Document:

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                                                                    EXHIBIT 10.3

                              EMPLOYMENT AGREEMENT

          This Employment Agreement dated as of November 19, 1999 and effective
as of September 1, 1999, is made by and between Empi Corp., a Minnesota
corporation (together with any successor thereto, the "Company"), and Patrick D.
Spangler (the "Executive").

                                    RECITALS

          A. It is the desire of the Company to assure itself of the services of
the Executive by engaging the Executive to perform such services under the terms
hereof.

          B. The Executive desires to commit himself to serve the Company on the
terms herein provided.

                                    AGREEMENT

          NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements set forth below the parties hereto agree as
follows:

          1.   Certain Definitions.

               (a)  "Annual Base Salary" shall have the meaning set forth in
Section 4.

               (b)  "Board" shall mean the Board of Directors of the Company.

               (c)  The Company shall have "Cause" to terminate the Executive's
employment hereunder upon the Executive's:

                    (i)   failure substantially to perform his duties hereunder,
     other than any such failure resulting from the Executive's Disability,
     after notice and reasonable opportunity for cure, all as determined by the
     Board;

                    (ii)  conviction of a felony or a crime involving moral
     turpitude; or

                    (iii) fraud or personal dishonesty involving Company's
     assets.

               (d)  "Company" shall have the meaning set forth in the preamble
hereto.

               (e) "Compensation Committee" means the compensation committee of
the Board.

               (f) "Date of Termination" shall mean (i) if the Executive's
employment is terminated by his death, the date of his death, or, (ii) if the
Executive's employment is terminated pursuant to Section 5(a)(ii) - (vi), the
date specified in the Notice of Termination.

               (g) "Disability" shall mean the absence of the Executive from the
Executive's duties to the Company on a full-time basis for a total of three
months during any six month period as a result of incapacity due to mental or
physical illness.

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               (h)  "Executive" shall have the meaning set forth in the preamble
hereto.

               (i)  The Executive shall have "Good Reason" to terminate his
employment in the event that the Company

                    (i)   fails to make any payment or provide any material
     benefit hereunder,

                    (ii)  commits a material breach of this Agreement, or

                    (iii) without the Executive's consent, materially diminishes
     the Executive's position, duties or responsibilities to the Company,

in each case, if the Company does not cure such failure, breach or action after
notice and a reasonable opportunity to cure.

               (j)  "Incentive Compensation Plan" shall mean the annual
performance bonus plan as in effect from time to time, as adopted and
administered by the Board.

               (k)  "Notice of Termination" shall have the meaning set forth in
Section 5 (b).

               (l) "Term" shall have the meaning set forth in Section 2(b).

          2.   Employment.

               (a) The Company shall employ the Executive, and the Executive
shall continue in the employ of the Company, for the period set forth in this
Section 2, in the position set forth in Section 3 and upon the other terms and
conditions herein provided. The initial term of employment under this Agreement
(the "Initial Term") shall be for the period beginning on the effective date of
this Agreement and ending on December 31, 2002, unless earlier terminated as
provided in Section 5.

               (b) The employment term hereunder shall automatically be extended
for successive one-year periods ("Extension Terms" and, collectively with the
Initial Term, the "Term") unless either party gives notice of non-extension to
the other no later than 90 days prior to the expiration of the then-applicable
Term.

          3.   Position and Duties.

               (a) The Executive shall serve as the Executive Vice President and
the Chief Financial Officer of the Company with such customary responsibilities,
duties and authority as may from time to time be assigned to the Executive by
the Board. The Executive shall devote substantially all his working time and
efforts to the business and affairs of the Company.

               (b) If elected or appointed thereto, and only for the duration of
such elected term or appointment, the Executive shall also serve as a director
of the Company and any

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of its subsidiaries and/or in one or more executive offices of any of such
subsidiaries, provided that the Executive is indemnified for serving in any and
all such capacities on a basis consistent with that provided by the Company to
other directors of the Company or similarly situated executive officers of any
such subsidiaries.

