SALES, MARKETING AND SERVICE AGREEMENT

                  THIS SALES, MARKETING AND SERVICE AGREEMENT (this "Agreement")
is made effective as of the 12th day of August 1999 (the "Effective  Date"),  by
and between Swissray America, Inc., a Delaware corporation,  with offices at 320
West 77th Street,  Suite 1A, New York, New York 10024  ("SWISSRAY")  and Hitachi
Medical  Systems  America  Inc.,  a Delaware  corporation,  with offices at 1959
Summit Commerce Park, Twinsburg, Ohio 44087 ("HMSA"). SWISSRAY and HMSA are each
sometimes  referred  to  herein as a  "Party,"  and are  sometimes  collectively
referred to herein as the "Parties."

                  In consideration of the mutual undertakings and agreements set
forth herein, and for other good and valuable  consideration given by each Party
hereto  to  the  other,   the  receipt  and   sufficiency  of  which  is  hereby
acknowledged, SWISSRAY and HMSA intending to be legally bound, agree as follows:

1.       DEFINITIONS.  Terms  not otherwise defined in this Agreement shall have
                       the following meanings:

         1.1   The term  "PRODUCT"  shall  mean the ddR  Multi-System  for X-Ray
               designed,  manufactured  and sold by SWISSRAY  under the SWISSRAY
               trademark  or  tradename,  as more fully  described  in Exhibit A
               attached  hereto and  incorporated  herein,  as well as  products
               manufactured and sold by SWISSRAY under the SWISSRAY trademark or
               tradename  that are new iterations  thereof,  so long as such new
               iterations  use the same core  technology as described in Exhibit
               A. No other  SWISSRAY  product,  whether  or not sold  under  the
               SWISSRAY  trademark or tradename,  is intended to be  encompassed
               within the definition of PRODUCT.

         1.2   "Term" shall mean the period of time  commencing on the Effective
               Date and ending upon  termination  of this  Agreement as provided
               under section 14 of this Agreement.

         1.3   "Effective Date" shall mean the date first written above.

         1.4   "SIS"  shall  mean  Swissray  Information  Solutions,   Inc.,  an
               affiliate of SWISSRAY.

2.       HMSA APPOINTMENT; SCOPE OF APPOINTMENT.

         2.1   General  Appointment.  SWISSRAY  hereby  appoints  HMSA, and HMSA
               hereby accepts  appointment,  solely to sell the PRODUCT directly
               to end users and to provide  warranty service for the PRODUCT its
               sells, all subject to the terms and conditions of this Agreement,
               including  the  limitations  set forth in sections 2.2 and 2.3 of
               this  Agreement.  See section 3.5 with  respect to  post-warranty
               service for PRODUCTS.

         2.2   Territories: HMSA is hereby authorized to sell the PRODUCT to end
               users  within  the  geographical  areas  specified  on Exhibit B,
               attached hereto and incorporated herein (the "Territory").

         2.3   SWISSRAY Reserved  Accounts:  Except with respect to the accounts
               listed in Exhibit C, attached hereto and incorporated herein (the
               "Reserved  Accounts"),  which are hereby  reserved  to  SWISSRAY,
               SWISSRAY  shall not sell the  PRODUCT  to  customers  within  the
               Territory  during the Term.  SWISSRAY  may sell  PRODUCTS  to the
               Reserved   Accounts  both  within  and  outside  the   Territory.
               Notwithstanding  anything  in  this  Agreement  to the  contrary,

<PAGE>

               nothing  in  this  Agreement  shall  prohibit  SIS  from  selling
               PRODUCTS to any  customer  within the  Territory as a part of the
               overall resolution of issues addressed by SIS. See Exhibit E.

         2.4   Notwithstanding anything to the contrary in this Agreement,  HMSA
               is not  authorized  to sell and  shall not sell  PRODUCTS  to the
               Reserved Accounts.  HMSA shall not, except as otherwise set forth
               in this  Agreement,  be  compensated  by SWISSRAY for any sale by
               SWISSRAY to any Reserved Account.

         2.5   If HMSA determines to market,  sell or service any direct digital
               radiographic system or computed radiography products (CR devices)
               that compete with  PRODUCTS,  HMSA shall give SWISSRAY  immediate
               notice  thereof and SWISSRAY shall have the right to presume that
               such intended  action will occur and may terminate this Agreement
               immediately  upon written  notice to HMSA.  Such  termination  by
               SWISSRAY shall be deemed a termination  for cause as described in
               section 14.2, below.

         2.6   Except as  specifically  limited by this section 2,  SWISSRAY and
               HMSA  shall  each  have  the  right to sell  and  distribute  any
               products and services within the Territory.

3.       HMSA'S  MARKETING  RESPONSIBILITIES.  HMSA  shall  have  the  following
               rights,    and   accepts   and   will   perform   the   following
               responsibilities,  at no additional  cost or expense to SWISSRAY,
               at all times during the Term:

         3.1   Promote Products: HMSA will use all reasonable commercial efforts
               to promote  the  goodwill  of  SWISSRAY  and to promote  and sell
               PRODUCTS  within the  Territory  in a manner that will  emphasize
               their high quality, technology and utility. Specifically:

         3.1.1 HMSA shall  develop  sales  incentives,  sales  support and other
               sales aids in support of the PRODUCT.

         3.1.2 Within  three (3) months  after the  Effective  Date,  HMSA shall
               provide  a  direct  mailing  in  support  of the  PRODUCT  to its
               Magnetic  Resonance  Imaging  product  installed  base within the
               Territory.  SWISSRAY  shall  have the right to  inspect,  but not
               copy,  the list of the  recipients of all such mailings  prior to
               the  mailing  being sent so that  SWISSRAY  may assure that it is
               being  sent  only  within  the  Territory  and  not  to  Reserved
               Accounts.

         3.1.3 SWISSRAY and HMSA shall,  to the extent  reasonably  practicable,
               coordinate  public  relations,   advertising  and  other  similar
               marketing  activities  and shall upon each party's  prior written
               approval  share on an equal basis the expenses of such  marketing
               activities.  The  primary  purpose  of such  activities  shall be
               commercial sales of the PRODUCT.

         3.2   Reports and Records:

         3.2.1 HMSA shall  provide  SWISSRAY  with reports  during the Term,  as
               follows:  (A) monthly,  at the end of each month during the Term:
               (i) a list of HMSA  current  sales  leads  or  prospects;  (ii) a
               rolling  forecast  of  sales  and  PRODUCT  requirements  for the
               following  six (6) month  period of which the first  ninety days'
               shall be  considered  firm  orders  and shall be  accompanied  by
               HMSA's purchase order, which shall be deemed accepted by SWISSRAY

                                       2
<PAGE>

               unless HMSA is notified to the contrary  within ten (10) business
               days thereafter;  (iii) the information required to be maintained
               by HMSA pursuant to section 3.2.2, below with respect to PRODUCTS
               sold by HMSA during the prior month;  and (B) on a routine basis,
               but in no event less than  monthly  during the Term, a good faith
               update from the appropriate  HMSA X-Ray  specialist to his or her
               SWISSRAY  regional  representative  counterpart  of the marketing
               activities and the status of sales leads within such region,  and
               (C) such other reports as may be reasonably requested by SWISSRAY
               from time to time. All reports submitted by HMSA shall become the
               property  of  SWISSRAY  but  shall  be  used  solely  for its own
               internal purposes.

         3.2.2 HMSA shall maintain  accurate  records that identify the Products
               (by model and serial  number)  it sells to all of its  customers,
               such  records to include,  customer's  name,  address,  telephone
               number and date of sale.  HMSA shall also  maintain  all  records
               required  to be  maintained  under  applicable  federal  laws and
               regulations,   including  as  required  by  the  Food,  Drug  and
               Cosmetics  Act. Such records shall be made  available to SWISSRAY
               for inspection  and copying  during HMSA's normal  business hours
               upon at least  twenty-four  (24) hours' prior notice to HMSA, but
               in no event shall SWISSRAY be allowed to see or copy resale price
               information.

         3.2.3 HMSA shall  notify  SWISSRAY  promptly of all  complaints  of its
               customers  regarding the PRODUCTS.  SWISSRAY shall have the right
               to  communicate  directly with such customer with respect to such
               complaint, but shall have no right to make, and shall not purport
               to have  authority to make, any commitment on behalf of HMSA with
               respect thereto.

