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                                                                   EXHIBIT 10.42

                                 (CRYOCATH LOGO)

                              DISTRIBUTION AGREEMENT

     THIS DISTRIBUTION AGREEMENT (the "Agreement") is made as of November 9th ,
2004, (the "Effective Date") by and between CRYOCATH TECHNOLOGIES INC., a
corporation organized and existing under the laws of Quebec, Canada, with its
principal offices at 16771 Chemin Ste-Marie, Kirkland (Quebec) Canada H9H 5H3
(hereinafter referred to as "Manufacturer" or "CryoCath"), and ATS Medical,
Inc., a corporation organized and existing under the laws of Minnesota with its
principal offices at 3905 ANNAPOLIS LANE, SUITE 105, MINNEAPOLIS, MN 55447
U.S.A., (hereinafter referred to as "Distributor").

     In consideration of the mutual promises contained herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     ARTICLE 1. DEFINITIONS

     As used in this Agreement, the terms set forth in this Article 1 shall have
the following meanings:

          1.1 Products.  Products shall mean those products listed in Exhibit A
     attached hereto, as amended from time to time by the Manufacturer and
     communicated in writing to Distributor.

          1.2 Territory.  Territory shall mean all countries except for USA,
     Italy, , Australia, Sweden, Denmark, Finland, Luxemburg, Spain, Portugal,
     Hungary, and the Czech Republic, Slovakia, Norway, Iceland, Mexico.

          1.3 Contract Quarter.  Contract Quarter shall mean a period of three
     consecutive calendar months beginning on January 1, April 1, July 1, or
     October 1.

          1.4 Purchase Commitment shall have the meaning set forth in Section
     3.2.

          1.5 Standard Terms and Conditions of Sale.  Standard Terms and
     Conditions of Sale shall mean Manufacturer's terms and conditions of sale
     for its products, as modified by Manufacturer from time to time and
     communicated in writing to Distributor.

          1.6 Trademarks.  Trademarks shall mean those trademarks and trade
     names, whether registered in the Territory or not, labeling, trade dress,
     packaging and devices which are owned by, licensed or assigned to
     Manufacturer or which it otherwise has aright to use and which are applied
     to or used with the Products by Manufacturer

**   The appearance of a double asterisk denotes confidential information that
     has been omitted from the exhibit and filed separately, accompanied by a
     confidential treatment request, with the Securities and Exchange Commission
     pursuant to Rule 24b-2 of the Securities Exchange Act of 1934.


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     ARTICLE 2. APPOINTMENT: EXCLUSIVITY; COMPETING PRODUCTS; PRICES

          2.1 Appointment. Subject to the terms of this Agreement, Manufacturer
     appoints Distributor as its exclusive distributor of the Products in the
     Territory in accordance with the terms of this Agreement and Distributor
     accepts this appointment. Such appointment does not constitute a grant of
     any rights or interests other than the rights specifically granted to the
     Distributor hereunder and does not constitute a license or sub-license of
     the Products. If the Distributor fails to meet the Purchase Commitment,
     Distributor's appointment will automatically become non-exclusive for the
     remaining term of this Agreement, as set forth under Section 3.2.

          2.2 Exclusivity. Subject to Distributor's compliance with the terms of
     this Agreement, Manufacturer shall sell the Products for delivery in the
     Territory only to Distributor.

          2.3 Promotion and Sale of Products only within Territory. Distributor
     shall promote and sell the Products to customers only for use or
     consumption within the Territory.

          2.4 Competing Products. Manufacturer or Distributor shall neither
     distribute nor market products competitive with the Products during the
     Term as defined in Section 17.1 and any renewal of this Agreement without
     the prior written consent of either Party. It is understood that
     Manufacturer is restricted from selling Products in Agent's Territory
     during the term of the Agreement. If either Party does not approve the
     other Party's request for representation of competitive products, the other
     Party must refuse to or cease representing the competitive products.
     Distributor shall not make any changes, alterations, modifications or
     additions to the Products without the prior written approval of CryoCath.

          2.5 Prices. Manufacturer shall sell Products to Distributor at prices
     previously communicated in writing by Manufacturer to its Product
     distributors generally from time to time. Subject to the Purchase
     Commitment as described in Section 3.2, the prices to be charged to the
     Distributor initially under this Agreement will be the prices set out in
     Exhibit A under "Distributor Price". A price adjustment will be made by
     Distributor with payment made to Distributor or deducted from payments owed
     by Distributor on the 30th day following the preceding quarter to which it
     applies. ** With respect to resale prices to be charged by Distributor to
     customers, Distributor shall have the right to determine the price of the
     Products within the Territory but will be guided by the prices listed for
     the Products in Exhibit A. Notwithstanding the generality of the foregoing,
     Distributor will not sell Products at prices below the Distributor Price in
     Exhibit A, as amended from time to time, without prior written approval
     from Manufacturer.

     ARTICLE 3. PROMOTION AND SALE OF PRODUCTS


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          3.1 Commercially Reasonable Efforts. Distributor shall exercise its
     commercially reasonable efforts to promote and sell the Products for use
     only by qualified individuals as appropriate in the Territory, in
     compliance with local laws and regulations and good commercial practice and
     for uses and applications reasonably approved by Manufacturer for the
     Products. Distributor shall only sell directly to end users of the Products
     and shall not sell indirectly or engage sub-distributors without the prior
     written consent of Manufacturer. Distributor shall be subject to
     performance criteria applied to distributors of the Products in general, as
     communicated in writing by Manufacturer from time to time, after discussion
     and agreement with the Distributor. Manufacturer shall use commercially
     reasonable efforts to promptly obtain and maintain government approvals to
     import, register and market the Products in each jurisdiction in the
     Territory. The decision to obtain government approvals in each jurisdiction
     in the Territory will be made jointly based on the economic viability for
     both parties of marketing products in such jurisdictions. Such decisions
     may require agreement to special adjustments referred to in Section 2.5
     determined on a jurisdiction-by-jurisdiction basis. In the event that a
     decision is made jointly not to pursue marketing of products in a given
     jurisdiction under this agreement, then Manufacturer may at his option be
     permitted to market products in such jurisdiction directly or indirectly
     without the Distributor. Distributor will diligently secure and maintain,
     as may be required from time to time, government importing, import and
     export licenses, customs clearances and currency authorizations and any
     other permits necessary in each jurisdiction in the Territory. Manufacturer
     will diligently secure and maintain, as may be required from time to time,
     government registration and marketing approvals in each jurisdiction in the
     Territory and shall submit to the government health authorities in each
     jurisdiction in the Territory where the sale of the Products is agreed to a
     complete application for registration and marketing plan.

