EX-10.3






EXHIBIT 10.3



REGISTRATION RIGHTS AGREEMENT




This Registration Rights Agreement (the “Agreement”) is made and entered into as of
this 19th day of December, 2008 by and among ATS Medical, Inc., a Minnesota corporation (the
“Company”), and the “Investors” named in that certain Common Stock and Warrant Purchase
Agreement, dated as of the date hereof (the “Purchase Agreement”), by and among the Company
and the Investors.



The parties hereby agree as follows:



1. Certain Definitions. As used in this Agreement, the following terms shall have the
following meanings:




“Affiliate” means, with respect to any Person, any other Person which directly or
indirectly controls, is controlled by, or is under common control with, such Person.




“Business Day” means a day, other than a Saturday or Sunday, on which banks in New
York City are open for the general transaction of business.




“Common Stock” shall mean the Company’s common stock, par value $0.01 per share.




“Effectiveness Date” means the date on which the Registration Statement is declared
effective by the SEC.




“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.




“Filing Date” means the date on which the Registration Statement is filed with the
SEC.




“Filing Deadline” shall have the meaning set forth in Section 2(a) below.




“Investors” shall mean the Investors identified in the Purchase Agreement and any
Affiliate or permitted transferee of any Investor who is a subsequent holder of any
Registrable Securities.




“Person” means an individual, corporation, partnership, limited liability company,
trust, business trust, association, joint stock company, joint venture, sole
proprietorship, unincorporated organization, governmental authority or any other form of
entity not specifically listed herein.




“Prospectus” shall mean the prospectus included in the Registration Statement, as
amended or supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by the Registration Statement
and by all other amendments and supplements to the prospectus, including post-effective
amendments and all material incorporated by reference in such prospectus.




“Register,” “registered” and “registration” refer to a registration
made by preparing and filing a Registration Statement or similar document in compliance
with the Securities Act (as defined below), and the declaration or ordering of
effectiveness of the Registration Statement or document.




“Registrable Securities” shall mean (i) the Shares, (ii)  the Warrant Shares and
(iii) any other securities issued or issuable with respect to or in exchange for Shares and
the Warrant Shares, including shares issued upon any stock split, stock dividend,
recapitalization, subdivision or similar event, provided that a security shall cease to
be a Registrable Security upon (A) sale pursuant to a Registration Statement or Rule 144
under the Securities Act or (B) such security becoming eligible for sale by the Investors
pursuant to the last sentence of Rule 144(b)(1)(i).




“Registration Statement” shall mean the registration statement of the Company filed
under the Securities Act that covers the resale of the Registrable Securities pursuant to
the provisions of this Agreement, amendments and supplements to such Registration
Statement, including post-effective amendments, all exhibits and all material incorporated
by reference in such Registration Statement.




“Required Investors” means the Investors holding a majority of the Registrable
Securities.




“SEC” means the Securities and Exchange Commission.




“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.




“Shares” means the shares of Common Stock issued pursuant to the Purchase
Agreement.




“Warrant Shares” means the shares of Common Stock issuable upon exercise of the
Warrants.




“Warrants” means the Warrants issued pursuant to the Purchase Agreement.



2. Registration.




	 	(a)	 	Registration Statements. As soon as reasonably practicable following
the Closing (as defined in the Purchase Agreement), but no later than thirty (30) days
after the Closing (the “Filing Deadline”), the Company shall prepare and file
with the SEC a Registration Statement on Form S-3 (the “Registration
Statement”) covering the resale of the Shares and the Warrant Shares. The
Registration Statement also shall cover, to the extent allowable under the Securities
Act and the rules and regulations promulgated thereunder, such indeterminate number of
additional shares of Common Stock resulting from stock splits, stock dividends or
similar transactions with respect to the Shares. The Registration Statement (and each
amendment or supplement thereto, and each request for acceleration of effectiveness
thereof) shall be provided in accordance with Section 3(c) to the Investors and their
counsel prior to its filing or other submission. If a Registration Statement covering
the Registrable Securities is not filed with the SEC on or prior to the Filing
Deadline, the Company will make pro rata payments to each Investor, as liquidated
damages and not as a penalty, in an amount equal to one percent (1.0%) of the
aggregate amount invested by such Investor for each 30-day period or pro rata for any
portion thereof following the Filing Deadline for which no Registration Statement is
filed with respect to the Registrable Securities; provided, however,
that the aggregate amount of such liquidated damages payable to each Investor,
together with the amount of any liquidated damages previously paid pursuant to any
provision of this Agreement, shall under no circumstances exceed twelve percent (12%)
of the aggregate amount invested by such Investor. Such payments shall be made to each
Investor in cash.






