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                                                                   EXHIBIT 10.12


                                ATS MEDICAL, INC

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT made this 18th day of September 2002 is by and between
ATS Medical Inc., a Minnesota Corporation (the "Company"), and Michael D. Dale a
resident of the State of Minnesota (the "Employee").

         WHEREAS, the parties wish to provide for the employment of the Employee
by the Company; and

         WHEREAS, the Company desires reasonable protection of its confidential
business and technical information, which has been and will be acquired, and is
being developed by the Company, at substantial expense.

         NOW, THEREFORE, in consideration of mutual promises contained herein,
the Company and the Employee, each intending to be legally bound, agree as
follows:

         1. Employment. Subject to all of the terms and conditions of this
Agreement, the Company agrees to employ the employee as PRESIDENT/CEO and the
Employee accepts this employment.

         2. Duties. The Employee will make the best use of his/her energy,
knowledge and training in advancing the Company's interest. He/she will
diligently and conscientiously perform the duties of CHIEF EXECUTIVE OFFICER for
the Company, as such duties may be defined by the Company's Board of Directors
and such other tasks as may from time to time be reasonably required to further
the growth of the Company. The Employee will make every effort to avoid using
any trade secrets or confidential information that he/she may have in his/her
possessions from any previous employer. Employee's work will be confined to new
developments created at the Company or in the public domain. This will help to
avoid any conflict with Employee's previous employers.

         3. Term. The Employee shall be employed on an "at will" basis. Either
party may terminate the employment relationship created by this agreement for
any reason by giving ten (10) working days prior written notice to the other
party. Because the employment relationship is "at will" the Employee shall have
no right to continued employment, and the Company may terminate the Employee for
any reason (other than because of Employee's race, sex, age or other legally
protected category) at any time. If this Agreement is terminated without cause
by the Company during the first year of this Agreement, Employee shall be
entitled to six (6) months severance benefits. The provision of severance
benefits to the terminated employee shall increase to 12 months after the first
year of employment and shall not imply a policy, practice of obligation of
providing severance benefits to any other terminated employees.

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No document or statement (oral or written) by the Company or its officers will
create a right to continued employment or a right to severance benefits for a
terminated employee.

         4. Compensation.

                  (a) Salary. The Company shall pay the Employee a salary of
         $9,615.39 bi-weekly.

                  (b) Within 30 days of employment, the Company shall pay the
         Employee a "Signing Bonus" of $100,000. .

                  (c) Benefits. The Employee will be entitled to participate in
         benefit plans which may be established by the Board of Directors of the
         Company.

                  (d) Expenses; The Company shall reimburse the Employee for all
         ordinary and necessary business expenses the Employee incurs while
         performing his/her duties under this Agreement, provided that the
         Employee accounts properly for such expenses to the Company in
         accordance with the general corporate policy of the Company as
         determined by the Company's Board of Directors and in accordance with
         the requirements of Internal Revenue Service regulations relating to
         substantiation of expenses.

                  (e) The Company's Board of Directors shall have the sole
         discretion of giving the Employee a bonus of $50,000 based on Sales and
         Earnings.

                  (f) The Company shall pay for the tax preparation of the
         Employee's tax return, if prepared by the Company's auditors.

         5. Inventions.

                  (a) "Inventions", as used in this Section 5, means any
         discoveries, designs, improvements or software (whether or not they are
         in writing or reduced to practice) or works of authorship (whether or
         not they can be patented or copyrighted) that the Employee makes,
         authors or conceives (either alone or with others) and that:

                           (i) concern directly the Company's products, research
                  or development;

                           (ii) result from any work the Employee performs for
                  the Company; or

                           (iii) use the Company's equipment, facilities, or
                  trade secret information.

