JOINT VENTURE/STOCKHOLDERS' AGREEMENT

         JOINT  VENTURE/STOCKHOLDERS'  AGREEMENT,  made and entered  into on the
dates of the respective  signatures set out below among Lukens Medical  Products
Private  Limited,  a company  registered  under the Companies Act, 1956, laws of
India  and  limited  by  shares  acting  through  _________________its  Managing
Director  and  constituted  attorney  Sri___________  and having its  registered
office at Plot No. 7 in Cochin Export Processing Zone,  Kakkanad,  Cochin, India
(hereinafter called the "Company") and the stockholders of the Company listed on
attached Schedule A, acting through those  representatives set out on Schedule A
(the "Stockholders").

                                   Background

         The  Stockholders  are desirous of organizing and acquiring an interest
in the Company  under the laws of India to engage in the  manufacture  of modern
syringes and hypodermic  needles in India and to set out in this Agreement their
respective rights,  powers,  duties and obligations with respect to the creation
and operation of the Company and their ownership of the shares of the Company.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants contained in this Agreement, the parties agree as follows:

                                    Section 1

                                   Definitions

        1.1 Defined  Terms.  Capitalized  terms used in this  Agreement  and not
defined elsewhere are defined in the attached Glossary.

                                    Section 2

                             Organization of Company

        2.1  Organization  Of  Company.   The  Company  has  been  organized  in
accordance with Organization Documents substantially in the form


<PAGE>



attached  hereto as Exhibit A and in  accordance  with all  applicable  laws and
regulations,  including  the  1992-1993  U.S./India  Treaty,  and the  rules and
regulations  of the Reserve  Bank of India  ("RBI") and all laws  regulating  or
pertaining to the issuance of shares of stock in the Company.

        2.2 Capital of  Company.  The initial  authorized  share  capital of the
Company  is Rs.  3,00,00,000/-  (Rupees  Three  Crores  only)  and  each  of the
Stockholders  shall  contribute  the  following  amounts to the  Company for the
following number of shares:

                  (a) Lukens has  contributed or will  contribute to the Company
cash or property in the amount of U.S. Eight Hundred Thousand Dollars ($800,000)
and  preincorporation  services  in  exchange  for that  number of shares of the
Company  stock,  which  at  Closing  shall  constitute  70%  of the  issued  and
outstanding stock of the Company;

                  (b) S.A.  Diagnostics  shall  contribute  to the  Company  the
equipment listed on attached Schedule B (the "Equipment")  having a value in the
amount of U.S. Three Hundred  Thousand  Dollars  ($300,000) in exchange for that
number of shares of the Company stock, which at Closing shall constitute 15 % of
the issued and outstanding stock of the Company;

                  (c) Superior  Medical Supplies shall contribute to the Company
the amount of U.S. One Hundred Thousand Dollars  ($100,000) in exchange for that
number of shares of the Company stock,  which at Closing shall constitute 5 % of
the issued and outstanding stock of the Company; and

                  (d) PENPOL shall contribute to the Company its promissory note
in the amount of U.S. Two Hundred  Thousand  Dollars  ($200,000) in exchange for
that number of shares of the Company stock, which at Closing shall constitute 10
% of the issued and outstanding stock of the Company.

        2.3 Closing.  The contributions to the Company described in Section 2.2,
above  shall occur at a closing to be held at a time and place  mutually  agreed
upon by the Parties, on or before February 28, 1997


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unless such date of closing is extended by the mutual consent of the Parties. At
or prior to the Closing:

                  (a)  each  Stockholder  shall  make  its  contribution  to the
Company as provided in Section 2.2, above;

                  (b) the Company  shall  issue a  certificate  or  certificates
representing  the Shares to be issued to each  Stockholder  under  Section  2.2,
above; and

                  (c)  the  parties  shall  execute  such  other  documents  and
instruments  necessary or desirable  for the  consummation  of the  Contemplated
Transactions and to conform to any legal requirement.

                  (d) the rights and  obligations  of the parties at Closing and
under  this  Agreement  are  subject  to any  rules  and  regulations  of Indian
government  authorities,  including,  but not  limited to the RBI,  the  Foreign
Investment Board and SEBI.

         2.4 Company Operations.  Subject always to the business judgment of the
Company's  Board of Directors and management,  the Company and the  Stockholders
anticipate  that the  Company  will use  reasonable  efforts to  accomplish  the
following:

                  (a) in order to take  advantage of the business  expertise and
experience of the  Stockholders,  the Company wit(,  from time to time,  consult
with the Stockholders, either individually or collectively,  regarding strategic
planning and direction related to the business of the Company;

                  (b)  within  two (2)  years  of the  date  of this  Agreement,
research and make a recommendations to the Stockholders with respect to possible
advantages and  disadvantages of  incorporation of the Company's  business under
the laws of a political jurisdiction other than India; and

                  (c)  when  and  if  determined  appropriate  in  the  business
judgment of the Company's  Board of Directors and when permitted  under the laws
governing the operation of the Company, consider the declaration


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and payment of  dividends in such amounts and at such times that will not impair
the Company's  operations.  The Company and the  Stockholders  do not anticipate
that the Company  will be in a position to declare and pay any  dividends  for a
period of at least two (2) years from the date of this Agreement, and thereafter
only at such  times  and in such  amounts  as are  commercially  reasonable  and
prudent in the business judgment of the Company's Board of Directors considering
the business needs of the Company.

                                    Section 3

                        Other Commitments and Agreements

         3.1 Transfer of Acquired Indian Assets by Lukens.  Lukens has purchased
certain  assets  of  Affiliated  Medical  Equipments,  Ltd.  from  Kerala  State
Industrial  Development  Corporation  Ltd.,  acting  for itself and on behalf of
Kerala Financial Corporation,  State Bank of Travancore and State Bank of Mysore
under that  Agreement  dated  January 7, 1997,  a copy of which is  attached  as
Exhibit B. (the "KSIDC Purchase Agreement").  At or prior to the Closing, Lukens
will  transfer  to the  Company  all of the assets so  acquired  under the KSIDC
Purchase  Agreement as a part of its  contribution  to the Company under Section
2.2(a),  above.  Notwithstanding  the  foregoing,  Lukens shall provide the Bank
Guarantee referenced in the KSIDC Purchase Agreement.