         3.3   Maintain Sales and Technological  Expertise:  Except as otherwise
               stated  below,  HMSA  shall,  at no cost or expense to  SWISSRAY,
               employ and maintain  sales and technical  personnel  sufficiently
               trained  to  assist  its  customers  in the  use of  Products  as
               solutions for end-user  problems,  to fill end-user  needs and to
               provide installation,  applications training and warranty service
               to its  customers.  SWISSRAY  will rely upon HMSA to provide such
               value-added  sales and  technical  and  engineering  service as a
               principal reason for entering into and continuing this Agreement.
               Without limiting this general obligation:

                  3.3.1    HMSA shall,  maintain an  aggressive  outbound  sales
                           force which actively pursues (including, making field
                           sales calls)  opportunities  to sell  Products to end
                           users,  and which is technically  trained as provided
                           in section 3.3.2, below;

                  3.3.2    HMSA shall provide necessary training so that (1) its
                           technical  support and service  engineer  staff shall
                           have a thorough  familiarity with the  specifications
                           and technical features of Products, and (2) its sales
                           personnel  will  have  a  full  understanding  of the
                           technical  features  of,  and  know  the  competitive
                           advantages of,  PRODUCTS.  HMSA shall  participate in
                           and  otherwise  cooperate  with  SWISSRAY in training
                           programs  which  SWISSRAY  may  establish,  and shall
                           require  its sales and  technical  staff to study all
                           materials   issued  to  HMSA  by  SWISSRAY  for  that
                           purpose;

                  3.3.3    HMSA  acknowledges   receipt  of  SWISSRAY's  current
                           service engineer  prerequisite minimum  requirements.

                                       3
<PAGE>

                           HMSA  shall  review   SWISSRAY's   service   engineer
                           prerequisite minimum requirements,  and shall require
                           its x-ray service engineers to meet such requirements
                           as the same may be  reasonably  amended  by  SWISSRAY
                           from time to time, including without limitation, with
                           respect  to  NT   Workstation,   DICOM  and  Ethernet
                           connectivity; and

                  3.3.4    HMSA will provide applications  training,  at its own
                           expense,  to  customers  in  connection  with  HMSA's
                           PRODUCT  sales.  SWISSRAY  shall  provide  the entire
                           requisite   documentation  and  software  to  support
                           applications  training and shall provide a "train the
                           trainer"  session for one HMSA  applications  person.
                           See Exhibit D.

         3.4      Warranty Service:  HMSA shall perform all warranty repairs and
                  parts  replacements  for PRODUCTS sold by HMSA, using SWISSRAY
                  Spare  Parts  (defined  in  section  8.1,  below),  as  may be
                  required by SWISSRAY's  End-User  Warranty (defined in section
                  11.1, below) using,  among other things,  the Activation Codes
                  made available to HMSA by SWISSRAY in accordance  with section
                  6.3. All such warranty repairs and parts replacements shall be
                  conducted  in  accordance  with  SWISSRAY's  warranty  service
                  policies  and  procedures  as they may be amended from time to
                  time   in   SWISSRAY's   sole,   absolute   discretion.   HMSA
                  acknowledges  receipt of SWISSRAY's  current  warranty service
                  policies and procedures manual.

                  3.4.1    In connection with its warranty service  obligations,
                           HMSA shall return parts  replaced  under the End-User
                           Product  Warranty to SWISSRAY  and HMSA shall pay all
                           expenses for transporting and insuring such defective
                           parts one-way to SWISSRAY.  SWISSRAY shall not accept
                           defective parts directly from HMSA customers,  unless
                           authorized  in  writing  by HMSA  to do so.  SWISSRAY
                           shall pay all expenses for  transporting and insuring
                           replacement parts for such parts that it confirms are
                           defective.

                  3.4.2    For the period of either (a) fifteen (15) months from
                           SWISSRAY's  delivery  of  PRODUCT  to  HMSA or to the
                           destination  specified in HMSA's order; or (b) twelve
                           (12)  months  after HMSA  completes  installation  of
                           PRODUCT  at  HMSA's  customer's  site,  whichever  is
                           shorter,  SWISSRAY  shall  issue a credit to HMSA for
                           the  net  cost  of  Spare   Parts  used  by  HMSA  as
                           replacement  parts under SWISSRAY's  End-User Product
                           Warranty.  SWISSRAY  reserves  the  right  to  verify
                           defects  in parts  before  it  issues  a Spare  Parts
                           credit to HMSA. HMSA  acknowledges and agrees that no
                           additional  consideration  shall  be due to HMSA  for
                           labor,  administrative or other costs associated with
                           warranty work performed by HMSA under this Agreement.

                  3.4.3    Within seven (7) days  following  the  expiration  or
                           earlier  termination  of this  Agreement,  HMSA shall
                           notify  SWISSRAY  in writing  whether  HMSA elects to
                           continue to provide  warranty  service as required by
                           this Agreement for HMSA's customers of PRODUCTS.  The
                           obligations  set forth in this  section  3.4.3  shall
                           survive the expiration or earlier termination of this
                           Agreement.  If HMSA fails to notify  SWISSRAY that it
                           elects to  continue  to provide  warranty  service as
                           required by this  Agreement,  SWISSRAY shall have the
                           right, at its option, to assume such warranty service
                           obligations.

                                       4
<PAGE>

                  3.4.4    HMSA  shall  not  contract  with any  third  party to
                           perform any of its installation or warranty  services
                           under  this  Agreement   without  the  prior  written
                           consent of SWISSRAY in each instance.

         3.5      Post-Warranty  Service:  HMSA may,  but shall not be obligated
                  to,  provide  post-warranty  service  for  PRODUCTS  sold  and
                  installed  by HMSA in the  Territory.  HMSA  acknowledges  and
                  agrees  that,  except to the extent of its  obligations  under
                  sections 8 and  11.2.2,  SWISSRAY  has no  responsibility  and
                  assumes no liability for  post-warranty  service  performed by
                  HMSA.

         3.6      Act   Lawfully:  Each  of SWISSRAY  and HMSA shall comply with
                  all   federal,  state   and  local  laws  and  regulations  in
                  performing  its  responsibilities  under this Agreement and in
                  all of its activities with respect to PRODUCTS.

         3.7      HMSA  shall  (1) at its own  expense,  except  as set forth in
                  section 3.4.2,  install and service the PRODUCTS in accordance
                  with   SWISSRAY's   published   specifications,   installation
                  procedures,  maintenance manuals and user manuals; and (2) not
                  modify  PRODUCTS  or Spare  Parts  without  the prior  written
                  consent of SWISSRAY.

         3.8      The  parties  acknowledge  that  the  services  of SIS  may be
                  significant to the proper systems integration and operation of
                  PRODUCTS.  Therefore,  whenever  HMSA shall receive an inquiry
                  from a customer or  potential  customer  of  PRODUCTS  that is
                  within the consulting or connectivity services offered by SIS,
                  HMSA shall  consult  with SIS with  respect  thereto and shall
                  direct such  customers  or  potential  customers to SIS in Gig
                  Harbor, Washington, tel. No. (253) 858-3330.

4.       SWISSRAY'S RESPONSIBILITIES.  SWISSRAY  accepts  and  will  perform the
         following  responsibilities  at  no additional  cost or expense to HMSA
         except as otherwise stated:

         4.1      The scope of the technical support, documentation and training
                  to be supplied by SWISSRAY is defined in Exhibit D attached to
                  this Agreement and incorporated herein. The technical support,
                  documentation  and  training to be supplied by SWISSRAY  shall
                  include a general indoctrination of PRODUCT knowledge.

         4.2      SWISSRAY  shall provide HMSA at no cost with four (4) complete
                  sets of operation manuals,  installation manuals and all other
                  service  documents  for the  PRODUCTS  upon  execution of this
                  Agreement, and thereafter during the Term, shall provide at no
                  cost to HMSA updates to these documents from time to time.

         4.3      SWISSRAY shall use its reasonable best efforts to provide HMSA
                  with access to the  installed  base of SWISSRAY  PRODUCTS  for
                  demonstration  and  testimonial  purposes.   Access,  in  each
                  instance,  to the SWISSRAY installed base shall be solely with
                  SWISSRAY's prior written authorization.

         4.4      For promotion purposes, SWISSRAY shall assist HMSA at mutually
                  agreed  upon   industry   trade-shows.   The  extent  of  such
                  assistance by SWISSRAY shall be mutually agreed upon on a case
                  by case basis.

         4.5      Subject to section 6.3, below, SWISSRAY shall, until the first
                  anniversary  of  the  Effective  Date,   provide  to  HMSA  at
                  SWISSRAY's  sole cost and expense  "SwissVision"  software and
                  images  that will  allow HMSA to  produce  clinical  images to
                  support  HMSA's  sales  effort.  HMSA will  provide  the laser

                                       5
<PAGE>

                  camera and manpower to produce such images.

         4.6      SWISSRAY  shall  provide  HMSA,  at  HMSA's  expense  (less an
                  initial  one-time  credit of  $5,000.00  ) with sales  support
                  materials,  including sales brochures, financial proformas and
                  sample images on X-Ray film in reasonable  quantities to allow
                  HMSA's to fulfill its obligations under this Agreement.