                  (b) The Employee agrees that all Inventions he/she makes
         during the term of this Agreement will be the sole and exclusive
         property of the Company. The Employee will, with respect to any such
         Invention:

                           (i) keep current, accurate, and complete records,
                  which will belong to the Company and be kept and stored on the
                  Company's premises while the Employee is employed by the
                  Company;

                           (ii) promptly and fully disclose the existence and
                  describe the nature of the Invention to the Company and in
                  writing (and without request);

                           (iii) assign (and the Employee does hereby assign) to
                  the Company all of his/her rights to the Invention, and
                  applications he/she makes for patents or copyrights in any
                  country, and any patents or copyrights granted to him/her in
                  any country; and

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                           (iv) acknowledge and deliver promptly to the Company
                  any written instruments, and perform any other reasonable acts
                  necessary in the Company's opinion and at its expense to
                  preserve property rights in the Invention against forfeiture,
                  abandonment, or loss and to obtain and maintain letters,
                  patents and/or copyrights on the Invention and to vest the
                  entire right and title to the Invention in the Company,
                  provided that the Employee makes no warranty or representation
                  to the Company as to rights against third parties hereunder.

The requirements of this subsection 5 (b) do not apply to an Invention for which
no equipment, facility, or trade secret information of the Company was used and
which was developed entirely on the Employee's own time, and which:

                           (i) does not relate directly to the Company's
                  business or to the Company's actual research or development;
                  and

                           (ii) does not result from any work the Employee
                  performed for the Company. Except as previously disclosed to
                  the Company in writing, the Employee does not have and will
                  not assert any claims to or rights under any Inventions as
                  having been made, conceived, authored, or acquired by the
                  Employee prior to his/her employment hereunder.

         6. Confidential Information.

                  (a) "Confidential Information," as used in this Section 6,
         means information that is not generally known and that is proprietary
         to the Company or that the Company is obligated to treat as
         proprietary. This information includes, without limitation:

                           (i) trade secret information about the Company and
                  its products or services;

                           (ii) "Inventions," as defined in subsection 5 (a)
                  above;

                           (iii) information concerning the Company's business,
                  as the Company has conducted it or as it may conduct it in the
                  future; and

                           (iv) information concerning any of the Company's
                  past, current, or possible future products, including (without
                  limitation) information about the Company's research,
                  development, engineering, purchasing, manufacturing,
                  servicing, finances, marketing or selling.

Any information that reasonably can be expected to be treated as Confidential
Information will be presumed to be Confidential Information (whether the
Employee or other originated it and regardless of how he/she obtained it).

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                  (b) Except as required in his/her duties to the Company, the
Employee will not, during his/her employment or for a period of three (3) years
after termination of his/her employment with the Company, use or disclose
Confidential Information to any person not authorized by the Company to receive
it, excluding Confidential Information:

                           (i) which becomes publicly available by a source
                  other than the Employee;

                           (ii) which is received by the Employee after
                  termination of his/her employment hereunder from a source who
                  did not obtain the information directly or indirectly from
                  employees or agents of the Company; or

                           (iii) for which disclosure thereof the Company has
                  consented in writing. When the Employee's employment with the
                  Company ends, he/she will promptly turn over to the Company
                  all records and any compositions, articles, devices, apparatus
                  and other items that disclose, describe, or embody
                  Confidential Information including all copies, reproductions,
                  and specimens of Confidential Information in his/her
                  possession regardless of who prepared them.

         7. Competitive Activities. The Employee agrees that during his/her
employment with the Company and for a period of one (1) year after his/her
employment with the Company ends:

                  (a) He/she will not alone, or in any capacity with another
         firm:

                           (i) directly or indirectly engage in any commercial
                  activity that is competitive with any of the Company's
                  business in which the Employee participated while he/she was
                  employed by the Company or any affiliate thereof, nor will
                  he/she participate in the management or operation of, or
                  become a significant investor in, any venture or enterprise of
                  whatever kind as a principal officer, director, employee,
                  representative, agent or shareholder of any entity whose
                  business is the design, development, production, marketing or
                  servicing of any product or service competitive with the
                  business of the Company as it exists at the time his/her
                  employment with the Company or any affiliate thereof is
                  terminated;

                           (ii) solicit or in any way interfere or attempt to
                  interfere with the Company's relationships with any of its
                  current or potential customers; or