         3.2 Bank Guarantees.  Each Stockholder does hereby guarantee to Sunwest
Bank of Albuquerque,  N.A., Albuquerque, New Mexico ("Sunwest") that the Company
and Lukens'  wholly-owned New Mexico subsidiary shall promptly and fully pay any
and all indebtedness,  of any kind or nature whatsoever, which now exists or may
hereafter arise or accrue in any manner from Company or Lukens' wholly-owned New
Mexico subsidiary to Sunwest related to that certain loan specifically described
on attached Exhibit C, including renewals,  extensions and modifications thereof
and  interest  or  other  charges  accruing  thereon.   All  such  indebtedness,
liabilities  and  obligations  of Company  and Lukens'  wholly-owned  New Mexico
subsidiary to Sunwest are hereinafter  called the "Guaranteed  Obligations."  If
Company  or Lukens'  wholly-owned  New  Mexico  subsidiary  fails at any time to
promptly pay or perform any of the Guaranteed


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Obligations when due, by acceleration or otherwise,  each Stockholder  promises,
to the extent of such Stockholder's  Proportionate  Share, to pay or perform the
same when due  immediately  upon demand,  together with: (i) such  Stockholder's
Proportionate  Share of  attorneys'  fees,  court costs and other  out-of-pocket
expenses  incurred by reason of Company's  default  and;  (ii) the amount of all
actual 'attorneys' fees, court costs and other  out-of-pocket  expenses incurred
in establishing and enforcing payment against such Stockholder.  As used in this
Section  3.2,  the  term  "Proportionate  Share"  means an  amount  equal to the
percentage of the  Guaranteed  Obligations  that is equal to such  Stockholder's
percentage  ownership  of Stock of the  Company.  As of the  date  hereof,  each
Stockholder's  Proportionate Share of the Guaranteed Obligations is set forth on
attached  Exhibit D. At Closing,  and  thereafter,  each  Stockholder  agrees to
execute and deliver any and all agreements,  documents and instruments which may
be required by Sunwest to evidence the  guarantee  provided for  hereunder.  The
guarantees of the  Stockholders  hereunder  shall apply only with respect to the
specific  indebtedness  described on Exhibit C, and shall not apply to any other
indebtedness of the Company or of Lukens or its subsidiaries.

         The parties acknowledge,  understand and agree that the loan referenced
in this  Section 3.2  secures a standby  letter of credit for the benefit of the
Company and such loan,  if required to be drawn upon,  is an  obligation  of and
will be  repaid  by the  Company  out of  assets  of the  Company  and  that the
guarantees herein are guarantees that the Company will repay such loan.

         3.3  Post-Closing  Agreements.  Subsequent to the Closing,  the Company
shall enter into one or more agreements to provide products  manufactured by the
Company to Lukens, S.A. Diagnostics,  Superior Medical Supplies and PENPOL. Such
agreements   shall  provide  that  such  products  will  be  sold  fully  loaded
manufacturing  costs  for the  products  plus  twenty-five  percent  (25%).  The
agreements  shall also provide that in the event that the Company's  capacity is
unable to meet the needs of each of Lukens, S.A.  Diagnostics,  Superior Medical
Supplies  and  PENPOL  with  respect to  products,  then the  products  shall be
allocated among Lukens, S.A.  Diagnostics,  Superior Medical Supplies and PENPOL
prorata  based upon the number of Shares  held by each in  relation to the total
number of


<PAGE>



Shares held by Lukens, S.A. Diagnostics, Superior Medical Supplies and PENPOL.
                                    Section 4

                              Financial Information

         4.1 Financial information. For so long as a Stockholder owns any of the
Shares, the Company agrees to furnish the Stockholder with the following:

                  (a) Quarterly Statements. Within sixty (60) days after the end
of the first, second, and third quarterly periods of each fiscal year, a balance
sheet  of the  Company  as at the end of each  such  period  and  statements  of
operations  and of changes in  financial  position  of the Company for each such
quarterly  period,  prepared in accordance with the Company's books and records.
This  balance  sheet  and these  statements  need not be  audited,  but shall be
certified as correct by the principal financial officer of the Company,  subject
to year-end audit adjustments.

                  (b) Annual Statements.  Within ninety (90) days after the last
day of each  fiscal  year of the  Company,  or if later  as soon as the  audited
accounts are ready, to deliver to each  Stockholder a copy of its audited report
containing  a balance  sheet of the Company as at the end of such fiscal  period
and copies of statements of operations  and of changes in financial  position of
the Company for such fiscal period.

                  (c)  Accountant's  Reports.  Promptly  when  received  by  the
Company,  a copy of any report  submitted to the Company by its  accountants  or
Statutory  Auditor  in  connection  with each  annual  audit of the books of the
Company made by such accountants.

                  (d) Other  Information.  On ten (10) days' written notice, the
Company shall permit a Stockholder,  at such Stockholder's  expense,  to discuss
the Company's  affairs,  finances,  and accounts with its present and comparable
officers  of the  Company  at  such  reasonable  times  and  as  often  as  such
Stockholder may reasonably request.

<PAGE>



                                    Section 5

                  Representations & Warranties of Stockholders

         5.1 General Representations and Warranties. Each Stockholder represents
and warrants to the Company and to each of the other Stockholders as follows:

                  (a) This Agreement  constitutes the legal,  valid, and binding
obligation of the Stockholder, enforceable against the Stockholder in accordance
with its terms. The Stockholder has the absolute and unrestricted  right, power,
and  authority  to  execute  and  deliver  this  Agreement  and to  perform  its
obligations  under  this  Agreement.  The  Stockholder  does not and will not be
required to obtain any consent from any Person in connection  with the execution
and delivery of this Agreement or the  consummation or performance of any of the
Contemplated Transactions.

