**Exhibit 10.5****CONFIDENTIAL SEPARATION AGREEMENT AND RELEASE**          THIS AGREEMENT is made and entered into between Marc R. Sportsman (“Employee”) and ATSMEDICAL, INC. (“the Company”).          WHEREAS, the Employee was employed by the Company; and          WHEREAS, the Employee signed an Employment Agreement dated April 15, 2003, and          WHEREAS, the Employee’s employment is being terminated, and          WHEREAS, the purpose of this Separation Agreement is to set forth the terms and conditionsunder which the Employee and the Company will sever their employment relationship.          NOW, THEREFORE, in consideration of the recitals stated above and the mutual agreements,covenants, and provisions contained in this Separation Agreement, the parties agree as follows:     **Termination****. The Employee and the Company agree that the effective date of theEmployee’s termination is February 2, 2007. Employee will, however, be paid through February 16,2007.**     **Payments****.**As consideration for the terms contained in this Agreement, including the Employee’srelease of claims, his agreement to maintain the confidentiality of the Agreement,and his promise to abide by the restrictive covenants in his Employment Agreement,the Employee will receive 26 biweekly payments of nine thousand five hundred fortyand 64/100 dollars ($9,540.86). The total amount of such payments will be twohundred forty eight thousand sixty two and 36/100 dollars ($248,062.36), lessapplicable withholdings for taxes.The Company will also pay health insurance premiums for the Employee throughFebruary 2008, consistent with Employee’s current compensation program.Employee shall have no right to any compensation, benefits, salary or bonus beyondthat referenced in the preceding subparagraphs of this Section 2. These sums willonly be paid, however, provided the rescission period referred to in Section 7 hasexpired without rescission of this Agreement by the Employee.The Company will pay the Employee and the Employee will accept from the Company, infull and final settlement, the above-referenced consideration.     Employee agrees that he is solely responsible for any and all liability created under thefederal and state tax laws and agrees to indemnify the Company and hold it harmless for all suchliability or obligations, if any. Further, the Company makes no warranty concerning the

 
treatment of any sums paid hereunder under said laws and employee has not relied upon any suchwarranty.     The Employee understands that no additional money is to be paid or other consideration givento him on account of his employment or termination of employment with the Company other than theconsideration referenced in this Agreement.     **Full Compensation****. The payments that will be made on Employee’s behalf to theEmployee for his benefit pursuant to this Separation Agreement will compensate him for andextinguish any and all of his claims arising out of his employment with the Company or hisemployment termination, including but not limited to claims for attorneys’ fees and costs, and anyand all claims for any type of legal or equitable relief.**     **Benefits****. The Employee is a participant in various employee benefit plans sponsoredby the Company. The payment of benefits, including the amounts and the timing thereof, will begoverned by the terms of the employee benefit plans, except to the extent those rights have beenexplicitly extended in this Agreement. The Company will answer any reasonable questions that theEmployee may have from time to time and will offer him the same assistance given other participantsin employee benefit plans so long as he is entitled to benefits thereunder.**     **Records, Documents and Property****. Employee will return to the Company all itsproperty, including any keys, cell phones, computers, and any documents or property of the Company.The Employee will also confirm that he has no duplicates of any documents or items returned.**     **General Release****. In consideration of the payments and other undertakings statedherein, the Employee will sign a separate Release in the form attached hereto as Exhibit A at thetime he signs this Separation Agreement. This Separation Agreement shall not be interpreted orconstrued to limit the General Release in any manner, or vice versa.**     **Rescission****. Employee will have up to 21 days to consider this Separation Agreementbefore signing it. Once this Agreement is executed, Employee may rescind this Separation Agreementwithin seven (7) calendar days to reinstate federal Age Discrimination in Employment Act claims andwithin fifteen (15) calendar days to reinstate Minnesota Human Rights Act claims under state law.To be effective, any rescission within the relevant time periods must be in writing and deliveredto the Employer, in care of Ms. Barb Searle, ATS Medical, Inc., 3905 Annapolis Lane, Suite 105,Minneapolis, Minnesota, 55447, either by hand or by mail within the 15-day period. If sent bymail, the rescission must be (1) postmarked within the 15-day period; (2) properly addressed to theEmployer; and (3) sent by certified mail, return receipt requested.**     If the Employee gives notice of rescission within the 15-day time period, he shall no longerbe entitled to the payments or benefits referred to in Section 2, and his original involuntarytermination shall remain as stated above.     **Confidentiality of Terms****. The terms of this Separation Agreement and Release will betreated as confidential by the Employee and he shall not disclose its terms to anyone except theEmployee may disclose the terms of this Agreement to his legal counsel,**

