Document:

Exhibit 10.3
                      TERMINATION AND CONSULTING AGREEMENT

     This   Termination  and  Consulting   Agreement  (the   "Agreement")   made
effectively  this 1st day of November,  2002  ("Effective  Date") by and between
Vasomedical,  Inc., a Delaware  Corporation  ("Employer" or  "Company"),  and D.
Michael  Deignan,  residing at 33 Cat Brier  Lane,  Hilton  Head  Island,  South
Carolina 29926 ("Employee") (collectively the "Parties").

     WHEREAS, the Parties entered into an employment agreement dated December 1,
2000 (the "Employment Agreement"); and

     WHEREAS,  the Parties are mutually  desirous of terminating  the Employment
Agreement on the terms and conditions set forth herein,  and otherwise  entering
into a consulting  arrangement (the  "Consulting  Arrangement") on the terms and
for the additional consideration described herein.

     NOW,  THEREFORE,  based upon the mutual covenants  contained herein and for
other  good and  valuable  consideration,  the  sufficiency  of which is  hereby
acknowledged, the Parties agree as follows:

     1. In accordance with paragraphs 4(a) and 6(c) of the Employment Agreement,
the  Employer  shall pay to Employee for the period from the  Effective  Date of
this Agreement to October 31, 2003 the sum of $240,000, payable in the manner in
which the  Employee's  annual salary is currently  being paid to the Employee by
the Employer.  All of the foregoing  payments shall be subject to deductions for
appropriate  federal,  state and local withholding taxes, Social Security taxes,
and any other charges  which by federal,  state and local law are required to be
deducted ("Severance Payment").

     2. (a)  During  the  period  commencing  on the  Effective  Date and ending
December  31,  2003 (the  "Consulting  Period"),  the  Employer  will retain the
Employee as a consultant to provide,  and the Employee agrees to provide,  up to
but not more than  forty  (40)  business  days of the  following  services  (the
"Services"):

     From time to time upon the reasonable request of senior level executives of
the Employer,  general advice or information  regarding potential  opportunities
for the  introduction  of the company's EECP systems,  the  Employer's  business
operations  and  affairs,   the  Employer's   current  and  potential   business
relationships   and   contractual   agreements   with   customers   and  lending
institutions,  pertinent  business  strategies,  personnel  matters,  and  other
related matters.

     In addition, as and to the extent reasonably  necessary,  the Employee will
provide  upon  request to the  Employer  and its  counsel  relevant  information
pertaining  to any matters  which are or will become the subject of  litigation,
and will cooperate  reasonably  with such counsel in connection with the conduct
of any such  litigation,  including,  but not  limited  to,  providing  relevant
testimonial  evidence by affidavit,  preparing for and attending an  examination
before trial, and appearing at trial as a witness on behalf of the Employer.

     (b) As consideration for the Services  described in Section 2 above and any
and all other  services  which the  Advisor  may render for and on behalf of the
Company that are not specifically  described  herein,  the Restrictive  Covenant
described in paragraph  4(a)  hereof,  and the Release  described in paragraph 5
hereof,  the Company  shall pay to the Employee the  following  compensation  in
addition to the Severance Payment described in paragraph 1 hereof.

          (i)  A  Consulting  Fee  (the  "Consulting  Fee")  in  the  amount  of
     $40,000.00  payable in 14 equal  installments of $2,857.14 per month on the
     first day of each such  month,  commencing  on  November 1, 2002 and ending
     December 31, 2003.
<PAGE>

          (ii) In addition to the  foregoing,  the Employee shall be entitled to
     be reimbursed  by the Employer for all  reasonable,  pre-approved  expenses
     incurred by him in connection with the performance of the Services upon the
     presentation of substantiating documentation therefor to the Employer.

          (iii) It is further  agreed between the Employer and the Employee that
     any options  which  otherwise  would have vested in the Employee  under the
     Employment  Agreement  pursuant to paragraph 4(b) thereof during the period
     from the  Effective  Date to December 31, 2003 had such  Agreement not been
     terminated,  shall vest during the  Consulting  Period in the manner and to
     the extent such options would have vested under the  Employment  Agreement,
     and be  exercisable  within three  months  after the end of the  Consulting
     Period.

     3. In the event of the Employee's death prior to full payment to him of the
Severance  Payment  under this  Agreement,  the Employer  nevertheless  shall be
required to pay the unpaid  balance of the Severance  Payment to the  Employee's
Estate at the times and in the same  manner in which the  Severance  Payment was
being paid to the  Employee  (the  "Death  Benefit"),  but shall have no further
obligation  with regard to payment of the unaccrued and unearned  balance of the
Consulting Fee.