                  (b)   Each   of   the   Stockholders   makes   the   following
representations with respect to its acquisition of the Shares:

                           (i) the  Stockholder  was not formed for the specific
purpose of acquiring the Shares;

                           (ii) the  Stockholder  is able to bear  the  economic
risk of loss of its investment in the Shares;

                           (iii)   the   Stockholder   is  not   aware   of  any
advertising,  article, notice or other communication published in any newspaper,
magazine,  or similar  media or  broadcast  over  television  or radio or of any
public  solicitation  by the Company or any other Person acting on behalf of the
Company with respect to the offering or sale of the Shares;

                           (iv)  the  Stockholder  is  fully  familiar  with the
proposed business of the Company;

                           (v) the Stockholder recognizes the risks of investing
in the Company and/or purchasing the Shares;


<PAGE>




                           (vi)  each  Stockholder  has  had an  opportunity  to
examine any and all Company  documents,  corporate  financial  records,  and any
other business records which may be appropriate in connection with a decision to
purchase the Shares,  and an  opportunity to discuss the business of the Company
with its officers and directors;

                           (vii) each Stockholder  believes that the Stockholder
and its representatives are adequately informed about the business and financial
condition of the Company and are able to evaluate the risks and merits of making
an investment in the Company;

                           (viii) each  Stockholder  agrees that all projections
of revenue  growth and potential  profits of the Company,  if any, that may have
been  discussed  with  any   representative  of  the  Stockholder,   are  highly
speculative  and  estimates  only,  that may not be relied upon as indicative of
actual results that may be achieved;

                           (ix)  in  entering   into  this   Agreement   and  in
purchasing  the  Shares,  each  Stockholder  is and will be  acting  for its own
account  and not for or on behalf of the  account  of any other  person,  and is
purchasing the Shares for investment and not for distribution; and

                           (x) the Stockholder has not paid and will not pay any
commission,  fee or other remuneration to any person, directly or indirectly, in
connection with its purchase of the Shares.

                  (c) There is no  pending  proceeding  that has been  commenced
against  the  Stockholder  and  that  challenges,  or may  have  the  effect  of
preventing,  delaying, making illegal, or otherwise interfering with, any of the
Contemplated  Transactions.  To such Stockholder's knowledge, no such proceeding
has been threatened.

                  (d)  There  is  no  suit,  action,   arbitration,   or  legal,
administrative,  or other proceeding,  governmental  investigation,  or contract
renegotiation  pending  nor,  to the  knowledge  of the  Stockholder  any  basis
therefor or any threat  thereof  against or affecting the  Stockholder or any of
its businesses, assets, or its financial condition, or


<PAGE>



which questions the validity of this Agreement or the Contemplated Transactions.

                  (e) To the knowledge of the  Stockholder,  the  Stockholder is
not in  violation,  breach,  or default in any  material  respect of any term or
provision of any statute, rule, governmental  regulation,  lease, license, note,
contract,  commitment,  indenture,  mortgage, deed of trust, or other agreement,
instrument,  or arrangement  applicable to or binding on the Stockholder and the
execution,  delivery,  and  performance of this  Agreement and the  Contemplated
Transactions,  will not, with notice or lapse of time or both: (i) result in any
violation of, or be in conflict with or constitute a breach of or default under,
any such term or provision; or, (ii) result in or constitute an event that would
permit any party to terminate  any  agreement  or to  accelerate  the  maturity,
require payment of, or allow removal of any guaranty of, any indebtedness or any
other obligation of the Stockholder.

                  (f) To the knowledge of the Stockholder, no consent, approval,
order  or  authorization  of,  or  registration,   qualification,   designation,
declaration or filing with, any governmental authority by the Stockholder or the
Company is  required  in  connection  with the  execution  and  delivery of this
Agreement or the Contemplated Transactions.

                  (g) Each Stockholder represents to the Company that it has not
dealt with any  broker,  finder,  investment  banker,  or  financial  advisor in
connection with this Agreement or the Contemplated Transactions or in connection
with any  investment  in or loan to the Company and agrees to indemnify and hold
harmless the Company,  against any loss,  liability,  damage,  cost,  claim,  or
expense  (including  attorneys'  fees)  incurred  by  reason  of any  brokerage,
commission,  investment banking, investment advisers, or finder's fee payable or
alleged to be payable due to this  Agreement  or the  Contemplated  Transactions
arising out of the acts of the Stockholder.

                  (h) This Agreement, and all statements, certificates and other
written material  furnished to the Company by or on behalf of the Stockholder as
required by or referred to in this Agreement, when read together, do not contain
any untrue statement of a material fact or omit


<PAGE>



to state a material fact necessary in order to make the statements made in them,
in light of the circumstances under which they are made, are not misleading.

        5.2 Representations and Warranties Regarding Equipment.  With respect to
the Equipment, S.A. Diagnostics represents and warrants as follows:

                  (a) At Closing,  the Company shall obtain good and  marketable
title to all of the  Equipment,  free and  clear of all  title  defects,  liens,
restrictions,  claims, charges, security interests, or other encumbrances of any
nature  whatsoever,   including  any  mortgages,   leases,   chattel  mortgages,
conditional sales contracts, collateral security arrangements, or other title or
interest  retention  arrangements  and free and clear of all taxes and duties or
similar charges; and

                  (b) the Equipment is in good operating order,  condition,  and
repair,  ordinary  wear  and  tear  excepted,  and is  suitable  for  use in the
Company's business.

                                    Section 6

                      Conditions To Obligations of a Party

         Each party's  obligations at the Closing are subject to the fulfillment
to that  party's  satisfaction,  except  to the  extent  waived or  modified  in
accordance  herewith,  at or  before  the  Closing,  of  each  of the  following
conditions:

        6. 1  Warranties  and  Statements  Correct.  Except as  affected  by the
Contemplated  Transactions,  the  representations and warranties made by each of
the  other  parties  to  this   Agreement  and  all  written   material  in  all
certifications  and documents referred to in this Agreement or delivered to such
party under this  Agreement  shall be true and correct  when made,  and shall be
deemed to be  repeated at and as of the time of the  Closing,  and shall be true
and correct at and as of that time.