          3.2 Purchase Commitment. In addition to the commercially reasonable
     efforts commitment described herein, Distributor hereby agrees to purchase
     from CryoCath ("Purchase Commitment") and for each renewal year term
     thereafter, the dollar value in Products set forth on the Purchase
     Commitment, Exhibit C. Distributor must meet the annual Purchase
     Commitments at the end of each twelve-month term and must meet 40% of the
     first term's commitment by the end of the first 9 months of that first term
     and 40% of the second term's commitment by the end of the first nine months
     of the second term (hereafter referred to as the "Interim Term Targets").
     It is understood that the initial period referred to with respect to the
     interim and annual purchase commitments will be for 15 months and will
     commence as of January 1, 2005. Subsequent periods will be for twelve
     months commencing on April 1, 2006 and April 1 each year thereafter.
     CryoCath shall transfer to Distributor as of January 1, 2005 all its
     existing customer accounts it has in the Territory identified in Section
     1.2.. Distributor shall pay a one time compensation fee to CryoCath for the
     transferred accounts on January 1, 2005 an amount equal to **

Throughout the term of this Agreement, if Distributor fails to purchase
Distributor's Purchase Commitment at any time or meet the Interim Term Targets,
Distributor's appointment may at CryoCath's option, be terminated or may
automatically become non-exclusive for the remaining


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term of this Agreement subject to a 30-day cure period, without prejudice to
CryoCath's other rights under this Agreement (including the right to terminate
this Agreement upon written notice to Distributor) and CryoCath may appoint one
or more additional agents or Distributors for sale of the Products or solicit
orders for the Products directly in the Territory for the remaining term of this
Agreement. Products returned to CryoCath for reason other than Product defect
shall not count towards the fulfillment of Distributor's relevant Purchase
Commitment. Purchase Commitments for the second twelve-month period are to be
negotiated mutually between the parties 6 months prior to the expiration of the
First Twelve Month Period such that ** Purchase Commitments will be adjusted as
new jurisdictions are added during the term of this agreement. Throughout the
term of this Agreement, if Distributor fails at any time to purchase
Distributor's Purchase Commitment or meet the Interim Term Targets,
Distributor's appointment may at CryoCath's option, automatically become
non-exclusive for the remaining term of this Agreement subject to a 30-day cure
period, without prejudice to CryoCath's other rights under this Agreement
(including the right to terminate this Agreement upon written notice to Agent)
and CryoCath may appoint one or more additional agents or Distributors for sale
of the Products or solicit orders for the Products directly in the Territory for
the remaining term of this Agreement. Products returned to CryoCath for reason
other than Product defect shall not count towards the fulfillment of
Distributor's relevant Purchase Commitment. The Purchase Commitment in year two
of the term of this Agreement will be established by Manufacturer in
consultation with Distributor after the third Contract Quarter and will be
confirmed in writing by the Manufacturer prior to the commencement of year 2 and
similarly for each renewal period thereafter.

          3.3 Facilities. Subject to Article 16 hereof, Distributor shall
     maintain, lease or contract with such offices, warehouses, and sales
     facilities as are necessary to fulfill its duties under this Agreement.

          3.4 Personnel. Distributor shall maintain such competent and qualified
     sales and service personnel as are required to meet its duties under this
     Agreement. Manufacturer agrees to train the individual responsible for
     training Distributor's personnel in each major jurisdiction. In all cases,
     such training will take place at Manufacturer's offices or at a place and
     times agreed to by Manufacturer.

          3.5 Inventories. Distributor shall, at Distributor's own expense,
     maintain a sufficient inventory of the Products at all times during the
     term of this Agreement as necessary to meet the requirements of any
     customer or potential customer within the Territory. Without restricting
     the generality of the foregoing, Distributor agrees to maintain inventory
     levels at not less than ** of forecasted requirements.

          3.6 Promotional Materials. In promoting the Products in the Territory,
     Distributor shall not use promotional materials contrary to the best
     interest of the Manufacturer. Manufacturer reserves the right to require
     prior approval of the promotional materials and advertising campaigns.
     Manufacturer will provide to Distributor reasonable amounts of such
     promotional materials that it provides to its own representatives, at no
     cost. Certain promo materials will be available at cost.


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          3.7 Reports. Commencing on the first day of the second Contract
     Quarter after the Effective Date, Distributor shall provide Manufacturer on
     the fifteenth day of each Contract Quarter with a written report containing
     information concerning the following:

               (a) Distributor's sales volumes and prices in each country for
          each of the Products for the preceding Contract Quarter;

               (b) Distributor's promotional activities regarding the Products
          for the preceding Contract Quarter;

               (c) a summary of current market conditions for the Products,
          including information concerning introductions, promotional activities
          and sales levels of products competitive with the Products;

               (d) forecasts of prospective purchase orders and anticipated
          sales volumes for the Products during the succeeding two Contract
          Quarters; and

               (e) forecasted purchase order submission dates.

          3.8 Warranties. Manufacturer's standard warranty of its Products shall
     apply to the sale of the Products to Distributor as contained in
     Manufacturer's terms and conditions of sale, as may from time to time be
     modified by Manufacturer, and Distributor shall extend such warranty to its
     customers. Manufacturer shall honor the claims of Distributor's customers
     within the limits of the warranties offered by Manufacturer to Distributor.
     Distributor shall offer no other warranties concerning the Products without
     the prior written authorization of Manufacturer.

          3.9 Customer Complaints. Distributor shall report to Manufacturer no
     later than within 48 hours of receipt all customer complaints of any nature
     concerning the Products and all notices of serious or adverse reaction
     associated with the use of the Products, and cooperate with Manufacturer in
     the resolution of such complaints. Distributor shall maintain records of
     such complaints for at least two years after their receipt and shall make
     such records available to Manufacturer for inspection and copying upon
     Manufacturer's request at any time during Distributor's normal business
     hours.

