Document:

MANUFACTURER'S REPRESENTATIVE AGREEMENT

THIS AGREEMENT, effective this 1ST DAY OF JUNE, 1996 BETWEEN ACUMED, INC., an
Oregon corporation, having its principal office at 10950 S. W. 5th Street, Suite
170, Beaverton, Oregon 97005 (hereafter referred to as "Company") and O.J.I.
SURGICAL, INC., having its principal office at 1517 SW Sunset Blvd. Portland,
Oregon (hereafter referred to as "REPRESENTATIVE").

                                  WITNESSETH:

ACCORDINGLY, the parties hereto agree as follows:

1. DEFINITIONS:

For purpose of this Agreement, the following definitions apply:

A. TERRITORY

     "TERRITORY" shall consist of the following description and none other.

     State of Oregon and Cowlitz and Clark Counties in Washington State (see
     attached map).

B. PRODUCTS

     "PRODUCTS" are defined as Acumed products as listed in ADDENDUM I of this
     agreement. PRODUCTS may be added or deleted from this agreement with thirty
     (30) days written notice.

C. CUSTOMERS

     "CUSTOMERS" are defined as hospitals, hospital administrators, orthopaedic
     surgeons, out-patient clinics, surgery centers, orthopaedic nurses,
     orthopaedic technicians, purchasing agents and podiatrists.

2. APPOINTMENT

A.   Company hereby appoints Representative to act as an exclusive
     manufacturer's representative for the purpose of soliciting and
     transmitting to the Company orders for the PRODUCTS from the CUSTOMERS in
     the TERRITORY. The Company agrees not to appoint any other entity or
     individual to act in the TERRITORY as a manufacturer's representative with
     respect to the PRODUCTS and CUSTOMERS.

B.   The Representative shall submit to the Company in a format described by the
     Company (Addendum 2) all orders for PRODUCTS in the TERRITORY. Such orders
     may be accepted or rejected by the Company at its sole discretion, but
     using reasonable standards of commercial judgment. It is understood and
     agreed that the relationship between the parties created hereby is solely
     that or independent contractor, and is in no regard and for no purpose
     whatsoever to be construed as creating the relationship or principal and
     agent, master and servant, employer and employee or any other. The
     Representative shall have no authority (i) to accept such orders, (ii) to
     bind the Company in any manner and for any purpose, (iii) to amend or
     modify to any extent such terms of sale or payment as Company may from time
     to time establish, (iv) to assume or create any obligation of any kind,
     express or implied on behalf of the Company, or (v) to delegate its duties
     hereunder except to its officers and employees.

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3.   INVOICING/PRICE

     Company will invoice PRODUCTS to CUSTOMERS in the TERRITORY at a maximum of
     the list price in effect at the time of shipment. Company reserves the
     right to change the list price at any time by providing the Representative
     notice in writing as to the effective date and new prices. All products are
     shipped F.O.B. Beaverton, Oregon.

4.   COMMISSION

     A.   Representative will receive a commission on all sales of PRODUCTS sold
          within the TERRITORY net of any charges for any repackaging, lost or
          damaged instrumentation, freight and taxes. Commissions and exceptions
          are noted in ADDENDUM 3.

     B.   Commissions will be paid by the 15th day following the last business
          day of the month (see Addendum 4, Item l.e. for possible exception). A
          detail of the commissionable sales will be provided with each
          commission check.

     C.   For the purposes of Paragraphs A and B, and notwithstanding the
          Company's willingness to advance commissions to the Representative
          based on invoices to CUSTOMERS, a sale will be deemed to have occurred
          only after Company has received payment in full for any PRODUCT(s)
          shipped into the TERRITORY. In this regard there shall be deducted
          from future commissions the following amounts:

          1.   In the event Company has not received full payment on an invoice
               to a CUSTOMER within ninety (90) days of the invoice date, those
               commissions advanced will be deducted from the commission check.
               If such invoice is later paid, the commission will be posted by
               the 15th day following the month of the collection, less any
               extraordinary costs incurred in the collection of this invoice.

          2.   If PRODUCTS are returned and accepted for CUSTOMER credit, any
               commissions advanced will be deducted from the commission check
               in the month that credit is issued.

               In the event there are not sufficient commissions owing to the
               Representative to offset said charges in the next month, the
               charges will be billed to the Representative. Or upon termination
               of this Agreement, the Representative shall pay said charges to
               company upon presentation.

5.   TERM/TERMINATION

     A.   The TERM of this Agreement shall be for one year and commence on JUNE
          1, 1996. This Agreement is automatically extended from year to year
          thereafter until terminated in one of the following ways:

          1.   This Agreement may be cancelled at any time during the original
               term or any extension thereof, for any reason whatsoever, by
               either of the parties hereto upon giving thirty (30) days written
               notice to the other party hereto. The Company may appoint a new
               Representative during this notice period.

          2.   This Agreement may be cancelled by the Company on thirty (30)
               days written notice if the Representative fails to comply fully
               and faithfully with any of the terms of this Agreement.

                                       2

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          3.   This Agreement may be cancelled by the Representative on thirty
               (30) days written notice if the Company fails to comply fully and
               faithfully with any of the terms of this Agreement.

          4.   In the event that either party hereto shall commit an act of
               bankruptcy or file voluntary petition of bankruptcy, or be
               declared bankrupt in an involuntary proceeding, or file for a
               plan under the Bankruptcy Act, or place its affairs in the hands
               of a receiver, or enter into a composition or the benefit of
               creditors, or perform any other act based upon or due to its
               inadequate credit position, then the other party to this
               Agreement may terminate this Agreement immediately by written
               notice of termination to the other party.

          5.   The Company shall not, for any reason whatsoever, including but
               not limited to the termination, cancellation or expiration of
               this Agreement, be liable to the Representative for compensation,
               reimbursement or damages, either on account of expenditures,
               investments or commitments made in connection therewith,
               development or maintenance of the Representative's business
               goodwill, or on account of any other thing or cause whatsoever.

6.   TERMINATION PROCEDURE

     A.   Upon termination, cancellation or expiration of this Agreement, for
          any reason whatsoever, the Representative will promptly return to the
          Company, transportation charges and insurance fully prepaid, all sales
          aids, sales samples, manuals, bulletins, literature, letterheads and
          related materials. Furthermore, the Representative will, at his own
          expense, promptly remove and discontinue the use of all trademarks and
          other designations, telephone listings and advertising which might
          convey the impression thereafter that he represents the Company in any
          manner.

