Exhibit 10.1
  


                           STOCK PURCHASE OPTION AGREEMENT

                                   by and between

                            AMERICAN ELECTROMEDICS CORP.

                                        and

                                     ANDY ROSCH




                                                        
                           Dated as of November 1, 1997


          <PAGE>
                
                           STOCK PURCHASE OPTION AGREEMENT


                    STOCK PURCHASE OPTION AGREEMENT dated as of the 1st day
          of November, 1997  by and between AMERICAN ELECTROMEDICS CORP., a
          Delaware corporation (the "Purchaser"  or "AEC"), and ANDY ROSCH,
          a German citizen (the "Seller").

                                 W I T N E S S E T H:
                                 - - - - - - - - - - 

                    WHEREAS, Seller owns 25,000 shares (the "Rosch Shares")
          of the issued  and outstanding capital stock (the  "Rosch Capital
          Stock")  of  Rosch  GmbH  Medizintechnik,  a  German  corporation
          ("Rosch") which comprises  fifty percent (50%) of  the issued and
          outstanding Rosch Capital Stock;

                    WHEREAS,  Seller owns  45,000  shares (the  "Meditronic
          Shares")  of  the  issued  and  outstanding  capital  stock  (the
          "Meditronic Capital Stock") of Meditronic Medizinelektronik GmbH,
          a  German   corporation  ("Meditronic")  (Rosch   and  Meditronic
          sometimes  collectively   referred  to  as  the   "Companies"  or
          individually as a  "Company") which comprises  forty-five percent
          (45%) of the issued and outstanding Meditronic Capital Stock; and

                    WHEREAS, upon  the terms and subject  to the conditions
          herein,  the Seller  desires to  sell to  the Purchaser,  and the
          Purchaser  desires to have the right to purchase from the Seller,
          the  Rosch  Shares  of Capital  Stock  owned  by  Seller and  the
          Meditronic Shares (collectively the "Purchased Shares"); 

                    NOW, THEREFORE, in consideration  of the covenants  and
          agreements  contained herein,  and  for other  good and  valuable
          consideration,  the receipt  and sufficiency  of which  is hereby
          acknowledged, the parties hereto,  intending to be legally bound,
          hereby agree as follows:

                                      ARTICLE 1

                                  PURCHASE AND SALE

                    1.1  Purchase and Sale of Capital Stock. Upon the terms
                         ----------------------------------
          and  subject to the conditions herein, at the Closing (as defined
          in Section 1.2 hereof), the Seller  shall sell and deliver to the
          Purchaser, and the  Purchaser shall  have the  right to  purchase
          from the Seller, the  Purchased Shares for a purchase  price (the
          "Purchase Price") equal to (a) US$ 200,000 and (b) 210,000 shares
          of AEC Common Stock, $.10 par value (the "AEC Shares").

                    1.2  Closing.  The closing of the transactions
                         -------
          contemplated  herein  (the "Closing")  shall  take  place at  the
          offices  of Rosch, Alt Buckow  6, Berlin, Germany,  at 10:00 A.M.
          local  time on  not  less than  three (3)  days  notice from  the
          Purchaser  to the Seller exercising its  right to purchase, which
          closing  date  may  not be  later  than  December  31, 1997  (the
          "Closing Date"), unless the parties hereto otherwise agree.

                                      ARTICLE 2

                     REPRESENTATIONS AND WARRANTIES OF THE SELLER

                    In order to  induce the  Purchaser to  enter into  this
          Agreement,  the  Seller hereby  represents  and  warrants to  the
          Purchaser as follows:

                    2.1  Authorization.  The Seller has full legal capacity
                         -------------
          to enter into this  Agreement and has taken all  action necessary
          to  consummate   the  transactions  contemplated  hereby.    This
          Agreement  has been duly executed and delivered by the Seller and
          constitutes  the  legal,  valid  and binding  obligation  of  the
          Seller, enforceable against him in accordance with its terms.  

                    2.2  Ownership of Capital Stock and Purchased Shares. 
                         -----------------------------------------------
          The Seller  owns  beneficially and  of record  the Rosch  Shares,
          which  constitute   fifty  percent   (50%)  of  the   issued  and
          outstanding  shares of the Rosch Capital Stock, free and clear of
          any claim,  lien, pledge, option,  security interest, restriction
          or other rights of  third parties.  The Seller  owns beneficially
          and of record the  Meditronic Shares, which constitute forty-five
          percent (45%)  of  the  issued  and  outstanding  shares  of  the
          Meditronic  Capital Stock,  free and  clear of  any  claim, lien,
          pledge, option, security interest, restriction or other rights of
          third parties.  Upon  delivery to the Purchaser at the Closing of
          certificates representing the Purchased Shares, together with all
          necessary  instruments of  transfer and  payment of taxes  by the
          Seller, and upon  the Seller's receipt of  the consideration, the
          Purchaser will have valid  and marketable title to  the Purchased
          Shares  free  of any  adverse claims  arising  in respect  of the
          Seller.

