Document:

exv10w4

 

EXHIBIT 10.4

EMPLOYMENT AGREEMENT

     THIS AGREEMENT made this 18th day of August is by and between CABG
Medical, Inc., a Minnesota Corporation (the “Company”), and John L. Babitt, 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/COO/CFO 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 President/COO/CFO 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 must not use 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 lawful reason at any time. Unless agreed to in writing by a
separate agreement, if this Agreement is terminated by the Company, Employee
shall not be entitled to any severance benefits. The Company may, in its sole
discretion, provide severance benefits in certain circumstances to a terminated
employee. The provision of severance benefits to a terminated employee,
however, shall not imply a policy, practice of obligation of providing
severance benefits to any other terminated employee.

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.

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     4. Compensation.

     (a) Salary. The Company shall initially pay the Employee an
annualized salary of $175,000, less applicable deductions and
withholdings.

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

     (c) 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.

     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
(ether 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.

     (c) 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 to the public 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 shall not, during his/her employment and for all times 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 for whatever reason, whether voluntarily or
involuntarily:

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

     (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 then-current or
potential customers; or

     (iii) employ or attempt to employ any of the Company’s
then-current employees 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

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	 	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; (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, and (c)
Employee provides notice to Company.

     (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. Unless prior written approval is obtained from the
Company’s Board of Directors or an appropriate committee of the Board, 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. Understandings. I acknowledge and agree that

     (a) Company has agreed to provide me the following valuable
consideration in exchange for my agreement to the terms of this
Agreement: $175,000 annual salary.

     (b) Company informed me, as part of the offer of the
President/COO/CFO described above, that a restrictive covenant agreement
with the terms contained in this Agreement would be required as a
condition of my receipt of $175,000 annual salary;

     (c) I have executed this Agreement prior to my receipt of the
$175,000 annual salary described above;

     (d) I have carefully considered the restrictions contained in this
Agreement and agree that they are reasonable;

     (e) The restrictions in this Agreement will not unduly restrict me
in securing other employment in the event of my termination from Company.

     10. 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.

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     11. Survival. The Employee acknowledges and agrees that Sections 5, 6, 7
and 8 of this Agreement shall survive the termination of this Agreement and
Employee’s employment.

     12. Miscellaneous.

     (a) Successors and Assigns. This Agreement may not be assigned by
the Employee. The Company may assign this Agreement 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.

     (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:

	 	 	 
	

	 	CABG Medical, Inc.
	

	 	14505 21st Avenue North, Suite 212
	

	 	Minneapolis, MN 55447

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     If to the Employee:

	 	 	 
	

	 	Mr. John L. Babitt
	

	 	168 Morningside Dr.
	

	 	Coral Gables, FL 33133

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

By: /s/ Manuel A. Villafaña

Title: Chairman & CEO

Employee: /s/ John L. Babitt

7exv10w6

 

EXHIBIT 10.6

June 17, 2003

Mr. Manuel A. Villafaña

P.O. Box 47946

Minneapolis, MN 55447

Dear Mr. Villafaña:

CABG Medical, Inc. (the “Company”) recognizes that your contribution to the
growth of the Company has been or will be substantial and therefore desires to
compensate you in the event of a change of control under the circumstances
defined below. In this connection, the Board of Directors of the Company (the
“Board”) recognizes that the possibility of a change in control may exist and
that such possibility, and the uncertainty and questions which it may raise
among management, may result in the departure or distraction of management
personnel to the detriment of the Company and its shareholders.

The Board has determined that appropriate steps should be taken to reinforce
and encourage the continued attention and dedication of members of the
Company’s management and consulting team, including yourself, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a change in control of the Company.

The Company agrees that you will receive the severance benefits set forth in
this letter agreement (“Agreement”) in the event your employment or consulting
arrangement with the Company is terminated subsequent to a “Change in Control”
(as defined in Section 2 hereof) under the circumstances described below:

	1.	 	Term of Agreement. This Agreement shall commence on the date hereof and
shall continue in effect through December 31, 2013; provided, however,
that commencing on January 1, 2004 and each January 1 thereafter, the term
of this Agreement shall automatically be extended for one additional year
unless, not later than November 30 of the preceding year, the Company
shall have given notice that it does not wish to extend this Agreement;
and provided further, that notwithstanding any such notice by the Company
not to extend, this Agreement shall continue in effect for a period of 24
months beyond the term provided herein if a change in control of the
Company (as defined in Section 2 hereof) shall have occurred during such
term.

