<PAGE>

                              EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT (hereinafter referred to as the "Agreement"), 
is made and entered as of the       day of                           1997, by 
and among JONATHAN KAGAN (hereinafter referred to as "Executive"), and 
COLORADO MEDTECH, INC., a Colorado corporation (hereinafter referred to as 
"Employer").

                              W I T N E S S E T H :

     WHEREAS, Employer desires to employ the Executive in an executive 
capacity with the Corporation on the terms hereinafter set forth, and the 
Executive desires to be so employed on such basis; and

     WHEREAS, the parties desire to establish the compensation and other 
benefits to be paid to the EXECUTIVE while he shall be in the employ of the 
Employer.

     NOW, THEREFORE, in consideration of the mutual promises contained in 
this Agreement, and for other good and valuable consideration, the receipt 
and sufficiency of which hereby is acknowledged, it is agreed as follows:

                                   EMPLOYMENT

     1.  TERM OF EMPLOYMENT.  Employer hereby agrees to employ Executive, and 
Executive hereby accepts such employment by Employer, as President of Novel 
Biomedical, Inc., a subsidiary of Employer, for a term commencing on the date 
hereof (hereinafter referred to as the "Term of Employment"), and ending on 
December 31, 2001.  The Term of Employment may be reduced by mutual agreement 
of the parties, in writing.

2.  DUTIES OF EMPLOYMENT.     

<PAGE>

     a.  Executive shall have such responsibilities and duties as shall be 
determined by the Board of Directors and the Chief Executive Officer of the 
Employer, consistent with this Agreement and with the position of President 
of the Novel Biomedical subsidiary or division.  The duties to be performed 
by Executive shall be performed in Minnesota, subject to reasonable travel 
requirements on behalf of Employer and subject to a maximum of 25% of each 
month averaged over a twelve month period.  During the Term of Employment, 
Employer shall not make any substantial change in the duties and 
responsibilities of the position held by Executive and shall not require 
Executive to perform duties which are not commensurate with his position 
without Executive's prior consent.

     b.  Executive shall render the services described herein diligently, 
using his best efforts.  Executive shall not hold other employment during the 
Term of Employment.

     3.  COMPENSATION.

     a.  During the Term of Employment, Executive shall receive base 
compensation ("Base Compensation") at a rate of not less than $85,000.00 per 
annum, payable twice monthly in accordance with Employer's normal payroll 
practices.  Base Compensation shall be reviewed annually, and may be 
increased depending on Executive's performance and Employer's financial 
condition.  Additionally, incentive stock options (the "ISOs") to purchase 
100,000 shares of Employer's Common Stock shall be granted on the date hereof 
at an exercise price equal to the fair market value of the Common Stock on 
the date hereof.  The ISOs shall be subject to vesting at the earlier of 
completion of performance criteria provided on Exhibit A, attached hereto, or 
at the end of five years from the date hereof.


                                       2

<PAGE>

     b.  During the Term of Employment Executive shall be entitled to 
participate in benefits programs, including MBO-based bonuses, adopted by 
Employer commensurate with other executives of Employer.  Employer shall not 
alter the bonus compensation program of Novel Biomedical through June 1997, 
and Executive shall not be entitled to participate in such Novel Biomedical 
program, provided that the financial performance of Novel Biomedical shall be 
adjusted to reflect Executive's employment by Employer prior to the 
calculation of any bonus due.

     4.  BENEFITS AND PERQUISITES.  Executive shall during the Term of 
Employment be eligible to receive all benefits and perquisites from time to 
time available generally to senior management and key executives of Employer, 
all of which shall be provided at the expense of Employer.  This Agreement is 
not intended to and shall not be deemed to be in lieu of any rights, benefits 
and privileges to which Executive may be entitled as an employee of Employer 
under any retirement, pension, profit sharing, insurance, hospital or other 
plans which may now be in effect or which may hereafter be adopted, it being 
understood that Executive shall have the same rights and privileges to 
participate in such plans and benefits as any other employee during 
Executive's period of employment with Employer.