          4. Compensation and Related Matters.

               (a) Annual Base Salary. During the Term the Executive shall
receive a base salary at a rate of $175,000 per annum ("Annual Base Salary"),
subject to increase as determined by the Compensation Committee and subject to
reduction only in connection with an across-the-board reduction applicable to
senior management of the Company generally.

               (b) Bonus. During the Term, the Executive shall be eligible to
receive a bonus pursuant to the Company's Incentive Compensation Plan, the 1999
terms of which are attached hereto as Exhibit A. If the Company meets or exceeds
its goals under the Incentive Compensation Plan, the bonus payable to the
Executive shall be equal to the amount prescribed in the Incentive Compensation
Plan, and otherwise if such goals are not met, shall be in such amount, if any,
as the Board determines in its sole discretion.

               (c) Benefits. The Executive shall be entitled to participate in
the other employee benefit plans, programs and arrangements of the Company
(including vacation) now (or, to the extent determined by the Board, hereafter)
in effect which are applicable to the senior officers of the Company, subject to
and on a basis consistent with the terms, conditions and overall administration
thereof.

               (d) Expenses. The Company shall reimburse the Executive for all
reasonable travel and other business expenses incurred by him in the performance
of his duties to the Company, in accordance with the Company's documentation and
other policies with respect thereto.

               (e) Directors' and Officers' Insurance. During the Term, the
Company will maintain for the benefit of the Executive (in his capacity as an
officer and/or director of the Company) directors' and officers' insurance;
provided, that the Company may terminate such insurance coverage for all
officers and directors, including the Executive, if a majority of the members of
the Board determine in good faith that such insurance is not available or is
available only at unreasonable expense.

          5. Termination . The Executive's employment hereunder may be
terminated by the Company or the Executive, as applicable, without any breach of
this Agreement only under the following circumstances:

               (a)  Circumstances.

                    (i) Death. The Executive's employment hereunder shall
     terminate upon his death.

                    (ii) Disability. If the Company determines in good faith
     that the Executive has incurred a Disability, the Company may give the
     Executive written notice

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         of its intention to terminate the Executive's employment. In such
         event, the Executive's employment with the Company shall terminate
         effective on the 30th day after receipt of such notice by the
         Executive, provided that within the 30 days after such receipt, the
         Executive shall not have returned to full-time performance of his
         duties. The Executive shall continue to receive his Annual Base Salary
         until the Date of Termination.

                    (iii) Termination for Cause. The Company may terminate the
          Executive's employment hereunder for Cause.

                    (iv) Termination without Cause. The Company may terminate
          the Executive's employment hereunder without Cause.

                    (v) Resignation for Good Reason. The Executive may terminate
          his employment for Good Reason.

                    (vi) Resignation without Good Reason. The Executive may
          resign his employment without Good Reason upon 60 days written notice
          to the Company.

               (b)  Notice of Termination. Any termination of the Executive's
employment by the Company or by the Executive under this Section 5 (other than
termination pursuant to paragraph (a)(i)) shall be communicated by a written
notice to the other party hereto indicating the specific termination provision
in this Agreement relied upon, setting forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated, and specifying a Date of
Termination which, except in the case of termination for Cause, shall be at
least fourteen days following the date of such notice (a "Notice of
Termination").

          6.   Severance Payments.

               (a) Termination without Cause or Resignation for Good Reason. If
the Executive's employment shall terminate without Cause (pursuant to Section
5(a)(iv)) or for Good Reason (pursuant to Section 5(a)(v)), the Company shall:

                    (i)   pay to the Executive, for the eighteen month period
     following the Date of Termination, in accordance with its regular payroll
     practice, his Annual Base Salary as in effect on the Date of Termination;
     and

                    (ii)  for the year in which the termination occurs, pay to
     the Executive a pro-rated amount of bonus based on the Company's
     year-to-date performance (as determined by the Board) in relation to the
     performance targets set forth in the Incentive Compensation Plan; and

