EXHIBIT 4.1



 


Exhibit 4.1


 


THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“ACT”), OR UNDER ANY STATE SECURITIES LAW
AND THIS NOTE MAY NOT BE PLEDGED, SOLD, ASSIGNED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT WITH RESPECT
THERETO UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW, OR UNLESS THE DEBTOR RECEIVES AN OPINION OF COUNSEL, SATISFACTORY
TO THE DEBTOR, THAT SUCH REGISTRATION IS NOT REQUIRED.


 


Aetrium
Incorporated


 


PROMISSORY
NOTE


 


	$2,000,000.00	September
    19, 2014


 


FOR
VALUE RECEIVED, Aetrium Incorporated, a Minnesota corporation (the “Debtor”),
promises to pay to the order of Lone Star Value Co-Invest I, LP (the “Holder”),
or its registered assigns, the principal amount of TWO MILLION DOLLARS ($2,000,000.00), in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the payment of public or private debts, together with interest
as set forth herein.


 


1.Payment
of Interest and Principal. All unpaid principal, together with any then accrued and unpaid interest and any other amounts
payable hereunder, shall be due and payable on April 1, 2019 (the “Maturity Date”). If any payment hereunder
becomes due and payable on a Saturday, Sunday or legal holiday under the laws of the United States of America or the State of
Minnesota, or both, the due date thereof shall be extended to the next business day and interest shall be payable for any principal
so extended for the period of such extension. Payments of principal and interest are to be made at the address provided herein
for the Holder (or at such other place as the Holder shall have notified the Debtor in writing at least five (5) days before such
payment is due) or by wire transfer pursuant to the Holder’s written instructions.


 


2.Interest. (a)
Interest shall accrue on the unpaid principal balance of this Note at the rate of ten percent (10.0%) per annum, and shall
be payable semiannually in cash on the third business day of each January and July in respect of the immediately preceding
semi-annual period. Interest shall be calculated from and include the date hereof and shall be calculated on an
actual/360-day basis.


 


(b)Notwithstanding
anything to the contrary contained herein, in no event shall this or any other provision herein permit the collection of any interest
which would be usurious under applicable law. If under any circumstances, whether by reason of advancement or acceleration of
the maturity of the unpaid principal balance hereof or otherwise, the aggregate amounts paid under this Note shall include amounts
which by law are deemed interest and which would exceed the maximum rate permitted by law, the Debtor stipulates that payment
and collection of such excess amounts shall have been and will be deemed to have been the result of a mistake on the part of both
the Holder and the Debtor, and the Holder shall promptly credit such excess (only to the extent such payments are in excess of
the maximum rate) against the unpaid principal balance hereof and any portion of such excess payments not capable of being so
credited shall be refunded to the Debtor.


 




    	 



    	 



    


 


3.Prepayment.
The Debtor shall be entitled to prepay the principal amount of this Note (in whole or in part) together with all interest under
this Note accrued and unpaid at the date of prepayment at any time without penalty or premium upon five (5) days prior written
notice to the Holder. The Debtor shall be obligated to effect such prepayment within three (3) days after the end of such notice
period.


 


4.Events
of Default. (a) Acceleration. Upon the occurrence of any of the following events (herein called “Events of
Default”):


 


(i)The
Debtor shall fail to make full and timely payment of principal of or interest on this Note when due and such failure continues
for a period of five (5) consecutive days;


 


(ii)(A)
The Debtor or any of its material subsidiaries shall commence any proceeding or other action relating to it in bankruptcy or seek
reorganization, arrangement, readjustment of its debts, receivership, dissolution, liquidation, winding-up, composition or any
other relief under any bankruptcy law, or under any other insolvency, reorganization, liquidation, dissolution, arrangement, composition,
readjustment of debt or any other similar act or law, of any jurisdiction, domestic or foreign, now or hereafter existing; (B)
the Debtor or any of its material subsidiaries shall admit the material allegations of any petition or pleading in connection
with any such proceeding; (C) the Debtor or any of its material subsidiaries shall apply for, or consent or acquiesce to, the
appointment of a receiver, conservator, trustee or similar officer for it or for all or a substantial part of its property; or
(D) the Debtor or any of its material subsidiaries shall make a general assignment for the benefit of creditors;


 


(iii)(A)
The commencement of any proceedings or the taking of any other action against the Debtor or any of its material subsidiaries in
bankruptcy or seeking reorganization, arrangement, readjustment of its debts, liquidation, dissolution, arrangement, composition,
or any other relief under any bankruptcy law or any other similar act or law of any jurisdiction, domestic or foreign, now or
hereafter existing; (B) the appointment of a receiver, conservator, trustee or similar officer for the Debtor or any of its material
subsidiaries for any of its property; or (C) the issuance of a warrant of attachment, execution or similar process against any
of the property of the Debtor or any of its material subsidiaries, and the continuance of any such events for sixty (60) days
undismissed, unbonded or undischarged;


