Document:

INTERNATIONAL SMART SOURCING, INC.

                           PLACEMENT AGENT'S AGREEMENT

June 12, 2000

Network 1 Financial Securities, Inc.
The Galleria, Penthouse
2 Bridge Avenue, Building 2
Red Bank, New Jersey  07701

Dear Ladies & Gentlemen:

                  The  undersigned,   International  Smart  Sourcing,   Inc.,  a
Delaware  corporation (the  "Company"),  proposes to offer for sale in a private
placement  ("Offering"),  a minimum  of  100,000  Shares of  Common  Stock  (the
"Minimum  Offering")  and a maximum  of  500,000  Shares of  Common  Stock  (the
"Maximum Offering"), $.001 par value ("Shares), at a purchase price of $3.00 per
share. The Shares will be offered on a best efforts,  all or none, basis for the
Minimum  Offering,  and a best efforts  basis  thereafter,  in  accordance  with
Section 4(2) and/or 3(b) of the  Securities Act of 1933, as amended (the "Act"),
and the  provisions  of Regulation D and S  promulgated  thereunder.  The Shares
shall be offered only to "Accredited  Investors",  as such term is defined under
Rule  501(a) of the Act,  including  without  limitation  entities  within  such
definition,  without  registration,  pursuant to the exemption from registration
created by  Regulation D under the Act. The Offering  shall  commence on the day
the Offering  Documents are first made  available to you by the Company and will
continue until the earlier to occur of (ii) the sale of the Maximum  Offering or
(ii)  August 31,  2000,  unless  extended  by the  Company for a period of up to
ninety (90) days from such date (the "Offering Period"). The first closing shall
occur  five  (5)  business   days  after  the   acceptance  by  the  Company  of
subscriptions  for the Minimum  Offering in order to allow  clearance  of checks
("First Closing"). Subsequent closings shall occur at times mutually agreed upon
by the Company and the Placement Agent until the Maximum  Offering is subscribed
for or the Offering is otherwise terminated, at the option of the Company.

                  The Company is subject to the  informational  requirements  of
the Securities  Exchange Act of 1934, as amended,  and in accordance  therewith,
files periodic reports,  proxy and information  statements and other information
with the Commission.  Such reports,  proxy and information  statements and other
information  will  be  referred  to  herein  as  the  "Public   Documents."  The
Subscription  Agreements and Questionnaires to be executed by each purchaser and
the Company  (collectively,  the "Subscription  Agreements") will be referred to
herein as the  "Offering  Documents."  Network 1 Financial  Securities,  Inc. is
sometimes  referred to herein as "Network 1" or the  "Placement  Agent." As used
herein, unless otherwise indicated,  the term "Company" shall mean International
Smart Sourcing, Inc., Inc. and any subsidiaries of International Smart Sourcing,
Inc., Inc. (each a "Subsidiary"  and  collectively,  the  "Subsidiaries"),  both
separately and as a consolidated entity.

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                  The   Company   has  agreed  to  include  the  Shares  in  any
registration  statement (except a Form S-8) under the Securities Act of 1933, as
amended (the "Act"),  the Company  files with  respect to its  Securities  for a
period of two years from the Final  Closing and to use its best  efforts to have
such registration  statement  declared  effective by the Securities and Exchange
Commission (the "SEC"), as promptly as practicable.

1.       APPOINTMENT OF PLACEMENT AGENT;  THE OFFERING PERIOD.

                  1.1 APPOINTMENT OF PLACEMENT  AGENT.  You are hereby appointed
exclusive  Placement  Agent of the Company  during the  offering  period  herein
specified  ("Offering  Period")  for the  purpose of  assisting  the  Company in
placing  the Shares  with  purchasers  who are  qualified  accredited  investors
("Subscribers").  You hereby  accept such agency and agree to assist the Company
in placing Shares with the Subscribers.  Your agency hereunder is not terminable
by the Company except upon  termination of the Offering or breach by you or your
material obligations hereunder.

                  1.2 OFFERING PERIOD. The Offering Period shall commence on the
day the Offering  Documents  are first made  available to you by the Company and
will  continue  until  the  earlier  to occur  of (ii)  the sale of the  Maximum
Offering or (ii) August 31, 2000, unless extended by the Company for a period of
up to ninety (90) days from such date (the "Offering  Period").  If, at any time
during the Offering Period, subscriptions for at least the Minimum Offering have
been  received and accepted by the Company (and funds in payment  therefor  have
cleared),  then, upon the mutual consent of the Company and the Placement Agent,
an initial  closing  ("Initial  Closing")  shall take place with respect to such
accepted  subscriptions  and the Company shall  continue the Offering  until all
Shares have been sold or the Termination Date, whichever occurs first. After the
Initial Closing,  subsequent closings with respect to accepted subscriptions may
take place at any time during the Offering Period as may be mutually  determined
by the Company and the Placement Agent (such subsequent closings and the Initial
Closing will each be referred to herein as a "Closing"). If subscriptions for at
least the Minimum  Offering are not received and accepted  (and funds in payment
therefor  cleared) by the Termination Date, then the Offering will be terminated
and all funds received from Subscribers  will be returned,  without interest and
without any deduction.

                  1.3 OFFERING DOCUMENTS. The Company will provide the Placement
Agent with a sufficient  number of copies of the Public and  Offering  Documents
for delivery to potential Subscribers and such other information,  documents and
instruments  which the  Placement  Agent deems  reasonably  necessary  to act as
Placement Agent hereunder and to comply with the rules, regulations and judicial
and administrative  interpretations  respecting compliance with applicable state
and federal statutes related to the Offering.