          3.10 Assistance of Government Officials. Without Manufacturer's prior
     written approval or as required by law, Distributor shall not hire, retain,
     or make payment of any kind to government or regulatory officials of the
     Government of the Territory or of any jurisdiction within the Territory, or
     their relatives to assist Distributor in marketing the Products.

          3.11 Storage Practices, etc. Distributor shall conform its sales,
     storage and quality control practices to those written standards provided
     by Manufacturer to Distributor from time to time.


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          3.12 Sales Records. Distributor shall prepare accurate and orderly
     business and accounting records concerning its inventories and sales of the
     Products. Distributor shall maintain these records for a period of at least
     two years after the Contract Quarters to which they apply. Distributor
     shall provide Manufacturer with copies of such records within fifteen (15)
     days of any written request by Manufacturer. Manufacturer may request, and
     Distributor agrees to comply with such request, an audit of Distributor's
     sales records for the purpose of verifying the accuracy of Manufacturer's
     price charged to Distributor through out the life of the Agreement.
     Manufacturer will be responsible for the cost of such audit provided that
     Distributor's records reflect actual end user sales to within 98%. In the
     event that the audit reveals accuracy of such records to be lower than 98%,
     Distributor will bare the cost of such audit.

          3.13 Shelf Life. Distributor shall maintain its inventory so as to
     sell the Products only during their applicable shelf lives as communicated
     to Distributor by Manufacturer from time to time. Manufacturer shall not be
     obligated to compensate Distributor for Products that Distributor is unable
     to sell within or after their shelf lives.

          3.14 Inspections. During Distributor's normal business hours,
     Distributor shall permit representatives of Manufacturer after reasonable
     notice to inspect Distributor's facilities and inventory to ensure that
     Distributor is meeting applicable quality control standards and otherwise
     exercising its best efforts in storing, promoting, selling and delivering
     the Products.

          3.15 Samples. The Manufacturer shall supply the Distributor with ** at
     Manufacturer's fully absorbed cost and a reasonable number of surgical
     consoles not for human use at **.

Conference and Marketing Booth. Distributor agrees to attend the following
conferences (ATS to attach list) each year for the promotion of Products. In
addition, Agent agrees to dedicate 25% of its Marketing booth sales
representative stations to CryoCath. CryoCath agrees to display ATS's name as
Distributor of its Products in its booth at such Surgical conferences that it
attends and at which it has booth space.

     ARTICLE 4. MANUFACTURER ASSISTANCE TO DISTRIBUTOR

     To assist Distributor in registering and marketing the Products in the
     Territory, Manufacturer shall:

     (i)  Provide Distributor with materials necessary to obtain health
          registrations, to the extent practicable. Such documentation shall be
          provided in English. Translation expense will be borne by the
          Distributor.

     (ii) Provide Distributor with information on marketing and promotional
          plans with respect to the Products as well as copies of marketing,
          advertising, sales and promotional literature concerning the Products
          produced by or for CryoCath, if any. Such documentation shall be
          provided in English. Translation expense will be borne by the
          Distributor.


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     (iii) Provide Distributor with certain certificates of analysis concerning
          the Products purchased by Distributor, certificates of free sale,
          trademark authorizations and any other documents which Distributor may
          require for registration purposes, at Distributor's request and
          expense, if available. Such documentation shall be provided in
          English. Translation expense will be borne by the Distributor.

     (iv) Provide Distributor with Field Service Manual, Field Service
          Procedures and requisite forms required to service CryoCath Products,
          as amended from time to time by CryoCath. Such documentation shall be
          provided in English. Translation expense will be borne by the
          Distributor.

     (v)  Distributor agrees subject to the terms identified in Section 17 of a
          Termination or Early Termination of this agreement that Distributor
          will transfer at Manufacturer's cost all registration and regulatory
          files of Product's to Manufacturer.

     ARTICLE 5. ADDITION AND DELETION OF PRODUCTS FROM AGREEMENT

          5.1 Addition of Products. From time to time new Products may be added
     to those covered by this Agreement by amendment of Exhibit A in accordance
     with Article 18.7.

          5.2 Deletion of Products. Manufacturer may delete specific Products,
     provided such Products are replaced with next generation Products, from
     coverage by this Agreement upon (30) thirty-day written notice to Agent,
     which notice includes an amendment of the attached Exhibit A reflecting the
     deletion. No such deletion shall be deemed a termination or partial
     termination of this Agreement.

          Manufacturer's address. Distributor shall mail or fax all orders for
          the Products to the following address:

               CryoCath Technologies Inc.
               16771 Chemin Ste-Marie
               Kirkland, Quebec H9H 5H3
               Canada
               Attention: Customer Service
               Fax: 1-514-694-6279

     or to such other address or facsimile number as Manufacturer shall from
     time to time designate in writing.

          5.3 Information in Distributor's Orders. In connection with each order
     of Products, Distributor shall provide Manufacturer with the following
     information:

               (a)  purchase order number;

               (b)  billing address;


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               (c)  name, list number, and quantity of Products being ordered;
                    and

               (d)  preferred warehouse of delivery.

          5.4 Precedence of Agreement over Purchase Orders. In the event of
     conflict between the terms of this Agreement and the terms of any purchase
     order form or other document submitted by Distributor to Manufacturer in
     connection with any order for the Products, this Agreement shall control
     unless the parties specifically otherwise agree in writing.

     ARTICLE 6. TERMS AND CONDITIONS OF SALE AND DELIVERY OF PRODUCTS;
          NON-CONFORMING AND NON-DELIVERED PRODUCTS

          6.1 Acceptance of Orders. All orders for Products submitted by
     Distributor shall be initiated by written purchase orders sent to CryoCath
     and shall request a delivery date during the term of this Agreement;
     provided however that an order may initially be placed orally or by
     facsimile. A written or facsimile confirmation purchase order is to be
     received by CryoCath within twenty-four (24) hours after an oral order is
     placed. No order shall be binding upon CryoCath until accepted by CryoCath
     in writing, and CryoCath shall have no liability to Distributor with
     respect to purchase orders that are not accepted. No partial shipment of an
     order shall constitute the acceptance of the entire order. CryoCath shall
     use commercially reasonable efforts to deliver Products at the times
     specified either in CryoCath's quotation or in CryoCath's written
     acceptance of Distributor's purchase orders. CryoCath will send a facsimile
     acceptance or non-acceptance of purchase orders within two business days.