<PAGE>





         6.2 Performance.  Each other party and the Company shall have performed
and complied with all agreements and conditions in this Agreement required to be
performed or complied with by it before or at the Closing.

        6.3 Consents and Waivers.  Each party shall have obtained all approvals,
consents  and  waivers   necessary  or  appropriate  for   consummation  of  the
Contemplated Transactions.

        6.4 Legal Investment.  At the time of the Closing,  the party's purchase
of the Shares under this  Agreement  shall be legally  permitted by all laws and
regulations to which the party and the Company are subject.

         6.5 Proceedings and Documents.  All corporate and other  proceedings in
connection with the Contemplated  Transactions shall be reasonably  satisfactory
in substance  and form to such party and such party shall have received all such
counterpart  originals or  certified  or other copies of such  documents as such
party may reasonably request.

         6.6 Waiver of Conditions to a Party's Obligations. A party may waive or
modify in  writing  any or all of the above  conditions  to its  obligations  to
purchase the Shares in whole or in part without prior notice; provided, however,
that no such waiver of a condition  shall  constitute  a waiver by such party of
any of such party's other rights or remedies, at law or in equity.

                                    Section 7

                       Limitations on Transfers of Shares

         7.1  Limitation  on  Shares  Transfer.  Except as  otherwise  expressly
provided  herein,  if a Stockholder  desires to transfer any or all of the Stock
then owned by such Stockholder (a "Shares  Transfer"),  then at least sixty days
prior  to  any  such  Shares  Transfer  other  than  a  Permitted  Transfer  (as
hereinafter   defined),   such  transferring   Stockholder  (the   "Transferring
Stockholder")   will  give  notice  (the   "Notice")  to  the  Company  and  the
non-transferring  Stockholders  of the  Company of its  intention  to effect the
Shares Transfer. The Notice will set forth (i) the number and


<PAGE>



class of shares to be sold by the transferring  Stockholder (the "Sale Shares"),
(ii) the date or proposed  date of the Shares  Transfer and the name and address
of the proposed  transferee,  (iii) the principal terms of the Shares  Transfer,
including the cash or other property or  consideration  to be received upon such
Shares Transfer, (iv) the percentage which the number of Sale Shares constitutes
with  respect  to  the  aggregate  number  of  shares  of  Stock  then  held  by
Transferring Stockholder, and (v) the written consent of the proposed transferee
to be bound by all the terms of this Agreement if the proposed  Shares  Transfer
is consummated.

         7.2   Corporation's   Option.   Subject  to  applicable   laws  of  the
jurisdiction  under which the Company is  organized,  the Company shall have the
option, but not the obligation, to purchase the Sale Shares on the same terms as
specified  in the  Notice.  Within 20 days after the  giving of the Notice  (the
Notice Date"), the Company shall give written notice to transferring Stockholder
and the remaining  Stockholders stating whether or not it elects to exercise its
option, the number of Sale Shares, if any, it elects to purchase, and a date and
time for  consummation  of the  purchase  not less  than 60 or more than 90 days
after the Notice  Date.  Failure by the Company to give such notice  within such
time period  shall be deemed an election by it not to exercise  its option.  The
Transferring  Stockholder shall not be entitled to vote, either as a shareholder
or director,  in connection with the decision of the Company whether to exercise
its option to purchase the Transferring Stockholder's Sale Shares, provided that
if the Transferring  Stockholder's  vote is required for valid corporate action,
the Transferring  Stockholder  shall vote in accordance with the decision of the
majority of the other directors or shareholders.

         7.3  Stockholders'  0ption.  If the  Company  fails or is unable  under
applicable  law to exercise  the option with  respect to all of the Sale Shares,
the Stockholders  other than the Transferring  Stockholder  shall thereupon have
the option, but not the obligation, to purchase the remaining Sale Shares on the
same terms as specified in the Notice. After the expiration of the 20-day period
in Section 7.2 hereof,  but within 30 days after the Notice  Date,  any electing
Stockholder  shall give written notice to the  Transferring  Stockholder and the
Company stating whether or not such  Stockholder  elects to exercise its option,
the number of Sale Shares,  if any,  such  Stockholder  elects to purchase,  and
(unless a closing


<PAGE>



date has already been set) a date and time for  consummation of the purchase not
more than 90 days after the Notice  Date.  Failure by such  Stockholder  to give
such  notice  within  such  time  period  shall be deemed  an  election  by such
Stockholder  not to  exercise  such  Stockholder's  option.  If  more  than  one
Stockholder exercises this option, the number of remaining Sale Shares purchased
shall be pro rated based on their equity ownership on a fully diluted basis.

         7.4  Definitions.  For purposes of this Section 7, the term  "Permitted
Transfer" shall mean a Shares Transfer to a corporate Affiliate in the case of a
transferring Stockholder that is a corporation, to any of its general or limited
partners or any Affiliate thereof in the case of a transferring Stockholder that
is a partnership,  to any spouse, parents, brothers,  sisters, children (natural
or adopted),  stepchildren or  grandchildren or a trust for any of their benefit
in the  case  of a  transferring  Stockholder  that  is an  individual  (each  a
"Permitted  Transferee");  provided,  that, prior to such Shares Transfer,  such
Permitted  Transferee  shall  agree in  writing  to be bound  by the  terms  and
conditions of this Agreement.  For purposes of this Section,  "Stock" shall mean
(a) the presently issued and outstanding shares of capital stock of the Company,
(b) any presently issued and outstanding options or stock subscription  warrants
exercisable  for shares of  capital  stock of the  Company  (which  options  and
warrants shall be deemed to be outstanding  shares of stock), (c) any additional
shares of capital stock  hereafter  issued and  outstanding,  (d) any options or
stock  subscription  warrants  exercisable  for shares of  capital  stock of the
Company  hereafter  issued and outstanding  (which options and warrants shall be
deemed to be outstanding shares of stock) and (e) any shares of capital stock of
the Company into which such shares,  options or stock subscription  warrants may
be converted or for which they may be exchanged or exercised.

