Exhibit 10.13


                        SUPPLY AND DISTRIBUTION AGREEMENT

         THIS AGREEMENT is made and effective the 25th day of October, 2004
("Effective Date") between Valley Forge Scientific Corp., a Pennsylvania
corporation, ("VFS"), and Stryker Instruments Division of Stryker Corporation, a
Michigan corporation ("Distributor").

                                   WITNESSETH

         WHEREAS, VFS designs, develops, manufactures and sells bipolar
electronic systems and stimulators;

         WHEREAS, Distributor designs, develops, manufactures and markets
medical devices, including devices for the treatment of chronic pain;

         WHEREAS, VFS and Distributor entered into a certain Development
Agreement dated as of September 6, 2002 (the "Development Agreement") pursuant
to which they collaborated to determine the feasibility of the commercialization
of certain products, which Development Agreement has terminated in accordance
with its terms;

         WHEREAS, as a result of the collaboration under the Development
Agreement, VFS desires to manufacture and supply to Distributor certain
products, which are more fully described in Schedule A, as the same may be
amended or supplemented from time to time by an instrument executed on behalf of
each of VFS and Distributor (the "Products"), all in accordance with the terms
and conditions set forth herein; and

         WHEREAS, Distributor desires to purchase Products from VFS and
distribute the Products throughout the world for use solely in connection with
the percutaneous treatment of pain (the "Field").

         NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein and intending to be legally bound, the
parties agree as follows:

SECTION I         SUPPLY AGREEMENT

         1.       Supply Requirements.

         1.1      Distributor agrees to purchase from VFS and VFS agrees to sell
to Distributor the Products on the terms set forth in this Agreement solely for
use in the Field.

         1.2      (a)      VFS shall deliver to Distributor, for Distributor's
inspection, a reasonable number of preproduction quality samples of each of the
Products ("Inspection Samples") as agreed upon by the parties which conform to
the specifications, consisting in the case of the Products designated as the
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Generator Product thereon (the "Generator Product") of the relevant
manufacturing specifications and subsidiary detail specifications, as set forth
in Schedule A, and drawings agreed upon by Distributor and VFS
("Specifications"), including reports documenting that the Products have been
inspected and tested.

         (b)      Distributor shall provide to VFS any objections it has
concerning the conformance of the Inspection Samples to the Specifications
within thirty (30) days after receipt of the Inspection Samples (the "Inspection
Period") and VFS shall make such changes to Products prior to production. If no
objections are received by Distributor during the Inspection Period, the
Inspection Samples shall be deemed acceptable by Distributor. The Inspection
Period for the Inspection Samples of the initial Products covered by this
Agreement that are listed in Schedule A on the Effective Date shall be known as
the "Initial Inspection Period".

         1.3      On or prior to the end of the Initial Inspection Period,
Distributor shall deliver to VFS a forecast of Distributor's requirements for
Products during the initial six-month period after the Initial Inspection
Period. On or before the last day of each month after the Initial Inspection
Period and during the Term, Distributor shall deliver to VFS a six-month rolling
forecast of Distributor's requirements for Products. Each forecast shall specify
the quantities of each Product and the projected shipment dates therefor. The
first three months of the initial six-month forecast shall represent
Distributor's binding purchase order for the quantities of Products specified
therein. For each six-month rolling forecast thereafter, the third month of such
rolling forecast shall be Distributor's binding purchase order for the
quantities specified therein. VFS shall not be obligated to supply quantities of
Products in excess of those quantities subject to binding purchase orders. VFS,
however, shall use its commercially reasonable efforts to deliver to
Distributor, pursuant to purchase orders, quantities of Products even if
Distributor has modified a projection of Product requirements for such
quantities. Three (3) months prior to the end of each Agreement Year (as defined
below) during the term of this Agreement, Distributor and VFS shall meet to
review the projected quantity mix of Products for purchase during the next
Agreement Year for manufacturing planning purposes.

         1.4      It is understood that the terms of this Agreement shall
supersede any conflicting terms of purchase orders for all purchases of
Products.

         1.5      Distributor and VFS have agreed upon the following minimum
purchase requirements (the "Initial Products Minimum") for the first three (3)
Agreement Years for the Generator Product:

                                                  Initial
                      Agreement Year         Products Minimum
                      --------------         ----------------

                             1                       *
                             2                       *
                             3                       *

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For purposes of this Agreement, the term "Agreement Year" shall mean the period
beginning on the date of the first acceptance by Distributor of a Generator
Product delivered by VFS to Distributor as ready for commercial sale
(Distributor shall diligently and in good faith promptly evaluate the "readiness
for commercial sale" of the Generator Product that VFS has delivered to
Distributor) and ending on the last day of the calendar quarter in which the
first anniversary date of such date occurs, unless such anniversary date is the
first day of a calendar quarter, in which case the first Agreement Year shall
end on the last day of the preceding calendar quarter, and each successive
twelve (12)-month period thereafter. On or before the beginning of the last
calendar quarter of the third Agreement Year and each Agreement Year thereafter,
VFS and Distributor shall conduct good faith negotiations regarding the Initial
Products Minimum for the next Agreement Year. In the event that one or more new
products have been added to Schedule A as contemplated by Section I, Paragraph
1.6(a), a separate minimum purchase requirement shall be agreed for each Product
that is a New Field Product ("New Product Minimum"). Notwithstanding the
foregoing, the minimum purchase requirements shall be reduced for each Agreement
Year to the extent that (i) VFS shall fail to deliver Products, subject to
binding purchase orders with a projected shipment date during such Agreement
Year, within thirty (30) days after the projected shipment date but, in any
event, during such Agreement Year, and/or (ii) VFS has been advised by
Distributor in writing and in timely manner that Products delivered during such
Agreement Year do not conform to the requirements of Section I, Paragraph 4
(which writing shall specify in reasonable detail how the Products do not
conform to the requirements of Section I, Paragraph 4) and, if it is determined
that such Products do not conform to the requirements of Section I, Paragraph 4,
replacements conforming to the requirements of Section I, Paragraph 4 have not
been delivered during such Agreement Year.

         1.6      (a) If during the term of this Agreement, VFS develops or
acquires rights to any new product indicated for use in the Field ("New Field
Product") then, prior to offering such New Field Product to a third party for
use in the Field, VFS shall offer Distributor the right of first refusal to
market the New Field Product in the Field under the terms of this Agreement", by
giving Distributor a written notice ("New Field Product Notice") of the product
specifications, intended use, projected availability, Distributor's purchase
price for the New Field Product, the applicable New Product Minimum, and other
terms, after which Distributor shall have thirty (30) days ("First New Field
Product Decision Period") to inform VFS in writing of its interest to market
such product under the terms proposed, subject to satisfactory review of a
"Field Ready Prototype" of such New Field Product; provided, however, that
Distributor shall have no rights to any new product for which the idea was
initially brought to VFS by a third party unless VFS in writing seeks
Distributor's input in connection with the development thereof, in which case
the parties shall agree in advance as to Distributor's rights. During the First
New Field Product Decision Period, VFS shall provide to Distributor such
information reasonably available to VFS, which Distributor reasonably requires
regarding the new product, subject to confidentiality and non-disclosure
provisions in this Agreement. The term "Field Ready Prototype" shall mean a
prototype functionally ready to be used in the indicated clinical testing
applications, except for complying with applicable government regulations
related to such testing, which shall be the sole responsibility of Distributor.