     B.   All Representative's consignment inventory must by turned over to a
          representative of the Company within seven (7) days of termination or
          shipped to a Company location. Representative will be responsible at
          the list price of all missing implants as documented per the
          CONSIGNMENT AGREEMENT (Addendum 4). Any items opened but not used will
          be assessed a restocking and repackaging charge per the published
          terms of the Company's current price list.

7.   COMPANY RESPONSIBILITIES

     A.   The Company agrees to assist the Representative in:

          1.   Promoting the sale of Company's PRODUCTS by providing
               Representative with reasonable amounts of sales literature,
               published technical information, sales aids, as well as holding
               periodic sales seminars.

          2.   Promotion of Company's PRODUCTS in professional journals and at
               regional and national meeting of orthopaedic professionals as
               deemed of value by the Company.

          3.   Training Representative's sales representatives and giving them a
               working and selling knowledge of Company's PRODUCTS and POLICIES
               AND PROCEDURES for business. Training may take place at Company's
               offices or at Representative's location at the discretion of
               Company.

                                       3

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          4.   Inventory:

               a.   At a minimum, Company will supply Representative a
                    consignment inventory of salable implants based upon the
                    formula in Addendum 5. Additional consignment inventory may
                    be provided at Company's discretion based upon TERRITORY
                    requirements.

                    Representative agrees to be responsible for all such
                    inventory as dictated by the CONSIGNMENT AGREEMENT.

               b.   Company will supply Representative with implant sales
                    samples, which are the Company's property, as outlined in
                    the SALES SAMPLE POLICY (Addendum 6).

8.   REPRESENTATIVE RESPONSIBILITIES

     A.   Representative agrees to exercise its best efforts to promote the sale
          of Company's PRODUCTS among CUSTOMERS in the TERRITORY. and in this
          regard Representative shall:

          1.   Maintain adequate manpower to service CUSTOMERS and prospective
               CUSTOMERS.

          2.   Follow through on inquiries developed by Company's conventions,
               advertising, workshops and promotional literature.

          3.   Assist the Company in staffing booths at national meetings or
               meetings within the Territory as needed.

          4.   Be responsible for direct and indirect selling expenses which may
               be incurred in carrying out responsibilities hereunder. It is
               expressly understood and agreed that Representative's exclusive
               remuneration under this Agreement is that set forth in paragraph
               4 hereof.

          5.   Obtain sales samples for each sales representative that is
               authorized to represent company's PRODUCTS, as dictated by the
               SALES SAMPLES POLICY.

          6.   Maintain adequate levels of instruments to service CUSTOMERS.

          7.   Sign a NON-DISCLOSURE AGREEMENT (Addendum 7), and maintain in
               confidence all confidential and proprietary information
               pertaining to the business of the Company.

          8.   Neither assert nor acquire nor attempt to acquire any rights or
               interests in or to, nor contest or assist others in contesting
               any trademarks of Company, which shall be solely responsible for
               design, development, supply production and performance of its
               products and protection of its trademarks.

          9.   Make no false or misleading representations with respect to
               Company's PRODUCTS. Representative shall make no express or
               implied warranties to CUSTOMERS or prospective CUSTOMERS on
               behalf of Company with respect to Company's PRODUCTS without
               Company's express written consent. Representative agrees to hold
               Company harmless from all damages resulting from Representative's
               breach of such obligation.

          10.  Maintain records of CUSTOMERS and Company inventory and other
               such records as reasonably requested by Company and as necessary
               to comply with all FDA regulations regarding tracking of
               products.

                                       4

<PAGE>

          11.  Not to knowingly sell or deliver, directly or indirectly, any of
               the PRODUCTS for resale or use outside of the TERRITORY.

          12.  Follow the policies and procedures of Acumed that are made known
               to the Representative.

9.   SALES QUOTA

     A.   Representative must obtain sales in the amount agreed upon per the
          attached quota. The first quota will be determined by the Company
          based upon the formula in ADDENDUM 8. The sales quota will thereafter
          be agreed to on an annual basis within ninety (90) days of the
          Company's fiscal year.

     B.   Company may establish quotas for specific product groups; in such
          case, Representative must obtain sales in that product group which are
          equal to or in excess of the quota.

     C.   Company may establish sales quotas for clearly defined regional
          sections within the TERRITORY to insure sales activity throughout the
          TERRITORY. EXAMPLE; TERRITORY is the State of New York. Separate
          quotas would be established for New York City and the rest of the
          state. If these separate quotas are not achieved, Company reserves the
          right to alter the TERRITORY.

10.  GENERAL

     A.   This Agreement contains the entire understanding of the parties, shall
          supersede any other oral or written agreements, and shall ensure to
          the benefit of Company's successors and assigns. It may not be
          modified in any way without the written consent of both parties.

     B.   Nothing herein shall be deemed to require that the Company continue
          the production of any PRODUCT.

     C.   Representative acknowledges that this Agreement is personal to it and
          shall not be assigned, alienated or otherwise transferred without the
          express written consent of the Company.

     D.   Representative agrees that Company shall be entitled to inspect and
          observe from time to time the activities and procedures relative to
          this Agreement of Representative and its salespersons with or without
          notice of any such inspection or observation.

     E.   Any notice, request or demand permitted hereunder shall be deemed to
          be properly given when deposited in the United States mail, registered
          or certified, postage paid, with return receipt requested addressed as
          follows:

                ACUMED, INC.
                10950 S. W .5TB STREET, SUITE 170
                BEAVERTON, OREGON 97005
                ATTENTION: PRESIDENT

     F.   Company shall not be liable for delays in delivery or failure to
          perform any obligation hereunder due to any cause beyond its control,
          including, but not limited to, labor disputes, fire, delays in
          transportation or shortages of materials or supplies.

     G.   Representative represents to Company that execution, delivery and
          performance of this Agreement and compliance with its terms by
          Representative will not result in a breach of any agreement to which
          Representative is a party.