                  1.4.  SEGREGATION  OF FUNDS.  Each  Subscriber of Shares shall
tender to the  Placement  Agent a check  payable  to the  order of  "Continental
Transfer and Trust  Company--International  Smart  Sourcing,  Inc.,  Inc. Escrow
Account" in the amount of the  investment  subscribed  for, which funds shall be
held in escrow by Continental  Transfer and Trust Company,  as escrow agent,  in

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accordance with Rules 10b-9 and 15c2-4 promulgated under the Securities Exchange
Act of 1934 ("Exchange Act"), as set forth in the Offering Documents.

2.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  The Company  represents
and  warrants to the Placement Agent and the Subscribers as follows:

                  2.1      DISCLOSURE IN OFFERING DOCUMENTS.

                  2.1.1 PRIVATE  OFFERING  EXEMPTION;  OFFERING  DOCUMENTS.  The
Offering  Documents  conform in all material  respects with the  requirements of
Section 4(2) and/or 3(b) of the Securities Act,  Regulation S, and Rules 501-506
of  Regulation D and with the  requirements  of all other  applicable  rules and
regulations of the Securities and Exchange Commission  ("Commission")  currently
in effect  relating to  transactions  not involving a public offering The Public
and Offering Documents contain all material  statements which are required to be
stated  therein in  accordance  with such  requirements  and do not  contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements  therein,  in the light of
the circumstances under which they were made, not misleading.  Assuming that (i)
a proper Form D is filed in  accordance  with Rule 503 of Regulation D, (ii) the
offer and the sale of the Shares by the  Placement  Agent was made in compliance
with Rule 502(c) of  Regulation  D,  Regulation  S, and/or  Section  4(2) of the
Securities  Act,  and  (iii)  the  representations  of  the  Subscribers  in the
Subscription  Agreements  signed by them are true and correct  (which facts will
not be independently verified by the Company) the sale of Shares in the Offering
is exempt from  registration  under the Securities Act and is in compliance with
Regulation D and Regulation S.

                  2.1.2 DISCLOSURE OF CONTRACTS.  The descriptions in the Public
Documents of all  contracts,  agreements,  instruments,  indentures,  mortgages,
loans, leases, licenses,  arrangements or undertakings of any nature, written or
oral, of the Company which involve  future  payments,  performance  or services,
development of products,  or delivery of goods or materials to or by the Company
of an  aggregate  amount or value in excess of  $50,000 or which  otherwise  are
material to the business or prospects of the Company (collectively, "Contracts")
are  accurate  in all  material  respects  and  present  fairly the  information
required to be disclosed  therein and there are no contracts or other  documents
required  to be  described  in the  Public  Documents  which  have  not  been so
described.  The Company has furnished the Placement Agent with true, correct and
complete  copies  (or  where  oral,  written  descriptions)  of  all  Contracts,
including all exhibits, schedules,  amendments,  supplements,  modifications and
waivers thereto.  Each of the Contracts is in full force and effect, the Company
has performed in all material respects all of its obligations  thereunder and is
not in default  thereunder,  and no party to a Contract  has made a claim to the
effect that the Company has failed to perform any obligations thereunder. To the
knowledge of the Company,  there is no plan,  intention,  or  indication  of any
contracting  party  to  a  Contract  to  cause   termination,   cancellation  or
modification  of such  Contract or to reduce or  otherwise  change its  activity
thereunder  so as to  adversely  affect in any  material  respect  the  benefits
derived or expected to be derived therefrom by the Company. The Company does not
know of the occurrence of any event or the existence of any state of facts which
with notice or the passage of time or both could cause it to be in default.  The

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Company is not a party to, or bound by, any warranty  agreement  with respect to
products  sold or any  contract,  agreement,  commitment  or  restriction  which
obligates the Company to perform services or to produce  products  unprofitably.
None of the provisions of such  contracts or  instruments  violates any existing
applicable law, rule, regulation,  judgment, order or decree of any governmental
agency or court having jurisdiction over the Company, its assets or businesses.

                  2.2      CHANGES AFTER DATES IN OFFERING DOCUMENTS.

                  2.2.1 NO MATERIAL  ADVERSE CHANGE.  Except as otherwise stated
in the Public Documents, since the most recent Balance Sheet Date, (i) there has
been no material adverse change in the condition,  financial or otherwise, or in
the  results of  operations,  business  or business  prospects  of the  Company,
including,  but not limited to a material loss or interference with its business
from fire, storm, explosion,  flood or other casualty, whether or not covered by
insurance,  or from any labor dispute or court or governmental  action, order or
decree,  whether or not arising in the  ordinary  course of  business,  (ii) the
Company has not become a party to, and neither the  business nor the property of
the  Company  has become the  subject of, any  litigation  which,  if  adversely
determined,  would have a material  adverse effect on the business,  properties,
assets,  condition (financial or otherwise) or prospects of the Company, whether
or not in the ordinary  course of business (a "Material  Adverse  Effect"),  and
(iii) there have been no  transactions  entered into by the Company,  other than
those in the ordinary course of business, which are material with respect to the
condition, financial or otherwise, or to the results of operations,  business or
business prospects of the Company.

                  2.2.2    RECENT SECURITIES TRANSACTIONS. ETC.  Since the  most
recent  Balance Sheet date, and except as otherwise  specifically  stated in the
Public Documents,  the Company has not (i) issued any securities or incurred any
liability or obligation, direct or contingent, for borrowed money; (ii) declared
or paid any  dividend  or made any other  distribution  on or in  respect to its
capital stock; or (iii) issued any options, warrants or other rights to purchase
the capital stock of the Company,  or any security or other  instrument which by
its terms is convertible into, exercisable for or exchangeable for capital stock
of the Company.

