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                                                                   EXHIBIT 10.23

                              EMPLOYMENT AGREEMENT


         THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of the 14th
day of March 2005, by and between James J. Herrmann ("Employee") and THIRD WAVE
TECHNOLOGIES, INC., a Delaware corporation (the "Company").

         WHEREAS, the Company desires to employ Employee as its Vice President,
Finance and Principal Financial Officer and Employee desires to accept such
employment pursuant to the terms and conditions set forth in this Agreement.

         NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth, and other good and valuable consideration, receipt of
which is hereby acknowledged, the parties agree as follows:

         1. Employment. The Company hereby agrees to employ Employee as its Vice
President, Finance and Principal Financial Officer and Employee hereby agrees to
serve the Company in such position, all subject to the terms and provisions of
this Agreement. Employee agrees (a) to devote his full-time professional
efforts, attention and energies to the business of the Company, and (b) to
perform such reasonable responsibilities and duties customarily attendant to the
position of Vice President, Finance and Principal Financial Officer. Nothing in
this Agreement will prevent Employee from engaging in additional activities in
connection with (i) serving on corporate, civic and charitable boards and
committees, (ii) delivering lectures and fulfilling speaking engagements, (iii)
managing personal investments; and (iv) engaging in charitable activities and
community affairs.

         2. Term of Employment. Employee's employment will continue until
terminated as provided in Section 6 below (the "Employment Term").

         3. Compensation. During the Employment Term, Employee shall receive the
following compensation.

                  3.1 Base Salary. Employee's annual base salary on the date of
         this Agreement is $190,000, payable in accordance with the normal
         payroll practices of the Company ("Base Salary"). Employee's Base
         Salary will be subject to annual review by the Compensation Committee
         and the Board of Directors of the Company. During the Employment Term,
         on each anniversary date of this Agreement, the Company shall review
         the Base Salary amount to determine any increases. In no event shall
         the Base Salary be less than the Base Salary amount for the immediately
         preceding twelve (12) month period other than as permitted in Section
         6.1(c) hereunder.

                  3.2 Annual Bonus Compensation. Employee shall be eligible to
         receive an annual cash bonus as determined by the Company's CEO and
         approved by the Compensation Committee in its sole discretion each
         calendar year. Employee's target annual bonus percentage that he is
         eligible to earn for each calendar year shall be thirty-five percent
         (35%) of his Base Salary as of January 1 of the applicable new calendar
         year. Any such bonus shall be based upon the compensation principles of
         the Company in effect at the time the CEO determines and the
         Compensation Committee approves the amount of any bonus to be awarded,
         and except as set forth in Section 7 hereof, Employee shall not be
         entitled to receive an annual bonus for any calendar year (including
         the bonus referenced above) unless he remains employed with the Company
         through December 31 of the applicable calendar year; provided, however,
         that if Employee is terminated with Cause or resigns without Good
         Reason, no bonus will be due.



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                  3.3 Long Term Incentive Plan. Employee shall participate in
         the Company's Long Term Incentive Plans ("LTIP") and shall be deemed a
         "Tier 1 Employee" thereunder. Employee's benefits under the LTIP shall
         be determined pursuant to the terms of the LTIP, and such benefits may
         not be terminated or diminished without the written consent of the
         Employee.

                  3.4 Equity Incentives and Other Long Term Compensation. The
         Company, upon the approval of the Compensation Committee, may grant
         Employee from time to time options to purchase shares of the Company's
         common stock, or other forms of equity, both as a reward for past
         individual and corporate performance, and as an incentive for future
         performance. Such options, if awarded, will be pursuant to the
         Company's then current stock option plan. All options granted to
         Employee shall vest in equal installments over the four-year period
         commencing with the date of grant of such options, subject to the
         acceleration of vesting (i) as described in Section 7.1(d) and 7.2(b)
         hereof and (ii) as may be set forth in the option grant agreements
         issued by the Company, as amended, provided, that in the event of a
         conflict between any option grant agreement and this Agreement, this
         Agreement shall control.

