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                                 ECHOCATH, INC.

                             SUBSCRIPTION AGREEMENT

Echocath Inc.
P.O. Box 7224
Princeton, New Jersey 08543
Attention: Frank DeBernardis, President

Gentlemen:

I.  Subscription.  The  undersigned,  intending  to  be  legally  bound,  hereby
irrevocably  agrees to purchase from  Echocath,  Inc., a New Jersey  corporation
(the  "Company"),  the number of shares (the "Shares") of the Company's Series B
Cumulative Convertible Preferred Stock (the "Preferred Stock"), set forth on the
signature page hereof, at a purchase price of $5.00 per Share.

II. Payment. The undersigned will pay for the subscription on the date hereof by
check payable in U.S.  dollars or by wire transfer in U.S. dollars to an account
designated by the Company.  The Company will file a Certificate of Amendment for
the  Preferred  Stock in the form of  Exhibit A  attached  hereto and will issue
certificates representing the Shares within 30 days of the date hereof.

III. Acceptance of Subscription. The undersigned understands and agrees that the
Company in its sole discretion reserve the right to accept or reject this or any
other  subscription  for  Shares,  in whole or in  part,  notwithstanding  prior
receipt by the  undersigned  of notice of acceptance of this  subscription.  The
Company  shall have no obligation  hereunder  until the Company shall accept and
agree to the terms of this Subscription Agreement, as evidenced by the execution
and  delivery  to the  undersigned  of an  executed  copy of  this  Subscription
Agreement.  If  this  subscription  is  rejected  in  whole,  this  Subscription
Agreement and all funds received from the undersigned  will be returned  without
interest or deduction, and this Subscription Agreement shall thereafter be of no
further force or effect. If this subscription is rejected in part, the funds for
such rejected portion of this  subscription will be returned without interest or
deduction, and this Subscription Agreement shall continue in force and effect to
the extent this subscription was accepted.

IV.  Representations  and  Warranties.   The  undersigned  hereby  acknowledges,
represents, warrants to and agrees with the Company as follows:

      (a) None of the Shares are registered under the Securities Act of 1933, as
      amended  (the  "Securities   Act")  or  any  state  securities  laws.  The
      undersigned  understands  that  the  offering  and sale of the  Shares  is
      intended  to be exempt  from  registration  under the  Securities  Act, by
      virtue  of  Section  4(2)  and  the  rules  and  regulations   promulgated
      thereunder,  based,  in part,  upon the  representations,  warranties  and
      agreements contained in this Subscription Agreement;

      (b) The undersigned has access to the same kind of information which would
      be available in  registration  statements  filed by the Company  under the
      Securities Act;

      (c) Neither the Securities and Exchange  Commission (the "Commission") nor
      any state securities  commission has approved the Shares offered or passed
      upon or  endorsed  the merits of the  offering,  and the  offering  of the
      Shares has not been  reviewed by any  Federal,  state or other  regulatory
      authority;





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      (d) The  undersigned  acknowledges  that  prior to the date  hereof it has
      received  and  reviewed  a copy of the  Company's  annual  report  on Form
      10-KSB, which annual report is attached hereto as Exhibit B;

      (e) The undersigned  acknowledges that all documents,  records,  and books
      pertaining to the  investment  in the Shares have been made  available for
      inspection by it, its attorney,  accountant,  purchaser  representative or
      tax advisor (collectively, the "Advisors");

      (f) The undersigned and the Advisors have had a reasonable  opportunity to
      ask  questions of and receive  answers from a person or persons  acting on
      behalf of the Company  concerning  the offering of the Shares and all such
      questions have been answered to the full  satisfaction  of the undersigned
      and its Advisors;

      (g) In evaluating  the  suitability  of an investment in the Company,  the
      undersigned has not relied upon any  representation  or other  information
      (oral or  written)  other than as  contained  in  documents  or answers to
      questions so furnished to the undersigned or its Advisors by the Company;

      (h) The  undersigned  is unaware of, and in no way relying on, any form of
      general  solicitation or general  advertising in connection with the offer
      and sale of the Shares;