     4. (a) The Employee  covenants and agrees that during the Consulting Period
and for a  period  of one  year  thereafter  (or such  longer  period  as may be
provided  therein) he shall abide by, and fully comply with,  the  provisions of
Paragraphs  8(a)  and  8(b) of the  Employment  Agreement  which  shall  survive
accordingly  and are fully  incorporated by reference  herein (the  "Restrictive
Covenant").

     (b) The Employee agrees further that in the event of a breach or threatened
breach of the  Restrictive  Covenant,  in  addition  to any other  remedies  the
Employer  may  have in  equity  or at law,  which  shall be  cumulative  and not
mutually exclusive,  the Employer shall be entitled to avail itself fully of the
enforcement  measures  set  forth in  Sections  9(a)  and (b) of the  Employment
Agreement,  which  shall  survive  accordingly  and are  fully  incorporated  by
reference herein.

     5. Subject only to the performance of, and compliance  with, the provisions
of this  Agreement,  as a material  inducement  to  Employer  to enter into this
Agreement,  Employee  hereby  waives,  remits,  releases and forever  discharges
Employer,  its Board  members,  officers,  directors,  stockholders,  employees,
agents, attorneys, subsidiaries,  servants, successors, insurers, affiliates and
their  successors  and  assignees,  from any and all manner of  action,  claims,
liens,  demands,  liabilities,  causes of  action,  charges,  complaints,  suits
(judicial,  administrative,  or otherwise), damages, debts, demands, obligations
of any other  nature,  past or present,  known or unknown,  whether in law or in
equity,  whether founded upon contract (expressed or implied),  tort (including,
but not  limited  to,  defamation),  statute or  regulation  (State,  Federal or
local),  common law and/or any other theory or basis,  from the beginning of the
world to the date hereof, including, but not limited to, any claim that Employee
has asserted,  now asserts or could have  asserted.  This  includes,  but is not
limited to, claims for compensation or benefits,  tortious claims arising out of
the  employment  relationship,  claims of an  expressed  or implied  contract of
employment,  claims under the Family and Medical Leave Act, claims arising under
Federal,  State or local laws prohibiting  employment or other discrimination or
claims  growing  out of any  legal  restrictions  on the  Employer's  rights  to
terminate its employees,  including without  limitation any claims arising under
Title VII of the United States Code,  and the Age  Discrimination  in Employment
Act. It is expressly  understood by Employee  that among the various  rights and
claims  being  waived by him in this  release  are those  arising  under the Age
Discrimination in Employment Act of 1967 (29 U.S.C.  621, et seq.).  Included in
this General Release are any and all claims for future damages allegedly arising
from the  alleged  continuation  of the effect of any past  action,  omission or
event.  Employee further agrees to waive any rights he may have to reinstatement
or reemployment with Employer (the "Release").

     6. (a) The  Employment  Agreement  shall be  terminated as of the Effective
Date hereof and neither party shall have any claim against the other  thereunder
except as herein expressly provided.

     (b) Consistent  with the foregoing,  the Employer will submit in writing to
the  Employer's  board of  directors  prior to the  Effective  Date,  his formal
resignation  as the Chief  Executive  Officer,  President  and a director of the
Employer effective as of the Effective Date.
<PAGE>

     7. It is recognized  and agreed that the Consulting  Arrangement  described
herein does not create or continue  the  relationship  of employer  and employee
between  the  Employee  and the  Company,  but rather,  that the  Services to be
performed  hereunder  shall  be  performed  by the  Employee  as an  independent
contractor.  Accordingly,  each of the parties  hereto agrees not to hold itself
out in any  manner  contrary  to the  terms  of this  Agreement  and none of the
parties  hereto shall be or become liable or bound by any  representation,  act,
omission or agreement whatsoever of any other party. Neither the Company nor the
Employee  shall have the right to make any contract or  commitment  on behalf of
the other or the authority to bind the other in any manner.

     8. Any action or  proceeding  brought to enforce any of the  provisions  of
this  Agreement  and/or to seek  other  relief  for  breach  thereof,  including
damages, must be instituted in a federal or state court situated in the State of
New York,  Nassau  County,  to the  jurisdiction  of which  courts,  the Parties
irrevocably and  unconditionally  submit.  This Agreement shall be construed and
governed by the laws of the State of New York,  without  regard to its governing
conflicts of law principles.

