EMPLOYMENT AGREEMENT
                              --------------------

     AGREEMENT  dated  as  of  September  8,  2003,  between  VASOMEDICAL,  INC.
("Company"),  a Delaware  corporation,  having its  principal  place of business
located at 180 Linden Avenue, Westbury, New York, and

     THOMAS  W.  FRY  ("Employee"),  residing  at 45  Hunter  Lane,  Ridgefield,
Connecticut 06877.

                                  WITNESSETH:

     WHEREAS,  the  Company  desires to employ  the  Employee  and the  Employee
desires  to be  employed  by the  Company  subject  to the terms and  conditions
hereinafter set forth.

     NOW,  THEREFORE,  in consideration of the mutual premises and of the mutual
covenants  hereinafter  contained and for good and valuable  consideration,  the
parties hereto agree as follows:

     1.  Representation/Freedom  to Contract.  Employee  represents and warrants
that he is free to enter into this Agreement and that he has not made,  prior to
his  employment,  and will not thereafter  make, any agreements  which may be in
conflict with this Agreement in the latter, or post-employment context. Employee
agrees that he will not disclose to the Company or use for the Company's benefit
any trade secret or confidential  information which is the property of any third
party and that there are no agreements or understandings which would prevent him
from being engaged by the Company pursuant to the terms of this Agreement.

     2.  Employment.  The Company hereby employs the Employee as Chief Financial
Officer of the Company and the Employee hereby accepts employment upon the terms
and conditions hereinafter set forth.

     3. Term. The term of this Agreement  shall be two (2) years,  commencing on
the date hereof  ("Effective  Date") and ending  September  7, 2005,  subject to
earlier  termination  as  provided  in this  Agreement  ("Term")  and subject to
certain provisions hereof which survive the Term.

     4. Compensation.

          (a) For all services rendered under this Agreement:

          (i) The  Company  shall pay the  Employee a base salary at the rate of
     $150,000 per annum payable in equal monthly installments. ("Base Salary").

          (ii) The Company shall agree to grant to the Employee on the Effective
     Date options to acquire  100,000  shares of the common stock of the Company
     (the "Shares") at the closing price per share of the Company's common stock
     on September 8, 2003,  pursuant to the  provisions of the  Company's  Stock
     Option  Plan  ("the  Plan")  attached  as Exhibit A, the terms of which are
     incorporated  herein. The options shall vest three years from the Effective
     Date contingent on your continued employment.

          (iii) The Employee  shall be provided with the  opportunity to earn up
     to an additional 30% of his base salary  annually under the Company's bonus
     incentive program each year. The bonus will be awarded at the discretion of
     the Board of Directors based upon the  achievement of individual  goals and
     the Company's financial performance.

     5. Duties.  The Employee  shall perform on a full time basis such duties of
an Employee  nature as shall be  customarily  associated  with an officer of the
Company subject to the direction of the Chief Executive Officer and the Board of
Directors.  The Employee  shall perform and discharge  well and  faithfully  the
duties  which  may be  assigned  to him  from  time to time  by the  Company  in
connection with the conduct of its business.

     6. Extent of  Services.  So long as during the Term of this  Agreement  the
Company has not  notified  the  Employee of his  disability  pursuant to Section

<PAGE>

11(a) hereof,  the Employee shall devote his full business  time,  attention and
best efforts to the business of the Company  subject to reasonable  absences for
vacation  and illness and may not during the term of this  Agreement  be engaged
(whether  or not  during  normal  business  hours)  in  any  other  business  or
professional activity,  whether or not such activity is pursued for gain, profit
or other pecuniary advantage.  Notwithstanding the foregoing,  Employee may join
professional  associations  that do not  interfere  with his  attention and best
efforts on behalf of the Company.

     7. Benefits/Expenses.

     (a) During the term of his  employment,  the Employee  shall be entitled to
participate in employee benefit plans or programs of the Company, if any, to the
extent that his position,  tenure,  salary, age, health and other qualifications
make  him  eligible  to  participate,  subject  to  the  rules  and  regulations
applicable  thereto.  Such additional  benefits shall include paid vacation and,
subject to  approval  of the Board of  Directors,  qualified  pension and profit
sharing plans. Medical and dental insurance will not be included.


     (b) The Employee shall be entitled to timely  reimbursement of all business
expenses  reasonably  incurred  by him in the  performance  of his duties to the
Company  subject to the business  expense policy of the Company,  subject to the
presenting of appropriate vouchers in accordance with the Company's policy.

