Document:

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                                                                   EXHIBIT 10.8

                                 AMENDMENT NO. 2
                                       TO
                                CREDIT AGREEMENT

        THIS AMENDMENT NO. 2 TO CREDIT AGREEMENT, dated as of June 30, 2002 (the
"Amendment"), between Rehabilicare Inc., a Minnesota corporation (the
"Borrower") and U.S. Bank National Association (the "Bank").

                                    RECITALS:

        A. The Borrower and the Bank are the parties to that certain Credit
Agreement dated as of July 14, 1999, as amended by an Amendment No. 1 to Credit
Agreement and Waiver dated as of March 31, 2001 (the "Original Agreement").

        B. The Borrower has requested that the Bank amend certain Sections of
the Original Agreement.

        C. Subject to the terms and conditions of this Amendment, the Bank will
agree to the foregoing requests of the Borrower.

        NOW, THEREFORE, the parties agree as follows:

        1. DEFINED TERMS. All capitalized terms used in this Amendment shall,
except where the context otherwise requires, have the meanings set forth in the
Original Agreement as amended hereby.

        2. AMENDMENTS.  The Original Agreement is amended as follows:

               (a) Each reference in the Original Agreement to:

                      (i) the "Adjusted Eurodollar Rate" for any Eurodollar Rate
               Loan Unit shall be deemed to be a reference to the LIBOR Rate;

                      (ii) a "Eurodollar Business Day" shall be deemed to be a
               reference to a New York banking day; and

                      (iii) the "Reference Rate" shall be deemed to be a
               reference to the Prime Rate; and

                      (iv) any "Reference Rate Loan Unit" or the "Reference Rate
               Loan Units", as the case may be, shall be deemed to be a
               reference to a Prime Rate Loan or the Prime Rate Loans.

               (b) The definition of "Interest Period" appearing in Section 1.1
        of the Original Agreement is amended in its entirety to read as follows:

               "`Interest Period': For any Eurodollar Rate Loan Unit, the period
        commencing on the date of such Eurodollar Rate Loan Unit and ending on
        the numerically corresponding day 1, 2, 3, or 6 months thereafter
        matching the interest rate term selected by the Borrower; provided,
        however, (a) if any Interest Period would otherwise end on a day which
        is not a New York Banking Day, then the Interest Period shall end on the
        next succeeding New York Banking Day unless the next succeeding New York
        Banking Day falls in another calendar month, in which case the Interest
        Period shall end on the immediately preceding New York Banking Day; (b)
        if any Interest Period begins on the last New York Banking Day of a
        calendar month (or on a day for which there is no numerically
        corresponding day in the calendar month at the end of the Interest
        Period), then the Interest Period shall end on the last New York Banking
        Day of the calendar month at the end of such Interest Period; (c) no
        Interest Period relating to any Loan shall extend beyond the stated
        Maturity of such Loan; and/or (d) Interest Periods shall not be chosen
        for any Eurodollar Rate Loan Units which would require payment of any
        amount of such Eurodollar Rate Loan Unit prior to the last day of the
        Interest Period in order to pay a scheduled installment of the Term Loan
        when due.

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               (c) The definition of "Revolving Credit Termination Date"
        appearing in Section 1.1 of the Original Agreement is amended by
        extending the date "July 1, 2002" appearing therein to the date "July 1,
        2003."

               (d) Section 1.1 of the Original Agreement is further amended by
        adding the following new definitions of "LIBOR Rate," "New York Banking
        Day," and "Prime Rate" in proper alphabetical order:

                      "`LIBOR Rate': For any Eurodollar Rate Loan Unit for its
               Interest Period, the LIBOR rate quoted by the Bank from Telerate
               Page 3750 or any successor thereto (which shall be the LIBOR rate
               in effect two New York Banking Days prior to commencement of such
               Interest Period), adjusted for any reserve requirement and any
               subsequent costs arising from a change in government regulation.

                      `New York Banking Day': Any day (other than a Saturday or
               Sunday) on which commercial banks are open for business in New
               York, New York.

                      `Prime Rate': The prime rate announced by the Bank from
               time to time, as and when such rate changes.

               (e) The third sentence of Section 2.4 of the Original Agreement
        is amended in its entirety to read as follows:

                      "In the event the Borrower does not timely select another
               interest rate option at least two New York Banking Days before
               the end of the Interest Period for a Eurodollar Rate Loan Unit,
               the Bank may at any time after the end of the Interest Period
               convert the Eurodollar Rate Loan Unit to a Reference Rate Loan
               Unit, but until such conversion, the funds advanced under the
               Eurodollar Rate Loan Unit shall continue to accrue interest at
               the same rate as the interest rate in effect for such Eurodollar
               Rate Loan Unit prior to the end of the Interest Period."

