Document:

Exhibit 10.1

                              AMENDMENT AND WAIVER
                              TO CREDIT AGREEMENT

     AMENDMENT  AND WAVER,  dated as of October  18,  2002 (the  "Amendment  and
Waiver"), with respect to the Credit Agreement dated as of February 21, 2002 (as
amended,  restated,  supplemented  or modified,  from time to time,  the "Credit
Agreement"),  by and  among  VASOMEDICAL,  INC.,  a  Delaware  corporation  (the
"Company")  and FLEET NATIONAL BANK, a national  banking  association  organized
under the laws of the United States of America (the "Bank").

                                    RECITALS

     The Company has requested and the Bank has agreed, subject to the terms and
conditions  of this  Amendment,  to amend and waive  certain  provisions  of the
Credit Agreement as herein set forth.

     Accordingly,  in  consideration of the premises and of the mutual covenants
and agreements hereinafter set forth, the parties hereto agree as follows:

     I.   Amendments.

     Section  1.1.  The  following  definitions  in  Section  1.01 of the Credit
Agreement  are hereby  amended  and  restated  in their  entirety  to provide as
follows:

     "Borrowing Base" shall mean an amount equal to seventy percent (70%) of the
     face amount of all Eligible Accounts of the Company, provided, however, the
     Bank may increase such  percentage from time to time in its sole discretion
     based upon the results of field exams and appraisals to be conducted by the
     Bank or its agents from time to time.

     "Consolidated  Tangible  Net Worth"  shall  mean,  for any period (a) total
     consolidated  assets of the Company  and its  Subsidiaries  (excluding  any
     intangible assets) less (b) deferred tax assets less (c) total consolidated
     liabilities of the Company and its Subsidiaries, in each case determined in
     accordance  with  Generally  Accepted  Accounting  Principles  applied on a
     consistent basis.

     "Revolving  Credit  Commitment"  shall mean the Bank's  obligation  to make
     Revolving  Credit Loans to the Company in an aggregate amount not to exceed
     (a) $2,000,000, at any time that Consolidated Net Income of the Company and
     its Subsidiaries, for the immediately preceding three-month period, is less
     than $1.00,  and (b) $5,000,000,  at any other time, as such amounts may be
     adjusted in accordance with the terms of this Agreement.

     Section 1.2. The last sentence of the definition of "Consolidated  EBIT" is
hereby amended and restated in its entirety to provide as follows:

     "All of the foregoing categories shall be calculated (without  duplication)
     for the fiscal quarter ending on the date of calculation thereof."

     Section 1.3. The last sentence of the definition of  "Consolidated  EBITDA"
is hereby  amended and restated in its  entirety to provide as follows:

     "All of the foregoing categories shall be calculated (without  duplication)
     for the fiscal quarter ending on the date of calculation thereof."

     Section 1.4. The  definition of "Eligible  Inventory" is hereby  deleted in
its entirety.

     Section 1.5. Section 2.01(a) of the Credit Agreement is amended by amending
and restating the first sentence thereof in its entirety to provide as follows:
<PAGE>

     "Subject to the terms and conditions,  and relying upon the representations
     and warranties set forth herein, and subject to the next sentence, the Bank
     agrees  to  make  loans   (individually  a  "Revolving  Credit  Loan"  and,
     collectively,  the  "Revolving  Credit  Loans") to the Company from time to
     time during the Revolving Credit Commitment Period, up to but not exceeding
     at any one time outstanding the amount of its Revolving Credit  Commitment;
     provided,  however,  that no Revolving  Credit Loan shall be made if, after
     giving effect to such  Revolving  Credit Loan,  the  aggregate  outstanding
     principal  amount of all  Revolving  Credit Loans at such time would exceed
     the lesser of (i) the Revolving Credit Commitment in effect at such time or
     (ii) the then current Borrowing Base.

     Section  1.6.  Section  3.1 is hereby  amended by  amending  and  restating
subsections "(a)" and "(b)" thereof in their entirety to provide as follows:

     "(a) Each Prime Rate Loan shall bear  interest for the period from the date
     thereof on the unpaid  principal  amount thereof at a fluctuating  rate per
     annum  equal to the Prime  Rate plus a margin of  one-half  of one  percent
     (.50%) per annum.

