CONSULTING AGREEMENT
                                 -------------------


          This Consulting Agreement (the "Agreement"), dated on February
          19, 1998 and effective as of March 16, 1998 is entered into by
          and between AMERICAN ELECTROMEDICS CORPORATION, a Delaware
          corporation (herein referred to as the "Company") and LIVIAKIS
          FINANCIAL COMMUNICATIONS, INC., a California corporation (herein
          referred to as the "Consultant"). 

                                       RECITALS
                                      ---------

               WHEREAS, Company is a publicly held corporation with its
          common stock traded through the OTC Bulletin Board; and

               WHEREAS, Consultant has experience in the area of corporate
          finance, investor communications and financial and investor
          public relations; and

               WHEREAS, Company desires to engage the services of
          Consultant to assist and consult with the Company in matters
          concerning corporate finance and to represent the company in
          investors' communications and public relations with existing
          shareholders, brokers, dealers and other investment professionals
          as to the Company's current and proposed activities;

               NOW THEREFORE, in consideration of the promises and the
          mutual covenants and agreements hereinafter set forth, the
          parties hereto covenant and agree as follows:

          1.   Term of Consultancy.  Company hereby agrees to retain the
               -------------------
           Consultant to act in a consulting capacity to the Company, and
          the Consultant hereby agrees to provide services to the Company
          commencing March 15, 1998 and ending on March 15, 1999.

          2.   Duties of Consultant.  The Consultant agrees that it will
               --------------------
          generally provide the following specified consulting services
          through its officers and employees during the term specified in
          Section 1.:

               (a)  Advise and assist the Company in developing and
          implementing appropriate plans and materials for presenting the
          Company and its business plans, strategy and personnel to the
          financial community, establishing an image for the Company in the
          financial community, and creating the foundation for subsequent
          financial public relations efforts;
          
               (b)  Introduce the Company to the financial community;

               (c)  With the cooperation of the Company, maintain an
          awareness during the term of this Agreement of the Company's
          plans, strategy and personnel, as they may evolve during such
          period, and advise and assist the Company in communicating
          appropriate information regarding such plans, strategy and
          personnel to the financial community.

               (d)  Assist and advise the Company with respect to its (i)
          stockholder and investor relations, (ii) relations with brokers,
          dealers, analysts and other investment professionals, and (iii)
          financial public relations generally;

               (e)  Perform the functions generally assigned to
          investor/stockholder relations and public relations departments
          in major corporations, including responding to telephone and
          written inquiries (which may be referred to the Consultant by the
          Company); preparing press releases for the Company with the
          Company's involvement and approval or reviewing press releases,
          reports and other communications with or to shareholders, the
          investment community and the general public; advising with
          respect to the timing, form, distribution and other matters
          related to such releases, reports and communications; and
          consulting with respect to corporate symbols, logos, names, the
          presentation of such symbols, logos and names, and other matters
          relating to corporate image;

               (f)  Upon the Company's approval, disseminate information
          regarding the Company to shareholders, brokers, dealers, other
          investment community professionals and the general investing
          public;

               (g)  Upon the Company's approval, conduct meetings, in
          person or by telephone, with brokers, dealers, analysts and other
          investment professionals to advise them of the Company's plans,
          goals and activities, and assist the Company in preparing for
          press conferences and other forums involving the media,
          investment professionals and the general investment public;

               (h)  At the Company's request, review business plans,
          strategies, mission statements budgets, proposed transactions and
          other plans for the purpose of advising the Company of the
          investment community implications thereof; and,

               (i)  Otherwise perform as the Company's financial relations
          and public relations consultant.

          3.   Allocation of Time and Energies.  The Consultant hereby
               -------------------------------
          promises to perform and discharge well and faithfully the
          responsibilities which may be assigned to the Consultant from
          time to time by the officers and duly authorized representatives
          of the Company in connection with the conduct of its financial
          and investor public relations and communications activities, so
          long as such activities are in compliance with applicable
          securities laws and regulations.  Consultant shall diligently and
          thoroughly provide the consulting services required hereunder. 
          Although no specific hours-per-day requirement will be required,
          Consultant and the Company agree that Consultant will perform the
          duties set forth hereinabove in a diligent and professional
          manner.  The parties acknowledge and agree that a
          disproportionately large amount of the effort to be expended and
          the costs to be incurred by the Consultant and the benefits to be
          received by the Company are expected to occur upon and shortly
          after, and in any event, within two months of the effectiveness
          of this Agreement.  It is explicitly understood that Consultant's
          performance of its duties hereunder will in no way be measured by
          the price of the Company's common stock, nor the trading volume
          of the Company's common stock.  It is also understood that the
          Company is entering into this Agreement with Liviakis Financial
          Communications, Inc. ("LFC"), a corporation and not any
          individual member of LFC, and with such, Consultant will not be
          deemed to have breached this Agreement if any member, officer or
          director of LFC leaves the firms or dies or becomes physically
          unable to perform any meaningful activities during the term of
          the Agreement, provided the Consultant otherwise performs its
          obligations under this Agreement.

