Exhibit 10.1

                                                                  Execution Copy

                     EXCLUSIVE SALES AND MARKETING AGREEMENT

      This AGREEMENT made the 5th day of October, 2000 (the "Effective Date") by
HOSPITAL  SPECIALTY  COMPANY,  (hereinafter  "HSC"), a Division of The Tranzonic
Companies,  an Ohio  corporation  with  principal  offices  at 670 Alpha  Drive,
Highland  Heights,  Ohio  44143  and  RMED  International,   Inc.,  (hereinafter
"Contractor"),  a  Colorado  corporation,  with  principal  offices  at  3925 N.
Hastings Way, Eau Claire, WI 54703.

                                    RECITALS:

      WHEREAS, HSC desires to purchase certain designated  quantities of private
label  (product  packaged  in  packages  containing  the  name  provided  by the
customer) and control label (brand name used by the manufacturer/marketer as its
own  product  name) baby  diapers  as  described  in  Exhibit 1 attached  hereto
(hereinafter   the  "Products"  or  "Units"),   from  a  manufacturer  who  will
manufacture said Units in accordance with the agreed upon specifications;

      WHEREAS,  Contractor is in the business of  manufacturing  baby diapers as
well as other items for its  customers and desires to  manufacture  and assemble
Units for HSC, as per the terms and conditions hereinafter set forth.

      NOW THEREFORE, the parties agree as follows:

1. MANUFACTURE AND SUPPLY.

      Contractor  shall  sell  the  Products  to  HSC  in  accordance  with  the
specifications  provided  herein and in the  specifications  attached  hereto as
Exhibit  I  (the  "Specifications")  (including,   without  limitation,  Product
description,   manufacturing   specification,   any   packaging   and   labeling
specifications and shipping  instructions)  agreed upon by the parties from time
to time. The Units shall be  manufactured by Contractor in its own facilities in
Eau Claire,  WI pursuant to the terms and conditions set forth herein and in the
Specifications.  Hereafter,  from time to time,  HSC may  request and may order,
through formal purchase  orders,  various  quantities of the Products.  Upon its
acceptance  of each  such  purchase  order,  Contractor  shall be  obligated  to
manufacture  and ship the  Products  described  therein in  accordance  with the
terms, conditions,  schedules for delivery and purchase prices reflected therein
and as set forth in this Agreement.

      Contractor  will maintain  sufficient  inventory  quantities to meet HSC's
customer delivery  requirements  pursuant to instructions  from HSC.  Contractor
will be liable for any penalties associated with shipping delays to HSC or HSC's
customers  unless  such  delay  can be  attributed  to  untimely  or  incomplete
instructions from HSC.

2. SALES AND MARKETING.

      HSC  shall  use  reasonable  commercial  efforts  to  market  and sell the
Products in North America (USA,  Canada,  Mexico).  HSC will provide  Contractor
with a written  marketing  plan  outlining  HSC's efforts to market and sell the
Products. The parties will review together such


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<PAGE>

marketing plan at least quarterly in order to determine the acceptability of the
marketing   plan  and  to  provide   information  to  Contractor  for  the  most
cost-effective  manufacture  of the  Products  at levels  necessary  to meet the
demand of HSC and its customers.  HSC shall be responsible for all costs related
to sales and marketing efforts.

      Contractor  will  have no  direct  contact  with  HSC's  customers  unless
instructed to do so by HSC and then only to the extent  expressly  authorized by
HSC.

3. EXCLUSIVITY.

      It is agreed to by the parties that HSC shall have the exclusive  right to
market  and sell  private  label baby  diapers  and its own  control  label baby
diapers  (e.g.,  "Precious")  in North America (USA,  Canada,  Mexico) which are
manufactured  by  Contractor.  In addition,  Contractor  agrees to offer HSC the
right of first  refusal  to  market  or sell any new  products  that  Contractor
manufactures  during term of this Agreement for the private label market.  Terms
of sale of the new products to be  negotiated  and subject to the  conditions of
this agreement.

      Provided that  Contractor  is able to supply the Products  pursuant to the
Specifications  contained  herein and at the  quantities  required  by HSC,  HSC
agrees to purchase  baby diapers  exclusively  from  Contractor.  If and only if
Contractor is unable to supply all of HSC's requirements for Products,  then HSC
and Contractor will seek and agree on the manufacturer to cover such shortfall.

      Contractor  maintains  the right to  manufacture  baby  diapers for diaper
manufacturers provided that such baby diapers are brand name and not for private
label retail.  In addition,  this Agreement  shall not preclude  Contractor from
manufacturing and selling its "TenderCare", "Tushies", "Rock-A-Bye" or "Bumpies"
brand baby diapers. Notwithstanding the foregoing, HSC's production requirements
will  take  precedence  over   Contractor's   manufacturing   for  other  diaper
manufacturers.