	 	(b)	 	Expenses. The Company will pay all expenses associated with
registration, including filing and printing fees, the Company’s counsel and accounting
fees and expenses, costs associated with clearing the Registrable Securities for sale
under applicable state securities laws and listing fees, including fees and expenses
of a single counsel to the Investors, but excluding discounts, commissions, fees of
underwriters, selling brokers, dealer managers or similar securities industry
professionals with respect to the Registrable Securities being sold.






	 	(c)	 	Effectiveness.






	 	i.	 	The Company shall use commercially reasonable efforts to have
the Registration Statement declared effective as soon as practicable. The
Company shall notify the Investors by facsimile or e-mail as promptly as
practicable, and in any event, within twenty-four (24) hours, after the
Registration Statement is declared effective and shall provide the Investors
with copies of any related Prospectus to be used in connection with the sale
or other disposition of the securities covered thereby. If the Registration
Statement is not declared effective by the SEC within (i) ninety (90) days
after the Filing Date if the SEC shall have informed the Company that no
review of the Registration Statement will be made or (ii) one hundred twenty
(120) days after the Filing Date if the SEC shall have informed the Company
that a review of the Registration Statement will be made, then the Company
will make pro rata payments to each Investor, as liquidated damages and not as
a penalty, in an amount equal to one percent (1.0%) of the aggregate amount
invested by such Investor for each 30-day period or pro rata for any portion
thereof following the date by which the Registration Statement should have
been effective; provided, however, that the aggregate amount
of such liquidated damages payable to each Investor, together with the amount
of any liquidated damages previously paid pursuant to any provision of this
Agreement, shall under no circumstances exceed twelve percent (12%) of the
aggregate amount invested by such Investor. Such payments shall be made to
each Investor in cash.






	 	ii.	 	The Company shall not file a registration statement on Form
S-1 or Form S-3 until the Effectiveness Date of the Registration Statement.





3. Suspension.




	 	(a)	 	Subject to Section 3(b) below, in the event: (i) of any request by the SEC or
any other federal or state governmental authority during the period of effectiveness
of the Registration Statement for amendments or supplements to the Registration
Statement or related prospectus or for additional information so that the Registration
Statement will not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading or otherwise fail to comply with the applicable rules and
regulations of the federal securities laws; (ii) of the issuance by the SEC or any
other federal or state governmental authority of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings for
that purpose; (iii) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose, provided that, considering the advice of counsel, the
Company reasonably believes that it must qualify in such jurisdiction; (iv) of any
event or circumstance that, considering the advice of counsel, the Company reasonably
believes necessitates the making of any changes in the Registration Statement or
related prospectus, or any document incorporated or deemed to be incorporated therein
by reference, so that, in the case of the Registration Statement, it will not contain
any untrue statement of a material fact or any omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and that in the case of a related prospectus, it will not contain any
untrue statement of a material fact or any omission to state a material fact required
to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or (v) that the Company
reasonably believes, considering the advice of counsel, that the Company may, in the
absence of a suspension described hereunder, be required under state or federal
securities laws to disclose any corporate development, the disclosure of which could
reasonably be expected to have a material adverse effect upon the Company, its
shareholders, a potentially material transaction or event involving the Company, or
any negotiations, discussions or proposals directly relating thereto; then the Company
shall deliver a certificate in writing to each Holder of Registrable Securities (the
“Suspension Notice”) to the effect of the foregoing (but in no event, without
the prior written consent of an Investor, shall the Company disclose to such Investor
any of the facts or circumstances regarding any material nonpublic information) and,
upon receipt of such Suspension Notice, the Holder will refrain from selling any
Registrable Securities pursuant to the Registration Statement (a “Suspension”)
until the Holder’s receipt of copies of a supplemented or amended prospectus prepared
and filed by the Company or until the Holder is advised in writing by the Company that
the current prospectus may be used and the Holder has received copies of any
additional or supplemental filings that are incorporated or deemed incorporated by
reference in any such prospectus.