          4.   Remuneration.  As full and complete compensation for
               ------------
          services described in this Agreement, the Company shall
          compensate Consultant as follows:

               4.1  For undertaking this engagement and for other good and
          valuable consideration, the Company agrees to issue and deliver
          to the Consultant a "Commencement Bonus" payable in the form of
          1,000,000 shares of the Company's Common Stock ("Common Stock")
          and 1,000,000 warrants (the "Warrants") entitling the Consultant
          the right to purchase shares of the Company's Common Stock.  The
          form and content of the Warrant agreement is attached hereto and
          referenced as "Exhibit A".  Among other things, the Warrants will
          contain the following terms and conditions:

                    1.   the Warrants will be excercible at a price of One
                         Dollar ($1.00);

                    2.   the Warrants will be for a term of four (4) years;

                    3.   the Warrants will contain no call and/or
                         redemption provisions;

                    4.   the Warrants will contain "piggyback registration
                         rights" such that the shares of common stock
                         issuable upon the exercise of the Warrants will be
                         included in the next appropriate registration
                         filed by the Company, which shall be filed by the
                         Company no later than October 1, 1998.  All
                         registration costs shall be borne solely by the
                         Company; and, 

                    5.   The Warrants shall be exercisable at anytime
                         during the term of the Warrants and shall contain
                         a "cashless exercise" provision.

               This Commencement Bonus shall be issued to the Consultant
          promptly following execution of this Agreement and shall, when
          issued and delivered to Consultant, be fully paid and non-
          assessable.  The Company understands and agrees that Consultant
          has foregone significant opportunities to accept this engagement
          and that the Company derives substantial benefit from the
          execution of this Agreement and the ability to announce its
          relationship with Consultant.  The 1,000,000 shares of Common
          Stock and the 1,000,000 Warrants issued as a Commencement Bonus,
          therefore, constitute payment for Consultant's agreement to
          represent the Company and are a non-refundable, non-
          apportionable, and non-ratable retainer; such Warrants are not a
          prepayment for future services.  If the Company decides to
          terminate this Agreement prior to March 15, 1999 for any reason
          whatsoever, it is agreed and understood that Consultant will not
          be requested or demanded by the Company to return any of the
          shares of Common Stock or Warrants paid to it hereunder.  750,000
          shares of the Common Stock and 750,000 of the Warrants issued
          pursuant to this Agreement shall be evidenced by a stock
          certificate and warrant agreement(s) issued in the name of
          Liviakis Financial Communications, Inc. and 250,000 shares of the
          Common Stock and 250,000 of the Warrants issued pursuant to this
          Agreement shall be evidenced by a stock certificate and warrant
          agreement(s) issued in the name of Robert B. Prag ("Prag").

               4.2  Consultant and Prag (hereinafter referred to as
          "Consultants") acknowledge that the shares of Common Stock and
          Warrants to be issued pursuant to this Agreement (collectively,
          the "Shares) have not been registered under the Securities Act of
          1933, and accordingly are "restricted securities" within the
          meaning of Rule 144 of the Act.  As such, the Shares may not be
          resold or transferred unless the Company has received an opinion
          of counsel reasonably satisfactory to the Company that such
          resale or transfer is exempt from the registration requirements
          of that Act.

               4.3  In connection with the acquisition of Shares hereunder,
          the Consultants represent and warrant to the Company as follows:

               (a)  Consultants acknowledge that the Consultants have been
          afforded the opportunity to ask questions of and receive answers
          from duly authorized officers or other representatives of the
          Company concerning an investment in the Shares, and any
          additional information which the Consultants have requested.

               (b)  Consultants' investment in restricted securities is
          reasonable in relation to the Consultants' net worth, which is in
          excess of ten (10) times the Consultants' cost basis in the
          Shares.  Consultants have had experience in investments in
          restricted and publicly traded securities, and Consultants have
          had experience in investments in speculative securities and other
          investments which involve the risk of loss of investment. 
          Consultants acknowledges that an investment in the Shares is
          speculative and involves the risk of loss.  Consultants have the
          requisite knowledge to assess the relative merits and risks of
          this investment without the necessity of relying upon other
          advisors, and Consultants can afford the risk of loss of his
          entire investment in the Shares.  Consultants are (i) accredited
          investors, as that term is defined in Regulation D promulgated
          under the Securities Act of 1933, and (ii) a purchases described
          in Section 25102 (f) (2) of the California Corporate Securities
          Law of 1968, as amended.