      If both  parties  agree to terminate  the  exclusive  sales and  marketing
provisions  of this  Agreement,  but  continue  the  supply  relationship,  then
Contractor  agrees not to compete against HSC for a period of three (3) years in
those baby diapers  accounts that HSC has sold baby diapers during the 12 months
prior to termination of this exclusivity. An HSC customer is defined as whomever
HSC invoices.

4. DESIGN AND SPECIFICATION.

            (a)  Contractor   shall  be  responsible  for  the  engineering  and
            manufacture  in  compliance  with  the  National  Brand   Equivalent
            Specifications  as agreed to and  attached  hereto and as may change
            from time to time.

            (b) Contractor  shall provide samples of the Products to HSC and HSC
            shall approve or (disapprove) such samples in writing upon execution
            of this  agreement  and in the  future  when both  parties  agree to
            change specifications.

            (c) Contractor  shall also submit any and all drawings and component
            specifications,  and any subsequent  changes thereto,  to be used in
            manufacturing


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<PAGE>

            Products  for HSC.  HSC shall  approve in writing any changes to the
            drawings or component or other  specifications or any changes to the
            Specifications  prior  to  the  commencement  of  production  of any
            Product  incorporating  such changes.  Contractor agrees not to make
            any  changes  to  the  Specifications   without  the  prior  written
            authorization  from HSC and agreed upon  samples  will be  provided.
            Contractor owns the  specifications but HSC has the right to use the
            specifications  after  termination.  HSC is not precluded from using
            the specifications  with other contractors when we need to use other
            contractors under this agreement.

5. PURCHASE PRICES AND PAYMENT TERMS

      The  prices  to be  paid by HSC to  Contractor  for  the  Units  purchased
pursuant to this Agreement shall be as set forth in the  Specifications  for all
relevant SKU's, and pursuant to the specific purchase orders to be issued during
the term of the Agreement. Contractor will determine base-line costs immediately
upon  execution of this  Agreement and provide such  information  to HSC at such
time.  The  prices of Units  will be fixed for a six (6) month  period  from the
Effective  Date of this  Agreement  and  cannot  be  changed  thereafter  unless
Contractor provides HSC with sixty (60) days notice of production cost increases
of at least five percent (5%) and only to the extent of actual increases in such
costs. Contractor shall provide reasonable  documentation to HSC supporting such
production cost increases. Subsequent price adjustments shall be fixed for a six
month  period from the date of price  adjustment.  Contractor  will use its best
efforts to provide pricing that allows HSC to compete  effectively in the retail
baby diaper market and make a reasonable  margin of profit.  In  furtherance  of
this obligation, Contractor agrees to notify HSC of production cost decreases of
five percent (5%) or more and will decrease its prices  immediately  upon and to
the extent of such actual cost decreases.

      Payment  terms shall be net thirty (30) days from date of receipt at HSC's
plant or shipping  date to the  customer,  with a 2% discount  for payment  made
within  fifteen  (15) days of receipt  at HSC's  plant or  shipping  date to the
customer.

      Such prices  shall  represent  the total cost of the  Products to HSC from
Contractor,  including,  but not  limited  to,  the price of the  Products,  the
packaging, warehousing,  literature, any applicable taxes or assessments and all
delivery  costs up to the time that HSC  takes  title to the  goods.  Contractor
agrees to warehouse and drop ship the Products for HSC at no additional  cost to
HSC. Upon instruction from HSC, the Products shall be delivered by Contractor to
the carrier chosen by HSC. All outbound shipments to HSC customers will indicate
HSC as the shipper. Freight will be billed third party to HSC.

      Contractor  shall,  at  its  own  cost,  inventory  and  transport  to its
production  facility all raw materials and component  parts (if  applicable) for
the completed assembly of the Units.

      It is further agreed and understood as follows:  (i) any  modifications to
purchase orders,  including,  but not limited to,  modifications to the purchase
price set forth in the Specifications, issued pursuant to this Agreement must be
in writing and executed by authorized officers of both HSC and Contractor;  (ii)
the  specifications  and purchase  price for any  additional  items added to the
Products,  which items are added after the date of this Agreement ("New Items"),
shall be  established  by written  agreement  of the  parties  and (iii) all New
Items, the specifications


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<PAGE>

therefor  and the agreed upon  purchase  price  therefor  shall be added to this
Agreement as an exhibit,  amendment or  supplement  and upon the addition of New
Items to this Agreement, (a) the New Items shall become "Products" or "Units" as
defined in this Agreement, (b) the specifications for the New Items shall become
"Specifications"  as  defined  in this  Agreement  and (c) such  "Products"  and
"Specifications"  shall  thereafter be subject to all of the  provisions of this
Agreement  and all of the rights and remedies of the parties  conferred  hereby.
Prices are FOB Contractor's plant.