     8. Disclosure of Information.

     (a) The  Employee  represents  and  warrants to the  Company  that no prior
employment or business agreements or arrangements  preclude,  or interfere with,
his ability to execute and perform his obligations under this Agreement.

     (b)  The  Employee   recognizes   and   acknowledges   that  the  Company's
Confidential  or  Proprietary  Data or  Information  as they have existed,  will
exist, may continue to exist from time to time, are valuable, special and unique
assets of the Company's business, access to and knowledge of which are essential
to the performance of the Employee's  duties  hereunder.  The Employee will not,
during or after the term of his employment by the Company,  in whole or in part,
directly  or  indirectly   disclose,   divulge  or  communicate   such  secrets,
information or processes to any person, firm, corporation,  association or other
entity for any reason or purpose  whatsoever,  except in the  performance of his
duties  hereunder,  nor shall the Employee make use of any such property for his
own purposes or for the benefit of any person, firm, corporation or other entity
(except the Company) under any circumstances provided that after the term of his
employment these restrictions  shall not apply to such secrets,  information and
processes  which are then in the public domain  (provided  that the Employee was
not  responsible,  directly or  indirectly,  for such  secrets,  information  or
process entering the public domain without the Company's consent).  The Employee
agrees to hold as the Company's property, all memoranda, books, papers, letters,
formulas  and other  data,  and all copies  thereof  and  therefrom,  in any way
relating to the Company's business and affairs, whether made by him or otherwise
coming into his possession,  and on termination of his employment,  or on demand
of the Company, at any time, to deliver the same to the Company.

     (c) The term "confidential or proprietary data or information":  as used in
this Agreement  shall mean  information  not generally  available to the public,
including without limitation,  all database information,  personnel information,
financial information,  customer lists, supplier lists, trade secrets,  patented
or proprietary information,  forms,  information regarding operations,  systems,
services,  know how, computer and any other processed or collated data, computer
programs, pricing, marketing and advertising data.

     (d) All written  materials,  records and documents  made by the Employee or
coming into Employee's  possession during  Employee's  employment by the Company
concerning any products,  processes or equipment manufactured,  used, developed,
investigated,  purchased,  sold  or  considered  by  the  Company  or  otherwise
concerning  the business or affairs of the Company shall be the sole property of
the Company,  and upon termination of Employee's  employment by the Company,  or
upon  request  of the  Company  during  Employee's  employment  by the  Company,
Employee  shall  promptly  deliver the same to the Company.  In  addition,  upon
termination  of Employee's  employment by the Company,  Employee will deliver to

<PAGE>

the  Company  all other  Company  property  in  Employee's  possession  or under
Employee's  control,   including  but  not  limited  to,  financial  statements,
marketing and sales data, customer and supplier lists,  database information and
other documents, and any Company credit cards.

     9.  Inventions.  The Employee  hereby  sells,  transfers and assigns to the
Company or to any person, or entity designated by the Company, all of the entire
right,  title and  interest  of the  Employee in and to all  inventions,  ideas,
disclosures and improvements,  whether patented or unpatented, and copyrightable
material,  made or conceived by the Employee,  solely or jointly, or in whole or
in part,  during or before the term hereof (but after the Effective  Date) which
(i) relate to methods, apparatus,  designs, products, processes or devices sold,
leased,  used  or  under  construction  or  development  by the  Company  or any
subsidiary or (ii) otherwise relate to or pertain to the business,  functions or
operations of the Company or any  subsidiary,  or (iii) arise (wholly or partly)
from the efforts of the  Employee  during the term hereof.  The  Employee  shall
communicate  promptly and  disclose to the Company,  in such form as the Company
requests,  all  information,  details and data pertaining to the  aforementioned
inventions,  ideas,  disclosures and improvements;  and, whether during the term
hereof or thereafter, the Employee shall execute and deliver to the Company such
formal  transfers and  assignments and such other papers and documents as may be
required  of the  Employee  to  permit  the  Company  or any  person  or  entity
designated by the Company to file and prosecute the patent  applications and, as
to copyrightable  material,  to obtain copyright  thereon.  Any invention by the
Employee  within one year following the  termination of this Agreement  shall be
deemed to fall within the  provisions  of this  paragraph  unless  proved by the
Employee to have been first  conceived and made following such  termination.  To
the extent that the Employee  shall be required to expend time or incur expenses
fulfilling  his  obligations  under this  paragraph,  post-  termination  of the
original term of this Agreement or any renewal term thereof,  the Company agrees
to reasonably compensate Employee for such time and/or such expenses.