                    (iii) continue for 18 months the Executive's coverage under
     the Company medical and dental plans and programs in which the Executive
     was entitled to participate immediately prior to the Date of Termination as
     if the Executive were an active employee during such time, subject to
     standard employee contributions by the Executive as are required under such
     plans, and further subject to the Executive's election

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          of "COBRA" continuation coverage during such period. Following the
          expiration of the COBRA period, the Company may continue coverage
          under the Company's medical and dental plans or provide the Executive
          with benefits substantially similar to those which the Executive would
          otherwise have been entitled to receive under such plans and programs.
          All post-employment coverage under such plans shall be co-extensive
          with COBRA continuation coverage required by law, and shall cease if
          the Executive becomes eligible for coverage under another employer's
          plans.

                    (b) Survival. The expiration or termination of the Term
shall not impair the rights or obligations of any party hereto which shall have
accrued hereunder prior to such expiration.

          7.   Competition.

               (a)  The Executive shall not, at any time during the Term or
during the 12-month period following the expiration of the term (or, if earlier,
the Date of Termination), without the prior written consent of the Board,
directly or indirectly engage in, or have any equity interest in, or be employed
by or manage or operate any person, firm, corporation, partnership, business or
product (whether as director, officer, employee, agent, representative, partner,
security holder, consultant or otherwise) that engages in any business or
develops, manufactures or sells any product which competes with any business or
product of the Company or any entity owned by it anywhere in the world;
provided, however, that the Executive shall be permitted to acquire a stock
interest in such a corporation provided such stock is publicly traded and the
stock so acquired is not more than five percent (5%) of the outstanding shares
of such corporation.

                    (b) In the event the terms of this Section 7 shall be
determined by any court of competent jurisdiction to be unenforceable by reason
of its extending for too great a period of time or over too great a geographical
area or by reason of its being too extensive in any other respect, it will be
interpreted to extend only over the maximum period of time for which it may be
enforceable, and/or over the maximum geographical area as to which it may be
enforceable and/or to the maximum extent in all other respects as to which it
may be enforceable, all as determined by such court in such action.

          8.  Nondisclosure of Proprietary Information.

                    (a) Except as required in the faithful performance of the
Executive's duties hereunder or pursuant to subsection (c), the Executive shall,
in perpetuity, maintain in confidence and shall not directly, indirectly or
otherwise, use, disseminate, disclose or publish, or use for his benefit or the
benefit of any person, firm, corporation or other entity any confidential or
proprietary information or trade secrets of or relating to the Company,
including, without limitation, information with respect to the Company's
operations, processes, products, inventions, business practices, business
strategy, business development, finances, principals, vendors, distributors,
suppliers, customers, potential customers, manufacturing methods, sales methods,
marketing methods, costs, prices, contractual relationships, information
systems, regulatory status, compensation paid to employees or other terms of
employment, or deliver to any person, firm, corporation or other entity any
document, record, notebook, computer program or similar repository of or
containing any such confidential or proprietary information or trade secrets.
The

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parties hereby stipulate and agree that as between them the foregoing matters
are important, material and confidential proprietary information and trade
secrets and affect the successful conduct of the businesses of the Company (and
any successor or assignee of the Company).

                    (b) Upon termination of the Executive's employment with
Company for any reason and upon the Company's request, the Executive will
promptly deliver to the Company all correspondence, drawings, manuals, letters,
notes, notebooks, reports, programs, plans, proposals, financial documents, or
any other documents concerning, without limitation, the Company's operations,
processes, products, inventions, business practices, business strategy, business
development, finances, principals, vendors, distributors, suppliers, customers,
potential customers, manufacturing methods, sales methods, marketing methods,
costs, prices, contractual relationships, information systems, regulatory
status, compensation paid to employees or other terms of employment and/or which
contain proprietary information or trade secrets.