6. TERM.

            a. The term of this Agreement (the "Term") shall begin on October 5,
            2000 and shall  extend  through  October 4, 2003 unless such Term is
            terminated  prior to such date in accordance  with the terms of this
            Agreement.

            b.  The  term  of  this  Agreement  will  automatically   renew  for
            additional  one year terms  unless  either  party gives at least one
            year's  prior notice of its  intention to not renew this  Agreement.
            Neither  Notice of  termination  nor  expiration  of the Term  shall
            affect the  obligations  of the parties  under this  Agreement  with
            respect to any pending  purchase  orders  which have been issued and
            accepted  prior to the effective  date of  termination or expiration
            date of this Agreement and the terms of this Agreement  shall remain
            effective  until all such purchase  orders shall have been satisfied
            or terminated in writing by the parties.

            c.  Notwithstanding  the  termination of this Agreement by any party
            hereto  (including  termination  under  this  Section  or any  other
            Section) or the expiration of this Agreement  pursuant to its terms,
            the   obligations   of   Contractor    pursuant   to   Sections   12
            (indemnification),  9 (warranty),  and 13 (patents,  trademarks  and
            other  conditions  relating to intellectual  property  rights) shall
            survive.

            d. After  notice and at HSC's  request  and  directions,  Contractor
            shall ship all HSC property,  including, but not limited to, any and
            all materials bearing Proprietary Marks (as defined in Section 13 of
            this  Agreement)  and all materials  constituting  Trade Secrets and
            Confidential  Information  of HSC,  directly  to HSC or to any other
            location as may be  designated at such time by HSC. HSC will pay for
            such materials  provided that they had not been  previously paid and
            shipping cost will be paid by HSC.

7. PACKAGING.

      All  Products  shall be packaged at  Contractor's  sole  expense in strict
accordance with the following:

            a. Specifications annexed hereto as Exhibit "1".

            b. HSC shall  supply,  at no charge,  all color  separations,  films
            and/or camera ready art necessary to produce all packaging.


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<PAGE>

            c. Contractor  shall not commence  production or reproduction of any
            packaging  without  supplying HSC with samples of all such materials
            and receiving  written  approval from HSC prior to production.  Once
            any such material is approved,  Contractor  shall make no changes in
            such material without the prior written approval of HSC.

            d.  Contractor   shall  be  responsible  for  all  reasonable  costs
            associated   with  printing,   production  or  fabrication  of  such
            packaging.

            e. All separations,  films, camera ready art and other packaging and
            literature provided by HSC shall at all times remain the property of
            HSC and  shall  be  subject  to the  provisions  of this  Agreement,
            including  Section 13 hereof.  Use of any materials  provided by HSC
            for the production of any packaging or Product  literature  pursuant
            to this Agreement for any other purpose is expressly prohibited.

      HSC  and  Contractor  will  agree  to  the  minimum   monthly/yearly  case
requirement for a private label. HSC will use commercially reasonable efforts to
execute private label packaging  agreements with all customers.  Contractor will
bear the risk of loss on all private label  packaging in inventory  greater than
an amount equal to ninety (90) days sales if HSC has a private  label  packaging
agreement or Contractor  and HSC have otherwise  agreed in writing.  HSC will be
responsible  for  inventory in amounts up to the  equivalent of ninety (90) days
private label sales.

8. INSPECTION AND ACCEPTANCE OF FINISHED PRODUCT.

      HSC reserves the right to sample,  inspect, and test Products delivered to
its  plant  or its  customers'  location,  as well as the  packaging,  labeling,
product   literature  and   enclosures   therefore,   in  accordance   with  the
Specifications  set forth in Exhibit 1, and in  accordance  with the  inspection
procedures  adopted by HSC and agreed to in writing by  Contractor.  HSC may, at
its  option,  reject any  production  run,  lot or part  thereof  which does not
reasonably satisfy such Specifications and inspection procedures.  HSC shall not
be deemed to have accepted any  individual  shipment of Products if it specifies
in writing to Contractor  that the relevant  production run or lot has failed to
meet the  Specifications  or  inspection  standards of HSC.  Upon such  failure,
Contractor  shall have the right to promptly cure the defect.  If such defect is
due to Contractor's failure and is not cured within a reasonable period of time,
HSC shall be entitled to terminate all or part of the purchase order pursuant to
which such defective  Product was produced and be reimbursed for the cost of any
rejected  Products and other costs directly related to the return (i.e.  freight
to and from,  and/or charges or penalties that may be levied by the customer) or
other nonconforming product. Contractor shall follow good manufacturing practice
at all times and will provide HSC with comparative independent lab tests of each
of its products at minimum every six (6) months or as may be required by private
label proposals at Contractor's cost.

