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                             EMPLOYMENT AGREEMENT


     THIS EMPLOYMENT AGREEMENT (the "Agreement") effective as of December 12, 
1997, is by and between Brimfield Precision, Inc., a Massachusetts 
corporation, with its offices located at 68 Mill Lane Rd., Brimfield, 
Massachusetts 01010 (the "Company"), and William G. Lyons (the "Employee"), 
an individual whose residence is __________________________________.

     This Agreement is entered into in connection with the sale of all the 
stock of the Company by Employee and his brother to Image Guided 
Technologies, Inc. ("IGT").  Employee understands and acknowledges that IGT 
would not have acquired the stock of the Company without this Agreement, 
including, without limitation, its covenant not to compete.

1.             EMPLOYMENT AND ACCEPTANCE OF EMPLOYMENT TERMS.  Upon and 
subject to the terms and conditions set forth herein, the Company hereby 
employs the Employee as its President and in such additional management 
position(s) as the Board of Directors of the Company (the "Board") may 
determine from time to time, and the Employee hereby agrees to accept such 
employment, for a period of one year (unless sooner terminated as hereinafter 
set forth) commencing on the date hereof and ending one year thereafter (the 
"Term").

1.             DUTIES.  The Employee agrees, during the Term to devote his 
entire business time, attention, and energies exclusively to the business of 
the Company as shall be required to perform the duties of the position 
specified in Section 1 (except with respect to advisory services to 
Blackstone Medical and other incidental business and community 
responsibilities), and to conform to the rules, regulations, instructions, 
personnel practices and policies of the Company, as existing and amended from 
time to time by the Company.

1.             COMPENSATION.

(a)                 SALARY.  In consideration of the Employee's performance of
services hereunder, the Company will pay to the Employee, during the Term of
the Employee's employment, and the Employee agrees to accept from the Company
for his services, a salary (the "Salary") of $150,000 per annum during the
Term, payable in accordance with the Company's normal payroll practices
applicable to its executive officers but not less often than monthly.

(a)                 BENEFITS.  During the term of the Employee's employment
hereunder, the Employee shall be entitled to full health insurance in
accordance with the plan currently in place at the Company and to participate
in any other medical, pension, bonus, profit-sharing or similar plan or program
that may be established by the Company and made available to its officers and
key employees generally; provided that the Company shall not be required to
implement or continue any such other employee benefit program.
(b)                 PAID VACATIONS.  The Employee shall be entitled to an
annual paid vacation of five weeks at such times and for such periods as may be
mutually acceptable to the Company and the Employee, in accordance with the
Company's policies governing vacations for officers and key employees.  Unused
vacation shall not accumulate.

(a)                 PAID HOLIDAYS.  The Employee shall be entitled to paid
holidays, in accordance with the Company's policies governing holidays for
officers and key employees.

(a)                 DEDUCTIONS.  The Company shall have the right to deduct
from the Salary and all other cash amounts payable by the Company under the
provisions of this Agreement to the Employee or, if applicable, to his estate,
legal representatives or other beneficiary designated in writing by the
Employee (a 'Designee') all social security taxes, all federal, state and
municipal taxes and all other charges and deductions which now or hereafter are
imposed by law as charges on the compensation of the Employee or charges on
cash benefits payable by the Company hereunder to his estate, legal
representatives or Designee.


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1.             REIMBURSEMENT OF CERTAIN EXPENSES.  The Company shall reimburse
the Employee, upon production of accounts and vouchers or other reasonable
evidence of payment by the Employee, all in accordance with the Company's
regular procedures in effect, from time to time and in form suitable to
establish the validity and deductibility of such expenses for tax purposes, all
reasonable, ordinary and necessary travel, automobile and other expenses as
shall have been incurred by him in the performance of his duties hereunder.

1.             NON-COMPETITION.

(a)                 NON-COMPETITION.  During the term of the Employee's
employment with the Company and the two year period immediately following the
date on which the Employee's employment with the Company terminates (the
"Termination Date"), the Employee will not, directly or indirectly, engage in
or own or control an interest in (except as a passive investor owning less than
one (1%) percent of the equity securities of a publicly owned company), or act
as a director, officer or employee of, or consultant to, any individual,
partnership, joint venture, corporation or other business entity directly or
indirectly engaged in, the Business (as hereinafter defined) anywhere in the
world.  The time period during which the restrictions set forth in this Section
5(a) apply shall be extended by the length of time during which it is
judicially determined that the Employee has violated these restrictions in any
respect.  In the event any of the provisions of this Section 5(a) are
unenforceable by law, then the restrictions shall be for such period and such
geographic area as a court shall find is necessary to protect the goodwill and
business of the Company.  The provisions of this Section 5(a) shall no longer
be enforceable in the event the Company either files for bankruptcy or other
protection from creditors or ceases to operate as an ongoing business entity.

(a)                 BUSINESS.  The term "Business" as used in this Agreement
shall mean (i) healthcare product contract machining, (ii) any other business
in which the Company or IGT is engaged on the this date, and (iii) any other
business in which the Company or IGT is engaged or is actively planning to
become engaged on the Termination Date, and in connection with the planning of
which the Employee has had significant involvement.