5.  RESTRICTIONS ON USE AND DISCLOSURE; NON-COMPETITION AGREEMENT.

     a.  Except as required by Executive's duties to Employer as an employee, 
Executive shall not (during or after any period of employment) directly or 
indirectly use, publish, disseminate or otherwise disclose any Confidential 
Information without the express prior written consent of Employer.  For 
purposes of this Agreement, "Confidential Information" shall mean all written 
and oral confidential or proprietary information of Employer and its 
affiliates, whether or not discovered or developed by Employer, and of third 
parties (such as suppliers, customers



                                       3

<PAGE>

and consultants) who may have imparted information in confidence to Employer 
or its affiliates, known by Executive as a result of his employment with 
Employer at any time (including prior to execution of this Agreement), 
provided that Confidential Information shall not include any such information 
which is now or hereafter becomes generally known in the industries in which 
Employer is conducting business without the fault of Executive.

     b.  Upon termination of employment with Employer for any reason, 
Executive shall forthwith deliver to Employer all Employer property, 
including without limitation, all copies of all procedural manuals, guides, 
customer lists, records and other documents and materials containing 
Confidential Information then in Executive's possession or control, whether 
prepared by Executive or others.

     c.  Upon the execution of this Agreement, Executive shall execute a 
Non-Competition Agreement in the form of that attached hereto as Schedule B; 
provided, however, that any obligations pursuant to such Non-Competition 
Agreement shall automatically terminate upon the occurrence of a material 
breach of this Agreement by Employer, provided that Executive has given 
Employer notice in writing of such breach and Employer has failed to cure 
such breach within sixty (60) days of such written notice.

                                   TERMINATION

6.  TERMINATION ON DEATH OR DISABILITY.

     a.  Employer shall have the right to terminate this Agreement on the 
death or Disability of Executive.  For purposes of this Agreement, 
"Disability" shall mean the failure of Executive, due to illness, accident, 
or any other physical or mental incapacity, to perform his duties 
substantially as required hereunder for a period of any one hundred and 
eighty (180)


                                       4

<PAGE>

consecutive days as evidenced by a certificate from a physician acceptable to 
Executive.  If following any such termination for Disability, but prior to 
the expiration of the Term of Employment, Executive shall offer his services 
to Employer on the original terms hereof if such Disability no longer exists 
(as evidenced by a physician's certificate), or on terms which reasonably 
reflect his still existing Disability, as the case may be, and Employer fails 
to employ Executive on such terms, then, as of the time of any such failure, 
Employer shall be deemed to have terminated Executive without Cause.

     b.  In the event of termination upon the death or Disability of 
Executive, Employer shall pay to Executive, or to his estate or personal 
representative, as the case may be, all arrearages of salary and expenses to 
the Date of Termination and a pro rata portion (based on the number of days 
in such fiscal year through the Date of Termination) of any incentive bonus 
which would have been payable to Executive for such year pursuant to Section 
3(b) hereof.  In the event of the termination of this Agreement by Employer 
for Disability, Employer shall continue to provide (at no cost to Executive 
except to the extent, if any, to which Executive is then paying for the same) 
for the balance of the Term of Employment, all health, disability and life 
insurance benefits that Executive was receiving at the Date of Termination.

     7.  TERMINATION FOR CAUSE.

     a.  Employer shall have the right to terminate Executive's employment 
hereunder at any time and with immediate effect for Cause.  For all purposes 
of this Agreement, Executive's employment shall be deemed terminated for 
"Cause" only if it is terminated by Employer for:

          i.  misappropriation of corporate funds by Executive or with 
Executive's knowledge or direct involvement;


                                      5

<PAGE>

          ii.  conviction of, or plea of guilty or NOLO CONTENDERE to, a 
felony involving fraud, embezzlement, theft or dishonesty or other criminal 
conduct by Executive; or

          iii.  gross and willful misconduct by Executive, PROVIDED, however, 
that no discharge shall be deemed for Cause under this clause (iii) unless 
Executive shall have first received written notice from the Board of 
Directors of Employer advising Executive of the specific acts or omissions 
alleged to constitute such gross and willful misconduct, and such misconduct 
continues uncured by Executive for a period of sixty (60) days.

          iv.  a material breach by Executive of the terms of this Agreement 
and a failure by Executive to cure such breach within sixty (60) days after 
receiving written notice from the Board of Directors of Employer advising 
Executive of the action allegedly resulting in the material breach.

     b.   Notwithstanding any of the foregoing, "Cause" shall not include the 
breach of any representation or warranty by Executive under the Agreement and 
Plan of Reorganization between Executive and Employer, dated December 10, 
1996, or an innocent ommission or error made by Executive thereunder.

     c.   If Executive's employment hereunder is terminated for Cause:  (i) 
Executive shall be entitled to payment of all arrearages of salary and 
expenses to the Date of Termination, but (ii) Executive shall not be eligible 
to receive, and Employer shall have no further obligation to make, from and 
after the Date of Termination, any further payments or benefits pursuant to 
this Agreement arising out of or in connection with Executive's employment 
hereunder.