      The  acceptance  of any part of a shipment of Units  shall not  constitute
acceptance of the whole shipment, nor does acceptance of one shipment constitute
acceptance of any subsequent shipment. The acceptance of any shipment or portion
thereof does not limit any warranty,


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<PAGE>

indemnification  or other  obligations of Contractor  hereunder.  Payment of any
amount under any purchase order shall not constitute  acceptance of any Products
delivered pursuant to such purchase order.

9. WARRANTY.

            a.  Contractor   hereby  warrants  that  the  Units,   any  and  all
            replacements  thereof and  replacement  parts or components  thereof
            will be of good and  merchantable  quality,  fit for their  intended
            purpose,  free of defects in  material  and  workmanship,  and shall
            strictly  conform  to  all   Specifications  as  contained  in  this
            Agreement or in any Exhibit or purchase order delivered  pursuant to
            this Agreement.

                  The  provisions  of  this  Section  9 and the  obligations  of
            Contractor  hereunder shall survive the termination or expiration of
            this Agreement.

10. FORCE MAJEURE.

      No party hereto,  however,  shall be responsible for delays caused by Acts
of  God,  labor  disputes,   governmental  action,  civil  disturbances  or  War
(collectively  "force  majeure").  HSC  agrees to  negotiate  modified  shipping
schedules with Contractor in the event of a force majeure,  but it is the intent
of this  paragraph to identify the  importance  of adhering to schedules  agreed
upon between HSC and  Contractor.  Notwithstanding  the foregoing,  in the event
that a force  majeure  shall  cause or be  likely  to cause a delay of more than
ninety (90) days, HSC shall have the right,  in its sole discretion to terminate
any purchase order or to terminate this Agreement.

11. CONFORMANCE WITH LAWS.

      It is agreed  between  the  parties  that the  Units  and their  packaging
purchased  pursuant to this  Agreement and subsequent  purchase  orders shall be
marked  with the  "Country  of Origin"  in  accordance  with the laws  governing
importation into the United States and shall be produced, packaged and delivered
in  accordance  with  all  applicable  laws  including,   but  not  limited  to,
environmental  laws,  intellectual  property laws,  employee  safety and welfare
laws,  consumer protection laws and any other laws,  regulations,  of the United
States or any state,  local laws or regulations  and any and all applicable laws
of any other jurisdiction, domestic or foreign.

12. INDEMNIFICATION.

      Contractor and all its  wholly-owned or controlled  subsidiaries  agree to
protect,  hold harmless,  defend and  indemnify,  at its own expense HSC and its
customers from and against all liability, costs and expenses (including the fees
and expenses of attorneys and other experts or  consultants)  arising out of (1)
the breach of any provision of this Agreement,  including those resulting from a
breach of any  agreement or warranty set forth in Section 13 or (2) the death or
injury to any person, or damage to property,  by whosoever suffered,  resulting,
or claimed to have  resulted from any  purchase,  sale,  use or operation of any
Unit furnished  hereunder,  solely due to defects and/or negligence in the total
design and  manufacturing  process  including but not limited to the components,
materials and  workmanship.  HSC shall  promptly  notify  Contractor of any such
claim or lawsuit. HSC shall have the right, at its expense, to retain counsel to
participate in


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<PAGE>

the  defense  of any suit.  Contractor  may not settle or admit  liability  with
respect to any such claim without the prior written consent of HSC.

      Pursuant  to  this  indemnification,  Contractor  shall  purchase  product
liability  insurance with limits of not less than  $2,000,000.  HSC shall be "an
additional named insured" under  Contractor's  product  liability  insurance for
products  manufactured  for HSC.  Contractor  shall  provide  a  Certificate  of
Insurance showing proof of such product  liability  insurance and proof that HSC
is name "an additional named insured" thereunder.

      HSC agrees to  indemnify  Contractor  against any claims  related to sales
promotion or warranties in excess of  Contractor's  warranties to HSC related to
the Products and such Products' performance.