               (f) Section 2.6 of the Original Agreement is amended in its
        entirety to read as follows:

               "SECTION 2.6 FUNDING LOSSES. If a Eurodollar Rate Loan Unit is
       prepaid prior to the end of the Interest Period for such Loan Unit,
       whether voluntarily or because prepayment is required due to such Loan
       Unit maturing or due to acceleration of such Loan Unit upon the
       occurrence of an Event of Default or otherwise, the Borrower agrees to
       pay all of the Bank's costs, expenses and Interest Differential (as
       determined by the Bank) incurred as a result of such prepayment. The term
       "Interest Differential" shall mean that sum equal to the greater of zero
       or the financial loss incurred by the Bank resulting from prepayment,
       calculated as the difference between the amount of interest the Bank
       would have earned (from like investments in the Money Markets as of the
       first day of the Eurodollar Rate Loan Unit) had prepayment not occurred
       and the interest the Bank will actually earn (from like investments in
       the Money Markets as of the date of prepayment) as a result of the
       redeployment of funds from the prepayment. Because of the short-term
       nature of this facility, the Borrower agrees that the Interest
       Differential shall not be discounted to its present value. Any prepayment
       of a Eurodollar Rate Loan Unit shall be in an amount equal to the
       remaining entire principal balance of such Eurodollar Rate Loan Unit. The
       term "Money Markets" refers to one or more wholesale funding markets
       available to the Bank, including negotiable certificates of deposit,
       commercial paper, eurodollar deposits, bank notes, federal funds,
       interest rate swaps or others. A certificate as to any such loss, cost or
       expense shall be submitted by the Bank to the Borrower together with such
       Bank's request for indemnification (which requests shall set forth the
       basis for requesting such amounts in reasonable detail) and shall, in the
       absence of manifest error or error proven by the Borrower, be conclusive
       and binding as to the amount thereof."

               (g) The first sentence of Section 4.2(a) of the Original
        Agreement is amended in its entirety to read as follows:

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                      "(a) The Borrower, by giving written or telephonic notice
               to the Bank by no later than 2:00 p.m. on the Business Day of a
               prepayment, may prepay the Loans, in whole or in part, at any
               time, without premium or penalty; provided, however, that: (i)
               any prepayment shall be subject to the provisions of Section 2.6;
               (ii) each partial prepayment of any Term Loan shall be in an
               amount of $500,000.00 or an integral multiple of $100,000.00
               above such amount; and/or (iii) no partial prepayment of an
               Eurodollar Rate Loan Unit shall be permitted."

        3. CONDITIONS TO EFFECTIVENESS. This Amendment shall become effective on
the date (the "Effective Date") when, and only when, the Bank shall have
received:

               (a) Counterparts of this Amendment executed by the Borrower;

               (b) A certified copy of the resolutions of the Board of Directors
        of the Borrower authorizing or ratifying the transactions contemplated
        hereby, designating the officers authorized to execute and/or deliver
        this Amendment and any other documents to be executed and/or delivered
        by the Borrower in connection herewith;

               (c) An Incumbency Certificate signed by the Secretary of the
        Borrower setting forth names of each officer of the Borrower designated
        to execute and/or deliver this Amendment and any other documents to be
        executed and/or delivered by the Borrower in connection herewith and an
        original sample of the signature thereof;

               (d) A certificate of the Secretary or an Assistant Secretary of
        the Borrower certifying (i) that there have been no changes to the
        articles of incorporation or bylaws of the Borrower previously delivered
        to the Bank; or if (i) is not correct, (ii) that the Articles and/or
        By-Laws delivered to the Bank in connection with this Amendment are true
        and correct copies of the Articles of Incorporation and/or By-Laws of
        the Borrower currently in full force and effect;

               (e) A Certificate of Good Standing for the Borrower issued by the
        Secretary of State of the State of Minnesota; and

               (f) Such other documents or other items as the Bank may
        reasonably request.

        4. REPRESENTATIONS AND WARRANTIES. To induce the Bank to enter into this
Amendment, the Borrower represents and warrants to the Bank as follows:

               (a) The execution, delivery and performance by the Borrower of
        this Amendment and any other documents to be executed and/or delivered
        by the Borrower in connection herewith have been duly authorized by all
        necessary corporate action, do not require any approval or consent of,
        or any registration, qualification or filing with, any government agency
        or authority or any approval or consent of any other person (including,
        without limitation, any stockholder), do not and will not conflict with,
        result in any violation of or constitute any default under, any
        provision of the Borrower's articles of incorporation or bylaws, any
        agreement binding on or applicable to the Borrower or any of its
        property, or any law or governmental regulation or court decree or
        order, binding upon or applicable to the Borrower or of any of its
        property and will not result in the creation or imposition of any
        security interest or other lien or encumbrance in or on any of its
        property pursuant to the provisions of any agreement applicable to the
        Borrower or any of its property except pursuant to the Loan Documents to
        which the Borrower is a party;

               (b) The representations and warranties contained in ARTICLE VII
        of the Original Agreement are true and correct as of the date hereof as
        though made on that date except to the extent that such representations
        and warranties relate solely to an earlier date;

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               (c) No events have taken place and no circumstances exist at the
        date hereof which would give the Borrower the right to assert a defense,
        offset or counterclaim to any claim by the Bank for payment of the
        Obligations;

               (d) The Original Agreement, as amended by this Amendment and the
        other Loan Documents to which the Borrower is a party remain in full
        force and effect and are the legal, valid and binding obligations of the
        Borrower and are enforceable in accordance with their respective terms,
        subject to limitations as to enforceability which might result from
        bankruptcy, insolvency, moratorium and other similar laws affecting
        creditors' rights generally and subject to limitations on the
        availability of equitable remedies; and

               (e) Prior to and after giving effect to this Amendment, no
        Adverse Event, Default or Event of Default has occurred and is
        continuing as of the date hereof.

