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Exhibit 10.2 CABG MEDICAL, INC. INVESTMENT AGREEMENT This Investment Agreement(the Agreement) is made as of March 22, 2005 by and between CABG
Medical, Inc., a Minnesota corporation (the Company) with its principal office at 14505
21st Avenue North, Minneapolis, Minnesota 55447, and Angiotech Pharmaceuticals, Inc., a
corporation organized and existing under the laws of the Province of British Columbia (Angiotech)
with its principal office at 1618 Station Street, Vancouver, British Columbia, Canada V6A 1B6. RECITALS WHEREAS, the Company desires to issue and sell to Angiotech, and Angiotech desires to purchase
on the terms and subject to the conditions set forth in this Agreement, certain shares of Company
common stock; and AGREEMENT NOW, THEREFORE,in consideration of the respective representations, warranties, covenants and
agreements set forth herein, and for other valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows: Section 1 Purchase and Sale of Common Stock 1.1 First Purchase and Sale of Common Stock. Subject to the terms and conditions of
this Agreement, at the First Closing (as defined in Section 2.1), the Company shall issue and sell,
and Angiotech shall purchase, for an aggregate purchase price equal to five million dollars (U.S.
$5,000,000) (the First Purchase Price), 1,104,972 shares of the Companys common stock, no par
value (the Common Stock) at a per share purchase price equal to $4.5425 (determined by
multiplying the closing sale price of a share of Common Stock as reported on the Nasdaq Stock
Market as of the end of the regular trading session on the date hereof by 1.15%). 1.2 Second Purchase and Sale of Common Stock. Subject to the terms and conditions of
this Agreement, including but not limited to Section 4.5, at the Second Closing (as defined in
Section 2.2), the Company shall issue and sell, and Angiotech shall purchase, for an aggregate
purchase price equal to the greater of (i) five million dollars (U.S. $5,000,000) and (ii) such
lesser amount as is necessary to comply with Section 4.5 hereof (the Second Purchase Price), that
number of shares of the Companys Common Stock determined by dividing the Second Purchase Price by
the sum of (i) the closing sale price of a share of Common Stock as reported on the Nasdaq Stock
Market as of the end of the regular trading session on the date upon which the Company achieves the
Net Sales Milestone, multiplied by (ii) 1.15%.




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1.3 Notice of Net Sales Milestone. The Company covenants and agrees that it will
provide written notice to Angiotech of the achievement of the Net Sales Milestone within ten (10)
business days of the achievement of such milestone. 1.4 Securities. The shares of Common Stock to be issued at each respective Closing
are herein collectively referred to as the Securities. Section 2 Closing Date; Delivery 2.1 First Closing Date. The completion of the first purchase and sale of Securities
will be held on the date hereof (the First Closing). The date of the First Closing is
hereinafter referred to as the First Closing Date. 2.2 Second Closing Date. The completion of the second purchase and sale of Securities
will be held twenty (20) business days following the date upon which the Company shall have
achieved cumulative Net Sales (as defined in that certain License Agreement dated March 22, 2005,
between the Company and Angiotech (the License Agreement)) on Eligible Products (as defined in
the License Agreement) equal to $13 million (the Net Sales Milestone) (the Second Closing).
The date of the Second Closing is hereinafter referred to as the Second Closing Date. 2.3 Delivery. At each or immediately following each Closing, the Company will deliver
to Angiotech the certificates evidencing the Securities. Such delivery shall be against payment of
the First or Second Purchase Price, as the case may be, for the Securities by wire transfer of
immediately available funds to the Companys bank account (in accordance with instructions
furnished by the Company). Section 3 Representations and Warranties of the Company The Company represents and warrants to Angiotech as follows: 3.1 Organization and Standing. The Company is a corporation duly organized and
validly existing under the laws of the state Minnesota, and is, to the extent applicable, in good
standing under the laws of said state, and has the requisite corporate power and authority to own
its properties and to carry on its business as now being conducted. Other than as disclosed in the
SEC Documents (as defined herein), the Company has no subsidiaries or direct or indirect ownership
in any firm, corporation or business that either individually or in the aggregate is material to
the business of the Company. The Company is qualified to do business and is in good standing as a
foreign corporation in every jurisdiction in which its ownership of property or conduct of business
requires it to be so qualified and in which the failure to so qualify would not have a material
adverse effect on the assets, properties, financial condition or business of the Company. 2