     9. (a) Except as required by law, the  Employer  and Employee  agree not to
publish,  communicate  or disseminate  any negative or  disparaging  information
regarding the other,  or to divulge,  directly or  indirectly,  any  information
regarding  this  Agreement  to the  media,  present or former  employees  of the
Employer,  suppliers,  vendors and other industry participants any other person;
provided,  however, that the Parties may disclose the contents of this Agreement
to their respective  financial  advisors,  accountants and attorneys.  As may be
appropriate, the Company shall be permitted additionally to make such disclosure
as may be appropriate  consistent with the Company's reporting requirements as a
public company.

     (b) Upon inquiry by any potential  employer of the  Employee,  the Employer
shall be required to provide only information  regarding the Employee's  salary,
the  Employee's  position  with the  Employer,  and the dates of the  Employee's
employment with the Employer.

     10.  This  Agreement  sets forth the  entire  agreement  and  understanding
between  the  parties  and  fully  supersedes  any and all prior  agreements  or
understandings  between  the parties  hereto  pertaining  to the subject  matter
hereof. All other contracts,  agreements or understandings  between the Employer
and Employee  whether oral or written are null and void.  The parties  represent
expressly that in signing this  Agreement,  they do not rely upon, nor have they
relied upon any representation or statement regarding the subject matter not set
forth specifically in this Agreement.

     11. Employee acknowledges that:

     (a) He has carefully  read and fully  understands  all of the provisions of
this Agreement.

     (b) By reason of this Agreement,  he is releasing the Employer from any and
all claims of any kind he may have against the Employer.

     (c) He agrees, knowingly and voluntarily,  to all of the terms set forth in
this Agreement and intends to be fully bound by the same.

     12. Any notice to be given to the Company or the Employee  hereunder  shall
be deemed  given if  delivered  personally,  telefaxed or mailed by certified or
registered  mail,  postage  prepaid,  to the other party hereto at the following
addresses:

        To the Company:         Vasomedical, Inc.
                                180 Linden Avenue
                                Westbury, New York 11590

        To Employee:            D. Michael Deignan
                                33 Cat Brier Lane
                                Hilton Head Island, South Carolina 29926
<PAGE>

Either  party may change the address to which  notice may be given  hereunder by
giving notice to the other party as provided herein.

     13.  This  Agreement  may not be  modified  or amended  except by a writing
signed by both Parties.  This agreement is not  assignable by the Employee,  and
otherwise  shall be binding  upon,  and inure to the benefit of, the  Employee's
successors, heirs, executors, administrators and legal representatives,  and the
Employer's successors and assigns.

     14. The  failure  of either  party to insist on strict  performance  of any
provision  or to  exercise  any  right  shall not be deemed a waiver of any such
provision or right thereafter.  Any waiver, to be effective,  must be in writing
and signed by the Party waiving compliance.

     15. Should any provisions of this Agreement be declared or determined to be
invalid or illegal,  the validity of the remaining,  terms and provisions  shall
not be affected  thereby and said illegal or invalid term or provision  shall be
deemed not to be part of this Agreement.

     16. This Agreement may be executed in counterparts.  Each counterpart shall
be  deemed  an  original,   and  when  taken  together  with  the  other  signed
counterpart, shall constitute one fully executed Agreement.

                                        /s/ D. Michael Deignan
                                        ----------------------
                                        D. MICHAEL DEIGNAN

                                        VASOMEDICAL, INC.

                                        By: /s/ Photios T. Paulson
                                        --------------------------
                                        Photios T. PaulsonExhibit 10.4

                              EMPLOYMENT AGREEMENT

     AGREEMENT  dated  as  of  October  28,  2002,  between  VASOMEDICAL,   INC.
("Company"),  a Delaware  corporation,  having its  principal  place of business
located  at  180  Linden  Avenue,  Westbury,  New  York,  and  GREGORY  D.  CASH
("Employee"),  residing at 269 Sturgies Highway,  Westport,  Connecticut  06880.
WITNESSETH:

     WHEREAS,  the  Company  desires to employ  the  Employee  and the  Employee
desires  to be  employed  by the  Company  subject  to the terms and  conditions
hereinafter set forth.