      (i) The undersigned  has such knowledge and experience in financial,  tax,
      and business  matters so as to enable it to utilize the  information  made
      available to it in connection  with the offering of the Shares to evaluate
      the  merits  and  risks  of an  investment  in the  Shares  and to make an
      informed investment decision with respect thereto;

      (j) The  undersigned is not relying on the Company  respecting the tax and
      other  economic  considerations  of an investment  in the Shares,  and the
      undersigned  has relied on the advice of, or has consulted  with, only its
      own Advisors;

      (k) The undersigned is acquiring the Shares solely for its own account for
      investment  and  not  with  a view  to  resale  or  distribution  and  the
      undersigned will not sell or transfer the Shares until they are registered
      for  resale  under  the  Securities  Act  or  an  exemption  therefrom  is
      available;

      (l)  The  undersigned  must  bear  the  economic  risk  of the  investment
      indefinitely  because  none of the  Shares  may be sold,  hypothecated  or
      otherwise  disposed of unless  subsequently  registered  under the Act and
      applicable  state  securities  laws or an exemption from  registration  is
      available.  Legends  shall be placed on the Shares to the effect that they
      have not been  registered  under the  Securities  Act or applicable  state
      securities laws and appropriate  notations thereof will be made in each of
      the Company's stock books;

      (m) The undersigned has adequate means of providing for the  undersigned's
      current needs and foreseeable  personal  contingencies and has no need for
      the undersigned's investment in the Shares to be liquid;

      (n) The  undersigned is aware that an investment in the Shares  involves a
      number  of very  significant  risks  and is able to bear  the  loss of its
      entire investment;

      (o) The  undersigned  represents  that it was not formed for the  specific
      purpose of acquiring the Shares, such entity is validly existing under the
      laws  of  the  state  of  its   organization,   the  consummation  of  the
      transactions  contemplated hereby is authorized by, and will not result in
      a violation of state law or its charter or other organizational documents,
      such entity has full power and authority to execute and

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      deliver this  Subscription  Agreement and all other related  agreements or
      certificates  and to carry out the  provisions  hereof and  thereof,  this
      Subscription  Agreement has been duly authorized by all necessary  action,
      this Subscription Agreement has been duly executed and delivered on behalf
      of such  entity  and is a legal,  valid  and  binding  obligation  of such
      entity.

V.  Indemnification.  The undersigned agrees to indemnify and hold harmless each
of the Company,  their respective officers,  directors,  employees,  agents, and
affiliates  against all  losses,  liabilities,  claims,  damages,  and  expenses
(including,  but not limited to, any and all expenses incurred in investigating,
preparing,  or defending against any litigation commenced or threatened) arising
out of any false  representation or warranty or breach by the undersigned of any
Agreement  herein or in any other  document  delivered in  connection  with this
Subscription Agreement.

VI.   Registration of the Shares.

         (a)  Piggyback Registration Rights.