               (c)  Consultants are acquiring the Shares for the
          Consultants' own account for long-term investment and not with a
          view toward resale or distribution thereof except in accordance
          with applicable securities laws.

          5.   Financing "Finder's Fee".   It is understood that in the
               ------------------------
          event Consultant introduces Company, or its nominees, to a lender
          or equity purchaser, not already having a preexisting
          relationship with the Company, with whom Company, or its
          nominees, ultimately finances or causes the completion of such
          financing, Company agrees to compensate Consultant for such
          services with a "finder's fee" in the amount of 2.5% of total
          gross funding provided by such lender or equity purchaser, such
          fee to be payable in cash.  This will be in addition to any fees
          payable by Company to any other intermediary, if any, which shall
          be per separate agreements negotiated between Company and such
          other intermediary.  It is also understood that in the event
          Consultant introduces Company, or its nominees, to an acquisition
          candidate, either directly or indirectly through another
          intermediary, not already having a preexisting relationship with
          the Company, with whom Company, or its nominees, ultimately
          acquires or causes the completion of such acquisition, Company
          agrees to compensate Consultant for such services with a
          "finder's fee" in the amount of 2% of total gross consideration
          provided by such acquisition, such fee to be payable in cash. 
          This will be in addition to any fees payable by Company to any
          other intermediary, if any, which shall be per separate
          agreements negotiated between Company and such other
          intermediary.  It is specifically understood that Consultant is
          not nor does it hold itself out be a Broker/Dealer, but is rather
          merely a "Finder" in reference to the Company procuring financing
          sources and acquisition candidates.

               5.1  It is further understood that Company, and not
          Consultant, is responsible to perform any and all due diligence
          on such lender, equity purchaser or acquisition candidate
          introduced to it by Consultant under this Agreement, prior to
          Company receiving funds or closing on any acquisition.  However, 
          Consultant will not introduce any parties to Company about which
          Consultant has any prior knowledge of questionable, unethical or
          illicit activities.

               5.2  Company agrees that said compensation to Consultant
          shall be paid in full at the time said financing or acquisition
          is closed.  Moreover, said compensation, will be a condition
          precedent to the closing of such financing or acquisition and
          Company shall execute any and all documents necessary to effect
          said compensation.

               5.3  As further consideration to Consultant, Company, or its
          nominees, agrees to pay with respect to any financing or
          acquisition candidate provided directly or indirectly to the
          Company by any lender or equity purchaser covered by this Section
          5. during the period of one year from the date of this Agreement,
          a fee to Consultant equal to that outlined in Section "5" herein.

               5.4   Consultant will notify Company of introductions it
          make for potential sources of financing or acquisitions in a
          timely manner (within approximately 3 days of introduction) via
          facsimile memo.  If Company has a preexisting relationship with
          such nominee and believes such party should be excluded from this
          Agreement, then Company will notify Consultant immediately of
          such circumstance via facsimile memo.

          6.   Expenses.  Consultant agrees to pay for all its expenses
               --------
          (phone, mailing, labor, etc.), other than extraordinary items
          (travel required by/or specifically requested by the Company,
          luncheons or dinners to large groups of investment professionals,
          mass faxing to a sizable percentage of the Company's
          constituents, investor conference calls, print advertisements in
          publications, etc.) approved by the Company prior to its
          incurring an obligation for reimbursement.

          7.   Indemnification.  The Company warrants and represents that
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          all oral communications, written documents or materials furnished
          to Consultant by the Company with respect to financial affairs,
          operations, profitability and strategic planning of the Company
          are accurate and Consultant may rely upon the accuracy thereof
          without independent investigation.  The Company will protect,
          indemnify and hold harmless Consultant against any claims or
          litigation including any damages, liability, cost and reasonable
          attorney's fees as incurred with respect thereto resulting from
          Consultant's communication or dissemination of any said
          information, documents or materials not designated by the Company
          to the Consultant as "confidential" or "Company private",
          excluding any such claims or litigation resulting from
          Consultant's communication or dissemination of information not
          provided or authorized by the Company.  To the extent feasible,
          the Company agrees to make Consultant an additional insured on
          any and all commercial liability and directors and officers
          liability insurance policies and to provide Consultant with
          current Certificates of Insurance reflecting the same.

          8.   Representations.  Consultant represents that it is not
               ---------------
          required to maintain any licenses and registrations under federal
          or any state regulations necessary to perform the services set
          forth herein.  Consultant acknowledges that, to the best of its
          knowledge, the performance of the services set forth under this
          Agreement will not violate any rule or provision of any
          regulatory agency having jurisdiction over Consultant. 
          Consultant acknowledges that, to the best of its knowledge,
          Consultant and its officers and directors are not the subject of
          any investigation, claim, decree or judgment involving any
          violation of the SEC or securities laws.  Consultant further
          acknowledges that it is not a securities Broker Dealer or a
          registered investment advisor.  Company acknowledges that, to the
          best of its knowledge, that it has not violated any rule or
          provision of any regulatory agency having jurisdiction over the
          Company.  Company acknowledges that, to the best of its
          knowledge, Company is not the subject of any investigation,
          claim, decree or judgment involving any violation of the SEC or
          securities laws.

