edwards Holdback Amount, such shares will automatically return to the status of
authorized and unissued common stock of the Parent.


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<PAGE>

     16. Release and Return of Escrow Shares to Parent for Net Operating Assets
Adjustment. Upon final resolution of an adjustment, if any, pursuant to Section
2.3 of the Merger Agreement requiring shares to be returned to Parent, Parent
shall give written notice thereof to the Escrow Agent and the Stockholder
Representative of the exercising of Parent's right to withdraw Escrow Shares in
order to give effect to the Net Operating Assets Adjustment as provided in
Section 2.3 of the Merger Agreement, specifying therein (a) the number of Escrow
Shares to be so withdrawn and (b) evidence of calculation or other rationale
providing for the withdraw of such number of Escrow Shares.

     17. Termination. This Escrow Agreement shall terminate as follows:

          (a) At the close of business on December 31, 2014 or one year after
the final Milestone Date, whichever occurs first, but in no event shall this
Escrow Agreement terminate within eighteen (18) months of the Effective Date
(the "Escrow Distribution Date"), provided that there are no claims then pending
against the Escrow Shares and Escrow Share Distributions related thereto or
Set-Off Shares and Set-Off Share Distributions related thereto that were made by
proper delivery of a Notice of Claim on or prior to such date, in which event
the Escrow Agent shall promptly thereafter deliver any remaining Escrow Shares
and Escrow Share Distributions related thereto, or Set-Off Shares and Set-Off
Share Distributions related thereto, to the Exchange Agent for distribution to
the Stockholders; or

          (b) Upon Final Resolution of any claims of Parent that are pending
against the Escrow Shares and Escrow Share Distributions related thereto or
Set-Off Shares and Set-Off Share Distributions related thereto on the Escrow
Distribution Date, provided that such claims were made by proper delivery of
Notices of Claims on or before the Escrow Distribution Date, in which event the
remaining Escrow Shares and Escrow Share Distributions related thereto or
Set-Off Shares and Set-Off Share Distributions related thereto shall be
distributed by the Escrow Agent to the Exchange Agent for distribution to the
Stockholders in accordance with the Exchange Agreement; or

          (c) Upon the mutual written agreement to terminate this Escrow
Agreement executed by Parent and the Stockholder Representative.

     18. Indemnification of the Parent Indemnitees. In addition to and not in
limitation of the indemnification provisions in the Merger Agreement, the
Stockholders hereby agree, severally and not jointly, in proportion to their
respective Escrow Account Interests, to indemnify and hold harmless Parent, the
Surviving Corporation and their respective successors, officers, directors,
stockholders and affiliates (the "Parent Indemnitees"), from and against any and
all loss, liability, cost, damage and expense, including, without limitation,
reasonable counsel fees, that the Parent Indemnitees may suffer or incur by
reason of any action, claim or proceeding brought against the Parent Indemnitees
arising out of or relating in any way to any actions or inactions taken by the
Stockholder Representative in his capacity as such under this Escrow Agreement
or the Merger Agreement.

     19. Authority of Escrow Agent. Parent and the Stockholder Representative,
by execution and delivery of this Escrow Agreement, constitute and appoint the
Escrow Agent as their true and lawful agent and attorney-in-fact to assign and
transfer the Escrow Shares and


                                       10

<PAGE>

Escrow Share Distributions related thereto and the Set-Off Shares and the
Set-Off Share Distributions related thereto, for and on behalf of Parent and the
Stockholder Representative, respectively, and in the name, place and stead of
Parent and the Stockholder Representative, respectively, as fully and to all the
same extent as Parent or the Stockholder Representative, respectively, could do
on their own behalf, as shall from time to time be required in accordance with
the provisions of this Escrow Agreement. In furtherance of the foregoing and not
in limitation thereof, the Escrow Agent is specifically authorized to forward
any of the Escrow Shares, the Set-Off Shares, any Distributions related thereto,
or any other property constituting a part of the Escrow Shares and the Set-Off
Shares pursuant to this Escrow Agreement to (i) Parent in satisfaction of the
Stockholders' indemnification obligations in the Merger Agreement, and/or
payment obligations of the Stockholders in the Merger Agreement, and/or in
satisfaction of Parent's set-off rights to recovery for the Edwards Holdback
Amount, and/or in satisfaction of Parent's right to give effect to a net
operating assets adjustment, if any, and as may be necessary to accomplish the
intent and purposes of this Escrow Agreement, or (ii) provided Parent has no
outstanding claims for indemnification, the Exchange Agent for purposes of
having any such consideration or other property delivered to the respective
Stockholders in accordance with the terms of the Exchange Agreement. Such
authority of the Escrow Agent shall not be affected by the subsequent
bankruptcy, insolvency, death, disability or incompetence of Parent or the
Stockholder Representative, respectively.

