MANUEL A. VILLAFANA
                              CONSULTING AGREEMENT

         THIS AGREEMENT is made as of the 20th day of April, 1998 by and between
ATS Medical, Inc., a Minnesota corporation (the "Company") and Manuel A.
Villafana, a resident of the State of Minnesota ("MAV").

         WHEREAS, the parties entered into Agreements dated October 1994 and
January 1995 for the employment of MAV as Chairman and Chief Executive Officer
of the Company (the "October 1994 Agreement" and the "January 1995 Agreement");
and

         WHEREAS, the Board of Directors and MAV desire to amend and restate the
October 1994 and January 1995 Agreements to modify certain provisions and to
extend the term of the agreement.

         NOW, THEREFORE, in consideration of the mutual promises contained
herein, the Company and MAV, each intending to be legally bound, agree to amend
the October 1994 and January 1995 Agreements and restate them in their entirety
as follows:

         1. Employment. Subject to all of the terms and conditions of this
Agreement, the Company agrees to employ MAV on a "full-time" basis as its
Chairman and Chief Executive Officer and MAV accepts this employment as
consultant.

         2. Duties. MAV will make the best use of his energy, knowledge and
training in advancing the Company's interests. He will diligently and
conscientiously perform the duties of Chairman and Chief Executive Officer of
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. During the term of this Agreement, MAV may engage in
any outside consulting activities which do not violate the provisions of
Sections 7 and 8 of this Agreement, provided MAV continues to devote
substantially all of MAV's full-time efforts to the Company.

         3. Term. Unless terminated at an earlier date in accordance with the
provisions of this Agreement, the term of MAV's services hereunder shall
commence on the date of this Agreement and shall terminate on December 31, 2001.
The Company may terminate the relationships created by this Agreement upon 60
days notice to MAV if such termination is without cause (as defined below), and
with no notice if such termination is for Cause.

         As used in this Agreement, the term "Cause" shall be defined as (i)
MAV's breach of any of his material duties or obligations under this Agreement,
which breach is not corrected within 30 days of receipt of written notice
thereof by MAV from the Company's Board of Directors, (ii) embezzlement or other
misappropriation of property of the Company or (iii) conviction of a felony
offense. No termination of the relationship created by this Agreement shall
relieve MAV of his duties under Sections 5, 6 and 7 hereof.


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         4. Compensation.

         (a) Base Salary. The Compensation Committee of the Board of Directors
         shall determine the base salary for MAV in accordance with its
         compensation practices.

         (b) Benefits. MAV shall be entitled to participate in any benefit plans
         which may be established by the Board of Directors of the Company for
         his benefit.

         (c) Expenses. The Company shall reimburse MAV for all ordinary and
         necessary business expenses MAV incurs while performing his duties
         under this Agreement, provided that MAV 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.

         (d) Bonuses. MAV shall be eligible to receive discretionary bonuses in
         addition to his base salary as and when determined by the Compensation
         Committee of the Board of Directors of the Company during the term of
         this Agreement.

         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 MAV makes, authors, or conceives
         (either alone or with others) and that:

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

                  (ii) results from any work MAV performs for the Company; or

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

         (b) MAV agrees that all Inventions he makes during his employment with
         the Company will be the sole and exclusive property of the Company. MAV
         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 MAV is employed by the Company;

                  (ii) promptly and fully disclose the existence and describe
                  the nature of the



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                  Invention to the Company in writing (and without request);

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

                  (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, MAV 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 MAV's own time, and which (i) does not relate
directly to the Company's business or to the Company's actual research or
development, or (ii) does not result from any work MAV performed for the
Company. Except as previously disclosed to the Company in writing, MAV does not
have and will not assert any claims to or rights under any Inventions as having
been made, conceived, authored, or acquired by MAV prior to his 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 MAV or
others originated it and regardless of how he obtained it).


<PAGE>


         (b) Except as required in his duties to the Company, MAV will not,
during his employment or for a period of five (5) years after termination of his
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 MAV, or
(ii) which is received by MAV after termination of his 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 MAV's employment with the Company ends,
he will promptly turn over to the Company all records and any compositions,
articles, devices, or embody Confidential Information, including all copies,
reproductions, and specimens of the Confidential Information in his possession,
regardless of who prepared them.

         7. Post-employment, Consulting and Competitive Activities. MAV agrees
that during his employment with the Company and for a minimum period of two (2)
years, extendible automatically up to five (5) years in one (1) year increments
unless terminated by ATS with a sixty (60) day notice prior to end of current
consulting year, after his employment with the Company ends:

         (a) He 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 MAV participated while he was
employed by the Company or any affiliate thereof, nor will he 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 shareholders 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 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 employees on behalf of any other entity
competing with the Company provided that, nothing in this Section 7 shall
restrict MAV'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) MAV'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 service of the Company; and (B) MAV's
employer takes reasonable measures to ensure that MAV is not involved with or
consulted in any aspect of the design, development, production, marketing or
servicing or such competitive product or service and, provided further, that if
the Company is purchased or acquired in a merger or similar transaction, the
provisions of this Section 7 (a) shall apply only to MAV's engaging in
activities competitive with the business in which the Company was engaged prior
to any such purchase or merger and such provisions shall not be deemed to
prohibit MAV from competing with any other aspects of the business of any
purchasing or acquiring person.

         (b) He 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 



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Agreement, provided that he reasonably believes his new position is or may be
contrary to this Agreement.

         (c) To compensate for the restrictions and consulting contained in this
Section 7, the Company will make a monthly payment to MAV commencing with the
first month after termination of employment and continuing until such
restrictions expire. The amount paid shall be MAV's monthly base salary and
medical benefits at the time of any termination of MAV's employment with the
Company adjusted annually to the CPI index. MAV hereby agrees to accept such
payment, and acknowledges that such payment, as well as other consideration
received in the course of his employment, is sufficient consideration for the
restrictions contained in this Section 7. MAV agrees that upon acceptance of
such payment, the Company shall have no further liability to MAV and such
payment shall, subject to the limitation described below, constitute a release
by MAV of all claims and liabilities against the Company arising from his
employment. The Company agrees that it shall make a good faith effort to settle
any employment-related claims by MAV prior to making the first payment due under
this Section 7 (c).

         (d) He will consult on non-confidential ATS matters with the President
and/or Board of Directors at their request on a limited time basis not to exceed
20 hours per month.

         8. Conflicting Business. MAV agrees that he will not transact business
with the Company personally, or as agent, owner, partner, or shareholder of any
other entity, except as approved by the Board of Directors. MAV further agrees
that he 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. MAV understands that if he fails to fulfill his
obligations under Section 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, MAV 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.      Miscellaneous.

         (a) Successors and Assigns. This Agreement may not be assigned by MAV.
         This Agreement may not be assigned by the Company without MAV's
         consent, which consent shall not be unreasonably withheld.

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

         (c) 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 



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         be effective to the extent it remain 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 the Agreement. Nor shall any single or partial exercise by
         any of the parties hereto of any right or remedy under this Agreement
         preclude any of them from otherwise or further exercising their 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
                                            Minneapolis, Minnesota 55447

              If to MAV:                    Manuel A. Villafana
                                            P.O. Box 41946
                                            Minneapolis, Minnesota  55447

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

                                            ATS MEDICAL, INC.
                                        
                                            By:_________________________


                                            Title: President and COO
                                                  ----------------------

                                            ____________________________
                                            Manuel A. Villafana