         4. Benefits.

                  4.1 Benefits. Employee will be entitled to participate in the
         sick leave, insurance (including medical, life and long-term
         disability), profit-sharing, retirement, and other benefit programs
         that are generally provided to employees of the Company similarly
         situated, all in accordance with the rules and policies of the Company
         as to such matters and the plans established therefore.

                  4.2 Vacation and Personal Time. The Company will provide
         Employee with four (4) weeks of paid vacation each calendar year
         Employee is employed by the Company, in accordance with Company policy.
         The foregoing vacation days shall be in addition to standard paid
         holiday days for employees of the Company.

                  4.3 Indemnification. To the fullest extent permitted by
         applicable law and as provided for in the Company's articles of
         incorporation and bylaws in effect as of the date of this Agreement,
         the Company will, during and after termination of employment, indemnify
         Employee (including providing advancement of expenses) for any
         judgments, fines, amounts paid in settlement and reasonable expenses,
         including attorneys' fees, incurred by Employee in connection with the
         defense of any lawsuit or other claim or investigation to which
         Employee is made, or threatened to be made, a party or witness by
         reason of being or having been an officer, director or employee of the
         Company or any of its subsidiaries or affiliates as defined under the
         Securities and Exchange Act of 1934 ("Affiliates") or a fiduciary of
         any of their benefit plans.

                  4.4 Liability Insurance. Both during and after termination
         (for any reason) of Employee's employment, the Company shall cause
         Employee to be covered under a directors and officers' liability
         insurance policy for his acts (or non-acts) as an officer or director
         of the Company or any of its Affiliates. Such policy shall be
         maintained by the Company, at its expense, in an amount and on terms
         (including the time period of coverage after the Employee's employment
         terminates) at least as favorable to the Employee as policies covering
         the Company's Board of Directors.



                                       2

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         5. Business Expenses. Upon submission of a satisfactory accounting by
Employee, consistent with current policies of the Company, the Company will
reimburse Employee for any out-of-pocket expenses reasonably incurred by
Employee in the furtherance of the business of the Company.

         6. Termination.

                  6.1 By Employee.

                           (a) Without Good Reason. Employee may terminate his
                  employment pursuant to this Agreement at any time without Good
                  Reason (as defined below) with at least ten (10) business
                  days' written notice (the "Employee Notice Period") to the
                  Company. Upon termination by Employee under this section, the
                  Company may, in its sole discretion and at any time during the
                  Employee Notice Period, suspend Employee's duties for the
                  remainder of the Employee Notice Period, as long as the
                  Company continues to pay compensation to Employee, including
                  benefits, throughout the Employee Notice Period.

                           (b) With Good Reason. Employee may terminate his
                  employment pursuant to this Agreement with Good Reason (as
                  defined below) at any time within ninety (90) days after the
                  occurrence of an event constituting Good Reason.

                           (c) Good Reason. "Good Reason" shall mean any of the
                  following: (i) Employee's Base Salary is reduced in a manner
                  that is not applied proportionately to other senior executive
                  officers of the Company, provided any such reduction shall not
                  exceed thirty percent (30%) of Employee's then current Base
                  Salary; (ii) Employee's duties, authority or responsibilities
                  are materially reduced or are materially inconsistent with the
                  scope of authority, duties and responsibilities of Employee's
                  position; or (iii) the occurrence of a material breach by the
                  Company of any of its obligations to Employee under this
                  Agreement.

                  6.2. By the Company.

                           (a) With Cause. The Company may terminate Employee's
                  employment pursuant to this Agreement for Cause, as defined
                  below, immediately upon written notice to Employee.

                           (b) Cause. "Cause" shall mean any of the following:

                                    (i) any willful refusal to perform essential
                                    job duties which continues for more than ten
                                    (10) days after notice from the Company;

                                    (ii) any intentional act of fraud or
                                    embezzlement by the Employee in connection
                                    with the Employee's duties or committed in
                                    the course of Employee's employment;

                                    (iii) any gross negligence or willful
                                    misconduct of the Employee with regard to
                                    the Company or any of its subsidiaries
                                    resulting in a material economic loss to the
                                    Company;

                                    (iv) the Participant is convicted of a
                                    felony;


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                                    (v) the Participant is convicted of a
                                    misdemeanor the circumstances of which
                                    involve fraud, dishonesty or moral turpitude
                                    and which is substantially related to the
                                    circumstances of Participant's job with the
                                    Company;

                                    (iv) any willful and material violation by
                                    the Employee of any statutory or common law
                                    duty of loyalty to the Company or any of its
                                    subsidiaries resulting in a material
                                    economic loss; or

                                    (v) any material breach by the Employee of
                                    this Agreement or any of the Agreements
                                    referenced in Section 8 of this Agreement.