     10.  Restrictive  Covenant.  During  the Term of this  Agreement  and for a
period  of two (2)  years  after the date of such  termination  for any  reason,
Employee shall not without the prior written consent of the Company:

     (a) Non-Competition. Act as an individual proprietor, partner, stockholder,
officer, principal, agent, employee, supervisor, manager, consultant, guarantor,
creditor,  lender,  co-endorser  or  in  any  other  capacity  whatsoever,  own,
participate  in the ownership of,  manage,  operate,  exercise any control over,
render  services to, or engage in any of the foregoing  for any business,  firm,
corporation,  limited liability company, its successors or assigns,  partnership
or other entity which operates a business  similar to or competitive with any of
the counterpulsation therapy products or services developed by the Company which
are conducted in any of the geographic areas,  including the continental  United
States,  in which the  Company's  business  is  conducted.  Notwithstanding  the
foregoing,  Employee may hold not more than one percent (1%) of the  outstanding
securities of any class of any  publicly-traded  securities of a company that is
engaged in activities referenced in Section 10(a) hereof.

     (b)  Non-Solicitation.  Solicit any business from any current  customers or
clients of the  Company,  its  successors  or assigns,  or from any  prospective
customers  or clients  of  Company,  its  successors  or  assigns  from whom the
Company's  employees or agents have engaged in, actual  business  within the two
(2) year period  immediately  preceding the termination  date of the Executive's
employment  for the purpose of selling  products or  services  competitive  with
those offered or sold or provided by the Company.

     (c)  Solicitation  of  Employees.   In  any  manner,  whether  directly  or
indirectly,  seek to  persuade  any  director,  officer,  or other  employee  of
Company,   its  successors  or  assigns  to  discontinue   their  employment  or
relationship  with Company,  its  successors or assigns,  nor will such Employee
solicit entice, or induce any such person for such purpose.

     (d) Severability. The parties hereto intend that the covenants contained in
this Section 10, which  pertain  only to  geographic  areas where the Company is
engaged in  business,  shall be deemed a series of separate  covenants  for each
applicable  area of the relevant  country,  state,  county and city.  If, in any
judicial proceeding,  a court shall refuse to enforce all the separate covenants
deemed  included in this  Section 10  because,  taken  together,  they cover too
extensive a geographic  area,  the parties  intend that those of such  covenants
(taken in order of the cities, counties,  states and countries therein which are
least  populous)  which  if  eliminated  would  permit  the  remaining  separate
covenants  to be  enforced  in such  proceeding  shall,  for the purpose of such
proceeding, be deemed eliminated from the provisions of this Section 10.
<PAGE>


     (e)  Nothing in this  Section 10 shall  reduce or abrogate  the  Employee's
obligations during the term of this Agreement under Sections 5 and 6 hereof.

     (f) The  provisions  of this  section  shall  not  apply  only in the event
Employee's  employment  is terminated  without cause as finally  determined by a
court of competent jurisdiction, which determination is not subject to appeal or
the posting of a bond.

        11.     Termination.

     (a)  Disability.  The  Company  shall  have the  right in the  event of the
permanent disability of the Employee,  to terminate this Agreement upon five (5)
days prior written notice. Upon termination,  the Company shall pay the Employee
all compensation earned under Section 4 through the date of termination. For the
purposes of this subparagraph  "permanent disability" shall mean the physical or
mental incapacity of the Employee for any consecutive  ninety (90) day period or
any aggregate  period of a one hundred and eighty (180) day period in any twelve
(12) month period of such a nature that the Employee  shall be unable to perform
his  duties as  contemplated  hereby.  Such  determination  shall be made by the
mutual agreement of the parties hereto, or in the event such agreement cannot be
reached, by the following procedure:

     (i)  If the Company maintains a disability insurance policy with respect to
          the Employee,  the  definition set forth in such policy shall control,
          provided the issuing insurance  company agrees to commence  disability
          payments as a result of such permanent disability.

     (ii) If the  Company  does not  maintain a  disability  income  policy with
          respect to the Employee:

          (A)  Each  party  shall  select  an  independent  physician  who shall
               examine the subject  Employee.  The mutual  agreement  of the two
               examining  physicians shall control,  and their decision shall be
               binding.

          (B)  If the two physicians  cannot agree,  they (the physicians) shall
               select a third  physician  to examine the subject  Employee.  The
               majority  opinion of such three  physicians  shall  control,  and
               their decision shall be binding.