                    2.3  No Violation. Neither the execution and delivery by
                         ------------
          the  Seller  of  this Agreement  or  any  of  the instruments  or
          agreements herein  referred to,  the consummation  by him  of the
          transactions  contemplated hereby or  thereby, nor the compliance
          by  him  with  any  of  the  terms  or  provisions  of  any  such
          instruments  or agreements  will: (a) constitute  or result  in a
          breach of any  provision of the  certificate of incorporation  or
          by-laws of either Company or any agreement to which the Seller or
          either Company is a party or by which any of them or any of their
          assets  or  properties  is  bound, (b)  contravene  any  federal,
          regional  or local  law, rule  or regulation, (c)  contravene any
          judgment, order  or decree applicable  to or binding  upon either
          Company or any  of their respective assets, or (d)  result in the
          creation of  any lien,  security interest, charge  or encumbrance
          upon  any  property or  assets of  either  Company.   No consent,
          approval or authorization of, and no filing or registration with,
          any  governmental or  regulatory official,  body or  authority is
          required  in connection with  the execution and  delivery of this
          Agreement or  the consummation  of the  transactions contemplated
          hereby.  

                    2.4  Securities Compliance. The Seller acknowledges and
                         ---------------------
          understands  that the AEC Shares will not be registered under the
          United States Securities Act of 1933, as amended (the "Securities
          Act"),  or the securities laws of any other country, and that the
          AEC Shares may not be offered or sold in the United States unless
          either registered  under the Securities Act or in compliance with
          any exemption  from such registration.   The Seller  is acquiring
          the AEC Shares for  his own account, for investment  purposes and
          has no current  intention to sell the AEC Shares.   The Seller is
          familiar  with the business  and operations of  AEC, has received
          the Form  10-KSB of AEC for  the fiscal year ended  July 29, 1996
          and  the Forms  10-QSB for  the three  fiscal quarters  in fiscal
          1997,  and has had  the opportunity  to discuss  AEC and  the AEC
          Shares with officers of AEC.

                    2.5  Incorporation.  Each Company is a corporation duly
                         -------------
          organized,  validly existing and in good  standing under the laws
          of  the  Republic  of Germany,  and  is  duly  qualified in  each
          jurisdiction  where  the nature  of  its  business requires  such
          qualification.    Each  Company  has  full  corporate  power  and
          authority to own, lease and operate its properties and assets and
          to conduct its business as currently conducted.  Neither  Company
          has  any direct  or indirect  subsidiaries, is  a partner  in any
          partnership  or  joint  venture,  and neither  Company  owns  any
          capital stock interests or  other equity interests, or  rights or
          options  to  acquire  any  equity  or  other  interests,  in  any
          entities.

                    2.6  Capitalization.  The authorized Capital Stock of
                         --------------
          Rosch consists of 50,000 shares, all of which are owned by either
          AEC  or Seller.  The  authorized Capital Stock  of the Meditronic
          consists of 100,000  shares.   All of the  outstanding shares  of
          each the Companies' Capital  Stock have been duly  authorized and
          validly issued and are  fully paid and nonassessable.   There are
          no   outstanding   options,   warrants,   subscriptions,   calls,
          unsatisfied  preemptive or contractual rights, voting agreements,
          registration rights  agreements or other rights  for the purchase
          of or receipt  of, and no securities  or obligations of any  kind
          convertible into or exchangeable for, any Capital Stock of either
          Company.

                    2.7  Contracts.  
                         ---------

                    2.7.1  Contracts of Rosch.  The Seller has delivered or
                           ------------------
          caused  to be delivered to the Purchaser true and complete copies
          of  all contracts,  leases, licenses,  loan agreements  and other
          arrangements,  together  with   all  amendments  and  supplements
          thereto and all  waivers of  any terms thereof,  whether oral  or
          written, to which Rosch is a party or by which any of  its assets
          or  properties  is subject  or  bound  (collectively, the  "Rosch
          Contracts").  The Rosch Contracts are valid and in full force and
          effect  and constitute  the respective  legal, valid  and binding
          obligations of  Rosch and the other  parties thereto, enforceable
          against  Rosch and such  other parties  in accordance  with their
          respective  terms,  and  there  are  no  existing  violations  or
          defaults by Rosch  or, to  the Seller's knowledge,  by any  other
          party  thereto and no event,  act or omission  has occurred which
          (with  or without notice, lapse  of time and/or  the happening or
          occurrence of any  other event)  would result in  a violation  or
          default thereunder.   No other party to any Rosch Contract has in
          writing  or otherwise asserted the right, and no basis exists for
          the assertion of any enforceable  right to renegotiate, cancel or
          terminate prior to the full term thereof any term or condition of
          any  Rosch  Contract,  nor does  the  Seller  or  Rosch have  any
          knowledge that any  party to  any Rosch Contract  intends to  not
          renew any Rosch Contract  upon termination of its   current term.
          Set forth on Schedule 2.7.1 to this Agreement is a true and
                       --------------
          complete list of all of the Rosch Contracts.

