MEDSTONE INTERNATIONAL INC/
AMEND. #2 TO EMPLOYMENT AGREEMENT WITH EXEC. VP
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<DESCRIPTION>AMEND. #2 TO EMPLOYMENT AGREEMENT WITH EXEC. VP
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Exhibit 10.32 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>AMENDMENT #2 TO </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="2"><B>MEDSTONE INTERNATIONAL, INC. </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>EMPLOYMENT AGREEMENT </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Executive Vice President of Sales and Marketing </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">(Eva Novotny) </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">This Amendment to Employment Agreement (the <U>Amendment</U>) is entered into
effective November 6, 2003 (the <U>Effective Date</U>), by and between Medstone International, Inc., a Delaware corporation (<U>Medstone</U>) and Eva Novotny (<U>Employee</U>) in order to secure her continued services. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>RECITALS </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">C.&nbsp;&nbsp;&nbsp;&nbsp;Medstone and Employee have executed an Employment Agreement (the <U>Agreement</U>) effective
August 13, 2002, and amended July 24, 2003, pursuant to an Amendment #1 which extended the term of the Agreement to December 31, 2003. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">D.&nbsp;&nbsp;&nbsp;&nbsp;Medstone and Employee desire to amend the Employment Agreement to change certain provisions thereof and to extend the term
thereof. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>AGREEMENT </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The parties to this Amendment hereby agree to amend the Agreement as
follows: </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">4.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Section 3 of the Agreement shall be amended to read in full as follows: </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">&#147;Unless earlier terminated in accordance with Section 6, the term of Employee&#146;s employment by Medstone under this Agreement shall commence on the Commencement Date and
shall continue until June 30, 2004.&#148; </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">5.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Section 6(c) of the Agreement shall be amended to read in full as follows: </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">&#147;If during the term of Employee&#146;s employment hereunder either (i) Employee&#146;s employment is terminated by Medstone without Good Cause or (ii) there is an Acquisition
and at or after the date of the Acquisition Employee&#146;s employment is terminated for any reason (including a voluntary termination by Employee), then Employee shall receive: (x) a severance payment equal to one (1) times the amount of
Employee&#146;s then current annual base salary; provided however that Employee shall not receive such severance payment if while employed under this Agreement, Employee enters into a written employment agreement governing the terms of
Employee&#146;s employment after the closing of the Acquisition with the buying or surviving party or any of its affiliates in the Acquisition and such written employment agreement expressly supercedes the provisions of this Section 6(c); and (y)
payment of, or reimbursement to Employee for, amounts paid to exercise Employee&#146;s COBRA benefits for Employee </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P>

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<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">and her dependants; provided however that Medstone&#146;s obligation to pay or reimburse Employee for such amounts shall cease on the earlier of (a) that date which is twelve months
following the date of termination of employment or (b) such time as Employee is covered under a health insurance policy. Any such severance payment shall be paid fully in cash to Employee on the date of termination of employment. As used in this
paragraph, an &#147;<U>Acquisition</U>&#148; means (1) a reorganization, merger or consolidation as a result of which Medstone is not the surviving corporation or as a result of which the outstanding shares of stock of Medstone are changed into or
exchanged for cash, property or securities not of Medstone&#146;s issue, except for a merger or consolidation with a wholly-owned subsidiary of Medstone or a transaction effected primarily to change the state of Medstone&#146;s incorporation or (2)
a sale or other transfer in one or a series of transactions of all or substantially all of the assets of Medstone to any person or entity or to persons or entities which are affiliated or acting in concert with respect to such sale or transfer.
Notwithstanding the foregoing, Employee shall not be entitled to any payments as provided in Section 6(c)(ii) if Employee is terminated by reason of her commission of a material act of fraud, embezzlement or misappropriation with respect to Medstone
or the buying party or its affiliates.&#148; </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">6.</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Except as amended hereby, the Agreement remains in full force and effect. </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first set forth above. </FONT></P> <P
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<TD VALIGN="top" COLSPAN="3" WIDTH="42%"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Medstone International, Inc.,</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">A Delaware corporation</FONT></P></TD>
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<TD VALIGN="top" COLSPAN="3" WIDTH="42%"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Employee</FONT></P></TD></TR>
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<TD VALIGN="top" ALIGN="center" WIDTH="42%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>David V. Radlinski,</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="1"><B>Chairman and CEO</B></FONT></P></TD>
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<TD VALIGN="top" ALIGN="center" WIDTH="42%"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Eva Novotny</B></FONT></P></TD></TR>
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