                  2.3 NO PREEMPTIVE RIGHTS; OPTIONS; REGISTRATION RIGHTS. Except
as set forth in the Public Documents, there are no preemptive or other rights to
subscribe for or purchase,  or any  restriction  upon the voting or transfer of,
any  shares of Common  Stock,  or other  securities  of the  Company,  under the
Certificate of Incorporation or By-Laws of the Company of under any agreement or
other  outstanding  instrument to which the Company is a party or by which it is
bound.  Except as set forth in the Public  Documents,  the Company does not have
outstanding any option, warrant, convertible security, or other right permitting
or  requiring it to issue,  or  otherwise to purchase or convert any  obligation
into, shares of Common Stock, or other securities of the Company and the Company
has not agreed to issue or sell any shares of Common Stock, or other  securities
of the Company.

                  2.4  FINANCIAL  STATEMENTS.  The  financial  statements of the
Company,  including  any notes  thereto and  supporting  schedules,  included or
incorporated by reference in the Public Documents ("Financials"), fairly present
the  financial  position and results of  operations  of the Company at the dates

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thereof and for the periods  covered  thereby,  subject,  in the case of interim
periods, to year-end adjustments and normal recurring accruals.  The Company has
no  material  liabilities  or  obligations,   contingent,  direct,  indirect  or
otherwise  except (i) as set forth in the latest  balance sheet  included in the
Financials or the footnotes  thereto (the date of such balance sheet referred to
as the "Balance  Sheet  Date"),  (ii) those  incurred in the ordinary  course of
business  since the  Balance  Sheet  Date,  and (iii) as set forth in the Public
Documents.  The Public Documents also sets forth all outstanding  amounts due to
any employees,  officers, directors or stockholders of the Company, or to any of
their respective  affiliates,  including,  but not limited to, accrued salaries,
loans, etc.

                  2.5 AUTHORIZED CAPITAL;  OPTIONS; ETC. The Company had, at the
date or dates indicated in the Public  Documents,  such duly authorized,  issued
and outstanding  capitalization as set forth in the Public Documents.  Except as
set forth in the Public  Documents,  there are no  options,  warrants,  or other
rights to purchase or otherwise  acquire any authorized  but unissued  shares of
capital stock of the Company or any security  convertible into shares of capital
stock of the Company, or any contracts or commitments to issue or sell shares of
capital stock or any such options, warrants, rights or convertible securities.

                  2.6      VALID ISSUANCE OF SECURITIES: ETC.

                  2.6.1  OUTSTANDING  SECURITIES.  All  issued  and  outstanding
securities of the Company have been duly  authorized  and validly issued and are
fully paid and non-assessable;  the holders thereof have no rights of rescission
with  respect  thereto,  and are not subject to personal  liability by reason of
being such holders;  and none of such securities were issued in violation of the
preemptive  rights of any  holders  of any  security  of the  Company or similar
contractual rights granted by the Company.  All outstanding options and warrants
to purchase shares of capital stock constitute the valid and binding obligations
of the Company,  enforceable  in  accordance  with their terms.  The  authorized
capital stock and  outstanding  options and warrants  conform to all  statements
relating thereto contained in the Public Documents.  The offers and sales of the
outstanding  capital stock,  options and warrants to purchase  shares of capital
stock  were  at all  relevant  times  either  registered  under  the Act and the
applicable  state  securities or Blue Sky laws or exempt from such  registration
requirements.

                  2.6.2 SHARES. The Shares have been duly and validly authorized
and, when issued and delivered in accordance with the terms of the  Subscription
Agreements, will be duly and validly issued, fully paid and non-assessable.  The
holders of the Shares  will not be subject to  personal  liability  by reason of
being  such  holders  and will not be subject  to the  preemptive  rights of any
holders of any security of the Company or similar  contractual rights granted by
the Company.  All corporate  action required to be taken for the  authorization,
issuance and sale of the Shares has been duly and validly taken.

                  2.7 REGISTRATION RIGHTS OF THIRD PARTIES.  Except as set forth
in the Public and  Offering  Documents,  no  holders  of any  securities  of the
Company  or of any  options  or  warrants  of  the  Company  exercisable  for or
convertible  or  exchangeable  into  securities of the Company have the right to
require the Company to register any such securities of the Company under the Act
or to include any such securities in a registration statement to be filed by the
Company.

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                  2.8 DUE  AUTHORIZATION.  The Company has full right, power and
authority to enter into this Agreement and the Subscription Agreements, to issue
the Shares of Common Stock and to perform all of its  obligations  hereunder and
thereunder  and to  consummate  the  transactions  contemplated  by the Offering
Documents.  This  Agreement  has been,  and the  Subscription  Agreements,  when
executed  and  delivered,  will have been,  duly and validly  authorized  by all
necessary  corporate  action and no further  corporate  action or approval is or
will be required for their respective execution,  delivery and performance. This
Agreement  constitutes  and  each  Subscription   Agreement  (assuming  the  due
authorization,  execution and delivery by each subscriber) to be entered into by
the  Company  with  respect  to  the  purchase  and  sale  of  the  Shares  (the
"Subscription  Agreements") will constitute,  when executed and delivered by the
Company,  valid and binding obligations of the Company,  enforceable against the
Company  in  accordance  with  their   respective  terms  (except  (i)  as  such
enforceability  may be  limited by  bankruptcy,  insolvency,  reorganization  or
similar  laws now or hereafter  in effect  relating to or  affecting  creditors'
rights  generally,  (ii)  that the  enforceability  of the  indemnification  and
contribution  provisions  of the  respective  agreements  may be  limited by the
federal and state  securities laws and public policy,  and (iii) that the remedy
of specific  performance and injunctive and other forms of equitable  relief may
be subject to the equitable  defenses and to the  discretion of the court before
which any proceeding therefor may be brought.