              (i) If, at any time commencing after the date of this Subscription
Agreement and expiring five (5) years thereafter, the Company proposes to file a
registration  statement or statements  under the  Securities  Act for the public
sale of the Company's Class A Common Stock,  no par value (the "Common  Stock"),
for cash (other than in  connection  with a merger or pursuant to Form S-4, Form
S-8 or comparable  registration statement) it will give written notice, at least
thirty (30) days prior to the filing of each such registration statement, to the
undersigned of its intention to do so. If the  undersigned  notifies the Company
in writing within ten (10) business days after receipt of any such notice of its
desire to  include  the  shares of the Common  Stock,  which may be issued  upon
conversion  of the Shares (the "Common  Shares") in such  proposed  registration
statement,  the Company shall afford the undersigned the opportunity to have the
Common Shares registered under such registration statement;  provided,  however,
that in the  case of an  underwritten  offering,  if the  Company  notifies  the
undersigned  in writing  that the  managing  underwriter  of such  offering  has
notified the Company that the  inclusion  in the  registration  statement of any
portion of the Common Shares would have an adverse  effect on such  underwritten
offering, then the managing underwriter may limit the number of Common Shares to
be included in such registration statement only to the extent necessary to avoid
such adverse effect; provided, further, however, that in the event any shares of
Common Stock issued  pursuant to any of the  securities  issued in the Company's
initial  public  offering  ("IPO   Securities")  are  to  be  included  in  such
underwritten  offering,  and the managing  underwriter  shall have determined to
limit the number of Common Shares or IPO Securities to be so included, then such
limitation  shall be applied to the Common  Shares and the IPO  Securities,  pro
rata based on the number of Common  Shares and IPO  Securities  requested  to be
included in such underwritten offering; and provided,  further, however, that in
the event  securities  of the Company,  other than IPO  Securities,  held by any
person or  entity  other  than the  Company  or the  undersigned  ("Third  Party
Securities") are to be included in such underwritten  offering, and the managing
underwriter  shall  have  determined  to limit the number of Common  Stock,  IPO
Securities  or Third Party  Securities to be so included,  then such  limitation
shall be applied to the Common  Shares,  the IPO  Securities and the Third Party
Securities, based on the number of Common Shares, IPO Securities and Third Party
Securities  requested to be included in such  underwritten  offering so that the
amount of Third Party  Securities are reduced by a percentage  which is twice as
great as the  percentage  which the  Common  Shares and the IPO  Securities  are
reduced.  Notwithstanding  the provisions of this Section VI(a)(i),  the Company
shall  have the  right at any time  after it shall  have  given  written  notice
pursuant to this Section VI(a)(i) (irrespective of whether a written request for
inclusion of any such securities shall

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have been made) to elect not to file any such proposed  registration  statements
or to  withdraw  the same  after  the  filing  but prior to the  effective  date
thereof.

              (ii)  Following the  effective  date of a  registration  statement
filed pursuant to Section VI(a)(i),  the Company shall, upon the written request
of the  undersigned,  forthwith  supply such reasonable  number of copies of the
registration  statement,  prospectus and other documents necessary or incidental
to the  registration  as shall be  reasonably  requested by the  undersigned  to
permit the undersigned to make a public  distribution of the Common Shares.  The
Company will use its reasonable efforts to qualify the Common Shares for sale in
such states as the undersigned shall reasonably  request,  provided that no such
qualification  will be required in any  jurisdiction  where,  solely as a result
thereof,  the  Company  would be  subject  to  general  service of process or to
taxation  or  qualification  as a foreign  corporation  doing  business  in such
jurisdiction.  The  obligations  of the Company  hereunder  with  respect to the
Common Shares are expressly  conditioned  on the  undersigned  furnishing to the
Company such appropriate  information  concerning the undersigned and the Common
Shares as the Company may reasonably request.

              (iii) The Company  shall bear the entire  cost and  expense of the
registration  of the  Common  Shares  pursuant  to Section  VI(a)(i);  provided,
however,  that the undersigned  shall be solely  responsible for the fees of any
counsel retained by the undersigned in connection with such registration and any
transfer taxes or underwriting discounts,  commissions or fees applicable to the
Common Shares sold by the undersigned pursuant thereto.

              (iv) Neither the filing of a registration statement by the Company
pursuant to this Section VI(a) nor the making of any request for prospectuses by
the  undersigned  shall impose upon the  undersigned  any obligation to sell the
Common Shares.

              (v) The undersigned,  upon receipt of notice from the Company that
an  event  has  occurred  which  requires  a   post-effective   amendment  to  a
registration  statement or a supplement to a prospectus included therein,  shall
promptly  discontinue  the  sale of the  Common  Shares  until  the  undersigned
receives a copy of a supplemented or amended prospectus from the Company,  which
the Company shall provide as soon as practicable after such notice.

              (vi)  Notwithstanding  anything else to the contrary  contained in
this  Subscription  Agreement,  if the  undersigned  requests to have any of the
Common  Shares  registered  under the  Securities  Act  pursuant to this Section
VI(a),  and if such Common  Shares are so  registered,  then this Section  VI(a)
shall be of no further force or effect.

         (b)  Demand Registration.