 
**professional accountant, tax or professional financial advisor, spouse or as may be requiredby law or court order.**     **Restrictions of Employment Agreement****. The restrictions on the use of inventions,confidential information, competitive activities, and the provisions dealing with the enforcementof those restrictions contained in the Employment Agreement dated April 15, 2003, specificallysections 5, 6 and 7, will continue in full force and effect even though employment under thatEmployment Agreement is terminated. Employee confirms his commitments to those restrictions andrecognizes that the payments in Section 2 above as further consideration for his promise to abideby those restrictions. Any failure to abide by those restrictions will result in forfeiture of allpayments, whether paid or unpaid, and unvested stock, described in Section 2.**     **Non-Disparagement****. The Employee agrees that he shall not disparage or defame theCompany or its agents or employees in any respect or make any comments concerning their employmentrelationship. Employee agrees not to make any negative statements concerning his relationship withthe Company, either in the employment or personal context.**     **Non-Admission****. Nothing in this Separation Agreement is intended to be, nor will bedeemed to be, an admission of liability by the Company that it has violated any state or federalstatute, local ordinance or principle of common law, or that it has engaged in any wrongdoing.**     **Non-Assignment****. The parties agree that this Separation Agreement and the Release willnot be assignable by Employee unless the Company agrees in writing.**     **Injunctive Relief****. Employee agrees that the Company will suffer irreparable injury ifEmployee breaches any portion of this Agreement. Therefore, Employee agrees that in addition toany legal action for money damages, an action for injunctive relief will be appropriate upon such abreach, and further agrees to reimburse the Company for its reasonable attorneys’ fees, costs, andexpenses incurred in enforcing Employee’s obligations hereunder and further agrees to waive anyrequirement that the Company post a bond as a condition of injunctive relief.**     **Merger/Entire Agreement****. This Separation Agreement and the Release attached asExhibit A, and the Employment Agreement dated April 15, 2003 constitute the entire agreementsbetween the parties with respect to the employment, association and the termination of theEmployee’s employment relationship with the Company, and the parties agree that there were noinducements or representations leading to the execution of this Separation Agreement or theRelease, except as herein contained. Employee agrees that any and all claims which he might havehad against the Company are fully released and discharged by this Separation Agreement and theRelease, and that the only claims which he may hereafter assert against the Company will be derivedonly from an alleged breach of the terms of this Separation Agreement.**     **Invalidity****. In case any one or more of the provisions of this Separation Agreementshall be invalid, illegal, or unenforceable in any respect, the validity, legality, andenforceability of the remaining provisions contained in this Separation Agreement will not in anyway be affected or impaired thereby.**