                  2.9 NO  CONFLICTS.  The  Company's  execution,  delivery,  and
performance of this Agreement and the Subscription Agreements,  the consummation
by the  Company of the  transactions  contemplated  herein and  therein  and the
compliance  by the  Company  with  the  provisions  of  this  Agreement  and the
Subscription  Agreements  have been duly  authorized by all necessary  corporate
action  and do not and will not,  with or  without  the  giving of notice or the
lapse of time or both (i)  result in a breach  of, or  conflict  with any of the
terms  and  provisions  of, or  constitute  a  default  under,  or result in the
creation,  modification,  termination  or  imposition  of any  lien,  charge  or
encumbrance  upon any property or assets of the Company pursuant to the terms of
any indenture,  mortgage,  deed of trust,  note, loan or credit agreement or any
other  agreement or instrument  evidencing an obligation for borrowed  money, or
any other  agreement or  instrument  to which the Company is a party or by which
the  Company  may be bound or to which  any of the  property  or  assets  of the
Company is  subject;  (ii)  result in any  violation  of the  provisions  of the
Certificate of  Incorporation  or the By-laws of the Company;  (iii) violate any
existing  applicable  law, rule,  regulation,  judgment,  order or decree of any
governmental agency or court, domestic or foreign,  having jurisdiction over the
Company or any of its properties or business;  or (iv) have any material adverse
effect on any permit, license,  certificate,  registration,  approval,  consent,
license or franchise  necessary  for the Company to own or lease and operate any
of its properties or to conduct its business.

                  2.10 NO DEFAULTS. Except as described in the Public Documents,
no material  default exists in the due  performance  and observance of any term,
covenant or condition of any permit,  license,  contract,  indenture,  mortgage,
deed of  trust,  note,  loan or credit  agreement,  or any  other  agreement  or
instrument  evidencing an obligation for borrowed  money, or any other agreement

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or  instrument  to which the  Company is a party or by which the  Company may be
bound or to which any of the properties or assets of the Company is subject. The
Company is not in violation of any material term or provision of its Certificate
of Incorporation or By-Laws or in material violation of any franchise,  license,
permit, applicable law, rule, regulation, judgment or decree of any governmental
agency or court,  domestic or foreign,  having  jurisdiction over the Company or
any of its properties or business, except as described in the Public Documents.

                  2.11     CORPORATE POWER; LICENSES; CONSENTS.

                  2.11.1  CONDUCT OF  BUSINESS.  The Company  has all  requisite
corporate power and authority, and has all necessary authorizations,  approvals,
orders,  licenses,  certificates  and  permits  of  and  from  all  governmental
regulatory  officials,  agencies,  authorities  and  bodies  to own or lease its
properties  and conduct its business as described in the Public  Documents.  The
Company  is  and  has  been  doing   business  in   compliance   with  all  such
authorizations,  approvals,  orders, licenses,  certificates and permits and all
federal,  state and local laws,  rules and  regulations.  The disclosures in the
Public Documents  concerning the effects of federal,  state and local regulation
on the Company's business as currently conducted or contemplated to be conducted
are correct in all material respects and do not omit to state a material fact.

                  2.11.2 TRANSACTIONS CONTEMPLATED HEREIN; CONSENTS. The Company
has all  corporate  power and  authority to enter into this  Agreement,  and the
Subscription  Agreements to carry out the provisions  and conditions  hereof and
thereof,  and all consents,  authorizations,  approvals  and orders  required in
connection  therewith  have been  obtained.  Except  as set forth in the  Public
Documents, no consent,  approval,  authorization,  order of, or filing with, any
court,  governmental  agency,  authority or other body is required to consummate
the transactions contemplated by this Agreement and the Subscription Agreements,
and the issuance of the Shares, except that the offer and sale of the Shares and
the Shares in certain  jurisdictions  may be  subject to the  provisions  of the
securities or Blue Sky laws of such jurisdictions.

                  2.12 TITLE TO PROPERTY;  INSURANCE. Except as set forth in the
Public  Documents,  the Company has good and  marketable  title to, or valid and
enforceable  leasehold  estates  in,  all  items of real and  personal  property
(tangible  and  intangible)  owned or leased by it, free and clear of all liens,
encumbrances,  claims,  security  interests,  defects  and  restrictions  of any
material nature  whatsoever.  The Company has adequately  insured its properties
against loss or damage by fire or other casualty and maintains such insurance in
adequate amounts which are adequate to protect its financial  condition  against
the risks involved in the conduct of its businesses.