         4.7      SWISSRAY  shall  secure from SIS a letter substantially in the
                  form of Exhibit E.
                          ---------

5.       PURCHASE OF PRODUCT AND SPARE PARTS BY HMSA.

         5.1      Governing  Terms and  Conditions.  The  terms  and  conditions
                  solely and  exclusively  governing  the sale of  Products  and
                  spare parts for  PRODUCTS  ("Spare  Parts") to HMSA will be as
                  set forth in this  Agreement.  If the terms and conditions set
                  forth in any document forming a part of any order for Products
                  or  Spare  Parts  placed  by  HMSA  are  different  from or in
                  addition to the provisions of this  Agreement,  the provisions
                  of this  Agreement  shall  prevail,  and any such different or
                  additional terms and conditions  proposed by HMSA thereby will
                  be deemed deleted and not binding or enforceable upon SWISSRAY
                  and are hereby objected to by SWISSRAY.

         5.2      Ordering: HMSA  purchase  orders  for  PRODUCT  or Spare Parts
                  shall be addressed to:

                                            SWISSRAY America, Inc.
                                            5801 Soundview Drive, Suite 50
                                            Gig Harbor, WA  98355

                  All HMSA  purchase  orders  must be  submitted  to SWISSRAY in
                  writing and are subject to  acceptance  by SWISSRAY in writing
                  (as provided in section 3.1.2 with respect to  PRODUCTS).  Any
                  shipment  of  Products  or Spare  Parts to HMSA in whole or in
                  partial  fulfillment  of  any  order  will  not be  deemed  to
                  constitute  an  acceptance by SWISSRAY of any of the terms and
                  conditions  of such  order,  except  as to  identification  of
                  Products  or  Spare  Parts,  as  the  case  may  be,  and  the
                  quantities  involved,  unless otherwise expressly agreed to in
                  writing by SWISSRAY.

         5.3      Delivery:
                  --------

                  5.3.1    SWISSRAY  shall use its  reasonable  best  efforts to
                           deliver  the  PRODUCT not later than ninety (90) days
                           from  the  date of the HMSA  purchase  order,  unless
                           otherwise  requested by HMSA and agreed to in writing
                           by SWISSRAY.

                  5.3.2    SWISSRAY  shall use its  reasonable  best  efforts to
                           ensure  that (i) lead  times  for  shipment  of Spare
                           Parts  shall not  exceed  seven (7) days from  HMSA's
                           purchase order date,  and (ii)  emergency  orders for
                           Spare  Parts shall be shipped  within  three (3) days
                           after purchase order date. SWISSRAY shall make direct
                           deliveries  of emergency  orders to customers of HMSA
                           on   behalf  of  HMSA   only   upon   prior   written
                           instructions by HMSA.

         5.4      Order  Cancellations  by HMSA. No purchase  order for PRODUCTS
                  accepted by SWISSRAY may be revoked or  cancelled by HMSA,  in
                  whole or in part,  except with SWISSRAY's  written consent and
                  upon the following terms:

                                       6
<PAGE>

                  5.4.1    HMSA shall pay SWISSRAY 33% of the purchase price for
                           purchase   orders   cancelled   or  revoked   between
                           forty-five  (45) and ninety (90) days of the delivery
                           date;

                  5.4.2    HMSA shall pay SWISSRAY 66% of the purchase price for
                           purchase orders  cancelled or revoked between fifteen
                           (15) and  forty-four  (44) days of the delivery date;
                           and

                  5.4.3    HMSA shall pay SWISSRAY 75% of the purchase price for
                           purchase orders  cancelled or revoked between one (1)
                           and fourteen (14) days of the delivery date.

         The  cancellation  payments  required under sections  5.4.1,  5.4.2 and
         5.4.3 shall not apply to cancellations, in whole or in part, by HMSA of
         its   purchase   order  for  PRODUCT   accepted  by  SWISSRAY  if  such
         cancellation by HMSA is exclusively caused by a modification to PRODUCT
         by  SWISSRAY  that   materially   and  adversely   affects   functional
         specifications  and with  respect to which  SWISSRAY  receives  written
         confirmation   from   HMSA's   customer   that  as  a  result  of  such
         modification, such HMSA customer cancelled its order with HMSA.

6.       CONTINGENCY PLAN, INTELLECTUAL PROPERTY.

         6.1      In order to ensure the availability and quality of service and
                  Spare Parts hereunder,  SWISSRAY shall maintain a complete and
                  up-to-date   set  of  (a)   drawings  of  Spare   Parts;   (b)
                  documentation  necessary  for the  repair  of  detectors;  (c)
                  contact  information  for third party  vendors of Spare Parts;
                  and (d) the  Activation  Code  described  in section 6.3 in an
                  escrow  location  mutually agreed upon for the deposit of such
                  documentation  pursuant  to the terms of a  Technology  Escrow
                  Agreement   among   SWISSRAY,   HMSA   and   Data   Securities
                  International,  Inc.  substantially  in the form of  Exhibit H
                  (the "Technology  Escrow  Agreement"),  which is being entered
                  into by such parties  contemporaneously with the execution and
                  delivery  of this  Agreement.  HMSA shall have  access to such
                  documentation  solely upon (a)  SWISSRAY,  its  successors  or
                  assigns  ceasing  to engage in the sale of  PRODUCTS  or Spare
                  Parts;  (b) the events set forth in section 14.2.1 below shall
                  occur to SWISSRAY and not be cured as provided therein; or (c)
                  provided  that  HMSA is not in breach  of this  Agreement,  if
                  SWISSRAY fails to make Spare Parts available to HMSA as may be
                  required by this  Agreement  for a period of ninety (90) days.
                  HMSA's  access to the  escrow,  if any,  shall be for the sole
                  purpose  of  fulfilling   HMSA's  warranty  and  post-warranty
                  service   obligations   to  its  customer  base  of  installed
                  PRODUCTS. The provisions of this section 6.1 shall survive the
                  expiration or earlier  termination of this  Agreement.  In the
                  event SWISSRAY shall terminate this Agreement for cause as set
                  forth in section 14.2, the Technology  Escrow  Agreement shall
                  be  simultaneously  terminated and the escrowed  documentation
                  shall be returned to SWISSRAY in accordance with the terms and
                  conditions of the Technology Escrow Agreement.

         6.2      HMSA  hereby  acknowledges  that  SWISSRAY  and its parent and
                  affiliates,  have legally  protected  rights and  interests in
                  Products, software,  tradenames,  trademarks, logos, insignias
                  and all other proprietary information and things, tangible and
                  intangible,  whether  or  not  registered  (the  "Intellectual
                  Property Rights").  HMSA will not imitate Products or infringe
                  upon  SWISSRAY's  Intellectual  Property  Rights  in  any  way
                  whatsoever.  HMSA shall immediately notify SWISSRAY in writing
                  upon  learning  that a  third  party  is or  may be  violating
                  SWISSRAY's Intellectual Property Rights.

                                       7
<PAGE>

         6.3      SWISSRAY    hereby   grants   to   HMSA   the    nonexclusive,
                  nontransferable,  nonsublicensable  right:  (a) to demonstrate
                  and evaluate (but not otherwise use) software  associated with
                  the PRODUCT;  and (b) to use the activation  codes provided by
                  SWISSRAY  to  HMSA  so  that  HMSA  can  have  access  to  the
                  diagnostic   software   resident   within  the  PRODUCT   (the
                  "Activation  Code")  solely for the purpose of  servicing  the
                  PRODUCT sold by HMSA and for no other purpose.  HMSA will not,
                  and will not allow any other  person  to,  make any  copies of
                  such  software,  to modify,  disassemble or decompile any such
                  software, or to remove, obscure or alter any notice of patent,
                  trademark, copyright or trade name on such software. No title,
                  ownership  or   proprietary   right  to  any  such   software,
                  Activation  Codes or other  Intellectual  Property  Rights  is
                  granted  or  transferred  by  virtue  of this  Agreement.  The
                  provisions of this Section 6.3 shall survive the expiration or
                  earlier termination of this Agreement.

         6.4      HMSA  shall  not  use  the  "SWISSRAY"  name  or  any  of  the
                  Intellectual  Property Rights without SWISSRAY's prior written
                  consent,  except  that  the  name  "SWISSRAY"  may be  used in
                  connection  with the sale of Products,  but only if due regard
                  is given to proper trademark use and the ownership by SWISSRAY
                  of its name and mark.  Without  limiting the generality of the
                  foregoing,  HMSA will not use any trademark or tradename owned
                  by  SWISSRAY,  or its parents or  affiliates,  either alone or
                  with  any  other  word or  words  as part of  HMSA's  trade or
                  corporate  name or in any  advertising,  without  the  express
                  written  consent  of  SWISSRAY.  HMSA will not remove any such
                  trademark or tradename from any Products, Spare Parts or other
                  literature or materials provided to HMSA by SWISSRAY. Upon the
                  termination  or  expiration  of  this  Agreement,   HMSA  will
                  discontinue completely any use of any of SWISSRAY's trademarks
                  or tradenames as set forth in section 15.3, below.