     20. Successors, General Duties, Reporting, Liability, Resignation, Removal
and Indemnification of Escrow Agent.

          (a) Any corporation into which the Escrow Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Escrow Agent will be a
party, or any corporation to which substantially all the corporate trust
business of the Escrow Agent may be transferred, shall be the Escrow Agent under
this Escrow Agreement without further act.

          (b) The duties and responsibilities of the Escrow Agent shall be
limited to those expressly set forth in this Escrow Agreement and the Escrow
Agent shall not be obligated to recognize any other agreement between any of the
parties hereto, including the Merger Agreement, even though reference thereto
may be made herein and whether or not the Escrow Agent has knowledge thereof.
All references in this Escrow Agreement to any other agreement are for the
convenience of the parties hereto other than the Escrow Agent, and the Escrow
Agent has no duties or obligations with respect thereto. The Escrow Agent will
hold and administer the Escrow Shares and Set-Off Shares, together with all
Distributions related thereto, in accordance with the provisions of this Escrow
Agreement.

          (c) Each quarter during the term of this Escrow Agreement, the Escrow
Agent shall prepare and send to the Parent and Stockholder Representative a
report describing in reasonable detail a summary of receipts and disbursements
from each Escrow Account. The Escrow Agent will maintain complete and accurate
records concerning all receipts and distributions to and from each Escrow
Account, including, but not limited to, the date and amount of each distribution
made to Parent or to the Exchange Agent for distribution to the Stockholders.
The Escrow Agent will be deemed in compliance with this Section 20(c) if it
maintains copies of all reports delivered from time to time pursuant to this
Section 20(c). In the


                                       11

<PAGE>

event that the Escrow Agent seeks indemnification pursuant to the terms of this
Escrow Agreement, the Escrow Agent shall, in addition to the report required
pursuant to this Section 20(c), prepare and send to Parent and the Stockholder
Representative on a monthly basis a detailed summary of the Escrow Agent's fees
and expenses, which shall include legal fees and expenses.

          (d) The Escrow Agent shall not be personally liable for any action
taken or omitted to be taken hereunder if taken or omitted to be taken by the
Escrow Agent in good faith or in the exercise by the Escrow Agent of its own
best judgment unless it acts grossly negligent or with willful misconduct. The
Escrow Agent shall also be fully protected in relying upon any written notice,
demand, certificate or document that the Escrow Agent in good faith believes to
be genuine unless it is grossly negligent or acts with willful misconduct.

          (e) Provided it acts in the absence of gross negligence, bad faith,
and willful misconduct; the Escrow Agent shall not be responsible for the
sufficiency or accuracy of the form, execution, validity or genuineness of
notices, documents or securities now or hereafter deposited or delivered under
this Escrow Agreement, or of any endorsement thereof, or for any lack of
endorsement thereof, or for any description therein, nor shall the Escrow Agent
be responsible or liable in any respect on account of the identity, authority or
rights of the persons executing or delivering or purporting to execute or
deliver this Escrow Agreement or any such document, notice, security or
endorsement.

          (f) The Escrow Agent may resign upon sixty (60) days' advance written
notice to the Parties hereto or be removed by the mutual consent of Parent and
the Stockholder Representative. No resignation or removal of the Escrow Agent
and no appointment of a successor Escrow Agent, however, shall be effective
until the acceptance of appointment by the successor Escrow Agent in the manner
herein provided. In the event of the resignation or removal of the Escrow Agent,
Parent and the Stockholder Representative shall agree upon a successor Escrow
Agent. Any successor Escrow Agent shall execute and deliver to the predecessor
Escrow Agent, Parent and the Stockholder Representative an instrument accepting
such appointment and the transfer of the Escrow Shares and the Set-Off Shares,
together with Distributions related thereto, and agreeing to the terms of this
Escrow Agreement, and thereupon such successor Escrow Agent shall, without
further act, become vested with all the estates, properties, rights, powers and
duties of the predecessor Escrow Agent as if originally named herein. In the
event Parent and the Stockholder Representative are unable to agree upon a
successor Escrow Agent within twenty (20) days of the creation of the vacancy,
Parent and the Stockholder Representative shall submit the dispute for
arbitration as provided in the Merger Agreement and the arbitrator shall select
a successor Escrow Agent within sixty (60) days of such arbitrator's
appointment.