                                       5

<PAGE>

     H.   In the event of termination of this Agreement, Company reserves the
          right, but is not obliged, to purchase from Representative all sales
          samples owned by the Representative at a price agreed upon between the
          parties. All sales samples given to the Representative must be
          returned to the Company or they will be invoiced at the sample price
          as outlined in the SALES SAMPLE POLICY.

     I.   This agreement shall be governed by and construed in accordance with
          the laws of the State of Oregon.

                            -----------------------

IN WITNESS WHEREOF, Company and Representative have caused this MANUFACTURER'S
REPRESENTATIVE AGREEMENT to be signed as of the date written above.

ACUMED, INC.                                    O.J.I. SURGICAL, INC.

By: Randall Huebner                             By: Harry Kraus
-------------------                             ---------------

/s/ RANDALL HUEBNER                             /S/ HARRY KRAUS
-------------------                             ---------------
   Signature                                       Signature

It: President                                   Its: President
-------------                                   --------------

Date: 4/28/97                                   Date: 4/21/97
-------------                                   -------------

                                       6

<PAGE>

                              ADDENDUM 1 PRODUCTS

Products are:

        Acutrak Systems

        Osteo-Clage Cerclage Cable System

        GTS TOE IMPLANT System

        Polarus Humeral Rod Systems

        2.7 and 3.5 Extremity Screw Systems

        Stableloc

        Bone Graft Instrumentation

        K-Wires (sterile packs)

        Small Bone Fixator

                                       7

<PAGE>

                                   ADDENDUM 2

                               ORDER ENTRY FORMAT

The Company will provide Representative with a billing form to be used when
phoning or faxing in orders. The form requests that the following information be
provided. If Representative wishes to use its own form, it must be approved by
the Company.

1.      Customer number

2.      Purchase order number

3.      Customer name

4.      Customer billing address

5.      Customer shipping address

6.      Other shipping address (if replacement to consignment)

7.      Instrument rental charge

8.      Freight charge

9.      Surgeon name

lO.     Patient name

11.     Surgery date

12.     Product code(s)

13.     Lot number(s) of implant(s)

14.     Prices

                                       8

<PAGE>

                                   ADDENDUM 3

                                   COMMISSIONS

1.   The commission for sales of all Acumed implants and instruments is 25%
     effective September 1, 1994 until further notice.

2.   NO commission will be paid on prototype products until added to the list of
     PRODUCTS as outlined in the Agreement.

3.   A 15% commission will be paid on custom instruments and implants.

4.   If an instrument rental is charged and the instruments are owned by Acumed,
     then the instrument rental charge will be split evenly by Acumed and
     Representative.

                                       9

<PAGE>

                                   ADDENDUM 4

                             CONSIGNMENT AGREEMENT

Agreement made between ACUMED, INC. (hereafter called Supplier) and O.J.I.
SURGICAL, INC. (hereafter called Representative) this 1ST DAY OF JUNE, 1996
The purpose of this agreement is to provide an inventory of the most current
Acumed implants and instruments (Products) presently available, as well as
insure the immediate availability of new designs as they evolve. Consequently,
the inventory levels maintained by the Representative will remain consistent
with the Customer demand for this service. Finally, the arrangements described
herein will release the Representative of the financial burden incurred by
purchasing and maintaining a complete stock of the above products.

NOW, THEREFORE, intending to be legally bound, the parties agree as follows:

1.   ESTABLISHMENT OF PROGRAM

     a.   Supplier will establish a consignment inventory program for standby
          implants and instruments for use by the Representative for its
          Customers. Instruments will be provided on consignment as detailed in
          ADDENDUM 5.

     b.   Representative will provide a secure area within its facility for the
          storage of consignment inventory separate from Representative's owned
          inventory .

     c.   Appropriate inventory levels will be determined by the joint agreement
          of Supplier and Representative.

     d.   The initial consignment inventory shall be shipped on a consignment
          no-charge purchase order. Any subsequent additions to the consignment
          inventory will be communicated by written correspondence including
          quantities, catalogue numbers and product descriptions. Any changes to
          consignment levels of product will be similarly communicated and
          acknowledged by the Representative and Supplier.

     e.   Representative shall be responsible for physical inventories of lot
          coded items on a quarterly basis. Supplier reserves the right to delay
          commission payments if the inventory is not received and reconciled by
          the 15th of the month.

     f.   Supplier will either replenish inventory used in surgery automatically
          upon the receipt of a completed order form or require that
          Representative replenish its inventory of Product on an as needed
          basis to maintain adequate stocking levels. A Customer purchase order
          is required WITHIN THREE DAYS OF IMPLANTING Supplier's products.
          Invoices will be issued and payments due in accordance with Supplier's
          published regular terms.

     g.   Items for which a hospital purchase order is issued will either be
          shipped from Supplier to Representative's designated receiving or
          directly to the hospital if so specified by Representative.

     h.   The hospital purchase order will clearly indicate that the products
          are for CONSIGNMENT REPLACEMENT and the Supplier will print
          CONSIGNMENT REPLACEMENT on the appropriate shipping and invoicing
          documents.

     i.   The Representative agrees that this consignment inventory is the
          property of Supplier and that the Supplier or the Supplier's
          representative will have free access (with appropriate prior notice
          and approval} to this inventory.

                                       10

<PAGE>

     j.   The Representative agrees to pay for any unutilized consignment
          inventory which has been opened and is not implantable WITHIN THREE
          DAYS OF OPENING. All consignment inventory opened but reusable will be
          repackaged by Supplier. There will be a 25% charge for this service.

     k.   The parties agree that the Representative will be responsible for
          inventory losses due to loss, theft, damage or otherwise not accounted
          for during routine audits at current distributor price list value.

     l.   The Supplier agrees to inform the Representative of any
          manufacturing/packaging changes that will affect the consignment.

2.   This agreement shall be effective for the period of the MANUFACTURER'S
     REPRESENTATIVE AGREEMENT and will be renewed in accordance with the dates
     of the MANUFACTURER'S REPRESENTATIVE AGREEMENT.

Executed by the parties hereto as indicated below:

ACUMED, INC.                                    O.J.I. SURGICAL, INC.