                  2.13 NO  PENDING  ACTIONS.  Except as set forth in the  Public
Documents, there are no actions, suits, proceedings,  claims, or hearings of any
kind or nature  existing or pending  (or, to the best  knowledge of the Company,
threatened)  or, to the best  knowledge of the Company,  any  investigations  or
inquiries, before or by any court, or other governmental authority,  tribunal or
instrumentality  (or, the  Company's  best  knowledge,  any state of facts which
would  give rise  thereto),  pending  or  threatened  against  the  Company,  or
involving  the  properties  of the  Company,  which might result in any material

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adverse  change in the business,  properties,  financial  position or results of
operations of the Company,  or which might adversely  affect the transactions or
other acts  contemplated by this Agreement or the validity or  enforceability of
this  Agreement.  Except as  described  in the  Public  Documents,  there are no
outstanding  orders,  judgments or decrees of any court,  governmental agency or
other  tribunal  naming the Company and  enjoining  the Company from taking,  or
requiring  the  Company  to take,  any  action,  or to which  the  Company,  its
properties or business, is bound or subject.

                  2.14 DUE INCORPORATION,  QUALIFICATION AND GOOD STANDING.  The
Company has been duly incorporated,  is validly existing as a corporation and is
in good standing  under the laws of its state of  incorporation.  The Company is
duly  qualified and licensed and in good standing as a foreign  corporation  for
the  transaction  of business and is in good  standing in each  jurisdiction  in
which the ownership or leasing of its  properties or the conduct of its business
requires such  qualification  or licensing,  except where the failure to qualify
would not have a Material  Adverse  Effect on the business of the  Company.  The
Company has all requisite corporate power and authority necessary to own or hold
its properties and conduct its business as described in the Public Documents.

                  2.15 TAXES.  Except as set forth in the Public Documents,  the
Company has filed all federal tax returns and all state and  municipal and local
tax returns (whether relating to income, sales, franchise,  withholding, real or
personal  property or other types of taxes)  required to be filed under the laws
of the United States and applicable states, and has paid in full all taxes which
have  become  due  pursuant  to such  returns or claimed to be due by any taxing
authority or otherwise due and owing;  provided,  however,  that the Company has
not paid any tax, assessment,  charge, levy or license fee that it is contesting
in good faith and by proper proceedings and adequate reserves for the accrual of
same are  maintained if required by generally  accepted  accounting  principles.
Each of the tax returns heretofore filed by the Company correctly and accurately
reflects the amount of its tax liability thereunder.  Except as set forth in the
Public  Documents,  the Company  has  withheld,  collected  and paid all levies,
assessments,  license  fees and taxes to the extent  required.  As used  herein,
"tax" or "taxes" include all taxes,  charges,  fees, levies or other assessments
imposed by any Federal,  state,  local, or foreign taxing authority,  including,
without limitation, income, premium, recapture, credit, excise, property, sales,
use,  occupation,  service,  service use,  leasing,  leasing  use,  value added,
transfer,  payroll,  employment,  license,  stamp,  franchise  or similar  taxes
(including any interest  earned  thereon or penalties or additions  attributable
thereto).  The  term  "returns"  means  all  returns,   declarations,   reports,
statements, and other documents required to be filed in respect of taxes.

                  2.16 NO RIGHT TO  PURCHASE.  Except as set forth in the Public
Documents,  the issuance of the Shares in the Offering  will not give any holder
of any of the Company's outstanding shares of Common Stock, options, warrants or
other convertible securities or rights to purchase securities of the Company (i)
the right to  purchase  any  additional  shares of  Common  Stock,  or any other
securities  of the Company,  or (ii) the right to purchase any  securities  at a
reduced price.

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                  2.17     TRANSACTIONS AFFECTING DISCLOSURE TO NASD.

                  2.17.1   FINDER'S FEES.  The Company is not obligated to pay a
finder's fee to anyone in connection with the introduction of the Company to the
Placement Agent, or the consummation of the Offering contemplated hereunder.

                  2.17.2 PAYMENTS WITHIN TWELVE MONTHS. Within the twelve months
prior to the date  hereof,  except as set forth in the Offering  Documents,  the
Company has not paid or issued any monies,  securities or other  compensation to
any member of the National  Association of Securities Dealers,  Inc. ("NASD") or
to any  affiliate  or  associate  of such a member  or to any  other  person  in
consideration  for such  person  raising  funds  for the  Company  or  providing
consulting services to the Company. The Company does not owe any monies or other
obligations to any NASD member, affiliate or associate.

                  2.17.3  USE OF  PROCEEDS.  None  of the  net  proceeds  of the
Offering  will be paid by the  Company to any NASD  member or its  affiliate  or
associates, except as specifically authorized herein.

                  2.18 FOREIGN  CORRUPT  PRACTICES ACT.  Neither the Company nor
any of its officers, directors,  employees, agents or any other person acting on
behalf of the Company has,  directly or indirectly,  given or agreed to give any
money,  gift or similar benefit (other than legal price concessions to customers
in the ordinary course of business) to any customer, supplier, employee or agent
of a customer or supplier, or official or employee of any governmental agency or
instrumentality  of any government  (domestic or foreign) or any political party
or  candidate  for  office  (domestic  or  foreign)  or any  political  party or
candidate  for office  (domestic or foreign) or other person who was, is, or may
be in a position to help or hinder the  business of the Company (or assist it in
connection with any actual or proposed  transaction) which (i) might subject the
Company  to any  damage  or  penalty  in any  civil,  criminal  or  governmental
litigation  or  proceeding,  (ii) if not  given in the  past,  might  have had a
materially  adverse effect on the assets,  business or operations of the Company
as  reflected  in  any of  the  financial  statements  contained  in the  Public
Documents or (iii) if not continued in the future,  might  adversely  affect the
assets, business, operations or prospects of the Company. The Company's internal
accounting controls and procedures are sufficient to cause the Company to comply
with the Foreign Corrupt Practices Act of 1977, as amended.