              (i) At any time commencing September 1, 1997 and expiring five (5)
years from the date of this Subscription  Agreement,  the undersigned shall have
the right (which right is in addition to the  registration  rights under Section
VI(a) hereof), exercisable by written notice to the Company, to have the Company
prepare and file with the Commission,  on one occasion, a registration statement
and such other  documents,  including a  prospectus,  as may be necessary in the
opinion of counsel for the Company,  in order to comply with the  provisions  of
the  Securities  Act, so as to permit a public  offering  and sale of the Common
Shares.

              (ii)  If  the  undersigned  exercises  its  registration  request,
pursuant to Section VI(b)(i) above,  between September 1st and November 1st (the
"Window  Period")  of any given  year,  the  registration  costs and filing fees
incurred in connection  with such  registration  (the "Costs")  shall be divided
evenly between the  undersigned  and the Company;  provided,  however,  that the
Costs payable by the undersigned shall be capped

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at $25,000.  If the undersigned  exercises such  registration  request on a date
outside of the Window  Period,  the Costs  shall be divided  evenly  between the
undersigned and the Company;  provided,  however,  that the Costs payable by the
undersigned  shall be capped at  $40,000.  Costs  shall not  include any amounts
payable  to the  undersigned's  counsel,  any  transfer  taxes  or  underwriting
discounts,  commissions or fees applicable to the Common Shares,  which shall be
payable  solely  by  the  undersigned.  Notwithstanding  the  foregoing,  if the
registration  statement  to which the Costs are  associated  is,  due  solely to
actions of the Company,  not declared  effective  by the  Commission  within six
months  from the date it is first  filed with the  Commission,  then the Company
shall pay all Costs associated with such registration statement.

              (iii) In connection  with any  registration  under  Section  VI(b)
hereof, the Company covenants and agrees as follows:

                   a.  The  Company  shall  use  its  best  efforts  to  file  a
registration statement within sixty (60) days of receipt of any demand therefor,
except that if such demand is made during the Window  Period,  the Company shall
use its best efforts to file a registration  statement within 60 days of the end
of the  Window  Period,  shall  use its best  efforts  to have any  registration
statements  declared  effective at the earliest possible time, and shall furnish
the undersigned  such number of  prospectuses as shall  reasonably be requested;
provided,  however, that the Company may, at any time, delay the filing or delay
or suspend the effectiveness of such demand  registration or, without suspending
such effectiveness, instruct the undersigned not to sell any securities included
in such demand  registration,  (i) if the Company shall have determined upon the
written advice of counsel (confirmation of which notice shall be provided to the
undersigned  in writing by such  counsel)  that the Company would be required to
disclose any actions  taken or proposed to be taken by the Company in good faith
and for valid business reasons, including without limitation, the acquisition or
divestiture of assets,  which disclosure would have a material adverse effect on
the  Company  or on such  actions,  or (ii) if  required  by law,  to update the
prospectus  relating  to any such  registration  to  include  updated  financial
statements (a  "Suspension  Period") by providing the  undersigned  with written
notice of such Suspension Period and the reasons therefor; and provided further,
that the Suspension  Periods,  in the aggregate,  do not exceed sixty (60) days.
The Company  shall provide such notice as soon as  practicable  and in any event
prior to the  commencement of such a Suspension  Period.  The obligations of the
Company hereunder with respect to the Common Shares are expressly conditioned on
the  undersigned   furnishing  to  the  Company  such  appropriate   information
concerning the  undersigned  and the Common Shares as the Company may reasonably
request.

                   b. The Company  agrees  that it will use its best  efforts to
maintain the  effectiveness  of any  registration  statement  filed  pursuant to
Section  VI(b)  hereof  for a period of 1 year from the  effective  date of such
registration statement.

                   c. The Company  will take all  necessary  action which may be
required  in  qualifying  or  registering   the  Common  Shares  included  in  a
registration  statement  for offering and sale under the  securities or blue sky
laws of such states as  reasonably  are requested by the  undersigned,  provided
that the Company  shall not be obligated to execute or file any general  consent
to service of process  or to  qualify as a foreign  corporation  to do  business
under the laws of any such jurisdiction.

         (iv)  Neither  the filing of a  registration  statement  by the Company
pursuant to this Section VI(b) nor the making of any request for prospectuses by
the  undersigned  shall impose upon the  undersigned  any obligation to sell the
Common Shares.