     (b) Death. This Agreement shall terminate  automatically  upon the death of
the Employee.  In such event,  the Company shall pay the estate of the Employee,
within thirty (30) days after the date of death, all  compensation  earned under
Section 4 through the date of termination.

     (c) For Cause.  In addition to its rights under  Section  11(a) above,  the
Company shall have the right,  at its sole option,  to terminate  this Agreement
"for Cause", as hereinafter defined, at any time, without any further payment to
the Employee other than  compensation  earned under Section 4(a)(i) prior to the
date of termination,  by notice to the Employee, as provided herein,  specifying
the reason for such  termination.  For purposes of this Section  11(c),  "cause"
shall  mean (i) the  Employee's  conviction  of a  felony,  (ii) the  Employee's
willful misconduct or gross negligence materially  detrimental to the Company in
the performance of his duties, or (iii) the breach by the Employee of a material
term of this Agreement which continues for thirty (30) days after written notice
thereof  is  given  to the  Employee  (constituting  an  opportunity  to  cure),
specifying the nature and the details of the breach.

     (d) Without  Cause.  The  Employee  may be  terminated  at any time without
cause.  If the Employee is terminated  by the Company  without Cause he shall be
entitled  to receive as his sole  compensation,  a  termination  payment,  in an
amount  equal  to  six  (6)  months'  Base  Salary   payable  in  equal  monthly
installments.  You shall have a duty to mitigate these payments  through seeking
employment  elsewhere.  In the  event you are  employed  by a third  party,  any
amounts earned shall be deducted from these payments.

     12. Remedies.  If there is a breach or threatened  breach of the provisions
of Sections 8, 9 or 10 of this  Agreement,  the Company  shall be entitled to an
injunction  restraining  the Employee from such breach.  Nothing herein shall be

<PAGE>

construed as  prohibiting  the Company from pursuing any other remedies for such
breach or threatened breach.

     13. Insurance. The Company may, at its election and for its benefit, insure
the Employee  through key man insurance up to  $1,000,000 or otherwise,  against
accidental  loss or  death  and  the  Employee  shall  submit  to such  physical
examination  and  supply  such  information  as may be  required  in  connection
therewith; provided, however, the Employee makes no representation regarding his
insurability at commercially reasonable rates or otherwise.

     14. Location of Performance.  The Employee's  services will be performed in
the Westbury,  New York area unless the Company relocates its principal facility
or its research and  development  facility to another  area,  in which event his
services will be performed,  at the Company's  option, in the area of relocation
as long as the new location is not more than 65 miles from the Employees present
home  residence.  The parties  acknowledge,  however,  that the  Employee may be
required to travel  extensively in connection with the performance of his duties
hereunder.

     15. Change of Control.  In the event (a) the Company has been  consolidated
or merged into or with any other  corporation or all or substantially all of the
assets of the Company have been sold to another corporation, with or without the
consent of  Employee,  in his sole  discretion;  or (b) the Company  undergoes a
Change of Control, as hereinafter defined below ; then

     Employee is entitled to the following settlement  benefits,  which he shall
also have the right to  exercise  in lieu of his  compensation  under  paragraph
11(d) hereof,  in the event his  employment  is terminated  without cause within
three months prior to the change of control event:

          (i) a lump-sum payment of twelve (12) months of the Base Salary; and

          (ii)  any  and  all  stock  options  held  by  Employee  shall  become
     immediately vested and exercisable; if

               (A) Employee  voluntarily and  unilaterally  resigns his position
          with the Company  within  ninetysi (90) days of an event  described in
          Section 15(a) or (b) hereof, or

               (B) Employee is given notice of termination  directly as a result
          of such  Change  in  Control  within  twelve  (12)  months of an event
          described in Section 15(a) or (b) hereof.

     A  "Change  of  Control"  of the  Company,  or in any  person  directly  or
indirectly controlling the Company, shall mean:

               (i) a change of  control  as such term is  presently  defined  in
          Regulation  240.12b-2  under the Securities  Exchange Act of 1934 (the
          "Exchange Act"); or

               (ii) if during the Term of Employment the  individuals who at the
          beginning of such period constitute the Board (the "Incumbent  Board")
          cease for any reason other than death,  disability  or  retirement  to
          constitute at least a majority thereof,  provided,  however,  that any
          individual  becoming a director  subsequent  to the date hereof  whose
          election, or nomination for election by the Company's stockholders was
          approved  by a vote  of at  least a  majority  of the  directors  then
          comprising  the  Incumbent  Board shall be  considered  as though such
          individual  were a member of the  Incumbent  Board,  but excluding for
          this purpose any such  individual  whose initial  assumption of office
          occurs as a result of an actual or  threatened  election  contest with
          respect to the  election or removal of  directors  or other  actual or
          threatened  solicitation  of proxies or  consents by or on behalf of a
          person other than the Board.