                    2.7.2  Contracts of Meditronic. The Seller has delivered
                           -----------------------
          or  caused to  be delivered  to the  Purchaser true  and complete
          copies of  all contracts,  leases, licenses, loan  agreements and
          other arrangements, together with all  amendments and supplements
          thereto and all  waivers of  any terms thereof,  whether oral  or
          written, to  which Meditronic is a  party or by which  any of its
          assets  or  properties is  subject  or  bound (collectively,  the
          "Meditronic Contracts").  The  Meditronic Contracts are valid and
          in  full force and  effect and  constitute the  respective legal,
          valid and binding obligations of Meditronic and the other parties
          thereto, enforceable against Meditronic and such other parties in
          accordance with their respective terms, and there are no existing
          violations  or  defaults  by   Meditronic  or,  to  the  Seller's
          knowledge,  by any  other  party thereto  and  no event,  act  or
          omission has  occurred which  (with or without  notice, lapse  of
          time and/or the happening or occurrence of any other event) would
          result in a  violation or default thereunder.  No  other party to
          any Meditronic Contract has in writing or  otherwise asserted the
          right, and no basis  exists for the assertion of  any enforceable
          right  to renegotiate, cancel or terminate prior to the full term
          thereof any  term or  condition of  any Meditronic  Contract, nor
          does the Seller or  Meditronic have any knowledge that  any party
          to any  Meditronic Contract intends  to not renew  any Meditronic
          Contract  upon termination  of its  current term.   Set  forth on
          Schedule 2.7.2 to this Agreement is a true and complete list of
          --------------
          all of the Meditronic Contracts.

                    2.8  Litigation.  There is no action, claim, suit,
                         ----------
          proceeding,  arbitral action  or  governmental  investigation  or
          audit pending or threatened against or relating to either Company
          which  would,  individually  or   in  the  aggregate,  materially
          adversely  affect  the business  or  the  financial condition  of
          either   Company  or   the  consummation   of  the   transactions
          contemplated by this Agreement.   The Seller is not  aware of any
          facts  or circumstances  which  may  give  rise  to  any  of  the
          foregoing.   There  is no  order, writ,  injunction, stipulation,
          judgment or decree outstanding against either Company.

                    2.9  Compliance with Laws.  Each Company has in all
                         --------------------
          material  respects complied  with all applicable  federal, state,
          local and international  laws, statutes, ordinances, regulations,
          judgments, orders and other  legal requirements (including  those
          relating  to  employment  and  employment  practices,  terms  and
          conditions of  employment, wages and hours  and nondiscrimination
          in employment)  affecting such Company's  respective business  or
          financial conditions.   Neither Company has  received any written
          notice to the effect that, or otherwise  been advised that, it is
          not  in compliance with  any of such  laws, statutes, ordinances,
          regulations,  judgments, orders  and  other  legal  requirements.
          Each  Company holds and is in compliance in all material respects
          with all permits, licenses,  franchises, orders, certificates and
          approvals  of   any  federal,   state  or  local   regulatory  or
          governmental  authority   necessary  for   or  relating   to  its
          respective business.

                    2.10 Taxes.    (a)  All taxes, including income, net
                         -----
          proceeds,   sales,  property,  personal  property  (tangible  and
          intangible), use, excise, duty, franchise, transfer, withholding,
          payroll,  employment and  other charges,  including interest  and
          penalties thereon, (collectively, "Taxes") of each Company due to
          the  date   hereof  to  all  federal,  state,  foreign  or  local
          authorities  (collectively, "Taxing Authorities")  have been duly
          paid or are adequately  provided on the Financial  Statements (as
          defined  in Section 2.11 below).   In addition,  all tax reports,
          returns, information  returns and  other documents in  respect of
          all  relevant Taxes (collectively, "Tax  Reports") to be filed by
          either Company  on or prior to  the Closing Date shall  have been
          filed by such  Company on or prior to the Closing Date.

                    (b)  There   are  no   agreements,  waivers   or  other
          arrangements providing  for extension of time with respect to the
          assessment or collection of any Tax of either Company nor, to the
          best  knowledge  of the  Seller,  are there  any  actions, suits,
          proceedings, investigations or claims now  pending against either
          Company  in respect of any  Tax, or any  matters under discussion
          with any Taxing Authority relating to any amount of any Tax.  The
          respective  Tax Reports of each Company have not been audited and
          are not in the process of  being audited by the applicable taxing
          authorities, and there is  no tax deficiency with respect  to any
          Tax outstanding, proposed or assessed against either Company.