By: Randall Huebner                             By: Harry Kraus
-------------------                             ---------------

/s/ RANDALL HUEBNER                             /S/ HARRY KRAUS
-------------------                             ---------------
   Signature                                       Signature

It: President                                   Its: President
-------------                                   --------------

Date: 4/28/97                                   Date: 4/21/97
-------------                                   -------------

<PAGE>

                                   ADDENDUM 5

                              CONSIGNMENT FORMULA

Consignment inventory will be provided in the TERRITORY under the following
general criteria:

1.   ACUTRAK PRODUCTS

     2 each of each screw size
     Instruments will be provided by Acumed

     Each consignment must generate at least four (4) screw sales per month
     within sixty (60) days of receiving consignment inventory.

2.   GTS PRODUCTS

     1 each of each implant size
     Instruments will be provided by Acumed

     Each set of implants must generate two (2) sales per month within sixty
     (60) days of receiving implants.

3.   OSTEO-CLAGE PRODUCTS

     8 each of 2mm CoCr Cable and Sleeve Implants
     4 each of 1.6mm CoCr Cable and Sleeve Implants
     4 each 2mm Cable only
     4 each 2mm Sleeve only
     1 set of instruments provided by Acumed

     Each consignment inventory must generate eight (8) cable and sleeve sales
     per month within sixty (60) days of receiving inventory.

4.   POLARUS HUMERAL ROD SYSTEMS

     1 each humeral rod
     1 set of screws
     1 set of instruments provided by Acumed

     Each humeral rod consignment must generate at least two (2) sales per month
     within sixty (60) days of receiving inventory.

5.   2.7 AND 3.5 EXTREMITY SCREW SYSTEMS

     2 each of each screw size
     1 set of instruments each provided by Acumed

     Each consignment must generate at least four (4) screw sales per month
     within sixty (60) days of receiving consignment inventory.

                                       12

<PAGE>

6.   STABLELOC

     2 Stableloc assemblies
     8 pins
     2 sets of instruments
     2 Stableloc assembly covers

7.   BONE GRAFT INSTRUMENTATION

     1 set of instruments provided by Acumed for hospital purchase

8.   SMALL BONE FIXATOR

     2 small Bone Fixator sets with tray
     2 fixator covers

9.   A Consignment Agreement, Addendum 4 of the Manufacturer's Representative
     Agreement, must be signed before any consignment inventory is shipped.

10.  If the above monthly sales turnover rates are met on a quarterly average
     basis, there is no charge for the consignment inventory .

11.  Consignment sets that do not meet the above criteria after two (2)
     quarterly periods may be requested to be returned to Acumed or be charged a
     monthly fee of $200 per set and this fee adjusted against the monthly
     commission payment.

12.  The Company reserves the right to make adjustments in the Representative's
     consignment inventory levels when sales activity or market conditions
     dictate.

13.  The Company reserves the right to eliminate all consignment inventory with
     thirty (30) days written notice for any reason.

                                       13

<PAGE>

                                   ADDENDUM 6

                      INSTRUMENTS AND SALES SAMPLE POLICY

INSTRUMENTS: Representative is required to have the following instruments:

1.   At least one (1) set of Acutrak instruments provided by Acumed.

2.   At least one (1) set of GTS instruments provided by Acumed.

3.   At least one (1) set of Osteo-Clage instruments provided by Acumed.

4.   At least one (1) set of Polarus instruments provided by Acumed.

5.   At least one (1) set of 3.5 Extremity Screw System instruments provided by
     Acumed.

6.   At least one (1) Stableloc assembly provided by Acumed.

7.   At least one (1) set of Bone Graft instruments provided by Acumed.

8.   At least one (1) set of 2.7 Extremity Screw System instruments provided by
     Acumed.

9.   At least one (1) Small Bone Fixator set provided by Acumed.

SALES SAMPLES: Acumed will generally provide a product sales sample for each
brand of product at no charge to Representative. These samples are the property
of Acumed and will be either new product or a reconditioned product at Acumed's
discretion. Lost samples may be billed at 20% of hospital list price. Company
reserves the right to have Representative purchase sample product from time to
time.

                                       14

<PAGE>

                                   ADDENDUM 7

                            NON-DISCLOSURE AGREEMENT

This non-disclosure agreement (the "AGREEMENT") is entered into this 1ST DAY OF
JUNE, 1996 by ACUMED, INC., (the "DISCLOSING PARTY") and O.J.I. SURGICAL, INC.,
its PRINCIPALS, MANAGEMENT and STAFF (the "RECEIVING PARTY") for the purpose of
preventing the unauthorized disclosure of Confidential Information (as defined
below) of the Disclosing Party which may be disclosed to the Receiving Party for
the purpose of pursuing the establishment of a business relationship or
negotiating any contract or agreement between the Disclosing Party and the
Receiving Party.

For purposes of the agreement, Confidential Information shall mean any and all
information relating to Acumed Products and Pricing.

In consideration of the Disclosing Party's disclosure of Confidential
Information to the Receiving party, the Receiving Party hereby agrees as
follows:

1.   The Receiving party shall hold and maintain the Confidential Information in
     strictest confidence and in trust for the sole and exclusive benefit of the
     Disclosing party .

2.   The Receiving party shall not, without the prior written approval of the
     Disclosing Party, use for its own benefit, publish or otherwise disclose to
     others, or permit the use by others for their benefit or to the detriment
     of the Disclosing party, any of the Confidential Information.

3.   The Receiving party shall carefully restrict access to the Confidential
     Information to those of its officers, directors and employees who clearly
     need such access in order to participate on the behalf of the Receiving
     Party in the analysis and negotiation of a business relationship or any
     contract or agreement, or the advisability thereof, with the Disclosing
     Party .The Receiving Party further warrants and represents that it will
     advise each of the persons to whom it provides access to any of the
     Confidential Information pursuant to the foregoing sentence that such
     persons are strictly prohibited from making use, publishing or otherwise
     disclosing to others or permitting others to use for their benefit or to
     the detriment of the Disclosing Party, any of the Confidential Information.

4.   The Receiving Party shall take actions necessary to protect the
     confidentiality of the Confidential Information except for its disclosure
     pursuant to paragraph 3 above, and hereby indemnifies the Disclosing Party
     against any and all losses, damages, claims or expenses incurred or
     suffered by the Disclosing Party as a result of the Receiving Party's
     breach of this Agreement.