     NOW,  THEREFORE,  in consideration of the mutual premises and of the mutual
covenants  hereinafter  contained and for good and valuable  consideration,  the
parties hereto agree as follows:

     1.  Representation/Freedom  to Contract.  Employee  represents and warrants
that he is free to enter into this Agreement and that he has not made,  prior to
his  employment,  and will not thereafter  make, any agreements  which may be in
conflict with this Agreement in the latter, or post-employment context. Employee
agrees that he will not disclose to the Company or use for the Company's benefit
any trade secret or confidential  information which is the property of any third
party and that there are no agreements or understandings which would prevent him
from being engaged by the Company pursuant to the terms of this Agreement.

     2.  Employment.  The Company  hereby  employs the Employee as President and
Chief  Operating  Officer  of  the  Company  and  the  Employee  hereby  accepts
employment upon the terms and conditions hereinafter set forth.

     3. Term. The term of this Agreement  shall be two (2) years,  commencing on
the date  hereof  ("Effective  Date") and ending  October 27,  2004,  subject to
earlier  termination  as  provided  in this  Agreement  ("Term")  and subject to
certain provisions hereof which survive the Term.

     4. Compensation.

     (a) For all services rendered under this Agreement:

          (i) The  Company  shall pay the  Employee a base salary at the rate of
     $220,000 per annum payable in equal monthly installments. ("Base Salary").

          (ii) The Company shall agree to grant to the Employee on the Effective
     Date options to acquire  300,000  shares of the common stock of the Company
     (the "Shares") at the closing price per share of the Company's common stock
     on October 25, 2002,  pursuant to the  provisions  of the  Company's  Stock
     Option  Plan  ("the  Plan")  attached  as Exhibit A, the terms of which are
     incorporated  herein.  The options shall vest  contingent on your continued
     employment as follows:

               (a) 100,000 options one year from date of employment;

               (b) One  twenty-fourth of the remaining  200,000 options for each
          month thereafter.
<PAGE>

          (iii) The Employee  shall be provided with the  opportunity to earn up
     an additional  50% of his base salary  annually  under the Company's  bonus
     incentive program each year. The bonus will be awarded at the discretion of
     the Board of Directors based upon the  achievement of individual  goals and
     the Company's financial performance.

     5. Duties.  The Employee  shall perform on a full time basis such duties of
an Employee  nature as shall be  customarily  associated  with an officer of the
Company subject to the direction of the Chief Executive Officer and the Board of
Directors.  The Employee  shall perform and discharge  well and  faithfully  the
duties  which  may be  assigned  to him  from  time to time  by the  Company  in
connection with the conduct of its business.

     6. Extent of  Services.  So long as during the Term of this  Agreement  the
Company has not  notified  the  Employee of his  disability  pursuant to Section
11(a) hereof,  the Employee shall devote his full business  time,  attention and
best efforts to the business of the Company  subject to reasonable  absences for
vacation  and illness and may not during the term of this  Agreement  be engaged
(whether  or not  during  normal  business  hours)  in  any  other  business  or
professional activity,  whether or not such activity is pursued for gain, profit
or other pecuniary advantage.  Notwithstanding the foregoing,  Employee may join
professional  associations  that do not  interfere  with his  attention and best
efforts on behalf of the Company.

     7. Benefits/Expenses.

     (a) During the term of his  employment,  the Employee  shall be entitled to
participate in employee benefit plans or programs of the Company, if any, to the
extent that his position,  tenure,  salary, age, health and other qualifications
make  him  eligible  to  participate,  subject  to  the  rules  and  regulations
applicable thereto.  Such additional benefits shall include,  medical and dental
coverage for Employee,  paid  vacation and,  subject to approval of the Board of
Directors,  qualified  pension  and profit  sharing  plans.  Medical  and dental
insurance  will commence on the date of this  Agreement or in lieu thereof,  the
Company will  reimburse the Employee for COBRA costs  incurred by Employee up to
$800 monthly for up to three months,  at which time medical and dental insurance
will commence.

     (b) The  Employee  shall have a monthly  unallocated  expense  allowance of
$1,833,  payable  monthly during the term of this  Agreement.  The Employee also
shall be entitled to timely  reimbursement of all business  expenses  reasonably
incurred by him in the  performance of his duties to the Company  subject to the
business expense policy of the Company, subject to the presenting of appropriate
vouchers in accordance with the Company's policy.

     8. Disclosure of Information.

     (a) The  Employee  represents  and  warrants to the  Company  that no prior
employment or business agreements or arrangements  preclude,  or interfere with,
his ability to execute and perform his obligations under this Agreement.