	2.	 	Change in Control. No benefits shall be payable hereunder unless there
shall have been a Change in Control of the Company, as set forth below,
and your employment by or consulting arrangement with the Company shall
have been terminated in accordance with Section 3 below. For purposes of
this Agreement, “Change of Control” shall mean any of the following events
occurring after the date of this Agreement:

     (a) A merger or consolidation to which the Company is a party if the
individuals and entities who were shareholders of the Company immediately
prior to the effective date of such merger or consolidation have,
immediately following the effective

 

 

date of such merger or consolidation, beneficial ownership (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934) of less
than fifty percent (50%) of the total combined voting power of all
classes of securities issued by the surviving corporation for the
election of directors of the surviving corporation;

     (b) The acquisition of direct or indirect beneficial ownership (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934) of
securities of the Company by any person or entity or by a group of
associated persons or entities acting in concert in one or a series of
transactions, which causes the aggregate beneficial ownership of such
person, entity or group, excluding Manuel A. Villafana and his
affiliates, to equal or exceed twenty percent (20%) or more of the total
combined voting power of all classes of the Company’s then issued and
outstanding securities;

     (c) The sale of substantially all of the assets of the Company to
any person or entity that is not a wholly-owned subsidiary of the
Company;

     (d) The approval by the shareholders of the Company of any plan or
proposal for the liquidation of the Company;

     (e) After such time as the Company’s Board of Directors has at least
three or more board members, a change in the composition of the Board of
the Company at any time during any consecutive twenty-four (24) month
period such that the “Continuity Directors” no longer constitute at least
a fifty percent (50%) majority of the Board. For purposes of this event,
“Continuity Directors” means those members of the Board who were
directors at the beginning of such consecutive twenty-four (24) month
period or were elected by, or on the nomination or recommendation of, at
least a two thirds (2/3) majority of the then-existing Board of
Directors; or

     (f) The execution by the Company of an agreement in principle or a
definitive agreement relating to an event described in Section 2(a),
2(b), 2(c), 2(d) or 2(e) that ultimately results in such a Change of
Control, or a tender or exchange offer or proxy contest is commenced that
ultimately results in an event described in Section 2(b) or 2(e).

	3.	 	Termination Following a Change in Control. If a Change in Control shall
have occurred, you shall be entitled to the benefits provided in Section 4
hereof upon any termination of your employment or consulting arrangement
within 12 months following the Change in Control unless such termination
is (A) because of your death, (B) by the Company for Cause (as defined
below) or (C) if any employee, by you other than for Good Reason (as
defined below).

     (a) Cause. Termination by the Company of your employment or
consulting arrangement for “Cause” shall mean termination upon:

     (i) Your conviction of or plea of guilty or nolo contendere to
a felony resulting from conduct occurring on or after the date of
the Change of Control;

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     (ii) Your incurable breach of any material element of any
proprietary or confidential information agreement with the Company;

     (iii) Your conduct that is materially detrimental to Company’s
business reputation or goodwill;

     (iv) Any dishonesty in dealing between you and the Company or
between you and Company’s vendors, advisors, other employees, or
customers;

     (v) Your active use of alcohol or controlled substances in a
manner which impairs your ability to perform your duties;

     (vi) Your violation of any material portion of this Agreement;

     (vii) Your failure to substantially perform your material
duties, which failure is not cured within thirty (30) days after
your receipt of written notice from the Company specifying the
non-performance.

     (b) Good Reason. Termination by you of your employment for “Good
Reason” shall mean termination within 12 months following a Change in
Control upon the occurrence of any one or more of the following:

     (i) the assignment to you of any duties inconsistent in any
respect with your position (including status, offices, titles, and
reporting requirements), authorities, duties, or other
responsibilities as in effect immediately prior to the Change in
Control or any other action of the Company which results in a
diminishment in such position, authority, duties, or
responsibilities, other than an insubstantial and inadvertent
action which is remedied by the Company promptly after receipt of
notice thereof given by you;

     (ii) a reduction by the Company in your base salary as in
effect on the date hereof and as the same shall be increased from
time to time hereafter;

     (iii) the Company’s requiring you to be based at a location in
excess of thirty (30) miles from the location of your principal
office immediately prior to the Change in Control;

     (iv) the failure by the Company to (a) continue in effect any
material compensation or benefit plan, program, policy or practice
in which you were participating at the time of the Change in
Control or (b) provide you with compensation and benefits at least
equal (in terms of benefit levels and/or reward opportunities) to
those provided for under each employee benefit plan, program,
policy and practice as in effect immediately prior to the Change in
Control (or as in effect following the Change in Control, if
greater); and

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     (v) any purported termination by the Company of your
employment that is not effected pursuant to a Notice of Termination
(as defined below).