         In the event Distributor gives written notice to VFS of its decision
not to exercise its right of first refusal during the First New Field Product
Decision Period, or fails to give written notice to VFS of its decision to

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exercise its right of first refusal within said First New Field Product Decision
Period, then, notwithstanding anything in this Agreement to the contrary, VFS
may pursue other distribution opportunities for the New Field Product in the
Field, on terms that are, in the aggregate, not less favorable to VFS than the
terms specified by VFS in the New Field Product Notice or contained in the last
subsequent proposal by VFS to Distributor, if any, and, in the event that VFS
desires to pursue such less favorable distribution opportunities, then VFS shall
be required (each time such situation arises) to give a new notice to
Distributor pursuant to this Paragraph 1.6(a) and comply with the right of first
refusal set forth herein for an additional thirty (30)-day period following the
receipt of such new notice by Distributor.

         In the event Distributor gives written notice to VFS of its decision to
exercise its right of first refusal during the First New Field Product Decision
Period, VFS shall provide to Distributor a Field Ready Prototype of the New
Field Product when such prototype is available, after which Distributor shall
have ninety (90) days to determine whether the Field Ready Prototype is
acceptable to Distributor ("Second New Field Product Decision Period") and to
agree in writing to have the New Field Product be added to Schedule A of this
Distribution Agreement under the terms set forth in the New Field Product
Notice, whereupon the parties shall agree upon the initial production run
purchases and add such New Field Product to Schedule A. Notwithstanding the
foregoing, the Second New Field Product Decision Period shall be extended to
forty-five (45) days after receipt of the necessary government approvals, if
any, for the clinical testing of the Field Ready Prototype of the New Field
Product provided that Distributor has in good faith commenced the effort to
obtain such approvals promptly after giving written notice of its decision
during the First New Field Product Decision Period to exercise its right of
first refusal with respect to such New Field Product and using commercially
reasonable efforts has diligently pursued the obtaining of such approvals until
such approvals are obtained. During the Second New Field Product Decision
Period, VFS shall provide to Distributor such information reasonably available
to VFS, which Distributor reasonably requires regarding the new product, subject
to confidentiality and non-disclosure provisions in this Agreement. In the event
Distributor gives written notice to VFS of its decision not to exercise its
right of first refusal during the Second New Field Product Decision Period, or
fails to give written notice to VFS of its decision to exercise its right of
first refusal within said Second New Product Decision Period, then,
notwithstanding anything in this Agreement to the contrary, VFS may pursue other
distribution opportunities in the Field, for the New Field Product on terms that
are, in the aggregate, not less favorable to VFS than the terms specified by VFS
in the New Field Product Notice or contained in the last subsequent proposal by
VFS to Distributor, if any, and, in the event that VFS desires to pursue such
less favorable distribution opportunities, then VFS shall be required (each time
such situation arises) to give a new notice to Distributor pursuant to this
Paragraph 1.6(a) and comply with the right of first refusal set forth herein for
an additional thirty (30)-day period following the receipt of such new notice by
Distributor.

         (b)      During the term of this Agreement, prior to offering a new
product indicated for use in lesion/ablation applications in conjunction with
generator products with the same features and technical specifications as the
Generator Product ("New Outside Product") to a third party distributor to
distribute or sell the New Outside Product for use in the field of orthopedic
surgery, ENT, craniomaxillofacial surgery or head and neck surgery (individually
an "Expanded Field" and collectively "Expanded Fields"), VFS shall offer
Distributor the right of first refusal to market the New Outside Product by

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giving Distributor a written notice ("New Outside Product Notice") of the
minimum purchase requirements, the particular Expanded Fields where the New
Outside Product is indicated for use, Distributor's purchase price for the New
Outside Product, product features and benefits, general specifications and other
terms, after which Distributor shall have a period of thirty (30) days after
delivery of a Field Ready Prototype of such New Outside Product ("New Outside
Product Decision Period") to enter into a distribution agreement for the New
Outside Product under the terms set forth in the New Product Notice that VFS
plans to offer such New Outside Product to a third party distributor ("New
Distribution Agreement").

         In the event the Distributor (i) gives written notice to VFS of its
decision not to exercise its right of first refusal during the New Outside
Product Decision Period, or (ii) if Distributor fails to enter into a New
Distribution Agreement with VFS during the New Outside Product Decision Period,
then, notwithstanding anything in this Agreement to the contrary, VFS may pursue
other distribution opportunities for the New Outside Product in the Expanded
Field(s) designated in the New Outside Product Notice, on terms that are, in the
aggregate, not less favorable to Valley Forge than the terms specified by VFS in
the New Outside Product Notice or contained in the last subsequent proposal by
VFS to Distributor, if any, and, in the event that VFS desires to pursue such
less favorable distribution opportunities, then VFS shall be required (each time
such situation arises during the term of this Agreement) to give a new notice to
Distributor pursuant to this Paragraph 1.6(b) and comply with the right of first
refusal set forth herein for an additional thirty (30)-day period following the
receipt of such new notice by Distributor.

         Notwithstanding anything in this Agreement to the contrary, the right
of first refusal in this Paragraph 1.6(b) shall not apply to (i) the marketing
or sale by VFS (including a Permitted Assignee as defined in Section III,
Paragraph 8.3) or its subsidiaries or other affiliates of any product through
its own sales force or through independent sales representatives and (ii) any
neurocranial or neurospinal application of any product.

         (c)      Notwithstanding anything in this Agreement to the contrary,
the rights of first refusal set forth in this Paragraph 1.6 shall terminate upon
the earlier of (i) the termination of this Agreement or (ii) upon the failure of
Distributor to satisfy the Initial Products Minimum or a New Product Minimum, as
the case may be, for any Product or New Field Product as set forth in Section I,
Paragraph 1.5, herein.

         1.7      (a) If Distributor does not meet the Initial Products Minimum
and/or a New Product Minimum for an Agreement Year, Distributor may, at its
option, nevertheless be deemed to have fulfilled such obligation by paying VFS
an amount (the "shortfall amount") equal to fifty percent (50%) of the
difference between (A) the amount Distributor would have paid to VFS had it
fulfilled such minimum purchase requirement for such Agreement Year and (B) the
amount Distributor has paid (or will pay) for the applicable Product or Products
actually purchased during such Agreement Year. Such payment, if made, shall be
due within thirty (30) days following the end of the such Agreement Year in
which Distributor did not fulfill its minimum purchase requirement.

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         (b)      If Distributor does not meet the Initial Products Minimum
and/or a New Product Minimum (or pay the applicable shortfall amount pursuant to
Paragraph 1.7 (a)) during an Agreement Year, VFS shall have the right to
terminate this Agreement, with respect only to the Products that are listed on
Schedule A on the Effective Date if the failure relates to the Initial Products
Minimum and/or with respect only to the applicable New Field Product if the
failure relates to one or more New Product Minimums, upon ninety (90) days prior
written notice to Distributor, such notice to be given not later than fifteen
(15) business days after the expiration of the 30-day period referred to in
Paragraph 1.7(a). The parties agree that, notwithstanding anything to the
contrary in this Agreement, if they mutually agree that material changes in
market conditions have occurred, then they will in good faith renegotiate the
Initial Product Minimums and/or the applicable New Product Minimums rather than
terminate this Agreement.