5.   This agreement shal1 continue in full force and effect indefinitely, except
     that the Receiving Party's obligations hereunder shal1 not extend to any of
     the Confidential Information which the Receiving Party can demonstrate was
     in the public domain on the date of this Agreement.

6.   The Receiving Party understands and acknowledges that any disclosure or
     misappropriation of any of the Confidential Information in violation of
     this Agreement may cause the disclosing Party irreparable harm, the amount
     of which may be difficult to ascertain and, therefore, agrees that the
     Disclosing Party shall have the right to apply to a court of competent
     jurisdiction for an order restraining any such further disclosure or
     misappropriation and for such other relief as the Disclosing Party shall
     deem appropriate, such right of the Disclosing Party to be in addition to
     the remedies otherwise available to the Disclosing Party at law or in
     equity.

7.   The Receiving party shall return to the Disclosing party any and all
     records, notes and other written, printed or tangible materials pertaining
     to the Confidential Information immediately upon written request of the
     Disclosing Party.

                                       15

<PAGE>

8.   This Agreement and the Receiving Party's obligations hereunder shall be
     binding upon the representatives, assigns and successors of the Receiving
     Party and shall inure to the benefit of the assigns and successors of the
     Disclosing Party.

9.   The Agreement shall be governed by and construed in accordance with
     internal laws of the State of Oregon.

10.  If any action at law or inequity is brought to enforce or interpret the
     provisions of this Agreement, the prevailing party in such action shall
     be entitled to reasonable attorney's fees.

11.  The Agreement constitutes the sole understanding of the parties with
     respect to the subject matter hereof and may not be amended or modified
     except in writing signed by each of the parties hereto.

IN WITNESS WHEREOF, THE PARTIES HERETO HAVE ENTERED INTO THIS AGREEMENT ON THE
DATE SET FORTH ABOVE.

Disclosing Party:                               Receiving Party:

ACUMED, INC.                                    O.J.I. SURGICAL, INC.

By: Randall Huebner                             By: Harry Kraus
-------------------                             ---------------

/s/ RANDALL HUEBNER                             /S/ HARRY KRAUS
-------------------                             ---------------
   Signature                                       Signature

It: President                                   Its: President
-------------                                   --------------

Date: 4/28/97                                   Date: 4/21/97
-------------                                   -------------

                                       16

<PAGE>

                                   ADDENDUM 8

                                  SALES QUOTA

Company reserves the right to have achievable sales quotas by product for a
specified period of time. These quotas may be in addition to the minimum
turnover rates for consignment inventory as detailed in Addendum 5.

Quotas will be determined after ninety (90) days of the signing of this
Agreement and on a calendar year basis thereafter.

Company reserves the right to alter the Territory and/or Products as defined in
this Agreement if individual quotas for products are not met.

Company will provide Representative a "Sales versus Quota" report at least on a
quarterly basis.

                                       17

<PAGE>

                                  AMENDMENT 1

This amendment, effective July 1, 1997, changes the territory as previously
defined in the Manufacturer's Representative Agreement dated June 1, 1996. The
updated territory is now defined as follows:

State of Oregon, excluding Baker and Malheur counties, and Cowlitz and Clark
Counties in Washington State (see attached map).

ACUMED, INC.                                    O.J.I. SURGICAL, INC.

By: Randall Huebner                             By: Harry Kraus
-------------------                             ---------------

/s/ RANDALL HUEBNER
-------------------                             ---------------
   Signature                                       Signature

It: President                                   Its: President
-------------                                   --------------

Date: 6/17/97                                   Date:
-------------                                   -------------

<PAGE>

                                  AMENDMENT 2

This amendment, effective May 1, 1998, changes the Representative's
responsibilities as previously defined in the Manufacturer's Representative
Agreement dated June 1,1996. The following clause is added to Section 8, Item A:

     13.  Representative shall immediately and fully advise Company of any suit,
          claim or complaint known to Representative resulting from the sale or
          use of any PRODUCTS.

ACUMED, INC.                                    O.J.I. SURGICAL, INC.

By: Randall Huebner                             By: Harry Kraus
-------------------                             ---------------

/s/ RANDALL HUEBNER                             /S/ HARRY KRAUS
-------------------                             ---------------
   Signature                                       Signature

It: President                                   Its: President
-------------                                   --------------

Date: 4/27/98                                   Date: 4/30/97
-------------                                   -------------SALES REPRESENTATIVE AGREEMENT

         Agreement made as of the 1ST day of JULY, 2000 (the "Effective Date"),
by and between SMITH & NEPHEW, INC. ("S&N"), and HARRY KRAUS ("Representative").

1.   TERM OF AGREEMENT. The initial term of this Agreement shall commence on the
     Effective Date and shall end on December 31, 2000, subject, however, to
     prior termination in accordance with Section 10 of this Agreement. After
     the initial term, this Agreement shall be automatically renewed and
     extended for successive additional six-month periods subject, however, to
     prior termination in accordance with Section 10 of this Agreement.

2.   APPOINTMENT AND DEFINITION OF PRODUCTS AND TERRITORY. S&N hereby grants to
     Representative, and Representative accepts from S&N, the right to sell the
     products listed in EXHIBIT A attached hereto (the "Products") in the
     geographic area described in EXHIBIT B attached hereto (the "Territory").
     S&N reserves the right to make sales of Products directly to customers
     inside the Territory subject to Representative's right to receive
     commissions on sales of Products in the Territory pursuant to Section 5.
     Whether Representative's right to sell the Products in the Territory is
     exclusive or non-exclusive is stated in EXHIBIT B.

3.   RESPONSIBILITIES OF THE REPRESENTATIVE.

     (a)  PROMOTION OF PRODUCTS. Representative will use its best efforts and
          devote such time as may be reasonably necessary to promote and
          maximize the sale and use of the Products in the Territory. In
          furtherance of but without limiting the foregoing, Representative
          agrees to:

          (i)  diligently solicit orders for the Products throughout the
               Territory;

          (ii) distribute within the Territory sales catalogs and other
               literature supplied by S & N; and Exogen, Inc. ("Exogen"); and

          (iii) maintain adequate facilities and a competent work force to
               promote and sell the products effectively.