                           (c) Without Cause. Subject to Section 7.1, the
                  Company may terminate Employee's employment pursuant to this
                  Agreement without Cause upon at least thirty days' written
                  notice ("Company Notice Period") to Employee. Upon any
                  termination by the Company under this Section 6.2(c), the
                  Company may, in its sole discretion and at any time during the
                  Company Notice Period, suspend Employee's duties for the
                  remainder of the Company Notice Period, as long as the Company
                  continues to pay compensation to Employee, including benefits,
                  throughout the Company Notice Period.

                  6.3 Death or Disability. Notwithstanding Section 2, in the
         event of the death or Disability (defined herein) of Employee during
         the Employment Term, Employee's employment and this Agreement shall
         immediately and automatically terminate and the Company shall pay
         Employee (or in the case of death, Employee's designated beneficiary)
         Base Salary, accrued, unpaid bonuses, in each case up to the date of
         termination. Neither Employee, his beneficiary nor estate shall be
         entitled to any severance benefits set forth in Section 7 if terminated
         pursuant to this section. For purposes of this Agreement, "Disability"
         shall mean any physical incapacity or mental incompetence as a result
         of which Employee is unable to perform the essential functions of his
         job for an aggregate of more than six (6) months during any
         twelve-month period. Employee acknowledges and agrees that given the
         nature of Employee's position with the Company it would cause the
         Company to suffer an undue hardship if required to retain Employee
         beyond the six (6) month period if Employee remains unable to perform
         the essential functions of his job, with or without a reasonable
         accommodation.

                  6.4 Survival. The agreement described in Section 8 hereof and
         attached hereto as Schedule A shall survive the termination of this
         Agreement.

         7. Severance and Other Rights Relating to Termination and Change of
Control.

                  7.1 Termination of Agreement Pursuant to Section 6.1(b) or
         6.2(c). If the Employee terminates his employment for Good Reason
         pursuant to Section 6.1(b), or the Company terminates Employee's
         employment without Cause pursuant to Section 6.2(c), subject to the
         conditions described in Section 7.3 below, the Company will provide
         Employee the following payments and other benefits:


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                           (a) The Company shall immediately pay to Employee a
                  lump-sum amount equal to the sum of (i) twelve (12) months of
                  Employee's then current Base Salary, (ii) any accrued but
                  unpaid Base Salary as of the termination date; and (iii) shall
                  pay Employee any accrued but unpaid bonus as of the
                  termination date, on the same terms and at the same times as
                  would have applied had Employee's employment not terminated;
                  provided, that, if such termination occurs on or within the
                  one year period following a Change of Control (as defined in
                  Section 7.2(a)), the Company shall also pay to Employee a pro
                  rata portion of his target bonus.

                           (b) If Employee elects COBRA coverage for health
                  and/or dental insurance in a timely manner, the Company shall
                  pay the monthly premium payments for such timely elected
                  coverage when each premium is due until the earlier of: (i)
                  twelve months from the date of termination; (ii) the date
                  Employee obtains new employment which offers health and/or
                  dental insurance that is reasonably comparable to that offered
                  by the Company; or (iii) the date COBRA continuation coverage
                  would otherwise terminate in accordance with the provisions of
                  COBRA. Thereafter, health and dental insurance coverage shall
                  be continued only to the extent required by COBRA and only to
                  the extent Employee timely pays the premium payments himself.

                           (c) The Company shall provide Employee an
                  outplacement consulting package up to a maximum value of Ten
                  Thousand Dollars ($10,000), which shall be selected at the
                  sole discretion of the Employee. Any payments made for such
                  outplacement consulting shall be made by the Company directly
                  to the consulting company.