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3.2 Corporate Power; Authorization. The Company has all requisite legal and corporate
power and authority and has taken all requisite corporate action to duly authorize, execute and
deliver this Agreement, to sell and issue the Securities, and to carry out and perform all of its
obligations under and contemplated by this Agreement. This Agreement has been duly executed and
delivered by an authorized officer of the Company and constitutes the legal, valid and binding
obligation of the Company, enforceable in accordance with its terms, except (a) as limited by
applicable bankruptcy, insolvency, reorganization or similar laws relating to or affecting the
enforcement of creditors rights generally, and (b) as limited by equitable principles generally
(regardless of whether such enforceability is considered a proceeding in equity or at law). 3.3 Issuance and Delivery. The Securities have been duly authorized and, when issued
and delivered in compliance with this Agreement, will be duly and validly issued and delivered and
will be outstanding, fully paid, nonassessable and free and clear of all pledges, liens,
encumbrances and restrictions other than any liens or encumbrances created by or imposed on the
holders thereof through no action of the Company; provided, however, that the Securities will be
subject to restrictions on transfer and state and federal securities laws and as provided herein.
No further approval or authority of the shareholders or the Board of Directors of the Company will
be required for the issuance and sale of the Securities to be sold by the Company as contemplated
herein. 3.4 SEC Documents; Financial Statements; Subsequent Events. The Company has filed in
a timely manner all documents that the Company was required to file with the Securities and
Exchange Commission (SEC) during the twelve (12) months preceding the date of this Agreement. As
of their respective filing dates, all documents filed by the Company with the SEC (the SEC
Documents) complied in all material respects with the requirements of the Securities Exchange Act
of 1934, as amended (the Exchange Act) or the Securities Act of 1933, as amended (the Securities
Act), as applicable and all rules and regulations thereunder. None of the SEC Documents
contained, as of their respective dates, any untrue statement of material fact or omitted to state
a material fact required to be stated therein or necessary to make the statements made therein, in
light of the circumstances under which they were made, not misleading, and such SEC Documents, when
read as a whole, do not contain any untrue statements of a material fact and do not omit to state a
material fact necessary to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included in the SEC
Documents (the Financial Statements) comply in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with respect thereto. The
Financial Statements have been prepared in accordance with United States generally accepted
accounting principles consistently applied, and fairly present the financial position of the
Company at the dates thereof and the results of the Companys operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal adjustments). 3.5 No Consents. No consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal, state, or local governmental
authority or any other third party on the part of the Company is required in connection with the
execution and delivery of this Agreement that has not been accomplished and the consummation of the
transactions contemplated by this Agreement, except for any filings under applicable 3




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federal and/or state laws, which filings and qualifications, if required, will be accomplished
in a timely manner consistent with such applicable law. 3.6 Exempt Transactions. Subject to the accuracy of Angiotechs representations and
warranties in Section 4 of this Agreement, the offer, sale and issuance of the Securities in
conformity with the terms of this Agreement constitute transactions exempt from the registration
requirements of Section 5 of the Securities Act and from the registration or qualification
requirements of the laws of any applicable state jurisdiction. 3.7 Intellectual Property. The Company owns or possesses adequate rights to use all
patents, patent rights, inventions, trademarks, trade names, copyrights, licenses, governmental
authorizations, trade secrets and know-how that are used or necessary for the conduct of the
Companys business as described in the SEC Documents; except as described in the SEC Documents, the
Company has not received any notice of, or has any knowledge of, any infringement of or conflict
with asserted rights of others with respect to any patent, patent right, invention, trademarks,
trade names, copyrights, licenses, governmental authorizations, trade secret or know-how that,
individually or in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a material adverse effect on the assets, properties, financial condition or business of
the Company. 3.8 Authorized Capital Stock. The authorized and outstanding capital stock of the
Company conforms, as of the dates for which such information is given, in all material respects to
the statements relating thereto contained in the SEC Documents. The issued and outstanding shares
of capital stock of the Company have been duly authorized, validly issued and are fully paid and
nonassessable; except as set forth or referred to in the SEC Documents, no warrants, options or
other rights to purchase, agreements or other obligation to issue, or agreements or other rights to
convert any obligation into, any shares of capital stock of the Company have been granted or
entered into by the Company. No holder of any security of the Company is entitled to any
preemptive or similar rights to purchase any securities of the Company. 3.9 Litigation. There are no actions, suits, proceedings or investigations pending
or, to the best of the Companys knowledge, threatened against the Company or any of its properties
before or by any court or arbitrator or any governmental body, agency or official in which there is
a reasonable likelihood (in the judgment of the Company) of an adverse decision that (a) would have
a material adverse effect on the Companys properties or assets or the business of the Company as
presently conducted or proposed to be conducted, or (b) would impair the ability of the Company to
perform in any material respect its obligations under this Agreement. The Company is not in
default with respect to any judgment, order or decree of any court or governmental agency or
instrumentality that, individually or in the aggregate, would have a material adverse effect on the
assets, properties, financial condition or business of the Company. 3.10 Compliance With Other Instruments. The business and operations of the Company
have been and are being conducted in accordance with all applicable laws, rules and regulations of
all governmental authorities, except for such violations of applicable laws, rules and regulations
that would not, individually or in the aggregate, have a material adverse effect on the assets,
properties, financial condition or business of the Company. Neither the execution and delivery of,
nor the performance or compliance with, this Agreement and the transactions 4