          6.2 Taxes, Stamp , Duties, Prices and Currency; Charges for Handling,
     Shipping and Insurance. All sales of the Products to Distributor under this
     Agreement shall be at Manufacturer's then- current prices, in U.S. dollars,
     as reflected on Exhibit A. Manufacturer may change these prices and this
     currency upon thirty (30) days' written notice to Distributor, which notice
     includes an appropriate amendment to Exhibit A. In each invoice in respect
     of any such sale, Manufacturer shall bill Distributor at currently
     applicable prices, plus Manufacturer's customary handling charges including
     taxes and Manufacturer's shipping and insurance expenses.

          6.3 Method of Payment. Distributor shall pay for all Products ordered
     under this Agreement by wire transfer of funds to Manufacturer's account as
     specified in Manufacturer's shipping invoice for such Products. Payment
     shall be made within thirty (60) days of Distributor's taking possession of
     ordered Products. Arrears shall bear interest at the rate of 18% per annum,
     or 1.5% per month.

          6.4 Method of Delivery; Passage of Title; Risk of Loss. Manufacturer
     shall deliver each order of Products hereunder by delivering to the carrier
     identified by Distributor FOB at Manufacturer's plant, or such other
     facility as utilized by


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     Manufacturer. Distributor shall pay all freight, duty and taxes. Upon
     Manufacturer's delivery of each order for Products, Manufacturer shall
     promptly give Distributor notice of such delivery. Manufacturer may give
     such notice by first-class mail or by confirmed facsimile to Distributor's
     principal office. Risk of loss and title to such Products will pass to
     Distributor upon Manufacturer delivering at the carrier as above mentioned.

          6.5 Delay in Shipment. Manufacturer shall endeavor to ensure prompt
     delivery to Distributor of all Products ordered by Distributor under this
     Agreement but shall not be liable for loss or damage suffered by
     Distributor as a result of any delay in shipment or delivery.

          6.6 Non-Conforming and Undelivered Goods.

          Procedure for notification regarding non-conforming and non-delivered
     goods. If any shipment of Products intended by Manufacturer to be delivered
     to Distributor in response to any order contains any non-conforming
     Product, contains fewer than the number of units of Products ordered by
     Distributor or is not delivered to Distributor on the date agreed upon by
     the parties, Distributor shall notify Manufacturer by facsimile within
     fifteen (15) days after that date, precisely specifying the non-conformity
     or non-delivery in question. If Distributor fails to provide Manufacturer
     on a timely basis with any notice required by this Article 6.6 with respect
     to any shipment of Products ordered by Distributor, Distributor shall be
     deemed to have acknowledged the timely delivery and conformity of all
     Products covered by that order.

     ARTICLE 7. ADDITIONAL EXPRESS WARRANTIES AND DISCLAIMER

          7.1 Warranty. Manufacturer warrants to Distributor that the Products
     purchased by Distributor shall materially conform to CryoCath's
     then-current specifications for such Products for the shelf life of such
     Products as set forth in the label of each such Product ("Distributor
     Warranty Period"). Distributor's exclusive remedy and CryoCath's sole
     liability for breach of the foregoing warranty shall be the remedy set
     forth in Section 7.2.

          7.2 Defective Products. In the event that any Product fails to conform
     to the warranty set forth in Section 7.1, CryoCath's sole and exclusive
     liability, and Distributor's exclusive remedy shall be, at CryoCath's sole
     election, to replace the Product or credit Distributor's account for the
     purchase price of such Product; provided, however, that: (a) Distributor
     promptly notifies CryoCath in writing during the Distributor Warranty
     Period that such Product fails to conform to the warranty set forth in
     Section 7.1, provides a detailed explanation of any alleged nonconformity,
     and requests a return material authorization number; and (b) such Product
     is returned within the Warranty Period to CryoCath F.O.B. CryoCath's
     shipping location in Kirkland, Quebec, Canada, or as otherwise notified by
     CryoCath, with the return material authorization number affixed prominently
     to the outside packaging. If CryoCath verifies that such Product fails to
     conform to the warranty set forth in Section 7.1, CryoCath will replace the
     Product or credit Distributor's account for the purchase price of such
     Product.


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          7.3 Disclaimer. TO THE FULL EXTENT PERMITTED UNDER APPLICABLE LAW,
     EXCEPT FOR THE WARRANTIES PROVIDED IN SECTIONS 7.1 and 7.2, CRYOCATH
     DISCLAIMS ALL OTHER WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY
     OR OTHERWISE, REGARDING THE PRODUCTS, INCLUDING WITHOUT LIMITATION,
     WARRANTIES OF THEIR QUALITY, FITNESS FOR ANY PURPOSE, OR MERCHANTABILITY.
     ANY OTHER REPRESENTATIONS OR WARRANTIES MADE BY ANY PERSON OR ENTITY,
     INCLUDING EMPLOYEES OR REPRESENTATIVES OF CRYOCATH, THAT ARE INCONSISTENT
     HEREWITH SHALL BE DISREGARDED AND SHALL NOT BE BINDING ON CRYOCATH.

          7.4 Limitation of Liability. **

     ARTICLE 8. TECHNICAL SERVICE, WARRANTY COVERAGE AND SERVICE CONTRACTS

          8.1 Technical Service. Distributor certifies that they have the
     technical capabilities and knowledge to provide optimal service on the
     Manufacturer's Products. Technical Service is defined as the ability to
     maintain and service critical and non-critical components, calibrate and
     troubleshoot all electronic, mechanical and vacuum systems contained within
     the CryoConsole.