                           (d) Employee will receive any awards under the LTIP
                  that are earned (as defined in any LTIP document), whether
                  vested or unvested, as of the termination date, on terms and
                  at the times set forth in the LTIP.

                           (e) Fifty percent (50%) percent of stock options
                  granted to Employee shall immediately become fully vested and
                  exercisable upon such termination or resignation. Executive
                  will be entitled to exercise such stock options in accordance
                  with Section 7.7.


                  7.2 Change of Control. The Board of Directors of the Company
         has determined that it is in the best interests of the Company and its
         stockholders to assure that the Company will have the continued
         dedication of the Employee, notwithstanding the possibility, threat or
         occurrence of a Change of Control (defined in Section 7.2(a) below).
         The Board believes it is imperative to diminish the inevitable
         distraction of the Employee by virtue of the personal uncertainties and
         risks created by a pending or threatened Change of Control and to
         encourage the Employee's full attention and dedication to the Company
         currently and in the event of any threatened or pending Change of
         Control, and to provide the Employee with compensation and benefits
         arrangements upon a Change of Control which ensure that the
         compensation and benefits expectations of the Employee will be
         satisfied and which are competitive with those of other
         similarly-situated companies. Therefore, in order to accomplish these
         objectives, the Board has caused the Company to include the provisions
         set forth in this Section 7.2.

                           (a) Change of Control. "Change of Control" shall
                  mean, and shall be deemed to have occurred if, on or after the
                  date of this Agreement, (i) any "person" (as such term is used
                  in Sections 13(d) and 14(d) of the Securities Exchange Act of
                  1934, as amended)



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                  or group acting in concert, other than a trustee or other
                  fiduciary holding securities under an employee benefit plan of
                  the Company acting in such capacity or a corporation owned
                  directly or indirectly by the stockholders of the Company in
                  substantially the same proportions as their ownership of stock
                  of the Company, becomes the "beneficial owner" (as defined in
                  Rule 13d-3 under said Act), directly or indirectly, of
                  securities of the Company representing more than 50% of the
                  total voting power represented by the Company's then
                  outstanding Voting Securities, (ii) during any period of two
                  consecutive years, individuals who at the beginning of such
                  period constitute the Board of Directors of the Company and
                  any new director whose election by the Board of Directors or
                  nomination for election by the Company's stockholders was
                  approved by a vote of at least two thirds (2/3) of the
                  directors then still in office who either were directors at
                  the beginning of the period or whose election or nomination
                  for election was previously so approved, cease for any reason
                  to constitute a majority thereof, (iii) the stockholders of
                  the Company approve a merger or consolidation of the Company
                  with any other corporation other than a merger or
                  consolidation which would result in the Voting Securities of
                  the Company outstanding immediately prior thereto continuing
                  to represent (either by remaining outstanding or by being
                  converted into Voting Securities of the surviving entity) at
                  least 80% of the total voting power represented by the Voting
                  Securities of the Company or such surviving entity outstanding
                  immediately after such merger or consolidation, or (iv) the
                  stockholders of the Company approve a plan of complete
                  liquidation of the Company or an agreement for the sale or
                  disposition by the Company of (in one transaction or a series
                  of related transactions) all or substantially all of the
                  Company's assets.

                           (b) Acceleration of Vesting of Stock Options. Vesting
                  of stock options granted to Employee shall be accelerated upon
                  any Change of Control to the extent set forth in the
                  applicable stock option agreement(s) between the Company and
                  Employee. Employee will be entitled to exercise such stock
                  options in accordance with such option agreements.

                           (c) LTIP Awards. Any awards granted to Employee under
                  the LTIP as of the Change of Control shall be treated as
                  described in the LTIP.

                           (d) If, within six (6) months before or after the
                  effective date of a Change of Control, the Employee terminates
                  his employment for Good Reason pursuant to Section 6.1(b) or
                  the Company terminates Employee's employment without Cause
                  pursuant to Section 6.2(c), subject to the conditions
                  described in Section 7.3 below, the termination shall be
                  treated for purposes of Section 7.2(b) and (c) as if it
                  occurred on the effective date of the Change of Control.

