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Exhibit 4.1
FORM OF 6% CONVERTIBLE SENIOR NOTE DUE 2025
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ATS MEDICAL, INC.
[FORM OF FACE OF NOTE]
[THE FOLLOWING PARAGRAPH SHALL APPEAR ON
THE FACE OF EACH RESTRICTED NOTE.]
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") OR APPLICABLE
STATE SECURITIES LAWS. THIS SECURITY MAY
NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER THE SECURITIES ACT
AND APPLICABLE STATE SECURITIES LAWS
OR AN EXEMPTION THEREFROM.
[THE FOLLOWING PARAGRAPH SHALL APPEAR ON
THE FACE OF EACH GLOBAL NOTE.]
Unless this Note is presented by an
authorized representative of The Depository
Trust Company, a New York corporation
("DTC"), to the Issuer or its agent for
registration of transfer, exchange or
payment, and any Note issued is registered
in the name of Cede & Co. or in such
other name as is requested by an authorized
representative of DTC (and any payment is
made to Cede & Co. or to such other
entity as is requested by an authorized
representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest
herein.
ATS MEDICAL, INC.
6% Convertible Senior Note due 2025
No. _____
$_______________
CUSIP No. _____________
ATS Medical,
Inc., a corporation duly organized and validly existing under
the laws of the State of Minnesota (herein
called the "Company", which term
includes any successor corporation under
the Indenture referred to on the
reverse hereof), for value received hereby
promises to pay to
____________________, or registered
assigns, the principal sum of ___________
United States Dollars on October 15, 2025
and to pay interest on said principal
sum semi-annually on April 15 and October
15 of each year (each, an "Interest
Payment Date"),
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commencing April 15, 2006, at the rate per
annum specified in the title of this
Note, accrued from the most recent date to
which interest has been paid or, if
no interest has been paid, from October 7,
2005. The interest so payable on any
April 15 or October 15 will be paid to the
person in whose name this Note (or
one or more Predecessor Notes) is
registered at the close of business on the
record date, which shall be the 4th day of
the month in which the Interest
Payment Date shall occur, whether or not
such date is a Business Day; provided
that any such interest not punctually paid
or duly provided for shall be payable
as provided in the Indenture. Each payment
of interest on this Note shall
include interest to, but excluding, the
date of such payment. Payment of the
principal of and interest accrued on this
Note (including Liquidated Damages, if
any) shall be made at the office or agency
of the Company maintained for that
purpose, which shall initially be the
office or agency of the Trustee in
Minneapolis, Minnesota, specified in the
Indenture, or at any other office or
agency permitted by the Indenture, in such
lawful money of the United States of
America as at the time of payment shall be
legal tender for the payment of
public and private debts; provided, that
interest may, at the option of the
Company, be paid by check mailed to the
address of the holder hereof on the Note
Register; provided further, however, that,
with respect to any holder of Notes
with an aggregate principal amount equal to
or in excess of Five Hundred
Thousand United States Dollars ($500,000),
interest on such holder's Notes shall
be paid by wire transfer in immediately
available funds to any bank located in
the United States in accordance with the
written wire transfer instruction
supplied by such holder from time to time
to the Trustee and paying agent (if
different from the Trustee) in writing at
least five (5) Business Days prior to
the applicable record date.
Reference is
made to the further provisions of this Note set forth on the
reverse hereof, including, without
limitation, provisions giving a holder of
this Note the right to convert this Note
into Common Stock of the Company on the
terms and subject to the limitations
referred to on the reverse hereof and as
more fully specified in the Indenture. Such
further provisions shall for all
purposes have the same effect as though
fully set forth at this place.
This Note shall
be deemed to be a contract made under the laws of the State
of New York and for all purposes shall be
construed in accordance with the
internal laws of the State of New York
without giving effect to any choice of
law or conflict of law provision or rule
(whether of the State of New York or
any other jurisdictions) that would cause
the application of the laws of any
jurisdictions other than the State of New
York.
This Note shall
not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall
have been manually signed by the
Trustee or a duly authorized authenticating
agent under the Indenture.
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IN WITNESS
WHEREOF, the Company has caused this Note to be duly executed.
ATS MEDICAL, INC.
________________________________________
[Name, Title]
Attest:
____________________________________
[Name, Title]
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Trustee, certifies that this is one
of the Notes described in the
within-named Indenture.
Dated:
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By:
---------------------------------
Authorized
Signatory
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[FORM OF REVERSE OF NOTE]
ATS MEDICAL, INC.