(a)                 EMPLOYEE REPRESENTATION.  The Employee represents that he
is not now subject to any employment agreement nor has he previously, at any
time, entered into any written agreement with any person, firm or corporation
which would or could preclude or prevent him from entering into this Agreement
or which requires the consent of any other party, the employee agrees to
indemnify the Company and each of its officers, directors and controlling
persons against any loss, liability or expense (including reasonable counsel
fees) incurred by the Company or its officers, directors and controlling
persons arising out of or in connection with any knowing misrepresentation made
by the Employee hereunder.  Employee further represents that the Company does
not owe him any money, nor is it liable to him for any amount, other than his
salary and other employment related expenses due him in the ordinary course of
business.

1.             CONFIDENTIALITY.  The Employee acknowledges that his employment
by the Company brings him into close contact with many confidential affairs of
the Company and its collaborators, consultants and clients, including, without
limitation information about costs, profits, markets, sales, key personnel,
pricing policies, operational methods, concepts, and other business affairs and
methods of the Company and its collaborators, consultants and clients and other
information not readily available to the public, as well as plans for future
developments (collectively referred to hereinafter as "Proprietary
Information").  The Employee further acknowledges that the relationships
between the Company and its officers, employees, agents, consultants and
clients constitute a valuable asset of the Company.  In recognition of the
foregoing, the Employee covenants and agrees:

(a)                 That all Proprietary Information shall be the exclusive
property of the Company and that he will keep secret all Proprietary
Information and will not use it for his own benefit or disclose it to, or use
it for the benefit of, anyone outside of the Company, either during or after
his employment by the Company; and


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(a)                 That he will deliver promptly to the Company on termination
of his employment by the Company, or at any time the Board may so request, all
memoranda, notes, documentation, data listing, records, reports and other
tangible manifestations of the Proprietary Information (and all copies
thereof), that he may then possess or have under his control.

1.             NON-SOLICITATION.  The employee hereby covenants and agrees
that, for a period of two (2) years after the termination of his employment
hereunder, he will not induce or attempt to induce any officer, employee,
agent, consultant, or client of the Company to discontinue such affiliation
with the Company or to refrain from entering into new business relationships
with the Company.  The time period during which the prohibitions set forth
above apply shall be extended by the length of time during which it is
judicially determined that the Employee has violated any such prohibition in
any respect.

1.             SPECIFIC PERFORMANCE.  Without intending to limit the remedies
available to the Company, the Employee agrees that damages at law will be an
insufficient remedy to the Company in the event that the Employee violates the
terms of Section 5, 6 or 7 of this Agreement and that the Company may apply for
and obtain immediate injunctive relief in any court of competent jurisdiction
to restrain the breach or threatened breach of, or otherwise to specifically
enforce, any of the agreements and covenants contained in such Sections.  The
parties hereto understand that each of the agreements and covenants of the
Employee contained in Sections 5, 6 and 7 of this Agreement are essential
elements of this Agreement and agree that the obligations of the Employee
thereunder will survive the termination of this Agreement.

1.             TERMINATION.

(a)                 TERMINATION BY THE COMPANY FOR CAUSE.  The Company may
terminate this Agreement and its obligations to the Employee hereunder at any
time for "Cause", which shall mean only (i) the willful or reckless failure by
the Employee to perform his duties hereunder (other than a failure resulting
from the Employee's incapacity due to physical or mental illness), which
failure shall not have been cured within fifteen (15) days after the receipt by
the Employee of written notice thereof from the Board specifying with
reasonable particularity such alleged failure; (ii) the willful or reckless
violation by the Employee of Sections 5, 6 or 7 hereof, which violation shall
not have been cured within fifteen (15) days after the receipt by the Employee
of written notice thereof from the Board specifying with reasonable
particularity such alleged violation; (iii) the commission by the Employee of
an act of fraud or theft against the Company or any of its subsidiaries, or the
Employee's willful misfeasance or willful malfeasance in the performance of his
duties to the Company; or (iv) the conviction of the Employee of (or the plea
by the Employee of nolo contendere to) any felony.

(a)                 TERMINATION UPON DEATH OR DISABILITY OF EMPLOYEE.  This
Agreement shall terminate upon the disability (resulting from the Employee's
inability, due to physical or mental illness, to perform his duties hereunder
on a full-time basis for three consecutive months or an aggregate of 90 days)
or death of the Employee, in which event the Employee or his estate, legal
representatives or designee shall be entitled to receive, in full satisfaction
of all obligations due to the Employee by the Company hereunder, an amount
equal to one month's Salary.

(a)                 TERMINATION BY THE COMPANY WITHOUT CAUSE.  In the event the
Company terminates this Agreement without Cause, the Employee shall be entitled
to the following benefits:

(i)                      The Company shall continue to pay the Employee the
Employee's Salary for the remaining period of the Term; and

(i)                      The Company shall maintain in effect for the Employee
for the remaining period of the Term, at its sole expense and on terms of
participation substantially the same as those in effect prior to such
termination, all group insurance and all other employee benefit plans, programs
or arrangements, 


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in which the Employee was participating immediately prior to such termination 
except for any revenue sharing programs based on corporate performance.