        5.     REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS.

               (a) From and after the date of this Amendment, each reference in
        the Original Agreement to "this Agreement," "hereunder," "hereof,"
        "herein" or words of like import referring to the Original Agreement,
        and each reference to the "Agreement," "thereunder," "thereof,"
        "therein" or words of like import referring to the Original Agreement in
        any other Loan Document shall mean and be a reference to the Original
        Agreement as amended hereby; and

               (b) The execution, delivery and effectiveness of this Amendment
        shall not, except as expressly provided herein, operate as a waiver of
        any right, power or remedy of the Bank under the Original Agreement or
        any other Loan Document, nor constitute a waiver of any provision of the
        Original Agreement or any such other Loan Document.

        6. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on demand all
costs and expenses of the Bank in connection with the preparation, reproduction,
execution and delivery of this Amendment and the other documents to be delivered
hereunder or thereunder, including their reasonable attorneys' fees and legal
expenses. In addition, the Borrower shall pay any and all stamp and other taxes
and fees payable or determined to be payable in connection with the execution
and delivery, filing or recording of this Amendment and the other instruments
and documents to be delivered hereunder, and agrees to save the Bank harmless
from and against any and all liabilities with respect to, or resulting from, any
delay in the Borrower's paying or omission to pay, such taxes or fees.

        7. GOVERNING LAW. THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY OF THIS
AMENDMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA,
WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT
TO FEDERAL LAWS OF THE UNITED STATES APPLICABLE TO NATIONAL BANKS.

        8. HEADINGS. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.

        10. COUNTERPARTS. This Amendment may be executed in separate
counterparts and by separate parties in separate counterparts, each of which
shall be an original and all of which taken together shall constitute one and
the same Amendment.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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        IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the date
first written above.

                                Rehabilicare Inc.

                                By:
                                   ____________________________________________
                                Title:
                                       _________________________________________

                                U.S. Bank National Association

                                By:
                                   _____________________________________________
                                Title:
                                       _________________________________________

                                       5<PAGE>
                                                                    EXHIBIT 10.9

                              EMPLOYMENT AGREEMENT

        EMPLOYMENT AGREEMENT (this "Agreement") dated as of May 9, 2002, between
Rehabilicare Inc. (the "Company"), a Minnesota corporation, and W. Glen Winchell
(the "Executive"), a resident of Minnesota

        WHEREAS, the Executive has served as Chief Financial Officer of the
Company for almost nine years;

        WHEREAS, the Executive has a Severance Pay Agreement, dated as of May 7,
1997, with the Company, as amended by Amendment No1 and Amendment No 2 thereto
(the "Severance Agreement") that applies only after a Change of Control (as
defined therein);

        WHEREAS, the Company is currently seeking to retain a new Chief
Executive Officer and both wishes to assure itself of the continued services of
Executive and to provide for an increased level of services prior to retention
of such Chief Executive Officer;

        WHEREAS, Executive wishes to confirm the terms of his employment on the
terms and conditions set forth in this Agreement and in the Severance Agreement.

        NOW, THEREFORE, in consideration of the premises, the mutual agreements
set forth below and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:

        1. Term. Unless terminated at an earlier date in accordance with Section
9 of this Agreement, the term of this Agreement shall commence on the date
hereof and continue for a period of eighteen months after the retention by the
Company of a new Chief Executive Officer.

        2. Position and Duties.

        (a) Service with Company. During the term of this Agreement, the
Executive agrees to perform such reasonable employment duties as the Board of
Directors of the Company shall assign to him from time to time as shall be
appropriate to his position. The Executive's title and position shall, until the
commencement of work by a new Chief Executive Officer, be "Chief Operating
Officer and Chief Financial Officer." After commencement of work by a new Chief
Executive Officer, Executive's title and position shall be "Vice President and
Chief Financial Officer."

        (b) Performance of Duties. The Executive agrees to serve the Company
faithfully and to the best of his ability and to devote his full time, attention
and efforts to the business and affairs of the Company during his employment by
the Company. The Executive hereby confirms that he is under no contractual
commitments inconsistent with his obligations set forth in this Agreement and
that during the term of this Agreement, he will not render or perform services
for any other corporation, firm, entity or person which are inconsistent with
the provisions of this Agreement. While he remains employed by the Company, the
Executive may participate in reasonable charitable activities and personal
investment activities so long as such activities do not interfere with the
performance of his obligations under this Agreement.