     8.  TERMINATION WITHOUT CAUSE.  Employer shall have the right to 
terminate Executive's employment hereunder for any reason other than Cause, 
provided that Employer shall pay to 


                                       6

<PAGE>

Executive:  (i) an amount (payable in equal semi-monthly installments) equal 
to the monthly amount of Base Compensation received by Executive over one 
year, and (ii) the amount of any benefits accrued to the date of termination.

9.  NOTICE OF TERMINATION.  Any purported termination of Executive's 
employment hereunder, either by Employer or by Executive, shall be 
communicated by a written Notice of Termination to the other party hereto 
(except in the case of termination upon the death of Executive in which event 
the Date of Termination shall be the date of death).  Such notice shall 
indicate the specific termination provision in this Agreement which is relied 
upon, recite the facts and circumstances claimed to provide the basis for 
such termination and specify the effective date of such termination (the 
"Date of Termination").  If within thirty (30) days from the date of the 
Notice of Termination the party receiving such notice notifies the other 
party that a dispute exists concerning such termination, the Date of 
Termination shall be the date on which the dispute is finally resolved.  The 
Date of Termination shall be extended by a notice of dispute only if such 
notice is given in good faith and the party giving such notice pursues the 
resolution of such dispute by entering immediately into binding arbitration 
under the terms attached hereto as Schedule C. Notwithstanding the pendency 
of any such dispute, and provided that Executive stands ready to provide the 
services hereunder, Employer will continue to pay the Employee his full Base 
Compensation in effect as of the date of the Notice of Termination and 
continue the Employee as a participant in all compensation, benefit and 
insurance plans in which he was participating at such date, until the dispute 
is finally resolved.

                                  MISCELLANEOUS


                                       7

<PAGE>

     10.  INDEMNITY.  Employer shall indemnify Executive and hold him 
harmless from and against any liability, cost or expense which he may incur 
as an employee or officer of Employer in a manner at least as beneficial to 
Executive as is now provided in accordance with the provisions of the 
Articles of Incorporation and Bylaws of Employer in effect on the date prior 
to the date hereof.

     11.  BINDING EFFECT.  This Agreement shall inure to the benefit of and 
be binding upon Employer, its successors and assigns, and any person, 
partnership, company or corporation which may acquire substantially all of 
Employer's assets or business or with or into which Employer may be 
liquidated, consolidated, merged or otherwise combined, and shall inure to 
the benefit of and be binding upon Executive, his heirs, executors, 
administrators, and personal representatives.

     12.  INJUNCTIVE RELIEF.  Executive acknowledges that any breach of 
Section 5 hereof would entail irreparable injury to Employer and that in 
addition to Employer's other remedies Employer shall be entitled to 
injunctive and other equitable relief to prevent any such breach, actual, 
intended or likely.

     13.  SEVERABILITY.  If any one or more of the terms, provisions 
covenants or restrictions of this Agreement shall be determined by a court of 
competent jurisdiction to be invalid, void or unenforceable, the remainder of 
the terms provisions, covenants and restrictions of this Agreement shall 
remain in full force and effect and shall in no way be affected, impaired or 
invalidated.

     14.  NOTICES.  Any notice, demand or other communication given by the 
parties under this Agreement shall be in writing (i) delivered personally, 
(ii) delivered by a reputable overnight delivery service, or (iii) sent by 
certified mail, return receipt requested to the address of the parties set 
forth beneath their signatures to this Agreement.  Notices so sent by mail 
shall be 


                                       8

<PAGE>

deemed delivered on the date and at the time indicated on the duly completed 
Postal Service return receipt.

     15.  GOVERNING LAW.  This Agreement shall be governed by and construed 
in accordance with the laws of the State of Colorado.

16.  ENTIRE AGREEMENT.  This Agreement contains the entire agreement of the 
parties relating to the subject matter hereof, and the parties have made no 
agreement, representations or warranties relating to the subject matter of 
this Agreement which are not set forth herein.

     17.  AMENDMENT.  No waiver or modification of this Agreement or of any 
covenant, condition or limitation herein contained shall be valid unless in 
writing and duly executed by the party to be charged therewith, and no 
evidence of any waiver or modification shall be offered or received in 
evidence of any proceeding, arbitration or litigation between the parties 
hereto arising out of or affecting this Agreement, or the rights or 
obligations of the parties hereunder, unless such waiver or modification is 
in writing, duly executed as aforesaid.