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contemplated hereby, will, with or without the giving of notice or the passage of time, (i)
result in any breach of, or constitute a default under, or result in the imposition of any lien or
encumbrance upon any asset or property of the Company pursuant to any agreement or other instrument
to which the Company is a party or by which the Company or any of its properties, assets or rights
is bound or effected, except for such breach or default or the imposition of any such lien or
encumbrance that, either individually or in the aggregate, would not have a material adverse effect
on the assets, properties, financial condition or business of the Company, or (ii) violate the
Articles of Incorporation or Bylaws of the Company or any other organizational documents of the
Company or any law, rule, regulation, judgment, order or decree. The Company is not in violation
of its Articles of Incorporation or Bylaws nor in violation of or in default under, any lien,
indenture, mortgage, lease, agreement, instrument, commitment or arrangements, except for such
defaults that would not, individually or in the aggregate, have a material adverse effect on the
assets, properties, financial condition or business of the Company, or subject to any restriction
that would prohibit the Company from entering into or performing its obligations under the
Agreement. 3.11 Brokers or Finders. No natural or legal person has or will have, as a result of
any act or omission of the Company, any right, interest or valid claim against Angiotech for any
commission, fee or other compensation as a finder or broker in connection with the transactions
contemplated by this Agreement. 3.12 Contracts. The contracts so described in the SEC Documents or incorporated by
reference therein are in full force and effect on the date hereof, except for contracts the
termination or expiration of which would, individually or in the aggregate, not have a material
adverse effect on the business, properties or assets of the Company, and the Company is not, nor to
the Companys knowledge, is any other party in breach of or default under any of such contracts.
The SEC Documents describe or incorporate by reference all material contracts to which the Company
is a party. 3.13 Properties. The Company has good and marketable title to all the properties and
assets reflected as owned in the financial statements included in the SEC Documents, subject to no
lien, mortgage, pledge, charge or encumbrance of any kind except (i) those, if any, reflected in
such financial statements or SEC Documents, or (ii) those that are not material in amount and do
not adversely affect the use made and promised to be made of such property by the Company. The
Company holds its leased properties under valid and binding leases, with such exceptions as are not
materially significant in relation to the business of the Company. Except as disclosed in the SEC
Documents, the Company owns or leases all such properties as are necessary to their operations as
now conducted or as proposed to be conducted. 3.14 Compliance. The Company has not been advised and has no reason to believe that
it is not conducting business in compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business; except where failure to be so in compliance would
not materially adversely affect the condition (financial or otherwise), business, results of
operations or prospects of the Company. 3.15 Taxes. The Company has filed all necessary federal, state and foreign income tax
returns and have paid or accrued all taxes shown as due thereon, and the Company has no 5




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knowledge of any tax deficiency that has been or might be asserted or threatened against the
Company that could materially and adversely affect the business, operations or properties of the
Company. 3.16 Insurance. The Company maintains insurance of the types and in the amounts
generally deemed adequate for its business, including, but not limited to, insurance covering all
real and personal property owned or leased by the Company against theft, damage, destruction, acts
of vandalism and all other risks customarily insured against, all of which insurance is in full
force and effect. 3.17 Contributions. The Company has not, directly or indirectly, at any time during
the last five years (i) made any unlawful contribution to any candidate for public office, or
failed to disclose fully any contribution in violation of law, or (ii) made any payment to any
federal or state governmental officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by the laws of the United States or
any jurisdiction thereof. 3.20 Use of Proceeds. The Company will use the proceeds received from Angiotech under
this Agreement for working capital purposes only. Section 4 Representations, Warranties and Covenants of Angiotech Angiotech hereby represent and warrant to the Company as follows: 4.1 Authorization. (i) Angiotech has all requisite legal and corporate or other power
and capacity and has taken all requisite corporate or other action to execute and deliver this
Agreement, to purchase the Securities and to carry out and perform all of its obligations under
this Agreement, and (ii) this Agreement constitutes the legal, valid and binding obligation of
Angiotech, enforceable in accordance with its terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, or similar laws relating to or affecting the enforcement of
creditors rights generally and (b) as limited by equitable principles generally (regardless of
whether such enforceability is considered a proceeding in equity or at law). 4.2 Investment Experience. Angiotech is an accredited investor as defined in Rule
501(a) under the Securities Act. Angiotech is aware of the Companys business affairs and
financial condition and has had access to and has acquired sufficient information about the Company
to reach an informed and knowledgeable decision to acquire the Securities. Angiotech has such
business and financial experience as is required to give it the capacity to protect its own
interests in connection with the purchase of the Securities. 4.3 Investment Intent. Angiotech is acquiring the Securities for its own account as
principal, and not as a nominee or agent, for investment purposes only, and not with a present view
to, or for, resale, distribution or fractionalization thereof, in whole or in part, within the
meaning of the Securities Act. Angiotech understands that the offer and sale of the Securities
have not been registered under the Securities Act or registered or qualified under any state 6