        3. Compensation.

        (a) Base Salary. As compensation for all services to be rendered by the
Executive under this Agreement, the Company shall pay to the Executive a base
salary for the period ending July 31, 2002, of $167,000 per annum, and
commencing on and after August 1, 2002, a base salary of no less than $187,000
per annum, in each case less deductions and withholdings, which salary shall be
paid in accordance with the Company's normal payroll procedures and policies.
The compensation payable to the Executive during each year after the year ending
July 31, 2002 shall be established by the Company's Board of Directors following
an annual performance review, but in no event shall the salary for any
subsequent year be less than the salary in effect for the prior year.
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        (b) Incentive Compensation. In addition to the base salary, the
Executive shall be eligible to participate in any bonus or incentive
compensation plans that may be established by the Board of Directors of the
Company from time to time applicable to the Executive and shall be entitled to
continue to participate in the bonus plan for the fiscal year of the Company
ending June 30, 2002, at a targeted bonus level of 30% of base salary. For each
of the fiscal years ending June 30, 2003 and June 30, 2004, the Executive's
targeted bonus level shall not be less than 35%; provided that the Company shall
not be obligated to establish any specific bonus program or any particular bonus
level for any executive for the fiscal year ending June 30, 2004; provided
further that if the Company does establish a bonus program for the fiscal year
ending June 30, 2004, the targeted bonus level of Executive relative to other
executive officers of similar seniority for such fiscal year shall be at least
as high as the 35% targeted bonus level would represent for executives in the
fiscal year ending June 30, 2002.

        (c) Participation in Benefit Plans. While he is employed by the Company,
the Executive shall also be eligible to participate in all Executive and
employee benefit plans or programs (including vacation time) of the Company to
the extent that the Executive meets the requirements for each individual plan.
The Company provides no assurance as to the adoption or continuance of any
particular Executive or employee benefit plan or program, and the Executive's
participation in any such plan or program shall be subject to the provisions,
rules and regulations applicable thereto.

        (d) Special Bonus. Provided Executive's employment has not been
terminated prior to August 1, 2002 (unless such termination is by the Company
without Cause or by Executive for Good Reason, in which case this proviso shall
not apply), the Company shall pay to the Executive, with the next regular
payroll payment after August 1, 2002, a one time bonus for the extra services
undertaken by Executive while the Company has functioned without a Chief
Executive Officer, equal to $35,000, which bonus shall be in addition to, and
not by way of offset to, any bonus due Executive under Section 3(b).

        (e) Expenses. The Company will pay or reimburse the Executive for all
reasonable and necessary out-of-pocket expenses incurred by him in the
performance of his duties under this Agreement, subject to the Company's normal
policies for expense verification. In addition, the Company shall provide the
Executive an automobile expense reimbursement allowance of $750.00 per month.

        4. Confidential Information. Except as permitted or directed by the
Company's Board of Directors, during the term of his employment or at any time
thereafter, the Executive shall not divulge, furnish or make accessible to
anyone or use in any way (other than in the ordinary course of the business of
the Company) any confidential or secret knowledge or information of the Company
that the Executive has acquired or become acquainted with or will acquire or
become acquainted with prior to the termination of the period of his employment
by the Company (including employment by the Company or any affiliated companies
prior to the date of this Agreement), whether developed by himself or by others,
concerning any trade secrets, confidential or secret designs, processes,
formulae, plans, devices or material (whether or not patented or patentable)
directly or indirectly useful in any aspect of the business of the Company, any
customer or supplier lists of the Company, any confidential or secret
development or research work of the Company, or any other confidential
information or secret aspects of the business of the Company. The Executive
acknowledges that the above-described knowledge or information constitutes a
unique and valuable asset of the Company and represents a substantial investment
of time and expense by the Company, and that any disclosure or other use of such
knowledge or information other than for the sole benefit of the Company would be
wrongful and would cause irreparable harm to the Company. Both during and after
the term of his employment, the Executive will refrain from any acts or
omissions that would reduce the value of such knowledge or information to the
Company. The foregoing obligations of confidentiality shall not apply to any
knowledge or information that is now published or which subsequently becomes
generally publicly known in the form in which it was obtained from the Company,
other than as a direct or indirect result of the breach of this Agreement by the
Executive.

        5. Ventures. If, during the term of his employment the Executive is
engaged in or associated with the planning or implementing of any project,
program or venture involving the Company and a third party or parties, all
rights in such project, program or venture shall belong to the Company. Except
as approved by the Company's Board of Directors, the Executive shall not be
entitled to any interest in such project, program or venture or to any

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commission, finder's fee or other compensation in connection therewith other
than the compensation to be paid to the Executive as provided in this Agreement.
The Executive shall have no interest, direct or indirect, in any vendor or
customer of the Company.

        6. Noncompetition Covenant. (a) Agreement Not to Compete. During the
term of his employment with the Company and for a period of one year after the
termination of such employment (unless such termination by the Company is
without Cause or such termination by the Executive is for Good Reason),
Executive shall not engage in competition with the Company in any manner or
capacity (e.g., as an advisor, principal, agent, partner, officer, director,
stockholder, employee, member of any association or otherwise) in any phase of
the business which the Company is conducting during the term of this Agreement,
including the design, development, manufacture, distribution, marketing, leasing
or selling of accessories, devices or systems related to the products or
services being sold by the Company or hire any current or former Executive of
the Company.

        (b) Geographic Extent of Covenant. The obligations of the Executive
under Section 6(a) shall apply to any geographic area in which the Company (i)
has engaged in business during the term of this Agreement through production,
promotional, sales or marketing activity, or otherwise, or (ii) has otherwise
established its goodwill, business reputation or any customer or supplier
relations.