     18.  COUNTERPARTS.  This Agreement may be executed in one or more 
counterparts each of which shall be considered an original.

     IN WITNESS WHEREOF, the parties have executed or caused this Agreement 
to be executed as of the day first above written.

COLORADO MEDTECH, INC.



By: 
    -----------------------------------
    John V. Atanasoff II, President
Address:    6175 Longbow Drive
            Boulder, CO 80301




                                       9


<PAGE>

-----------------------------------
Jonathan Kagan
Address:    200 Homedale Road
            Hopkins, MN  55343






















                                      10

<PAGE>

                                   SCHEDULE A
                            ISO PERFORMANCE CRITERIA



JONATHAN KAGAN 100,000 SHARE INCENTIVE STOCK OPTION VESTING SCHEDULE


Options will vest at the earlier of:

     A.)  5 years from February 21, 1997, or

     B.)  The % of annual MBO achievement times the options listed in the 
          following table:


              OPTIONS                   MBO PERIOD ENDED
              -------                   ----------------

              10,000                    6/30/97

              30,000                    6/30/98

              30,000                    6/30/99

              30,000                    6/30/2000

              *                         6/30/2001

     *  Balance of options not previously vested.




<PAGE>

                                   SCHEDULE B
                            NON-COMPETITION AGREEMENT


     THIS AGREEMENT is made as of this 21st day of February, 1997 between 
Colorado MEDtech, Inc., a Colorado corporation (the "Company") and Jonathan 
Kagan ("Employee").

     WHEREAS, Employee has sold his interest in Novel Biomedical, Inc. to the 
Company and has agreed to become an employee of the Company, and will be a 
key, valued executive employee of the Company, and, as such, will be in a 
position to damage the business of the Company by engaging in competing 
activiies; and

     WHEREAS, the Company wishes to protect itself from competitive 
activities of Employee which would injure its business;

     NOW, THEREFORE, in consideration of the employment offered to Employee, 
the promises and mutual covenants and agreements herein set forth, and for 
other good and valuable consideration, including future compensation, the 
parties hereby agree as follows:

     1.  (a) Employee agrees that he possesses the knowledge, skills and 
reputation in the industry in which the Company's subsidiary, Novel 
Biomedical, Inc., operates which are of material importance to the Company, 
and which are special and unique.  Employee acknowledges that his services 
cannot readily be replaced and that the loss of his services, or the use of 
his services by a competitor, may cause harm to the Company.  Therefore, 
Employee agrees that during the period commencing with the date hereof and 
ending two (2) years after his employment with the Company is terminated for 
"Cause", as defined in Section 7 of the Employment Agreement between the 
Company and Employee dated of even date herewith (the "Employment 
Agreement"), or one (1) year after his employment with the Company is 
terminated for any other reason, including the expiration of his Employment 
Agreement with the Company, he will not, knowingly, directly or indirectly, 
as a principal, officer, director, shareholder (other than as a holder of 5% 
or less of a publicly traded corporation's capital stock), partner, employee, 
or in any other capacity whatsoever, engage in, be or become associated with, 
or advise or assist any business, firm, partnership, individual, corporation, 
or any other entity which competes with, or which, on the date of 
termination, has a significant active program in place to compete with, any 
business engaged in by the Company or any subsidiary of the Company in the 
field of contract development or OEM manufacturing of medical devices for 
diagostics or therapeutics on which the Employee worked during his 
employment; provided, however, that Employee also agrees not to compete with 
the Company in relation to any product or device the Company is actively 
pursuing at the time of Employee's termination, anywhere in the United States 
of America.  The parties recognize that, notwithstanding the foregoing 
restriction, Employee may have investment, employment or consulting 
opportunities with other companies in the medical device field which do not 
compete with the business of the Company and which would not necessarily 
violate the terms of this Paragraph 1.

         (b) Any and all obligations under this Agreement shall automatically 
terminate and become of no further force or effect upon the occurrence of a 
material breach of the 

<PAGE>

Employment Agreement by the Company, as provided in the Employment Agreement.

         (c) It is agreed that Employee's services are unique, and that any 
breach or threatened breach by Employee of any provisions of this Paragraph 1 
may not be remedied solely by damages.  Accordingly, in the event of a breach 
or threatened breach by Employee of any of the provisions of this paragraph 1, 
the Company may be entitled to injunctive relief, restraining Employee and any 
business, firm, partnership, individual, corporation, or entity participating 
in such breach or attempted breach, from engaging in any activity which would 
constitute a breach of this Paragraph 1.  Nothing herein, however, shall be 
construed as prohibiting the Company from pursuing any other remedies 
available at law or in equity for such breach or threatened breach, including 
but not limited to, the recovery of damages.