                           (e) Payments and benefits that trigger Sections 280G
                  and 4999 of the Internal Revenue Code of 1986, as amended,
                  will be reduced to the extent necessary so that no excise tax
                  would be imposed if doing so would result in the employee
                  retaining a larger after-tax amount, taking into account the
                  income, excise and employment taxes imposed on the payments
                  and benefits.

                  7.3 Conditions Precedent to Payment of Severance. The
         Company's obligations to Employee described in Sections 7.1 and 7.2 are
         contingent on Employee's delivery to the Company of his signed waiver
         and release, in the form attached hereto as Exhibit 7.3, of all claims
         he may have against the Company up to the date of the termination of
         his employment


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         with the Company, and (if applicable) his not revoking such release.
         Moreover, the Employee's rights to receive payments and benefits
         pursuant to Sections 7.1 and 7.2 are conditioned on the Employee's
         ongoing compliance with his obligations as described in Section 8
         hereof. Any cessation by the Company of any such payments and benefits
         shall be in addition to, and not in lieu of, any and all other remedies
         available to the Company for Employee's breach of his obligations
         described in Section 8 hereof.

                  7.4 No Severance Benefits. Employee is not entitled to any
         severance benefits if this Agreement is terminated pursuant to Sections
         6.1(a) or 6.2(a) of this Agreement; provided however, Employee shall be
         entitled to (i) Base Salary prorated through the effective date of such
         termination; (ii) Bonuses for which the payment date occurs prior to
         the effective date of such termination; and (iii) medical coverage and
         other benefits required by law and plans (as provided in Section 7.6,
         below).
..
                  7.5 Benefits Required by Law and Plans; Vacation Time Pay. In
         the event of the termination of Employee's employment, Employee will be
         entitled to medical and other insurance coverage, if any, as is
         required by law and, to the extent not inconsistent with this
         Agreement, to receive such additional benefits as Employee may be
         entitled under the express terms of applicable benefit plans (other
         than bonus or severance plans) of the Company, its subsidiaries and
         Affiliates.

                  7.6 Exercise Period of Stock Options after Termination. Unless
         it would subject the employee to adverse tax consequences under Section
         885 of the recently enacted American Jobs Creation Act of 2004, Pub.
         Law No. 108-357, 118 Stat. 1418 (the Act), added ss. 409A to the
         Internal Revenue Code (Code), notwithstanding anything contained herein
         or in the option grant agreements to the contrary, in the event of
         Employee's termination after his first anniversary with the Company,
         Employee's vested stock options shall be open for exercise until the
         earlier of (i) two years from the date of termination or (ii) the
         latest date on which those options expire or are eligible to be
         exercised under the option grant agreements, determined without regard
         to such termination or resignation; provided further that such extended
         exercise period shall not apply in the event the Employee resigns
         without Good Reason or is terminated by the Company for Cause, in which
         case, the exercise periods shall continue to be governed by the terms
         of the option grant agreements.


         8. Restrictions.

                  8.1 The Confidential Information Agreement. Simultaneously
         with the execution of this Agreement, Employee will sign the Employee
         Agreement with Respect to Confidential Information, Invention
         Assignment and Arbitration attached hereto as Schedule A (the
         "Confidential Information Agreement").

                  8.2 Agreement Not to Compete. In consideration for all of the
         payments and benefits that may become due to Employee under this
         Agreement, Employee agrees that for a period of twelve (12) months
         after termination of his employment for any reason, he will not,
         directly or indirectly, without the Company's prior written consent,
         (a) perform for a Competing Entity in any Restricted Area any of the
         same services or substantially the same services that he performed for
         the Company; (b) in any Restricted Area, advise, assist, participate
         in, perform services for, or


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         consult with a Competing Entity regarding the management, operations,
         business or financial strategy, marketing or sales functions or
         products of the Competing Entity (the activities in clauses (a) and (b)
         collectively are, the "Restricted Activities"); or (c) solicit or
         divert the business of any Restricted Customer. Employee acknowledges
         that in his position with the Company he has had and will have access
         to knowledge of confidential information about all aspects of the
         Company that would be of significant value to the Company's
         competitors.