     (b)  REPORTS. Representative shall provide S&N and Exogen with periodic and
          other special sales reports as may reasonably be requested from time
          to time by S&N and Exogen.

     (c)  MARKET INFORMATION. Representative shall forward to Company all
          information relating to the Product, whether favorable or adverse,
          received by it or its employees, agents or subcontractors. Likewise,
          Representative shall forward to S&N all marketing information acquired
          on medical instruments in competition, either directly or indirectly,
          with any of the Products. Representative shall submit 30 days
          following the execution date of this Agreement and 30 days prior to
          the beginning of each six month period that this Agreement is in
          effect, a written business plan containing, among other things,
          marketing information, forecast input and sales plans.

                                                                          PAGE 1

<PAGE>

     (d)  RECORDS. Representative shall keep complete and accurate records
          concerning all employees, agents and subcontractors "including,
          without limitation, information detailing (i) training for Medical
          Device and Complaint Reporting ("MDR") under the United States Food
          and Drug Administration ("FDA") requirements, (ii) sales training
          programs for all employees, agents and subcontractors selling Products
          (iii) sales records for all employees, agents and subcontractors
          selling Products, and (iv) a list of all customers with whom
          employees, agents and subcontractors selling Products have done
          business. S&N shall be allowed access to such records at all
          reasonable times ( during normal business hours, or at other times
          that are mutually agreeable by S&N and Representative) following S&N's
          request. Within 10 days of the date of this Agreement, Representative
          shall provide S&N with a list of employees and agents authorized to
          sell the Products and shall notify S&N in writing within 15 days of
          any change to that list.

     (e)  EXPENSES. Representative will pay all expenses incurred by it in
          connection with its business and will be solely responsible for the
          acts and expenses of its employees and agents.

     (f)  AUTHORITY. Representative will not, without S&N's prior written
          approval, accept, alter, enlarge, or limit orders, make
          representations or guarantees concerning Products, accept the return
          of, or make any allowance for, Products, or bill any customer for any
          order of Products.

     (g)  POLICIES. Representative will abide by all policies and procedures
          established by S&N and Exogen from time to time regarding the
          solicitation and recording of orders, sales promotions, and other
          matters related to the sale of Products.

     (h)  TRADE SHOWS. If requested by S&N, Representative at its own expense
          will assist S&N in presentations at trade shows and in sales
          promotional campaigns.

     (i)  SALES LEADS. Representative agrees to promptly advise S&N of any sales
          leads or potential customers for Products outside of the Territory.

     (j)  TRAINING. Representative will make every reasonable effort to assure
          active participation of all appropriate personnel in its organization
          in the use of training materials and attendance at training programs
          of S&N.

     (k)  COLLECTION. Representative will use its best efforts to assist Exogen,
          upon its request, with any collections for Products sold in the
          Territory .

     (l)  COMPLIANCE WITH LAWS. Representative shall comply in all material
          respects, with all laws, regulations, and requirements of all
          governmental agencies governing the manufacture and distribution of
          the Products, including, without limitation to, the FDA's MDR and FDA
          Medical Device Registration guidelines.

                                                                          PAGE 2

<PAGE>

4.   RESPONSIBILITIES OF S&N. S&N agrees to:

     (a)  Provide to Representative such literature, brochures, information and
          training as is required in the judgment of S & N;

     (b)  Keep Representative informed of the prices at which the Products are
          offered for sales and of changes in products, specifications, prices
          and deliveries;

     (c)  Provide Representative with a copy of the acknowledgement of any order
          for Products submitted by a customer in the Territory which is
          accepted by S&N and a copy of each invoice for Products shipped in the
          Territory; and

     (d)  Comply in all material respects, with all laws, regulations, and
          requirements of all governmental agencies governing the manufacture
          and distribution of the Products, including, but not limited to, the
          FDA guidelines and the FDA's MDR requirements.

5.   COMMISSIONS.

     (a)  S&N agrees to pay and Representative agrees to accept commissions as
          set forth in EXHIBIT C attached hereto as full payment for all sales
          made and services rendered by Representative under this Agreement.

     (b)  Commissions will be paid to Representative, subject to the provisions
          of Sections 6 of this Agreement, on Net Invoice Prices (as defined
          below) of Orders (as defined below) for the sale of Products delivered
          to customers in the Territory while this Agreement is in effect.

     (c)  "Net Invoice Price" means the amount shown on the invoice as due from
          the customer, after giving effect to quantity or other discounts,
          sales allowances and adjustments for bad debt. No commissions shall be
          paid on the replacement of Products previously sold in the Territory.

     (d)  "Order" means any commitment to purchase Products which has been
          accepted and shipped by S&N, and which is obtained by Representative
          or directly by S&N, and which is obtained by Representative or
          directly by S&N during the term of this Agreement from (i) any
          customer located in the Territory, or (ii) any third party payer
          purchasing the Product on behalf of any customer located in the
          Territory, subject to the provisions in EXHIBIT C.

6.   ACCEPTANCE OF ORDERS; EXCLUDED ORDERS.

     (a)  All orders shall be submitted to Exogen and shall be subject to
          acceptance or rejection, in the sole discretion of Exogen, by an
          authorized employee of Exogen at its principal office. Representative
          understands that it is granted only the authority to solicit and
          obtain Orders for Products for transmittal to Exogen. Representative
          is neither expressly nor implicitly authorized to accept Orders on
          behalf of Exogen or to enter into written or oral contracts or
          agreements of any nature on behalf of Exogen.

                                                                          Page 3

<PAGE>

     (b)  S&N may designate by written notice to Representative certain
          customers within the Territory as "National, Regional, or Government
          Accounts." Representative will be paid commissions on sales to these
          accounts, depending upon the Representative's responsibilities set
          forth in EXHIBIT C that apply to those accounts.

     (c)  Representative recognizes that S&N has appointed or may appoint (i)
          other sales representatives for the Products in areas other than the
          Territory; (ii) other sales representatives within the Territory for
          goods manufactured by S&N other than the Products; and (iii) other
          sales representatives within the Territory for the Products if
          Representative's rights hereunder are stated to be non-exclusive in
          EXHIBIT A. This Agreement does not give Representative any right to
          offer for sale or sell goods manufactured or offered for sales by S&N
          other than the Products.