                    2.11 Financial Information. The Seller has delivered to
                         ---------------------
          the Purchaser  true,  correct  and complete  copies  of  (i)  the
          financial  statements of each Company for each of the years ended
          December 31, 1995 and 1996, (ii) the financial statements of each
          Company for the interim  period ended July 31, 1997,  which shall
          be audited  in the  case of  Rosch and unaudited  in the  case of
          Meditronic,   and (iii) prior to Closing, Seller shall deliver to
          Purchaser unaudited  financial statements  of each Company  as of
          October 31, 1997 (collectively,  the "Financial Statements).  The
          Financial  Statements   present  and  will  present   fairly  the
          financial position, assets  and liabilities of each Company as of
          the  dates  thereof  and   the  revenues,  expenses,  results  of
          operations and cash flows of each Company for the periods covered
          thereby.   The  Financial Statements are  in accordance  with the
          respective  books and records of each Company, do not reflect any
          transactions  which are  not bona  fide transactions  and do  not
          contain any untrue statement of a  material fact or omit to state
          any  material fact  necessary  to make  the statements  contained
          therein, in light of  the circumstances in which they  were made,
          not  misleading.  The respective  Financial Statements of each of
          the Companies make full and adequate disclosure of, and provision
          for,  all of the  respective obligations and  liabilities of each
          Company as  of the dates thereof.   Neither Company has  made any
          distributions  of cash or assets, other than in the normal course
          of  business, since December 31,  1996.  Neither  Company has any
          liabilities or obligations, whether accrued, absolute, contingent
          or otherwise, which are  material to such Company except  for the
          liabilities   and  obligations  disclosed   in  their  respective
          Financial  Statements  or incurred  since  July 31,  1997  in the
          ordinary course of business.  

                    2.12 Absence of Changes.  Since December 31, 1996 there
                         ------------------
          has  not  been  any material  adverse  change,  or  any event  or
          development  which,  individually  or  together  with other  such
          events,  could reasonably  be  expected to  result in  a material
          adverse  change, in the business or financial condition of either
          Company, nor has  there been the declaration of or the payment of
          any  dividend or  other distribution  by either   Company  to its
          respective stockholders.

                    2.13 Intellectual Property.  Schedule 2.13 lists all
                         ---------------------   -------------
          trademarks,  registered copyrights,  trade names,  service marks,
          patents and  similar  intangible  rights,  and  all  applications
          therefor ("Intellectual Property") owned by either Company or used
                     ------------ --------
          at any time in the past two years in their respective businesses.
          Except as set forth in Schedule 2.13, each Company is the sole
                                 -------------
          owner of all its respective Intellectual Property, free and clear
          of all liens, security interests,  charges or encumbrances.  Each
          Company is the  beneficial and record  owner of all  Intellectual
          Property necessary or desirable to the conduct of  its respective
          business as heretofore conducted. Except as set forth in Schedule
                                                                   --------
          2.13, no proceedings have been instituted, are pending or, to the
          ----
          knowledge  of the  Seller  after due  inquiry, threatened,  which
          challenge or would affect the rights of either Company in respect
          to any of the aforesaid or the validity thereof.  Neither the use
          by the Companies anywhere  of the names and trademarks  set forth
          in Schedule 2.13 (the "Trademarks") infringes upon or otherwise
             -------------
          violates the rights of others.   Except as set forth in  Schedule
          2.13, none  of the other Intellectual Property  infringes upon or
          otherwise  violates the rights of others.  Except as set forth in
          Schedule 2.13, none of the Intellectual Property is being infringed
          -------------
          by others and none of the Intellectual Property is subject to any
          outstanding order,  decree, judgment, stipulation or  charge.  No
          licenses,  sublicenses, or  agreements pertaining  to any  of the
          Intellectual Property  have been  granted by either  Company and,
          except as set forth in Schedule 2.13, neither Company has received
                                 -------------
          any charge  of interference  or infringement of  any Intellectual
          Property.  Schedule 2.13 also sets forth a complete and correct
                     -------------
          list of  all trademark,  service mark,  trade name and  copyright
          registrations, issued patents and applications for the foregoing,
          filed  by  either  Company   with  respect  to  any  Intellectual
          Property.  All such registrations are valid and in full force and
          effect  and all  such applications  were duly and  properly filed
          and, except as set  forth in  Schedule 2.13,  neither Company has
                                        -------------
          received notice to  the contrary  or of  any opposition or  other
          adverse proceeding with respect to such registrations or applications.

                                      ARTICLE 3

                   REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

                    In  order  to induce  the  Seller  to enter  into  this
          Agreement, the  Purchaser hereby  represents and warrants  to the
          Seller as follows:

                    3.1  Incorporation. The Purchaser is a corporation duly
                         -------------
          organized, validly  existing and in good standing  under the laws
          of the State of Delaware.

                    3.2  Authorization.  The Purchaser has all necessary
                         -------------
          corporate  power and authority  to enter into  this Agreement and
          has  taken all  corporate action  to consummate  the transactions
          contemplated hereby.   This Agreement has been  duly executed and
          delivered by the Purchaser and  constitutes the legal, valid  and
          binding obligation  of the  Purchaser, enforceable against  it in
          accordance with its terms.