                  8.3 Additional Definitions.

                           (a) Customer. "Customer" means any individual or
                  entity for whom the Company has provided services or products
                  or made a proposal to perform services or provide products.

                           (b) Restricted Customer. "Restricted Customer" means
                  any Customer with whom/which Employee had contact on behalf of
                  the Company during the 12 months preceding the end, for
                  whatever reason, of his employment.

                           (c) Competing Entity. "Competing Entity" means any
                  business entity engaged in the development, design,
                  manufacture, marketing, distribution or sale of molecular
                  diagnostics.

                           (d) Restricted Area. "Restricted Area" means any
                  geographic location where if Employee were to perform any
                  Restricted Activities for a Competing Entity in such a
                  location, the effect of such performance would be competitive
                  to the Company.

                  8.4 Reasonable Restrictions on Competition Are Necessary.
         Employee acknowledges that reasonable restrictions on competition are
         necessary to protect the interests of the Company. Employee also
         acknowledges that he has certain skills necessary to the success of the
         Company, and that the Company has provided and will provide to him
         certain confidential information that it would not otherwise provide
         because he has agreed not to compete with the business of the Company
         as set forth in this Agreement.

                  8.5 Restrictions Against Solicitations. Employee further
         covenants and agrees that during Employee's employment by the Company
         and for a period of twelve months following the termination of his
         employment with the Company for any reason, he will not, except with
         the prior consent of the Company's Chief Executive Officer, directly or
         indirectly, solicit or hire, or encourage the solicitation or hiring
         of, any person who is an employee of the Company for any position as an
         employee, independent contractor, consultant or otherwise, provided
         that the foregoing shall not prevent Employee from serving as a
         reference.

                  8.6 Affiliates. For purposes of this Section 8, the term
         "Company" will be deemed to include the Company and its Affiliates.

                  8.7 Ability to Obtain Other Employment. Employee hereby
         represents that his experience and capabilities are such that in the
         event his employment with the Company is terminated, he will be able to
         obtain employment if he so chooses during the period of non-competition
         following the termination of employment described above without
         violating the terms of this Agreement, and that the enforcement of this
         Agreement by injunction, as described below, will not prevent him from
         becoming so employed.




                                       8
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                  8.8 Injunctive Relief. Employee understands and agrees that if
         he violates any provision of this Section 8, then in any suit that the
         Company may bring for that violation, an order may be made enjoining
         him from such violation, and an order to that effect may be made
         pending litigation or as a final determination of the litigation.
         Employee further agrees that the Company's application for an
         injunction will be without prejudice to any other right of action that
         may accrue to the Company by reason of the breach of this Section 8.

                  8.9 Section 8 Survives Termination. The provisions of this
         Section 8 will survive termination of this Agreement.

                  8.10 Condition of Payments. The provisions of this Section 8
         regarding the restrictions on Employee shall be conditioned on Company
         making the payments to Employee as contemplated by Section 7.1 above.
         If Employee is terminated due to a disability pursuant to Section 6.3
         or if Employee voluntarily resigns without Good Reason, in which case
         Employee will not be eligible to receive the severance payments set
         forth in Section 7.1, Employee shall not be bound by the agreement not
         to compete in Section 8.2. Employee, will, however, remain bound at all
         times by the Confidential Information Agreement and the restriction on
         solicitation in Section 8.5.

         9. Arbitration. Unless other arrangements are agreed to by Employee and
the Company, any disputes arising under or in connection with this Agreement,
other than a dispute in which the primary relief sought is an equitable remedy
such as an injunction, will be resolved by binding arbitration to be conducted
pursuant to the Agreement for Arbitration Procedure of Certain Employment
Disputes attached as Schedule B hereof.