     (b) Each  LIBOR  Rate Loan  shall bear  interest  for the  Interest  Period
     applicable  thereto on the unpaid  principal  amount  thereof at a rate per
     annum equal to the Reserve  Adjusted  Libor  determined  for each  Interest
     Period  thereof in  accordance  with the terms  hereof plus a margin of two
     percent (2.0%) per annum."

     Section  1.7.  Section 5.02 of the Credit  Agreement  is hereby  amended by
adding the following new subsection  "(e)"  immediately  after  subsection "(d)"
thereof:

     "(e) Borrowing Base Certificate.  On the date of each borrowing  hereunder,
     the Company  shall have  delivered to the Bank a duly  completed  Borrowing
     Base Certificate, dated such date and signed by the Chief Financial Officer
     of the Company."

     Section 1.8.  Section 5.03(d) of the Credit Agreement is hereby amended and
restated in its entirety to provide as follows:

     "(d)  Availability.  After giving effect to any requested  Revolving Credit
     Loan, (i) the outstanding  principal  amount of the Revolving  Credit Loans
     shall not exceed the lesser of (A) the then current  Borrowing Base and (B)
     the  Revolving  Credit  Commitment  then in  effect,  (ii)  cash  and  cash
     equivalents of the Company and its  Subsidiaries not subject to any Lien or
     other  restriction  shall  not be less  than  fifty  percent  (50%)  of the
     aggregate outstanding principal amount of the Revolving Credit Loans"

     Section 1.9.  Section 6.03(e) of the Credit Agreement is hereby amended and
restated in its entirety to provide as follows:

     "(e) as soon as available,  and in any event within twenty (20) days of the
     end of each calendar month, monthly accounts receivable agings summaries of
     the Company and a monthly Borrowing Base Certificate,  provided that at any
     time that there are no  outstanding  Revolving  Credit  Loans,  the Company
     shall  only  be  required  to  provide  to  the  Bank  quarterly   accounts
     receivables  agings  summaries,  within twenty (20) days of the end of each
     fiscal quarter;"

     Section 1.10. Section 7.02(h) of the Credit Agreement is hereby amended and
restated in its entirety to provide as follows:

     "(h) Intentionally omitted."
<PAGE>

     Section 1.11. Section 7.03(d) of the Credit Agreement is hereby amended and
restated in its entirety to provide as follows:

     "(d) Intentionally Omitted."

     Section 1.12.  Section 7.06 of the Credit  Agreement is hereby  amended and
restated in its entirety to provide as follows:

     "SECTION 7.06. Loans and  Investments.  Make or commit to make any advance,
     loan,  extension of credit, or capital contribution to, or purchase or hold
     beneficially any stock or other securities, or evidence of Indebtedness of,
     purchase  or acquire  all or a  substantial  part of the assets of, make or
     permit to exist any interest whatsoever in, any other Person except for (a)
     the  ownership of stock of its  Subsidiaries  as existing as of the Closing
     Date and (b) Eligible Investments. Notwithstanding anything to the contrary
     herein,  no  loans or  investments  shall be made to  Viromedics,  Inc.,  a
     Delaware corporation, at any time that it shall be an Inactive Subsidiary."

     Section 1.13. Section 7.13(a) of the Credit Agreement is hereby amended and
restated in its entirety to provide as follows:

     "(a) Leverage Ratio. Commencing with the fiscal quarter ending February 28,
     2003, permit the ratio of Consolidated  Funded Debt to Consolidated  EBITDA
     to be greater than the 2.25:1.00, at the end of any fiscal quarter."

     Section 1.14. Section 7.13(b) of the Credit Agreement is hereby amended and
restated in its entirety to provide as follows:

     (b) Interest  Coverage  Ratio.  Commencing  with the fiscal  quarter ending
     February 28, 2003,  permit the ratio of  Consolidated  EBIT to Consolidated
     Interest  Expense  to be less  than  5.00:1.00,  at the  end of any  fiscal
     quarter.