13. PATENTS,  TRADEMARKS AND OTHER CONDITIONS RELAT1NG TO INTELLECTUAL  PROPERTY
    RIGHTS; CONFIDENTIALITY.

            a. In the event that HSC and Contractor jointly develop a patentable
            item,  in   consideration   of  HSC's  agreement  to  purchase  from
            Contractor  hereunder  Contractor  agrees to irrevocably  assign all
            patent rights to HSC unless  otherwise  agreed to in writing by HSC,
            except for Contractor's own branded names,  patents,  trademarks and
            improvements,   new  patents,   new  trademarks  re:  those  brands.
            Contractor is prohibited from applying for any patents without prior
            written consent from HSC.

            b.  Contractor  shall affix to the Units  trademarks,  trade  names,
            copyrighted names and other  identifying  symbols of HSC, whether in
            existence as of the execution of this Agreement or arising,  created
            or implemented  after the date hereof (the "HSC Proprietary  Marks")
            strictly  in  accordance  with  HSC's  instructions  and in no other
            manner.  All such  Proprietary  Marks relating to the Units shall at
            all times remain the property of HSC,  and  Contractor  shall not at
            any time acquire any rights  thereto.  Contractor  shall not use any
            such  Proprietary   Marks  in  connection  with  any  other  party's
            trademark,  trade  name,  symbol,  copyrighted  name or  copyrighted
            material or take any other action which might dilute any Proprietary
            Mark. It is understood that this Agreement is not to be construed as
            a license to  Contractor to use the  Proprietary  Marks as described
            herein and the same shall not be used in  connection  with any goods
            other than those  produced for and sold to HSC pursuant to the terms
            of this  Agreement.  Contractor  shall  maintain and  implement  the
            Quality Control  Standards  established by HSC.  Contractor will not
            sell any  Product  using any HSC  Proprietary  Marks or any marks of
            HSC's   customers   if  such  Product  does  not  conform  with  the
            Specifications  or is otherwise  non-conforming as determined by HSC
            in accordance  with Section 8. HSC retains right of first refusal to
            sell non-conforming goods as "seconds".  In any event non-conforming
            goods cannot be sold in original packaging without the permission of
            HSC,  which will not be  unreasonably  withheld.  HSC's customer may
            preclude any such disposition.


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<PAGE>

            c. In addition,  each party  acknowledges that, in the course of its
            performance pursuant to this Agreement, it will be made aware of, be
            exposed  to or  otherwise  receive  Trade  Secrets  or  Confidential
            Information  (as  defined  below) of the other  party and such Trade
            Secrets  or  Confidential  Information  may  not be the  subject  of
            trademark or copyright protection. Accordingly, unless the receiving
            party shall have been notified by the other party in writing that an
            item  is  not  a  Trade  Secret  or  Confidential  Information,  the
            receiving party shall treat all information  received from the other
            party  as a  Trade  Secret  or  Confidential  Information.  For  the
            purposes   hereof,   the  phrase  "Trade  Secrets  or   Confidential
            Information"  shall have the  meaning  generally  ascribed  to these
            words in common business usage,  including,  but not limited to, all
            or any  portion  of  (1)  any  business,  scientific,  technical  or
            manufacturing   information,   (2)  any  product  design,   process,
            procedure,  formula  or  improvement,  (3) any  marketing  material,
            Production  information,  or system, (4) any Product defect,  design
            defect,  pending  recall or similar  information or (5) any business
            plan,  marketing  strategy,  new product line, product  improvement,
            financial information, cost information, profit information, listing
            of names, addresses or customers.

                  Each  party  agrees  that it shall use the Trade  Secrets  and
            Confidential  information  strictly in conformance with the terms of
            this Agreement,  and shall not, without the prior written consent of
            the other  party,  disclose  or use any time,  any Trade  Secrets or
            Confidential  Information,  except  (1) to the extent  necessary  to
            fulfill  its  obligations  hereunder,  (2) to the  extent  any  such
            information  shall  become  generally  available  in  writing to the
            general  public  (other than  through  the actions of the  receiving
            party)  or  (3) to the  extent  required  by a  court  of  competent
            jurisdiction  or  necessary  to  comply  with  any  applicable  law,
            regulation or order.

            d. In the event of a termination of commercial relations between the
            parties  hereto and/or  cancellation,  expiration or  termination of
            this  Agreement  for any  reason  whatsoever,  Contractor  shall not
            thereafter   make,  use,   exercise  or  sell  any  product  bearing
            Proprietary  Mark or any  colorable  imitation  thereof,  and  shall
            promptly return to HSC all design drawings, tool drawings,  tooling,
            and other property belonging to HSC.

            e.  Contractor  warrants  that  neither the Products nor any process
            related to the Product  violates  or  infringes  any other  patents,
            existing  or  pending  and  that  Contractor  possesses  any and all
            licenses  or other  permits to use the  proprietary  information  of
            third parties incorporated in the Products or any process related to
            the Products.  Pursuant to this warranty,  Contractor agrees to hold
            and save HSC, its successors,  assigns, customers and users harmless
            from loss and/or  liability  of any nature of kind arising out of or
            existing because of the infringement or alleged  infringement of any
            patent or the  violation  of any  license  of permit of  proprietary
            information for or on account of the manufacture, sale or use of any
            Products furnished hereunder. HSC shall notify Contractor in writing
            of any suit  filed  against it or its  customers,  on account of any
            such  infringement  or  alleged  infringement,  and at  Contractor's
            request shall give Contractor control of the