        7.5  Other  Limitations.   Notwithstanding   anything  to  the  contrary
contained  herein,  the Transferring  Stockholder shall not be obligated to sell
any of the Sale Shares offered to the Company or the other Stockholders pursuant
to this  Section  7 to the  Company  or such  Stockholders,  as the case may be,
unless  notice is received  as to the  purchase of all of the Sale Shares by the
Company and/or such Stockholders within the time period specified.  In the event
that such


<PAGE>



notice is not received, or if such notice is received but the purchase of all of
the Sale Shares is not  consummated  within 90 days after the Notice  Date,  the
Transferring  Stockholder  may,  not later than 120 days after the Notice  Date,
sell all, but not less than all, of the Sale Shares to the  proposed  transferee
specified in the Notice on terms and conditions  which in all material  respects
are no more  favorable to such proposed  transferee  than those set forth in the
Notice.  Following such transfer any transferee thereof shall be bound by all of
the terms of the Agreement whether or not he, she or it shall become a signatory
hereto.  If at the end of such 120 day period the  Transferring  Stockholder has
not  completed  the sale of the Sale Shares as  provided in the Notice,  no Sale
Shares may be sold or otherwise  disposed of until they are again  offered under
the procedures specified in this Section 7.

         7.6 Transfers Void. Any attempted transfer in violation of the terms of
this Section 7 shall be  ineffective to vest in any transferee any interest held
by the  Transferring  Stockholder in the Stock.  Without limiting the foregoing,
any  purported  Shares  Transfer  in  violation  of  this  Section  7  shall  be
ineffective  as against the  Company,  and the Company  shall have a  continuing
right and option (but not an obligation) to purchase the shares  purported to be
transferred by the Transferring Stockholder for a price and on terms the same as
those at which the purported Shares Transfer was sought to be effected.

                                    Section 8

                                Preemptive Rights

        8.1 Preemptive  Rights. The Company shall not issue, sell or exchange to
or with any Person,  agree to issue,  sell or exchange to or with any Person, or
reserve or set aside for issuance,  sale or exchange to or with any Person, any:
(a) shares of Common Stock;  (b) any other equity  security of the Company;  (c)
any debt  security  of the  Company  which by its terms is  convertible  into or
exchangeable  for any equity  security of the  Company;  (d) any security of the
Company that is a combination of debt and equity; or (a) any option,  warrant or
other right to subscribe for,  purchase or otherwise acquire any equity security
or any such debt security of the Company (the "Offered  Securities"),  unless in
each case the


<PAGE>



Company  shall  have  first  offered  to  sell  to  each  Stockholder  up to its
Proportionate  Share of the  Offered  Securities,  at a price and on such  other
terms as offered to such other Person or Persons and which price and terms she((
have been  specified by the Company in a writing  delivered to the  Stockholders
(the "Offer"),  which offer by its terms shall remain open and irrevocable for a
period  of 20  days  from  the  date  it is  delivered  by  the  Company  to the
Stockholders  (the  "Notice  Period").  For  the  purposes  of this  Section,  a
Stockholder's  Proportionate  Share  shall  be that  percentage  of the  Offered
Securities which is equal to the percentage which the number of shares of Common
Stock of the Company owned by the  Stockholder at the time of its receipt of the
Offer bears to the total outstanding  Common Stock of the Company at the time of
the Stockholder's receipt of the Offer.

         8.2 Notice. Notice of a Stockholder's  intention to accept, in whole or
in part, an Offer shall be evidenced by a writing signed by the  Stockholder and
delivered to the Company  prior to the end of the Notice  Period,  setting forth
such portion of the Offered  Securities  as the  Stockholder  elects to purchase
(the "Notice of Acceptance").

         8.3 Sale of Securities  by the Company.  The Company shall have 90 days
from the expiration of the Notice Period to sell all or any part of such Offered
Securities  as to  which a  Notice  of  Acceptance  has not  been  given  by the
Stockholders (the "Refused Securities") to any other Person or Persons, but only
upon  terms  and  conditions  in  all  material  respects,   including,  without
limitation,  unit price and interest rates which, in the aggregate,  are no more
favorable to such other Person or Persons or less  favorable to the Company than
those set forth in the Offer.  Upon and  subject  to the  closing of the sale to
such other Person or Persons of all the Refused Securities,  which shall include
payment of the purchase price to the Company in accordance with the terms of the
Offer, each Stockholder  shall purchase from the Company,  and the Company shall
sell to such Stockholder, the Offered Securities in respect of which a Notice of
Acceptance  was  delivered  to the  Company  by that  Stockholder,  at the terms
specified in the Offer. The purchase by a Stockholder of any Offered  Securities
is  subject  in all cases to the  preparation,  execution  and  delivery  by the
Company and the Stockholder of a customary  purchase  agreement relating to such
Offered Securities reasonably  satisfactory in form and substance to the Company
and the Stockholder.


<PAGE>




         8.4 Unpurchased  Securities.  In each case, any Offered  Securities not
purchased by the  Stockholders or any other Person or Persons in accordance with
this  Section 8 may not be sold or  otherwise  disposed  of until they are again
offered to the Stockholders under the procedures specified in this Section 8.

        8.5  Excluded  Securities.  The  rights of the  Stockholders  under this
Section  8  shall  not  apply  to  the  following   securities   (the  "Excluded
Securities"):

                  (a) Common Stock or options to purchase or rights to subscribe
for Common Stock, or securities by their terms  convertible into or exchangeable
for Common  Stock,  or  options  to  purchase  or rights to  subscribe  for such
convertible  or  exchangeable  securities  issued  to  officers,   employees  or
directors of,  consultants to, executive  recruiters for, or lessors of personal
property  to,  the  Company,  pursuant  to any  agreement,  plan or  arrangement
approved by the Board of Directors of the Company;

                  (b) Common Stock  issued as a stock dividend or upon any stock
split or other subdivision or combination of shares of Common Stock; and

                  (c) any securities  issued for  consideration  other than cash
pursuant  to  a  merger,   consolidation,   acquisition   or  similar   business
combination.