                    (c) The Executive may respond to a lawful and valid subpoena
or other legal process but shall give the Company the earliest possible notice
thereof, shall, as much in advance of the return date as possible, make
available to the Company and its counsel the documents and other information
sought and shall assist such counsel in resisting or otherwise responding to
such process.

          9. Injunctive Relief. It is recognized and acknowledged by the
Executive that a breach of the covenants contained in Sections 7 and 8 will
cause irreparable damage to Company and its goodwill, the exact amount of which
will be difficult or impossible to ascertain, and that the remedies at law for
any such breach will be inadequate. Accordingly, the Executive agrees that in
the event of a breach of any of the covenants contained in Sections 7 and 8, in
addition to any other remedy which may be available at law or in equity, the
Company will be entitled to specific performance and injunctive relief.

          10. Binding on Successors. This Agreement shall be binding upon and
inure to the benefit of the Company, the Executive and their respective
successors, assigns, personnel and legal representatives, executors,
administrators, heirs, distributees, devisees, and legatees, as applicable.

          11. Governing Law. This Agreement shall be governed, construed,
interpreted and enforced in accordance with the substantive laws of the State of
Minnesota.

          12. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.

          13. Notices. Any notice, request, claim, demand, document and other
communication hereunder to any party shall be effective upon receipt (or refusal
of receipt) and shall be in writing and delivered personally or sent by telex,
telecopy, or certified or registered mail, postage prepaid, as follows:

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               (a)  If to the Company:

                           Empi Corp.
                           599 Cardigan Road
                           St. Paul, MN 55126
                           Attn:  Joseph E. Laptewicz, Jr.
                           Phone: (651) 415-9000
                           Fax:  (651) 415-7497

                           With copies to:

                           The Carlyle Group
                           520 Madison Avenue, 41st Floor
                           New York, NY 10022
                           Attn:  Walter Jin
                           Phone: (212) 381-4900
                           Fax:  (212) 381-4901

                           and

                           Latham & Watkins
                           885 Third Avenue, Suite 1000
                           New York, New York 10022
                           Attn:  Maureen A. Riley
                           Phone: (212) 906-1200
                           Fax:  (212) 751-4864

               (b) If to the Executive, to him at the address set forth below
under his signature;

or at any other address as any party shall have specified by notice in writing
to the other parties.

          14.  Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.

          15.  Entire Agreement. The terms of this Agreement are intended by the
parties to be the final expression of their agreement with respect to the
employment of the Executive by the Company and may not be contradicted by
evidence of any prior or contemporaneous agreement. The parties further intend
that this Agreement shall constitute the complete and exclusive statement of its
terms and that no extrinsic evidence whatsoever may be introduced in any
judicial, administrative, or other legal proceeding to vary the terms of this
Agreement.

          16.  Amendments; Waivers. This Agreement may not be modified, amended,
or terminated except by an instrument in writing, signed by the Executive and
the Chairman of the compensation committee of the Board. By an instrument in
writing similarly executed, the

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Executive or the Company may waive compliance by the other party or parties with
any provision of this Agreement that such other party was or is obligated to
comply with or perform, provided, however, that such waiver shall not operate as
a waiver of, or estoppel with respect to, any other or subsequent failure. No
failure to exercise and no delay in exercising any right, remedy, or power
hereunder preclude any other or further exercise of any other right, remedy, or
power provided herein or by law or in equity.

          17. No Inconsistent Actions. The parties hereto shall not voluntarily
undertake or fail to undertake any action or course of action inconsistent with
the provisions or essential intent of this Agreement. Furthermore, it is the
intent of the parties hereto to act in a fair and reasonable manner with respect
to the interpretation and application of the provisions of this Agreement.

          18. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators in St. Paul, Minnesota in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction; provided, however, that the Company shall be entitled to seek a
restraining order or injunction in any court of competent jurisdiction to
prevent any continuation of any violation of the provisions of Sections 7 or 8
of the Employment Agreement and the Executive hereby consents that such
restraining order or injunction may be granted without the necessity of the
Company's posting any bond. The fees and expense of the arbitrator shall be
borne by the Company.