2.       Prices and Payment.

         2.1      During the first Agreement Year, pricing of Products shall be
according to the terms set forth in Schedule B attached hereto.

         2.2      Upon the request of either party, the parties shall negotiate
in good faith during the first two months of the fourth quarter of each
Agreement Year with respect to changes in the pricing of Products to be
effective on the first day of the second Agreement Year and of each Agreement
Year thereafter. Such negotiations shall take into account, among other things,
the competitive market conditions then existing, the cost of materials and
labor, quantities of Products to be purchased by Distributor and economic
conditions. The price in effect for any Product for any Agreement Year shall,
however, not increase by more than three percent (3%) over the price in effect
for the preceding Agreement Year. Price increases resulting from improvements or
changes in a particular Product shall be negotiated in good faith by both
parties prior to the delivery of the improved or changed Product and shall not
be subject to the foregoing limitation on the amount of increase.

         2.3      Payment to VFS for Products shall be made forty-five (45) days
following the date of the invoice from VFS (which shall be no earlier than the
date of shipment) for Products specified in purchase orders and not rejected by
Distributor for nonconformance pursuant to Section I, Paragraph 4.1. All
payments to VFS under this Agreement shall be made in U.S. dollars. All payments
due under this Agreement not made on their due date shall bear interest at the
lesser of (i) one and one-half percent (1.5%) per month and (ii) the maximum
lawful interest rate permitted under applicable law.

3.       Shipment.

         3.1      All sales of Products shall be F.O.B. VFS's factory at the
prices set forth in Schedule B, which prices shall be exclusive of freight,
insurance and taxes. VFS shall, at Distributor's cost, ship the Products to any
location chosen by Distributor, utilizing carriers chosen by Distributor. Title
and risk of loss or damage to the Products shall pass to Distributor at the time
they are loaded on to the carrier specified by Distributor.

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         3.2      Unless otherwise agreed in advance, all Products, inclusive of
operating and service manuals and complete standard sets of accessories, shall
be packed, labeled, marked and otherwise prepared for shipment by VFS in such a
way as to be acceptable to carriers and in accordance with good commercial
practice, so as to minimize risk of loss or damage in transit. An itemized
packing list and Product inspection report in the form set forth in Schedule C
attached hereto shall accompany each shipment.

4.       Specifications, Testing, and Warranty.

         4.1      VFS agrees to sell the Products to Distributor for use in the
Field, for the term of this Agreement and warrants that such Products will meet
the Specifications or such modified specifications as may be agreed upon in
writing by Distributor and VFS. Distributor shall have a period of thirty (30)
days from date of receipt of Products to inspect and accept Products that
conform to the Specifications or reject Products that do not conform to the
Specifications. Rejection of non-conforming Products by Distributor shall not
excuse VFS from its obligations to deliver Products pursuant to this Agreement.

         4.2      VFS reserves the right to make engineering changes that do not
affect the form, fit, function, performance or appearance of the Products and
that do not require regulatory approval without the prior approval of
Distributor; provided, however, that VFS shall provide Distributor with notice
of such change as promptly as practical after VFS's final internal approval of
such change. With regard to all other material changes to the Products, VFS
agrees to give Distributor written notice and to simultaneously provide
Distributor with Specifications for the changes. No changes relating to the
form, fit, function, performance or appearance will be made to any Products
supplied to Distributor at any time without the prior written approval or deemed
approval as provided below of Distributor. Distributor agrees to inform VFS of
its approval or disapproval of changes relating to the form, fit, function,
performance or appearance of the Products within thirty (30) days after
receiving notice of any such proposed changes. If Distributor does not respond
to VFS within said thirty (30)-day period, the change will be deemed to have
been approved.

         4.3      Distributor may request, in writing, that VFS change the
Specifications or otherwise incorporate changes into the Products and/or develop
customized Products for Distributor. Such request will include a description of
the proposed changes that will reasonably permit VFS to evaluate the cost and
feasibility. Within forty-five (45) days after receiving such a request from
Distributor, VFS will advise Distributor whether it is reasonably able to make
such changes and, if so, the timetable and terms and conditions under which it
would make such changes, and any resulting increase or decrease in prices
hereunder. VFS's evaluation shall be in writing and, if it is reasonably able to
make the change, it shall also state the impact on delivery schedules for
Products covered by pending purchase orders hereunder. If, after good faith
negotiations, Valley Forge and Distributor agree upon the terms of the changes,
then this Agreement, the Specifications, delivery schedules and pricing schedule
will be amended accordingly.

         i.       Unless otherwise agreed to in writing by VFS and Distributor,
         purchases by Distributor of more customized products shall not be
         credited to Distributor in meeting the dollar amount of the minimum
         purchase requirement pursuant to Section I, Paragraph 1.5.

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         ii       VFS shall not unreasonably refuse to incorporate the changes
         or develop a more customized product when requested by Distributor .

         4.4      Within the times specified in this Paragraph 4.4, Distributor
shall have the right to return to VFS, for full credit/refund plus cost of
freight, any Product that is defective or fails to comply with the
Specifications, provided, however, that such defect or failure is in no way the
result of any modification to the Product, improper repair, or of any damage
(assuming proper packaging for transportation by VFS) to the Product after
loaded on to the carrier specified by Distributor. Notwithstanding failure of
Distributor to inspect and/or return any shipment, or its acceptance of any
shipment, Distributor shall be entitled to return to VFS, for either repair,
free of charge, credit/refund or exchange, at VFS's option, any Product that is
defective or fails to comply with the Specifications if returned by Distributor
within one (1) year after shipment of Generator Product by Distributor to its
end user or ninety (90) days after shipment of any other Product by Distributor
to its end user. Notwithstanding anything in this Agreement to the contrary, the
use of any instrument other than one approved by VFS for use with the Generator
Product shall void all warranties contained in this Agreement with regard to the
Generator Product.

         4.5      In the event it is discovered by Distributor, and VFS is
notified by Distributor within the time periods stated in Section I., Paragraph
4.4 hereof, that a Product is defective or fails to comply with the
Specifications, Distributor shall return the Product to VFS and specify in
writing the alleged complaint, Product code, serial number, if there is one, and
the return address of Distributor or the end user if the Product is to be drop
shipped to the end user. VFS will, at its option and at its expense, either
repair or replace such defective Product within fifteen (15) business days after
its return by Distributor, freight prepaid to VFS at its repair facility, and
receipt by VFS at such facility. If VFS determines that the returned Product has
been abused by the end user, VFS shall provide Distributor with a quote for
repair of the Product and Distributor shall either agree to pay for the repair,
parts, labor and calibration or instruct VFS to return the Product to
Distributor without repairs. In either case, Distributor shall pay the freight
for return of the Product to Distributor. VFS shall charge Distributor for any
such repair, parts, labor and calibration as set forth in Section I,
Paragraph.4.6 hereof.