                                    Section 9

                          Legend on Stock Certificates

        9.1 Legends. Each certificate of the signatories hereto representing the
Shares shall bear the following legend:

               THE  RIGHTS OF THE HOLDER OF THESE  SECURITIES  IN RESPECT OF THE
               TRANSFER  OF  THESE  SECURITIES  ARE  SUBJECT  TO THE  TERMS  AND
               CONDITIONS OF


<PAGE>



               THAT CERTAIN JOINT  VENTURE/STOCKHOLDERS'  AGREEMENT  DATED AS OF
               [the date of this  Agreement],  AS THE SAME MAY BE  AMENDED  FROM
               TIME TO TIME,  AMONG LUKENS MEDICAL  PRODUCTS PRIVATE LIMITED AND
               CERTAIN HOLDERS OF OUTSTANDING CAPITAL STOCK OF SUCH CORPORATION.
               NO TRANSFER OF THESE SECURITIES SHALL BE VALID OR EFFECTIVE UNTIL
               SUCH  CONDITIONS ARE  FULFILLED.  COPIES OF SUCH AGREEMENT MAY BE
               OBTAINED  AT NO COST BY  WRITTEN  REQUEST  MADE BY THE  HOLDER OF
               RECORD OF THIS  CERTIFICATE  TO THE  SECRETARY OF LUKENS  MEDICAL
               PRODUCTS PRIVATE LIMITED.

                                   Section 10

                                   Termination

         10.1 Termination.  This Agreement shall remain in full force and effect
from the date hereof until (a)  ownership of all of the Shares of the Company by
one  of  the  parties   hereto;   or  (b)  the   liquidation   of  the  Company.
Notwithstanding the foregoing, and notwithstanding termination of this Agreement
the rights and powers of each party and the duties and obligations of each party
under Sections 3.2, 11, 12 13 and 14 shall survive  termination  and the parties
shall continue to be bound by such provisions indefinitely.

                                   Section 11

                                 Indemnification

         11.1  Indemnification.  The  Company  shall  indemnify  and hold Lukens
harmless  from  and  against,  for and in  respect  of any  and  all  liability,
judgments, damages, losses, penalties, costs and expenses (including court costs
and reasonable  attorneys' and experts' fees) suffered,  sustained,  incurred or
required  to be paid by  Lukens  arising  out of or in  connection  with or as a
result of the Bank Guarantee referenced in Section 3.1 of this Agreement.


<PAGE>




                                   Section 12
                                 Confidentiality

         12.1 Reciprocal  Confidentiality  Obligations.  During the term of this
Agreement, Confidential Information of one party may be disclosed to one or more
of the other parties. A party to whom any Confidential  Information is disclosed
shall not disclose such  Confidential  Information to any other Person or entity
or use such  Confidential  Information  except for Company  purposes or purposes
specifically  contemplated  by this  Agreement.  The disclosure of  Confidential
information  by one party to another  shall not  constitute  a license,  sale or
offer to  license or sell  Confidential  Information.  Confidential  Information
shall be maintained in confidence  for a period of five (5) years after the date
of termination of this  Agreement.  Nothing  contained in this Agreement will in
any way restrict or impair a party's right to use,  disclose,  or otherwise deal
with any Confidential  Information  which: (a) as shown by written records,  was
known to it prior to its receipt from the other party; (b) is or becomes part of
the general  public  knowledge  otherwise  than as a consequence  of a breach of
duties or obligations of the party;  (c) becomes known or available to the party
from  sources  other  than the other  party  without  restrictions  as to use or
disclosure  and  otherwise  than as a  consequence  of a  breach  of  duties  or
obligations  of the  party  under  this  Agreement;  or (d) as shown by  written
records,  is  independently  developed  by  employees,  agents,  contractors  or
consultants of the party.  Notwithstanding the foregoing,  a party shall have no
obligation  respecting,  or be liable for,  use or  disclosure  of  Confidential
Information where such disclosure is compelled by judicial or other governmental
action  initiated  against  the  party;  only if,  however,  the party  promptly
notifies the other party of such action and  cooperates  with the other party in
obtaining any available protective order or its equivalent.

                                   Section 13

                               Dispute Resolution

        13.1 Dispute Resolution/Pre-Arbitration.  Each party agrees that, unless
otherwise  required in order to comply with deadlines under the law, it will not
institute arbitration under Section 13.2 of this


<PAGE>



 Agreement  with respect to any dispute,  controversy,  or claim arising out of,
relating to, or in connection  with, this Agreement or an alleged breach of this
Agreement, until:

                  (a)      It has given each of the other parties written notice
          of its grievance;

                  (b)      The other parties have failed to provide a prompt and
          effective remedy within a reasonable period of time;

                  (c) The parties have submitted the matter to each of the chief
executive  officers of the  corporate  stockholders  and each of the  individual
stockholders for resolution,  and they are unable,  after a reasonable period of
time, to produce a mutually satisfactory resolution of the matter.

         13.2  Arbitration.  In  the  event  that  the  pre-arbitration  dispute
resolution  procedures set forth in Section 13.1 do not result in the resolution
of any  dispute,  controversy,  or claim  arising  out of,  relating  to,  or in
connection  with,  this  Agreement  or  an  alleged  breach  of  this  Agreement
(including  the  validity,   scope,  and   enforceability  of  this  arbitration
agreement)  and except as provided  under Section 13.3 of this  Agreement,  such
dispute,   controversy,  or  claim  shall  be  solely  and  finally  settled  by
arbitration in accordance with the Commercial Rules of the American  Arbitration
Association.  The place of  arbitration  shall be in  Albuquerque,  New  Mexico,
U.S.A. and the law applicable to the arbitration  procedure shall be the Federal
Arbitration Act (9 USC ss. 2). Judgment on the arbitration  award may be entered
and enforced in any court having jurisdiction over the parties or their assets.

         Each party shall,  except as otherwise  provided herein, be responsible
for its own  expenses,  including  legal  fees,  incurred  in the  course of any
arbitration proceedings.  The costs and fees of the arbitration shall be divided
evenly between the parties.