 
     **Voluntary and Knowing Action****. The Employee acknowledges that he has been advised ofhis right to be represented by his own attorney, that he has read and understands the terms of thisSeparation Agreement, and that he is voluntarily entering into the Separation Agreement to resolveany disputes with the Company, and that he has not relied upon any statements made by the Company,its agents or attorneys.**     **Governing Law and Jurisdiction****. This Separation Agreement will be construed andenforced in accordance with the laws of the State of Minnesota. Jurisdiction and venue shall onlybe appropriate in Hennepin County, Minnesota.**     **Counterparts****. This Separation Agreement may be executed in any number ofcounterparts, each of which shall be deemed an original, but all of which shall constitute one andthe same instrument.**     IN WITNESS WHEREOF, the parties hereto have executed this Separation Agreement on the datesindicated at their respective signatures.       Dated: February 23, 2007 /s/ Marc R. Sportsman         Marc Sportsman, Employee           ATS MEDICAL, INC.         Dated: March 6, 2007 By: /s/Michael Kramer             Its: Acting Chief Financial Officer  

 
EXHIBIT ARELEASEDefinitions. I intend all words used in this Release to have their plain meanings inordinary English. Technical legal words are not needed to describe what I mean. Specific terms Iuse in this Release have the following meanings: A. I, me, and my include both me and anyone who has orobtains any legal rights or claims through me.  B. Company, as used herein, shall at all times mean ATS Medical, Inc., itsparents, subsidiaries, successors and assigns, their affiliated and predecessorcompanies, their successors and assigns, their affiliated and predecessor companies andthe present or former officers, directors, employees and agents of any of them, whetherin their individual or official capacities, and the current and former trustees oradministrators of any pension or other benefit plan applicable to the employees orformer employees of the Company, in their official and individual capacities.  C. My Claims mean all of the rights I have now to any relief of any kindfrom the Company, whether or not I now know about those rights, arising out of myemployment with the Company, and my employment termination, including but not limitedto, claims for breach of contract; fraud or misrepresentation; violation of theMinnesota Human Rights Act, the Age Discrimination in Employment Act, or other federal,state, or local civil rights laws based on age or other protected class status;defamation; intentional or negligent infliction of emotional distress; breach of thecovenant of good faith and fair dealing; promissory estoppel; negligence; wrongfultermination of employment; and any other claims for unlawful employment practices.However, this release shall not affect any claims which could be made under any welfarebenefit plan or any pension or retirement plan through the Company.Agreement to Release My Claims. I am receiving a substantial amount of money paid by theCompany. I agree to give up all My Claims against the Company in exchange for those paymentsspecified in the attached Confidential Separation Agreement. I will not bring any lawsuits, fileany charges, complaints, or notices, or make any other demands against the Company based on MyClaims. The money I am receiving is a full and fair payment for the release of all My Claims. TheCompany does not owe me anything in addition to what I will be receiving.I understand and agree that, notwithstanding anything to the contrary in this Release, nothing inthis Release is intended to or shall: (a) impose any condition, penalty, or other limitationaffecting my right to challenge this Release; (b) constitute an unlawful release or waiver of anyof my rights under any laws; or (c) prevent, impede, or interfere with my ability or right to: (i)provide truthful testimony if under subpoena to do so; (ii) file any charge or complaint (includinga challenge to the validity of this Release) with, or participate in an investigation or proceedingconducted by, the EEOC, the MDHR, or any other governmental entity; or (iii) respond as otherwiserequired and/or provided for by law. Notwithstanding anything to the contrary in this

 
Release, nothing in this Release is intended to be or shall be construed to be a violation of anylaw.     Additional Agreements and Understandings. Even though the Company is paying me to releaseMy Claims, the Company does not admit that it may be responsible or legally obligated to me. Infact, the Company denies that it is responsible or legally obligated for My Claims or that it hasengaged in any wrongdoing.     I understand that I may rescind (that is, cancel) this Release within seven (7) calendar daysof signing it to reinstate federal claims and within fifteen (15) calendar days of signing it toreinstate state claims. To be effective, my rescission must be in writing and delivered to theCompany in care of Ms. Barb Searle, ATS Medical, Inc., 3905 Annapolis Lane, Suite 105, Minneapolis,Minnesota, 55447, either by hand or by mail within the 15-day period. If sent by mail, therescission must be:1. Postmarked within the 15-day period;