     (b)  The  Employee   recognizes   and   acknowledges   that  the  Company's
Confidential  or  Proprietary  Data or  Information  as they have existed,  will
exist, may continue to exist from time to time, are valuable, special and unique
assets of the Company's business, access to and knowledge of which are essential
to the performance of the Employee's  duties  hereunder.  The Employee will not,
during or after the term of his employment by the Company,  in whole or in part,
directly  or  indirectly   disclose,   divulge  or  communicate   such  secrets,
information or processes to any person, firm, corporation,  association or other
entity for any reason or purpose  whatsoever,  except in the  performance of his
duties  hereunder,  nor shall the Employee make use of any such property for his

<PAGE>

own purposes or for the benefit of any person, firm, corporation or other entity
(except the Company) under any circumstances provided that after the term of his
employment these restrictions  shall not apply to such secrets,  information and
processes  which are then in the public domain  (provided  that the Employee was
not  responsible,  directly or  indirectly,  for such  secrets,  information  or
process entering the public domain without the Company's consent).  The Employee
agrees to hold as the Company's property, all memoranda, books, papers, letters,
formulas  and other  data,  and all copies  thereof  and  therefrom,  in any way
relating to the Company's business and affairs, whether made by him or otherwise
coming into his possession,  and on termination of his employment,  or on demand
of the Company, at any time, to deliver the same to the Company.

     (c) The term "confidential or proprietary data or information":  as used in
this Agreement  shall mean  information  not generally  available to the public,
including without limitation,  all database information,  personnel information,
financial information,  customer lists, supplier lists, trade secrets,  patented
or proprietary information,  forms,  information regarding operations,  systems,
services,  know how, computer and any other processed or collated data, computer
programs, pricing, marketing and advertising data.

     (d) All written  materials,  records and documents  made by the Employee or
coming into Employee's  possession during  Employee's  employment by the Company
concerning any products,  processes or equipment manufactured,  used, developed,
investigated,  purchased,  sold  or  considered  by  the  Company  or  otherwise
concerning  the business or affairs of the Company shall be the sole property of
the Company,  and upon termination of Employee's  employment by the Company,  or
upon  request  of the  Company  during  Employee's  employment  by the  Company,
Employee  shall  promptly  deliver the same to the Company.  In  addition,  upon
termination  of Employee's  employment by the Company,  Employee will deliver to
the  Company  all other  Company  property  in  Employee's  possession  or under
Employee's  control,   including  but  not  limited  to,  financial  statements,
marketing and sales data, customer and supplier lists,  database information and
other documents, and any Company credit cards.

     9.  Inventions.  The Employee  hereby  sells,  transfers and assigns to the
Company or to any person, or entity designated by the Company, all of the entire
right,  title and  interest  of the  Employee in and to all  inventions,  ideas,
disclosures and improvements,  whether patented or unpatented, and copyrightable
material,  made or conceived by the Employee,  solely or jointly, or in whole or
in part,  during or before the term hereof (but after the Effective  Date) which
(i) relate to methods, apparatus,  designs, products, processes or devices sold,
leased,  used  or  under  construction  or  development  by the  Company  or any
subsidiary or (ii) otherwise relate to or pertain to the business,  functions or
operations of the Company or any  subsidiary,  or (iii) arise (wholly or partly)
from the efforts of the  Employee  during the term hereof.  The  Employee  shall
communicate  promptly and  disclose to the Company,  in such form as the Company
requests,  all  information,  details and data pertaining to the  aforementioned
inventions,  ideas,  disclosures and improvements;  and, whether during the term
hereof or thereafter, the Employee shall execute and deliver to the Company such
formal  transfers and  assignments and such other papers and documents as may be
required  of the  Employee  to  permit  the  Company  or any  person  or  entity
designated by the Company to file and prosecute the patent  applications and, as
to copyrightable  material,  to obtain copyright  thereon.  Any invention by the
Employee  within one year following the  termination of this Agreement  shall be
deemed to fall within the  provisions  of this  paragraph  unless  proved by the
Employee to have been first  conceived and made following such  termination.  To
the extent that the Employee  shall be required to expend time or incur expenses
fulfilling  his  obligations  under  this  paragraph,  post-termination  of  the
original term of this Agreement or any renewal term thereof,  the Company agrees
to reasonably compensate Employee for such time and/or such expenses.
<PAGE>