         4.6      VFS agrees to provide repair, maintenance, modification and
other services on a timely basis on units of the Generator Product purchased by
Distributor or its end user at $125.00/hour (as increased by the percentage
increase (if any)in the Consumer Price Index (CPI), as defined by the U.S.
Department of Labor, Bureau of Labor Statistics measured as of the ninth month
of the then current Agreement Year as compared to the CPI measured as of
December 2002), plus the charges for repair parts. Notwithstanding the foregoing
sentence, the hourly rate that VFS charges Distributor for such services shall
not exceed the lowest rate that VFS charges any other customer for similar
services. Upon request by Distributor, VFS shall provide to Distributor its then
current price list for spare or replacement parts for Generator Products. VFS
agrees to maintain an inventory of spare and replacement parts for the Generator
Product if and when production ceases for a period of at least five (5) years

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following the last delivery date of a Generator Product to Distributor. VFS
agrees to refurbish Generator Products at a cost agreed upon annually by VFS and
Distributor.

         4.7      VFS MAKES NO WARRANTY OTHER THAN THOSE EXPRESSLY MADE HEREIN,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULAR PURPOSE.

5.       Compliance With Laws and Regulations.

         5.1      VFS represents and warrants that it is and, during the term of
this Agreement, will continue to be (i) a Domestic Device Establishment,
registered with the FDA and (ii) ISO 9001 and EN 46001 certified. VFS further
represents and warrants that all Products sold and delivered to Distributor
under this Agreement shall be manufactured in accordance with the
Specifications, applicable industry standards and current Good Manufacturing
Practices ("cGMPs") as set forth in the Quality System Regulation promulgated by
the FDA and found in Code of Federal Regulations, Title 21 Part 820 (the "QSR")
and in accordance with all United States applicable statutes, laws, standards
and regulations (including, but not limited to, the United States Medical
Devices Amendments of 1976) and the regulations promulgated thereunder,
including the QSR, that are applicable to the Products. VFS agrees to provide
Distributor with copies of its FDA registration, ISO 9001 certificate and EN
46001 certificate.

         5.2      Distributor, upon reasonable advance notice to VFS during
normal business hours, may on an annual basis visit VFS manufacturing facilities
to observe VFS quality assurance procedures for testing, packaging and shipping
during VFS's initial production runs of the Products and shall have the right to
evaluate VFS's manufacturing, documentation control, inspection and calibration
systems. Such visits by Distributor personnel will be mutually scheduled by
Distributor and VFS.

         5.3      VFS shall notify Distributor of any FDA audit, or any audit
from any other regulatory body, of its facilities for the manufacture of the
Products, or any request for information from the FDA or other regulatory body
related to the manufacture of the Products, as soon as practicably possible
after receipt of such notice of such audit or such request. VFS shall notify
Distributor as soon as practicable after receiving notice of any claim or action
by the FDA or other regulatory body stating any non-compliance with this
Paragraph 5 or any notice with respect to any violation of applicable statutes,
laws, rules or regulations. Both parties shall notify each other of any adverse
reaction, malfunction, injury or other similar claims with respect to the
Products or the devices in which they are incorporated, of which either party
becomes aware. The parties shall discuss and determine the responsibility for
the investigation of all such complaints and the responsible party shall forward
to the other a summary of its findings with respect thereto. Distributor shall
be responsible for managing all customer and end-user communications with
respect to such complaints and for filing any medical device report required to
be filed with the FDA and vigilance reports required to be filed with regulatory
authorities in other jurisdictions in which the Products are marketed. Nothing

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herein shall preclude either party from taking any action that it is required to
take under applicable law or regulation.

         5.4      Unless otherwise agreed to in writing by the Parties, VFS
shall be responsible for the preparation, submission and obtaining of
appropriate documents for regulatory clearance to market the Products in the
United States, including but not limited to 510(k)'s and/or PMA's, as may be
applicable, and shall provide copies of such documents to Distributor upon
request. VFS shall provide Distributor with such information as VFS and
Distributor shall reasonably agree upon, for the purpose of registration and/or
regulatory clearance to sell the Products in any other country in which
Distributor proposes to sell the Products. Distributor shall be solely
responsible, at its own cost, to obtain the CE mark on any Products subject to
this Agreement. Any additional costs reasonably incurred by VFS in obtaining
and/or maintaining international compliance will be billed to Distributor (and
paid by Distributor) at VFS's direct engineering costs, as the costs are
incurred during the approval process. If compliance is not commercially
reasonable in a particular country foreign to the United States, VFS and
Distributor will negotiate in good faith in an attempt to determine whether
compliance will be obtained.

         5.5      If requested by Distributor, VFS, at Distributor's cost, shall
take all steps necessary to obtain and maintain determinations that the Products
meet the consensus-based standards of safety required by the Occupational Safety
and Health Act as determined by one or more Nationally Recognized Testing
Laboratories and the equivalent approvals under the applicable standards
promulgated by the Canadian Standards Association, the International
Electrotechnical Commission, the German Technical Inspection Associations (TUVs)
or their equivalents in other jurisdictions.

         5.6      This Agreement shall be reviewed by VFS at least annually for
compliance to ISO 9001 Section 4.3.

         5.7      Unless otherwise agreed to in writing by the parties, VFS
shall take all action necessary and bear all engineering costs incurred to
insure that the Products and any changes or improvements to the Products conform
with applicable regulatory standards required to allow application of the CE
mark for the Products, recognizing that Distributor will be responsible for
obtaining the CE mark for the Products and all costs for submission and testing
in connection associated therewith.

6.       Product Recall.

         If either party believes that because of a defect in manufacturing or
design a recall, market withdrawal, safety alert or similar action ("Recall") of
any Products is desirable or required by law, it will promptly notify the other
party. The parties will then discuss reasonably and in good faith whether such
Recall is appropriate or required and the manner in which any mutually agreed
Recall shall be handled. This Paragraph 6 shall not limit the obligations of
either party under law with respect to Recall of Products required by law or
properly mandated by governmental authority. Voluntary Recalls shall be
conducted by mutual agreement (agreement not to be unreasonably withheld). VFS
shall bear all reasonable costs and expenses of any such Recall which relates to
the manufacture of the Products. Distributor shall maintain complete and

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accurate records for such periods as may be required by applicable law of all
the Products sold by it. The parties will cooperate fully with each other in
effecting any Recall of the Products pursuant to this Paragraph 6. However,
Distributor shall be responsible for the actual conduct of any Recall of the
Products, including communications with customers and end-users, and for any
required notification to the FDA and other applicable regulatory authorities in
respect thereof.

7.       Product Name/Private Labeling.

         Distributor shall have the right to market and advertise Products
exclusively in the Field under Distributor's name, trademarks, trade names,
labels or other designations (collectively referred to as the "Marks") for the
term of this Agreement. All of such Marks shall remain the property of
Distributor, and VFS shall have no rights thereto. Distributor agrees to
recognize the role of VFS as manufacturer of the Products through identification
of VFS on the Products and literature relating thereto with the "Manufactured by
Valley Forge Scientific Corp." logo, except as otherwise required for CE marked
Products.

SECTION II        DISTRIBUTION AGREEMENT.