         6.5      HMSA acknowledges  that, should it breach its covenants as set
                  forth in  sections  6.2,  6.3,  or 6.4 above,  or section  13,
                  below, SWISSRAY will be irreparably harmed, that money damages
                  alone would not provide an adequate remedy, and that therefore
                  SWISSRAY  shall be entitled to an injunction  preventing  HMSA
                  from further  breaching such covenants  without any further or
                  more  particularized  showing  of  irreparable  injury  or the
                  posting of a bond or other security. Such an injunction may be
                  applied for before any Court having  jurisdiction  thereof. In
                  any such proceeding, SWISSRAY will also be entitled to recover
                  damages only as set forth in section 11.6 of this Agreement.

7.       MODIFICATION OF PRODUCT.

         7.1      SWISSRAY  may  modify  the  PRODUCT  in  its  sole,   absolute
                  discretion prior to delivery of PRODUCT. If such modifications
                  materially affect specifications or FDA submissions,  SWISSRAY
                  shall  use  its  best   efforts   to   notify   HMSA  of  such
                  modifications  in writing at least  ninety  (90) days prior to
                  first  delivery  of the  modified  PRODUCT.  In no event  will
                  SWISSRAY  be  obligated  to  make  any  such  modification  to
                  Products  previously supplied to HMSA or to continue to supply
                  Products as made prior to such modification.

         7.2      Modifications of PRODUCT which, in SWISSRAY's sole discretion,
                  are based upon safety or legal  concerns  shall be implemented
                  by  SWISSRAY  as  promptly  as may be  practicable  under  the
                  circumstances.  Notwithstanding  anything  to the  contrary in
                  this Agreement, SWISSRAY may, in its sole discretion,  suspend
                  sales and  shipment  of  PRODUCTS  or Spare  Parts for  safety
                  reasons without liability to HMSA.

                                       8
<PAGE>

         7.3      SWISSRAY  shall send HMSA all field change orders  relating to
                  the PRODUCT in writing.  HMSA shall  promptly  implement  such
                  field change orders within the time period  referenced in such
                  field change order. Field change orders shall contain at least
                  the following information:

                  (a)      Reason for change;
                  (b)      Designation of PRODUCT concerned by serial number(s);
                  (c)      Importance of modification (immediately, next service
                           call optionally);
                  (d)      Time required for work, and
(e)             Instructions for implementation.

         7.4      If, in SWISSRAY's sole judgment,  safety-related  field change
                  orders to PRODUCT are  required by law,  the costs of material
                  in  respect  of such  field  change  orders  shall be borne by
                  SWISSRAY  and the  cost of labor to  implement  same  shall be
                  borne by HMSA. In all other cases, unless a field change order
                  is required by SWISSRAY solely for its  convenience,  in which
                  case  SWISSRAY  shall bear the cost of  material  and labor in
                  respect  thereof,  the cost of materials and labor  associated
                  with a field change order shall be borne by HMSA.

         7.5      SWISSRAY  shall  promptly  respond  to HMSA's written concerns
                  relating to safety problems.

8.       SPARE PARTS, POST WARRANTY SERVICE.

         8.1      SWISSRAY shall make available to HMSA a complete list of Spare
                  Parts arranged according to SWISSRAY's part numbers. The Spare
                  Parts list shall be revised by  SWISSRAY  as  necessary  to be
                  kept up-to-date and shall cross reference HMSA part numbers.

         8.2      Spare  Parts  shall be packed  and  labeled  to  identify  the
                  contents of each  package in  accordance  with the Spare Parts
                  list.  Labeling shall indicate the respective  revision level,
                  if any, of Spare Parts.

         8.3      For a period  of seven (7) years  following  shipment  of each
                  PRODUCT under this Agreement,  SWISSRAY shall supply HMSA with
                  Spare Parts for such  PRODUCT at the then  current list price,
                  less any applicable discount. Thereafter, if any Spare Part is
                  not  available for purchase,  SWISSRAY  shall make  reasonable
                  efforts to  re-engineer  the fit or function of similar  Spare
                  Parts, if any, for a reasonable fee.

         8.4      Spare  Parts  shall  be  of  the  same  quality  as  the parts
                  installed in the PRODUCTS.

         8.5      The  parties   acknowledge  the  importance  of  post-warranty
                  service to the proper  operation  of PRODUCTS.  Therefore,  if
                  HMSA determines at any time that it will not, itself,  satisfy
                  any one or more post-warranty  service contracts for PRODUCTS,
                  HMSA shall  provide  SWISSRAY  with the first  opportunity  to
                  assume HMSA's obligations under such contracts.

9.       PRICES AND TERMS OF PAYMENT.

                                       9
<PAGE>

         9.1      The prices for PRODUCT (the "Prices") are stated in Exhibit F,
                  attached to this  Agreement and  incorporated  herein.  Prices
                  include  packaging,  packing  and  are  FOB to  SWISSRAY's  US
                  shipping point.

         9.2      Terms of payment:

                  For PRODUCT:

                  10% upon date of order
                  70% upon tender of delivery to the shipping  address in HMSA's
                  Purchase  Order 20% 30 days after  tender of  delivery  to the
                  shipping address in HMSA's Purchase Order

                  For Spare Parts:

                  100%  30 days after tender of delivery to the shipping address
                  in HMSA's Purchase Order

         9.3      The Prices  listed on Exhibit F shall remain in effect for all
                  Products or Spare Parts ordered prior to the first anniversary
                  of the Effective  Date.  For any PRODUCT  ordered  thereafter,
                  SWISSRAY may change the price by written  notification to HMSA
                  ninety  (90)  days  prior to the date the  price  change  will
                  become effective,  provided that, no price change shall affect
                  PRODUCT  orders placed by HMSA prior to effective  date of the
                  price changes.

10.      SHIPPING, TAXES, TITLE, RISK OF LOSS, Force Majeure.
         ---------------------------------------------------

         10.1     At  the  time  of shipment of PRODUCTS to HMSA, SWISSRAY shall
                  furnish HMSA with at least the following information:

                  (a)      Purchase order number
                  (b)      Transportation information
(c)             Serial number of the PRODUCT

         10.2     Shipment.
                  --------

                  10.2.1   Shipment Terms.  Delivery and price terms for PRODUCT
                           and  Spare  Parts  are  F.O.B.   to  SWISSRAY's  U.S.
                           shipping  point.  Thereafter,  HMSA  shall  bear  all
                           costs,  insurance  premiums,  freight  and all  other
                           charges and  expenses  incurred  after  SWISSRAY  has
                           placed  Products  or Spare  Parts in the custody of a
                           carrier. All such costs, charges and expenses will be
                           included  on  SWISSRAY's  invoice and will be paid by
                           HMSA in accordance  with the terms of this Agreement.
                           The  method  and  route of  shipment  shall be as set
                           forth on HMSA's  purchase  order.  If the  method and
                           route  of  shipment  are  not   specified  on  HMSA's
                           purchase  order,  the  method  and route of  shipment
                           shall be at SWISSRAY's discretion.

                  10.2.2   Separate  Shipments.  Each  shipment  of  Products or
                           Spare Parts to HMSA will  constitute a separate  sale
                           obligating   HMSA  to  pay  therefor,   whether  such
                           shipment  is in whole or in  partial  fulfillment  of
                           HMSA's  purchase  order  or  confirmation   for  such
                           Products or Spare Parts, as the case may be.

                                       10
<PAGE>

                  10.2.3   Suspension of Shipment.  In the event of a default by
                           HMSA under this Agreement,  SWISSRAY may decline,  at
                           its sole option,  to make further shipments under any
                           and/or all orders for  Products  or Spare Parts under
                           this  Agreement.   If  SWISSRAY  elects  to  continue
                           shipments,  such  continuation  will not constitute a
                           waiver of such default, nor will such continuation in
                           any way  limit  SWISSRAY's  legal  remedies  for such
                           default.

                  10.2.4   Shipment Allocation. If PRODUCTS are in short supply,
                           SWISSRAY  reserves the right to allocate  shipment of
                           orders and back orders for all  PRODUCTS  among HMSA,
                           other  customers  and  itself in its  sole,  absolute
                           discretion.  SWISSRAY  shall notify HMSA in the event
                           of a change in the status of HMSA's  deliveries under
                           this section 10.2.4.

                  10.2.5   Shipment   Directly  to   Customer.   Notwithstanding
                           anything  in  this  Agreement  to  the  contrary,  if
                           SWISSRAY  shall  suspend  shipments  as  provided  in
                           section  10.2.3,   SWISSRAY  shall  have  the  right,
                           without   liability,   to  ship  suspended   PRODUCTS
                           directly to the HMSA  customer to whom the  suspended
                           shipment was due for  SWISSRAY's  own  account.  HMSA
                           shall   cooperate   with   SWISSRAY   to  assure  the
                           completion of such shipment.