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securities law in reliance on specific exemptions therefrom which exemptions may depend upon,
among other things, the bona fide nature of its investment intent as expressed herein. Angiotech
will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit
any offers to buy, purchase or otherwise acquire or take a pledge of) any of the Securities except
in compliance with the Securities Act, and the rules and regulations promulgated thereunder. 4.4 Registration or Exemption Requirements. Angiotech further acknowledges and
understands that the Securities may not be resold or otherwise transferred except in a transaction
registered under the Securities Act or unless an exemption from such registration is available.
Angiotech understands that the certificate(s) evidencing the Securities will be imprinted with a
legend that prohibits the transfer of such securities unless (i) they are registered or such
registration is not required, and (ii) if the transfer is pursuant to an exemption from
registration other than Rule 144 under the Securities Act and, if the Company shall so request in
writing, an opinion of counsel reasonably satisfactory to the Company is obtained to the effect
that the transaction is so exempt. 4.5 Shareholding Restriction. Angiotech represents that it will at no time own more
than 19.9 percent (19.9%) of the issued and outstanding stock of the Company as a result of the
consummation of the transactions contemplated by this Agreement, the License Agreement, or the
exercise of that certain warrant issued in favor of Angiodevice International GmbH dated of even
date herewith (the Warrant), with such ownership percentage calculated as of the time of each
potential issuance. Angiotech acknowledges that it may not be able to exercise certain rights
under this Agreement or the Warrant if during the term of the Agreement or the Warrant such
exercise would bring its ownership percentage of the Companys capital stock to twenty percent
(20%) or greater of the then outstanding shares of the Companys capital stock. Section 5 Conditions to Angiotech Obligation to Close The obligation of Angiotech to purchase the Securities at each Closing is subject to the
fulfillment or waiver of the following conditions, any of which may be waived in whole or in part
by Angiotech. 5.1 Representations and Warranties. The representations and warranties made by the
Company in Section 3 hereof shall be true and correct in all material respects when made, and shall
be true and correct in all material respects on the Second Closing Date with the same force and
effect as if they had been made on and as of said date. 5.2 Covenants. All covenants, agreements and conditions contained in this Agreement
to be performed by the Company on or prior to each respective Closing Date shall have been
performed or complied with in all material respects. 5.3 License Agreement. The Company shall have executed the License Agreement on or
prior to the First Closing Date. 7




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Section 6 Conditions to Closing of Company The Companys obligation to sell and issue the Securities at each Closing to Angiotech is
subject to the fulfillment or waiver of the following conditions, any of which may be waived in
whole or in part by the Company: 6.1 Representations and Warranties. The representations and warranties made by such
Investor in Section 4 hereof shall be true and correct in all material respects when made, and
shall be true and correct in all material respects on the Second Closing Date with the same force
and effect as if they had been made on and as of such date. 6.2 Covenants. All covenants, agreements and conditions contained in this Agreement
to be performed by Angiotech on or prior to each respective Closing Date shall have been performed
or complied with in all material respects. 6.3 License Agreement. Angiotech shall have executed the License Agreement on or
prior to the First Closing Date. Section 7 Registration Rights 7.1 Registration Under the Securities Act of 1933. None of the Common Stock issued to
Angiotech pursuant to Sections 1.1 or 1.2 hereof or following the exercise of the Warrant (the
Shares) have been registered for purposes of public distribution under the Securities Act. 7.2 Registrable Securities. As used herein the term Registrable Security means each
of the Shares, and any shares of Common Stock issued upon any stock split or stock dividend in
respect of such Shares; provided, however, that with respect to any particular Registrable
Security, such security shall cease to be a Registrable Security when, as of the date of
determination, (i) it has been effectively registered under the Securities Act and disposed of
pursuant thereto, (ii) registration under the Securities Act is no longer required for subsequent
public distribution of such security under Rule 144(k) promulgated under the Securities Act or
otherwise, or (iii) it is no longer held by Angiotech. The term Registrable Securities means any
and/or all of the securities falling within the foregoing definition of a Registrable Security.
In the event of any merger, reorganization, consolidation, recapitalization or other change in
corporate structure affecting the Common Stock, such adjustment shall be made in the definition of
Registrable Security as is appropriate in order to prevent any dilution or enlargement of the
rights granted pursuant to this Section 7. 7.3 Piggyback Registration. If, following the second anniversary of the date hereof
and terminating on the seventh anniversary of the date hereof, the Company proposes to prepare and
file any new registration statement or post-effective amendments thereto covering equity or debt
securities of the Company, or any such securities of the Company held by its shareholders (in any
such case, other than in connection with a merger, acquisition or pursuant to Form S-8 or 8