7.   COMPETITIVE PRODUCTS. Representative shall not during the term of this
     Agreement, without prior written consent of S&N, market or sell goods which
     in S&N's opinion compete directly or indirectly with Exogen products.

8.   CHANGES IN AGREEMENT AND EXHIBITS.

     (a)  Because of S&N's sales policies, the commission rates it is willing to
          pay to Representative and the sums on which it is willing to sell its
          products may change after this Agreement has been signed, S&N reserves
          the right, in its sole discretion, to make changes in this Agreement
          or in any of the Exhibits to this Agreement. Changes in this Agreement
          or in any Exhibits will be effective 30 days after written notice of
          the change has been given to Representative; provided, however, that
          S&N may make changes affecting promotions and prices without notice.
          Representative may, if it does not agree to the change, terminate this
          Agreement under Section 10 (e). No changes made by S&N shall be
          applied retroactively if the change would result in a reduction in
          commissions due to Representative.

     (b)  Upon 30 days prior written notice to the Representative, S&N may, in
          its sole discretion, modify the Territory or terminate in full this
          Agreement if S&N determines that the Representative's level of sales
          is unsatisfactory to S&N .

9.   FORECASTS. S&N shall establish and notify Representative in writing 30 days
     prior to the beginning of each six month period that this Agreement is in
     effect of its sales quota for each such six month period and its quarterly
     quotas for each quarter of such six month period (the "Sales Quota" or the
     "Quotas"), which Quotas shall be established by S&N on a good faith basis.
     EXHIBIT D attached hereto sets forth the Representative's Sales Quota
     commencing with the first full month Representative sells Sonic Accelerated
     Fracture Healing System ("SAFHS"), under this Agreement.

10.  TERMINATION. This Agreement may be terminated:

     (a)  By either party without cause, effective at the end of the then
          current term, by giving prior written notice of termination to the
          other party at least 30 days prior to the end of the then current
          term. If no notice is given, this Agreement shall automatically renew
          as stated in Section 1.

                                                                          PAGE 4

<PAGE>

     (b)  At any time, by either party , if the other party breaches any of its
          obligations under this Agreement and fails to remedy such breach
          within 30 days after written notice of such breach is provided to such
          other party .

     (c)  By S&N, effective immediately and without notice, if (i) all or a
          substantial part of the assets of Representative, or more than 50% of
          the capital stock of Representative, is sold or otherwise transferred
          to any person; (ii) Representative is merged or consolidated with any
          other person; (iii) a receiver, trustee, or liquidator of
          Representative is appointed for any of properties or assets of
          Representative; (iv) Representative makes a general assignment for the
          benefit of its creditors; (v) Representative files a petition under
          the federal Bankruptcy Code or other federal or state statute for the
          reorganization of Representative or any arrangement with its creditors
          or readjustment of its debt, or its dissolution or liquidation, or
          such a petition is filed against Representative and is not dismissed
          within 60 days thereafter; or (vi) Representative ceases doing
          business or commences dissolution or liquidation proceedings.

     (d)  By S&N, upon 30 days prior written notice to the Representative if the
          Representative's aggregate sales, net of returns, of Products during
          any quarter of this Agreement does not equal or exceed the
          Representative's Sales Quota for each such period.

     (e)  By Representative, if S&N changes any portion of this Agreement or any
          Exhibit to this Agreement pursuant to Section 8(a) and Representative
          disagrees with the change, by written notice of tern1ination to S&N,
          effective 10 days following the giving of such notice.

          It is specifically understood by Representative and by S&N that if one
          party shall duly exercise its right of termination under this section
          10, the only rights of the other party shall be those specified in
          Sections 11, 12, 14, and 18 hereof, and that neither party shall be
          entitled to any compensation or claim for goodwill or other loss, cost
          or expense which either of them may suffer or claim to have suffered
          by reason of termination of this Agreement.

11.  RIGHTS FOLLOWING TERMINATION.

     (a)  Following termination of this Agreement, S&N shall have no further
          responsibility to Representative except to (i) pay commissions then
          due, and (ii) pay when they become due commissions on Orders accepted
          by S&N prior to termination, which are scheduled for shipment and are
          actually shipped within 30 days following termination; provided,
          however, that S&N's obligation under clause 11 (a)(ii) shall be an
          amount equal to one-half(1/2) of the usual commission otherwise due
          under Exhibit C. Except as expressly stated herein, S&N shall have no
          liability for commissions with respect to Orders received by S&N after
          the Effective Date of termination of this Agreement.

     (b)  In the event of termination, Representative shall promptly return to
          S&N or its designee all sales literature, brochures, technical
          information, price lists, samples, evaluation units and other
          materials supplied by S&N to Representative without charge.

                                                                          Page 5

<PAGE>

     (c)  The rights and obligations of the parties to this Agreement set forth
          in this Section 11 and Sections 12, 14, and 18 hereof shall survive
          any termination or expiration of this Agreement. The termination or
          expiration of this Agreement shall in no case relieve either party
          from its obligations to pay to the other monies accrued hereunder
          prior to such termination or expiration.

     (d)  S&N shall have no liability to Representative for damages of any
          kind, including incidental or consequential damages, on account of
          the termination or expiration of this Agreement. Without limiting the
          generality of the foregoing, S&N shall not be liable to Representative
          on account of the termination or expiration of this Agreement for
          reimbursement or damages for the loss of goodwill, prospective profits
          or anticipated sales, or on account of any expenditures, investment,
          leases or commitments made by Representative or for any reason
          whatsoever based upon or growing out of such termination or
          expiration.

12.  PROPRIETARY RIGHTS AND CONFIDENTIALITY .

     (a)  Except as expressly set forth in Section 14, neither this Agreement
          nor any sale of Products under this Agreement shall be construed as
          granting to the Representative any license or right in or to any
          patent, copyright, trademark or other proprietary right of S&N or
          Exogen.

     (b)  The Representative shall maintain the confidentiality of, and not
          disclose to others, any confidential or proprietary information of S&N
          or Exogen which it may now have or may hereafter obtain, including
          without limitation specifications, technical reports, customer lists
          and product plans relating to S&N's business or products.
          Representative shall cause each of its employees, agents and
          subcontractors to execute such agreements as may be necessary to
          assure compliance with this Section l2(b).