         10. Assignments; Transfers; Effect of Merger. No rights or obligations
of the Company under this Agreement may be assigned or transferred by the
Company except that such rights or obligations may be assigned or transferred
pursuant to a merger or consolidation, or pursuant to the sale or transfer of
all or substantially all of the assets of the Company, provided that the
assignee or transferee is the successor to all or substantially all of the
assets of the Company. This Agreement will not be terminated by any merger,
consolidation or transfer of assets of the Company referred to above. In the
event of any such merger, consolidation or transfer of assets, the provisions of
this Agreement will be binding upon the surviving or resulting corporation or
the person or entity to which such assets are transferred. The Company agrees
that concurrently with any merger, consolidation or transfer of assets referred
to above, it will cause any successor or transferee unconditionally to assume,
either contractually or as a matter of law, all of the obligations of the
Company hereunder in a writing promptly delivered to the Employee. This
Agreement will inure to the benefit of, and be enforceable by or against,
Employee or Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, designees and legatees. None of
Employee's rights or obligations under this Agreement may be assigned or
transferred by Employee other than Employee's rights to compensation and
benefits, which may be transferred only by will or operation of law. If Employee
should die while any amounts or benefits have been accrued by Employee but not
yet paid as of the date of Employee's death and which would be payable to
Employee hereunder had Employee continued to live, all such amounts and benefits
unless otherwise provided herein will be paid or provided in accordance with the
terms of this Agreement to such person or persons appointed in writing by
Employee to receive such amounts or, if no such person is so appointed, to
Employee's estate.

         11. No Set-off, No Mitigation Required. Except as expressly provided
otherwise in this Agreement, the obligation of the Company to make any payments
provided for hereunder and otherwise to perform its obligations hereunder will
not be affected by any set-off, counterclaim, recoupment,



                                        9
<PAGE>

defense or other claim, right or action which the Company may have against
Employee or others. In no event will Employee be obligated to seek other
employment or take other action by way of mitigation of the amounts payable to
Employee under any of the provisions of this Agreement, and such amounts will
not be reduced (except as otherwise specifically provided herein) whether or not
Employee obtains other employment.

         12. Taxes. The Company shall have the right to deduct from any payments
made pursuant to this Agreement any and all federal, state, and local taxes or
other amounts required by law to be withheld.

         13. Miscellaneous. No amendment, modification or waiver of any
provisions of this Agreement or consent to any departure thereof shall be
effective unless in writing signed by the party against whom it is sought to be
enforced. This Agreement contains the entire Agreement that exists between
Employee and the Company with respect to the subjects herein contained and
replaces and supercedes all prior agreements, oral or written, between the
Company and Employee with respect to the subjects herein contained. Nothing
herein shall affect any terms in the Confidential Information Agreement, the
Noncompetition Agreement, the LTIP, and any stock option plans or agreements
between Employee and the Company now and hereafter in effect from time to time.
If any provision of this Agreement is held for any reason to be unenforceable,
the remainder of this Agreement shall remain in full force and effect. Each
section is intended to be a severable and independent section within this
Agreement. The headings in this Agreement are intended solely for convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement. This Agreement is made in the State of Wisconsin and shall be
governed by and construed in accordance with the laws of said State. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument. All notices and all other communications provided for in this
Agreement shall be in writing and shall be considered duly given upon personal
delivery, delivery by nationally reputable overnight courier, or on the third
business day after mailing from within the United States by first class
certified or registered mail, return receipt requested, postage prepaid, all
addressed to the address set forth below each party's signature. Any party may
change its address by furnishing notice of its new address to the other party in
writing in accordance herewith, except that any notice of change of address
shall be effective only upon receipt.




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<PAGE>

         The parties hereto have executed this Employment Agreement as of the
date first written above.

                                 /s/ James J. Herrman
                                 ---------------------------------------------
                                 James J. Herrman ("Employee")


                                 Notice Address:
                                 428 Hillside Avenue
                                 Elmhurst, IL  60126


                                 THIRD WAVE TECHNOLOGIES, INC. ("Company")


                                 By:      /s/ John J. Puisis
                                          ------------------------------------
                                          John J. Puisis, President and CEO

                                 Notice Address:
                                 502 South Rosa Road
                                 Madison, Wisconsin 53719-1256
                                 Attn:  Chief Executive Officer




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