                           (iii) employ or attempt to employ any of the
                  Company's employee on behalf of any other entity competing
                  with the Company, provided that, nothing in this Section 7
                  shall restrict the Employee's employment by or association
                  with any entity, venture, or enterprise which engages in a
                  business with a product or service competitive with any
                  product or service of the Company so long as the following
                  conditions are complied with: (a) the Employee's employment or
                  association with such entity, venture or enterprise is limited
                  to work which does not involve or relate to the design,
                  development, production, marketing or servicing of a product
                  or service which is directly competitive with any product or

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                  service of the company; and (b) the Employee's employer takes
                  reasonable measures to insure that the Employee is not
                  involved with or consulted in any aspect of the design,
                  development, production, marketing, or servicing of such
                  competitive product or service.

                           (b) Employee will, prior to accepting employment with
                  any new employer, inform that employer of this Agreement and
                  provide that employer with a copy of Section 7 of this
                  Agreement, provided that he/she reasonably believed his/her
                  new position is or may be contrary to this Agreement.

         8. Conflicting Business. The Employee agrees that he/she will not
transact business with the Company personally, or as agent, owner, partner, or
shareholder of any other entity. The Employee further agrees that he/she will
not engage in any business activity or outside employment that may be in
conflict with the Company's proprietary or business interests.

         9. No adequate Remedy. The Employee understands that if he/she fails to
fulfill his/her obligations under Sections 5,6,7 or 8 of this agreement, the
damages to the Company would be very difficult to determine. Therefore, in
addition to any other rights or remedies available to the Company at law, in
equity or by statute, the Employee hereby consents to the specific enforcement
of Sections 5,6, 7 or 8 of this Agreement by the Company through an injunction
or restraining order issued by any appropriate court.

         10. No Prior Agreements. The Employee hereby represents and warrants to
the Company that he/she is not a party to or otherwise subject to any non
competition, confidentiality or other agreement which would in any way restrict
his/her ability to fulfill his/her duties hereunder or which would be breached
or violated by execution of this agreement by the Employee.

         11. Miscellaneous.

                  (a) Successors and Assigns. This Agreement may not be assigned
by the Employee. Except as provided in the next sentence. This Agreement may not
be assigned by the Company without the Employee's consent, which consent shall
not be unreasonably withheld. In any event, the Company may assign this
Agreement without the consent of the Employee in connection with a merger,
consolidation, assignment, sale or other disposition of substantially all of its
assets or business or the assets or business of a division of the Company.

                  (b) Modification. This Agreement may be modified or amended
only by a writing signed by each of the parties hereto.

                  (c) Governing Law. The laws of the State of Minnesota shall
govern the validity, construction, and performance of this Agreement.

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                  (d) Construction. Wherever possible, each provision of this
Agreement shall be interpreted so that it is valid under applicable law. If any
provision of this Agreement is to any extent invalid under applicable law in any
jurisdiction, that provision shall still be effective to the extent it remains
valid. The remainder of this Agreement also shall continue to be valid, and the
entire Agreement shall continue to be valid in other jurisdictions.

                  (e) Non-Waiver. No failure or delay by any of the parties
hereto in exercising any right or remedy under this Agreement shall waive any
provision of this Agreement. Any single or partial exercise by either of the
parties hereto of any right or remedy under this Agreement shall not preclude
the party from otherwise or further exercising its rights or remedies, or any
other rights or remedies granted by any law or any related document.

                  (f) Captions. The headings in this Agreement are for
convenience only and shall not affect the interpretation of this Agreement.

                  (g) Notices. All notices and other communications required or
permitted under this Agreement shall be in writing and hand delivered or sent by
registered first-class mail, postage prepaid. Such notices and other
communication shall be effective upon receipt if hand delivered and shall be
effective five (5) business days after mailing if sent by mail to the following
addresses, or such other addresses as either party shall have notified the other
party:

         If to the Company:         ATS  Medical, Inc
                                    3905 Annapolis Lane,  Suite 105
                                    Plymouth, MN 55447

         If to the Employee:        Michael D. Dale
                                    1450 Hunter Drive
                                    Wayzata, MN 55391



         IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement as of the date first above written.

By:
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Title:
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Employee:
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