6% Convertible Senior Note due 2025
This Note is one
of a duly authorized issue of Notes of the Company,
designated as its 6% Convertible Senior
Notes due 2025 (herein called the
"Notes"), limited (except as otherwise
provided in the Indenture) to the
aggregate principal amount outstanding of
_______________ United States Dollars,
($____________) all issued or to be issued
under and pursuant to an Indenture
dated as of October 7, 2005 (herein called
the "Indenture"), between the Company
and Wells Fargo Bank, National Association
(herein called the "Trustee"), to
which Indenture and all indentures
supplemental thereto reference is hereby made
for a full description of the rights,
limitations of rights, obligations, duties
and immunities thereunder of the Trustee,
the Company and the holders of the
Notes. All capitalized terms used herein
without definition shall have the
meaning set forth in the Indenture.
In case an Event
of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal
of and premium, if any, on all Notes
and the interest accrued thereon (including
Liquidated Damages to the extent
accrued and unpaid) may be declared, and
upon said declaration shall become, due
and payable, in the manner, with the effect
and subject to the conditions
provided in the Indenture. Liquidated
damages paid pursuant to Section 15.2 of
the Indenture, if any, shall be paid within
ten (10) Business Days after the end
of each month with respect to which such
liquidated damages have accrued
pursuant to Section 15.2 in the same manner
as interest is paid. Liquidated
Damages on the Notes paid pursuant to
Section 2(f) of the Registration Rights
Agreement, if any, shall be paid at the
times and in the manner provided
therein.
The Indenture
contains provisions permitting the Company and the Trustee in
certain limited circumstances, without the
consent of the holders of the Notes,
and in other circumstances, with the
consent of the holders of not less than a
majority in aggregate principal amount of
the Notes at the time outstanding,
evidenced as in the Indenture provided, to
execute amendments to the Indenture
or supplemental indentures adding any
provisions to or changing in any manner or
eliminating any of the provisions of the
Indenture or of any supplemental
indenture or modifying in any manner the
rights of the holders of the Notes;
provided, however, that no such amendment
or supplemental indenture shall (i)
extend the fixed maturity of any Note, or
reduce the rate or extend the time of
payment of interest thereon, or reduce the
principal amount thereof or premium,
if any, thereon, or reduce any amount
payable on redemption or repurchase
thereof, impair or change in any respect
adverse to the holder of Notes the
obligation of the Company to repurchase any
Note at the option of the holder in
accordance with Article XVI of the
Indenture, or impair or adversely affect the
right of any Noteholder to institute suit
for the payment thereof, or change the
currency in which the Notes are payable, or
impair or change in any respect
adverse to the Noteholders the right to
convert the Notes into Common Stock
subject to the terms set forth in the
Indenture, including Section 15.6, or to
subordinate the Notes in right of payment
to other indebtedness, in each such
case without the consent of the holder of
each Note so affected, or (ii) reduce
the aforesaid percentage of Notes, the
holders of which are required to consent
to any such supplemental indenture, without
the consent of the holders of all
Notes then outstanding. In addition, any
amendment or supplemental indenture
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that disproportionately affects the rights
of a Noteholder or a class of
Noteholder shall require the prior consent
of such Noteholder or the prior
consent of Noteholders holding a majority
of the principal amount of Notes then
held by such class, as applicable.
It is also
provided in the Indenture that the holders of not less than a
majority in aggregate principal amount of
the Notes at the time outstanding may
on behalf of the holders of all of the
Notes waive any past or existing default
or Event of Default under the Indenture and
its consequences except (i) a
default in the payment of interest or
premium, if any, on, or the principal of,
the Notes when due, (ii) a failure by the
Company to convert any Notes into
Common Stock or (iii) a default in respect
of a covenant or provisions of the
Indenture which under Article XI thereof
cannot be modified or amended without
the consent of all affected holders of
Notes then outstanding.
Interest on the
Notes shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
The Notes are
issuable in registered form without coupons in denominations
of One Thousand United States Dollars
($1,000) principal amount and integral
multiples thereof. At the office of the
Trustee or the Company referred to on
the face hereof, and in the manner and
subject to the limitations provided in
the Indenture, without payment of any
service charge but with payment of a sum
sufficient to cover any tax, assessments or
other governmental charges that may
be imposed in connection with any exchange
or registration of transfer of Notes,
Notes may be exchanged for a like aggregate
principal amount of Notes of other
authorized denominations. All transfers are
subject to the restrictions thereon
provided in the Indenture.
From and after
October 20, 2008, the Company may, at its option, redeem all
or any part of the Notes, upon notice as
set forth in the Indenture, and the
Company shall pay each holder of Notes
redeemed a redemption price equal to the
principal amount of such Notes, plus
accrued and unpaid interest thereon, if
any, to, but excluding, the date of
redemption, subject to the proviso in the
final sentence of this paragraph. If notice
of redemption has been given as
provided in the Indenture, the Notes or
portion of Notes called for redemption
shall, unless converted into Common Stock
pursuant to the terms of the
Indenture, become due and payable on the
date and at the place or places stated
in such notice at the applicable redemption
price and interest accrued to, but
excluding, the date fixed for redemption,
and on and after such date (unless the
Company shall default in the