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successor form) (for purposes of this Section 7, collectively, the Registration Statement), it
will give written notice of its intention to do so by certified mail, return receipt requested
(Notice), at least thirty (30) business days prior to the filing of each such Registration
Statement, to Angiotech. Upon the written request of Angiotech, made within twenty (20) business
days after receipt by Angiotech of the Notice, that the Company include any of Angiotechs
Registrable Securities in the proposed Registration Statement, the Company shall use its best
efforts to effect the registration under the Securities Act of the Registrable Securities which it
has been so requested to register (Piggyback Registration), at the Companys sole cost and
expense and at no cost or expense to (except as provided in Section 7.4(a) hereof). Notwithstanding the provisions of this Section 7.3, the Company shall have the right at any
time after it shall have given written notice pursuant to this Section 7.3 (irrespective of whether
any written request for inclusion of Registrable Securities shall have already been made) to elect
not to file any such proposed Registration Statement, or to withdraw the same after the filing but
prior to the effective date thereof. 7.4 Covenants of the Company With Respect to Registration. The Company covenants and
agrees as follows: (a) The Company shall pay all costs, fees and expenses (other than underwriting fees,
discounts and nonaccountable expense allowance applicable to the Registrable Securities and
fees and expenses of counsel retained by Angiotech) in connection with all Registration
Statements including, without limitation, the Companys legal and accounting fees, printing
expenses, and blue sky fees and expenses. (b) The Company will use its reasonable best efforts to take all necessary action which
may be required in qualifying or registering the Registrable Securities included in the
Registration Statement for offering and sale under the securities or blue sky laws of such
states as are reasonably requested by Angiotech. (c) To the fullest extent permitted by law, the Company will indemnify and hold
Angiotech harmless against any losses, claims, damages, or liabilities to which it may
become subject under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any of the following statements, omissions or violations
(collectively a Violation) by the Company: (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, including any
preliminary prospectus or final prospectus contained therein or any amendments or
supplements thereto, (ii) the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements therein not misleading,
or (iii) any violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation promulgated under the
Securities Act, the Exchange Act or any state securities law in connection with the offering
covered by the Registration Statement; and the Company will reimburse Angiotech for any
legal or other expenses reasonably incurred by it in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section shall not apply to 9




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amounts paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall not be
unreasonably withheld, conditioned or delayed), nor shall the Company be liable in any such
case for any such loss, claim, damage, liability or action to the extent that it arises out
of or is based upon a Violation which occurs in reliance upon and in conformity with written
information furnished to it expressly for use in connection with such registration by
Angiotech. (d) to the extent permitted by law, Angiotech will indemnify and hold harmless the
Company, each of its directors, each of its officers, each person, if any, who controls the
Company within the meaning of the Securities Act, any underwriter and any other investor
selling securities under the Registration Statement or any of such other investors,
trustees, partners, directors or officers or any person who controls such investor, against
any losses, claims, damages or liabilities (joint or several) to which the Company or any
such director, officer, controlling person, underwriter or other such investor, or trustee,
partner, director, officer or controlling person of such other investor may become subject
under the Securities Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are
based upon any Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information furnished by
Angiotech; and Angiotech will reimburse any legal or other expenses reasonably incurred by
the Company or any such director, officer, controlling person, underwriter or other
investor, or trustee, partner, officer, director or controlling person of such other
investor in connection with investigating or defending any such loss, claim, damage,
liability or action if it is judicially determined that there was such a Violation;
provided, however, that the indemnity agreement contained in this Section shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of Angiotech, which consent shall not be
unreasonably withheld, conditioned or delayed. (e) promptly after receipt by an indemnified party under this Section of notice of the
commencement of any action (including any governmental action), such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying party under this
Section, deliver to the indemnifying party a written notice of the commencement thereof and
the indemnifying party shall have the right to participate in, and, to the extent the
indemnifying party so desires, jointly with any other indemnifying party similarly noticed,
to assume the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own counsel, with the
fees and expenses to be paid by the indemnifying party; and provided further, that if there
is more than one indemnified party, the indemnifying party shall pay for the fees and
expenses of one counsel for any and all indemnified parties to be mutually agreed upon by
such indemnified parties, unless representation of an indemnified party by the counsel
retained by the other indemnified parties would be inappropriate due to actual or potential
differing interests between such indemnified parties. The failure to deliver written notice
to the indemnifying party within a reasonable time of the commencement of any such action,
if materially prejudicial to its ability to defend such action, shall relieve such
indemnifying 10