	 	(b)	 	Notwithstanding the foregoing, the Company shall not suspend the Registration
Statement or related prospectus for more than thirty (30) consecutive days or for a
total of more than sixty (60) days in any twelve (12) month period (each a
“Permitted Suspension “and together the “Permitted Suspensions”).






	 	(c)	 	On any day after the Effectiveness Date for the Registration Statement, sales
of the Registrable Securities as may be required to be included on the Registration
Statement cannot be made pursuant to the Registration Statement (including, without
limitation, because of a failure to keep the Registration Statement effective, to
disclose such information as is necessary for sales to be made pursuant to the
Registration Statement or to register sufficient shares of Registrable Securities or
because of a Suspension) then the Company will make pro rata payments to each
Investor, as liquidated damages and not as a penalty, in an amount equal to one
percent (1.0%) of the aggregate amount invested by such Investor for each 30-day
period or pro rata for any portion thereof following the date by which such sales of
Registrable Securities under the Registration Statement cannot be made;
provided, however, that the aggregate amount of such liquidated
damages payable to each Investor, together with the amount of any liquidated damages
previously paid pursuant to any provision of this Agreement, shall under no
circumstances exceed twelve percent (12%) of the aggregate amount invested by such
Investor. Such payments shall be made to each Investor in cash. Notwithstanding the
foregoing, the Company shall not be required to pay liquidated damages during any
Permitted Suspension.






	 	(d)	 	The Company will use commercially reasonable efforts to terminate a
Suspension as promptly as practicable after delivery of a Suspension Notice to the
Holders.





4. Company Obligations. The Company will use commercially reasonable efforts to effect the
registration of the Registrable Securities in accordance with the terms hereof, and pursuant
thereto the Company will, as expeditiously as possible:




	 	(a)	 	cause the Registration Statement to become effective and to remain
continuously effective for a period that will terminate upon the earlier of (i) the
date on which all Registrable Securities have been sold pursuant to the Registration
Statement, as the Registration Statement may be amended from time to time, (ii) the
date on which all Registrable Securities covered by the Registration Statement may be
sold pursuant to Rule 144 in a ninety (90) day period and (iii) the two (2) year
anniversary of the Effectiveness Date of the Registration Statement (the
“Effectiveness Period”) and advise the Investors in writing when the
Effectiveness Period has expired;






	 	(b)	 	prepare and file with the SEC such amendments and post-effective amendments
to the Registration Statement and such supplements to the Prospectus as may be
necessary to keep the Registration Statement effective for the period specified in
Section 4(a) and to comply with the provisions of the Securities Act and the Exchange
Act with respect to the distribution of all of the Registrable Securities covered
thereby;






	 	(c)	 	provide copies to and permit counsel designated by the Investors to review
the Registration Statement and any amendments or supplements thereto and any comments
made by the staff of the SEC and the Company’s responses thereto a reasonable period
of time prior to its filing with the SEC or its receipt from the SEC as applicable and
shall duly consider comments made by such counsel thereon;






	 	(d)	 	furnish to the Investors and their legal counsel (i) promptly after the same
is prepared and publicly distributed, filed with the SEC, or received by the Company
(but not later than two (2) Business Days after the filing date, receipt date or
sending date, as the case may be) one (1) copy of the Registration Statement and any
amendment thereto, the preliminary prospectus, free writing prospectus and Prospectus
and each amendment or supplement thereto (as applicable), and each letter written by
or on behalf of the Company to the SEC or the staff of the SEC, and each item of
correspondence from the SEC or the staff of the SEC, relating to the Registration
Statement (other than any portion of any thereof which contains information for which
the Company has sought confidential treatment), and (ii) an electronic copy of a
Prospectus, including a preliminary prospectus and any free writing prospectus, and
all amendments and supplements thereto and such other documents as each Investor may
reasonably request in connection with the disposition of such Registrable Securities
owned by such Investor that are covered by the Registration Statement;






	 	(e)	 	use commercially reasonable efforts to (i) prevent the issuance of any stop
order or other suspension of effectiveness and, (ii) if such order is issued, obtain
the withdrawal of any such order at the earliest practicable time and to notify each
Investor of the issuance of such an order and the resolution thereof;