     2.  Any waiver of any of the terms and conditions of this Agreement 
shall not operate as a waiver of any other breach of such terms or 
conditions, or any other term or condition, nor shall any failure to enforce 
any provision hereof operate as a waiver of such provision or any other 
provision hereof.

     3.  Any and all notices referred to herein shall be sufficient if 
furnished in writing, sent by registered or certified mail, return receipt 
requested, or via a reputable overnight delivery service, to Employee at his 
address as shall be furnished to the Company in writing, and to the Company 
at its principal office in Boulder, Colorado.

     4.  This Agreement shall be governed by and construed in accordance with 
the laws of the State of Colorado.

     5.  No modification or changes in this Agreement shall be valid unless 
such modification or changes are in writing and signed by all parties hereto.

     6.  The invalidity or unenforceability of any provision in this Agreement 
shall not affect the other provisions hereof.  This Agreement shall be 
construed as though such invalid or unenforceable provisions were omitted.

     7.  This Agreement may not be assigned by either party hereto without 
the prior written approval of the other party.

     8.  Any controversy or claim arising out of or relating to this 
Agreement shall be settled by arbitration pursuant to the rules established 
by Schedule C attached to Employee's Employment Agreement of even date 
herewith.

     9.  As used herein, any reference to the masculine shall include, if 
appropriate, the feminine.


                                      -2-

<PAGE>


     IN WITNESS WHEREOF the parties hereto have set their hands and seals as 
of the date and year first above written.


                                       COLORADO MEDTECH, INC.

                                       By  JOHN V. ATANASOFF II
                                         -------------------------------------
                                         John V. Atanasoff II, President


                                       EMPLOYEE:

                                           JONATHAN KAGAN
                                       ---------------------------------------
                                       Jonathan Kagan
















                                      -3-



<PAGE>

                                   SCHEDULE C
                                   ARBITRATION

Except as provided below, any and all disputes arising under or related to 
this Agreement which cannot be resolved through negotiations between the 
parties shall be submitted to binding arbitration.  If the parties fail to 
reach a settlement of their dispute within fifteen (15) days after the 
earliest date upon which one of the parties notified the other(s) of its 
desire to attempt to resolve the dispute, then the dispute shall be promptly 
submitted to arbitration by a single arbitrator through any professional 
arbitration provider (the "Service") who can provide a former judge to 
conduct such arbitration.  The arbitrator shall be selected by the Service on 
the basis, if possible, of his or her expertise in the subject matter(s) of 
the dispute.  The decision of the arbitrator shall be final, nonappealable 
and binding upon the parties, and it may be entered in any court of competent 
jurisdiction.  The arbitration shall take place in Minneapolis, Minnesota.  
The arbitrator shall be bound by the laws of the State of Colorado applicable 
to the issues involved in the arbitration and all Colorado rules relating to 
the admissibility of evidence, including, without limitation, all relevant 
privileges and the attorney work product doctrine.  All discovery shall be 
completed in accordance with the time limitations prescribed in the Colorado 
rules of civil procedure, unless otherwise agreed by the parties or ordered 
by the arbitrator on the basis of strict necessity adequately demonstrated by 
the party requesting an extension of time.  The arbitrator shall have the 
power to grant equitable relief where applicable under Colorado law, and 
shall be entitled to make an award of punitive damages when applicable under 
Colorado law.  The arbitrator shall issue a written opinion setting forth his 
or her decision and the reasons therefor within thirty (30) days after the 
arbitration proceeding is concluded.  The obligation of the parties to submit 
any dispute arising under or related to this Agreement to arbitration as 
provided in this Section shall survive the expiration or earlier termination 
of this Agreement.  Notwithstanding the foregoing, either party may seek and 
obtain an injunction or other appropriate relief from a court to preserve or 
protect trademarks, tradenames, copyrights, patents, trade secrets or other 
intellectual property or proprietary information or to preserve the status 
quo with respect to any matter pending conclusion of the arbitration 
proceeding, but no such application to a court shall in any way be permitted 
to stay or otherwise impede the progress of the arbitration proceeding.

In the event of any arbitration or litigation being filed or instituted 
between the parties concerning this Agreement, the prevailing party will be 
entitled to receive from the other party or parties its attorneys' fees, 
witness fees, costs and expenses, court costs and other reasonable expenses, 
whether or not such controversy, claim or action is prosecuted to judgment or 
other form of relief.