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party of any liability to the indemnified party under this Section, but the omission so
to deliver written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section. (f) if the indemnification provided for in this Section is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to any losses, claims,
damages or liabilities referred to herein, the indemnifying party, in lieu of indemnifying
such indemnified party thereunder, shall to the extent permitted by applicable law,
contribute to the amount paid or payable by such 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 indemnifying party on the one hand and of the indemnified party on the other in
connection with the Violation(s) that resulted in such loss, claim, damage or liability, as
well as any other relevant equitable considerations. The relative fault of the indemnifying
party and of the indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the indemnifying party
or by the indemnified party and the parties relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission. No person or
entity guilty of fraudulent misrepresentation (within the meaning of Section 11 of the
Securities Act) shall be entitled to contribution from any person or entity who shall not
have been guilty of such fraudulent misrepresentation. Section 8 Restrictions on Transferability of Securities;Compliance with Securities Act; Voting Agreement 8.1 Restrictions on Transfer. Except as expressly permitted by this Agreement,
Angiotech agrees and covenants that it shall not sell, transfer, encumber or dispose of the
Securities, whether by sale, assignment, exchange, gift, bequest, pledge, encumbrance or transfer
either by operation of law or any other means. 8.2. First Refusal to Company. If Angiotech decides to effect a transfer of the
Securities, it shall first deliver written notice to the Company of such intent to transfer
(Notice of Transfer), which Notice of Transfer shall specify (i) the number of shares of Common
Stock proposed to be transferred (collectively the Offered Stock), (ii) the date of the proposed
transfer, which shall not be less than 60 days after the actual receipt of such Notice of Transfer
by the Company, (iii) the identity, including the complete name, address and telephone number of
the proposed transferee of the Offered Stock (the Proposed Transferee), and (iv) the proposed
consideration to be received and terms of payment upon such transfer (such consideration and the
terms of payment being hereinafter referred to collectively as the Offer Price). The Notice of
Transfer shall be accompanied by a copy of any bona fide written offer made to or received from the
Proposed Transferee. Such Notice of Transfer shall constitute an offer to sell and transfer the
Offered Stock, in whole or in part, to the Company at the Offer Price, and the date of such offer
(the Offer Date) shall be the date of actual receipt by the Company of the Notice of Transfer.
The Company shall promptly furnish a copy of the Notice 11




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of Transfer to all of the members of its Board of Directors and schedule a special or regular
meeting of the Board of Directors to evaluate the Companys capacity to purchase the Offered Stock
at the Offer Price. For a period of 30 days after the Offer Date, the Company shall have the right
and option (but not the obligation) to elect to purchase all or any portion of the Offered Stock.
If the Company exercises its right and option to purchase in whole or in part the Offered Stock,
the Company shall signify such exercise and the number of shares of Offered Stock to be purchased
by giving written notice to Angiotech (Notice of Exercise) within 30 days after the Offer Date.
The Notice of Exercise shall specify that the Company is exercising its right and option to
purchase all or any portion of the Offered Stock pursuant to this section 6. Upon such exercise by
the Company, Angiotech shall sell and transfer to the Company those shares of Offered Stock with
respect to which the option is exercised. Such transfer shall be on terms and conditions identical
to those set forth in the Notice of Transfer. Any Notice of Exercise which is mailed in the manner
provided herein shall be conclusively presumed to have been duly given when mailed, whether or not
Angiotech shall have actually received the Notice of Exercise. 8.3 Failure to Exercise Refusal Right. If the Company does not exercise its rights
and options to purchase some or all of the Offered Stock at the Offer Price within the time
permitted under Section 6 above, then, within the 60-day period thereafter, Angiotech may transfer
to the Proposed Transferee those shares of Offered Stock with respect to which such rights and
options were not exercised; provided, however, that such transfer must be made in strict compliance
with the terms and conditions of such transfer as set forth in the Notice of Transfer, including,
without limitation, the Offer Price. Such transfer shall be made (a) pursuant to an effective
registration under the Securities Act or an exemption from the registration requirements thereof,
and (b) in accordance with applicable state law. If such transfer to the Proposed Transferee is
not consummated within the 60-day period described in this Section 8.3, the transfer shall not be
made and the restrictions of this Agreement shall again apply. 8.4 Drag-Along Right. If the Board of Directors of the Company approves the sale of
substantially all of the capital stock or assets of the Company (each a Merger Transaction), then
the Company shall have the right (the Drag-Along Right), to require Angiotech to sell all, but
not less than all, of its Securities in favor of such Merger Transaction. The Company may exercise
the Drag-Along Right by written notice to Angiotech not later than 30 days prior to the closing of
the sale of the Merger Transaction. Such notice shall contain the terms and conditions of such
Merger Transaction. Angiotech has executed and delivered a proxy, in the form attached as Exhibit
A, in favor of the Company, allowing the Company to vote Angiotechs Securities in favor of such
Merger Transaction. 8.5 Restrictive Legend. Each certificate representing the Securities shall bear
substantially the following legend (in addition to any legends required under applicable securities
laws):  (a)
    THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS UPON TRANSFER AND RIGHTS OF FIRST REFUSAL AND MANDATORY SALE
UPON THE HAPPENING OF CERTAIN EVENTS AS SET FORTH IN AN AGREEMENT AMONG THE
REGISTERED HOLDER AND THE 12