	 	(f)	 	prior to any public offering of Registrable Securities, use commercially
reasonable efforts to register or qualify or cooperate with the Investors and their
counsel in connection with the registration or qualification of the Registrable
Securities for offer and sale under the securities or blue sky laws of such
jurisdictions requested by the Investors and do any and all other commercially
reasonable acts or things necessary or advisable to enable the distribution in such
jurisdictions of the Registrable Securities covered by the Registration Statement;
provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to (i) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(f), (ii) subject itself to general taxation in any jurisdiction where it
would not otherwise be so subject but for this Section 3(f), or (iii) file a general
consent to service of process in any such jurisdiction;






	 	(g)	 	use commercially reasonable efforts to cause all Registrable Securities
covered by the Registration Statement to be listed on each securities exchange,
interdealer quotation system or other market on which similar securities issued by the
Company are then listed;






	 	(h)	 	immediately notify the Investors, at any time when a Prospectus relating to
Registrable Securities is required to be delivered under the Securities Act, upon
discovery that, or upon the happening of any event as a result of which, the
Prospectus included in the Registration Statement, as then in effect, includes an
untrue statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in light of
the circumstances then existing, and at the request of any such holder, promptly
prepare and furnish to such holder an electronic copy of a supplement to or an
amendment of such Prospectus as may be necessary so that, as thereafter delivered to
the purchasers of such Registrable Securities, such Prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in light of
the circumstances then existing;






	 	(i)	 	otherwise use commercially reasonable efforts to comply with all applicable
rules and regulations of the SEC under the Securities Act and the Exchange Act, take
such other actions as may be reasonably necessary to facilitate the registration of
the Registrable Securities hereunder; and make available to its security holders, as
soon as reasonably practicable, but not later than the Availability Date (as defined
below), an earnings statement covering a period of at least twelve (12) months,
beginning after the effective date of the Registration Statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act,
including Rule 158 promulgated thereunder (for the purpose of this subsection 3(i),
“Availability Date “means the 45th day following the end of the fourth fiscal
quarter that includes the effective date of the Registration Statement, except that,
if such fourth fiscal quarter is the last quarter of the Company’s fiscal year,
“Availability Date “means the 90th day after the end of such fourth fiscal
quarter); and






	 	(j)	 	with a view to making available to the Investors the benefits of Rule 144 (or
its successor rule) and any other rule or regulation of the SEC that may at any time
permit the Investors to sell shares of Common Stock to the public without
registration, the Company covenants and agrees to: (i) make and keep public
information available, as those terms are understood and defined in Rule 144, during
the Effectiveness Period; (ii) file with the SEC in a timely manner all reports and
other documents required of the Company under the Exchange Act; and (iii) furnish to
each Investor upon request, as long as such Investor owns any Registrable Securities,
(A) a written statement by the Company that it has complied with the reporting
requirements of the Exchange Act, (B) a copy of the Company’s most recent Annual
Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other information
as may be reasonably requested in order to avail such Investor of any rule or
regulation of the SEC that permits the selling of any such Registrable Securities
without registration.





5. Obligations of the Investors.




	 	(a)	 	Each Investor shall furnish in writing to the Company such information
regarding itself, the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it, as shall be required to effect
the registration of such Registrable Securities and shall execute such documents in
connection with such registration as the Company may reasonably request. At least five
(5) Business Days prior to the anticipated filing date of the Registration Statement,
the Company shall notify each Investor of the information the Company requires from
such Investor if such Investor elects to have any of the Registrable Securities
included in the Registration Statement. An Investor shall provide such information to
the Company at least two (2) Business Days prior to the anticipated filing date of the
Registration Statement if such Investor elects to have any of the Registrable
Securities included in the Registration Statement.






	 	(b)	 	Each Investor, by its acceptance of the Registrable Securities agrees to
cooperate with the Company as reasonably requested by the Company in connection with
the preparation and filing of a Registration Statement hereunder, unless such Investor
has notified the Company in writing of its election to exclude all of its Registrable
Securities from the Registration Statement.






	 	(c)	 	Each Investor agrees that, upon receipt of any notice from the Company of
either (i) the commencement of a Suspension pursuant to Section 3, such Investor will
immediately discontinue disposition of Registrable Securities pursuant to the
Registration Statement, until the Investor’s receipt of the supplemented or amended
prospectus filed with the SEC and until any related post-effective amendment is
declared effective and, if so directed by the Company, the Investor shall deliver to
the Company (at the expense of the Company) or destroy (and deliver to the Company a
certificate of destruction) all copies in the Investor’s possession of the Prospectus
covering the Registrable Securities current at the time of receipt of such notice.