          (g) Parent, the Stockholders, and the Stockholder Representative,
jointly and severally, hereby indemnify and hold harmless the Escrow Agent from
and against any and all loss, liability, cost, damage and expense, including,
without limitation, reasonable counsel fees, which the Escrow Agent may suffer
or incur by reason of any action, claim or proceeding brought against the Escrow
Agent arising out of or relating in any way to this Escrow Agreement or any
transaction to which this Escrow Agreement relates unless such action, claim or
proceeding is the result of the willful misconduct or gross negligence of the
Escrow Agent. The


                                       12

<PAGE>

Escrow Agent may consult counsel in respect of any question arising under this
Escrow Agreement and the Escrow Agent shall not be liable for any actions taken
or omitted in good faith upon advice of such counsel.

     21. Actions Relating to the Escrow Accounts.

          (a) The Stockholder Representative may initiate any legal proceeding
against any party regarding, or defend any claim or action against or involving,
the Escrow Fund and may assert counterclaims in such claims or actions, pursuant
to the terms and conditions of the Merger Agreement. Pursuant to the terms and
conditions of the Merger Agreement, in any action taken by the Stockholder
Representative, the Stockholder Representative will be the sole and exclusive
representative of the Stockholders in connection with all matters arising under
the Merger Agreement and the agreements and transactions contemplated thereby
including without limitation, representing the Stockholders in the event of any
claim pursuant to Article 9 of the Merger Agreement, and will be deemed to
represent all of the Stockholders' interests in the Escrow Accounts, and no
Stockholder will independently be a party to such action. The Stockholders will
be bound by the action taken by the Stockholder Representative hereunder. The
Stockholder Representative is authorized only to represent such Stockholders in
their capacities as Stockholders hereunder and as Stockholders under the Merger
Agreement, and not in any other capacity.

          (b) No Company Stockholder will be entitled to act independently with
respect to any actions required with respect to any claims for indemnification
asserted against or on behalf of the Stockholders pursuant to the Merger
Agreement or any other action relating to the Merger Agreement, the other
agreements and the transactions contemplated thereby and any such actions will
be taken solely by the Stockholder Representative. The Stockholder
Representative will have full power and authority to act on behalf of the
Stockholders with respect to such matters and the Stockholders will be bound by
any and all such actions. The Stockholders and Parent acknowledge and agree that
Boyd D. Cox is the Stockholder Representative for purposes of this Escrow
Agreement, the Merger Agreement, and all the agreements and transactions
contemplated thereby, and that until notice of a change in the Stockholder
Representative is given pursuant to Sections 23 and 24 of this Escrow Agreement,
Parent and the Escrow Agent will be entitled to rely upon the power and
authority of the Stockholder Representative to act on behalf of the Stockholders
and will be fully protected in acting on and relying upon any notice, direction,
request, waiver, consent, receipt or other paper or document signed or presented
by the Stockholder Representative.

          (c) In the event the Escrow Agent becomes a party to or otherwise
involved in an action regarding the Escrow Accounts, the Escrow Agent will
cooperate with the Stockholder Representative and Parent and participate in the
compromise, dismissal or settlement of such action only at the direction of, and
with the written consent of, the Stockholder Representative and Parent. The
Stockholder Representative and Parent may compromise, dismiss or settle any
action involving the Escrow Accounts without the written consent of any of the
Stockholders or the Escrow Agent, except in the case of the Escrow Agent, any
compromise, dismissal or settlement that adversely affects the Escrow Agent.


                                       13

<PAGE>

          (d) The Stockholder Representative will have the full power and
authority to file such proofs of claim and other papers as may be necessary or
appropriate in order to have the claims of the Stockholder Representative or the
Stockholders allowed in any judicial proceeding. Nothing contained in this
Section 21 will be deemed to authorize the Escrow Agent to consent to or accept,
on behalf of the Stockholder Representative or the Stockholders, any plan of
reorganization, arrangement or adjustment affecting the rights of the
Stockholder Representative or the Stockholders, or to authorize the Escrow Agent
to vote in respect of the claims of the Stockholder Representative or any
Stockholders in any such proceeding.