                            [signature page follows]

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          IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.

                                             THE COMPANY

                                             EMPI CORP.

                                             By: _______________________________
                                                 Name:
                                                 Title:

                                             THE EXECUTIVE

                                                 _______________________________
                                                 Name:     Patrick D. Spangler

                                                 Address:  599 Cardigan Road
                                                           St. Paul, MN 55126

                                       9<PAGE>

                                                                    EXHIBIT 10.4

                       Managing Director Service Agreement

                                     between

                                   ORMED GmbH
                           Merzhauser Stra(B)e 112
                                 79100 Freiburg

                    - hereinafter referred to as "Company" -

                                       and

                                Rudiger Hausherr
                                 Lindengarten 17
                                  79219 Staufen

               - hereinafter referred to as "Managing Director" -

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                                       I.

1.   Mr. Rudiger Hausherr renders his services as Managing Director of ORMED
     GmbH since June 1, 1994.

2.   All former employment agreements or other Service Contracts between the
     parties shall be cancelled by signing this Service Agreement. Especially
     all employment protection provisions resulting from the prior activity
     within this company or within the HUG group shall not be transferred to
     this Service Agreement. The Allianz Pension fund existing at present time
     for Managing Director and all other insurance contracts
     (Direktversicherung, Unfall, Reisversicherung ) will remain the same.

                                       II.

                                      (S) 1
                               Activity and duties

1.   The Managing Director has to conduct the business of the Company with the
     due diligence of a conscientious businessman and must conscientiously
     fulfil the duties imposed on him by Law, the Articles of Association of the
     Company, the attached Business Instructions, other general or specific
     instructions received from the Company's shareholder's meeting and this
     Service Agreement.

2.   The Managing Director is obliged to obtain the prior approval (consent) of
     the shareholders' meeting or the majority shareholder for all transactions
     pursuant to the Business Instructions in their respective applicable
     version.

                                      (S) 2
                                  Working time

1.   The Managing Director shall devote his full and unrestricted work capacity
     to the Company unless otherwise agreed in this Service Agreement.

2.   Each assumption of paid or unpaid secondary activities or honorary
     positions as well as appointments to supervisory boards, advisory boards
     etc. require the prior written approval of the shareholders' meeting. The
     Approval can be revoked at any time, whereby in the event of a revocation
     any provisions as to notice periods for the termination of an assumed
     office must be taken into consideration.

                                      (S) 3
                                  Remuneration

1.   The Managing Director shall receive an annual salary in the amount of DM
     330.000 payable in twelve monthly instalments in the amount of DM 27.500
     each.

2.   In addition, the Managing Director receives an annual premium subject to
     the fulfilment of the following requirements.

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     As of January 1, 2000 the annual premium amounts to DM 80,000 in case
     certain targets agreed with the shareholders are met by 100 %, it being
     understood that the respective proportion of the premium indicated below
     becomes due in case only one of the two targets is met. If the targets are
     only met by 90 % or less, no premium has to be paid. In case the targets
     are met by 90 - 100 %, half of the premium is due. If the targets are met
     in excess of 100 % the premium may be increased by shareholders' resolution
     at the shareholders' meeting's discretion.

     The targets consist of:

     -     Revenue as planned             45% of the premium amount

     -     EBIT as planned                55% of the premium amount

                                     (S) 4
                                   Company car

1.   The Company shall provide the Managing Director with a car in accordance
     with its car policy applicable from time to time which is appropriate for
     Mr. Hausherr's position as Managing Director and his appearance vis-a-vis
     customers.

2.   The Managing Director is entitled to also use the company car for private
     purposes. An amount corresponding to the private use shall be added to his
     monthly salary and shall be taxed according to the directives for income
     taxes.