6. Indemnification.




	 	(a)	 	Indemnification by the Company. The Company agrees to indemnify and
hold harmless, to the fullest extent permitted by law, the Investors and their
respective directors, officers, employees, shareholders and each Person who controls
any Investor (within the meaning of the Securities Act) against any losses, claims,
damages, liabilities and expense (including reasonable attorneys’ fees) resulting from
or which arise out of or are based up any untrue statement or alleged untrue statement
of a material fact or any omission or alleged omission of a material fact required to
be stated in the Registration Statement or Prospectus or preliminary prospectus or
free writing prospectus or amendment or supplement thereto or necessary to make the
statements therein not misleading and will reimburse each Investor and their
respective directors, officers, employees, shareholders or controlling Persons for any
legal and other expenses reasonably incurred as such expenses are reasonably incurred
by such Person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action; provided,
however, that the Company will not be liable in any such case if and to the
extent that any such loss, claim, damage or liability arises out of or is based upon
an untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by an Investor in writing specifically
for use in the Registration Statement or Prospectus or preliminary prospectus or free
writing prospectus.






	 	(b)	 	Indemnification by the Investors. Each Investor agrees, severally but
not jointly, to indemnify and hold harmless, to the fullest extent permitted by law,
the Company, its directors, officers, employees, shareholders and each Person who
controls the Company (within the meaning of the Securities Act) against any losses,
claims, damages, liabilities and expense (including reasonable attorneys’ fees)
resulting from or which arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact or any omission or alleged omission of a material
fact required to be stated in the Registration Statement or Prospectus or preliminary
prospectus or free writing prospectus or amendment or supplement thereto or necessary
to make the statements therein not misleading, to the extent, but only to the extent
that such untrue statement or omission or alleged statement or omission is contained
in any information furnished in writing by such Investor to the Company specifically
for inclusion in the Registration Statement or Prospectus or free writing prospectus
or amendment or supplement thereto, and will reimburse the Company and its directors,
officers, employees, shareholders or controlling Persons for any legal and other
expenses reasonably incurred as such expenses are reasonably incurred by such Person
in connection with investigating, defending, settling, compromising or paying any such
loss, claim, damage, liability, expense or action. In no event shall the liability of
an Investor be greater in amount than the dollar amount of the proceeds (net of all
expense paid by such Investor in connection with any claim relating to this Section 6
and the amount of any damages such Investor has otherwise been required to pay by
reason of such untrue statement or omission or alleged untrue statement or omission)
received by such Investor upon the sale of the Registrable Securities included in the
Registration Statement giving rise to such indemnification obligation.






	 	(c)	 	Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder shall (i) give prompt notice to the indemnifying party of
any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided that any Person entitled to
indemnification hereunder shall have the right to employ separate counsel and to
participate in the defense of such claim, but the fees and expenses of such counsel
shall be at the expense of such Person unless (a) the indemnifying party has agreed to
pay such fees or expenses, or (b) the indemnifying party shall have failed to assume
the defense of such claim within five (5) Business Days after written notice thereof
and employ counsel reasonably satisfactory to such Person or (c) in the reasonable
judgment of any such Person, considering the advice of counsel, a conflict of interest
exists between such Person and the indemnifying party with respect to such claims (in
which case, if the Person notifies the indemnifying party in writing that such Person
elects to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim on
behalf of such Person); and provided, further, that the failure of any
indemnified party to give notice as provided herein shall not relieve the indemnifying
party of its obligations hereunder, except to the extent that such failure to give
notice shall materially adversely affect the indemnifying party in the defense of any
such claim or litigation. It is understood that the indemnifying party shall not, in
connection with any proceeding in the same jurisdiction, be liable for fees or
expenses of more than one additional firm of attorneys at any time for all such
indemnified parties. No indemnifying party will, except with the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement that
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect of such
claim or litigation.






	 	(d)	 	Contribution. If for any reason the indemnification provided for in
the preceding paragraphs (a) and (b) is unavailable to an indemnified party or
insufficient to hold it harmless, other than as expressly specified therein, then the
indemnifying party shall contribute to the amount paid or payable by the indemnified
party as a result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable considerations. No Person
guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the
Securities Act shall be entitled to contribution from any Person not guilty of such
fraudulent misrepresentation. In no event shall the contribution obligation of a
holder of Registrable Securities be greater in amount than the dollar amount of the
proceeds (net of all expenses paid by such holder in connection with any claim
relating to this Section 6 and the amount of any damages such holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission) received by it upon the sale of the Registrable Securities giving
rise to such contribution obligation.