     22. Escrow Agent's Fee. The Escrow Agent shall be entitled to compensation
for its services as stated in the fee exhibit attached hereto as Appendix A. The
Escrow Agent shall send a copy of each invoice to both Parent and the
Stockholder Representative. Parent shall pay such compensation in cash upon
receipt of the Escrow Agent's invoice. The fee agreed upon for the services
rendered hereunder is intended as full compensation for the Escrow Agent's
services as contemplated by this Escrow Agreement; provided, however, that in
the event that the Escrow Agent renders any material service not contemplated in
this Escrow Agreement, or there is any assignment of interest in the subject
matter of this Escrow Agreement, or any material modification hereof, of if any
material controversy arises hereunder, or the Escrow Agent is made a party to
any litigation pertaining to this Escrow Agreement, or the subject matter
hereof, then the Escrow Agent shall be reasonably compensated for such
extraordinary services and reimbursed for all costs and expenses, including
reasonable attorney's fees (the "Extraordinary Expenses"), occasioned by any
delay, controversy, litigation or event. The Escrow Agent may recover such
Extraordinary Expenses from either Parent or the Stockholder Representative. The
Parties agree, that amongst themselves, the Extraordinary Expenses shall be
apportioned one-half (1/2) to Parent and one-half (1/2) to the Stockholder
Representative (or the Stockholders pro rata pursuant to their Escrow Account
Interest if the Stockholder Representative is unable to pay) upon receipt of the
Escrow Agent's invoice by each Party.

     23. Removal; Successor Stockholder Representative. The Stockholder
Representative may resign at any time by giving thirty (30) days' written notice
to the Stockholders, Parent and the Escrow Agent. Such resignation shall take
effect thirty (30) days after the date of the receipt of such notice by the
Escrow Agent or at any later time specified therein, and if no time be
specified, at the time of its receipt by the Escrow Agent. The acceptance of a
resignation will not be necessary to make it effective, unless so specified
therein. Holders of a majority of the Escrow Account Interest will be entitled
to remove and replace the Stockholder Representative at any time and for any
reason upon sending written notice thereof to Parent. In the event of the death
or disability of the Stockholder Representative, the Alternative Stockholder
Representative shall automatically become the Stockholder Representative. In the
event of the resignation or removal of the Stockholder Representative, the
Alternative Stockholder Representative shall automatically become the
Stockholder Representative (unless the holders of a majority of the Escrow
Account Interest select a different Stockholder Representative). Parent shall
(i) forward, if received by Parent, a copy of the written notice received from
the holders of a majority of the Escrow Account Interest naming the new
Stockholder Representative in the case of removal or (ii) provide written notice
to the Escrow Agent informing the Escrow Agent as to whom the Escrow Agent shall
recognize as the Alternative Stockholder Representative in the case of death,
disability, or resignation of the Stockholder Representative. Parent and the
Escrow Agent, as the case may be, shall be entitled to rely upon all actions
authorized and all documents, certificates


                                       14

<PAGE>

and instructions executed or issued by the Stockholder Representative until such
time as Parent and the Escrow Agent, as the case may be, receive written notice
of such resignation or removal of the Stockholder Representative from the
Stockholder Representative.

     24. Notice Provisions. All notices, requests, demands and other
communications required or permitted hereunder shall be made in writing and
shall be deemed to have been duly delivered and effective:

          (a) on the date of delivery, if delivered personally;

          (b) on the date of receipt if sent by reputable nationwide overnight
courier; or

          (c) on the date of transmission, if sent by facsimile, telecopy,
telegraph, telex or other similar telegraphic communications equipment:

     If to the Company or to Parent or Merger Subsidiary:

          To:  ATS Medical, Inc.
               3905 Annapolis Lane #105
               Minneapolis, Minnesota 55447
               Attn: Rick Curtis, Vice President Marketing and Business
                     Development
               Fax: (763) 553-1492

          With a copy to:

               Oppenheimer Wolff & Donnelly LLP
               3300 Plaza VII
               45 South Seventh Street
               Minneapolis, Minnesota 55402
               Attn: Thomas A. Letscher, Esq.
               Fax: (612) 607-7100

or to such other address as the Company, Parent, or Merger Subsidiary shall
furnish to the other parties hereto in writing in accordance with this
subsection.

     If to the Stockholder Representative:

          To:  Boyd D. Cox
               P.O. Box 573
               Fayetteville, Arkansas 72702

or to such other address as the Stockholder Representative shall furnish to the
other parties hereto in writing in accordance with this subsection.

     If to the Escrow Agent:

               Wells Fargo Bank, N.A.
               608 Second Avenue South


                                       15

<PAGE>

               Minneapolis, Minnesota 55479
               Attn: Nick Tally
               Fax: (612) 667-9825

or to such other address as the Escrow Agent shall furnish to the other parties
hereto in writing in accordance with this subsection.