        (c) Limitation of Covenant. Ownership by the Executive, as a passive
investment, of less than two percent of the outstanding shares of capital stock
of any corporation listed on a national securities exchange or publicly traded
on Nasdaq shall not constitute a breach of this Section 6.

        (d) Indirect Competition. The Executive will not, directly or
indirectly, assist or encourage any other person in carrying out, directly or
indirectly, any activity that would be prohibited by the above provisions of
this Section 6 if such activity were carried out by the Executive, either
directly or indirectly. In particular the Executive agrees that he will not,
directly or indirectly, induce any Executive of the Company to carry out,
directly or indirectly, any such activity.

        (e) Acknowledgment. The Executive agrees that the restrictions and
agreements contained in this Section 6 are reasonable and necessary to protect
the legitimate interests of the Company and that any violation of this Section 6
will cause substantial and irreparable harm to the Company that would not be
quantifiable and for which no adequate remedy would exist at law and accordingly
injunctive relief shall be available for any violation of this Section 6.

        (f) Blue Pencil Doctrine. If the duration or geographical extent of, or
business activities covered by, this Section 6 are in excess of what is valid
and enforceable under applicable law, then such provision shall be construed to
cover only that duration, geographical extent or activities that are valid and
enforceable. The Executive acknowledges the uncertainty of the law in this
respect and expressly stipulates that this Agreement be given the construction
which renders its provisions valid and enforceable to the maximum extent (not
exceeding its express terms) possible under applicable law.

        7. Patent and Related Matters.

        (a) Disclosure and Assignment. The Executive will promptly disclose in
writing to the Company complete information concerning each and every invention,
discovery, improvement, device, design, apparatus, practice, process, method or
product, whether patentable or not, made, developed, perfected, devised,
conceived or first reduced to practice by the Executive, either solely or in
collaboration with others, during the term of this Agreement, or within six
months thereafter, whether or not during regular working hours, relating either
directly or indirectly to the business, products, practices or techniques of the
Company ("Developments"). The Executive, to the extent that he has the legal
right to do so, hereby acknowledges that any and all of the Developments are the
property of the Company and hereby assigns and agrees to assign to the Company
any and all of the Executive's right, title and interest in and to any and all
of the Developments. At the request of the Company, the Executive will confer
with the Company and its representatives for the purpose of disclosing all
Developments to the Company as the Company shall reasonably request during the
period ending one year after termination of the Executive's employment with the
Company.

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        (b) Future Developments. As to any future Developments made by the
Executive that relate to the business, products or practices of the Company and
that are first conceived or reduced to practice during the term of this
Agreement, or within six months thereafter, but which are claimed for any reason
to belong to an entity or person other than the Company, the Executive will
promptly disclose the same in writing to the Company and shall not disclose the
same to others if the Company, within 20 days thereafter, shall claim ownership
of such Developments under the terms of this Agreement. If the Company makes no
such claim, the Executive hereby acknowledges that the Company has made no
promise to receive and hold in confidence any such information disclosed by the
Executive.

        (c) Limitation on Sections 7(a) and 7(b). The provisions of Section 7(a)
and 7(b) shall not apply to any Development meeting the following conditions:

        (1) such Development was developed entirely on the Executive's own time;

        (2) such Development was made without the use of any Company equipment,
        supplies, facility or trade secret information;

        (3) such Development does not relate (A) directly to the business of the
        Company or (B) to the Company's actual or demonstrably anticipated
        research or development; and

        (4) such Development does not result from any work performed by the
        Executive for the Company.

        (d) Assistance of the Executive. Upon request and without further
compensation therefor, but at no expense to the Executive, the Executive will do
all lawful acts, including but not limited to, the execution of papers and
lawful oaths and the giving of testimony, that in the opinion of the Company,
may be necessary or desirable in obtaining, sustaining, reissuing, extending and
enforcing United States and foreign copyrights and Letters Patent, including but
not limited to, design patents, on the Developments, and for perfecting,
affirming and recording the Company's complete ownership and title thereto, and
to cooperate otherwise in all proceedings and matters relating thereto.

        (e) Records. The Executive will keep complete, accurate and authentic
accounts, notes, data and records of the Developments in the manner and form
requested by the Company. Such accounts, notes, data and records shall be the
property of the Company, and, upon its request, the Executive will promptly
surrender same to it or, if not previously surrendered upon its request or
otherwise, the Executive will surrender the same, and all copies thereof, to the
Company upon the conclusion of his employment.

        (f) Obligations, Restrictions and Limitations. The Executive understands
that the Company may enter into agreements or arrangements with agencies of the
United States Government, and that the Company may be subject to laws and
regulations which impose obligations, restrictions and limitations on it with
respect to inventions and patents which may be acquired by it or which may be
conceived or developed by employees, consultants or other agents rendering
services to it. The Executive shall be bound by all such obligations,
restrictions and limitations applicable to any such invention conceived or
developed by him while he is employed by the Company and shall take any and all
further action which may be required to discharge such obligations and to comply
with such restrictions and limitations.