                    3.3  No Violation.  The execution, delivery and
                         ------------
          performance  of   this  Agreement   by  the  Purchaser   and  the
          consummation  of the  transactions contemplated hereby  will not,
          with or without  the giving of notice or the  passage of time, or
          both, result  in  (i) a  violation  of  or a  conflict  with  any
          provision of the Purchaser's  Certificate of Incorporation or By-
          Laws; (ii) a breach or violation of or constitute a default under
          any  term  or  provision  of any  contract,  agreement,  license,
          permit, indenture,  instrument, mortgage,  lease, right  or other
          obligation or restriction to which the Purchaser is a party or by
          which any  asset or property of the Purchaser is or may be bound;
          or (iii) a violation by the Purchaser of any law, which violation
          would  materially  adversely  affect  the  consummation   of  the
          transactions contemplated by this Agreement. 

                    3.4  Capitalization. The authorized capital stock of the
                         --------------
          Purchaser consists  of 1,000,000 shares of  Preferred Stock, $.01
          par value, none of which is outstanding, and 20,000,000 shares of
          Common  Stock, $.10  par  value, of  which  2,553,136 shares  are
          outstanding,  excluding shares  reserved  for  issuance upon  the
          exercise of  options, warrants  and convertible debentures.   The
          AEC Shares, when issued  in accordance with this Agreement,  will
          be duly authorized, validly issued, fully paid and nonassessable.

                    3.5  Consents and Approvals.  No approval, consent,
                         ----------------------
          waiver,   order   or    authorization   of,   or    registration,
          qualification,  declaration, or  filing with,  or notice  to, any
          federal, state, local or  foreign governmental authority or other
          third party is required that has not been obtained on the part of
          the  Purchaser in  connection  with the  execution, delivery  and
          performance  of  this  Agreement  and  the  consummation  of  the
          transactions contemplated hereby.

                    3.6  Reporting Requirements. The Purchaser is subject to
                         ----------------------
          periodic reporting  under the United  States Securities  Exchange
          Act of 1934, as  amended (the "Exchange Act"), and has  filed all
          financial  reports required  thereunder with the  U.S. Securities
          and Exchange Commission  since August  1, 1995.   The AEC  Common
          Stock is  traded on the OTC  Bulletin Board.   When available the
          Purchaser shall deliver to the Seller the Purchaser's Form 10-KSB
          for the fiscal year ended July 31, 1997.

                                      ARTICLE 4

                      CONDITIONS TO OBLIGATIONS OF THE PURCHASER

                    The obligations  of  the Purchaser  to  consummate  the
          transactions contemplated hereby are  subject to the fulfillment,
          at or before  the Closing,  of each of  the following  conditions
          (all or  any of which may  be waived in  whole or in part  by the
          Purchaser at its sole discretion):

                    4.1  Representations, Warranties and Obligations.  All
                         -------------------------------------------
          representations and  warranties of  the Seller contained  in this
          Agreement shall be true  and correct in all material  respects at
          and as of the date of this Agreement and at and as of the Closing
          Date as if such  representations and warranties were made  at and
          as of the Closing Date.   The Seller shall have performed  in all
          material   respects  all   of  his   agreements,   covenants  and
          obligations  required hereby to be  performed prior to  or at the
          Closing Date.

                    4.2  Stock Certificates. The Seller shall deliver to the
                         ------------------
          Purchaser  the  certificates  evidencing  the  Purchased  Shares,
          together with the requisite instruments of transfer.  

                    4.3  Good Standing Certificate.  Each Company shall
                         -------------------------
          deliver to the Purchaser a certificate as of a recent  date as to
          the good standing of such Company from each jurisdiction in which
          that  Company  is  incorporated,  qualified  or  licensed  to  do
          business.

                    4.4  Consents and Approvals.  The Seller shall have
                         ----------------------
          obtained and delivered to  the Purchaser all approvals, consents,
          waivers, orders and authorizations of governmental authorities or
          other  third  parties  necessary  to  permit  the  Seller  to the
          consummate the  transactions contemplated by  this Agreement  and
          the Stockholders  Agreement.  The  Seller and each  Company shall
          also have made,  and delivered  to the Purchaser  copies of,  all
          registrations, qualifications, declarations,  or filings with, or
          notices to,  any federal,  state or local  governmental authority
          necessary  to  permit the  Seller and  each  of the  Companies to
          consummate the transactions contemplated by this Agreement.

                    4.5  Retention. The Seller shall enter into an agreement
                         ---------
          to be  a General  Manager of Rosch  for a  term of not  less than
          three years, and  with the  Seller agreeing not  to compete  with
          Rosch  for  a  period of  two  years  after  termination of  such
          retention, upon terms satisfactory to AEC.  

                                      ARTICLE 5

                       CONDITIONS TO OBLIGATIONS OF THE SELLER

                    The  obligations  of  the   Seller  to  consummate  the
          transactions contemplated hereby are subject to the  fulfillment,
          at or before  the Closing,  of each of  the following  conditions
          (all or any  of which may  be waived in whole  or in part  by the
          Seller at his sole discretion):

                    5.1  Representations, Warranties and Obligations.  All
                         -------------------------------------------
          representations and warranties of the Purchaser contained in this
          Agreement shall be true  and correct in all material  respects at
          and as of the date of this Agreement and at and as of the Closing
          Date as if such  representations and warranties were made  at and
          as of the Closing  Date.  The  Purchaser shall have performed  in
          all  material  respects  all  of its  agreements,  covenants  and
          obligations  required hereby to be  performed prior to  or at the
          Closing Date.