1.       Appointment.

         1.1      VFS hereby grants Distributor exclusive worldwide marketing
rights for distribution and sale of the Products for use in the Field for the
term of this Agreement ("Exclusive Rights"). VFS shall not distribute or cause
to be distributed products in the Field that are competitive with the Products
during the term of this Agreement. Nothing in this Agreement shall restrict VFS
or its subsidiaries or other affiliates from selling the Products to others for
use outside of the Field.

         1.2      (a) Distributor covenants and agrees that it and its
distributors shall not directly or indirectly sell the Products for any use
outside of the Field.

                  (b) Distributor covenants and agrees that it will not sell any
bipolar electrosurgical products for use in the Field other than the Products
for the term of this Agreement. Notwithstanding the foregoing, Distributor may
sell the N-50 products and accessories currently marketed by it prior to the
date of first commercial sale of a Generator Product by Distributor. After such
first commercial sale, Distributor shall be prohibited from selling the N-50
generator products other than the sale of its inventory of such generator
products existing immediately prior to such first commercial sale. Nothing in
this Agreement shall prohibit Distributor from continuing to sell accessories
for use with the N-50 generator products and servicing such products sold by
Distributor.

         1.3      For the term of this Agreement, Distributor shall have the
right to distribute and sell the Products and all modifications, improvements,
and developments incorporated into the Products and accessories and components
thereof manufactured by VFS in the Field and to appoint sub-distributors for
national and international sales in the Field.

                                       11
<PAGE>

2.       Responsibilities of Distributor.

         2.1      In marketing the Products, Distributor shall use commercially
reasonable efforts in the promotion and sale of the Products and in providing
support to end users who own the Products and prospective customers for the
Products. Within thirty (30) days prior to the end of the Initial Inspection
Period, Distributor shall provide to VFS a marketing plan for the Products.

         2.2      Distributor will:

                  i.       advertise the Products in medical journals that in
                           its judgment are suited for sale of the Products, and
                           the copy of such advertisement, as well as any and
                           all other brochures, marketing and sales materials,
                           etc. used by Distributor shall be subject to review
                           by VFS for technical accuracy prior to its release.
                           In disagreements as to marketing or sales content,
                           Distributor shall prevail. On matters of technical
                           description or medical use or practice, VFS shall
                           prevail;

                  ii.      show the Products at a minimum of four (4) trade
                           shows per year;

                  iii.     provide education to the customer/end user on proper
                           use of all Products prior to initial use; and

                  iv.      Review its marketing plan for the Products with VFS
                           on a semi-annual basis.

         2.3      Distributor shall maintain methods for identifying and tracing
Products that it distributes. Distributor and VFS shall agree upon methods for
this tracking system.

         2.4      (a) Distributor agrees to designate one or more "Distributor
Trainer(s)." Distributor shall be responsible for all costs associated with the
Distributor Trainer(s), including without limitation, the cost of training the
Distributor Trainer(s) so that they are able to provide comprehensive training
to Distributor's sales representatives, which training shall include preparing
sales representatives to educate the customer/end-user on the uses and operation
of the Products. VFS shall assist Distributor in preparing sales training and
customer education materials. All materials must be approved by VFS before
distribution to sales representatives and customers. Distributor shall bear all
costs of production of these educational materials.

         (b)      VFS shall attend up to two (2) Distributor meetings per year
in order to assist Distributor in providing training for Distributor Trainers
and sales representatives at no cost to Distributor. Additional training will be
provided by VFS as agreed upon by VFS and Distributor and with VFS being
reimbursed for all travel expenses for its employees.

3.       Technical Assistance and Labeling.

         As promptly as possible after completion of any development work and at
such other times as are reasonably requested by Distributor, VFS will furnish
Distributor with examples of VFS labeling, user and technical manuals, in

                                       12
<PAGE>

electronic file form to the extent available, for the Products and written
information regarding the Products required for inclusion in customer user and
service manuals. Distributor and VFS agree to cooperate in issuing any changes
to the manuals through agreed upon Engineering Change Orders (ECO's). VFS will
also assist and cooperate with Distributor in reviewing Distributor developed
labeling, manuals and sales information about the Products for technical
content. Distributor will be solely responsible for all costs, including the
design, production, printing, and distribution costs, of customer user manuals
and sales aids or marketing materials for the Products in the Field..

4.       Patent Infringement.

         4.1      VFS represents that the waveform and circuitry of the
Generator Product is covered by the patents and patent applications set forth on
Exhibit 1 attached hereto, which are exclusively owned or licensed by VFS. If a
third party claims that the sale, distribution or use of the Products infringes
a patent or trademark owned by that third party and such party threatens to
commence or commences a suit or action based upon such claim, the parties agree
to notify each other promptly of such threat of action or action, and to
cooperate with each other in the defense of such a suit or action, subject to
the indemnification obligations set forth in Section III., Paragraph 4.1.

         4.2      In addition to the requirements of Section II., Paragraph 4.1
hereof, if the sale, distribution or use of a Product (other than the Products
designated as Developed Products on Schedule A) infringes on the patent of a
third party, and Distributor or its customer is enjoined by final judgment of a
court of competent jurisdiction from using the Product, VFS shall (or if any
Product or part thereof becomes, or in VFS's opinion is likely to become, the
subject of a claim of infringement of any intellectual property right of a third
party, VFS may), at VFS's option, either (i) replace or modify the Product so
that it becomes non-infringing or (ii) procure for Distributor the right to
continue to sell the Product for the term of this Agreement, or, if neither (i)
or (ii) is feasible, terminate this Agreement with regard to the infringing
Product and repurchase all Distributor's inventory of the infringing Product at
the price paid by Distributor, including freight.

5.       Manufacturing Rights.

         5.1      (a) Should VFS be unable to or fail for any reason, other than
as set forth in Section I, Paragraph 5.2 hereof, to manufacture a Product in
quantities at least equal to the Initial Products Minimum or the applicable New
Product Minimum, as the case may be, that are in accordance with the agreed upon
Specifications, applicable industry standards and current Good Manufacturing
Practices ("cGMPs") as set forth in the Quality System Regulation promulgated by
the FDA and found in Code of Federal Regulations, Title 21 Part 820 (the "QSR")
that are applicable to the Products (hereinafter referred to as a "Manufacturing
Deficiency"), Distributor within 30 days of the discovery of the Manufacturing
Deficiency, on one hundred and twenty (120) days prior written notice to VFS,
may: (i) remove the particular Product from the terms of this Agreement; or (ii)
exercise the right to designate a manufacturer, set forth in Paragraph 5.1(b)
herein. During the one hundred and twenty (120)-day notice period set forth in
the preceding sentence, VFS will have the right to cure such Manufacturing

                                       13
<PAGE>

Deficiency in order to keep the particular Product in compliance with the terms
of this Agreement and, if it is successful in doing so, the notice shall be null
and void.

         (b)      In the event that VFS fails to cure the Manufacturing
Deficiency, Distributor may at Distributor's option require VFS to find and
contract with another source (reasonably acceptable to Distributor) within
thirty (30) days to manufacture the Product in accordance with the Specification
set forth in Schedule A. VFS agrees to provide such source with the technology
necessary to enable it to manufacture the Product and to render such other
assistance as may reasonably be requested to assure an orderly transition of the
manufacturing operation.