     Section 1.15. Section 7.13(c) of the Credit Agreement is hereby amended and
restated in its entirety to provide as follows:

     "(c)  Consolidated  Tangible Net Worth.  Permit  Consolidated  Tangible Net
     Worth to be less than the amount set forth below  opposite  the  applicable
     fiscal quarter:

Fiscal Quarter Ending                 Consolidated Tangible Net Worth
---------------------                 -------------------------------
November 30, 2002                  $12,583,651 (the "Reference Amount")
February 28, 2003 and the          The Reference Amount plus 50% of
last day of each fiscal quarter    Consolidated Net Income (but not net loss) of
thereafter                         the Company for the fiscal quarter then
                                   ending"

     Section  1.16.  Section  7.13(d) of the  Credit  Agreement  is amended  and
restated in its entirety to provide as follows:

     "(d)  Consolidated  Net Income.  Permit  Consolidated Net Income to be less
     than (i)  ($600,000),  for the fiscal quarter ending  November 30, 2002, or
     (ii) $1.00, at the end of any fiscal quarter thereafter with respect to the
     fiscal quarter then ending."

     Section 1.17.  Section 7.13 of the Credit  Agreement is further  amended by
adding the following new subsection "(f)" immediately following subsection "(e)"
thereof:
<PAGE>

     "(f)  Consolidated  Liquidity.  Permit  cash  and cash  equivalents  of the
     Company and its Subsidiaries not subject to any Lien or other  restriction,
     to be less than fifty percent (50%) of the aggregate  outstanding principal
     amount of the Revolving Credit Loans.

     Section  1.18.  Exhibit A and Exhibit F to the Credit  Agreement are hereby
amended and  replaced  with Exhibit A and Exhibit F,  respectively,  attached to
this Amendment and Waiver.

     II. Waiver.

     Section 2.1. The Bank hereby waives the Company's  compliance  with Section
7.13(a) of the Credit  Agreement,  Leverage Ratio,  for the fiscal quarter ended
August  31,  2002,  provided  that the  ratio  of  Consolidated  Funded  Debt to
Consolidated  EBITDA  was not less than  (0.93):1.00  at the end of such  fiscal
quarter.

     Section 2.2. The Bank hereby waives the Company's  compliance  with Section
7.13(b) of the Credit Agreement, Interest Coverage Ratio, for the fiscal quarter
ended  August  31,  2002,  provided  that  the  ratio  of  Consolidated  EBIT to
Consolidated  Interest Expense was not less than (25.07):1.00 at the end of such
fiscal quarter.

     Section 2.3. The Bank hereby waives the Company's  compliance  with Section
7.13(c),  Consolidated  Tangible Net Worth,  for the fiscal quarter ended August
31,  2002,  provided  that  Consolidated  Tangible  Net  Worth was not less than
$13,183,651 at the end of such fiscal quarter.

     Section 2.4. The Bank hereby waives the Company's  compliance  with Section
7.13(d) of the Credit Agreement, Consolidated Net Income, for the fiscal quarter
ended August 31, 2002,  provided that the  Consolidated  Net Income was not less
than ($4,234,278) at the end of such fiscal quarter.

     Section  2.5. The waivers set forth above are limited  specifically  to the
matters set forth above and for the specific instances and purposes given and do
not constitute,  directly or by implication,  a waiver or amendment of any other
provision  of the  Credit  Agreement  or a  waiver  of any  Default  or Event of
Default,  whether now existing or hereafter  arising  (except as contemplated by
Sections 2.1, 2.2, 2.3 and 2.4 above ).

     III. Miscellaneous.

     Section 3.1.  This  Amendment and Waiver shall become  effective  only upon
receipt by the Bank of (a) this  Amendment  and  Waiver,  duly  executed  by the
Company and the Guarantor,  (b) the Amended and Restated  Revolving Credit Note,
substantially  in the form of Exhibit A attached  hereto,  duly  executed by the
Company and (b) an amendment fee of $15,000.

     Section 3.2.  This  Amendment and Waiver shall be governed by and construed
in accordance with the laws of the State of New York.