 




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(iv)The
Debtor breaches any of its representations and warranties made under that certain Securities Purchase Agreement, dated as of the
date hereof (the “Purchase Agreement”), by and between the Debtor and the Holder;


 


(v)The
Debtor shall fail to comply with any of its covenants or obligations under this Note (other than such failure described subsection
(i) above) or the Purchase Agreement, which failure shall continue uncured for thirty (30) calendar days after notice thereof
to the Debtor; or


 


(vi)The
Debtor shall, directly or indirectly, in one or more related transactions, (A) consolidate or merge with or into (whether or not
Debtor is the surviving corporation) another person, (B) sell, assign, transfer, convey or otherwise dispose of all or substantially
all of the properties or assets of Debtor to another person, (C) allow another person to make a purchase, tender or exchange offer
that is accepted by the holders of more than 50% of the outstanding shares of the Debtor’s common stock, par value $0.001
per share (the “Common Stock”) (not including any shares of Common Stock held by the person or persons making
or party to, or associated or affiliated with the persons making or party to, such purchase, tender or exchange offer), or (D)
consummate a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization
or spin-off) with another person whereby such other person acquires more than 50% of the outstanding shares of Common Stock (not
including any shares of Common Stock held by the other person or other persons making or party to, or associated or affiliated
with the other persons making or party to, such stock purchase agreement or other business combination);


 


then,
and in any such event, the Holder, at the Holder’s option and without written notice to the Debtor, may declare the entire
principal amount of this Note then outstanding together with accrued unpaid interest thereon immediately due and payable, and
the same shall forthwith become immediately due and payable without presentment, demand, protest, or other notice of any kind,
all of which are expressly waived. The Events of Default listed herein are solely for the purpose of protecting the interests
of the Holder of this Note. If this Note is not paid in full upon acceleration, as required above, interest shall accrue on the
outstanding principal of and interest on this Note from the date of the Event of Default up to and including the date of payment
at a rate equal to the lesser of twelve percent (12.0%) per annum compounded on the third Business Day of each January and July
or the maximum interest rate permitted by applicable law.


 


(b)Non-Waiver
and Other Remedies. No course of dealing or delay on the part of the Holder of this Note in exercising any right hereunder
shall operate as a waiver or otherwise prejudice the right of the Holder of this Note. No remedy conferred in this Note or the
Purchase Agreement is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall
be in addition to every other remedy conferred herein or now or hereafter existing at law or equity or by statute or otherwise.


 




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(c)Collection
Costs; Attorney’s Fees. In the case of an Event of Default, if this Note is turned over to an attorney for collection,
the Debtor agrees to pay all reasonable costs of collection, including reasonable attorney’s fees and expenses and all out-of-pocket
expenses incurred by the Holder in connection with such collection efforts.


 


5.Cancellation.
Upon full satisfaction of the Debtor’s obligations hereunder, the Holder shall promptly deliver or cause to be delivered
to the Debtor this Note for cancellation.


 


6.Amendment;
Waiver. This Note may not be amended or modified or the provisions hereof waived (either generally or in a particular instance
and either retroactively or prospectively) without the prior written consent of the party against whom such amendment, modification,
or waiver is sought to be enforced. All of the terms and provisions of this Note shall be applicable to and binding upon each
and every maker, Holder, endorser, surety, guarantor and all other persons who are or may become liable for the payment hereof
and their respective successors and assigns.


 


7.Lost
Documents. Upon receipt by the Debtor of evidence satisfactory to it of the loss, theft, destruction or mutilation of this
Note or any note exchanged for it, and (in the case of loss, theft or destruction) of indemnity reasonably satisfactory to it,
and upon surrender and cancellation of such note, if mutilated, the Debtor will make and deliver in lieu of such note a new note
of like tenor and unpaid principal amount and dated as of the original date of the original note.


 


8.Miscellaneous.


 


(a)Severability.
In case any one or more of the provisions contained in this Note should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired
thereby.