                                     (S) 5
                        Continued payment during sickness

In case the Managing Director is not able to work due to sickness, not based on
his fault, he shall receive the difference between sickness benefits and his net
salary for the duration of six months, but limited to the duration of this
Service Agreement.

                                     (S) 6
                                    Vacation

The Managing Director is entitled to 30 working days of vacation per year. His
vacation shall be co-ordinated with other key employees of the Company and shall
comply with the interest of the Company.

                                     (S) 7
                                 Confidentiality

1.   The Managing Director is obliged during the duration of this Service
     Agreement and afterwards to keep confidential all information or data
     relating to the Companies or any other associated Company he becomes aware
     of and not to disclose any documents concerning the Companies or any other
     associated Companies either by himself or by third parties. This includes
     trade secrets, know-how, inventions, designs, processes, formulae,
     notations, improvements financial information and lists of customers

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     concerning the affairs, business or products of the Company or of the
     associated Companies or of any of their predecessors in business or of any
     of their suppliers, agents, distributors or customers.

2.   Publications of facts of which the Managing Director received knowledge
     during his services for the Company or which relate to his sphere of duty
     require the prior approval of the shareholders' meeting.

                                     (S) 8
                               Disability to work

The Managing Director has to notify the Company within three working days of
every disability to work and the approximate duration thereof. If so requested,
the Managing Director is obliged to disclose the reasons for his disability to
work.

                                     (S) 9
                               Payment after death

In case the Managing Director dies, his widow or a person to be named by the
Managing Director shall receive the complete remuneration based on this contract
for a period of three months.

                                     (S) 10
                            Non competition covenant

1.   During the term of the Service Agreement, the Managing Director is not
     allowed to act for or on behalf of a direct or indirect competitor of the
     Company as a self-employed entrepreneur, an employee or in any other way.
     Furthermore, the Managing Director is not allowed to establish or to
     acquire such a Company or to directly or indirectly participate in such a
     competitive company.

2.   In case of the Managing Director's violation of the non-competition clause
     pursuant to Section 1 above, the Managing Director is obligated to pay a
     penalty in -the amount of five monthly remuneration(s) based on the average
     monthly net remuneration, excluding bonuses. The penalty has to be paid for
     each violation separately. In case of a permanent violation the penalty has
     to be paid for each month commenced. Additional claims of the Company shall
     remain unaffected.

3.   For the period of one year after the expiration of this Service Agreement
     the Managing Director is not allowed to act for or on behalf of a direct or
     indirect competitor of the Company as a self-employed entrepreneur, an
     employee or in any other way. Furthermore, during this period the Managing
     Director is not allowed to establish or to acquire such company or to
     directly or indirectly participate in such competitive company. The
     post-contractual non-competition clause is subject to the condition
     precedent that this Service Agreement will not be terminated prior to six
     months following the expiration of the fix initial term pursuant to (S) 12
     Section 1 of this Service Agreement.

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4.   For the duration of the aforementioned post-contractual non-competition
     clause the Company shall pay to the Managing Director a compensation in the
     amount to 50% of the average monthly net remuneration of the Managing
     Director calculated on the basis of the Managing Director's income of the
     last twelve months before the expiration of this Service Agreement. The
     average monthly net remuneration shall include any bonuses (pro rata for
     each month of service) pursuant to (S) 3 Section 2 of this Service
     Agreement, unless this Service Agreement is terminated by the Company for
     cause or by the Managing Director. The monthly compensation payment is due
     at the end of each calendar month.

5.   The Compensation will be reduced by earnings by the Managing Director
     during the period of the post-contractual non-competition covenant
     resulting from his activities as self-employed entrepreneur, as employee or
     any other activities according to sec. 74c German Commercial Code (HGB).
     This also applies to earnings which the Managing Director fails to realise
     and to unemployment benefits potentially obtained by the Managing Director.
     The Managing Director is obligated to disclose the amounts of earnings and
     the amounts of failed earnings upon the Company's request immediately.