         10.3     Taxes.  Federal,  state and  municipal  taxes now or hereafter
                  imposed in respect of the sale, use, production,  manufacture,
                  delivery or transportation of Products or services of SWISSRAY
                  (except  SWISSRAY's  income taxes not levied in lieu of any of
                  the foregoing) will be added to and become a part of the price
                  of Products  payable by HMSA. Such taxes required by law to be
                  collected  or paid by SWISSRAY  will be  additional  to prices
                  quoted on Exhibit F, will be  included on  SWISSRAY's  invoice
                  and will be paid by HMSA unless HMSA  supplies  tax  exemption
                  certificates in form satisfactory to SWISSRAY.

         10.4.    Title and Risk of Loss.  All shipments  from  SWISSRAY's  U.S.
                  shipping point are made at HMSA's risk.  Title to PRODUCTS and
                  risk of loss of or damage to Products or Spare Parts will pass
                  to HMSA upon SWISSRAY  placing  Products or Spare Parts in the
                  custody of a carrier for shipment to HMSA. It will be the sole
                  responsibility  of HMSA to file all claims for shipment damage
                  or loss with the carrier but SWISSRAY will cooperate with HMSA
                  in such effort.

         10.5.    Force Majeure.   Notwithstanding  anything  in  this Agreement
                  to  the  contrary,  SWISSRAY  shall not be liable for loss or
                  damage  of any kind  resulting  from  delay or  inability  to
                  deliver,   or   failure  to  deliver,   caused    directly  or
                  indirectly    by: acts of God or the public enemy;  accidents;
                  strikes  or  differences   with  labor;  inability  to  obtain
                  labor,  material,  equipment   or  transportation;  compliance
                  with  or  the    operation  of  any  applicable   legislation,
                  regulation,    directive,  ruling,  judgment  or  order of any
                  governmental     unit  or  any   court  or   other   competent
                  governmental    authority  or matters  covered by section 7.2,
                  above;    or any other thing,  similar or  dissimilar,  beyond
                  SWISSRAY's    absolute  and  unconditional  control.  SWISSRAY
                  shall  not  be required to use overtime  labor,  nor to expend
                  any  monies  whatsoever,  to cure any such delay or failure to
                  deliver.  In  the  event of any  partial  failure to  deliver,
                  SWISSRAY  will  have the right to receive payment pro rata for
                  such  of   Products  or Spare Parts as it did in --- ---- fact
                  deliver,  whether  or  not  delivery of the same may have been
                  delayed.

11.      WARRANTY, LIMITATION OF DAMAGES.

                                       11
<PAGE>

         11.1     End-User  Product  Warranty.  SWISSRAY  extends a warranty for
                  Products  directly to end-users of the Products (the "End-User
                  Product   Warranty").   SWISSRAY's  current  End-User  Product
                  Warranty  is attached as Exhibit G. As set forth in Exhibit G,
                  the End-User  Product  Warranty  shall be in effect for twelve
                  (12) months from the date of completion of the installation of
                  the PRODUCT at HMSA's customers' site. Replacement parts shall
                  be  warranted  for  the  remainder  of the  original  warranty
                  period.

         11.2     SWISSRAY Warranties to HMSA.
                  ---------------------------

                  11.2.1   General:  SWISSRAY  warrants  to HMSA that:  (1) HMSA
                           shall  acquire  good title to the  PRODUCTS  free and
                           clear of all liens and encumbrances;  (2) there is no
                           pending  litigation or, to the knowledge of SWISSRAY,
                           any  existing   claim   involving  the  PRODUCT  that
                           adversely  affects HMSA's rights or obligations under
                           this  Agreement  in  respect  of  the  PRODUCT;   (3)
                           SWISSRAY's   sale   of  the   PRODUCT   to   HMSA  as
                           contemplated  by this  Agreement will not violate any
                           contract,   agreement  or   understanding   to  which
                           SWISSRAY  is a party or by which  SWISSRAY  is bound;
                           (4) throughout the Term of this  Agreement,  SWISSRAY
                           shall have the right to continue  to sell  PRODUCT to
                           HMSA.

                           In addition,  SWISSRAY  warrants to HMSA that, at the
                           time of sale  by  SWISSRAY,  the  PRODUCT  (1)  shall
                           comply  with all  applicable  United  States laws and
                           regulations  including  but  not  limited  to  safety
                           standards  and  FDA   requirements   related  to  the
                           manufacture  or sale of  PRODUCTS;  and (2)  shall be
                           listed by UL as appropriate and labeled  accordingly.
                           SWISSRAY  shall  certify  compliance  with  any  such
                           applicable laws and  regulations,  shall maintain any
                           UL listing and shall  maintain  required  FDA records
                           throughout the Term.

                  11.2.2   Spare  Parts:  SWISSRAY  warrants  to HMSA  only that
                           Spare Parts will be free from defects in material and
                           workmanship  at the time of delivery  to HMSA.  For a
                           period of twelve (12) months  thereafter  (the "Spare
                           Parts  Warranty  Period"),   SWISSRAY  in  its  sole,
                           absolute discretion, as HMSA's exclusive remedy under
                           this section  11.2.2,  will either repair Spare Parts
                           found by SWISSRAY to be  defective,  or replace  such
                           defective  Spare  Parts,   with  new  or  refurbished
                           equivalent Spare Parts. Repaired or replacement Spare
                           Parts are warranted  under the terms of this warranty
                           for  the  remainder  of  the  original   Spare  Parts
                           Warranty  Period.  Exchanged  Spare Parts  become the
                           property of SWISSRAY.

                           This Spare Parts warranty shall not apply if warranty
                           service is  necessitated  in whole or in part by: (1)
                           Spare Parts having been abused or damaged by casualty
                           or  accident  or Spare  Parts not used in  accordance
                           with SWISSRAY's  manuals or  publications,  (2) Spare
                           Parts having been serviced or modified  other than by
                           SWISSRAY, or the use of parts or software not sold by
                           SWISSRAY for the Spare Parts, (3) failure to maintain
                           the environmental  conditions  prescribed by SWISSRAY
                           for Spare Parts,  or (4)  deviation  from  SWISSRAY's
                           recommended maintenance procedures for Spare Parts.

         11.3     No Other  SWISSRAY  Warranty.  Except as set forth in  section
                  11.2,  above,  SWISSRAY  makes no  warranties,  guarantees  or
                  representations,  express or implied,  to HMSA with respect to
                  Products,  Spare  Parts or  otherwise.  ALL OTHER  WARRANTIES,
                  EXPRESS OR IMPLIED,  INCLUDING WITHOUT  LIMITATION ANY IMPLIED

                                       12
<PAGE>

                  WARRANTY  OF  MERCHANTABILITY  OR OF FITNESS  FOR USE OR FOR A
                  PARTICULAR PURPOSE ARE HEREBY EXCLUDED AND DISCLAIMED.

         11.4     HMSA  Warranty to SWISSRAY.  HMSA  warrants  that it shall (1)
                  install and service the PRODUCTS in accordance with SWISSRAY's
                  published specifications, installation procedures, maintenance
                  manuals  and user  manuals;  (2) not modify  PRODUCTS or Spare
                  Parts; and (3) comply with all applicable  federal,  state and
                  local laws,  rules,  regulations and ordinances  including but
                  not limited to safety standards and FDA requirements,  related
                  to HMSA's obligations under this Agreement.

         11.5     No  Warranty  by HMSA to  Customers.  HMSA  will  not make any
                  warranties,  representations  or  guarantees  to  any  person,
                  either  orally  or in  writing,  in the name or on  behalf  of
                  SWISSRAY  with  respect  to  Products  (or their  features  or
                  specifications)   or   otherwise,   except  as  set  forth  in
                  SWISSRAY's written literature distributed by SWISSRAY for that
                  purpose.

         11.6     Damage Limitations

                  11.6.1   EXCEPT  AS PROVIDED IN SECTION 11.6.2 WITH RESPECT TO
                           DIRECT  DAMAGES  ARISING  OUT  OF  CLAIMS  RELATED TO
                           PRODUCT OR SPARE PARTS ORDERS AND EXCEPT  AS PROVIDED
                           IN  SECTION  12  WITH  RESPECT TO THIRD PARTY CLAIMS,
                           UNDER  NO  CIRCUMSTANCE  WILL  SWISSRAY   OR  HMSA BE
                           LIABLE  FOR  ANY  DAMAGES,  UNDER  ANY  LEGAL THEORY,
                           INCLUDING,  WITHOUT  LIMITATION,  BREACH OF WARRANTY,
                           DIRECT,  INDIRECT,  SPECIAL,  INCIDENTAL, PUNITIVE OR
                           CONSEQUENTIAL  DAMAGES  (EXCEPT   FOR   CONSEQUENTIAL
                           DAMAGES  RELATING TO PERSONAL INJURY IN JURISDICTIONS
                           WHERE SUCH DAMAGES  MAY NOT BE DISCLAIMED AS A MATTER
                           OF  LAW)  OR  LOSS OF PROFITS, SUSTAINED BY THE OTHER
                           PARTY, OR BY ANY PERSON DEALING WITH SUCH OTHER PARTY
                           IN  CONNECTION  WITH ANY PRODUCT OR SPARE PARTS ORDER
                           OR PRODUCTS OR SPARE PARTS COVERED THEREBY.