         5.2      VFS shall not be liable for any failure to supply or deliver,
or for any delay in the delivery of, the Products hereunder, when any such
failure or delay is caused, directly or indirectly, by fires, floods, accidents,
explosions, strikes or other labor disturbances (regardless of the
reasonableness of the demands or labor), wars, shortages of fuel, power or raw
materials, inability to obtain or delays of transportation facilities, acts of
God, or any cause, whether similar or dissimilar, to the foregoing beyond the
reasonable control of VFS, as the case may be, affecting VFS's production and/or
delivery of the Products covered by this Agreement or Distributor's acceptance
or resale thereof. Such failure will be excused for three months or as long as
such event shall be continuing (whichever period is shorter) provided that VFS
gives immediate written notice to Distributor of the Force Majeure Event. VFS
shall exercise all reasonable efforts to eliminate the Force Majeure event and
to resume performance. In the event the failure continues beyond three months,
then Distributor may at Distributor's option require VFS to find and contract
with another source (reasonably acceptable to Distributor) within thirty (30)
days from the end of the three-month period to manufacture and supply the
Products. VFS agrees to provide such source with the technology necessary to
enable it to manufacture the Products and to render such other assistance as may
reasonably be requested to assure an orderly transition of the manufacturing
operation.

         5.3      (a) Valley Forge hereby grants to Distributor a royalty-free
license to use all techniques, processes, documentation and know-how that have
been developed or are owned by VFS or as to which VFS has acquired any rights
that are necessary or useful in the manufacture of the Products (the
"Manufacturing Technology") in the Field to use, sell, make and have made the
Products for use in the Field (collectively the "Bankruptcy License Rights");
provided, however, that the Bankruptcy License Rights granted hereunder shall be
subject to the terms of Paragraph 5.3(b) and shall be effective only if (i) a
petition under Title 11 of the United States Code ("Title 11") has been
voluntarily filed by VFS, or involuntarily filed by a third party or parties and
not dismissed within ninety (90) days thereafter, and (ii) this Agreement has
been rejected in the Title 11 case (a "Bankruptcy Event"). Notwithstanding
anything in this Paragraph 5.3(a) to the contrary, Distributor shall not have
any Bankruptcy License Rights, nor shall it exercise any Bankruptcy License
Rights, other than after the occurrence of a Bankruptcy Event. Furthermore,
notwithstanding anything in this Paragraph 5.3(a) to the contrary, any and all
Bankruptcy License Rights shall terminate at the end of the term of this
Agreement.

         (b)      All rights and licenses to Manufacturing Technology granted
under this Agreement by VFS to Distributor are, for all purposes of Section
365(n) of Title 11, licenses of rights to intellectual property as defined in
Title 11. VFS agrees during the term of this Agreement to create and maintain

                                       14
<PAGE>

current copies or, if not amenable to copying, detailed descriptions or other
appropriate embodiments, of all such Manufacturing Technology. If a case is
commenced by or against VFS under Title 11, then, unless and until this
Agreement is rejected as provided in Title 11, VFS (in any capacity, including
debtor-in-possession) and its successors and assigns (including, without
limitation, a Title 11 trustee) at its option shall either perform all of the
obligations provided in this Agreement to be performed by VFS or provide to
Distributor all such Manufacturing Technology reasonably required to make or
have made, use and sell Products (including all embodiments thereof) in the
Field +held by VFS, as provided in this Agreement, as Distributor may elect in a
written request, immediately upon such request, and VFS shall not interfere with
Distributor's rights. If a Bankruptcy Event occurs and Distributor elects to
retain its rights hereunder as provided in Title 11, then VFS (in any capacity,
including debtor-in-possession) and its successors and assigns (including,
without limitation, a Title 11 trustee) shall provide to Distributor all such
Manufacturing Technology (including all embodiments thereof) held by VFS
immediately upon Distributor's written request therefor and nothing herein is
intended to, nor shall, impair or adversely affect Distributor's rights under
Title 11, including under Section 365(n) of Title 11.

SECTION III        GENERAL PROVISIONS

1.       Term.

         1.1      Unless terminated sooner pursuant to Section III., Paragraph 2
hereof or extended as provided herein, the term of this Agreement shall commence
on the Effective Date and shall continue in force until the end of the fifth
Agreement Year. If on or before the end of the fourth Agreement Year, the term
of this Agreement has not been extended beyond the end of the fifth Agreement
Year by written agreement of Distributor and VFS, the parties on written notice
from either party shall for a period of ninety (90) days after such written
notice (but in no event shall such period extend past the end of the fifth
Agreement Year) conduct good faith discussions at mutually convenient times
regarding the terms and conditions of an extension to this Agreement. While the
parties are obligated to discuss an extension in good faith, there is no
obligation on the part of either party to agree to an extension.

2.       Termination and Remedies

         2.1      Either party may terminate this Agreement upon written notice
to the other party in the event of a material breach of this Agreement by the
other party which is not cured within ninety (90) days after written notice of
such breach is given. Notwithstanding the foregoing, (i) in the event
Distributor fails to timely pay for shipped Products within the time period set
forth in Section I, Paragraph 2.3 or breaches the covenants and agreements in
Section II, Paragraph 1.2 (a), VFS may terminate the Agreement if such breach is
not cured within ten (10) days after written notice by VFS; (ii) in the event
that Distributor breaches the covenants and agreements in Section II, Paragraph
1.2(b), VFS may terminate this Agreement if Distributor does not cease from
selling products in breach of the terms of Section II, Paragraph 1.2(b)
("Prohibited Products") within ten (10) days after written notice and within
sixty (60) days after such written notice pay to VFS an amount for each
Prohibited Product sold by Distributor equal to fifty percent (50%) of the then
current price of the Product that has the same or similar use as the Prohibited

                                       15
<PAGE>

Product; (iii) in the event of a breach of Section III, Paragraph 3, and in
addition to all other rights and remedies that VFS has under this Agreement or
at law or equity, VFS may terminate this Agreement within ten (10) days after
written notice to Distributor; and (iv) in the event a business combination
transaction occurs that results in a New VFS (as defined in Section III,
Paragraph 8.3) that competes with Distributor or its affiliates in the
manufacture and/or sale of products for use in the field of pain management,
Distributor may terminate this Agreement by giving at least ninety (90) days'
written notice to such New VFS at any time during the six (6)-month period
following the effective date of such transaction. The notice and cure periods in
this Paragraph 2.1 shall not apply to Distributor's failure to satisfy its
minimum purchase requirements or payment of the shortfall amount as set forth in
Section I, Paragraph 1.7.

         2.2      Either party, at its election, may declare the other party
to be in default under the Agreement and, without prejudice to any of its rights
hereunder, may forthwith terminate the Agreement by written notice to the other
party in the event the other party (i) makes a general assignment for the
benefit of creditors, (ii) has a receiver of all or substantially all of its
assets appointed, (iii) files a voluntary petition for reorganization or other
arrangement or in bankruptcy under the U.S. bankruptcy laws, or (iv) is declared
insolvent.

         2.3      Notwithstanding anything to the contrary in this Agreement,
any termination of this Agreement will not affect any rights of either party
arising under this Agreement prior to such termination. In addition each party
shall have all rights and remedies available to it at law or equity, except as
limited by the terms of , Section III, Paragraph 2.4, below.