 


(b)Notices
and Addresses. All notices, offers, acceptances and any other acts under this Note (except payment) shall be in writing, and
shall be sufficiently given if delivered to the addressee in person, by FedEx or similar receipted delivery, by facsimile delivery
or, if mailed, postage prepaid, by certified mail, return receipt requested, as follows:


 





	 	To
Holder:	Lone Star Value Co-Invest I, LP

53 Forest Avenue, 1st Floor

Old Greenwich, Connecticut 06870

Fax: (203) 990-0727
	 	 	 
	 	To
the Debtor:	Aetrium Incorporated

2350 Helen Street

North St. Paul, Minnesota 55109

Fax: (651) 770-7975
	 	 	 
	 	 	With
a copy to (which shall not constitute notice):
	 	 	 
	 	 	Olshan
Frome Wolosky LLP

Park Avenue Tower

65 East 55th Street

New York, New York 10022

Attn: Adam Finerman, Esq.

Fax: (212) 451-2222



 


or
to such other address as any of them, by notice to the others may designate from time to time.


 




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(c)Governing
Law. This Note and any dispute, disagreement, or issue of construction or interpretation arising hereunder, whether relating
to its execution, its validity, the obligations provided therein or performance, shall be governed and interpreted according to
the law of the State of Minnesota, without regard to principals of conflicts of law.


 


(d)Binding
Effect; Assignment. This Note and the various rights and obligations arising hereunder shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted assigns. The Debtor may not delegate, transfer or
assign any rights or obligations hereunder without the Holder’s prior written consent. The Holder may not assign or delegate
all or any portion of the rights of the Holder hereunder without the consent of the Debtor (such consent not to be unreasonably
withheld, conditioned or delayed), except that no such consent shall be required for an assignment or delegation to an affiliate
of the Holder or while an Event of Default has occurred and is continuing. Any transfer or assignment of any of the rights, interests
or obligations hereunder in violation of the terms hereof shall be void and of no force or effect.


 


(e)Jurisdiction
and Venue. Each of the Holder and the Debtor (i) agree that any legal suit, action or proceeding arising out of or relating
to this Note shall be instituted exclusively in the courts of Ramsey County in the State of Minnesota, (ii) waive any objection
to the venue of any such suit, action or proceeding and the right to assert that such forum is not a convenient forum, and (iii)
irrevocably consent to the jurisdiction of the courts of Ramsey County in the State of Minnesota in any such suit, action or proceeding,
and further agree to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding
and agree that service of process upon them mailed by certified mail to their respective addresses shall be deemed in every respect
effective service of process upon them in any such suit, action or proceeding.


 


(f)Section
Headings. Section headings herein have been inserted for reference only and shall not be deemed to limit or otherwise affect,
in any manner, or be deemed to interpret in whole or in part any of the terms or provisions of this Note.


 




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(g)Waiver
of Presentment. Debtor and each surety, endorser and guarantor hereof hereby waive all demands for payment, presentations
for payment, notices of intention to accelerate maturity, notices of acceleration of maturity, demand for payment, protest, notice
of protest and notice of dishonor, to the extent permitted by law, except for those notices expressly provided for herein. No
extension of time for payment of this Note or any installment hereof, no alteration, amendment or waiver of any provision of this
Note shall release, modify, amend, waive, extend, change, discharge, terminate or affect the liability of Debtor under this Note.


 


(h)Forbearance.
Any forbearance by the holder of this Note in exercising any right or remedy hereunder or under any other agreement or instrument
in connection with this Note or otherwise afforded by applicable law shall not be a waiver or preclude the exercise of any right
or remedy by the holder of this Note. The acceptance by the holder of this Note of payment of any sum payable hereunder after
the due date of such payment shall not be a waiver of the right of the holder of this Note to require prompt payment when due
of all other sums payable hereunder or to declare a default for failure to make prompt payment.


 


(i)Acceleration.
At the election of the holder of this Note, all payments due hereunder may be accelerated, and this Note shall become immediately
due and payable without notice or demand, upon the occurrence of an Event of Default under this Note, which default is not cured
within any grace period expressly provided therefor. In addition to the rights and remedies provided herein, the holder of this
Note may exercise any other right or remedy in any other document, instrument or agreement evidencing or otherwise relating to
the indebtedness evidenced hereby in accordance with the terms thereof, or under applicable law, all of which rights and remedies
shall be cumulative.


 


(j)Construction.
This Note shall be construed without any regard to any presumption or rule requiring construction against the party causing such
instrument or any portion thereof to be drafted.


 




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[SIGNATURE
PAGE OF Aetrium Incorporated PROMISSORY NOTE]


 


IN
WITNESS WHEREOF, the Debtor has caused this Note to be made and issued in its name on the date specified above.


 


	 	Aetrium Incorporated
	 	 
	 	By:	/s/ Daniel M. Koch
	 	Name:	Daniel M. Koch
	 	Title:	President and Chief Executive Officer



 



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