          8.2 Warranty Obligation to Customer. In addition to the specific
     warranty described in Section 7.1, Manufacturer warrants that the products
     sold shall be free from defects in material and workmanship for a period of
     12 months from date of installation at customer's site (the "Customer
     Warranty Period"). During the Customer Warranty Period, Manufacturer will
     supply all parts used in servicing such products, excluding gas and
     disposable products and accessories. Distributor shall provide all warranty
     service to the end user free of charge while the unit is covered during the
     Customer Warranty Period. Distributor will complete preventive maintenance
     visits on the equipment during the Customer Warranty Period as required.
     Distributor shall provide all non-warranty service at reasonable rates for
     all Products in the Territory. Non-warranty service shall include,
     electronic set-up and calibration as well as operational troubleshooting.
     Distributor shall maintain properly equipped service departments and an
     adequate inventory of spare parts sufficient to meet the needs of the
     Territory. Distributor shall use only Manufacturer's authorized parts and
     gases. Failure to do so completely voids all warranty obligations of
     Manufacturer and shall be considered a material breach of this Agreement.
     Manufacturer is not responsible for product failures due to power failures
     or natural catastrophes of any kind.

          8.3 Warranty Replacement Parts. Warranty parts shall be replaced free
     of charge, provided validation by Manufacturer verifies that the failure
     was due to defects in material and/or workmanship and that all parts are
     properly returned to Manufacturer. The defective part(s) shall be replaced
     from the Distributor's service department inventory prior to the defective
     part(s) being returned to Manufacturer. The proper written documentation
     describing the exact defect(s) of the Product must be included.


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     Manufacturer's obligation is limited to the repair or replacement, at its
     option, of any warranted Product that is returned.

          8.4 Interchangeability.  Due to the complexity and interchangeability
     of the components, the use of new or like new parts may be used at the
     discretion of the Manufacturer. All such parts shall be refurbished and
     will meet Manufacturer's specifications and high quality standards in force
     on the date of shipment.

          8.5 Non-Warranty Replacement Parts.  Non-warranty parts will be
     provided on an exchange basis at Manufacturer's current Distributor List
     Price attached as Exhibit A and as amended from time to time by the
     Manufacturer. The Distributor shall pay shipping costs and all insurance,
     taxes, fees, duties, and other charges incurred in connection with the
     shipment of defective and replacement parts to and from Manufacturer's
     facility.

          8.6 Warranty Procedures.  All Warranty claims hereunder must be made
     in writing promptly after discovery of the defect and must be received by
     Manufacturer's service department within the applicable warranty period.
     Such claims shall state the nature and details of the claim, the date on
     which the defect giving rise to the claim was first discovered, and the
     product serial number and must be attached to the defective product.
     Distributor shall request authorization from Manufacturer prior to the
     return of each defective product for repair or replacement by Manufacturer.
     Upon such request, Manufacturer shall provide the address of the facility
     to which such product must be returned, together with a Return Material
     Authorization (RMA) number to be prominently displayed on the shipping
     container for the defective product. Manufacturer's obligation is limited
     to the repair or replacement, at its option, of any warranted Product that
     is returned to Manufacturer in Manufacturer's standard shipping container
     or properly packed in accordance with Manufacturer's packing procedures,
     freight prepaid, in which Manufacturer's examination shows the product to
     have failed under normal use. Upon determination of product failure,
     Manufacturer will reimburse Distributor for shipping costs related to the
     return of the defective product to Manufacturer's facility. Manufacturer
     may, at its sole option, employ new or used parts for Products to make such
     repair or replacement. Any Products replaced under this warranty shall
     become Manufacturer's property. Notwithstanding any contrary provisions of
     this Agreement, Manufacturer shall be responsible for all shipping expenses
     and bear risk of loss relating to the return shipment to Distributor of
     repaired or replacement Products which were under warranty.

          8.7 Service Contracts.  Distributor shall have the exclusive right to
     provide service for the Products in the Territory, however, Manufacturer
     may at its option, provide service directly from time to time. Service
     Contracts shall be substantially in the form attached as Exhibit D and
     shall be sold in accordance with the pricing described in Exhibit A.


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     ARTICLE 9. TRADEMARKS

          9.1 Use of Manufacturer's Name.  Distributor shall be entitled to
     represent within the Territory in promotional materials and otherwise that
     it is Manufacturer's exclusive distributor of the Products in the Territory
     provided that Distributor remains in compliance with its obligations under
     this Agreement.

          9.2 Sale Only Under the Trademarks.  Distributor shall promote and
     sell the Products in the Territory only under the Trademarks and the
     CryoCath name. Distributor will be permitted to apply a business card size
     sticker with Distributor's name on CryoCath's promotional literature for
     Surgical Products and on the side of the console's control unit on the
     opposite side of the power supply placed in Distributor's Territory.

          9.3 Use of Trademarks.  Manufacturer and Distributor undertake not to
     use the Trademarks in a manner that will impair the name or jeopardize the
     goodwill or the reputation of the Products or either Party, and to use the
     Trademarks in accordance with the standards and specifications of both
     Parties.

          9.4 Distributor Waiver.  Both Parties shall not have, assert or
     acquire any right, title or interest in or to any Trademark owned by the
     other Party.

          9.5 Distributor Acknowledgment of Validity.  Distributor acknowledges
     the validity of the Trademarks and shall not take any action that may
     impair any right, title or interest of Manufacturer in any Trademark or
     that may create any such right, title or interest adverse to Manufacturer.

          9.6 Prohibition of Use of Trademarks on Other Products.  Distributor
     shall not use any Trademark except in connection with the Products.

          9.7 Notice of Infringement of Trademarks.  Distributor shall promptly
     notify Manufacturer of any apparent infringement or threatened infringement
     of any Trademark, and shall, upon request by Manufacturer and at
     Manufacturer's expense, use its commercially reasonable efforts to assist
     Manufacturer to restrain any such infringement or threatened infringement.

