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EXHIBIT 4.9
SHARE TRANSFER RESTRICTION AGREEMENT
THIS SHARE TRANSFER RESTRICTION AGREEMENT (this "Agreement") is
made
and entered into as of January 23, 2006 (the "Effective Date"), by
and between
ATS Medical, Inc., a Minnesota corporation ("Parent"), and _____,
[a _____
corporation OR an individual resident of the state of _____] (the
"Significant
Stockholder"). Each term used herein but not otherwise defined
herein shall have
the meaning ascribed thereto in that certain Agreement and Plan of
Merger, dated
of even date herewith, by and among Parent, 3F Therapeutics, Inc.
(the
"Company"), Seabiscuit Acquisition Corp., a Delaware corporation
and a
wholly-owned subsidiary of Parent ("Merger Subsidiary"), and the
other parties
thereto (the "Merger Agreement").
WHEREAS, upon the Closing, and pursuant to the terms and conditions
of
the Merger Agreement, the Merger Subsidiary shall be merged with
and into the
Company (the "Merger"), with the Company as the surviving
corporation in the
Merger;
WHEREAS, pursuant to the terms and conditions of the Merger
Agreement,
Parent will issue to the Stockholders, or deposit in escrow with an
escrow
agent, a number of shares of its common stock, $0.01 par value per
share
("Parent Common Stock"), following the consummation of the Merger
("Initial
Merger Consideration"), and thereafter may issue to the
Stockholders additional
Parent Common Stock if certain milestones are achieved ("Contingent
Merger
Consideration" and together with Initial Merger Consideration,
"Merger
Consideration");
WHEREAS, it is a condition precedent to the consummation of the
transactions contemplated in the Merger Agreement that the
Significant
Stockholder execute this Agreement to restrict the transfer of
Parent Common
Stock received as Merger Consideration on the terms and conditions
contained
herein; and
WHEREAS, the Significant Stockholder has agreed to enter into
this
Agreement and to restrict the sale, assignment, transfer,
conveyance,
hypothecation, or alienation of Parent Common Stock received as
Merger
Consideration in order to provide for an orderly market for Parent
Common Stock
subsequent to the Closing.
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.
Transfer Restrictions.
(a) Transfer
Restriction upon Certain Initial Merger Consideration.
The Significant Stockholder hereby agrees not to sell, pledge,
hypothecate, offer to sell, contract to sell (including,
without
limitation, any short sale), grant any option, right or warrant
to purchase or otherwise transfer, assign, or dispose of,
directly or indirectly ("Transfer"), any shares of Parent
Common
constituting Initial Merger Consideration, but not including
Escrow Shares ("Initial Shares") prior to the six-month
anniversary of the Effective Time (the "Initial Restriction
Period"). Upon the expiration of the Initial Restriction
Period,
the Initial Shares shall be subject to
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an additional Transfer restriction (the "Subsequent Restriction
Period"), which Transfer restriction will lapse as follows: on
the one-month anniversary of the commencement of the Subsequent
Restriction Period, and on each of the five successive monthly
anniversaries thereafter, the Transfer restriction shall lapse
with respect to one-sixth (1/6th) of the Initial Shares, with
all
Transfer restrictions under this Section 1(a) lapsing upon the
expiration of the Subsequent Restriction Period.
(b) Transfer
Restriction upon Escrow Shares. The Significant
Stockholder hereby agrees not to Transfer any shares of Parent
Common constituting Escrow Shares, except that during each of
the
five months following the Distribution Date, this Transfer
restriction shall lapse with respect to one-sixth (1/6th) of
the
Escrow Shares. On the date that is six months after the
Distribution Date, the transfer restriction shall lapse with
respect to the remaining portion of such Escrow Shares.
(c) Transfer
Restriction upon Contingent Merger Consideration. The
Significant Stockholder hereby agrees not to Transfer any
shares
of Parent Common Stock received as Contingent Merger
Consideration ("Contingent Shares"), if any, during the
six-month
period following the date of receipt of any Contingent Shares
(each such date, a "Contingent Share Receipt Date"), if such
Transfer would violate the provisions of this Section 1(c). The
Transfer restriction described in this Section 1(c) will lapse
as
follows: on the one-month anniversary of a Contingent Share
Receipt Date, and on each of the five successive monthly
anniversaries thereafter, the Transfer restriction shall lapse
with respect to one-sixth (1/6th) of the Contingent Shares
received on such Contingent Share Receipt Date, with all
Transfer
restrictions under this Section 1(c) lapsing upon the
expiration
of such six-month period.
(d) No Transfer
in violation of Section 1(a), (b) or (c) will be
effective for any purpose or confer on any transferee or
purported transferee any rights whatsoever.
(e) Permitted
Parent Common Stock Transfers. Notwithstanding anything
contained in this Agreement to the contrary, the Significant
Stockholder may transfer Parent Common Stock received as Merger
Consideration in accordance with the Exchange Act and the
Securities Act to (i) a spouse, a lineal ancestor or
descendant,
or adopted child, of the Significant Stockholder, (ii) a trust
for the primary benefit of the Significant Stockholder or the
foregoing individuals, (iii) if the Significant Stockholder is
a
partnership, any Person that is a current or former limited or
general partner of such partnership; (iv) if the Significant
Stockholder is a limited liability company, any Person that is
a
current or former member of the Significant Stockholder; or (v)
to any Affiliate of the Significant Stockholder; provided,
however, that the transferee of such Parent Common Stock shall
agree to be bound by the limitations set forth in this
Agreement.
(f) Beneficial
Rights of Significant Stockholder. Except as otherwise
provided in any agreements between Parent and the Significant
Stockholder, the Significant
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Stockholder shall be entitled to its beneficial rights of
ownership of Parent Common Stock received as Merger
Consideration, including without limitation the right to
receive
dividends and to vote such Parent Common Stock for any and all
purposes; provided, however, that the Significant Stockholder
shall not be entitled to any beneficial rights of ownership,
including the right to vote, of the Escrow Shares until such
shares have been released from escrow to the Significant
Stockholder in accordance with the terms of the Escrow
Agreement.
(g) Legends. In
addition to any legends that may be required by state
securities or other applicable laws, the Significant
Stockholder
acknowledges that the stock certificates evidencing Parent
Common
Stock issued as Merger Consideration will be endorsed with the
following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER, AS SET
FORTH IN A SHARE TRANSFER RESTRICTION AGREEMENT
ENTERED INTO BETWEEN PARENT AND THE HOLDER OF THIS
CERTIFICATE, A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL OFFICE OF PARENT.
Parent shall remove and/or to cause the transfer agent of the
Parent Common stock to remove, the above legend set forth on
any
and all stock certificate(s) representing shares of Parent
Common
Stock, and to issue to the Significant Stockholder a new stock
certificate or certificates without such legend, promptly
following (a) expiration of any Transfer restrictions imposed
hereunder upon shares of Parent Common Stock as to which such
Transfer restrictions have expired and (b) the surrender to
Parent or the transfer agent by the Significant Stockholder of
the stock certificate or certificates bearing such legend for
reissuance of stock certificates without such legend as to
those
shares as to which the Transfer restrictions have expired.
(h) Waiver of
Transfer Restrictions by Parent. Notwithstanding
anything to the contrary set forth in this Agreement, Parent
may,
in its sole and absolute