6.   In case of the Managing Directors violation of the post-contractual
     non-competition clause, the Managing Director is obligated to pay a penalty
     in the amount of five monthly remuneration(s) based on the average monthly
     net remuneration, excluding any bonuses. The penalty has to be paid for
     each violation separately. In case of a permanent violation the penalty has
     to be paid for each month commenced. (Additional claims of the Company
     shall remain unaffected.)

7.   The Company can waive the restraint on competition until the end of the
     Service Agreement by written declaration, with the result that the
     non-competition compensation is to be paid until six months after the
     declaration of waiver, despite the prohibition having been lifted.

8.   If the Company terminates the Service Agreement for important reasons due
     to contract-breaching conduct of the Managing Director, the restraint on
     competition becomes invalid to the extent the Company informs the Managing
     Director in writing before one month after the termination.

9.   If the Company terminates the Service Agreement without an important
     reason, the restraint on competition becomes invalid if the Managing
     Director declares in writing within one month of receipt of the termination
     that he does not feel bound by the restraint on competition. If the Company
     undertakes to pay the full last average remuneration for the term of the
     restraint on competition, the restraint on competition continues to be
     valid.

                                     (S) 11
                                   Inventions

The Company has to be notified about all inventions made during the duration of
the employment contract.

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                                     (S) 12
                            Duration and termination

1.   This Service Agreement is concluded for a fix initial term of thirty
     months, commencing June 01, 2000.

2.   Unless either party notifies the other party by October 31, 2002 at the
     latest that it does not desire to continue this Service Agreement beyond
     the fix initial term, the Service Agreement shall automatically extend for
     an indefinite term. Then it can be terminated by either party with six
     months notice to the end of a calendar month.

3.   The appointment of the Managing Director can be revoked at any time by
     resolution of the Shareholders' Meeting. The revocation of the appointment
     of the Managing Director is deemed to be a termination according to the
     previous sentence with effect as of the date provided for in the previous
     sentence.

4.   In the event of termination, the Company is entitled to suspend the
     Managing Director from his duties immediately after having received or sent
     the termination notice balancing the suspension with the remaining vacation
     entitlement.

5.   The right to terminate this Service Agreement for important cause shall not
     be affected by the previous provisions.

6.   The notice of termination has to be given in writing.

                                     (S) 13
                               Return of Documents

After termination of this Service Agreement, or in the event of release of the
Managing Director from his duties, the Managing Director is obliged to return
all items of Company property and documents in their entirety without undue
delay, in particular keys, books, datacarrier, printed items of any kind or
extracts or copies thereof which are in his possession at such time. The
Managing Director is not entitled to retain those items and documents for any
reason. The company car has to be returned at the end of this Service Agreement.

                                     (S) 14
                      Additional agreements and amendments

1.   This Service Agreement contains all contractual stipulations between the
     parties. There are no oral side agreements or other agreements than
     mentioned in this Service Agreement.

2.   All alterations or revisions of this Service Agreement must be in writing
     and must be approved by resolution of the Shareholders' Meeting.

3.   If provisions of this Service Agreement or parts of provisions of this
     Service Agreement are or become void, the validity of the other provisions
     of this Service Agreement shall

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     not be affected thereby. The void provision shall be replaced by a legal
     provision which comes as close as possible to the economic and legal
     rationale of the void provision.

4.   Rights based on this Service Agreement have to be claimed within a period
     of two month after becoming due. Otherwise, those rights are deemed to be
     excluded.

5.   This contract will be exclusively governed by German Law.

6.   Both parties declare that they each have received a copy of this contract.

Freiburg, June 30, 2000             Shoreview, July 1, 2000

_____________________________       _________________________________

Rudiger Hausherr                    ORMED GmbH
                                    represented by:
                                    HOHENSTAUFENEINHUNDERTACHTUND-
                                    VIERZIGSTE Verwaltungs GmbH & Co. KG,
                                    in turn, represented by Patrick D. Spangler

                                        7

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