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CORPORATION, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE
CORPORATION.(b)
    THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS BEEN ACQUIRED FOR
INVESTMENT AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR
ANY APPLICABLE STATE SECURITIES LAW. SUCH SECURITIES MAY NOT BE PLEDGED,
SOLD, TRANSFERRED OR HYPOTHECATED IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO
IT, STATING THAT SUCH PLEDGE, SALE, TRANSFER OR HYPOTHECATION IS EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF SAID ACT AND ANY APPLICABLE STATE SECURITIES
LAW. 8.6 Transfer of Securities. Angiotech hereby covenants with the Company not to make
any sale of the Securities except either (i) in accordance with Rule 144, in which case Angiotech
covenants to comply with Rule 144, or (ii) in accordance with another exemption from the
registration requirements of the Securities Act. The legend set forth in Section 8.5 will be
removed from a certificate representing the Securities following and in connection with any sale
thereof pursuant to subsection (ii) hereof, but not in connection with any sale of Securities
pursuant to subsection (iii) hereof, and also will be removed at such time that the Securities may
be sold under Rule 144 without restriction as to volume and manner of sale. Section 9 Miscellaneous 9.1 Construction. The Company and Angiotech have participated jointly in the
negotiation and drafting of this Agreement. No presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. 9.2 Notices. Any notice, request, demand, waiver, consent, approval or other
communication that is required or permitted to be given to any party hereunder shall be in writing
and shall be deemed given only if delivered to the party personally or sent to the party by
telecopy, telegram or by registered or certified mail (return receipt requested) with postage and
registration or certification fees thereon prepaid, addressed to the party at its address set forth
below: If to the Company: CABG Medical, Inc.
14505  21st Avenue North
Suite 212
Minneapolis, MN 55447-5602
Attn: President 13




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If to Angiotech: Angiotech Pharmaceuticals, Inc.
1618 Station Street
Vancouver, BC, Canada V6A 1B6
Attention: CBO 9.3 Successors and Assigns. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors and assigns. 9.4 Survival of Representations, Warranties and Agreements. The representations and
warranties of the Company in Section 3 hereof and the representations and warranties of Angiotech
in Section 4 hereof shall survive the purchase of the Securities for a period of twenty-four (24)
months following the Closing. All covenants and agreements set forth herein shall survive the
Closing without limitation, except as otherwise specifically provided herein. 9.5 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Minnesota, without giving effect to the conflicts of laws principles
thereof. 9.6 Severability. The parties agree that (a) the provisions of this Agreement shall
be severable in the event that any provision hereof is held by a court of competent jurisdiction to
be invalid, void or otherwise unenforceable, (b) such invalid, void or otherwise unenforceable
provision shall be automatically replaced by another provision which is as similar as possible in
terms to such invalid, void or otherwise unenforceable provision but which is valid and
enforceable, and (c) the remaining provisions shall remain enforceable to the fullest extent
permitted by law. 9.7 No Third Party Beneficiaries. Nothing herein expressed or implied is intended or
should be construed to confer upon or give to any person other than the parties hereto and their
successors and assigns any rights or remedies under or by reason of this Agreement. 9.8 Entire Agreement. This Agreement constitutes the entire understanding of the
parties with respect to the subject matter hereof, and supersedes any prior agreements or
understandings, written or oral, between the parties with respect to the subject matter hereof. 9.9 Amendment and Waiver. The parties may, by mutual agreement, amend this Agreement
in any respect in a writing executed by each party, and any party, as to such party, may waive any
of its rights hereunder. To be effective, any such waiver must be in writing and be signed by the
party providing such waiver. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies that any party may otherwise have at law or in equity. The
waiver by any party hereto of any breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach, whether or not similar. 14




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9.10 Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but which together shall constitute one and the same instrument. 9.11 Headings. The headings preceding the text of the sections and subsections hereof
are inserted solely for convenience of reference, and shall not constitute a part of this Agreement
nor shall they affect its meaning, construction or effect. 9.12 Public Announcement. In the event any party proposes to issue any press release
or public announcement concerning any provisions of this Agreement or the transactions contemplated
hereby, such party shall so advise the other party hereto, and the parties shall thereafter use
their best efforts to cause a mutually agreeable release or announcement to be issued. Neither
party will publicly disclose or divulge any provisions of this Agreement or the transactions
contemplated hereby without the other parties written consent, except as may be required by
applicable law (including applicable SEC rules and regulations). 9.13 Further Assurances. Each party to this Agreement shall do and perform or cause
to be done and performed all such further acts and things and shall execute and deliver all such
other agreements, certificates, instruments and documents as the other party hereto may reasonably
request in order to carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby. 9.14 Expenses. Angiotech and the Company shall each pay their own expenses incident to
this Agreement and the preparation for, and consummation of, the transactions provided for herein. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day
and year first written above. CABG MEDICAL, INC.By:
    