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<PAGE>

            defense of such suit, insofar as HSC has the authority to do so, and
            information  and  assistance  for  the  same,  all  at  Contractor's
            expense.  HSC and the party  against  whom suit is brought,  may, at
            their own expense,  be  represented by their own counsel in any such
            suit. Furthermore,  in the event that HSC or its customers should be
            enjoined  in such  suit or  proceeding  from  using  any part of the
            Products delivered  hereunder,  Contractor,  at HSC's option,  shall
            promptly  either:  (a)  secure  termination  of  the  injunction  or
            liability; or (b) replace said Products with non-infringing Products
            or  modify  them  to  become  non-infringing,  all  at  Contractor's
            expense.  Contractor  is  responsible  for all  product  related due
            diligence and all technical and production issues.

                  Similarly HSC warrants to Contractor that HSC or its customers
            owns or has authorization to use all of the intellectual property in
            the  artwork  and  slogans  that  it  provides  to  Contractor   for
            packaging.

            f. The  provisions of this Section 13 shall survive the  termination
            or expiration of this Agreement indefinitely.

14. RISK OF LOSS.

      Unless  otherwise  specified  herein  or  in  any  purchase  order  issued
hereunder,  risk of loss shall  remain  with  Contractor  until the title of the
Units passes to HSC upon delivery to freight carriers. Passing does not restrict
HSC rights to non-conforming product per paragraph 8 herein.

15. SUBCONTRACTING.

      It is  understood  between the parties  that  Contractor  may  subcontract
manufacture   of  the  Units  provided  that  said   subcontractor   is  a  U.S.
manufacturer.  It is agreed  that any such  subcontracting  arrangement  between
Contractor and subcontractor shall in no way affect or relieve Contractor of its
obligations,  representations  and warranties to HSC pursuant to this Agreement;
nor shall any of HSC's rights pursuant to this Agreement be affected thereby.

16. WAIVERS.

      No action taken pursuant to this Agreement,  shall be deemed to constitute
a waiver by the party taking such action of the  obligations  to comply with any
representation,  warranty, covenant or agreement contained herein. The waiver by
any party hereto of any condition or provision,  or of a breach of any condition
or provision, of this Agreement shall not operate or be construed as a waiver of
any other condition or provision, or of any subsequent breach. The waiver by any
party of any of the conditions precedent to its obligations under this Agreement
shall not preclude it from seeking  redress for breach of this  Agreement  other
than with respect to the condition so waived.

17. DEFAULT; REMEDIES; TERMINATION.

            a. If any of the "events of default"  listed in (i) through  (vi) of
            this subsection  shall occur, the  non-defaulting  party may, at its
            option,  with not less  than six (6)  months  notice to the party in
            default and provided that an agreed upon corrective


                                                                               9
<PAGE>

            action  has not  been  taken  within  30  days  notice  of  default,
            terminate  this  Agreement  and  all   prospective   rights  of  the
            defaulting party hereunder. The "events of default" are as follows:

                  i.    Non-conforming Products;

                  ii.   Inability   to   provide   National   Brand   Equivalent
                        Specifications;

                  iii.  Inability to meet shipping requirements;

                  iv.   Insolvency or bankruptcy;

                  v.    Predatory marketing practices; or

                  vi.   Non-competitive pricing.

                  In the event of termination  due to an event of default on the
            part of Contractor,  Contractor  agrees not to compete at those baby
            diaper  accounts  sold by HSC for a  period  of  three  years  after
            expiration of this Agreement.

            b. The termination of this Agreement for any reason whatsoever shall
            not relieve  either party of any  obligation  due to the other party
            on, or accrued as of, the date of such termination.  Notwithstanding
            the   termination   of  this  Agreement  by  any  party  hereto  the
            obligations of Contractor pursuant to Sections 12 (indemnification),
            9  (warranty),  and 13  (patents,  trademarks  and other  conditions
            relating to intellectual  property  rights;  confidentiality)  shall
            survive.

            c. In the event  Contractor  shall, at any time, act with respect to
            the Products in any manner other than as expressly permitted hereby,
            HSC shall be entitled to immediate  injunctive relief to prevent the
            continuation or recurrence of such use.

            d. All remedies  specified  herein or otherwise  available  shall be
            cumulative  and in addition to any and every other  remedy  provided
            hereunder or now or hereafter available under applicable law.

            e. HSC shall have no liability to Contractor for any costs, expenses
            or  damages,   including,  but  not  limited  to,  consequential  or
            incidental  damages,  arising  out  of or  in  connection  with  any
            exercise by HSC of any of its rights hereunder,  including,  but not
            limited to, any actions of HSC pursuant to Sections 6, 8, or 9.

            f.  Contractor  has the right to terminate  for  non-payment  by HSC
            provided  that  HSC  does  not  cure  within  30 days of  notice  of
            delinquency.