         2.4      NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY,
EACH PARTY HERETO WAIVES ANY CLAIM TO PUNITIVE DAMAGE OR EXEMPLARY DAMAGES FROM
THE OTHER. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, EACH
PARTY HERETO WAIVES ANY CLAIM OF CONSEQUENTIAL DAMAGES FROM THE OTHER EXCEPT
WITH RESPECT TO ANY BREACH OF SECTION III, PARAGRAPH 3; IT BEING AGREED THAT A
PARTY MUST PROVE THE EXISTENCE OF, AND ITS ENTITLEMENT TO, CONSEQUENTIAL DAMAGES
WITH RESPECT TO A BREACH OF SECTION III, PARAGRAPH 3 IN ACCORDANCE WITH
APPLICABLE LAW.

3.       Confidential Information.

         3.1.     As used herein, "Confidential Information" shall mean the
Specifications, all know-how relating to the development, manufacture, sale or
use of any Product, including, without limitation, processes, techniques,
methods, products, apparatuses, biological materials and other materials and
compositions which are reasonably related thereto, the direct labor, direct
overhead and raw materials costs incurred in the manufacture of Product, the raw
material, and all other confidential or proprietary information that is reduced
to writing, marked as confidential and given to one party by the other party
relating to such other party or any of its affiliates, including information
regarding any of the products of such other party or any of its affiliates,
information regarding its advertising, distribution, marketing or strategic
plans or information regarding its costs, productivity or technological
advances. Neither party shall, during the term of this Agreement and for a
period of five (5) years following the termination or expiration of this

                                       16
<PAGE>

Agreement for any reason, use or disclose to third parties any Confidential
Information of the other (except to the extent reasonably necessary to exercise
its rights or comply with its obligations under this Agreement) and each party
shall insure that its employees, officers and agents shall not use or disclose
to third parties any Confidential Information of the other (except to the extent
reasonably necessary to exercise its rights or comply with its obligations under
this Agreement); provided, however, that Distributor and VFS may disclose
Confidential Information to their employees on a need to know basis provided
such persons are informed of the confidential nature of such information and are
under contractual obligation to not use the Confidential Information and to keep
such information confidential. Confidential Information shall not include
information that (i) was already known to the receiving party at the time of its
receipt thereof, as evidenced by its written records, (ii) is disclosed to the
receiving party after its receipt thereof by a third party who has a right to
make such disclosure without violating any obligation of confidentiality, (iii)
is or becomes part of the public domain through no fault of the receiving party
or (iv) is required to be disclosed to comply with applicable laws or
regulations or an order of a court or regulatory body having competent
jurisdiction.

         3.2      In the event that a party receives a subpoena which requires
the disclosure of Confidential Information, such party shall provide the other
party at least ten (10) days' written notice of such subpoena prior to the
return date, or as much advance notice as possible if the return date is in less
than ten (10) days, to allow the other party to move to quash such subpoena. The
party shall not disclose the Confidential Information during the notice period
and during the pendency of any motion to quash the subpoena.

         3.3      Title to all tangible forms of Confidential Information,
including any copies thereof, shall be and remain with discloser. The recipient
shall not copy or reproduce, in whole or in part, any Confidential Information
from the discloser without written authorization except as is necessary to
fulfill the purpose of this Agreement. Upon written request or termination of
this Agreement, all tangible forms of Confidential Information with exception of
an archive copy to be used solely for compliance with the recipient's
obligations under this Agreement or applicable law, shall be promptly returned
to the discloser or destroyed.

4.       Indemnification and Insurance.

         4.1      VFS shall indemnify and hold Distributor harmless against any
and all claims, suits, proceedings, expenses, attorney's fees, recoveries and
damages, including expenses of total or partial Recall of Products, caused by
defects in design, materials, or workmanship of the Products or based on a claim
that the Products (other than the Products designated as Developed Products on
Schedule A) or their use infringes upon the claim of a patent of a third party,
except to the extent caused by Distributor's distribution practices,
Distributor's advertising or promotional material for the Products that has not
been approved by VFS, misrepresentations by Distributor, use of the Product in
an application or an environment for which it was not designed or contemplated
hereunder, or modifications to, or improper repair of the Product. The
indemnification obligation, however, shall not apply if any Product is used in
conjunction with a device, instrument or product that is not approved for use
with the Product.

                                       17
<PAGE>

         4.2      VFS shall maintain product liability insurance (containing
either a vendor's endorsement or a contractual liability coverage) on Products
supplied by VFS with minimum limits of three million dollars
($3,000,000.00)/five million dollars ($5,000,000.00) and shall furnish to
Distributor, within thirty (30) days after the Effective Date of this Agreement,
a certificate of insurance by the carrier including the foregoing endorsements,
coverage and limits providing that such insurance may not be cancelable without
at least thirty (30) days prior notice to Distributor.

         4.3      Distributor shall indemnify and hold VFS harmless against any
and all claims, suits, proceedings, expenses, recoveries and damages, including
expenses of total or partial Recall of Products caused by Distributor's
distribution practices or Distributor's advertising or promotional material for
the Products, which advertising or promotional material has not been approved by
VFS, or misrepresentations of the Products by Distributor or damage to the
Products caused by unauthorized repair or modification of the Products by
Distributor.

5.       No Transfer of Patent and Know-How.

         Nothing in this Agreement constitutes or shall be construed as a
transfer to Distributor of any of the patents, intellectual property rights,
trade secrets or know-how of VFS relating to the Products or any other products
or products-in-development of VFS or a license for Distributor to use such
patents, intellectual property rights, trade secrets or know-how.

6.       Representations, Warranties and Agreements of VFS

         6.1      VFS is a corporation duly organized and validly existing in
good standing under the laws of Pennsylvania. VFS has the corporate power to
execute, deliver and perform this Agreement.

         6.2      The execution and delivery of this Agreement by VFS does not,
and the performance of VFS's obligations hereunder will not, violate any
provision of the organization documents of VFS or violate any provision of, or
result in a breach of any of the terms or provisions of or the acceleration of
any of the obligations under, or constitute a default under, any mortgage,
lease, agreement, instrument, order, arbitration award, judgment or decree to
which VFS is a party or to which VFS or its assets, properties or business are
subject to on the date hereof. This Agreement is a valid and binding agreement
of VFS enforceable against it in accordance with its terms.

         6.3      VFS is not party to any agreement with or obligation to any
third-party or any other legally binding commitment of any kind or nature
whatsoever that would, in the reasonable opinion of VFS, adversely affect VFS'
ability to perform the terms of this Agreement.

         6.4      No approval of any person, entity or government authority is
necessary with respect to the execution, delivery and performance by VFS of this
Agreement.

                                       18
<PAGE>

         7.       Representations, Warranties and Agreements of Stryker.

         7.1      Stryker is a corporation duly organized and validly existing
in good standing under the laws of Michigan. Stryker has the corporate power to
execute, deliver and perform this Agreement.

         7.2      The execution and delivery of this Agreement by Stryker does
not, and the performance of Stryker's obligations hereunder will not, violate
any provision of the organization documents of Stryker or violate any provision
of, or result in a breach of any of the terms or provisions of or the
acceleration of any of the obligations under, or constitute a default under, any
mortgage, lease, agreement, instrument, order, arbitration award, judgment or
decree to which Stryker is a party or to which Stryker or its assets, properties
or business are subject to on the date hereof. This Agreement is a valid and
binding agreement of Stryker enforceable against it in accordance with its
terms.