     Section  3.3.  All terms used herein  shall have the same meaning as in the
Credit Agreement, as amended hereby, unless specifically defined herein.

     Section 3.4. This Amendment and Waiver shall constitute a Loan Document.

     Section 3.5. As expressly  amended hereby,  the Credit Agreement remains in
full force and effect in accordance with the terms thereof. The Credit Agreement
is ratified and  confirmed in all respects by the Company.  The  amendments  and
waivers herein are limited  specifically  to the matters set forth above and for
the  specific  instance  and  purposes  for which  given  and to not  constitute
directly or by implication an amendment or waiver of any other provisions of the
Credit Agreement or a waiver of any Event of Default or event which upon notice,
lapse of time or both would  constitute  an Event of Default  which may occur or
may have occurred under the Credit Agreement or any other Loan Document.

     Section  3.6.  The Company  hereby  represents  and  warrants  that (i) the
representations  and warranties by the Company  pursuant to the Credit Agreement

<PAGE>

and each other Loan  Document are true and correct on the date hereof,  and (ii)
after giving effect to this  Amendment and Waiver,  no Event of Default or event
which upon notice,  lapse of time or both would  constitute  an Event of Default
exists under the Credit Agreement or any other Loan Document.

     Section  3.7.  This  Amendment  and Waiver may be  executed  in one or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one Amendment and Waiver.

[next page is signature page]
<PAGE>

     IN WITNESS WHEREOF, the Company and the Bank have caused this Amendment and
Waiver to be duly executed by their duly  authorized  officers as of the day and
year first above written.

                                VASOMEDICAL, INC.

                        By: /s/ Joseph A. Giacalone
                        ---------------------------
                                Name: Joseph Giacalone
                                Title: Chief Financial Officer

                                FLEET NATIONAL BANK

                        By: /s/ Jeffrey A. Morris
                        -------------------------
                                Name:  Jeffrey A. Morris
                                Title: Senior Vice President

                                    CONSENT

The  undersigned,  not parties to the Credit  Agreement but as a Guarantor under
the Guaranty dated as of February 21, 2002, hereby acknowledges the terms of the
Amendment and Waiver  contained herein and confirms that its Guaranty is in full
force and effect.

                                180 LINDEN AVENUE CORPORATION

                        By: /s/ Joseph A. Giacalone
                        ---------------------------
                                Name: Joseph A. Giacalone
                                Title: Vice President

<PAGE>

                                   EXHIBIT A
                                   ---------

                   AMENDED AND RESTATED REVOLVING CREDIT NOTE

$5,000,000                                              Suffolk County, New York
                                                                October 18, 2002

     FOR  VALUE  RECEIVED,   VASOMEDICAL,  INC.,  a  Delaware  corporation  (the
"Company"), promises to pay to the order of FLEET NATIONAL BANK (the "Bank"), on
or before the Revolving Credit Commitment Termination Date, the principal amount
of FIVE MILLION DOLLARS ($5,000,000) or, if less, the unpaid principal amount of
all  Revolving  Credit  Loans made by the Bank to the  Company  under the Credit
Agreement referred to below.

     The Company also  promises to pay interest on the unpaid  principal  amount
hereof  from the date  hereof  until  paid in full at the rates and at the times
which shall be determined,  and to make principal repayments on this Note at the
times which shall be determined, in accordance with the provisions of the Credit
Agreement referred to below.

               This Note  is the  "Revolving  Credit  Note"  referred  to in the
                    Credit  Agreement  dated as of  February  21,  2002,  by and
                    between  the  Company  and  the  Bank  (as the  same  may be
                    amended,  modified or  supplemented  from time to time,  the
                    "Credit  Agreement")  and is issued pursuant to and entitled
                    to the benefits of the Credit  Agreement to which  reference
                    is hereby made for a more  complete  statement  of the terms
                    and  conditions  under  which  the  Revolving  Credit  Loans
                    evidenced hereby were made and are to be repaid. Capitalized
                    terms used herein without definition shall have the meanings
                    set forth in the Credit Agreement.