          9.   Legal Representation.  The Company acknowledges that it has
               --------------------
          been represented by independent legal counsel in the preparation
          of this Agreement.  Consultant represents that they have
          consulted with independent legal counsel and/or tax, financial
          and business advisors, to the extent the Consultant deemed
          necessary.

          10.  Status as Independent Contractor.  Consultant's engagement
               --------------------------------
          pursuant to this Agreement shall be as independent contractor,
          and not as an employee, officer or other agent of the Company. 
          Neither party to this Agreement shall represent or hold itself
          out to be the employer or employee of the other.  Consultant
          further acknowledges the consideration provided hereinabove is a
          gross amount of consideration and that the Company will not
          withhold from such consideration any amounts as to income taxes,
          social security payments or any other payroll taxes.  All such
          income taxes and other such payment shall be made or provided for
          by Consultant and the Company shall have no responsibility or
          duties regarding such matters.  Neither the Company or the
          Consultant possess the authority to bind each other in any
          agreements without the express written consent of the entity to
          be bound.

          11.  Attorney's Fee.  If any legal action or any arbitration or
               --------------
          other proceeding is brought for the enforcement or interpretation
          of this Agreement, or because of an alleged dispute, breach,
          default or misrepresentation in connection with or related to
          this Agreement, the successful or prevailing party shall be
          entitled to recover reasonable attorneys' fees and other costs in
          connection with that action or proceeding, in addition to any
          other relief to which it or they may be entitled.

          12.  Waiver.  The waiver by either party 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 such
          other party.

          13.  Notices.  All notices, requests, and other communications
               --------
          hereunder shall be deemed to be duly given if sent by U.S. mail,
          postage prepaid, addressed to the other party at the address as
          set forth herein below:


          To the Company:          American Electromedics Corporation
                                   Mr. Michael Pieniazek, President & CEO
                                   13 Columbia Drive; Suite 18
                                   Amherst, NH  03031

          To the Consultant:       Liviakis Financial Communications, Inc.
                                   John M. Liviakis, President
                                   2420 "K" Street, Suite 220
                                   Sacramento, CA  95816

                    It is understood that either party may change the
          address to which notices for it shall be addressed by providing
          notice of such change to the other party in the manner set forth
          in this paragraph.


          14.  Choice of Law, Jurisdiction and Venue.  This Agreement
               --------------------------------------
          shall be governed by, construed and enforced in accordance with
          the laws of the State of California.  The parties agree that
          Sacramento County, CA. will be the venue of any dispute and will
          have jurisdiction over all parties.

          15.  Arbitration.  Any controversy or claim arising out of or
               -----------
          relating to this Agreement, or the alleged breach thereof, or
          relating to Consultant's activities or remuneration under this
          Agreement, shall be settled by binding arbitration in California,
          in accordance with the applicable rules of the American
          Arbitration Association, and judgment on the award rendered by
          the arbitrator(s) shall be binding on the parties and may be
          entered in any court having jurisdiction thereof.  The provisions
          of Title 9 of Part 3 of the California Code of Civil Procedure,
          including section 1283.05, and successor statutes, permitting
          expanded discovery proceedings shall be applicable to all
          disputes that are arbitrated under this paragraph.

          16.  Miscellaneous Conditions.  Company and Consultant each
               ------------------------
          agree to the following terms and conditions:

               a.)  The Company shall arrange that all insiders agree to a
          six month lockup agreement, which would include all officers and
          directors.

          17.  Complete Agreement.  This Agreement contains the entire
               -------------------
          agreement of the parties relating to the subject matter hereof. 
          This Agreement and its terms may not be changed orally but only
          by an agreement in writing signed by the party against whom
          enforcement of any waiver, change, modification, extension or
          discharge is sought.


     <PAGE>


     AGREED TO:


     "Company"                AMERICAN ELECTROMEDICS CORPORATION



     Date:                    By:  /s/ Michael Pieniazek
          ------------           -------------------------------------
                                    Michael Pieniazek, President & CEO
                                    & Its Duly Authorized Officer
       

     "Consultant"             LIVIAKIS FINANCIAL COMMUNICATIONS, INC.



      Date:  2/19/98          By: /s/ John M. Liviakis    /s/ Robert B. Prag
           ------------          ----------------------  -------------------- 
                                   John M. Liviakis        Robert B. Prag
                                   President               Sr. Vice
                                                           President