     10.  Restrictive  Covenant.  During  the Term of this  Agreement  and for a
period  of two (2)  years  after the date of such  termination  for any  reason,
Employee shall not without the prior written consent of the Company:

     (a) Non-Competition. Act as an individual proprietor, partner, stockholder,
officer, principal, agent, employee, supervisor, manager, consultant, guarantor,
creditor,  lender,  co-endorser  or  in  any  other  capacity  whatsoever,  own,
participate  in the ownership of,  manage,  operate,  exercise any control over,
render  services to, or engage in any of the foregoing  for any business,  firm,
corporation,  limited liability company, its successors or assigns,  partnership
or other entity which operates a business  similar to or competitive with any of
the products or services  developed by the Company which are conducted in any of
the geographic  areas,  including the  continental  United States,  in which the
Company's  business is conducted.  Notwithstanding  the foregoing,  Employee may
hold not more than one percent (1%) of the  outstanding  securities of any class
of any  publicly-traded  securities  of a company that is engaged in  activities
referenced in Section 10(a) hereof.

     (b)  Non-Solicitation.  Solicit any business from any current  customers or
clients of the  Company,  its  successors  or assigns,  or from any  prospective
customers  or clients  of  Company,  its  successors  or  assigns  from whom the
Company's  employees or agents have engaged in, actual  business  within the two
(2) year period  immediately  preceding the termination  date of the Executive's
employment  for the purpose of selling  products or  services  competitive  with
those offered or sold or provided by the Company.

     (c)  Solicitation  of  Employees.   In  any  manner,  whether  directly  or
indirectly,  seek to  persuade  any  director,  officer,  or other  employee  of
Company,   its  successors  or  assigns  to  discontinue   their  employment  or
relationship  with Company,  its  successors or assigns,  nor will such Employee
solicit entice, or induce any such person for such purpose.

     (d) Severability. The parties hereto intend that the covenants contained in
this Section 10, which  pertain  only to  geographic  areas where the Company is
engaged in  business,  shall be deemed a series of separate  covenants  for each
applicable  area of the relevant  country,  state,  county and city.  If, in any
judicial proceeding,  a court shall refuse to enforce all the separate covenants
deemed  included in this  Section 10  because,  taken  together,  they cover too
extensive a geographic  area,  the parties  intend that those of such  covenants
(taken in order of the cities, counties,  states and countries therein which are
least  populous)  which  if  eliminated  would  permit  the  remaining  separate
covenants  to be  enforced  in such  proceeding  shall,  for the purpose of such
proceeding, be deemed eliminated from the provisions of this Section 10.

     (e)  Nothing in this  Section 10 shall  reduce or abrogate  the  Employee's
obligations during the term of this Agreement under Sections 5 and 6 hereof.

     (f) The  provisions  of this  section  shall  not  apply  only in the event
Employee's  employment  is terminated  without cause as finally  determined by a
court of competent jurisdiction, which determination is not subject to appeal or
the posting of a bond.
<PAGE>
     11. Termination.

     (a)  Disability.  The  Company  shall  have the  right in the  event of the
permanent disability of the Employee,  to terminate this Agreement upon five (5)
days prior written notice. Upon termination,  the Company shall pay the Employee
all compensation earned under Section 4 through the date of termination. For the
purposes of this subparagraph  "permanent disability" shall mean the physical or
mental incapacity of the Employee for any consecutive  ninety (90) day period or
any aggregate  period of a one hundred and eighty (180) day period in any twelve
(12) month period of such a nature that the Employee  shall be unable to perform
his  duties as  contemplated  hereby.  Such  determination  shall be made by the
mutual agreement of the parties hereto, or in the event such agreement cannot be
reached, by the following procedure:

          (i) If the  Company  maintains  a  disability  insurance  policy  with
     respect to the  Employee,  the  definition  set forth in such policy  shall
     control,   provided  the  issuing  insurance  company  agrees  to  commence
     disability payments as a result of such permanent disability.

          (ii) If the Company does not maintain a disability  income policy with
     respect to the Employee:

               (A) Each party shall select an  independent  physician  who shall
          examine  the  subject  Employee.  The  mutual  agreement  of  the  two
          examining  physicians  shall  control,  and  their  decision  shall be
          binding.

               (B) If the two  physicians  cannot agree,  they (the  physicians)
          shall select a third  physician to examine the subject  Employee.  The
          majority  opinion of such three  physicians  shall control,  and their
          decision shall be binding.