     ARTICLE 10. PRODUCT RECALLS

          In the event that Manufacturer, after consultation with Distributor,
     deems it necessary to recall any Product because such Product fails to
     comply with the warranties set forth in Section 8.1 hereof, or if any
     governmental authority requests recall of any Product for any reason,
     Distributor shall promptly effect such recall in accordance with its
     standard procedures then in effect. Distributor shall keep CryoCath fully
     informed as to the status of such recall. Distributor shall initiate no
     communications regarding any such recall with the news media, customers,
     governmental or regulatory authorities, except if and to the extent
     required by applicable law, without the prior approval of CryoCath, which
     approval will not be unreasonably withheld or delayed. All costs and
     expenses associated with implementation of a recall shall be borne by: (a)
     Manufacturer, if the recall results from fault attributable to
     Manufacturer; or (b) Distributor, if the recall


                                       12
<PAGE>
     results from fault attributable to Distributor; provided that each party
     will provide, at its expense, any assistance reasonably requested by the
     other party in connection with the implementation of any recall pursuant to
     this Section.

     ARTICLE 11. CLAIMS AGAINST MANUFACTURER AND DISTRIBUTOR; INDEMNIFICATION
          AND INSURANCE

          11.1 Product Liability Claims and Patent Infringement ;
     Indemnification by Manufacturer.  Manufacturer shall have full and
     exclusive responsibility for the defense of any claim, lawsuit or other
     action in which it is alleged that a Product supplied hereunder by
     Manufacturer has caused injury to a third party or infringes on a third
     party's patent, and shall hold Distributor harmless with respect to any
     such claim, lawsuit or other action. Manufacturer shall indemnify
     Distributor from and against any damages, costs or expenses, including
     reasonable attorneys' fees, which are incurred by Distributor and which
     arise from any such claim, lawsuit or other action, save when such claim,
     lawsuit or action arises as a result of Distributor's mishandling or
     mislabeling the Product, or when Distributor misrepresented the Product's
     efficacy, safety or warranty, or when attributable to Distributor's acts,
     negligence or omissions. However, none of the foregoing shall apply if the
     claim or loss is due solely or in part to the act or omission of Agent.

          11.2 Actions Against Distributor; Indemnification by Distributor.
     Distributor shall have full and exclusive responsibility for the defense of
     any claim, lawsuit or other action which is brought against Distributor and
     in which it is alleged that Distributor has committed an act or made an
     omission contrary to the terms of this Agreement or that any employee or
     agent of Distributor has caused injury to a third party in carrying out or
     failing to carry out any duty of Distributor under this Agreement, or as a
     result of their acts, negligence or omissions. Distributor shall indemnify
     Manufacturer for any damage, cost or expense, including reasonable
     attorneys' fees, which is incurred by Manufacturer in connection with any
     such claim, lawsuit or other action and in connection with any claim,
     lawsuit or other action arising as a result of Distributor's mishandling or
     mislabeling the Product or of Distributor misrepresenting the Product's
     efficacy, safety or warranty, or of Distributor's acts, negligence or
     omissions.

          11.3 Insurance.  Each of the parties shall obtain and maintain in
     effect insurance coverage ** as to cover adequately the types of liability
     occasioned by the indemnities described above as well as such other
     insurable risks as may arise whenever either party sends its employees,
     agents or subcontractors to the premises of the other party.

          11.4 Survival.  The obligations of the parties under sections 11 and
     12 shall survive the expiration or the termination of this Agreement.

     ARTICLE 12. CONFIDENTIALITY

Either Party acknowledges that by reason of their relationship hereunder, either
Party will have access to certain information and materials concerning the other
Party's business plans, customers, technology, and products that are
confidential and of substantial value to it, which


                                       13
<PAGE>
value would be impaired if such information were disclosed to third parties.
Either party agrees that both Parties will not use in any way for their own
account or the account of any third party, nor disclose to any third party, any
such confidential information revealed to the receiving Party by each other.
Both Parties shall take every reasonable precaution to protect the
confidentiality of such information. Upon request by either party, the
disclosing Party shall advise the receiving Party whether or not it considers
any particular information confidential. The Distributor shall not publish any
technical description of the Products beyond the description published by
CryoCath. In the event of termination of this Agreement, there shall be no use
or disclosure by either party of any confidential information of CryoCath or
Distributor, and Distributor shall not manufacture or have manufactured any
compositions, devices, components or assemblies utilizing any of CryoCath's
confidential information. Without the disclosing Party's prior consent,
receiving Party shall not directly or indirectly disclose any confidential or
proprietary information received pursuant to this Agreement, including but not
limited to such information specifically designated as confidential by the
disclosing Party. This duty shall not apply to:

     (a)  Information which is already known to receiving Party at the time of
          its disclosure to the receiving Party;

     (b)  Information disclosed to receiving Party by a third party as a matter
          of right; or

     (c)  Information, which becomes patented, published or otherwise part of
          the public domain as a result of acts of the disclosing Party or a
          third party obtaining such information as a matter of right.

The parties also agree to maintain the terms of this Agreement in strict
confidence.

     ARTICLE 13. DISTRIBUTOR AUTHORIZATIONS

          13.1 Distributor Warranty.  Distributor warrants that it is legally
     authorized to import the Products into the Territory and to distribute them
     therein and that it will exercise its commercially reasonable efforts to
     maintain these authorizations during the term of this Agreement. Upon
     request by Manufacturer, Distributor shall provide Manufacturer with
     evidence of these authorizations.

          13.2 Disqualification.  Distributor shall immediately notify
     Manufacturer if it suffers the loss or impairment of any license, permit or
     other authorization that it requires in order to import the Products into
     the Territory or to distribute them therein.

          13.3 Product Registrations.  Manufacturer shall use its commercially
     reasonable efforts to obtain and to maintain and, to the extent lawful, in
     Manufacturer's name any product registrations, market authorizations,
     licenses or other government approvals required from time to time for the
     importation, distribution and sale of the Products in the Territory.


                                       14
<PAGE>
     ARTICLE 14. COMPLIANCE WITH APPLICABLE LAW

     Distributor shall comply with all laws, statutes, decrees, regulations and
policies which have the effect of law in the Territory, including but not
limited to anti-bribery laws, and which apply to its activities under this
Agreement.

     ARTICLE 15. LEGAL RELATIONSHIP

     No provision of this Agreement is intended by the parties or shall be
construed to establish Distributor as Manufacturer's officer, agent, employee,
or legal representative. Distributor has no authority under this Agreement to
assume any obligation on behalf of Manufacturer and shall not hold out to any
third party that it has authority to act on behalf of Manufacturer. In all of
its activities under this Agreement, except as specifically herein provided or
otherwise authorized by Manufacturer in advance and in writing, Distributor
shall be responsible for its own expenses and shall not incur expenses for
Manufacturer's account.