13.  PRODUCT CHANGES.

     (a)  It is understood that new and additional products may be introduced by
          S&N from time to time. Representative shall be authorized to solicit
          orders for sales of such new or additional products only if and when
          S&N authorizes Representative, in writing, to represent S&N in
          connection with each such product.

     (b)  Upon 30 days prior written notice to the Representative, Products may
          be deleted from the list of Products which Representative is
          authorized to sell. No commissions shall be paid on Orders for such
          deleted Products received by S&N after the effectiveness of such
          Product deletion.

14.  TRADEMARKS. Representative shall conduct business under its own name.
     Representative shall not use any trademarks or trade names of S&N in any
     manner, except as authorized in writing by S&N or in connection with the
     use of literature supplied by S&N. Representative shall discontinue such
     usage upon termination of this Agreement.

                                                                          Page 6

<PAGE>

15.  RELATIONSHIP BETWEEN PARTIES. The relationship between S&N and
     Representative is that of independent contractors, and nothing in this
     Agreement shall be construed to constitute Representative as an employee,
     partner or agent of S&N. Without limiting the foregoing, Representative
     shall have no authority to act for or to bind S&N in any way, to alter any
     of the terms or conditions of any standard forms or other agreements of S&N
     with purchasers of Products, to make representations or warranties or to
     execute agreements on behalf of S&N, or to represent that is in any way
     responsible for the acts or omissions of Representative. Representative
     shall indemnify and hold S&N harmless for any liability or damage to S&N
     resulting from a violation of this Section 15.

16.  NOTICES. All notices, requests, demands, and other communications under
     this Agreement shall be in writing and shall be deemed to have been duly
     given when delivered in person or, if mailed, when mailed by United States
     certified or registered mail, postage prepaid, to the parties at the
     addresses set forth below their signatures to this Agreement or at such
     other address as may be given in writing by either party to the other in
     accordance with this Section 16.

17.  ASSIGNABILITY.

     (a)  Representative acknowledges that S&N is entering into this Agreement
          in reliance upon the personal reputation, qualifications and abilities
          of the present owner or owners of Representative's business and
          operations, and accordingly, the Representative may not assign its
          rights or obligations under this Agreement, either voluntarily or by
          operation of law, except with the prior written consent of S&N. A
          change in control of the Representative's business shall be deemed to
          be an assignment for this purpose.

     (b)  S&N may assign this Agreement without Representative's consent.

18.  INDEMNIFICATION. S&N shall indemnify and hold harmless Representative from
     any and all claims, damages or costs which arise out of Representative's
     performance of its duties hereunder, except to the extent such claims,
     damages or costs result, directly or indirectly, from Representative's
     breach of Section 15 hereof or the gross negligence or willful misconduct
     of Representative. Representative shall indemnify and hold harmless S&N
     from and all claims, damages or costs which arise out of Representative's
     performance of its duties hereunder, to the extent such claims, damages or
     costs result, directly or indirectly, from Representative's breach of
     Section 15 hereof or the gross negligence or willful misconduct of
     Representative.

19.  MISCELLANEOUS.

     (a)  This Agreement shall not be binding upon S&N until it has been
          executed by a duly authorized officer of S&N .

     (b)  This Agreement shall be governed by, and construed in accordance with,
          the laws of the State of Tennessee without giving effect to conflict
          of laws principles.

     (c)  This Agreement constitutes the entire understanding between the
          parties relating to the subject matter of this Agreement and
          supersedes all prior writings, negotiations or understandings with
          respect thereto. No modification or addition to this Agreement shall
          have any effect unless it is set forth in writing and signed by both
          parties.

                                                                          Page 7

<PAGE>

     (d)  The waiver by S&N of any breach of any provision of this Agreement
          shall not be construed as a continuing waiver of such breach or as a
          waiver of other breaches of the same or of other provisions of this
          Agreement.

     (e)  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.

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

REPRESENTATIVE                                  SMITH & NEPHEW, INC.
HARRY KRAUS

Name Printed: Harry Kraus
             --------------------

By: /s/ HARRY KRAUS                             By: /s/ RUE A. BERG
    ---------------                                 ---------------
    Harry Kraus

Title:                                          Title: V.P. Sales
      -------------                                   -------------

Address:                                        Address:

4905 SW Dosch Park Lane                         1450 Brooks Road
Portland, OR 97201                              Memphia, Tennessee 38116

TaxID or Social Security No: ###-##-####
                             ------------

Date:                                           Date:
      ------------------------                       ------------------------

Exhibits:
        A. Products
        B. Territory
        C. Commission
        D. Sales Quota

                                                                          PAGE 8

<PAGE>

                                    EXHIBIT A

                                   "PRODUCTS "

Exogen 2000(TM) - Ultrasound Bone healing Therapy for Fresh Closed Distal Radius
(Colles') Fractures and Closed or Grade I Open Tibial Diaphysis Fractures in
Skeletally Mature Individuals When These Fractures are Orthopaedically Managed
by Closed Reduction and Cast Immobilization.

<PAGE>

                                    EXHIBIT B

                                   "TERRITORY"

REPRESENTATIVE:                                         -----------------------

(name, social security  no. or Federal I.D.)            -----------------------

EXCLUSIVE                                               NON-EXCLUSIVE     X
         ---------------                                              ---------

TERRITORY: TO BE DEFINED BY THE PORTLAND DISTRICT SALES MANAGER.

<PAGE>

                                    EXHIBIT C

                                  "COMMISSIONS"

COMMISSIONS ARE 13% OF THE NET INVOICE PRICE AS DEFINED IN SECTION 5 PARAGRAPH C
UNTIL AN EXOGEN SPECIALIST IS HIRED TO ASSIST IN YOUR TERRITORY.

COMMISSIONS REVERT TO 5% OF THE NET INVOICE PRICE AS DEFINED IN SECTION 5
PARAGRAPH C AS SOON AS AN EXOGEN SPECIALIST IS HIRED TO ASSIST IN YOUR
TERRITORY.

<PAGE>

                                    EXHIBIT D

                                  "SALES QUOTA"

               The Sales Quota is to be determined by the Manager
          in terms of number of monthly REVENUE SHIPMENTS and ORDERS .

<PAGE>

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