(c) Reimbursement of Health Care Coverage. Company shall reimburse Consultant hiscost of health care insurance coverage for himself and family in an amount not to exceed fifteenthousand six hundred dollars ($15,600) per year.          (d) Independent Contractor Status. It is expressly agreed and understood thatConsultant, including his employees and/or subcontractors, is performing services under thisAgreement as an independent contractor for the Company and neither Consultant nor any of hisemployees or subcontractors is an employee or agent of the Company. The Company’s liabilityhereunder shall be limited to payment of the fees and expense reimbursements provided in thisAgreement. All liability to the persons actually providing services under this Agreement orrelated to the providing of such services, including but not limited to, payment of wages or othercompensation, withholding of taxes and similar charges related to such wages or other compensation,and worker’s compensation, shall be the sole responsibility of Consultant.     **4. Confidential Information.**          (a) Company Information. Consultant agrees at all times during the term of hisengagement and thereafter to hold in strictest confidence, and not to use, except for the benefitsof the Company, or to disclose to any person, firm or corporation without written authorization ofthe Company, any trade secrets, confidential knowledge, data or other proprietary informationrelating to products, processes, know-how, designs, formulas, developmental or experimental work,computer programs, data bases, other original works of authorship, customer lists, business plans,financial information or other subject matter pertaining to any business of the Company or any ofits clients, consultants or licensees, including any such information developed hereunder(hereinafter referred to as “Confidential Information”).          (b) Other Employer Information. Consultant agrees that he will not, during the termof his engagement by the Company, improperly use or disclose any proprietary information or tradesecrets of former or concurrent employers or companies, and that he will not bring onto thepremises of, or provide to, the Company any unpublished documents or any property belonging toformer or concurrent employers or companies, if any, unless consented to in writing by saidemployers or companies.          (c) Third Party Information. Consultant recognizes that the Company has received andin the future will receive from third parties their confidential or proprietary information subjectto a duty on the Company’s part to maintain the confidentiality of such information and to use itonly for certain limited purposes. Consultant agrees that he owes the Company and such thirdparties, during the term of engagement and thereafter, a duty to hold all such confidential orproprietary information in the strictest confidence and not to disclose it to any person, firm orcorporation (except as necessary in carrying out work for the Company consistent with the Company’sagreement with such third party) or to use it for the benefit of anyone other than for the Companyor such third party (consistent with the Company’s agreement with such third party) without theprior express written authorization of the Company.          (d) Employees and Subcontractors. Consultant shall cause all of his employees orsubcontractors to execute and deliver to the Company an agreement covering the matters set forth inthis Section 4.
2

 
     **5. Retaining and Assigning Inventions and Original Works.**          (a) Prior Inventions and Original Works. Attached hereto, as Exhibit A, is alist describing all inventions, original works of authorship, developments, improvements, and tradesecrets (collectively the “Prior Disclosures”) which were made by Consultant prior to engagement bythe Company, which belong to Consultant, which relate to the Company’s business and products, andwhich are not assigned to the Company; or, if no such list is attached, or no entries are madethereon, Consultant represents that there are no such Prior Disclosures.          (b) Inventions and Original Works Assigned to the Company. Consultant agrees that hewill promptly make full written disclosure to the Company, will hold in trust for the sole rightand benefit of the Company, and will assign, and does hereby assign, to the Company all his right,title, and interest in and to any and all inventions, original works of authorship, developments,improvements or trade secrets which they may solely or jointly conceive or develop or reduce topractice, or cause to be conceived or developed or reduced to practice, and which arise out of orrelate to the services rendered under this Agreement. All works of authorship created byConsultant hereunder shall be “works for hire” and owned by the Company.          (c) Maintenance of Records. Consultant agrees to keep and maintain adequate andcurrent written records of all developments, inventions, trade secrets and original works ofauthorship that are directly related to the services provided to the Company. The records will bein the form of notes, sketches, drawings, and any other format that may be specified by theCompany. The records will be available to and remain the sole property of the Company at alltimes.          (d) Inventions Assigned to the United States. Consultant agrees to assign, and doeshereby assign, to the United States government all their right, title and interest in and to anyand all inventions, original works of authorship, developments, improvements or trade secretswhenever such full title is required to be in the United States by a contract between the Companyand the United States or any of its agencies.          (e) Obtaining Patents and Copyright Registrations. Consultant agrees that hisobligation to assist the Company to obtain United States or foreign patents and copyrightregistrations covering inventions and original works of authorship assigned hereunder to theCompany shall continue beyond the termination of this engagement, but the Company shall compensatehim at a reasonable rate for time actually spent at the Company’s request on such assistance. Ifthe Company is unable because of Consultant’s legal incapacity, mental or physical incapacity orfor any other reason to secure the relevant signatures to apply for or to pursue any applicationfor any United States or foreign patents or copyright registrations covering inventions or originalworks of authorship assigned to the Company as above, then Consultant hereby irrevocably designatesand appoints the Company and its duly authorized officers and agents as his agent and attorney infact, to act for and in his behalf and stead to execute and file in any such applications and to doall other lawfully permitted acts to further the prosecution and issuance of patents or copyrightregistrations thereon with the same legal force and effect as if executed by him. Consultanthereby waives and quitclaims to the Company any and all claims, of any nature whatsoever, whichthey now or may hereafter have for infringement of any patents or copyright resulting from suchapplication for patents or copyright registrations assigned hereunder to the Company.
3