     Each of the Bank and any  subsequent  holder  of this Note  agrees,  by its
acceptance hereof,  that before transferring this Note it shall record the date,
Type and amount of each  Revolving  Credit  Loan and the date and amount of each
payment or prepayment of principal of each Revolving Credit Loan previously made
hereunder on the grid schedule annexed to this Note; provided, however, that the
failure of the Bank or holder to set forth such Revolving Credit Loans, payments
and other  information  on the attached  grid  schedule  shall not in any manner
affect the obligation of the Company to repay the Revolving Credit Loans made by
the Bank in accordance with the terms of this Note.

     This Note is subject to  optional  and  mandatory  prepayments  pursuant to
Section 3.03 of the Credit Agreement.

     Upon the  occurrence  of an Event of  Default,  the  unpaid  balance of the
principal  amount of this Note  together  with all accrued  but unpaid  interest
thereon,  may  become,  or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.

     All  payments of  principal  and  interest in respect of this Note shall be
made in lawful money of the United  States of America in  immediately  available
funds at the office of Fleet  National  Bank,  located at 300 Broad Hollow Road,
Melville,  New York  11747 or at such  other  place  as shall be  designated  in
writing for such purpose in accordance with the terms of the Credit Agreement.

     No reference  herein to the Credit  Agreement and no provision of this Note
or the Credit  Agreement  shall alter or impair the  obligation  of the Company,
which is absolute  and  unconditional,  to pay the  principal of and interest on
this Note at the place,  at the  respective  times,  and in the currency  herein
prescribed.

     This Note amends and  restates in its  entirety  and given in  substitution
for, but not in satisfaction of, that certain  Revolving Credit Note dated as of
February  21,  2002,  issued by the Company in favor of the Bank in the original

<PAGE>

principal sum of $15,000,000.00 (the "Original Note"). In addition to evidencing
the  indebtedness  formerly  evidenced  by the  Original  note,  this Note shall
evidence any accrued and unpaid interest on the Original Note.

     The  Company  and  endorsers  of this Note  waive  presentment,  diligence,
demand, protest, and notice of any kind in connection with this Note.

     THIS NOTE SHALL BE  GOVERNED  BY, AND SHALL BE  CONSTRUED  AND  ENFORCED IN
ACCORDANCE  WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW.

     IN WITNESS  WHEREOF,  the Company  has caused this Note to be executed  and
delivered  by its  duly  authorized  officer,  as of the day and year and at the
place first above written.

                                VASOMEDICAL, INC.

                        By: /s/ Joseph A. Giacalone
                        ---------------------------
                                Name:   Joseph A. Giacalone
                                Title:  Chief Financial Officer

<PAGE>

                                    SCHEDULE

Date      Principal    Type              Applicable   Amount of       Notation
 of       Amount of    of     Interest   Interest     Principal       Made
Loan      Loan         Loan   Rate       Period       Paid            By
----      ---------    ----   --------   ----------   ---------       --------
<PAGE>
                                   EXHIBIT F
                                   ---------

                          FORM OF NOTICE OF BORROWING

                                                        [Date]
Fleet National Bank
300 Broad Hollow Road
Melville, New York 11747
Attention: Jeffrey A. Morris,
           Senior Vice President

                Re:  Vasomedical, Inc.
Gentlemen:

     Pursuant to the Credit  Agreement  dated as of February 21,  2002,  (as the
same may have been and may hereafter be amended,  modified or  supplemented  the
"Credit  Agreement") by and among Vasomedical,  Inc. and Fleet National Bank, we
hereby give you  irrevocable  notice that we request a Revolving  Credit Loan as
follows:

        1.      Amount of Loan:         $____________
        2.      Borrowing Date:         _____________
        3.      Type of Loan:           [Prime Rate Loan] [LIBOR Rate Loan]
        4.      Interest Period:        [Specify 1, 2, 3, or 6 months]