                  11.6.2   THE  LIABILITY  OF EITHER  PARTY,  IF ANY, FOR DIRECT
                           DAMAGES IN CONNECTION  WITH A BREACH OF THE TERMS AND
                           CONDITIONS  OF  THIS  AGREEMENT,  REGARDLESS  OF  THE
                           DELIVERY OR  NON-DELIVERY OF PRODUCTS OR SPARE PARTS,
                           WILL NOT,  IN ANY EVENT,  BE GREATER  THAN THE ACTUAL
                           PURCHASE PRICE PAID OR TO BE PAID BY HMSA'S  CUSTOMER
                           FOR THE PRODUCTS OR SPARE PARTS WITH RESPECT TO WHICH
                           SUCH CLAIM IS MADE.

         11.7     The provisions of this section 11 shall survive the expiration
                  or earlier termination of this Agreement.

12.      THIRD PARTY CLAIMS.

         12.1     SWISSRAY shall  indemnify,  hold harmless and defend HMSA, its
                  parents,   subsidiaries  and  affiliates  and  its  and  their
                  officers,  directors,  agents,  employees  and  each of  their
                  successors and assigns (the "HMSA  Indemnified  Parties") from

                                       13

<PAGE>

                  and against or, in SWISSRAY's sole absolute discretion,  shall
                  settle, any and all third-party claim, loss, liability,  cost,
                  damage and expense including,  without limitation,  reasonable
                  attorneys'  fees,  with  respect  to  which  HMSA or the  HMSA
                  Indemnified  Parties  may  suffer   (collectively,   "Losses")
                  arising  out  of  (1)  alleged  product  liability  solely  in
                  connection with the design or manufacture of the Products; (2)
                  SWISSRAY's  material  breach  of  this  Agreement  by  act  or
                  omission of SWISSRAY,  its employees,  agents, or contractors,
                  or  otherwise;  and (3)  alleged  infringement  of any patent,
                  copyright,  trademark,  trade  secret  or  other  intellectual
                  property  right  solely  in  connection  with  the  design  or
                  manufacture of the PRODUCTS  (collectively,  "Patent Claims"),
                  provided  that,  SWISSRAY  shall have no obligation for Losses
                  for  Patent  Claims if  PRODUCTS  that are the  subject of any
                  Patent  Claims  have been  altered or  modified by HMSA or its
                  customers or have been combined by HMSA with any other product
                  or have been made to HMSA's  specifications  or custom made at
                  HMSA's request.

                  12.1.1   Notwithstanding  anything  to the  contrary  in  this
                           Agreement SWISSRAY's liability for Losses indemnified
                           under  12.1(2)  (but not under  12.1(1)  or  12.1(3))
                           shall be limited to the actual purchase price paid by
                           HMSA's  customer  for Spare  Parts or  PRODUCTS  with
                           respect to which such claim for Losses is made.

                  12.1.2   In  the  event  a claim is made against SWISSRAY that
                           PRODUCT  or  Spare  Parts  infringe  the intellectual
                           property  rights  of any third party, SWISSRAY may at
                           its  option  (a)  obtain  a  license for HMSA and its
                           customers  to  continue  to  use  or  to   sell   the
                           infringing  PRODUCT;  or  (b)  replace  or modify the
                           PRODUCT  so  that  it   performs   substantially   in
                           accordance  with  its  specifications  and avoids the
                           alleged infringement.  Moreover,  SWISSRAY may cancel
                           all  orders  for  PRODUCT  or Spare Parts effected by
                           such Patent Claim and, in  such event, HMSA shall use
                           commercially  reasonable  efforts  to  mitigate   its
                           damages. HMSA acknowledges and agrees that SWISSRAY's
                           liability  for cancelling orders for PRODUCT or Spare
                           Parts  pursuant  to  this  section  12.1.2  shall  be
                           limited  to  the  purchase price that would have been
                           paid by HMSA's customer for such  cancelled  PRODUCTS
                           or Spare Parts.

         12.2     HMSA shall  indemnify,  hold harmless and defend  SWISSRAY and
                  its parents,  subsidiaries  and  affiliates  and its and their
                  officers,  directors,  agents,  employees  and  each of  their
                  successors  and assigns (the "SWISSRAY  Indemnified  Parties")
                  from and against or, in HMSA's sole absolute discretion, shall
                  settle, any and all third-party claim, loss, liability,  cost,
                  damage and expense, including, without limitation,  reasonable
                  attorneys'  fees,  which SWISSRAY or the SWISSRAY  Indemnified
                  Parties  may suffer  arising out of (1) any act or omission of
                  HMSA, its employees,  agents or contractors in connection with
                  the satisfaction of HMSA's  obligations  under this Agreement;
                  and (2) HMSA's material  breach of this  Agreement,  including
                  its obligations described in Exhibit C.

12.3              The   indemnifications  set forth above are conditioned  upon
                  HMSA  or  SWISSRAY, as the case may be, giving the other party
                  prompt   notice  if  its   receipt  of   a   claim  for  which
                  indemnification  is  sought  hereunder.  The indemnified party
                  shall,  at   no  out-of-pocket  expense  to  the  indemnifying
                  party,  cooperate  with  the indemnifying  party in respect of
                  the  defense of  such matter. The indemnified party shall have
                  the   right,  without  affecting its indemnity  hereunder,  to
                  participate  in  the administration,  defense or settlement of
                  any  such  matter at its own  expense and with  counsel of its
                  own   choosing.  The  indemnifying  party shall not settle any
                  claim  indemnified  hereunder without the  written  consent of

                                       14

<PAGE>

                  the  indemnified   party unless the indemnified party is given
                  a full and unconditional release in respect of such matter.

12.4     The  provisions  of  this  section  12  shall survive the expiration or
         earlier termination of this Agreement.

13.      CONFIDENTIALITY.

         13.1     Each Party shall keep  confidential the Intellectual  Property
                  Rights,  Activation Codes,  technical data, past,  present and
                  future  business  plans,   concepts  and  designs,   drawings,
                  sketchings,  techniques,   technologies,  systems,  processes,
                  know-how,  trade  secrets  and/or  information  identified  as
                  confidential   (hereinafter   referred  to  as   "CONFIDENTIAL
                  INFORMATION")  that it  receives  from the  other  party.  The
                  receiving  party  agrees  not  to  reproduce,   disclose  such
                  CONFIDENTIAL  INFORMATION to any third party, or to use it for
                  any  purpose  not  authorized  by the  disclosing  party.  The
                  receiving party agrees to instruct its employees having access
                  to  such   CONFIDENTIAL   INFORMATION  of  receiving   party's
                  confidentiality  obligations,  and further  agrees to restrict
                  access of such CONFIDENTIAL INFORMATION to employees or agents
                  who have a need to know  pursuant to their scope of employment
                  or agency arrangement.  The receiving party agrees to hold the
                  disclosing party's CONFIDENTIAL  INFORMATION in confidence and
                  to protect such  information with the same degree of care used
                  in protecting the receiving party's similar  information,  but
                  in no event, with less than a reasonable degree of care.

         13.2     This  confidentiality  obligation shall not apply to know-how,
                  data and/or information which is:

                  13.2.1   demonstrated  to be available  from public sources or
                           in  the  public  domain   through  no  fault  of  the
                           receiving party, its employees or agents;

                  13.2.2   demonstrated  to be  received  at any  time  from any
                           third  party  without   breach  of  a   nondisclosure
                           obligation or obligation of secrecy to the disclosing
                           party or any other party;

                  13.2.3   demonstrated  through  proper  documentation  to have
                           been developed  independently  by the receiving party
                           without   reliance   on   the   disclosing    party's
                           CONFIDENTIAL  INFORMATION  or to  have  been  in  the
                           possession  of  the  receiving  party  prior  to  its
                           disclosure by disclosing party;

                  13.2.4   required to be disclosed by judicial or  governmental
                           order,  provided that, the disclosing  party is given
                           prompt  written  notice  of a request  or demand  for
                           disclosure to enable it to seek a protective order or
                           similar relief; or

                  13.2.5   approved for  disclosure by prior written  consent of
                           an  authorized   corporate   representative   of  the
                           disclosing party.

         13.3     The provisions of this section 13 shall survive the expiration
                  or termination of this Agreement.