                                                                              10
<PAGE>

18. NOTICES.

      Any notices and other  communications  provided for hereunder or in any of
the Ancillary  Agreements shall be in writing (including  telegraphic,  telex or
cable communication) and shall become effective (i) when manually delivered on a
business day during normal  business  hours at the place of receipt to the party
to be given such notice,  (ii) on the third  business day following the day when
deposited,  if mailed by  certified  or  registered  mail  with  return  receipt
requested and postage thereon fully prepaid, (iii) on the business day following
the day when deposited,  if sent by overnight courier, fully prepaid, or (iv) on
the business day such notice shall have been sent by telex, telegram,  telecopy,
cable or similar electronic device, fully prepaid. The addresses for such notice
shall be:

To HSC:                       Hospital Specialty Company
                              670 Alpha Drive
                              Highland Heights, Ohio 44143
                              Attn: Bill Hemann

To Contractor:                Rmed International, Inc.
                              3926 N. Hastings Way
                              Eau Claire, WI 54703
                              Attn: Ed Reiss

19.  ASSIGNMENT.

      a. This Agreement is assignable by HSC in the event that HSC or its parent
company is sold or the retail  business of HSC's  parent  company is sold unless
the sale is to another baby diaper manufacturer.  In the event that such sale is
to another baby diaper  manufacturer,  then the successor company shall have the
right to continue this Agreement or to terminate with one year's notice.  During
this one year period,  the successor  company must honor all  provisions of this
Agreement. Should the successor company terminate this Agreement pursuant to its
terms,  then the  Contractor  is relieved  of all  non-compete  provisions  upon
termination  and will pay Contractor a three percent (3%) commission on any baby
diaper  business  previously  performed  by  Contractor  to HSC at the  time  of
acquisition and transferred to the successor company upon termination.

      b. In the event that Contractor is sold or sells its baby diaper business,
this  Agreement  and all  obligations  contained  herein must be assigned to the
acquiring party.

20. CONTRACTOR OBLIGATIONS UPON TERMINATION.

      Should  Contractor or Contractor's  successors and assigns  terminate this
Agreement  without cause,  then Contractor or its successors or assigns,  as the
case may be,  shall pay HSC an amount equal to four times HSC's gross profit for
its private label baby diaper business during the preceding  twelve (12) months.
At the sole discretion of HSC, Contractor or Contractor's


                                                                              11
<PAGE>

successors or assigns, as the case may be, shall supply HSC's control label baby
diapers on a non-exclusive  basis under the same pricing terms contained in this
Agreement for a period of at least twelve (12) months. In addition, HSC or HSC's
successors or assigns,  as the case may be, agrees not to compete in the private
label baby diaper  business  for a period of two (2) years unless HSC is sold to
another baby diaper manufacturer.

21. HSC OBLIGATIONS UPON TERMINATION.

      Should  HSC or HSC's  successors  and  assigns  terminate  this  Agreement
without cause, then HSC or its successors or assigns,  as the case may be, shall
provide six (6) months  notice and shall  assist  Contractor  to  transition  or
assign its private label baby diaper  business to Contractor.  Contractor  shall
pay HSC or its  successors  or assigns a  commission  of two percent (2%) of net
sales of  private  label  baby  diaper  business  that HSC has  transitioned  or
assigned to Contractor for a period of two (2) years from the expiration of this
Agreement.  If HSC or its  successors  or  assigns  wish to  terminate  only the
exclusivity  provision of this Agreement,  then Contractor agrees not to compete
against HSC for those private label accounts maintained by HSC.

22. HSC'S RIGHT OF FIRST REFUSAL.

      Should  Contractor  decide to sell its baby diaper business then HSC shall
be given a first option to buy at a negotiated  price of not more than the price
Contractor  could sell to a bona-fide third party  purchaser.  Contractor has no
obligation  to sell if it  decides  that such  third  party  purchaser's  bid is
inadequate.