     We hereby certify that (i) the representations and warranties  contained in
the Credit Agreement and the other Loan Documents are true, correct and complete
on and as of the date  hereof to the same extent as though made on and as of the
date hereof;  (ii) no Default or Event of Default has occurred and is continuing
under the  Credit  Agreement  or will  result  after  giving  effect to the Loan
requested  hereunder;  (iii)  the  Company  has  performed  all  agreements  and
satisfied all conditions under the Credit Agreement  required to be performed by
it on or before the date  hereof;  (iv)  after  giving  effect to the  requested
Revolving Credit Loan, the outstanding  principal amount of the Revolving Credit
Loans shall not exceed the lesser of (a) the current  Borrowing Base and (b) the
Revolving  Credit  Commitment  currently  in  effect,  and  (v)  cash  and  cash
equivalents of the Company and its Subsidiaries not subject to any Lien or other
restriction  is not less than fifty percent  (50%) of the aggregate  outstanding
principal  amount  of  the  Revolving  Credit  Loans  (including  the  requested
Revolving Credit Loan).

     Capitalized  terms used  herein but not defined  shall have the  respective
meanings given to them in the Credit Agreement.

     IN WITNESS WHEREOF, the Company has caused this document to be executed and
delivered by its Executive Officer as of the date written above.

                                VASOMEDICAL, INC.

                                By: ________________________
                                Title:  Chief Financial OfficerExhibit 10.2

     THIS AGREEMENT  ("Agreement")  made effective the 1st day of October,  2002
("Effective  Date"), by and between  VASOMEDICAL,  INC., a Delaware  corporation
with  its  principal   office  at  180  Linden   Avenue,   Westbury,   New  York
("Vasomedical" or the "Company"),  and DR. PETER F. COHN, an individual residing
at 27 Bouton Road, Huntington, New York 11743 ("Dr. Cohn" or the "Advisor").

                              W I T N E S S E T H:

     WHEREAS,  the Advisor has  particular  expertise and is an authority in the
field of cardiology and has  considerable  knowledge about, and experience with,
EECP therapy and related protocols; and

     WHEREAS,  the  Company is desirous  of  engaging  Dr. Cohn as a  Scientific
Advisor to the  Company  to  provide  the  services  hereinafter  set forth (the
"Services"), and the Advisor is agreeable to such retention in such capacity for
the period and on the terms and conditions set forth herein.

     NOW,  THEREFORE,  in  consideration  of the  premises  and  of  the  mutual
covenants  and  conditions  herein  contained,  the  parties  hereto do agree as
follows:

     1. The Company  retains the Advisor to perform the  Services for a four (4)
year period  commencing on the Effective  Date and ending on September 30, 2006,
(the  "Advisory  Period")  and the Advisor  hereby  accepts  such  retention  in
conformity with the provisions of this Agreement.

     2. The Advisor's  Services  during the Advisory Period shall consist of the
following:

     (a) During each respective year of the Agreement ("Agreement Years"), which
shall be defined by the first,  second,  third and fourth  anniversaries  of the
Effective  Date,  the  Advisor  shall be  required  to travel to and  attend two
medically relevant and professionally recognized symposiums, conferences or like
convocations  selected  jointly by the Advisor and the  Company  (the  "Speaking
Engagements") and to participate  thereat as a speaker and/or  representative on
behalf of the Company for the purpose of promoting the Company, its EECP system,
discussing  the  results of relevant  studies,  investigations  and trials,  and
otherwise,  in a  manner  not  inconsistent  with  his  professional  integrity,
presenting  the virtues and benefits of the EECP  therapy as a valuable  medical
protocol in the field of cardiology.

     (b) The Advisor shall provide from time to time as may be convenient to the
Advisor upon reasonable  telephone  request from senior level  executives of the
Company, general advice or information regarding potential opportunities for the
introduction of the Company's EECP systems, possible applications of the EECP as
therapeutic protocol in cardiology, and other relevant matters pertaining to the
Advisor's expertise in the field of cardiology.

     (c) The  Advisor  authorizes  the  Company  to  identify  the  Advisor as a
Scientific Advisor to the Company on its stationery,  literature and promotional
materials.

     (d) Notwithstanding anything herein to the contrary, the Advisor may attend
as a speaker  and/or  representative  on behalf of the Company for the  purposes
described in (b) hereof, any one or more additional Speaking Engagements, as may
be agreed upon in advance by the Company.