     (b) Death. This Agreement shall terminate  automatically  upon the death of
the Employee.  In such event,  the Company shall pay the estate of the Employee,
within thirty (30) days after the date of death, all  compensation  earned under
Section 4 through the date of termination.

     (c) For Cause.  In addition to its rights under  Section  11(a) above,  the
Company shall have the right,  at its sole option,  to terminate  this Agreement
"for Cause", as hereinafter defined, at any time, without any further payment to
the Employee other than  compensation  earned under Section 4(a)(i) prior to the
date of termination,  by notice to the Employee, as provided herein,  specifying
the reason for such  termination.  For purposes of this Section  11(c),  "cause"
shall  mean (i) the  Employee's  conviction  of a  felony,  (ii) the  Employee's
willful misconduct or gross negligence materially  detrimental to the Company in
the performance of his duties, or (iii) the breach by the Employee of a material
term of this Agreement which continues for thirty (30) days after written notice
thereof  is  given  to the  Employee  (constituting  an  opportunity  to  cure),
specifying the nature and the details of the breach.

     (d) Without  Cause.  The  Employee  may be  terminated  at any time without
cause.  If the Employee is terminated  by the Company  without Cause he shall be
entitled  to receive as his sole  compensation,  a  termination  payment,  in an
amount  equal to six (6)  months'  Base  Salary  (one-half  of such  annual Base
Salary) and unallocated expenses set forth in paragraph 7(b), payable in six (6)
equal monthly installments.

     12. Remedies.  If there is a breach or threatened  breach of the provisions
of Sections 8, 9 or 10 of this  Agreement,  the Company  shall be entitled to an
injunction  restraining  the Employee from such breach.  Nothing herein shall be
construed as  prohibiting  the Company from pursuing any other remedies for such
breach or threatened breach.
<PAGE>
     13. Insurance. The Company may, at its election and for its benefit, insure
the Employee  through key man insurance up to  $1,000,000 or otherwise,  against
accidental  loss or  death  and  the  Employee  shall  submit  to such  physical
examination  and  supply  such  information  as may be  required  in  connection
therewith; provided, however, the Employee makes no representation regarding his
insurability at commercially reasonable rates or otherwise.

     14. Location of Performance.  The Employee's  services will be performed in
the Westbury,  New York area unless the Company relocates its principal facility
or its research and  development  facility to another  area,  in which event his
services will be performed,  at the Company's option, in the area of relocation.
The parties  acknowledge,  however,  that the Employee may be required to travel
extensively in connection with the performance of his duties  hereunder.  In the
event the Company relocates its principal offices to more than 75 miles from the
New York City  Metropolitan  area,  Employee  agrees to relocate  provided he is
advanced actual relocation costs not to exceed $75,000.

     15. Change of Control.  In the event (a) the Company has been  consolidated
or merged into or with any other  corporation or all or substantially all of the
assets of the Company have been sold to another corporation, with or without the
consent of  Employee,  in his sole  discretion;  or (b) the Company  undergoes a
Change of Control, as hereinafter defined below ; then

     Employee is entitled to the following  settlement  benefits  which he shall
also have the right to  exercise  in lieu of his  compensation  under  paragraph
11(d) hereof,  in the event his  employment  is terminated  without cause within
three months prior to the change of control event:

          (i) a lump-sum payment of twelve (12) months of the Base Salary; and

          (ii)  any  and  all  stock  options  held  by  Employee  shall  become
     immediately vested and exercisable; if

               (A) Employee  voluntarily and  unilaterally  resigns his position
          with the  Company  within  sixty  (60) days of an event  described  in
          Section 15(a) or (b) hereof, or

               (B) Employee is given notice of termination  directly as a result
          of such  Change  in  Control  within  twelve  (12)  months of an event
          described in Section 15(a) or (b) hereof.

     A  "Change  of  Control"  of the  Company,  or in any  person  directly  or
indirectly controlling the Company, shall mean:

          (i) a  change  of  control  as  such  term  is  presently  defined  in
     Regulation  240.12b-2  under  the  Securities  Exchange  Act of  1934  (the
     "Exchange Act"); or

          (ii) if  during  the Term of  Employment  the  individuals  who at the
     beginning of such period constitute the Board (the "Incumbent Board") cease
     for any reason other than death,  disability or retirement to constitute at
     least a majority thereof, provided, however, that any individual becoming a
     director  subsequent to the date hereof whose  election,  or nomination for

<PAGE>

     election by the Company's stockholders was approved by a vote of at least a
     majority of the directors  then  comprising  the  Incumbent  Board shall be
     considered as though such individual were a member of the Incumbent  Board,
     but excluding for this purpose any such individual whose initial assumption
     of office  occurs as a result of an actual or threatened  election  contest
     with  respect to the  election or removal of  directors  or other actual or
     threatened  solicitation of proxies or consents by or on behalf of a person
     other than the Board.