                  2.19 INTANGIBLES.  The Company owns or possesses the requisite
licenses or rights to use all trademarks,  service marks,  service names,  trade
names,   patents  and  patent   applications,   copyrights   and  other   rights
(collectively, "Intangibles") used by the Company in its business or relating to
products sold by the Company,  and all such Intangibles are stated in the Public
Documents.  The Company's  Intangibles  which have been registered in the United
States Patent and Trademark  Office have been fully  maintained  and are in full
force and effect.  There is no claim or action by any person  pertaining  to, or
proceeding pending or to the Company's knowledge, threatened and the Company has
not  received any notice of conflict  with the  asserted  rights of others which
challenges  the exclusive  right of the Company with respect to any  Intangibles
used in the conduct of the Company's  business except as described in the Public
Documents. To the best of Company's knowledge, the Intangibles and the Company's

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<PAGE>

current products, services and processes do not infringe on any intangibles held
by any third  party.  To the best of the  Company's  knowledge,  no others  have
infringed upon the Intangibles of the Company.

                  2.20     RELATIONS WITH EMPLOYEES

                  2.20.1 EMPLOYEE  MATTERS.The  Company has generally  enjoyed a
satisfactory  employer-employee  relationship  with  its  employees  and  is  in
compliance in all material  respects with all federal,  state and local laws and
regulations respecting the employment of its employees and employment practices,
terms and conditions of employment and wages and hours relating  thereto.  There
are no pending  investigations  involving the Company by the U.S.  Department of
Labor, or any other governmental  agency responsible for the enforcement of such
federal,  state or local laws and employment laws and  regulations.  There is no
unfair labor practice  charge or complaint  against the Company pending before a
Labor Relations Board or any strike,  picketing,  boycott,  dispute, slowdown or
stoppage  pending  or  threatened  against  or  involving  the  Company  or  any
predecessor entity. No questions concerning  representation exist respecting the
employees of the Company and no collective  bargaining agreement or modification
thereof  is  currently  being  negotiated  by  the  Company.   No  grievance  or
arbitration  proceeding  is pending  under any  expired or  existing  collective
bargaining agreements of the Company, if any.

                  2.20.2  EMPLOYEE  BENEFIT  PLANS.  Except as  disclosed in the
Public Documents,  the Company neither  maintains,  sponsors nor contributes to,
nor is it  required to  contribute  to, any  program or  arrangement  that is an
"employee  pension  benefit  plan,  an  employee  welfare  benefit  plan,"  or a
"multi-employer  plan" as such terms are  defined  in  Sections  3(2),  3(1) and
3(37), respectively,  of the Employee Retirement Income Security Act of 1974, as
amended  ("ERISA")  ("ERISA  Plans").  Other  than as  disclosed  in the  Public
Documents,  the Company does not, and has at no time,  maintained or contributed
to a defined  benefit  plan,  as defined in  Section  3(35) of ERISA.  Except as
disclosed in the Public Documents, if the Company does maintain or contribute to
a defined benefit plan, any termination of the plan on the date hereof would not
give rise to  liability  under  Title IV of ERISA,  and no ERISA Plan which is a
pension  plan has incurred an  accumulated  funding  deficiency"  (as defined in
Section 302 of ERISA) and no ERISA Plan which is a "welfare plan" (as defined in
Section 3(1) of ERISA) has any unfunded liabilities.  Except as disclosed in the
Public  Documents,  there are no unfunded benefits under any ERISA Plan which is
subject to the funding  standards of ERISA.  No ERISA Plan (or any trust created
thereunder)  has  engaged in a  "prohibited  transaction"  within the meaning of
Section 406 of ERISA or Section  4975 of the Internal  Revenue Code of 1986,  as
amended (the  "Code"),  which could subject the Company to any tax or penalty on
prohibited transactions and which has not adequately been corrected.  Each ERISA
Plan  is in  compliance  with  all  material  reporting,  disclosure  and  other
requirements  of the  Code and  ERISA as they  relate  to any such  ERISA  Plan.
Determination  letters have been received from the Internal Revenue Service with
respect to each ERISA Plan which is intended to comply with Code Section 401(a),
stating that such ERISA Plan and the attendant  trust are  qualified  thereunder
and nothing has occurred which would cause the loss of such qualification. Other
than claims for  benefits in the  ordinary  course,  there is no pending  claim,
litigation,  arbitration or any other legal proceeding  involving any ERISA Plan

                                       10

<PAGE>

which may result in material  liability  on the part of the Company or any ERISA
Plan under ERISA or any other law, nor, is there any reasonable basis for such a
claim. The Company has no bonus,  incentive or deferred compensation plans which
constitute a continuing liability of the Company, except individual arrangements
of the  Company  with  employees  relating  to their  employment.  There  are no
employees  of the  Company  who,  in  connection  with their  employment  by the
Company,  are receiving  any pension or  retirement  payments or are entitled to
receive any unfunded pensions not covered by a pension plan to which the Company
is a party. For purposes of this Agreement,  the Company and any entity, whether
incorporated  or  unincorporated,  treated as a single employer with the Company
under Section 414(b),  414(c),  414(m), or 416(o) of the Code, shall be referred
to as the  "Controlled  Group" and any  "employee  benefit  plan" (as defined in
Section  3(3) of  ERISA)  maintained  or  contributed  to by any  member  of the
Controlled  Group shall be referred to as a  "Controlled  Group  Plan." For each
Controlled  Group Plan that is a pension  plan:  (i) except as  disclosed in the
Memorandum,  all  contributions  required to be made under ERISA Section 302 and
Section 412 (whether or not waived)  have been made,  (ii) no  reportable  event
(within the meaning of ERISA Section  4043) has occurred at any time,  and (iii)
no  material  liability  under  Title Iv of ERISA  exists or is  expected  to be
incurred  by any member of the  Controlled  Group.  No member of the  Controlled
Group has had, at any time, any  obligation to contribute to any  "multiemployer
plan." Each  Controlled  Group Plan which is a "group health plan" (as such term
is defined in Code Section 4980(g))  complies and has complied in each and every
case  with  the  applicable  requirements  of the  CONSOLIDATED  OMNIBUS  BUDGET
RECONCILIATION ACT OF 1985, as amended ("COBRA").