                    5.2  Consents and Approvals.  The Purchaser shall have
                         ----------------------
          obtained  and delivered  to the  Seller all  approvals, consents,
          waivers, orders and authorizations of governmental authorities or
          other  third  parties  necessary   to  permit  the  Purchaser  to
          consummate the transactions contemplated by this Agreement.  

                    5.3  Stock Certificates. The Purchaser shall deliver the
                         ------------------
          certificates evidencing the AEC Shares, registered in the name of
          the  Seller, which  certificate  shall have  set forth  thereon a
          legend  referring to the restrictions on sale or transfer imposed
          under  the  Securities Act.    In addition,  the  Purchaser shall
          deliver a "lock-up" letter agreeing that for a period of one year
          from the Closing Date he will not sell or transfer 200,000 of the
          210,000 AEC Shares.

                    5.4  Payment.  The Purchaser shall deliver a certified
                         -------
          check or  arrange a wire transfer to the account of the Seller in
          the amount of US$ 200,000.

                    5.5  Good Standing Certificates.  The Purchaser shall
                         --------------------------
          deliver to the  Seller a  certificate of good  standing from  the
          Secretary of State of the State of Delaware.

                    5.6  General Manager. The Purchaser shall cause Rosch to
                         ---------------
          enter  into an  agreement  with the  Seller  retaining him  as  a
          General Manager for a term of not less than three years, and with
          the Seller agreeing not to compete with Rosch for a period of two
          years   after   termination   of  such   retention,   upon  terms
          satisfactory to the Seller.  

                                      ARTICLE 6

                                   INDEMNIFICATION

                    6.1  Indemnification by the Seller. The Seller agrees to
                         -----------------------------
          defend, indemnify and  hold the Purchaser and  its successors and
          assigns  (the "Indemnified  Purchaser Group")  harmless from  and
          against  any  and  all  losses, liabilities,  damages,  costs  or
          expenses (including  reasonable  attorneys' fees,  penalties  and
          interest) payable to  or for the benefit of,  or asserted by, any
          party, resulting from, arising out of, or incurred as a result of
          the  breach of any  representation, warranty or  covenant made by
          the Seller herein.

                    6.2  Indemnification by the Purchaser.  The Purchaser
                         --------------------------------
          agrees to defend, indemnify and hold the Seller harmless from and
          against  any  and all  losses,  liabilities,  damages, costs,  or
          expenses  (including  reasonable attorneys'  fees,  penalties and
          interest)  payable to or for the  benefit of, or asserted by, any
          party, resulting from, arising out of, or incurred as a result of
          the breach of  any representation, warranty  or covenant made  by
          the Purchaser herein.

                    6.3  Survival of Representations and Warranties.  The
                         ------------------------------------------
          representations, warranties, covenants and agreements made by the
          Seller, on the  one hand, and the  Purchaser, on the  other hand,
          shall survive the Closing Date for a period of one (1) year.

                    6.4  Notice of Claims.  Each of the Purchaser and the
                         ----------------
          Seller  agrees to give prompt written notice  to the other of any
          claim against the party giving notice  which might give rise to a
          claim  by  it  against the  other  party  hereto  based upon  the
          indemnification  provisions contained herein,  stating the nature
          and  basis  of  the claim  and  the  actual  or estimated  amount
          thereof; provided, however, that failure to give such notice will
                   --------  -------
          not affect the obligation of the  indemnifying  party to  provide
          indemnification in accordance with the provisions of this Article
          6 unless, and only to the extent that, such indemnifying party is
          actually  prejudiced thereby.  In the event that any action, suit
          or proceeding is brought against the  Seller or any member of the
          Indemnified  Purchaser  Group with  respect  to  which any  party
          hereto may  have liability  under the  indemnification provisions
          contained herein, the indemnifying party shall have the right, at
          its  sole cost and expense, to defend  such action in the name or
          on  behalf of the indemnified  party and, in  connection with any
          such  action, suit  or proceeding,  the parties  hereto agree  to
          render  to  each  other  such  assistance as  may  reasonably  be
          required  in order to ensure  the proper and  adequate defense of
          any such action,  suit or proceeding; provided, however,  that an
                                                --------  -------
          indemnified party shall have the right to retain its own counsel,
          with the fees and  expenses to be paid by the indemnifying party,
          if representation  of  such  indemnified  party  by  the counsel
          retained by the indemnifying party would be inappropriate because
          of actual or potential differing interests between such indemnified
          party and any other party represented by such counsel. Neither party
          hereto shall make any settlement of any claim which might give rise
          to liability of the other party under the indemnification provisions
          contained herein without the written consent of such other party,
          which   consent  such   other  party   covenants  shall   not  be
          unreasonably withheld.