     25. Tax Information.

          (a) Each of the Parties will complete and return to the Escrow Agent
any and all tax forms or reports required to be maintained or obtained by the
Escrow Agent in connection with its administration of this Escrow Agreement. The
Parties agree that, for tax reporting purposes, all income from the investment
of cash Distributions shall, as of the end of each calendar year, be reported as
having been earned by Parent.

          (b) With respect to the disbursement of any Distributions or Deposited
Shares pursuant to this Escrow Agreement, the Stockholder Representative shall
be responsible for determining any tax reporting and withholding relating to any
disbursement made to the Exchange Agent for disbursement to the Stockholders.
Parent shall be responsible for determining any tax reporting and withholding
relating to any such disbursement to Parent. The Stockholder Representative or
Parent, as the case may be, shall instruct the Escrow Agent with respect to any
and all tax reporting and withholding by (i) specifying in writing the amount of
any withholding prior to any disbursement, (ii) instructing the Escrow Agent in
writing as to the specific version of the tax form to be distributed, (iii)
furnishing any information required in such tax reporting forms that the Escrow
Agent may reasonably request, and (iv) furnishing any guidance or direction in
writing as may be reasonably requested by the Escrow Agent. The Escrow Agent
will, in accordance with written instruction given in accordance with this
Section 25, print and mail tax reporting forms to persons receiving
distributions pursuant to this Escrow Agreement and transmit withholding amounts
in accordance with its standard policies and procedures. The Escrow Agent shall
not be considered the payor with respect to any payments made under this
Agreement, and the Parties acknowledge that the Escrow Agent is not in a
position to characterize the nature of the payment made to recipients for tax
purposes. The Escrow Agent further shall not be considered the payor with
respect to any payments made to any non-resident aliens and, accordingly, is not
the "withholding agent" for purposes of any such payments as that term is
defined under the regulations of the Internal Revenue Service ("IRS"). Any tax
certifications received as a result of solicitations made by the Escrow Agent at
the request of any Party will be forwarded to such Party for its review and
analysis. The Escrow Agent shall not have any liability for any withholding,
interest, or penalties assessed by the IRS due to a failure to withhold or
report the proper amount of tax.

     26. General.

          (a) Execution in Counterparts. This Escrow Agreement may be executed
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same document.


                                       16

<PAGE>

          (b) Waivers. No waiver of any term, covenant or condition of this
Escrow Agreement shall be effective unless made in a written instrument duly
executed by or on behalf of the party against whom the waiver is to be
effective.

          (c) Amendments. The parties may agree to the amendment or modification
of this Escrow Agreement by an agreement in writing executed in the same manner
as this Escrow Agreement.

          (d) Assignment. This Escrow Agreement may not be assigned by any of
the parties hereto except pursuant to written consent of each of the parties
hereto, which shall include the Escrow Agent.

          (e) Binding Effect. This Escrow Agreement shall be binding upon the
successors and assigns of the parties hereto.

          (f) Governing Law. This Escrow Agreement and the legal relations among
the parties hereto shall be governed by and construed in accordance with the
internal substantive laws of the State of Delaware (without regard to the laws
of conflict that might otherwise apply) as to all matters, including, without
limitations, matters of validity, construction, effect, performance and
remedies.

          (g) Captions. The captions of this Escrow Agreement are for
convenience of reference only and shall not affect in any manner any of the
terms, covenants or conditions hereof.

          (h) Definitions. Capitalized terms used in this Escrow Agreement but
not defined herein shall have the meanings ascribed thereto in the Merger
Agreement.

          (i) Injunctive Relief. It is expressly agreed among the parties hereto
that monetary damages would be inadequate to compensate a party hereto for any
breach by any other party of its covenants and agreements herein. Accordingly,
the parties agree and acknowledge that any such violation or threatened
violation will cause irreparable injury to the others and that, in addition to
any other remedies which may be available, such party will be entitled to
injunctive relief against the threatened breach hereof or the continuation of
any such breach without the necessity of proving actual damages and may seek to
specifically enforce the terms hereof.

                  [Remainder of Page Intentionally Left Blank]


                                       17
<PAGE>

     IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the day and year first above written.

PARENT:                                 ATS MEDICAL, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


ESCROW AGENT:                           WELLS FARGO BANK, N.A.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


STOCKHOLDER REPRESENTATIVE:


                                        ----------------------------------------
                                        Boyd D. Cox

                      [SIGNATURE PAGE TO ESCROW AGREEMENT]

                                 SIGNATURE PAGE
                                ESCROW AGREEMENT