                  2.21 NO ANTI-DILUTION  ADJUSTMENT.  Except as set forth in the
Offering  Documents,  the  issuance of any of the  Securities  will not give any
holder  of  any  of  the  Company's  outstanding  options,   warrants  or  other
convertible  securities or rights to purchase  shares of the  Company's  capital
stock,  the right to purchase any additional  shares of capital stock and/or the
right to purchase  shares of Common Stock at a reduced price or a greater number
of shares of Common Stock.

                  2.22     ENVIRONMENTAL MATTERS.    Except  as set forth in the
Public Documents:

                  2.22.1 The Company has  obtained  all  permits,  licenses  and
other  authorizations  that are required  with  respect to the  operation of its
business  under the  Environmental  Laws (as  defined  below)  and,  to the best
knowledge of the Company, is in compliance with all terms and conditions of such
required permits, licenses and authorizations;

                  2.22.2 The  Company is in  compliance  with the  Environmental
laws (including,  without limitation,  compliance with standards,  schedules and
timetables therein);

                  2.22.3 No real property or facility owned,  operated,  leased,
or  controlled  by  the  Company  or,  to the  knowledge  of  the  Company,  any
predecessor in interest of the Company, is listed or proposed for listing on the
National   Priorities  List  or  the   Comprehensive   Environmental   Response,
Compensation,  and Liability  Information  System,  both  promulgated  under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended  ("CERCLA"),  or on any  comparable  state  or  local  list  established

                                       11

<PAGE>

pursuant  to any  Environmental  Law,  and  the  Company  has not  received  any
notification or potential or actual  liability or request for information  under
CERCLA or any comparable  state or local law, except that which would not have a
Material Adverse Effect;

                  2.22.4 THERE HAVE BEEN NO RELEASES (I.E.,  any past or present
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting,  escaping,  leaching,  disposing or dumping,  on-site or off-site) of
Hazardous  Materials by the Company or, to the  knowledge  of the  Company,  any
predecessor  in interest of the Company at, on,  under,  from or into any of the
real property owned,  operated,  leased, managed or controlled by the Company in
violation  of any  Environmental  Laws or  giving  rise to  liability  under any
Environmental Law;

                  2.22.5  There are no  polychlorinated  biphenyls  or  asbestos
located  in,  at, on or under  any  facility  or real  property  owned,  leased,
managed,  used or  controlled  by the  Company in such  amounts,  conditions  or
concentrations to require removal,  remedial or corrective  action, or to result
in liability  under the  Environmental  Laws;  to the  knowledge of the Company,
there have been no  releases  (i.e.,  any past or present  releasing,  spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching,  disposing or dumping,  on-site or off-site),  at, on, under,  from or
into any real  property in the vicinity of any real  property  owned,  operated,
leased,  managed,  used or  controlled  by the  Company  or any  predecessor  in
interest that could reasonably be expected to result in liability by the Company
under the Environmental Laws; and

                  2.22.6 There is no civil,  criminal or administrative  action,
suit,  demand,  hearing,  notice  of  violation  or  deficiency,  investigation,
proceeding, notice or demand letter pending or, to the knowledge of the Company,
threatened against the Company under any Environmental Law.

                  2.22.7   For the purposes of this Agreement:

                  (A) "ENVIRONMENTAL LAWS" means the common law and all federal,
state, local and foreign laws or regulations,  codes, orders, decrees, judgments
or injunctions issued, promulgated, approved or entered thereunder, now or as in
effect at the Closing, relating to pollution or protection of public or employee
health or the environment,  including,  without limitation, laws relating to (a)
emissions,   discharges,  releases  or  threatened  releases  of  any  Hazardous
Materials into the  environment  (including,  without  limitation,  ambient air,
surface  water,  ground  water,  land  surface or  subsurface  strata),  (b) the
manufacture,  processing,  distribution,  use, generation,  treatment,  storage,
disposal,  transport or handling of  Hazardous  Materials,  and (c)  underground
storage  tanks,  and related  piping,  and  emissions,  discharges,  releases or
threatened releases therefrom.

                  (B)  "ENVIRONMENTAL  LIABILITY" means, any damages incurred or
suffered (a) resulting from or arising out of any breach of or inaccuracy of any
representation of warranty contained in Section 2.20 hereof or (b) arising under
any Environmental Law and based on or resulting from (i) any facts or conditions
relating to the business or  operations,  or the real  property,  facilities  or
assets owned, operated, leased, managed or controlled by the Company, any of its

                                       12

<PAGE>

subsidiaries  or former  subsidiaries  or any  predecessors  in  interest of the
Company or any of its  subsidiaries  or former  subsidiaries in existence on the
Closing  Date,  or  (ii)  any  acts  or  omissions  of the  Company,  any of its
subsidiaries or former subsidiaries,  its representatives or any predecessors in
interest of the Company or any of its subsidiaries or former  subsidiaries on or
prior to, the Closing Date.