7. Miscellaneous.




	 	(a)	 	Amendments and Waivers. This Agreement may be amended only by a
writing signed by the Company and the Required Investors. The Company may take any
action herein prohibited, or omit to perform any act herein required to be performed
by it, only if the Company shall have obtained the written consent to such amendment,
action or omission to act, of the Required Investors.






	 	(b)	 	Notices. All notices and other communications provided for or
permitted hereunder shall be made as set forth in Section 9.4 of the Purchase
Agreement.






	 	(c)	 	Assignments and Transfers by Investors. The provisions of this
Agreement shall be binding upon and inure to the benefit of the Investors and their
respective successors and assigns. An Investor may transfer or assign, in whole or
from time to time in part, to one or more Persons its rights hereunder in connection
with the transfer of Registrable Securities by such Investor to such Person,
provided that such Investor complies with all laws applicable thereto and
provides written notice of assignment to the Company promptly after such assignment is
effected.






	 	(d)	 	Assignments and Transfers by the Company. This Agreement may not be
assigned by the Company (whether by operation of law or otherwise) without the prior
written consent of the Required Investors, provided, however, that
the Company may assign its rights and delegate its duties hereunder to any surviving
or successor corporation in connection with a merger or consolidation of the Company
with another corporation, or a sale, transfer or other disposition of all or
substantially all of the Company’s assets to another corporation, without the prior
written consent of the Required Investors, after notice duly given by the Company to
each Investor.






	 	(e)	 	Benefits of the Agreement. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective permitted successors
and assigns of the parties. Nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their respective successors
and assigns any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.






	 	(f)	 	Counterparts; Faxes. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. This Agreement may also be executed via
facsimile, which shall be deemed an original.






	 	(g)	 	Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.






	 	(h)	 	Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the remaining
provisions hereof but shall be interpreted as if it were written so as to be
enforceable to the maximum extent permitted by applicable law, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted by
applicable law, the parties hereby waive any provision of law which renders any
provisions hereof prohibited or unenforceable in any respect.






	 	(i)	 	Further Assurances. The parties shall execute and deliver all such
further instruments and documents and take all such other actions as may reasonably be
required to carry out the transactions contemplated hereby and to evidence the
fulfillment of the agreements herein contained.






	 	(j)	 	Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of the
subject matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.






	 	(k)	 	Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed by, and construed in accordance with, the internal laws of
the State of New York without regard to the choice of law principles thereof. Each of
the parties hereto irrevocably submits to the exclusive jurisdiction of the courts of
the State of New York located in New York County and the United States District Court
for the Southern District of New York for the purpose of any suit, action, proceeding
or judgment relating to or arising out of this Agreement and the transactions
contemplated hereby. Service of process in connection with any such suit, action or
proceeding may be served on each party hereto anywhere in the world by the same
methods as are specified for the giving of notices under this Agreement. Each of the
parties hereto irrevocably consents to the jurisdiction of any such court in any such
suit, action or proceeding and to the laying of venue in such court. Each party hereto
irrevocably waives any objection to the laying of venue of any such suit, action or
proceeding brought in such courts and irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in an inconvenient
forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY
LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER.




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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first above written.



The Company:



ATS MEDICAL, INC.



By: /s/ Michael R. Kramer

Name: Michael R. Kramer

Title: Chief Financial Officer





THE INVESTORS:



ESSEX WOODLANDS HEALTH VENTURES FUND VIII, L.P.



By: Essex Woodlands Health Ventures VIII, L.P.



Its General Partner



By: Essex Woodlands Health Ventures VIII, LLC



Its General Partner



By: /s/ Martin Sutter

Title: Manager




ESSEX WOODLANDS HEALTH VENTURES FUND VIII-A, L.P.



By: Essex Woodlands Health Ventures VIII, L.P.



Its General Partner



By: Essex Woodlands Health Ventures VIII, LLC



Its General Partner



By: /s/ Martin Sutter

Title: Manager




ESSEX WOODLANDS HEALTH VENTURES FUND VIII-B, L.P.



By: Essex Woodlands Health Ventures VIII, L.P.



Its General Partner



By: Essex Woodlands Health Ventures VIII, LLC



Its General Partner



By: /s/ Martin Sutter

Title: Manager





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