14.      TERM AND TERMINATION.

                                       15

<PAGE>

         14.1     Term.  Unless  earlier  terminated  pursuant to section  14.2,
                  below,  this  Agreement  shall remain in force until the first
                  anniversary of the Effective Date (the "Term"). This Agreement
                  may be renewed  for  additional  periods  if each party  gives
                  written  notice of its intent to renew to the other  party not
                  less than  sixty  (60) days'  prior to the  expiration  of the
                  initial or any renewal period. SWISSRAY and HMSA shall consult
                  during the tenth (10th) month  following the Effective Date to
                  consider  whether to renew this  Agreement  and if so, for how
                  long and whether the renewal will be for an expanded territory
                  or otherwise. In reaching such decisions, SWISSRAY shall place
                  substantial   weight  on  HMSA's  performance  in  respect  of
                  purchase volumes and future  commitments to purchase PRODUCTS.
                  Assuming  that  HMSA can meet  SWISSRAY's  marketing  needs in
                  SWISSRAY's  sole,  good  faith  discretion,  it is  SWISSRAY's
                  present  intent to expand the  Territory  up to and  including
                  exclusivity throughout the United States.

                  If, after the  expiration  of the Term,  the Agreement has not
                  been renewed as above provided, and if the parties nonetheless
                  continue to do business,  then the Agreement  will continue in
                  effect  subject to all of the terms and  conditions  set forth
                  herein,  except that it will be  terminable  by either  party,
                  with or without cause,  for any reason or for no reason,  upon
                  30 days' written notice to the other party.

         14.2     Termination for Cause.  Notwithstanding  the Term hereof, this
                  Agreement may by written  notice be terminated and canceled at
                  the option of the party having such right as follows:

                  14.2.1   By  either  Party in the event  that the other  Party
                           voluntarily  files a petition  in  bankruptcy  or has
                           such a petition involuntarily filed against it, or is
                           placed in an insolvency proceeding, or if an order is
                           entered  appointing  a receiver  or trustee  for or a
                           levy attachment is made against a substantial portion
                           of its assets which voluntary  petition,  involuntary
                           petition, insolvency proceeding or order shall not be
                           vacated,   set   aside  or   stayed   or  a  plan  of
                           reorganization  shall not  accepted  within  120 days
                           after its  initiation,  or if any  assignment for the
                           benefit of its creditors is made;

                  14.2.2   By  SWISSRAY  in the event HMSA shall have  infringed
                           SWISSRAY's  Intellectual  Property Rights or breached
                           its obligations in section 13, above;

                  14.2.3   By  either  Party in the event  that the other  Party
                           shall  have  failed  to  cure,  upon 30  days'  prior
                           written   notice,   any   breach   of   a   covenant,
                           representation  or warranty  made or to be  performed
                           hereunder.

                  14.2.4   By either  Party in the event the other  Party  shall
                           merge or  consolidate  with or into any other entity,
                           or if either Party shall sell or otherwise dispose of
                           its capital stock or substantially all of its assets.

15.      PROVISIONS  AFTER  TERMINATION  OF  THE  AGREEMENT.  If  this Agreement
         expires or is sooner terminated:

         15.1     SWISSRAY  shall  continue to supply to HMSA PRODUCT to fulfill
                  HMSA's open sales orders to HMSA customers  prior to notice of
                  termination  of this  Agreement,  except  that,  SWISSRAY  may
                  demand  full  payment  immediately  upon tender of delivery of
                  PRODUCT to the destination stated in HMSA's purchase order.

                                       16
<PAGE>

         15.2     SWISSRAY may declare all sums owing from HMSA  immediately due
                  and  payable,  notwithstanding  any  credit  terms  previously
                  extended or in effect,  if SWISSRAY  terminates this Agreement
                  for cause in accordance with section 14.2.

         15.3     HMSA shall immediately discontinue use, direct or indirect, of
                  the  Intellectual  Property  Rights,  except  that,  HMSA  may
                  provide  post-warranty  service for PRODUCTS to its  customers
                  and SWISSRAY  shall  continue to supply  Spare Parts  therefor
                  pursuant to section 8.3, above.

         15.4     Nothing  contained  herein is intended to prejudice any rights
                  of  the  Parties   hereto  that  have  accrued  prior  to  the
                  termination of this Agreement in accordance  with its terms or
                  otherwise,  or any rights of the Parties  that are intended to
                  survive any such termination.

16.      ARBITRATION AND GOVERNING LAW.

         16.1     Arbitration.  Except as provided in section  6.5,  above,  and
                  except with respect to disputes as to indebtedness arising out
                  of the sale of Products or Spare  Parts,  any  controversy  or
                  claim  arising  out of or relating  to this  Agreement  or the
                  breach  thereof,  whether  common law or statutory,  including
                  without   limitation   claims  asserting   violations  of  the
                  antitrust  laws or  RICO,  shall  be  settled  exclusively  by
                  arbitration  in  New  York,  New  York,   using  the  American
                  Arbitration Association.

         16.2     Governing Law. The arbitrators shall apply the internal law of
                  the  State  of  New  York,   excluding  its   conflict-of-laws
                  principles,   in  determining  the  rights,   obligations  and
                  liabilities of the parties. The arbitrators shall not have the
                  power to alter,  modify,  amend,  add to or subtract  from any
                  term or provision of this Agreement,  nor to grant  injunctive
                  relief,  including interim relief, of any nature, nor to award
                  punitive  damages of any nature.  In all other  respects,  the
                  Commercial  Arbitration  Rules  of  the  American  Arbitration
                  Association  shall  govern the  arbitration.  Judgment  on the
                  award of the  arbitrators  may be entered by any Court  having
                  jurisdiction  to do so,  and the  parties  to  this  Agreement
                  hereby  irrevocably   consent  and  submit  to  the  exclusive
                  personal  jurisdiction and venue of the United States District
                  Court for the  Southern  District  of New York or the  Supreme
                  Court of the State of New York,  County of New York,  for that
                  purpose as well as for any and all other permitted purposes in
                  connection with this Agreement.

         16.3     Failure to  Arbitrate.  The failure or refusal of either party
                  to submit to  arbitration  shall  constitute  a breach of this
                  Agreement.  If judicial action is commenced in order to compel
                  arbitration,  and if  arbitration  is in fact  compelled,  the
                  Party that shall have resisted  arbitration  shall be required
                  to pay to the other  Party all costs and  expenses,  including
                  reasonable  attorneys'  fees,  that it  incurs  in  compelling
                  arbitration.  All  other  fees  and  charges  of the  American
                  Arbitration Association shall be borne by the losing Party or,
                  in the event, neither Party is the losing party on all issues,
                  as the arbitrators shall determine in their award.

         16.4     Matters   Not   Arbitrated.   With   respect   to   claims  or
                  controversies that are not the subject of arbitration pursuant
                  to this  Agreement,  the rights and obligations of the parties
                  under this  Agreement  will be governed by the internal law of
                  the  State  of New  York,  exclusive  of its  conflict-of-laws
                  principles.  All such  causes of action  instituted  by either
                  party with respect to this Agreement will be brought solely in
                  the United States District Court for the Southern  District of
                  New York, or, if that court lacks subject matter jurisdiction,

                                       17

<PAGE>

                  then  solely  in the  Supreme  Court of the State of New York,
                  County of New  York.  For this  purpose,  the  Parties  hereby
                  irrevocably  consent to the  jurisdiction  of the State of New
                  York over  their  person,  and waive any  defense  based  upon
                  improper venue, inconvenient venue or lack of jurisdiction.

17.      INSURANCE.

         SWISSRAY will provide HMSA with  documentation of acceptable  levels of
         product  liability  insurance  coverage (minimum limits of five million
         dollars  ($5,000,000) each occurrence and in the aggregate) naming HMSA
         as an additional insured, related to the PRODUCT.

18.      MISCELLANEOUS.

         18.1     All  changes  and  amendments  to  this  Agreement  must be in
                  writing,  must recite that they are  amendments  or changes to
                  this  Agreement  and must be signed by a corporate  officer of
                  HMSA and a corporate  officer of  SWISSRAY  to be valid.  This
                  requirement of written form can only be waived in writing.

         18.2     Notices and communications  between SWISSRAY and HMSA required
                  by this  Agreement  shall  be  given  in  writing  and sent by
                  certified mail,  postage prepaid and return receipt requested,
                  or by fax to the  following  address of the parties or to such
                  other address as the party concerned may  subsequently  notify
                  in writing to the other party:

                  If to SWISSRAY to:      SWISSRAY America, Inc.
                                          320 West 77th Street, Suite 1A
                                          New York, New York 10024
                                          Attn: Mr. Ueli Laupper, Vice President
                                          Fax No.: 212-545-7912

                  With a copy to:         Piliero Goldstein Jenkins & Hall, LLP
                                          292 Madison Avenue
                                          New York, New York 10017
                                          Attn:  Edward J. Goldstein, Esq.
                                          Fax No.: 212-685-2028

                  If to HMSA to:          Hitachi Medical Systems America, Inc.
                                          1959 Summit Commerce Park
                                          Twinsburg, OH  44087
                                          Attn:  Mr. Richard L. Ernst, President
                                                 & CEO
                                          Fax No.: 330-425-1410

                  Any  such  notice  if  given  or  made  by  certified  mail as
                  aforesaid shall be deemed to have been received on the earlier
                  of the-date  actually  received and the date five (5) calendar
                  days  after  the same was  posted  and if given or made by fax
                  shall be deemed to have been received at the time of dispatch,
                  provided  that,  a copy of such fax  notice  is  delivered  by
                  certified  mail within five (5)  calendar  days after the same
                  was  faxed.  If the date of deemed  receipt  is not a business
                  day,  the  date of  deemed  receipt  shall  be the  next  such
                  succeeding business day.