Your right to terminate your employment pursuant to this Subsection shall not
be affected by your incapacity due to physical or mental illness. Your
continued employment shall not constitute consent to, or a waiver of rights
with respect to, any circumstance constituting Good Reason hereunder.
Termination by you of your employment for Good Reason as defined in this
Subsection 3(b) shall constitute termination for Good Reason for all purposes
of this Agreement.

     (c) Notice of Termination. Any purported termination of your
employment or consulting arrangement by the Company or by you (other than
by reason of your death) within 12 months following the month in which a
Change in Control occurs, shall be communicated by Notice of Termination
to the other party hereto in accordance with Section 8 hereof. Failure
by you to provide Notice of Termination shall not limit any of your
rights under this Agreement except to the extent the Company can
demonstrate that it suffered actual damages by reason of such failure.
For purposes of this Agreement, a “Notice of Termination” shall mean a
written notice which shall indicate the specific termination provision in
this Agreement relied upon and the Date of Termination (as defined below)
and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of your employment under the
provision so indicated.

     (d) Date of Termination. “Date of Termination” shall mean the date
specified in the Notice of Termination (except in the case of your death,
in which case Date of Termination shall be the date of death); provided,
however, that if your employment or consulting arrangement is terminated
by the Company other than for Cause, the date specified in the Notice of
Termination shall be at least 60 days from the date the Notice of
Termination is given to you and if your employment is terminated by you
for Good Reason, the date specified in the Notice of Termination shall
not be more than 60 days from the date the Notice of Termination is given
to the Company.

     (e) Termination Prior to a Change in Control. Any termination of
your employment or consulting arrangement by the Company without Cause
prior to a Change in Control which occurs at the request or insistence of
any person (other than the Company) related to the Change in Control
shall be deemed to have occurred after the Change in Control for purposes
of this Agreement.

	4.	 	Compensation Upon Termination. Subject to paragraph 5 of this Agreement,
following a Change in Control, upon termination of your employment or
consulting arrangement during the term of this Agreement you shall be
entitled to the following benefits:

     (a) If your employment by the Company shall be terminated (y) by the
Company for any reason other than Cause, or (z) by you for Good Reason,
or if your consulting arrangement shall be terminated by the Company for
any reason other than Cause you shall be entitled to the benefits
provided below:

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     (i) the Company shall pay you your full base salary or
consulting fees through the Date of Termination at the rate in
effect at the time Notice of Termination is given;

     (ii) the Company will pay as severance benefits to you a
severance payment equal to the sum of (i) 36 months of your annual
base salary or annual base consulting fees in effect at the time
Notice of Termination is given or immediately prior to the date of
the Change in Control, and (ii) any annual target bonus potential
available to you at the time Notice of Termination is given, with
such amount payable at the Company’s option in a lump sum or in
installment payments over a period not longer than 36 months; and

     (iii) for a 12-month period after the Date of Termination
(which time period will coincide with the 18-month COBRA period
available to you, if applicable), the Company will arrange to
provide you either with welfare benefits (including life and health
insurance benefits), perquisites and other employee benefits of
substantially similar design and cost (to you) as the welfare
benefits, perquisites and other employee benefits available to you
immediately prior to the Notice of Termination or the Company will
pay you an amount equal to the Company’s share of the cost of such
programs in effect at the time of Termination; but benefits
otherwise receivable by you pursuant to this Subsection (a)(iii)
shall be discontinued if you obtain full time employment providing
welfare benefits during the 12-month period following the Date of
Termination.

     (b) The payment provided for in Section 4(a)(i) and at least the
first payment provided for in Section 4(a)(ii) above shall be made not
later than 60 days following the Date of Termination; provided, however,
that if the amounts of such payments cannot be finally determined on or
before such day, the Company shall pay to you on such day an estimate as
determined in good faith by the Company of the minimum amount of such
payments and shall pay the remainder of such payments, with the exception
of scheduled installment payments, as soon as the amount thereof can be
determined but in no event later than 75 days after the Date of
Termination.

In the event that the amount of the estimated payment exceeds the amount
subsequently determined to have been due, such excess shall constitute a
loan by the Company to you payable no later than 30 days after demand by
the Company.

