SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 29, 1999
ATS MEDICAL, INC.
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(Exact name of registrant as specified in its charter)
Minnesota 000-18602 41-1595629
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(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification No.)
3905 Annapolis Lane, Suite 105, Minneapolis, Minnesota 55447
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(Address of principal executive offices)
Registrant's telephone number, including area code: (612) 553-7736
Not Applicable
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(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets.
On December 29, 1999, ATS Medical, Inc. (the "Buyer" or "ATS") and
Sulzer Carbomedics, Inc. (the "Seller") entered into an agreement (the "Carbon
Agreement") pursuant to which, subject to the terms and conditions contained in
the Carbon Agreement, Buyer obtained an exclusive worldwide right and license to
use Seller's trade secrets, know-how and other intellectual property necessary
to manufacture, or have manufactured, use, sell and assemble the ATS pyrolytic
carbon bileaflet mechanical heart valve (the "ATS Valve") and components thereof
(collectively, the "Licensed Technology") and a non-exclusive worldwide right
and license to use the Licensed Technology for other purposes after 2008. The
Carbon Agreement also contains a commitment by Seller to assist and supervise
Buyer in establishing a pyrolytic carbon component production facility in
Minnesota. Seller has been the exclusive supplier of carbon components used in
the ATS Valve since [1990]. Under the terms of the Carbon Agreement, Buyer is
required to pay Seller a license fee of $41,000,000, consisting of eight (8)
annual installment payments, subject to deferral if certain milestones are not
satisfied. The initial installment payment of $5,000,000, which was due upon
execution of the Carbon Agreement, came from cash on hand. Upon execution of the
Carbon Agreement, the Option Agreement dated September 24, 1990 between Buyer
and Seller was terminated.
On December 29, 1999, Buyer and Seller also entered into an amendment
(the "Supply Contract Amendment") to their OEM Supply Contract dated September
24, 1990. The Supply Contract Amendment provides for a reduction in the minimum
number of carbon components that Buyer is required to purchase from Seller each
year and a reduction in the purchase price of such components. In addition, on
December 29, 1999, Buyer and Seller entered into an amendment (the "License
Amendment") to their License Agreement dated September 24, 1990. Each of the
Carbon Agreement, the Supply Contract Amendment and the License Amendment was
the product of arms' length negotiations by the parties.
The Carbon Agreement, Supply Contract Amendment and License Amendment
are filed as Exhibits 99.1, 99.2 and 99.3 to this report, respectively.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Business Acquired
Not applicable.
(b) Pro Forma Financial Information
Not applicable.
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(c) Exhibits
Exhibit No. Description
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*99.1 Carbon Agreement by and between Sulzer Carbomedics, Inc. and
ATS Medical, Inc., dated December 29, 1999.
*99.2 Amendment 7 to OEM Supply Contract by and between Sulzer
Carbomedics, Inc. and ATS Medical, Inc., dated December 29,
1999.
99.3 Amendment 2 to License Agreement by and between Sulzer
Carbomedics, Inc. and ATS Medical, Inc., dated December 29,
1999.
*Portions of the Exhibit have been omitted pursuant to a request for
confidential treatment, which has been submitted separately to the Securities
and Exchange Commission in accordance with Rule 24b-2 of the Securities Exchange
Act of 1934.
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SIGNATURE PAGE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: January 12, 2000 ATS MEDICAL, INC.
/s/ John H. Jungbauer
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John H. Jungbauer
Chief Financial Officer
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