     ARTICLE 16. ADEQUACY OF DISTRIBUTOR'S FACILITIES

     Distributor acknowledges that Distributor's present office facilities,
warehousing facilities and personnel are adequate for the purpose of
distributing the Products in the Territory in compliance with this Agreement and
that no further investment in these facilities or in this personnel is required
to accomplish this purpose. Distributor agrees that once Distributor takes
possession of Products delivered by Manufacturer, Distributor shall separately
contract with such carriers and warehouses for the shipment and warehousing of
the Products from the time of Distributor's taking possession until
Distributor's sale of the Products to third-party customers.

     ARTICLE 17. TERM AND TERMINATION

          17.1 Term.  This Agreement shall take effect on the Effective Date and
     unless earlier terminated under the provisions of this Agreement, it shall
     be effective for a two (2) year period following the Effective Date. It
     shall be subject to automatic renewal for additional terms of one (1) year
     each if the Purchase Commitment is met for the preceeding year or upon
     express written agreement of the parties.

          17.1.1 Early Termination. Manufacturer may terminate the Agreement at
     any time for any reason. **

          17.2 Termination for Breach, Insolvency.  Either party may
     immediately terminate this Agreement by written notice to the other party
     upon the occurrence of any of the following events:

               (a) if the other party materially breaches any of its duties
          under this Agreement and fails to correct this breach within thirty
          days after receiving written notice thereof;

               (b) if the other party enters bankruptcy proceedings voluntarily
          or involuntarily, assigns its assets for the benefit of creditors or
          otherwise becomes or is threatened with becoming insolvent;


                                       15
<PAGE>
          17.3 Distributor Disqualification.  Manufacturer may terminate
     Distributor's right to a Territory immediately and without any liability to
     Distributor by providing written notice to Distributor if Distributor
     becomes legally disqualified for any reason from importing or distributing
     the Products in the Territory. or if Distributor loses any license or other
     authorization that it is required to have under the laws of the Territory
     for the importation, promotion or sale of the Products.

          17.4 Consequences of Termination.  In the event of a termination of
     this Agreement under any provision of Articles 17.1 through 17.3:

               (a) The term of this Agreement shall automatically terminate, but
          this termination shall not relieve either party of any duty accrued
          during that term or from any duty expressly provided in this Agreement
          to survive that term.

               (b) In the event that Distributor meets its annual Purchase
          Commitments as defined in Section 3.2 or;

          Distributor elects to Early Termination of the agreement as defined in
          Sec 17.1.1,
**

               It is understood that the twelve month notification period and
          Compensation Fee would not apply in the event that the Agreement is
          terminated because Distributor does not meet any of the purchase
          minimums referred to in section 3.2.

               (c) Both parties shall cease using and return to Manufacturer all
          information designated by either Party as confidential and all sales,
          advertising and promotional materials supplied to Distributor by
          Manufacturer. Distributor shall provide a customer list of
          Distributor's accounts which have purchased Product over the agreement
          period . Both Parties shall for a period of five (5) years after
          termination continue to hold in strict confidence all such
          information.

               (d) Manufacturer will repurchase from Distributor Distributor's
          inventory of Products, such that such inventory may ** of Distributors
          past sales in the Territory, that are in saleable condition and with
          remaining shelf lives exceeding 9 months for the same price that
          Distributor paid for this inventory. In the event that inventory is
          not repurchased by Manufacture from Distributor, the Distributor will
          be permitted to sell such inventory to end-users at the current agreed
          upon prices in the Territory. In the event that this agreement is
          terminated due to Distributor's failure to meet the annual Purchase
          Commitments defined under this agreement then Manufacturer shall not
          be obligated to re-purchase such inventory.

               (e) Both Parties shall immediately cease using any of the
          Trademarks.

               (f) Upon request by Manufacturer, Distributor shall take all
          necessary or appropriate actions to transfer to Manufacturer or its
          designee any Product , permits, consents or other approvals by
          government agencies obtained by


                                       16
<PAGE>
          Distributor in order to import, distribute or sell the Products in the
          Territory. The reasonable costs of such transfer shall be borne by
          Manufacturer.

               g) If payments under 17.4(b) are not being paid by Manufacturer
          to Distributor, then manufacturer will repurchase all accounts from
          Distributor that Distributor purchased from Manufacturer at the
          beginning of this agreement. **

     ARTICLE 18. GENERAL PROVISIONS

          18.1 Notices.  All notices under this Agreement shall be in writing
     sent by courier, first-class mail or by confirmed facsimile, or otherwise
     as provided by Section 19.2 hereof, and shall be addressed to the parties
     at the addresses set forth below;

     In the case of Manufacturer:

                                    CRYOCATH TECHNOLOGIES INC.
                                    16771 Chemin Ste-Marie, Kirkland
                                    Quebec, Canada  H9H 5H3
                                    Canada
                                    Attn: Vice-President, Sales and Marketing
                                    Fax No. 514-694-6279

     In the case of Distributor:

     ATS Medical
     3905 Annapolis Lane, Suite 105
     Minneapolis, Minnesota
     55447
     Att. VP Business Development
     Fax (763)553-1492

          A party may change its address designated above by giving written
     notice to the other party.

          18.2 Notice Periods.  All notice periods provided in this Agreement
     shall be deemed to begin running (a) in the case of notice by letter sent
     by first-class or registered mail, on the third day following the date of
     posting; (b) in the case of notice by facsimile or other telegraphic
     communication, on the date when the communication is sent and confirmed;
     and (c) in the case of any other method of notice, on the date when the
     notice is actually received.

          18.3 Waiver of Rights.  No failure or delay by either party in
     exercising any right or remedy under this Agreement shall be construed as a
     waiver of such right or remedy, nor shall any single or partial exercise of
     any right or remedy preclude any further or other exercise of such right or
     remedy. All rights and remedies under this Agreement are cumulative and
     shall not be deemed exclusive of any other rights or remedies provided by
     law.