    /s/ John L. BabittName:
    
    John L. BabittTitle:
    
    President, Chief Operating Officer andChief Financial OfficerANGIOTECH PHARMACEUTICALS, INC.By:
    
    K. Thomas BaileyName:
    
    K. Thomas BaileyTitle:
    
    Vice President, Business Development
 15




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AMENDMENT TO INVESTMENT AGREEMENT THIS INVESTMENT AGREEMENT (the Agreement) is made as of April 7, 2005 by and between
CABG Medical, Inc., a Minnesota corporation (the Company) with its principal office at 14505
21st Avenue North, Minneapolis, Minnesota 55447, and Angiotech Pharmaceuticals, Inc., a
corporation organized and existing under the laws of the Province of British Columbia (Angiotech)
with its principal office at 1618 Station Street, Vancouver, British Columbia, Canada V6A 1B6. RECITALS WHEREAS, the Company and Angiotech are parties to that certain Investment Agreement dated as
of March 22, 2005 (the Investment Agreement), pursuant to which (i) the Company agreed to sell to
Angiotech, and Angiotech agreed to purchase, 1,100,715 shares of the Companys common stock and
(ii) Angiotech agreed to make an additional $5 million investment in the Company upon the
achievement by the Company of certain milestones set forth therein (the Second Investment); WHEREAS, the parties desire to modify certain provisions regarding the Second Investment. NOW, THEREFORE, in consideration of the respective agreements contained herein, and for other
good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the
parties hereto agree as follows: 1)Defined Terms.Each capitalized term used herein that is not otherwise defined
herein shall have the meaning ascribed to such term in the Investment Agreement. 2)Calculation of Share Total for First Investment.Pursuant to the terms of the
Investment Agreement, Angiotech agreed to purchase $5,000,000 worth of the Companys common stock
at a 15% premium to the closing market price on March 22, 2005, the date of the Investment
Agreement. The closing market price on March 22 was $3.95. Therefore, the correct number of
shares to be issued to Angiotech was 1,100,715 ($5,000,000 divided by the sum of $3.95 multiplied
by 1.15%). While the Investment Agreement contained the correct closing share price and formula,
there was an error made in the final calculation of the total number of shares. As a result, in
Section 1.1 of the Investment Agreement, the total number of shares was listed as 1,104,972 instead
of the correct total of 1,100,715. The Investment Agreement is hereby amended to replace the
number 1,104,972 with the correct number, 1,100,715. 3)Limitation on Maximum Number of Shares to be Issued to Angiotech pursuant to the
Investment Agreement.Pursuant to Section 1.2 of the Investment Agreement, Angiotech agreed to
make an additional $5,000,000 investment in the Company at a 15% premium to the closing market
price on the date the Company achieves the Net Sales Milestone. NASDAQ Stock Market Rule 4350(i),
however, requires shareholder approval for any present or potential issuance of common stock if the
number of shares of common stock to be issued is or will be equal to or in excess of 20% of the
number of shares or common stock outstanding before the issuance of the stock. On March 22, 2005,
the date upon which the Company and Angiotech executed the Investment




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Agreement, the Company had 16,372,975 shares of common stock outstanding, representing all of
its issued and outstanding capital stock as of that date. Pursuant to Section 1.1 of the
Investment Agreement, the Company issued Angiotech 1,100,715 shares on March 22, 2005. In order to
ensure continued compliance with Rule 4350(i), under no circumstances will the Company issue
Angiotech more than 2,173,878 shares at the Second Closing (calculated by multiplying 16,372,975,
the Companys outstanding shares as of March 22, 2005, by 19.999% (which equals 3,274,593 shares),
less the 1,100,715 shares issued to Angiotech on March 22, 2005). 4)Miscellaneous.Except as expressly amended by this Amendment, all of the terms and
provisions of the Investment Agreement shall remain in full force and effect. This Amendment may
be executed in any number of counterparts, each of which shall be deemed as original and all of
which together shall constitute one instrument. IN WITNESS WHEREOF, each of the parties has caused this Amendment to Investment Agreement to
be executed in a manner appropriate for each and to be dated as of the date first above written. CABG MEDICAL, INC.By:
    
    /s/ John L. BabittName:
    
    John L. BabittIts:
    
    President, Chief Operating Officer andChief Financial OfficerANGIOTECH PHARMACEUTICALS, INC.By:
    
    /s/ K. Thomas BaileyName:
    
    K. Thomas BaileyIts:
    
    Vice President, Business Development