 
          (f) Employees and Subcontractors. Consultant shall cause all of his employees andsubcontractors to execute and deliver to the Company an agreement covering the matters set forth inthis Section 5.     **6. Conflicting Engagement.**Consultant agrees that, during the term of engagement by theCompany, he will not engage in any other employment, occupation, consulting or other businessactivity that conflicts or could potentially conflict with the obligations to the Company.     **7. Returning Company Documents.**Consultant agrees that, at the termination of the engagementby the Company, he will deliver to the Company (and will not keep in possession or deliver toanyone else) any and all samples, compounds, devices, records, data, notes, reports, proposals,lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, otherdocuments or property, or reproductions of any aforementioned items belonging to the Company, itssuccessors or assigns. In the event of the termination of this engagement, Consultant agrees tosign and deliver the “Termination Certification” attached hereto as Exhibit B.     **8. Representations.**Consultant agrees to execute any proper oath or verify any properdocument required to carry out the terms of this Agreement. Consultant represents that itsperformance of all the terms of this Agreement will not breach any agreement to keep in confidenceproprietary information acquired by it in confidence or in trust prior to its engagement by theCompany. Consultant has not entered into, and agrees to not enter into, any oral or writtenagreement in conflict herewith.     **9. Miscellaneous.**          (a) Notices. All notices, requests, demands and other communications (collectively,“Notices”) given or made pursuant to this Agreement shall be in writing and shall be deemed to havebeen duly given if sent by registered or certified mail, return receipt requested, postage and feesprepaid, or otherwise actually delivered, to the following addresses: (i) If to the Company, to:    Cardiogenesis Corporation11 MusickIrvine, CA 92618Attention: Chief Financial Officer  (ii) If to Consultant, to:    Paul J. McCormick11 MusickIrvine, CA 92618Any Notice shall be deemed duly given when received by the addressee thereof, provided that anyNotice sent by registered or certified mail shall be deemed to have been duly given two (2) daysfrom the date of deposit in the United States mails, unless sooner received. Any of the parties tothis Agreement may from time to time change its address for receiving Notices by giving writtenNotice thereof in the manner set forth above.
4

 
          (b) Entire Agreement. This Agreement contains the sole and entire agreement andunderstanding of the parties with respect to the entire subject matter of this Agreement, and anyand all prior discussions, negotiations, commitments and understandings, whether oral or otherwise,relating to the subject matter of this Agreement are hereby merged herein. No representations,oral or otherwise, express or implied, other than those contained in this Agreement, have beenrelied upon by any party to this Agreement.          (c) Governing Law, Venue. This Agreement shall be governed by California law and theparties consent to the exclusive jurisdiction by the state and federal courts sitting in OrangeCounty, California.          (d) Severability. Whenever possible each provision of this Agreement shall beinterpreted in such manner as to be effective and valid under applicable law, but if any provisionof this Agreement shall be or become prohibited or invalid under applicable law, such provisionsshall be ineffective to the extent of such prohibition or invalidity without invalidating theremainder of such provision or the remaining provisions of this Agreement.          (e) Captions. The various captions of this Agreement are for reference only and shallnot be considered or referred to in resolving questions or interpretation of this Agreement.          (f) Counterparts. This Agreement may be executed in any number of counterparts, eachof which shall be deemed to be an original, but all of which together shall constitute one and thesame instrument.          (g) Specific Performance. Consultant acknowledges that the Company would have extremedifficulty in attempting to prove the actual damages suffered by it as a result of a breach byConsultant of any of his obligations under the Agreement, and that therefore, in addition to anyother remedy at law or in equity, the Company shall be entitled to seek and receive specificperformance and temporary, preliminary and injunctive relief from any violation of the provisionsof this Agreement from any court of competent jurisdiction without the necessity of proving theactual amount of damages resulting from such breach.          (h) Attorneys’ Fees. If any action, suit or other proceeding is instituted to remedy,prevent or obtain relief from a default in the performance by either party of its obligations underthis Agreement, the prevailing party shall recover all of such party’s attorneys’ fees incurred ineach and every such action, suit or other proceeding, including any and all appeals or petitionstherefrom. As used in this Section 9(h), attorneys’ fees shall be deemed to mean the full andactual costs of any legal services actually performed in connection with the matters involvedcalculated on the basis of the usual fee charged by the attorney performing such services and shallnot be limited to “reasonable attorneys’ fees” as defined in any statute or rule of court.          (i) Assignment. Consultant may not assign his rights, obligations or duties underthis Agreement without the express written consent of the Company, which consent may be withheld inthe Company’s sole discretion, and any attempted or purported assignment or any delegation ofConsultant’s duties or obligations arising under this Agreement to any third party or entity shallbe deemed to be null and void, and shall constitute a material breach by Consultant of its dutiesand obligations under this Agreement. This Agreement shall inure to the benefit of and be bindingupon any successors or the Company by way of merger, consolidation or transfer of all orsubstantially all
5

 
of the assets of the Company, and any parent, subsidiary or affiliate of the Company to whichthe Company may transfer its rights under and pursuant to this Agreement.          (j) Waiver. Waiver by any of the parties of any breach of any provision of thisAgreement shall be in writing and shall not operate or be construed as a waiver of any prior orsubsequent breach of the same or any other provision hereof.          (k) Survival of Consultant’s Obligations. The obligations of Consultant hereundershall survive the termination of Consultant’s engagement with the Company and the termination ofthis Agreement regardless of the reason or cause for such termination.          IN WITNESS WHEREOF, this Agreement has been made and entered into as of the date and yearfirst above written.      “Company”