     (c) The Company shall also pay to you any legal fees and expenses
incurred by you (A) as a result of successful litigation against the
Company for nonpayment of any benefit hereunder or (B) in connection with
any dispute with any federal, state or local governmental agency with
respect to benefits claimed under this Agreement. If you utilize
arbitration to resolve any such dispute, the Company will pay any legal
fees and expenses incurred by you in connection therewith.

     (d) You shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise,
nor shall the amount of

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any payment provided for in this Section 4 be reduced by any compensation
earned by you as the result of employment by another employer after the
Date of Termination, or otherwise, except as set forth in Section
4(a)(iii) hereof.

	5.	 	(a) Release of Claims. Payment of any severance payments under the terms
of this Agreement are conditioned on you signing a full and final release
of all claims against the Company, prepared at the direction of the
Company.
	 
		 	(b) Limitation on Payments. You shall not be entitled to receive any
Change of Control Payments, as defined below, which would constitute a
“parachute payment” for purposes of Code Section 280G, or any successor
provision, and the regulations thereunder. In the event any Change of
Control Payments payable to you would constitute a “parachute payment,”
you shall have the right to designate those Change of Control Payments
which will be reduced or eliminated so that you will not receive a
“parachute payment.” For purposes of this Section 5(b), a “Change of
Control Payment” shall mean any payment, benefit or transfer of property
in the nature of compensation paid to or for your benefit under any
arrangement which is considered contingent on a Change of Control for
purposes of Code Section 280G, including, without limitation, any and all
of the Company’s salary, bonus, incentive, restricted stock, stock
option, compensation or benefit plans, programs or other arrangements,
and shall include benefits payable under this Agreement.

	6.	 	Nonexclusivity of Rights. Nothing in this Agreement shall prevent or
limit your continuing or future participation in any benefit, bonus,
incentive, retirement or other plan or program provided by the Company and
for which you may qualify, nor shall anything herein limit or reduce such
rights as you may have under any other agreement with, or plan, program,
policy or practice of, the Company. Amounts which are vested benefits or
which you are otherwise entitled to receive under any agreement with, or
plan, program, policy or practice of, the Company (including, without
limitation, the cash out of unused vacation days upon termination of
employment) shall be payable in accordance with such agreement, plan,
program, policy or practice, except as explicitly modified by this
Agreement.

	7.	 	Successors and Assigns. This Agreement shall inure to the benefit of and
be enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and legatees.
If you should die while any amount would still be payable to you hereunder
if you had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to
your devisee, legatee or other designee or, if theme is no such designee,
to your estate or, if no estate, in accordance with applicable law.

	8.	 	Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United
States registered mail, postage prepaid, addressed to the other party as
follows:

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               If to the Company, to:

	 
	CABG Medical, Inc.

	Attention: Corporate Secretary

	14505
21st Avenue North, Suite 212

	Minneapolis, Minnesota 55447

               If to you, to:

	 
	Mr. Manuel A. Villafaña

	P.O. Box 47946

	Minneapolis, MN 55447

	 	 	Either party to this Agreement may change its address for purposes of
this Section 8 by giving 15 days’ prior notice to the other party hereto.
	 
	9.	 	Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in
writing and signed by you and such officer as may be specifically
designated by the Board. The validity, interpretation, construction, and
performance of this Agreement shall be governed by the laws of the State
of Minnesota.
	 
	10.	 	Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
	 
	11.	 	Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together
will constitute one and the same instrument.
	 
	12.	 	Arbitration. If you so elect, any dispute or controversy arising under
or in connection with this Agreement shall be settled exclusively by
arbitration in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator’s
award in any court having jurisdiction; provided, however, that you shall
be entitled to seek specific performance of your right to be paid until
the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement. If you do not elect
arbitration, you may pursue any and all legal remedies available to you.
	 
	13.	 	Effective Date. This Agreement shall become effective as of the date set
forth above.
	 
	14.	 	Employment. This Agreement does not constitute a contract of employment
or impose on the Company any obligation to retain you as an employee or a
consultant, to continue your current employment status or consultant
status or to change any employment policies of the Company. For
employees, unless otherwise indicated in a separate

7

 

		 	    Employment Agreement, you remain at all times an at-will employee as
described in such agreement.

       If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter which
will then constitute our agreement on this subject.

Sincerely,

CABG MEDICAL, INC.

	 	 	 
	By

	 	/s/ Manuel A. Villafaña
	

	 	
 
	

	 	Name
	

	 	Title Chairman & CEO

Agreed to this 18 day of June, 2003

	 	 	 
	By

	 	/s/ Manuel A. Villafaña
	

	 	
 
	

	 	Name

8

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