         18.3     No rights, duties,  obligations or interests in this Agreement
                  shall be  assigned  by either  SWISSRAY  or HMSA  without  the

                                       18

<PAGE>

                  written  consent  of  the  other  Party,   and  any  attempted
                  assignment, whether voluntarily,  involuntarily,  by operation
                  of  law  or   otherwise,   shall  be  wholly   void,   totally
                  ineffective,  and of no force and effect, and shall not confer
                  any rights of any kind upon the intended assignee.

         18.4     The  Parties  acknowledge  and  agree  that  the  Parties  are
                  independent  contractors.  Nothing in this Agreement  shall be
                  deemed  to  establish  or  otherwise  create or  constitute  a
                  relationship   of  principal  and  agent  or  franchisor   and
                  franchisee  between SWISSRAY and HMSA. Neither HMSA nor any of
                  its agents or  employees  shall have any right or authority to
                  assume or create any obligation of any kind,  whether  express
                  or implied,  on behalf of SWISSRAY  or have any  authority  to
                  bind  SWISSRAY in any  respect  whatsoever.  Neither  HMSA nor
                  SWISSRAY  will  represent   itself,   either  directly  or  by
                  implication, as franchisee or franchisor (as the case may be),
                  agent, joint venturer,  partner or representative of the other
                  Party.

         18.5     The  titles  to  the  sections  in  this   Agreement  are  for
                  convenience  of  reference  only  and  are  not  part  of this
                  Agreement  and shall not in any way affect the  interpretation
                  thereof.

         18.6     In the event that any of the  provisions of this  Agreement or
                  the  application of any such  provisions to the parties hereto
                  with respect to their obligations  hereunder will be held by a
                  Court  or  other  tribunal  of  competent  jurisdiction  to be
                  unlawful,  invalid,  or void or  unenforceable,  the remaining
                  provisions  of this  Agreement  will  remain in full force and
                  effect  and  will  in  no  way  be   affected,   impaired   or
                  invalidated.  In the  event,  however,  that any  law,  order,
                  regulation,   direction,   restriction   or   limitation,   or
                  interpretation  thereof,  will in the judgment of either Party
                  substantially alter the relationship between the Parties under
                  this   Agreement,   or  the   advantages   derived  from  such
                  relationship,  either Party may request the other Party hereto
                  to modify this  Agreement,  and, if, within 30 days subsequent
                  to the making of such request,  the Parties  hereto are unable
                  to agree upon a  mutually  satisfactory  modification  hereof,
                  then either Party may terminate this Agreement without further
                  cause on 30 days' notice to the other Party.

         18.7     This  Agreement  together  with its  Exhibits  sets  forth the
                  entire  agreement  between the parties  hereto with respect to
                  the subject  matter hereof and  supersedes and cancels any and
                  all  prior  or  contemporaneous   discussions,   negotiations,
                  arrangements and agreements  between them, express or implied,
                  with respect to such subject matter.  The Parties  acknowledge
                  that no  representations  or promises have been made to induce
                  either of them to enter into this Agreement  other than as may
                  be specifically set forth herein.

         18.8     The  failure  or refusal  by either  Party to insist  upon the
                  strict  performance  of any provision of this  Agreement or to
                  exercise   any  right  in  any  one  or  more   instances   or
                  circumstances shall not be construed as a waiver of such right
                  presently or as a modification or amendment of this Agreement,
                  nor  shall  such  failure  or  refusal  be  deemed a custom or
                  practice  contrary to such provision or right. A waiver of any
                  default by either party of any of the terms and  conditions of
                  this Agreement  shall not be deemed to be a continuing  waiver
                  or a waiver  of any  other  default  or of any  other of these
                  terms and conditions,  but shall apply solely to the instances
                  to which such waiver is granted.

         18.9     (a) This  Agreement  shall be  binding  upon and  inure to the
                  benefit of the respective  successors and permitted assigns of
                  the parties  hereto.  (b) The rights of the Parties under this
                  Agreement  are for the sole  benefit of SWISSRAY  and HMSA and
                  are  not  intended  for  any  other  person.   (c)  The  words
                  "including,"  "includes,"  "include" and "covering" as used in

                                       19

<PAGE>

                  this  Agreement  mean,   respectively,   "including,   without
                  limitation," "includes, without limitation," "include, without
                  limitation" and "covering, without limitation." (d) References
                  to sections are to sections in this Agreement and in each case
                  include  references to all  subsections  under the  referenced
                  section.  (e) The words "hereof"  "herein" and "hereunder" and
                  words  of  similar   import  shall  refer  to  all  applicable
                  provisions  of  this  document  and  not  to  any   particular
                  provision.  (f) This  Agreement  is the result of  negotiation
                  and, accordingly, no presumption or burden of proof will arise
                  with respect to any ambiguity or question of intent concerning
                  this  Agreement  favoring  or  disfavoring  any  Party to this
                  Agreement by virtue of the authorship of any provision of this
                  Agreement.  (g) Words  denoting the  singular  tense or person
                  shall include the plural and vice versa and  references to the
                  masculine gender shall, where the context permits, include the
                  feminine  and/or  neuter  genders  and  vice  versa.  (h)  All
                  references   to  statutory   provisions   shall   include  all
                  amendments and re-enactments  thereof.  (i) The obligations of
                  the  parties  that   expressly   survive  the   expiration  or
                  termination of this  Agreement,  or which, by their nature are
                  intended to survive such expiration or  termination,  shall so
                  survive in  accordance  with their  terms or as is required to
                  give effect to such intention, respectively.

         18.10    This  Agreement may be executed in multiple  counterparts  and
                  duplicate originals,  each of which will be deemed enforceable
                  without production of the others.

                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Agreement to be executed in duplicate by their duly  authorized  officers on the
day and year mentioned below.


SWISSRAY AMERICA, INC.                      HITACHI MEDICAL SYSTEMS
                                                                  AMERICA, INC.


By:_____/Ueli Laupper/___________           By:__/Richard L. Ernst__________
         -------------                           -----------------
          (authorized signature)                 (authorized signature)

Name:___Ueli Laupper____________            Name:__Richard L. Ernst________
        ------------                              -----------------
       (print or type)                            (print or type)

Title:_____CEO_________________             Title:___President and CEO_______
           ---                                       -----------------





By:____/Michael Baker/___________
         -------------
        (authorized signature)

Name:____Michael Baker__________
         -------------
        (print or type)

Title:___Deputy CEO_____________
      SWISSRAY America, Inc.

                                       20
<PAGE>



                                    EXHIBIT A





IS  NOT  BEING  FILED  WITH  THIS  REGISTRATION   STATEMENT  AS  A  REQUEST  FOR
CONFIDENTIALITY  WITH RESPECT TO SUCH EXHIBIT HAS BEEN SEPARATELY FILED WITH THE
MATERIAL (EXHIBIT A) FOR WHICH  CONFIDENTIALITY  IS SOUGHT.  THE NUMBER OF PAGES
OMITTED AMOUNTS TO 4 PAGES.

                                       21
<PAGE>




                                    EXHIBIT B


                                 [The Territory]

The  Territory  shall be the Fifty (50) states of the United  States of America,
except the following geographic areas:

1.       The  States  of  Alabama,  Arizona,  Connecticut,  Mississippi,  Maine,
         Massachusetts, New York, Rhode Island, Vermont and New Hampshire.

2.       The  portion  of  New Jersey that includes the Atlantic City Expressway
         and north.

3.                The   following   counties  in  the  State  of   Pennsylvania:
                  Allegheny,  Clinton, Mercer, Armstrong, and Crawford, Mifflin,
                  Beaver, Elk, Potter,  Butler, Erie, Venago,  Cambria,  Forest,
                  Warren,  Cameron,  Indiana,  Washington,   Center,  Jefferson,
                  Westmoreland, Clarion, Lawrence, Clearfield and McKean.

4.       The following counties in the State of California:Orange and San Diego.

5.       The Panhandle of Florida - Tallahassee west.


                                       22
<PAGE>



                            EXHIBITS C, D, E, F AND G



ARE  NOT  BEING  FILED  WITH  THIS  REGISTRATION  STATEMENT  AS  A  REQUEST  FOR
CONFIDENTIALITY  WITH RESPECT TO SUCH EXHIBITS HAVE BEEN  SEPARATELY  FILED WITH
THE MATERIAL (EXHIBIT C, D, E, F and G) FOR WHICH CONFIDENTIALITY IS SOUGHT. THE
NUMBER OF PAGES OMITTED AMOUNTS TO 11 PAGES.





                                       23