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         (v) The  undersigned,  upon  receipt of notice from the Company that an
event has occurred which requires a  post-effective  amendment to a registration
statement  or a supplement  to a prospectus  included  therein,  shall  promptly
discontinue the sale of the Common Shares until the undersigned  receives a copy
of a  supplemented  or amended  prospectus  from the Company,  which the Company
shall provide as soon as practicable after such notice.

VII.     Registration Indemnification.

         (a) The Company shall indemnify and hold harmless the undersigned  from
and against any and all losses,  claims,  damages and liabilities  caused by any
untrue  statement of a material  fact  contained in any  registration  statement
covering the Common  Shares filed by the Company under the  Securities  Act, any
post-effective  amendment  to such  registration  statement,  or any  prospectus
included  therein  required to be filed or  furnished by reason of Section VI of
this  Subscription  Agreement  or  caused  by any  omission  to state  therein a
material fact required to be stated  therein or necessary to make the statements
therein not  misleading,  except,  insofar as such  losses,  claims,  damages or
liabilities  are caused by any such  untrue  statement  or  omission  based upon
information  furnished  or required to be furnished in writing to the Company by
the undersigned  expressly for use therein,  which indemnification shall include
each person, if any, who controls the undersigned within the meaning of the Act;
provided,  however,  that the  indemnification  in this  paragraph  VII(a)  with
respect to any prospectus  shall not inure to the benefit of the undersigned (or
to the benefit of any person controlling the undersigned) on account of any such
loss,  claim,  damage or liability arising from the sale of the Common Shares by
the  undersigned,  if a copy of a subsequent  prospectus  correcting  the untrue
statement or omission in such earlier prospectus was provided to the undersigned
by the Company prior to the subject sale and the  subsequent  prospectus was not
delivered or sent by the  undersigned  to the purchaser  prior to such sale; and
provided  further,  that the Company  shall not be obligated to so indemnify the
undersigned  or other person  referred to above unless the  undersigned or other
person,  as the case may be, shall at the same time  indemnify the Company,  its
directors,  each officer signing such registration statement and each person, if
any, who controls the Company within the meaning of the Securities Act, from and
against any and all losses, claims, damages and liabilities caused by any untrue
statement of a material  fact  contained  in such  registration  statement,  any
registration  statement or any  prospectus  required to be filed or furnished by
reason of this Subscription Agreement or caused by any omission to state therein
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements therein not misleading,  insofar as such losses,  claims,  damages or
liabilities  are  caused  by  any  untrue   statement  or  omission  based  upon
information furnished in writing to the Company by the undersigned expressly for
use therein.

         (b) If for any reason the indemnification provided for in the preceding
subparagraph  is held by a court of competent  jurisdiction to be unavailable to
an  indemnified  party with  respect to any loss,  claim,  damage,  liability or
expense  referred  to  therein,   then  the  indemnifying   party,  in  lieu  of
indemnifying such indemnified  party thereunder,  shall contribute to the amount
paid or payable by the indemnified party as a result of such loss, claim, damage
or  liability  in such  proportion  as is  appropriate  to reflect  not only the
relative benefits received by the indemnified party and the indemnifying  party,
but also the relative fault of the indemnified party and the indemnifying party,
as well as any other relevant equitable considerations.

VIII. Board Seat. If at any time, through the date which is three years from the
date of this Subscription  Agreement, a seat on the Company's Board of Directors
(the  "Board")  shall become  vacant,  for whatever  reason,  and if the Company
determines,  in its sole  discretion,  to fill such vacant Board seat,  then the
Company shall notify the undersigned and the undersigned  shall have thirty (30)
days following such

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notification  to provide the Company with the name of an individual to fill such
Board seat. If the Company approves such individual, which approval shall not be
unreasonably  withheld,  then the  Company  shall elect such  individual  to the
Board. If such  individual is not approved then the  undersigned  shall have the
right to submit the names of additional  individuals until one is elected to the
Board. Once one individual  nominated by the undersigned is elected to the Board
the undersigned shall not have the right to nominate any additional  individuals
to the Board.

