Employment Agreement
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         This EMPLOYMENT AGREEMENT ("Agreement") is entered into between PrimeSource Surgical, Inc., a Delaware
corporation, and James L. Hersma, whose principal residence is at 4100 West 86th St., Tulsa, OK  74132
("EXECUTIVE") and effective March 2, 2001, is assumed by Luxtec Corporation, a Massachusetts corporation with a
principal place of business at 99 Hartwell Stree, West Boylston, MA 01583 ("COMPANY") in connection with
COMPANY'S acquisition of PrimeSource Surgical, Inc.  References herein to the COMPANY shall include PrimeSource
Surgical, Inc. for the period beginning on December 4, 2000 and ending on March 2, 2001.

         1.       Employment.
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                  (a)      Executive Responsibilities.  COMPANY hereby employs EXECUTIVE, and EXECUTIVE hereby
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agrees to accept employment from COMPANY, as President and Chief Executive Officer of COMPANY.  EXECUTIVE shall
report directly to COMPANY'S Board of Directors.  EXECUTIVE agrees during the term of his employment under this
Agreement to perform the duties and responsibilities customarily required of such position, as reasonably
directed by COMPANY'S Board of Directors, and in accordance with COMPANY'S bylaws and applicable state
corporation law.  EXECUTIVE further agrees to devote his full business time and energies to the business and
affairs of COMPANY, unless otherwise authorized by the Board of Directors of COMPANY.  EXECUTIVE may, however,
engage in civic and not-for-profit activities so long as such activities do not materially interfere with the
performance of his duties to COMPANY hereunder.

              (b)     Director Responsibilities.  Subject to obtaining any necessary stockholder consents,
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EXECUTIVE shall be elected a member of the Board of Directors, to serve in such position until the next regular
meeting of COMPANY'S stockholders.  EXECUTIVE'S continued service on COMPANY'S  Board of Directors thereafter
shall be subject to his election by vote of the stockholders, but COMPANY will include EXECUTIVE in its
recommended slate of candidates for membership on the Board.  In the event that EXECUTIVE'S employment with
COMPANY under this Agreement is terminated for any reason, EXECUTIVE shall promptly submit to the Chairman of the
Board his resignation as a Director.







         2.       Term of Employment.
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         The employment under this Agreement shall commence as of December 4, 2000 and shall end at the end of
the day on December 3, 2001, provided that the term of EXECUTIVE'S employment under this Agreement shall
thereupon and thereafter be extended automatically for successive periods of one year unless otherwise terminated
under paragraph 5 of this Agreement.

         3.       Compensation.
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                  (a)      Base Salary.  As compensation for services provided to COMPANY, EXECUTIVE shall
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receive an initial salary at the annual rate of $275,000, less such payroll and withholding taxes as required by
law to be deducted and any such other amounts as EXECUTIVE shall authorize in writing.  Provided EXECUTIVE
remains employed under this Agreement on the first anniversary date of his employment hereunder, his salary shall
be increased to an annual rate of $325,000 effective as of that date.  The salary shall be payable in
semi-monthly installments.  Such salary shall be reviewed by the Board of Directors at least annually at the end
of, and after, the second year of employment hereunder.  Such salary may be increased, but not decreased, from
time to time as decided in the discretion of the Board of Directors of COMPANY.

                  (b)      Bonuses.  The Compensation Committee of COMPANY'S Board of Directors shall institute
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an incentive bonus program in which EXECUTIVE will be eligible to participate during each employment year
(beginning in the 2001 fiscal year) while EXECUTIVE is employed by COMPANY.  Such bonus program shall provide
EXECUTIVE a maximum bonus of up to 55% of his annual salary paid during the year in which the bonus is earned,
based upon factors established by the Chairman of the Compensation Committee, after consultation with EXECUTIVE,
and approved by the Board of Directors.

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