        13.3 Injunctive Relief. Sections 13.1 and 13.2 shall not be construed to
limit or  preclude a party from  bringing  any action in any court of  competent
jurisdiction for injunctive or other provisional relief


<PAGE>



as necessary or appropriate, but only for such injunctive or provisional relief.

                                   Section 14

                                  Miscellaneous

        14.1 Governing Law. The laws of the State of New Mexico will govern this
transaction and the  interpretation  and construction of this Agreement  without
reference to choice of law principles.

        14.2  Representations and Warranties.  All agreements,  representations,
and  warranties  in this  Agreement  shall survive the execution and delivery of
this Agreement.

         14.3 Assignment, Successors and Assigns. No party may assign any of its
rights,  powers,  duties or obligations  under this Agreement  without the prior
written  consent of the other party,  which  consent  shall not be  unreasonably
withheld.  Subject to the preceding  sentence,  the provisions of this Agreement
shall inure to the benefit of, and be binding on, the  successors and assigns of
the parties to this Agreement.

         14.4  Third  Party  Beneficiaries.  Subject  to the  provisions  of the
preceding Section, nothing in this Agreement, express or implied, is intended to
confer  any  rights or  remedies  under or by reason  of this  Agreement  on any
Persons other than the parties to it, nor is anything in this Agreement intended
to relieve or discharge  the  obligation or liability of any third person to any
party to this Agreement, nor shall any provision give any third Person any right
of subrogation or action over or against any party to this Agreement.

         14.5 Entire Agreement.  This Agreement  constitutes the full and entire
understanding  and agreement  between the parties with regard to the subjects of
this  Agreement,  and  supersedes  all  prior  and  contemporaneous  agreements,
representations, and understandings of the parties.


<PAGE>





         14.6 Separability and Severability. Unless otherwise expressly provided
in  this   Agreement,   any  invalidity,   illegality,   or  limitation  on  the
enforceability  of all or part of this  Agreement,  whether at!sing by reason of
the law of a party's domicile or otherwise, shall in no way affect or impair the
validity,  legality,  or enforceability  of this Agreement.  If any provision of
this  Agreement  shall be invalid,  illegal,  or  unenforceable,  the  validity,
legality,  or enforceability of the remaining provisions shall not in any way be
affected or impaired by such invalidity, illegality, or unenforceability.

         14.7  Counterparts.  This  Agreement  may be  executed in any number of
counterparts,  each of which  shall be an  original,  but all of which  together
shall  constitute  one  instrument.  It is  contemplated  that there will be one
original of this Agreement  which shall be retained by the Company and that each
of the other parties shall received copies of the original.

         14.8  Headings.   The  various  headings  of  this  Agreement  are  for
convenience of reference only, shall not affect the meaning or interpretation of
this Agreement, and shall not be considered in construing this Agreement.

         14.9 Amendments and Waivers.  Except as  specifically  provided in this
Agreement, neither this Agreement nor any term of this Agreement may be amended,
waived,  discharged,  or  terminated by any act or failure to act, but only by a
written  instrument  signed by the party  against whom  enforcement  of any such
amendment, waiver, discharge, or termination is sought.

         14.10  Cumulative  Rights/No  Waiver.  The rights and  remedies  of the
parties to this  Agreement  are  cumulative  and not  alternative.  Neither  the
failure nor any delay by any party in exercising any right,  power, or privilege
under  this  Agreement  will  operate  as a  waiver  of such  right,  power,  or
privilege,  and no single or  partial  exercise  of any such  right,  power,  or
privilege will preclude any other or further  exercise of such right,  power, or
privilege  or the  exercise of any other  right,  power,  or  privilege.  To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement can be discharged by one


<PAGE>



party,  in whole or in part, by a waiver or  renunciation  of the claim or right
unless in writing signed by the other party;  (b) no waiver that may be given by
a party  will be  applicable  except in the  specific  instance  for which it is
given; and (c) no notice to or demand on one party will be deemed to be a waiver
of any  obligation of such party or of the right of the party giving such notice
or demand to take further  action  without  notice or demand as provided in this
Agreement.

         14.11 Further Assurances.  The parties agree to furnish upon request to
each other such further  information,  to execute and deliver to each other such
other  documents,  and to do such other acts and things,  all as the other party
may  reasonably  request  for the  purpose  of  carrying  out the intent of this
Agreement.

         14.12  Notices.  All  notices  and  other  communications  required  or
permitted  under this Agreement  shall be in writing and shall be deemed to have
been  given  when  personally  delivered  to the  party  to whom the  notice  or
communication  is to be  given,  when  sent  by  facsimile  transmission  to the
telephone  number set forth in attached  Schedule A or such other  number as may
hereinafter  be designated in writing by the recipient to the sender listing all
parties,  or when duly sent by first class registered or certified mail,  return
receipt requested,  postage prepaid,  addressed to such party at the address set
forth in  attached  Schedule  A or such  other  address  as may  hereinafter  be
designated in writing by the addressee to the addressor listing all parties. All
such notices shall be deemed to have been received:  (a) in the case of personal
delivery,  on  the  date  of  such  delivery;  (b)  in  the  case  of  facsimile
transmission,  on the date of transmission;  and (c) in the case of mailing,  on
the fourteenth day after the posting thereof.



<PAGE>



         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on their behalf.