IX.  Series A Preferred  Stock.  The Company  hereby  represents  that there are
currently  no shares  of the  Company's  Series A  Convertible  Preferred  Stock
("Series A Stock") issued and/or  outstanding  and the Company hereby  covenants
that it will not issue any shares of Series A Stock  while  there are any shares
of the Preferred Stock issued and outstanding.

X.  Irrevocability;  Binding Effect.  The undersigned  hereby  acknowledges  and
agrees that the subscription hereunder is irrevocable by the undersigned, except
as  required by  applicable  law,  and that this  Subscription  Agreement  shall
survive the death or disability of the undersigned and shall be binding upon and
inure to the benefit of the parties and their heirs, executors,  administrators,
successors, legal representatives,  and permitted assigns. If the undersigned is
more than one person,  the  obligations of the  undersigned  hereunder  shall be
joint  and  several  and  the  agreements,   representations,   warranties,  and
acknowledgments  herein  shall be deemed to be made by and be binding  upon each
such  person  and  his  heirs,  executors,  administrators,   successors,  legal
representatives, and permitted assigns.

XI.  Modification.  This Subscription  Agreement shall not be modified or waived
except by an  instrument  in writing  signed by the party  against whom any such
modification or waiver is sought.

XII.  Notices.  Any notice or other  communication  required or  permitted to be
given  hereunder  shall be in  writing  and shall be mailed by  certified  mail,
return receipt  requested,  or delivered against receipt to the party to whom it
is to be given (a) if to either of the Company,  at the address set forth above,
or (b) if to the  undersigned,  at the address set forth on the  signature  page
hereof  (or,  in either  case,  to such other  address  as the party  shall have
furnished in writing in accordance  with the  provisions of this Section X). Any
notice or other  communication  given by certified mail shall be deemed given at
the time of  certification  thereof,  except  for a notice  changing  a  party's
address which shall be deemed given at the time of receipt thereof.

XIII.  Assignability.  Following the initial purchase of the Shares,  the rights
and obligations hereunder are assignable by the undersigned;  provided, however,
that  anyone to whom this  Subscription  Agreement  is  assigned  must  agree in
writing to be bound by all of the terms and provisions hereof but the rights and
obligations of the undersigned under Section VIII of this Subscription Agreement
are not transferable or assignable.

XIV.  Applicable  Law.  This  Subscription  Agreement  shall be  governed by and
construed  in  accordance  with the  internal  laws of the  State of New  Jersey
without regard to its conflicts of laws principles.

XV. Blue Sky Qualification. The Sale of the Shares is expressly conditioned upon
the  exemption  from  qualification  of the  offer and sale of the  Shares  from
applicable  Federal and state securities laws. The Company shall not be required
to qualify this transaction  under the securities laws of any jurisdiction  and,
should  qualification  be necessary,  the Company shall be released from any and
all obligations to maintain its offer, and may rescind any sale  contracted,  in
the jurisdiction.

XVI. Counterparts.  This Subscription Agreement may be executed in any number of
counterparts,  all of which taken  together  shall  constitute  one and the same
instrument and any of the parties hereto may execute

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this  subscription by signing any of such counterpart and delivering the same by
telex, telecopy,  telegraph, cable or otherwise in writing (each delivery by any
of such means to be deemed to be "in writing" for purposes of this  Subscription
Agreement).

XVII. Use of Pronouns. All pronouns and any variations thereof used herein shall
be deemed to refer to the masculine, feminine, neuter, singular or plural as the
identity of the person or persons referred to may require.

         IN WITNESS  WHEREOF,  the  undersigned  has executed this  Subscription
Agreement this 27th day of February, 1997.

Number of Shares Subscribed:   280,000 Shares of Preferred Stock
Total Subscription Amount:       $1,400,000

                                             EP MEDSYSTEMS, INC.

                                             By:
                                                 ------------------------------
                                                  Name:
                                                  Title:

                                             Taxpayer Identification Number

                                             ----------------------------------

                                             ----------------------------------

                                             Address

                                             ACCEPTED AND AGREED

                                             ECHOCATH, INC.

                                             By:
                                                 ------------------------------
                                                  Name:
                                                  Title:

                                             Date: February 27, 1997

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