     3.  Compensation.  In consideration for the Services described in Section 2
above, any and all other Services which the Advisor may render for and on behalf
of the Company not  specifically  described  herein,  the  Restrictive  Covenant
described in Section 7 hereof and the Release described in Section 9 hereof, the
Company shall pay to the Advisor the following Compensation:

     (a) An  aggregate  Advisory  Fee  (the  "Advisory  Fee") in the  amount  of
$600,000 payable as follows:
<PAGE>
          (i) $200,000  payable on or before December 31, 2002 in respect of the
     First Agreement Year.

          (ii) $133,000 in respect of the Second Agreement Year payable in equal
     installments of $33,250.00 on or before the first day of the third,  sixth,
     ninth and twelfth month of such Year.

          (iii) $133,000 in respect of the Third Agreement Year payable in equal
     installments of $33,250.00 on or before the first day of the third,  sixth,
     ninth and twelfth month of such Year.

          (iv) $134,000 in respect of the Fourth Agreement Year payable in equal
     installments  of  $33,250.00  on or before the  fifteenth day of the third,
     sixth and ninth month and $34,250 on or before the first day of the twelfth
     month of such Year.

     (b) The sum of  $2,500  (the  "Honorarium")  for  each of the two  Speaking
Engagements  described in Section 2(b) as well as any other Speaking Engagements
attended  by the  Advisor  as agreed  upon by the  Company  and the  Advisor  in
accordance with Section 2(d).

     (c) In addition to the  foregoing,  the Advisor  shall be reimbursed by the
Company for all reasonable  travel  expenses  incurred by him in connection with
the Speaking Engagements  consistent with historical,  customary practice,  upon
the presentation of substantiating documentation therefor to the Company.

     4. (a) The  following  events  ("Events  of  Default")  shall be  deemed to
constitute a default on the part of the Company hereunder:

          (i) The failure to pay any amount due hereunder for a period of thirty
     (30) days after written notice from the Advisor.

          (ii) the  commencement of a proceeding in bankruptcy or under the laws
     of any state naming  Vasomedical  as the debtor  which is not  subsequently
     dismissed within sixty (60) days thereafter;

          (iii)  the  making  by  Vasomedical  of an  assignment  or  any  other
     arrangement for the benefit of creditors under any state statute;

          (iv) the  appointment  of any  trustee,  receiver or  liquidator  with
     regard  to all or any  substantial  part  of  Vasomedical's  properties  or
     assets.

     (b) Upon the occurrence of an Event of Default, the Advisor can declare the
unpaid  balance of the Advisory Fee  immediately  due and payable,  and interest
thereon shall thereafter accrue at the legal rate of nine (9%) percent per annum
(the "Acceleration  Right"). The Acceleration Right shall not be affected in any
manner by any  failure or alleged  failure on the part of the Advisor to perform
the  Services  required of him  hereunder  or to abide by any other  covenant or
agreement contained herein.

     5. In the event of the Advisor's  death prior to full payment to him of the
Advisory Fee under this Agreement, the Company shall be required nevertheless to
pay the unpaid balance of the Advisory Fee plus any unreimbursed expenses at the
times and in the manner  prescribed  herein to his Estate or any other person or
persons whom the Advisor may designate in writing (the "Death Benefit").

     6. This Agreement and the obligation of Vasomedical to pay the Advisory Fee
and any other sums due to the  Advisor  hereunder  shall in no way be  affected,
impaired,  excused,  withheld,  delayed or reduced  because the Advisor fails to
fulfill any of his obligations under this Agreement due to death,  disability or
otherwise, including, without limitation, a breach or alleged breach on the part
of the Advisor of any covenant or agreement herein.
<PAGE>

     7. (a) The Advisor covenants and agrees that during the Advisory Period, he
shall not, either as an employee, agent, advisor, consultant, officer, or in any
other  capacity or manner  whatsoever  anywhere  in the world,  speak or solicit
business on behalf of,  promote,  perform any services for, or allow his name to
be used in any manner in  connection  with,  any other entity who  manufactures,
sells, advertises for sale or distributes any enhanced external counterpulsation
system or  provides  services  comparable  to those  provided  by the Company in
competition with the Company (the "Restrictive Covenant").