     16. Successors and Assigns.  This Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the Company,  and unless clearly
inapplicable,  all  references  herein to the Company shall be deemed to include
any successors.  In addition,  this Agreement shall be binding upon and inure to
the benefit of the Employee and his heirs, executors,  legal representatives and
assigns;  provided,  however, that the obligations of Employee hereunder may not
be delegated without the prior written approval of the Board of Directors of the
Company.

     17.  Successor  Company.  The Company shall require any successor  (whether
direct or indirect, by purchase,  merger,  consolidation or otherwise) to all or
substantially  all of the business  and/or  assets of the Company,  to expressly
assume and agree to perform  this  Agreement  in the same manner and to the same
extent  that the Company  would be required to perform as if no such  succession
had taken place.

     18.  Notices.  Any notice  required  or  permitted  to be given  under this
Agreement  shall be  sufficient  if in  writing  and shall be deemed  given when
delivered personally or three days after being sent by first-class registered or
certified mail, return receipt requested, to the party for which intended at its
or his address set forth at the beginning of this Agreement  (which, in the case
of the  Company,  shall be sent  "Attention:  Chairman of the Board") or to such
other  address as either party may  hereafter  specify by similar  notice to the
other.

     19.  Waiver of Breach.  A waiver by the Company or the Employee of a breach
of any  provision  of this  Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by the other party.

     20.  Entire  Agreement.  This  Agreement  supersedes  all prior  agreements
between the parties,  written and oral, and cannot be amended or modified except
by a  writing  signed  by  both  parties.  It may  be  executed  in one or  more
counterpart copies, each of which shall be deemed an original,  but all of which
shall constitute the same instrument.

     21. Choice of Law/Forum.  This Agreement shall be governed and construed in
accordance with the laws of the State of New York,  without regard to principles
of  conflicts  of law.  Any  disputes  arising  out of this  Agreement  shall be
adjudicated  in the  Federal or State court  presiding  in the County of Nassau,
State of New York.

     22. Captions/Exhibits.  Captions used in this Agreement are for convenience
of reference  only and shall not be deemed a part of this  Agreement nor used in
the  construction of its meaning.  Exhibits  attached to this Agreement shall be
deemed as fully a part of this Agreement as if set forth in full herein.

     23.  Severability.  If any  provision  of this  Agreement  shall be  deemed
invalid  or  unenforceable  as written it shall be  construed,  to the  greatest
extent possible, in a manner which shall render it valid and enforceable and any
limitations on the scope or duration of any such provision  necessary to make it
valid and  enforceable  shall be deemed to be part  thereof;  no  invalidity  or

<PAGE>

unenforceability  shall affect any other  portion of this  Agreement  unless the
provision deemed to be so invalid or unenforceable is a material element of this
Agreement, taken as a whole.

     24.  Acknowledgment.  Employee acknowledges that he has carefully read this
Agreement  and hereby  represents  and warrants to the Company  that  Employee's
entering  into this  Agreement,  and the  obligations  and duties  undertaken by
Employee hereunder,  will not conflict with, constitute a breach of or otherwise
violate the terms of any other  agreement to which  Employee is a party and that
Employee is not  required to obtain the consent of any person or entity in order
to enter into and perform his obligations under this Agreement.

     With  respect to the  covenants  contained  in Sections 8, 9 and 10 of this
Agreement,  Employee  agrees that any remedy at law for any breach or threatened
or attempted  breach of such  covenants may be  inadequate  and that the Company
shall be entitled to specific performance or any other mode of injunctive and/or
other  equitable  relief to enforce its rights  hereunder  or any other relief a
court  might  award  without  the  necessity  of showing  any  actual  damage or
irreparable harm or the posting of any bond or furnishing of other security.

     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the day and year first hereinabove written.

                                      VASOMEDICAL, INC.

                                      By:     /s/ Photios Paulson
                                              -------------------
                                              Photios Paulson
                                              Chief Executive Officer

                                              /s/ Gregory D. Cash
                                              -------------------
                                              Gregory D. Cash, Employee

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