                                      ARTICLE 7

                                 CONDUCT OF BUSINESS

                    7.1  Carry on Business, etc. From the date hereof until
                         ----------------------
          the  Closing,  except  as  permitted  by  this  Agreement  or  as
          otherwise consented  to by the  Purchaser in writing,  the Seller
          shall cause each Company to:

                         (A)    carry on  their  business  in the  ordinary
                    course  in substantially  the same  manner in  which it
                    previously   has  been  conducted  and  use  reasonable
                    efforts  to   preserve  intact  its   present  business
                    organization and  to  preserve its  relationships  with
                    customers,   suppliers   and  others   having  business
                    dealings  with it,  keep available  the service  of its
                    present   officers  and  employees   and  preserve  its
                    goodwill;

                         (B)   maintain  its  properties  in  good  working
                    repair, order  and  condition, in  accordance with  its
                    standard maintenance  policies, and in any  event in at
                    least  as good repair,  order and  condition as  on the
                    date hereof (ordinary wear and tear excepted) and so as
                    to permit the continued operation of the business after
                    the Closing Date;

                         (C)  maintain its corporate existence;

                         (D)  duly comply in all material respects with all
                    laws  applicable  to  it  and to  the  conduct  of  its
                    business;

                         (E)  neither (a)  amend or change its Articles  of
                    Association or Memorandum of Association; nor (b) merge
                    with  or  into, consolidate  with,  or  acquire all  or
                    substantially  all of the stock or  assets of any other
                    corporation,  partnership,  limited partnership,  joint
                    venture,  association, or  other entity; nor  (c) sell,
                    lease,  transfer or  otherwise  convey any  significant
                    part  of its assets  (other than inventory  sold in the
                    ordinary  course  of  business);  nor  (d)  change  the
                    character  of   its  business;   nor  (e)   enter  into
                    negotiations or any agreement  with respect to any such
                    transactions;

                         (F)   neither declare, pay or make any dividend or
                    other  distribution   or  payment  in  respect  of  the
                    outstanding shares of its stock, nor  purchase, redeem,
                    or otherwise acquire any shares of its stock; and

                         (G)   neither (a)  enter into any  loan agreement,
                    whether or not secured  by the Company's assets, except
                    in  the ordinary  course  of business;  (b) acquire  or
                    dispose of  any material asset or  property, whether by
                    sale, lease  or license, except in  the ordinary course
                    of business; (c)  acquire or dispose  of, or enter  any
                    lease, commitment  or other transaction  in respect of,
                    any real estate; (d) make any new commitment to pay any
                    severance or termination  pay to any  agent, consultant
                    or employee of the  Company other than in the  ordinary
                    course of  business or to any  person who is or  was an
                    officer, director or stockholder  of the Company or its
                    subsidiary;  (e)  make  any change  in  its  accounting
                    methods  or  practices;  (f)  terminate  or  modify any
                    material license,  permit or  Commitment other  than in
                    the ordinary course of  business; (g) do or omit  to do
                    any act which may cause a material breach of or default
                    under any Commitment or a breach of any representation,
                    warranty, covenant  or agreement made  herein by either
                    Company  or the  Seller; nor  (h) incur  any obligation
                    (fixed,  contingent  or otherwise)  or  enter into  any
                    lease, commitment or other transaction,  other than the
                    sale of each companies  products in the ordinary course
                    of business, consistent with past practice,  which will
                    bind  either  Company  after  the Closing  Date  to  an
                    expenditure in excess of US$ 75,000; and

                         (H)   maintain its books of account and records in
                    its usual, regular and ordinary manner, consistent with
                    its past practice.

                                      ARTICLE 8

                                POST-CLOSING COVENANTS

                    8.1  Board of Directors.  Upon the closing of this
                         ------------------
          Agreement,  the  Board of  Directors  shall  elect the  Seller  a
          director  of AEC  to  fill a  current  vacancy  in the  Board  of
          Directors and shall include the Seller on the management slate of
          directors  for  the election  of  directors  at  the 1998  annual
          meeting of AEC stockholders.

                    8.2  Guarantees.  The Purchaser shall arrange for the
                         ----------
          release  and discharge of the Seller no later than six (6) months
          after the Closing Date, from each personal guarantee set forth on
          Schedule 8.2 to this Agreement of the indebtedness, obligations and
          ------------
          liabilities of the  Companies given by  the Seller in  connection
          with the Companies' respective bank loans.

                                      ARTICLE 9

                                  GENERAL PROVISIONS

                    9.1  Expenses.  Each party to this Agreement shall pay
                         --------
          its own  costs and  expenses (including, without  limitation, the
          fees  and expenses  of its  agents, representatives,  counsel and
          accountants)   incidental  to  the   negotiation,  drafting,  and
          performance of this Agreement.

                    9.2  Successors and Assigns.  This Agreement shall be
                         ----------------------
          binding upon  and inure  to  the benefit  of the  Seller and  the
          Purchaser,   and  their   respective  heirs,   successors,  legal
          representatives and assigns. 