23. CONFIDENTIALITY.

      During or after the term of this  Agreement  and for a period of three (3)
years after its termination,  neither party shall communicate,  divulge,  or use
for the benefit of another  person or entity,  any  confidential  or proprietary
information  or  knowledge  disclosed  by the other  party,  including,  without
limitation:   (i)  present  or  prospective   customer  lists,  (ii)  management
information reports, (iii) details of contracts, (iv) acquisition plans, (v) new
personnel  acquisition plans, (vi) trade secrets,  (vii) financial  information,
(viii)  product  designs,   details  or  specifications,   and  (ix)  any  other
information or materials of any kind which the disclosing party may designate as
confidential or proprietary ("confidential information").  Each party shall only
divulge  confidential  information  to  its  employees  to  the  limited  extent
necessary for such party to comply with its  obligations  under this  Agreement.
Each party shall require all persons to whom such  confidential  information  is
disclosed  to agree,  to the same  extent as each  party has  agreed  under this
Agreement, to maintain the confidentiality of such confidential  information and
not disclose it to others. The receiving party shall be liable to the disclosing
party for all damages of any kind caused by any breach of this  Section 23 or by
any unauthorized  disclosure of the disclosing party's confidential  information
by the receiving party or its employee(s),  representative(s) or other person to
whom the receiving party has disclosed such information.  In addition,  both HSC
and Contractor  must agree in writing to any public  disclosure or press release
of financial or other  business  information  to the public or to the  financial
community.


                                                                              12
<PAGE>

24. MISCELLANEOUS.

      a.  During the term of this  Agreement  and any  renewal  period and for a
period of two (2) years after the expiration or termination  hereof, the parties
agree not to solicit or hire each  other's  employees.  Each party  acknowledges
that such soliciting or hiring employees under contract to the other party could
constitute  tortuous  interference  with  business  relations.  (E.g.,  All  HSC
non-union employees are employed pursuant to an employment  agreement containing
a non-compete provision.)

      b. This Agreement  shall inure to the benefit of and shall be binding upon
the parties hereto and their respective heirs, legal representatives, successors
and permitted assigns.

      c. The Section and other  headings  contained  in this  Agreement  are for
reference  purposes only and shall not affect the meaning or  interpretation  of
this Agreement.

      d. This Agreement may be executed in any number of  counterparts,  each of
which,  when  executed,  shall  be  deemed  to be an  original  and all of which
together shall be deemed to be one and the same instrument.

      e. In this Agreement,  unless the context otherwise requires, words in the
singular or in the plural shall each  include the  singular and the plural,  and
words of the masculine  gender shall  include the feminine and the neuter,  and,
when the sense so indicates, words of the neuter gender may refer to any gender.

      f. This Agreement  shall be governed by the laws of the State of Ohio. The
rights and obligations of the parties under this Agreement shall not be governed
by the provisions of the 1980 U.N. Convention on Contracts for the International
Sales of Goods;  rather,  these rights and obligations  shall be governed by the
laws of the State of Ohio, United States of America, including the provisions of
the Uniform Commercial Code as enacted in the State of Ohio.

      g.  Any  term  or  provision  of  this  Agreement   which  is  invalid  or
unenforceable  shall  be  ineffective  to  the  extent  of  such  invalidity  or
unenforceability  without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement.

      h. This Agreement embodies the entire agreement between the parties hereto
with respect to the subject matter hereof and  supersedes  all prior  agreements
and understandings,  oral or written,  with respect thereof.  This Agreement may
not be changed  orally,  but may be amended,  superseded,  canceled,  renewed or
extended,  and the terms hereof may be waived,  only by an instrument in writing
signed by each of the parties, or, in the case of a waiver,  signed by the party
against whom  enforcement of such waiver is being sought.  In the event that any
terms and conditions of the Specifications or any other invoice,  acknowledgment
or other  purchase  document  conflict with the terms and  conditions  contained
herein, the terms and conditions of this Agreement shall govern.

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


                                                                              13
<PAGE>

                                  HOSPITAL SPECIALTY COMPANY, a
                                  Division of The Tranzonic Companies

/s/ Kenneth R. Kramer             /s/ William E. Hemann
---------------------             ------------------------
Witness                           By:    William E. Hemann
                                      --------------------
                                  Its:   Vice-President
                                      --------------------

                                  RMED INTERNATIONAL, INC.

/s/ Stephen Brajdic               /s/ Todd L. Nelson
-------------------               ------------------------
Witness                           By: Todd L. Nelson
                                      --------------------
                                  Its: Vice-President
                                      --------------------


                                                                              14
<PAGE>

                                  HOSPITAL SPECIALTY COMPANY, a
                                  Division of The Tranzonic Companies

                                  /s/ William E. Hemann
---------------------             ------------------------------------------
Witness                           By:    William E. Hemann
                                      --------------------------------------
                                  Its:   Vice-President
                                      --------------------------------------

                                  RMED INTERNATIONAL, INC.

                                  /s/ Edward Reiss
-------------------               ------------------------------------------
Witness                           By: Edward Reiss
                                      --------------------------------------
                                  Its: Chairman of the Board; V.P. Sales CEO
                                      --------------------------------------


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