     16. Successors and Assigns.  This Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the Company,  and unless clearly
inapplicable,  all  references  herein to the Company shall be deemed to include

<PAGE>

any successors.  In addition,  this Agreement shall be binding upon and inure to
the benefit of the Employee and his heirs, executors,  legal representatives and
assigns;  provided,  however, that the obligations of Employee hereunder may not
be delegated without the prior written approval of the Board of Directors of the
Company.

     17.  Successor  Company.  The Company shall require any successor  (whether
direct or indirect, by purchase,  merger,  consolidation or otherwise) to all or
substantially  all of the business  and/or  assets of the Company,  to expressly
assume and agree to perform  this  Agreement  in the same manner and to the same
extent  that the Company  would be required to perform as if no such  succession
had taken place.

     18.  Notices.  Any notice  required  or  permitted  to be given  under this
Agreement  shall be  sufficient  if in  writing  and shall be deemed  given when
delivered personally or three days after being sent by first-class registered or
certified mail, return receipt requested, to the party for which intended at its
or his address set forth at the beginning of this Agreement  (which, in the case
of the  Company,  shall be sent  "Attention:  Chairman of the Board") or to such
other  address as either party may  hereafter  specify by similar  notice to the
other.

     19.  Waiver of Breach.  A waiver by the Company or the Employee of a breach
of any  provision  of this  Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by the other party.

     20.  Entire  Agreement.  This  Agreement  supersedes  all prior  agreements
between the parties,  written and oral, and cannot be amended or modified except
by a  writing  signed  by  both  parties.  It may  be  executed  in one or  more
counterpart copies, each of which shall be deemed an original,  but all of which
shall constitute the same instrument.

     21. Choice of Law/Forum.  This Agreement shall be governed and construed in
accordance with the laws of the State of New York,  without regard to principles
of  conflicts  of law.  Any  disputes  arising  out of this  Agreement  shall be
adjudicated  in the  Federal or State court  presiding  in the County of Nassau,
State of New York.

     22. Captions/Exhibits.  Captions used in this Agreement are for convenience
of reference  only and shall not be deemed a part of this  Agreement nor used in
the  construction of its meaning.  Exhibits  attached to this Agreement shall be
deemed as fully a part of this Agreement as if set forth in full herein.

     23.  Severability.  If any  provision  of this  Agreement  shall be  deemed
invalid  or  unenforceable  as written it shall be  construed,  to the  greatest
extent possible, in a manner which shall render it valid and enforceable and any
limitations on the scope or duration of any such provision  necessary to make it
valid and  enforceable  shall be deemed to be part  thereof;  no  invalidity  or
unenforceability  shall affect any other  portion of this  Agreement  unless the
provision deemed to be so invalid or unenforceable is a material element of this
Agreement, taken as a whole.

     24.  Acknowledgment.  Employee acknowledges that he has carefully read this
Agreement  and hereby  represents  and warrants to the Company  that  Employee's
entering  into this  Agreement,  and the  obligations  and duties  undertaken by
Employee hereunder,  will not conflict with, constitute a breach of or otherwise
violate the terms of any other  agreement to which  Employee is a party and that
Employee is not  required to obtain the consent of any person or entity in order
to enter into and perform his obligations under this Agreement.

     With  respect to the  covenants  contained  in Sections 8, 9 and 10 of this
Agreement,  Employee  agrees that any remedy at law for any breach or threatened
or attempted  breach of such  covenants may be  inadequate  and that the Company
shall be entitled to specific performance or any other mode of injunctive and/or
other  equitable  relief to enforce its rights  hereunder  or any other relief a
court  might  award  without  the  necessity  of showing  any  actual  damage or
irreparable harm or the posting of any bond or furnishing of other security.
<PAGE>

     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the day and year first hereinabove written.

                                  VASOMEDICAL, INC.


                           By:     /s/ Gregory D. Cash
                                   Chief Executive Officer and President

                                   /s/ Thomas W. Fry
                                   Thomas W. Fry, Employee