        (g) Copyrightable Material. All right, title and interest in all
copyrightable material that the Executive shall conceive or originate, either
individually or jointly with others, and which arise out of the performance of
this Agreement, will be the property of the Company and are by this Agreement
assigned to the Company along with ownership of any and all copyrights in the
copyrightable material. Upon request and without further compensation therefor,
but at no expense to the Executive, the Executive shall execute all papers and
perform all other acts necessary to assist the Company to obtain and register
copyrights on such materials in any and all countries. Where applicable, works
of authorship created by the Executive for the Company in performing his
responsibilities under this Agreement shall be considered "works made for hire,"
as defined in the U.S. Copyright Act.

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        (h) Know-How and Trade Secrets. All know- how and trade secret
information conceived or originated by the Executive that arises out of the
performance of his obligations or responsibilities under this Agreement or any
related material or information shall be the property of the Company, and all
rights therein are by this Agreement assigned to the Company.

         8.     Termination of Employment.

        (a) Grounds for Termination. The Executive's employment shall terminate
prior to the expiration of the initial term set forth in Section 1 or any
extension thereof in the event that at any time:

            (1)  The Executive dies;

            (2) The Executive becomes "disabled," so that he cannot perform the
            essential functions of his position with or without reasonable
            accommodation;

            (3) The Board of Directors of the Company elects to terminate this
            Agreement for "Cause" and notifies the Executive in writing of such
            election;

            (4) The Board of Directors of the Company elects to terminate this
            Agreement without "Cause" and notifies the Executive in writing of
            such election;

            (5) The Executive elects to terminate this Agreement for "Good
            Reason" and notifies the Company in writing of such election; or

            (6) The Executive elects to terminate this Agreement without "Good
            Reason" and notifies the Company in writing of such election.

        If this Agreement is terminated pursuant to clause (1), (2), or (3) of
this Section 8(a), such termination shall be effective immediately. If this
Agreement is terminated pursuant to clause (4) (5) or (6) of this Section 8(a),
such termination shall be effective 30 days after delivery of the notice of
termination.

        (b) Definitions:

               (1)    "Cause" means

                      (A) The Executive has breached the provisions of Section
                      4, 5 or 6 of this Agreement in any material respect;

                      (B) The Executive has engaged in willful and material
                      misconduct, including willful and material failure to
                      perform the Executive's duties as an officer or Executive
                      of the Company and has failed to cure such default within
                      30 days after receipt of written notice of default from
                      the Company;

                      (C) The Executive has committed fraud, misappropriation or
                      embezzlement in connection with the Company's business; or

                      (D) The Executive has been convicted or has pleaded nolo
                      contendere to criminal misconduct (except for parking
                      violations and occasional minor traffic violations).

               In the event that the Company terminates the Executive's
               employment for "Cause" pursuant to clause (B) of this Section
               8(b)(1) and the Executive objects in writing to the Board's
               determination that there was proper "Cause" for such termination
               within 20 days after the Executive is notified of such
               termination, the matter shall be resolved by arbitration in
               accordance with the provisions of Section 9(a). If the Executive
               fails to object to any such determination of "Cause" in writing
               within such 20-day period, he shall be deemed to have waived his
               right to object to that determination. If

                                       5
<PAGE>
               such arbitration determines that there was not proper "Cause" for
               termination, such termination shall be deemed to be a termination
               pursuant to clause (4) of Section 8(a), and the Executive's sole
               remedy shall be to receive the cash compensation and benefits
               contemplated by Section 8(e), and reasonable attorneys' fees and
               expenses incurred in such arbitration contemplated by Section
               9(a).

               (2)    "Good Reason" means:

                      (A) the assignment to Executive of employment
                      responsibilities or the removal of employment
                      responsibilities which are not of commensurate with
                      Executive's responsibilities, authority and status as
                      chief financial officer of the Company;

                      (B) a breach of the obligations of the Company under
                      Section 3 that has not been cured within 10 days of notice
                      from Executive; or

                      (C) The Company's requiring Executive to be based or
                      maintain a regular office outside of the seven county Twin
                      Cities Metropolitan Area.

               In the event that the Executive terminates the Executive's
               employment for "Good Reason" pursuant to clause (A) of this
               Section 8(b)(2) and the Company objects in writing to the
               Executive's determination that there was proper "Good Reason" for
               such termination within 20 days after the Company is notified of
               such termination, the matter shall be resolved by arbitration in
               accordance with the provisions of Section 9(a). If the Company
               fails to object to any such determination of "Good Reason" in
               writing within such 20-day period, it shall be deemed to have
               waived its right to object to that determination. If such
               arbitration determines that there was not "Good Reason" for
               termination, such termination shall be deemed to be a termination
               pursuant to clause (6) of Section 8(a), and the Executive's sole
               remedy shall be to receive the cash compensation and reasonable
               benefits contemplated by Section 8(e), and attorneys' fees and
               expenses incurred in such arbitration contemplated by Section
               9(a).

               (3) "Disabled" means any mental or physical condition that
               renders the Executive unable to perform the essential functions
               of his position, with or without reasonable accommodation, for a
               period in excess of six months.

        (c) Effect of Termination. Notwithstanding any termination of this
Agreement, except as qualified in Sections 6(a) and 8(h), the Executive, in
consideration of his employment hereunder to the date of such termination, shall
remain bound by the provisions of this Agreement which specifically relate to
periods, activities or obligations upon or subsequent to the termination of the
Executive's employment.