                    9.3  Waiver. Any term or condition of this Agreement may
                         ------
          be waived, to  the extent permitted  by law, at  any time by  the
          party that is entitled to the benefit thereof, but no such waiver
          shall  be effective unless set forth in a written instrument duly
          executed  by or  on  behalf of  the  party waiving  such  term or
          condition.   No waiver by any  party of any term  or condition of
          this Agreement, in any one or  more instances, shall be deemed to
          be or  construed as a  waiver of  the same or  any other term  or
          condition  of  this  Agreement  on  any  future  occasion.    All
          remedies,  either under  this Agreement  or by  law or  otherwise
          afforded, will be cumulative and not alternative.

                    9.4  Brokers and Finders.  Neither the Seller nor the
                         -------------------
          Purchaser has entered  into, nor will enter  into, any agreement,
          arrangement or understanding with any  person or firm which  will
          result in the obligation of such  party to pay any finder's  fee,
          brokerage commission  or similar  payment in connection  with the
          transactions contemplated by this Agreement.

                    9.5  Entire Agreement.  This Agreement (including the
                         ----------------
          Schedules and Exhibits  hereto) constitutes the  entire agreement
          by  the  parties  and  supersedes any  other  agreement,  whether
          written or  oral, that may have been made or entered into by them
          as to  the subject matter herein.   This Agreement may be amended
          or supplemented  only by  a written  instrument  executed by  the
          parties hereto which  states specifically that it  is intended to
          amend or supplement this Agreement.

                    9.6  Notices.  All notices, demands, requests, and other
                         -------
          communications  hereunder  shall be  in  writing  in the  English
          language and shall be deemed to have been duly given and shall be
          effective upon receipt if delivered by hand or facsimile, or sent
          by  certified  or registered  mail,  postage  prepaid and  return
          receipt  requested,  or  by  prepaid overnight  express  service.
          Notices shall be sent  to the parties at the  following addresses
          (or at  such other addresses for a party as shall be specified by
          like notice; provided  that such notice  shall be effective  only
          upon receipt thereof):

                    (a)  If to the Seller:

                         Andy Rosch
                         c/o Rosch GmbH Medizintechnik
                         Alt Buckow 6
                         12349 Berlin Germany
                         Tel: 49-30-667-91514
                         Fax: 49-30-604-2881
                   
                    (b)  If to the Purchaser:

                         American Electromedics Corp.
                         13 Columbia Drive, Suite 18
                         Amherst, New Hampshire 03031
                         Attention: Mr. Michael T. Pieniazek, 
                                    President
                         Tel: (603) 880-6300
                         Fax: (603) 880-8977


                    9.7  Specific Performance. The Seller agrees that money
                         --------------------
          damages would not be a sufficient remedy to the Purchaser for any
          breach  of  this  Agreement  by  the  Seller,  and  therefor  the
          Purchaser  shall   be  entitled  to   specific  performance   and
          injunctive relief as  remedies for any such  breach or threatened
          breach.  Such remedies shall not be deemed the exclusive remedies
          of the Purchaser  for a breach of  this Agreement by  the Seller,
          but shall be  in addition to all other remedies  available at law
          or equity.

                    9.8  Severability.  In the event that any provision
                         ------------
          contained in this Agreement  shall for any reason  be held to  be
          invalid,   illegal   or  unenforceable   in  any   respect,  such
          invalidity, illegality or unenforceability  shall not affect  any
          other provision  hereof and this Agreement shall  be construed as
          if such  invalid, illegal  or unenforceable provisions  had never
          been  contained herein and, in lieu of each such illegal, invalid
          or unenforceable provision, there shall be added automatically as
          a part of this Agreement a  provision as similar in terms to such
          illegal, invalid  or unenforceable  provision as may  be possible
          but still be legal, valid and enforceable.

                    9.9  Applicable Law.  This Agreement and the legal
                         --------------
          relations  between the  parties hereto  shall be governed  by and
          construed in accordance with the substantive laws of the Republic
          of Germany, without giving effect to  the principles of conflicts
          of  law thereof,  except as  to  the AEC  Shares  which shall  be
          governed by the laws of the State of Delaware.

                    9.10 Titles and Headings.  Titles and headings to
                         -------------------
          sections hereof  are inserted  for convenience of  reference only
          and are not intended to be a part of, or to affect the meaning or
          interpretation of, this Agreement.  

                    9.11 Counterparts. This Agreement may be executed in one
                         ------------
          or  more counterparts, each of which shall be deemed an original,
          but  all  of which  together shall  constitute  one and  the same
          instrument.

                    IN WITNESS WHEREOF, the parties hereto have caused this
          Agreement to be executed as of the date first above written.


                                        AMERICAN ELECTROMEDICS CORP.


                                        By:  /s/ Michael T. Pieniazek
                                           ----------------------------
                                           Name:   Michael T. Pieniazek
                                           Title:  President


                                             /s/ Andy Rosch
                                        --------------------------------
                                                 ANDY ROSCH