                                            Lukens  Medical   Products   Private
                                            Limited,  a company registered under
                                            the  Companies  Act,  1956,  laws of
                                            India

                                            By:    /s/ Robert S. Huffstodt
                                                 -------------------------------
                                            Title:
                                            Date:    2/21/97

                                            Lukens Medical Corporation,
                                            a Delaware corporation

                                            By:    /s/ Robert S. Huffstodt
                                                 -------------------------------
                                            Title: President & CEO
                                                --------------------------------
                                            Date:    2/21/97
                                                --------------------------------


                                            S.A. Diagnostics,
                                            a South African corporation

                                            By:       /s/ Roy Richmond
                                                --------------------------------

                                            Title
                                                --------------------------------
                                            Date:    2/21/97
                                                --------------------------------


                                            Superior Medical Supplies
                                            a Texas corporation

                                            By:      /s/ Shirley Frankel
                                                --------------------------------
                                                     Shirley Frankel, President
                                            Date:    2/21/97
                                                --------------------------------







<PAGE>



                                            PENPOL,
                                            a company registered under the
                                            Companies Act, 1956, laws of India

                                            By:
                                                --------------------------------

                                            Title:
                                                --------------------------------

                                            Date:
                                                --------------------------------



<PAGE>



                                    GLOSSARY

"Affiliate"  When  used  with  respect  to a  specified  Person,  a Person  that
directly,  or  indirectly  through  one or more  intermediaries,  controls or is
controlled by or is under common control with the Person specified.

"Closing" The  consummation of the acquisition of the Shares by the Stockholders
and the delivery of this Agreement as provided in Section 2 of this Agreement.

"Company" Lukens Medical Products Private Limited,  an Indian company registered
under the Companies Act, 1956 of India.

"Confidential  Information"  Trade  secrets,  know-how,  inventions,   concepts,
designs,  U.S.  and foreign  patents  and/or  patent  applications,  copyrighted
materials,   software,   schematics,   code,   source  listings,   flow  charts,
specifications,  copies of source or object code or other  documentation  of any
type,  and  other  data,  knowledge,  and  information,  relating  to a  party's
technology,  methods and procedures of operation,  business or marketing  plans,
financial  information,  customer  lists and  data,  as well as the  nature  and
results of research  and  development  activities,  and all other  materials  or
information  related to the business or activities of a party or its existing or
new products and component developments, processes and techniques.

"Contemplated  Transactions"  All  of  the  transactions  contemplated  by  this
Agreement, including:

     (a) the acquisition of the Shares by each Stockholder pursuant to the terms
and conditions of this Agreement;

     (b) the execution, delivery, and performance of all instruments, agreements
and documents to be executed and delivered under this Agreement; and

     (c) the  performance by the Company and each of the  Stockholders  of their
respective covenants and obligations under this Agreement.


<PAGE>




"Excluded Securities" As defined in Section 8.5 hereof.

"Lukens" Lukens Medical Corporation, a Delaware corporation.

"Notice Date" As defined in Section 7.2 hereof.

"Notice of Acceptance" As defined in Section 8.2 hereof.

"Notice Period" As defined in Section 8.1 hereof.

"Offer" As defined in Section 8.1 hereof.

"Notice" As defined in Section 7.1 hereof.

"Offered Securities" As defined in Section 8.1 hereof.

"Offered Shares" As defined in Section 7.4 hereof.

"Organization  Documents"  The  Memorandum and Articles of Association of Lukens
Medical Products Private Ltd, a copy of which is attached as Exhibit A.

"PENPOL"  Peninsula  Polymer Limited  (PENPOL),  a company  registered under the
Companies Act, 1956, laws of India.

"Permitted Transfer" As defined in Section 7.4 hereof.

"Person" Any  individual,  corporation  (including  any nonprofit  corporation),
general  or limited  partnership,  limited  liability  company,  joint  venture,
estate,  trust,  association,  organization,  labor  union,  or other  entity or
governmental body.

"Refused Securities" As defined in Section 8.3 hereof.

"S.A. Diagnostics" S.A. Diagnostics, a company organized under the laws of South
Africa.

"Sale Shares" As defined in Section 7.1 hereof.


<PAGE>





"Shares" The shares of the  Company's  Stock to be acquired by each  Stockholder
under this Agreement.

"Shares Transfer" As defined in Section 7.1 hereof.

"Stock" As defined in Section 7.4 hereof.

"Stockholders" The holders of the of the Stock of the Company listed on Schedule
A attached  hereto and any  transferee of shares owned by any such person or any
successor or assign of any such person.

"Superior   Medical  Supplies"   Superior  Medical   Supplies,   Inc.,  a  Texas
corporation.

"Transferring Stockholder" As defined in Section 7.1 hereof.


<PAGE>



                                    Exhibit A
                             Organization Documents





<PAGE>



                                    Exhibit D
                  Proportionate Share of Guaranteed Obligations




Stockholder       Proportionate Share       Principal Amount Guaranteed
-----------       -------------------       ---------------------------

Lukens Medical             70%                       $252,000
Corporation
S.A. Diagnostics           15%                       $ 54,000
PENPOL                     10%                       $ 36,000

Superior Medical           5%                        $ 18,000
Supplies


Each  Stockholder's  Proportionate  Share  will  vary  from  time  to  time as a
consequence of the accrual of that Stockholder's Proportionate Share of interest
and  other  costs  that  may  be  payable  under  the  loan  documents  and  the
Stockholders' guaranty under Section 3.2 of this Agreement.



<PAGE>



                                   Schedule A
                                  Stockholders

<TABLE>
<CAPTION>
<S>                                                                   <C>
NAME                                                                   PERCENTAGE OWNERSHIP
----                                                                   --------------------
Lukens Medical Corporation                                                       70%
a Delaware corporation (U.S.A.)
3820 Academy Parkway North N.E.
Albuquerque, New Mexico, 87109
By: Robert S. Huffstodt, its President & CEO
Facsimile No.: (505) 342-9735

S.A. Diagnostics                                                                 15%
a South African corporation
302 Yoron Street
Waterkloof Glen
Pretoria 0081
South Africa
By: Roy Richmond, its
Facsimile No.:    011-27-12-99-88957

Peninsula Polymers Limited (PENPOL)                                              10%
an Indian Company
P.O. Box 2205
1X/1323 Sasthamangalam
Trivandrum, India 695 010
By: C. Balagopol, its Managing Director and constituted attorney Sri
______________.
Facsimile No.:    011-91-471-324599

Superior Medical Supplies, Inc.                                                  5%
2112 Menton Drive
Carrollton, Texas 75006
By: Shirley Frankel, its President
Facsimile No.: (214) 416-9310


</TABLE>