                                       17
<PAGE>
          18.4 Assignments.  Distributor may not assign all or any part of its
     rights or duties under this Agreement without the prior written consent of
     the other party. Manufacturer may not assign all or any part of its rights
     or duties under this Agreement without the prior written consent of the
     other party except for in such cases as may be required for insurance,
     taxation or financing.

          18.5 Force Majeure.  Neither party shall be liable for any failure to
     perform provisions of this Agreement or supply the Products due to war,
     whether declared or undeclared, acts of war or terrorism, embargo, strikes,
     fires, explosions, flood, riot, lockout, injunction, interruption of
     transportation, accidents, or other similar causes beyond its control.

          18.6 Severability.  If any provision of this Agreement is declared
     invalid by any court of competent jurisdiction or by a government agency
     having jurisdiction over the Agreement, this declaration shall not affect
     the validity of any other provision and each other provision shall remain
     in full force and effect.

          18.7 Entire Agreement; Amendments.  This Agreement, including the
     attached Exhibits, contains the entire agreement of the parties with
     respect to the subject matter hereof. This Agreement supersedes and cancels
     all prior oral and written agreements between the parties with respect to
     this subject matter. Except as otherwise provided herein, this Agreement
     may be amended only by an agreement in writing signed by both parties.

          18.8 Rights and Remedies.  Nothing in this Agreement limits or
     restricts the rights or remedies available to the parties under the
     applicable law.

          18.9 Governing Law; Forum.  The law of the Province of Ontario and
     Canada shall govern the interpretation and enforcement of this Agreement.

          18.10 Headings.  All section headings in this Agreement are for
     convenience only and shall not in any way affect the meaning or
     interpretation of the Agreement.

          18.11 Language.  This Agreement has been drafted in the English
     language at the express request of the parties. Ce contrat a ete redige en
     anglais a la demande expresse des parties.

          18.12 Non Solicit.  During the term of this Agreement and for a period
     of 12 months thereafter, either Party will not, whether for itself or on
     behalf of another, except if mutually agreed upon in writing, directly or
     indirectly ecourage, solicit, entice, hire or cause any employees or
     consultants of the other Party to leave their working relationship.

IN WITNESS WHEREOF the parties have caused this Agreement to be executed by
their authorized representatives as of the Effective Date written above.


                                       18
<PAGE>
      CryoCath Technologies Inc.        ATS Medical, Inc.


By:                                     By:
    ---------------------------------       ------------------------------------
Name:                                   Name:
      -------------------------------         ----------------------------------
Title:                                  Title:
       ------------------------------          ---------------------------------
Date:                                   Date:
      -------------------------------        -----------------------------------


                                       19
<PAGE>
                    EXHIBIT A - SURGICAL PRODUCTS AND PRICES

**


                                       20
<PAGE>
                                    EXHIBIT B

                             REGULATORY REQUIREMENTS


                                       21
<PAGE>
                                    EXHIBIT C

                               PURCHASE COMMITMENT

**


                                       22
<PAGE>
                                    EXHIBIT D

                                SERVICE CONTRACT


                                       23
<PAGE>
                                    Exhibit D

(CRYOCATH LOGO)

xxxxxxxxx
xxxxxxxxxxx
xxxxxxxxxxx

Dear xxxxxxxxxxx:

We would like to inform you that the warranty on your SurgiFrost(C) Surgical
CryoAblation System has expired (or will expire), as of (date).

We are pleased to offer your hospital the opportunity to purchase our service
contract for the SurgiFrost(C) Surgical CryoAblation System. The SERVICE
AGREEMENT is designed to keep your CryoAblation system in top operating
condition and at the leading edge of CryoTherapy technology. The price of our
service agreement is xxxxx E per year.

The SurgiFrost(C) Surgical CryoAblation System SERVICE AGREEMENT includes the
following:

12 HOUR, 5 DAY EMERGENCY PHONE SUPPORT

Our Technical Support Specialists are available to answer your questions on the
use of the SurgiFrost(C) Surgical CryoAblation System. Emergency Phone Support
is available throughout Europe from 7:00 a.m. to 7:00 pm (CET), five days a week
(European phone number when available).

DEPOT SERVICE/SWAP SYSTEM

If required, your SurgiFrost(C) Surgical CryoAblation System will be sent to our
home office for repairs and a replacement system will be provided.

If you wish to purchase this service agreement, please fill out the service
agreement form and fax to +1-514-694-6279.

THIS OFFER IS VALID FOR 30 DAYS FROM THE ABOVE DATE. USER MISHANDLING WILL VOID
THE SERVICE AGREEMENT.

Do not hesitate to contact your Account Executive, Sandy Racicot at (514)
694-1212 ext. 393 or Gabrielle Fernau, European Sales Administrator, at 41 21
641 1652 for additional information.

Sincerely,

Gerard Mahoudeau
Vice President European Sales

                           CryoCath Technologies Inc.
            16771 Chemin Ste-Marie, Kirkland, Quebec, Canada H9H 5H3
              T +1 514 694 2775 F +1 514 694 6279 www.cryocath.com
<PAGE>
                                    Exhibit D

(CRYOCATH LOGO)

     CRYOCATH TECHNOLOGIES INC. SERVICE AGREEMENT FOR SURGIFROST(R) SURGICAL
                               CRYOABLATION SYSTEM

     Agreement to purchase the Cryocath Technologies Inc's Service contract for
_____ years at XXXX E per year effective as of _________________.

THE SERVICE AGREEMENT INCLUDES:

-    12 HOUR, 5 DAY EMERGENCY SUPPORT

-    DEPOT SERVICE / SWAP SYSTEM

Date:
      -------------------------------------------

Hospital:
          --------------------------------------------------------

Account number: 00100000002bGCP
                                ---------------------

Console Serial number: CSC-093
                               ----------------

Contact Person:                                 phone number:
                -------------------------------               ------------------

Signature:                                          Title:
           ----------------------------------------        ---------------------

PO#
    -----------------------

Please fill out form and fax to +1-514-694-6279.

                           CryoCath Technologies Inc.
            16771 Chemin Ste-Marie, Kirkland, Quebec, Canada H9H 5H3
              T +1 514 694 2775 F +1 514 694 6279 www.cryocath.com