        (d) Surrender of Records and Property. Upon termination of his
employment with the Company, the Executive shall deliver promptly to the Company
all records, manuals, books, blank forms, documents, letters, memoranda, notes,
notebooks, reports, data, tables, calculations or copies thereof that relate in
any way to the business, products, practices or techniques of the Company, and
all other property, trade secrets and confidential information of the Company,
including, but not limited to, all documents that in whole or in part contain
any trade secrets or confidential information of the Company, which in any of
these cases are in his possession or under his control.

        (e) Severance Pay and Benefits.

                      (1) If the Executive's employment by the Company is
               terminated by the Company without Cause or pursuant to clause (4)
               of Section 8(a) or by the Executive for Good Reason or pursuant
               to clause (5) of Section 8(a), the Company shall:

                      (A) pay to Executive his base salary through the date
                       of termination;

                                       6
<PAGE>

                      (B) pay to Executive the value of any vacation time
                      accrued in accordance with the Company's policies and not
                      taken through the date of termination;

                      (C) continue to pay to the Executive his base salary for a
                      period of 15 months after the date of such termination;

                      (D) continue to provide health, life, disability and
                      dental insurance benefits for the Executive through the
                      earlier of (i) the date that the Executive obtains an
                      employment position providing equivalent benefits, or (ii)
                      15 months from the date of termination of employment;

                      (E) provided Executive has served for a period of at least
                      three months since the commencement of the fiscal year,
                      pay Executive a pro rata portion (based on the number of
                      days of employment during that fiscal year) of any bonus
                      payment that would have been payable to him for that
                      fiscal year pursuant to Section 3(b) if the Executive had
                      been in the employ of the Company for the full fiscal
                      year;

                      (F) pay to Executive his $35,000 Special Bonus if not yet
                      paid;

                      (G) release Executive from the one year covenant not to
                      compete set forth in Section 6 of this Agreement.

               The Executive agrees that the payments made in accordance with
               clause (C) above shall be made over the 15 month period after the
               date of termination (pro rata with respect to (E)) with the
               Company's normal payroll disbursements to employees. The payment
               in clause (E) above shall be made at the same time bonus payments
               are made to other executives with respect to such year (after the
               completion of the fiscal year when a determination has been made
               that bonus objectives have been achieved). The Executive also
               agrees that the compensation set forth in this Section (e)(1)
               constitutes all the compensation and benefits due Executive upon
               termination pursuant to clause (4) or clause (5) of Section 8(a)
               and that no other compensation of any kind shall be due Executive
               upon such termination, including, without limitation, no
               compensation by way of (1) 401K or other ERISA or stock plan
               benefits accruing after the date of such termination, (2)
               automobile allowance, expense allowance, materials or equipment
               allowance or phone or cell phone allowance, (3) bonus with
               respect to any fiscal year after the fiscal year in which the
               Executive's employment terminated, (4) payment with respect to
               any other severance plan or policy, including the executive
               officer severance policy otherwise in place at the Company.

               (2) If this Agreement is terminated pursuant to clauses (1), (2)
        (3) or (6) of Section 8(a), the Executive's right to base salary and
        benefits after the date of such termination shall immediately terminate,
        except as may otherwise be required by applicable law.

        (f) Severance Agreement Controls. The provisions of this Agreement shall
have no application to the termination of Executive after a Change of Control as
defined in the Severance Agreement made between the Executive and the Company,
and Executive and the Company agree that the Severance Agreement shall in all
respects control the compensation and benefits due Executive upon termination
after a Change of Control, unless that Severance Agreement has expired or been
terminated at the time of such Change of Control, in which case the provisions
of this Agreement, if they remain in effect, shall apply to the Executive's
terms of employment, the termination of the Executive, and the compensation and
benefits due the Executive upon termination.

        9.     Settlement of Disputes.

        (a) Arbitration. Except as provided in Section 9(b), any claims or
disputes of any nature between the Company and the Executive arising from or
related to the performance, breach, termination, expiration, application or
meaning of this Agreement or any matter relating to the Executive's employment
and the termination of that employment by the Company shall be resolved
exclusively by arbitration in Minneapolis, Minnesota in accordance

                                       7
<PAGE>
with the applicable rules of the American Arbitration Association. In the event
of submission of any dispute to arbitration, each party shall, not later than 30
days prior to the date set for hearing, provide to the other party and to the
arbitrator(s) a copy of all exhibits upon which the party intends to rely at the
hearing and a list of all persons each party intends to call at the hearing. The
fees of the arbitrator(s), reasonable attorneys' fees and legal expenses, and
other costs incurred by the Executive or the Company in connection with such
arbitration shall be paid by the party that is unsuccessful in such arbitration
to the prevailing party or to the extent neither party entirely prevails, as
allocated and awarded by arbitration.

        The decision of the arbitrator(s) shall be final and binding upon both
parties. Judgment of the award rendered by the arbitrator(s) may be entered in
any court of competent jurisdiction.