         7.3      Stryker is not party to any agreement with or obligation to
any third-party or any other legally binding commitment of any kind or nature
whatsoever that would, in the reasonable opinion of Stryker, adversely affect
Stryker's ability to perform the terms of this Agreement.

         7.4      No approval of any person, entity or government authority is
necessary with respect to the execution, delivery and performance by Stryker of
this Agreement.

8.       Miscellaneous.

         8.1      This Agreement is not intended to create a partnership,
association, joint venture or unincorporated business between VFS and
Distributor, or any other type of entity which could be determined to be
obligated to file tax or reporting returns pursuant to the Internal Revenue Code
(or similar taxing laws of any county or U.S. State). Except as otherwise
provided herein, each party hereto shall be responsible for the payment of all
expenses or obligations incurred by it, including payments of withholding,
social security, or other taxes or charges applicable to its employees,
consultants, or contractors. Except as provided herein, neither party shall have
the right to make any agreement in the name of the other party, nor obligate the
other party to pay any amount, perform any act, or incur any liability or
obligation.

         8.2      Except as specifically agreed to in writing, each party shall
bear all cost and expenses which it incurs in connection with this Agreement.

         8.3      Except as provided below, this Agreement may only be assigned
with the prior written consent of the other party, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, (i) a business combination
transaction that results in another person or entity (a "New VFS") becoming the
owner of in excess of 35% of VFS' voting securities, whether through a merger or
sale of stock, or acquiring all or substantially all of the assets of VFS, or
otherwise obtaining effective operating control of VFS or (ii) any other change
in VFS' stockholders shall not constitute an assignment of this Agreement by VFS
that requires Distributor's consent provided that VFS obtains the written
agreement of any New VFS to be bound by this Agreement as was VFS. In the event
of any permitted assignment pursuant to this Paragraph 8.3, the assignee,

                                       19
<PAGE>

including without limitation a New VFS (the "Permitted Assignee"), shall
automatically be entitled to the benefits and terms of this Agreement as was the
assignor from and after the date of such assignment and shall automatically be
obligated as was the assignor as to all obligations then accrued or thereafter
to accrue under this Agreement.

         8.4      No amendment of modification or addition hereto shall be
effective or binding on either of the parties hereto unless or until the same is
reduced to writing and signed by both parties.

         8.5      This Agreement, together with its Schedules and Exhibit,
embodies the entire understanding between the parties regarding the subject
matter hereof and supersede any and all prior understandings and agreements
relating to such subject matter.

         8.6      The validity and interpretation of this Agreement shall be
governed by the laws of the State of New York. Any disputes or contentions
arising in connection with this Agreement between the parties shall, if
possible, be settled in an amicable way. If, however, no understanding is
reached, such disputes and contentions shall be exclusively and finally settled
by binding arbitration before three (3) arbitrators in accordance with the rules
of the American Arbitration Association. All arbitrations shall take place in
New York, New York.

         8.7      If the performance of this Agreement or any obligation
hereunder, except the making of payments hereunder, is prevented, restricted or
interfered with by reason of fire, flood, earthquake, explosion or other
casualty or accident; strikes or labor disputes; inability to procure parts,
supplies or power; war or other violence; any law, order, proclamation,
regulation, ordinance, demand or requirement of any government agency; or any
other act or condition whatsoever beyond the reasonable control of the affected
party, the party so affected, upon giving prompt notice to the other party,
shall be excused from such performance to the extent of such prevention,
restriction or interference; provided, however, such prevention, restriction or
interference does not continue for more than one hundred and twenty (120) days
and provided that the party so affected shall take all reasonable steps to avoid
or remove such causes of nonperformance and shall resume performance hereunder
with dispatch whenever such causes are removed prior to such one hundred and
twenty (120) days. This Paragraph 8.7 shall not be applicable to the failure of
VFS to supply or deliver, or for any delay in the delivery of, the Products,
which failure or delay shall be covered by Section II, Paragraph 5.2.

         8.8      It is expressly understood that the failure of either party to
enforce any rights arising from the failure of the other party to perform, or
perform properly, the other party's obligations hereunder shall not constitute a
waiver of its rights arising from such failure or improper performance, and that
enforcement of any right hereunder shall not preclude exercise of any other
remedies available at law. All rights and remedies, whether conferred hereby or
by any other instrument or by law shall be cumulative, and may be exercised
singularly or concurrently.

         8.9      If any provision of the Agreement is held invalid by law,
rule, order, or regulation of any government or by the final determination of
any court of the United States, such invalidity shall not affect the
enforceability of any other provision in this Agreement not held to be invalid.

                                       20
<PAGE>

         8.10     This Agreement may be signed in counterparts; each counterpart
shall constitute an original document, but all of which shall constitute one
instrument. This Agreement may be duly executed and delivered by a party by
execution and facsimile delivery of signature page of a counterpart to the other
party, provided that, in such case, the executing party shall promptly deliver a
complete counterpart that it has executed to the other party.

         8.11     Any press release or other disclosure to the public regarding
this Agreement and the transactions contemplated hereby shall be mutually agreed
upon by the parties hereto; provided, however, that either party may make any
such public announcement or disclosure that counsel advises in writing is
required by applicable securities laws or regulations or rules or agreements
with any stock exchange on which its shares are listed, in which case the party
making the announcement or disclosure shall inform the other party in advance of
the timing and proposed content and shall provide the other party with
reasonable opportunity to review and comment on any such required announcement
or disclosure.

         8.12     All notices and consents hereunder shall be in writing and
shall be deemed to have been properly given and to be effective on the date of
delivery if delivered in person, by one-day courier service or by facsimile
transmission (provided a copy is sent by one-day courier service) to the
respective address or facsimile number provided below or to such other address
or facsimile number as either party shall designate by written notice to the
other in such manner:

         To VFS:
         -------

         Valley Forge Scientific Corp.
         136 Greentree Road, Suite 100
         Oaks, Pennsylvania  19456
         Attention:  Michael Ritchie, Vice President-General Manager
         Facsimile: (610) 666-7565

         with a copy to:

         Russell U. Schenkman, Esq.
         Schenkman Jennings & Howard, LLC
         13 Roszel Road, Suite C-225
         Princeton, New Jersey  08540
         Facsimile: (609) 799-1555

         To Distributor:
         ---------------

         Stryker Corporation
         Stryker Instruments Division
         4100 East Milham Avenue
         Kalamazoo, Michigan 49001-6197
         Attn:  Dave Koldyke, Vice President, Finance  and Accounting
         Facsimile:  269-324-5331

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<PAGE>

         with a copy to:

         John H. Denne, Esq.
         Winston & Strawn LLP
         200 Park Avenue
         New York, New York  10166
         Facsimile:  (212) 294-4700

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the Effective Date by their duly authorized officers.

Stryker Corporation                          Valley Forge Scientific Corp.


By: /s/ CURT HARTMAN                         By: /s/ JERRY L. MALIS
    ---------------------------                  -----------------------------

Title: President                             Title: President

Date: October 25, 2004                       Date: October 25, 2004

                                       22