     (b) The Advisor  covenants  that he will not  disclose  any trade  secrets,
customer lists, processes,  inventions, or any other confidential or proprietary
information  of the Company to any person,  firm,  corporation,  association  or
other  entity  for any reason or  purpose  whatsoever,  nor make use of any such
property  for his own purpose or the benefit of any person,  firm,  corporation,
association  or other entity  other than  Vasomedical  under any  circumstances.
Knowledge or information  which is generally  known to the public or the medical
community shall not constitute trade secrets or confidential information for the
purposes of this subsection (b).

     (c) In the  event of any  breach  or  threatened  breach  of the  Advisor's
obligations  described  in  subsection  (a) or  (b) of  this  Section  7,  it is
acknowledged that the Company will be irreparably  harmed,  and thus the Company
shall be entitled only to seek  injunctive  relief  enforcing the obligations of
the Advisor hereunder without the necessity of posting a bond.

     8. It is  recognized  and agreed  that this  Agreement  does not create the
relationship of employer and employee between the Advisor and the Company,  but,
rather,  that the services to be performed  hereunder  shall be performed by the
Advisor 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 Advisor 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.

     9. In  consideration  of the payments to be made to the Advisor pursuant to
this Agreement,  the Advisor hereby releases and discharges Vasomedical from all
claims, liabilities,  promises, contracts, agreements, obligations and causes of
action,  known or unknown,  fixed or  contingent,  in any way connected with any
transaction,  event,  act or omission  occurring on or prior to the date of this
Agreement, including any of the matters at issue in a certain lawsuit pending in
the  Supreme  Court,  Nassau  County  predicated  upon an alleged  breach by the
Company of a  Registration  Provision in a Warrant  issued to the Advisor  dated
February,  1996. The release (the "Release") described herein shall be expressly
subject to, and shall in no way  affect,  the  performance  by the Company of it
incumbent payment obligations to the Advisor under this Agreement.

     10. All notices, requests, demands and other communications hereunder shall
be in  writing,  and  shall be deemed  to have  been  duly  given if  personally
delivered,  or mailed  certified  mail,  return  receipt  requested,  or sent by
nationally recognized overnight courier service, to the parties at the addresses
first written above or to such other places as the parties may notify each other
in writing pursuant to this Section 10.

     11. This Agreement was executed by the parties in accordance with and shall
be governed and interpreted in accordance with the laws of New York.

     12. This Agreement  shall be binding upon and shall inure to the benefit of
the Advisor as well as the Company and their  successors  and assigns.  However,
nothing  herein  contained  shall  permit the Advisor to assign or delegate  his
rights or obligations hereunder,  except in the event of his death as prescribed
in Section 5.

     13.  This  Agreement  contains  the entire  agreement  between  the parties
relating to the subject  matter hereof and  supersedes as of the date hereof all
previous  agreements between the parties whether written or oral with respect to
the subject matter hereof. This Agreement may not be modified, altered, amended,
or the performance of any provision waived without the written agreement of both
parties hereto.
<PAGE>

     14. If any  provision  of this  Agreement  shall be held to be  invalid  or
unenforceable,  such invalidity or  unenforceability  shall not affect or impair
the validity or  enforceability  of the remaining  provisions of this Agreement,
which  shall  remain in full  force and  effect  and the  parties  hereto  shall
continue to be bound thereby.

     15. Any action,  proceeding or application  arising out of, relating to, or
in connection  with this  Agreement must be instituted or brought in the Supreme
Court of the State of New  York,  Nassau  County,  and to the  extent  possible,
referred  specifically to the Honorable  Leonard B. Austin for consideration and
determination.

     IN WITNESS WHEREOF,  the parties hereto have set their hands as of the date
first set forth above.

                                VASOMEDICAL, INC.

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

                                /s/ Peter F. Cohn
                                ----------------------
                                DR. PETER F. COHN

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