        (b) Resolution of Certain Claims -- Injunctive Relief. Section 9(a)
shall have no application to claims by the Company asserting a violation of
Section 4, 6, 7 or 8(d) or seeking to enforce, by injunction or otherwise, the
terms of Section 4, 6, 7 or 8(d). Such claims may be maintained by the Company
in a lawsuit subject to the terms of Section 9(c). The Executive acknowledges
that it would be difficult to fully compensate the Company for damages resulting
from any breach by him of the provisions of Section 4, 6, 7 or 8(d) of this
Agreement. Accordingly, the Executive agrees that, in addition to, but not to
the exclusion of any other available remedy, the Company shall have the right to
seek to enforce the provisions of Sections Section 4, 6, 7 or 8(d) by applying
for temporary and permanent restraining orders or injunctions from a court of
competent jurisdiction without the necessity of filing a bond therefor, and
without the necessity of proving actual damages, and the prevailing party,
whether the Company or the Executive, shall be entitled to recover from the
unsuccessful party their reasonable attorneys' fees and costs in enforcing the
provisions of Sections Section 4, 6, 7 or 8(d) or defending against such
enforcement.

        (c) Venue. Any action at law, suit in equity or judicial proceeding
arising directly, indirectly, or otherwise in connection with, out of, related
to or from this Agreement, or any provision hereof, shall be litigated only in
the courts of the State of Minnesota, County of Hennepin. The Executive and the
Company consent to the jurisdiction of such courts over the subject matter set
forth in Section 9(b). The Executive waives any right the Executive may have to
transfer or change the venue of any litigation brought against the Executive by
the Company.

        10.    Miscellaneous.

        (a) Entire Agreement. This Agreement (including the exhibits, schedules
and other documents referred to herein), together with the Severance Agreement,
contains the entire understanding between the parties hereto with respect to the
subject matter hereof and supersedes any prior understandings, agreements or
representations, written or oral, relating to the subject matter hereof.

        (b) Counterparts. This Agreement may be executed in separate
counterparts, each of which will be an original and all of which taken together
shall constitute one and the same agreement, and any party hereto may execute
this Agreement by signing any such counterpart.

        (c) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law but if any provision of this Agreement is held to be invalid,
illegal or unenforceable under any applicable law or rule, the validity,
legality and enforceability of the other provision of this Agreement will not be
affected or impaired thereby. In furtherance and not in limitation of the
foregoing, should the duration or geographical extent of, or business activities
covered by, any provision of this Agreement be in excess of that which is valid
and enforceable under applicable law, then such provision shall be construed to
cover only that duration, extent or activities which may validly and enforceably
be covered. The Executive acknowledges the uncertainty of the law in this
respect and expressly stipulates that this Agreement be given the construction
which renders its provision valid and enforceable to the maximum extent (not
exceeding its express terms) possible under applicable law.

        (d) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, personal
representatives and, to the extent permitted by subsection (e), successors and
assigns.
                                       8
<PAGE>

        (e) Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable (including by operation of law) by either party without the prior
written consent of the other party to this Agreement.

        (f) Modification, Amendment, Waiver or Termination. No provision of this
Agreement may be modified, amended, waived or terminated except by an instrument
in writing signed by the parties to this Agreement. No course of dealing between
the parties will modify, amend, waive or terminate any provision of this
Agreement or any rights or obligations of any party under or by reason of this
Agreement. No delay on the part of the Company or the Executive in exercising
any right hereunder shall operate as a waiver of such right. No waiver, express
or implied, by the Company or by the Executive of any right or any breach by the
other party shall constitute a waiver of any other right of that party or breach
by the other party.

        (g) Notices. All notices, consents, requests, instructions, approvals or
other communications provided for herein shall be in writing and delivered by
personal delivery, overnight courier, mail, electronic facsimile or e-mail
addressed to the receiving party at the address set forth herein. All such
communications shall be effective when received.

        Rehabilicare Inc.
        1811 Old Highway 8
        New Brighton, MN 55112
        Attention: Chairman

        W. Glen Winchell
        10 Peggy Circle
        Grasston, MN 55030

Any party may change the address set forth above by notice to each other party
given as provided herein.

        (h) Headings. The headings and any table of contents contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.

        (i) Governing Law. ALL MATTERS RELATING TO THE INTERPRETATION,
CONSTRUCTION, VALIDITY AND ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING EFFECT TO ANY CHOICE
OF LAW PROVISIONS THEREOF.

        (j) Third-Party Benefit. Nothing in this Agreement, express or implied,
is intended to confer upon any other person any rights, remedies, obligations or
liabilities of any nature whatsoever.

        (k) Withholding Taxes. The Company may withhold from any benefits
payable under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or governmental regulation or ruling.

        (l) Assistance and Fees of Counsel. Executive acknowledges that he has
received the assistance of his own counsel in negotiating and reviewing the
terms of this Agreement. The Company agrees to reimburse the Executive, upon
invoice detailing the services performed, for up to $2,500 of the fees of such
counsel related to the negotiation and review of this Agreement.

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth in the first paragraph.

                                            REHABILICARE INC.

                                            By: ________________________________
                                            Name:_______________________________
                                            Title:______________________________
                                                  W. Glen Winchell
                                                  (Executive)

                                       9

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