(a)                 TERMINATION BY THE EMPLOYEE FOR CAUSE.  The Employee may
terminate his employment hereunder for cause.  Only the following shall
constitute "cause" for such termination: (i) failure of the Company to continue
the Employee in his then current position during the term of this Agreement;
(ii) a material change by the Company in the nature or scope of the Employee's
responsibilities, title, authorities, powers, functions or duties from the
responsibilities, title, authorities, powers, functions or duties normally
exercised by an executive in the then current position in the Company, or (iii)
a material breach by the Company of Section 3 hereof or of any other provision
of this Agreement; which failure, change or breach continues for more than
fifteen (15) days following written notice given by the Employee to the
Company, such written notice to set forth in reasonable detail the nature of
such failure, change or breach.  In such event the Company shall continue to
provide compensation and benefits in accordance with Sections 9(c)(i) and (ii).

1.             INDEMNIFICATION.  To the fullest extent permitted by law and in
addition to any other rights permitted or granted under the Company's articles
of incorporation, by-laws, or any agreement or policy of insurance, or by law,
the Company shall indemnify the Employee if the Employee is made a party, or
threatened to be made a party, to any threatened, pending or contemplated
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that the Employee is or was an employee,
officer or director of the Company or any subsidiary of the Company, in which
capacity the Employee is or was serving at the Company's request, against any
and all costs, losses, damages, judgments, liabilities and expenses (including
reasonable attorneys' fees) which may be suffered or incurred by him in
connection with any such action, suit or proceeding provided, however that,
there shall be no indemnification in relation to matters as to which the
Employee is adjudged to have been guilty of fraud, bad faith or gross
negligence or as a result of the Employee's material breach of this Agreement.

1.             IDEAS AND INVENTIONS.  Employee agrees to, and does hereby,
assign to the Company all of Employee's right, title and interest in and to any
and all ideas, concepts, know-how, techniques, processes, inventions,
discoveries, developments, works of authorship, innovations and improvements
("Inventions") conceived or made by Employee, prior to or during the term of
this Agreement, whether alone or with others, whether patentable or not, that
relate to or are connected with the Business.

1.             ENTIRE AGREEMENT AND WAIVER.  This Agreement is the entire
agreement between the parties with respect to the subject matter hereof and
supersedes any and all prior or contemporaneous oral and prior written
agreements and understandings.  There are no oral promises, conditions,
representations, understandings, interpretation or terms of any kind or
condition or inducements to the execution hereof or in effect among the
parties.  No custom or trade usage, nor course of conduct among the parties,
shall be relied upon to vary the terms hereof.  This Agreement may not be
amended, and no provision hereof shall be relied upon to vary the terms hereof.
This Agreement may not be amended, and no provision hereof shall be waived,
except by writing signed by all the parties to this Agreement, which states
that it is intended to amend or waive a provision of this Agreement.  Any
waiver of any rights or failure to act in a specific instance shall relate only
to such instance and shall not be construed as an agreement to waive any rights
or fail to act in any other instance, whether or not similar.

1.             SEVERALITY.  Should any provision of this Agreement be
unenforceable or prohibited by any applicable law, this Agreement shall be
considered divisible as to such provision which shall be inoperative, and the
remainder of this Agreement shall be valid and binding as though such provision
were not included herein.

1.             COUNTERPARTS.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original.  It shall not be
necessary when making proof of this Agreement to account for more than one
counterpart.


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1.             HEADINGS.  All headings in this Agreement are for convenience
only and shall not affect the meaning of any provision hereof.

1.             SUCCESSORS AND ASSIGNS.  This Agreement shall inure to the
benefit of, and be binding upon, the Company and any corporation with which the
Company merges or consolidates or to which the Company sells all or
substantially all of its assets, and upon the Employee and his executors,
administrators, heirs and legal representatives.  This Agreement may not be
assigned by the Employee.

1.             GOVERNING LAW.  This Agreement shall be construed and enforced
in accordance with the laws of the Commonwealth of Massachusetts, without
reference to the conflict of laws principles thereof.

1.             NOTICES.  All notices hereunder shall be in writing and shall be
sent to the parties at the following addresses:

          If to Company:

          Brimfield Precision, Inc.
          c/o Image Guided Technologies, Inc.
          5710-B Flatiron Parkway
          Boulder, CO 80301

          If to Employee:

          _____________________________
          _____________________________
          _____________________________

and shall be deemed received by the recipient when personally delivered or, if
mailed, three (3) days after the date of deposit in the United States Mail,
certified or registered, postage prepaid.  Either party hereto may change its
or his address for notices by notice to the other party as above provided.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.

COMPANY:                         EMPLOYEE:

Brimfield Precision, Inc.


By:                              /s/ William G.Lyons
   -----------------------       -------------------------------
                                 William G. Lyons