                  (C)  "HAZARDOUS  MATERIALS"  means  any  hazardous,  toxic  or
chemical substance,  any pollutant or contaminant,  any hazardous constituent or
any waste, including, without limitation,  petroleum, including crude oil or any
fraction thereof,  or any petroleum product,  as defined under any Environmental
Law.

                  2.23 NO REGULATORY  PROBLEMS.  THE COMPANY (I) HAS NOT FILED a
registration  statement  which  is the  subject  of any  pending  proceeding  or
examination  under Section 8 of the Securities  Act, and is not and has not been
the subject of any refusal order or stop order  thereunder;  (ii) is not subject
to any pending  proceeding  under Rule 258 of the  Securities Act or any similar
rule adopted  under Section 3(b) of the  Securities  Act, or to an order entered
thereunder;  (iii)  has not been  convicted  of any  felony  or  misdemeanor  in
connection  with the purchase or sale of any security or involving the making of
any  false  filing  with  the  Commission;  (iv) is not  subject  to any  order,
judgment,  or decree  of any  court of  competent  jurisdiction  temporarily  or
preliminarily restraining or enjoining, or any order, judgment, or decree of any
court of  competent  jurisdiction  permanently  restraining  or  enjoining,  the
Company from  engaging in or  continuing  any conduct or practice in  connection
with the purchase or sale of any  security or involving  the making of any false
filing with the  Commission;  and (v) is not subject to a United  States  Postal
Service  false  representation  order  entered  under  Section 3005 of Title 39,
United States Code; or a temporary  restraining order or preliminary  injunction
entered  under  Section 3007 of Title 39,  United  States Code,  with respect to
conduct alleged to have violated Section 3005 of Title 39, United States Code.

                  To the Company's  knowledge,  none of the Company's directors,
officers,  or beneficial owners of five (5%) percent or more of any class of its
equity  securities  (i) has been  convicted  of any  felony  or  misdemeanor  in
connection with the purchase or sale of any security,  involving the making of a
false filing with the Commission,  or arising out of the conduct of the business
of an underwriter,  broker,  dealer,  municipal securities dealer, or investment
advisor;  (ii) is  subject  to any  order,  judgment,  or decree of any court of
competent  jurisdiction  temporarily  or  preliminarily  or  restraining,  or is
subject  to  any  order,   judgment,   or  decree  of  any  court  of  competent
jurisdiction,  permanently enjoining or restraining such person from engaging in
or continuing any conduct or practice in connection with the purchase or sale of
any security, or involving the making of a false filing with the Commission,  or
arising out of the conduct of the business of an  underwriter,  broker,  dealer,
municipal securities dealer, or investment adviser; (iii) is subject to an order
of the Commission  entered  pursuant to Section  15(b),  15B(a) or 15B(c) of the
Exchange Act, or is subject to an order of the  Commission  entered  pursuant to
Section 203(e) or (f) of the Investment  Advisers Act of 1940; (iv) is suspended
or expelled from membership in, or suspended or barred from  association  with a
member of, an exchange  registered as a national securities exchange pursuant to
Section  6 of  the  Exchange  Act,  an  association  registered  as  a  national
securities  association  under  Section 15A of the  Exchange  Act, or a Canadian

                                       13

<PAGE>

securities  exchange or association for any act or omission to act  constituting
conduct  inconsistent  with just and equitable  principles  of trade;  or (v) is
subject to a United States Postal  Service  false  representation  order entered
under  Section  3005 of  Title  39,  United  States  Code,  or is  subject  to a
restraining order or preliminary  injunction entered under Section 3007 of Title
39, United States Code, with respect to conduct alleged to have violated Section
3005 of Title 39, United States Code.

                  2.24  SUBSIDIARIES.  Except for the  Subsidiaries set forth in
the Public  Documents,  the Company has no subsidiaries  and has no interest in,
shares of  capital  stock of or right to  acquire  an  interest  in or shares of
capital stock of any other corporation,  limited liability company,  partnership
or other entity.  The Company owns all of the  outstanding  capital stock of the
Subsidiaries  free and clear of all liens,  charges and encumbrances of any kind
whatsoever,  and there are no  outstanding  rights to  acquire,  or  directly or
indirectly  control  the vote or transfer  of, any of the  capital  stock of the
Subsidiaries.

                        The  representations  and warranties made by the Company
in this  Agreement  shall,  in  the  event  that  the  Company  has one  or more
subsidiaries (a  "subsidiary(ies)") also shall apply and be true with respect to
each subsidiary,  individually  and  taken  as a whole  with the Company and all
other subsidiaries, as if each representation and warranty contained herein made
specific  reference to the subsidiary each time the term "Company" was used.

                  2.25    STOCK COLLATERAL. None of the Company's obligations to
any third  party are secured by any of the Company's outstanding securities.

                  2.26 REAFFIRMATION. All of the representations, warranties and
covenants  of the  Company  set  forth in this  Agreement  or in any  letter  or
certificate  furnished  to Placement  Agent  pursuant  hereto,  each of which is
incorporated  herein by reference  and made a part hereof,  shall be true in all
material  respects upon the execution of this  Agreement,  shall be deemed to be
repeated  at and as of the  Closing  Date  and all  subsequent  dates on which a
subsequent Closing hereunder takes place.

         3. REPRESENTATIONS AND WARRANTIES OF THE PLACEMENT AGENT. The Placement
Agent represents and warrants as follows:

                  3.1  DUE   INCORPORATION.   The   Placement   Agent   is  duly
incorporated  and validly  existing and in good  standing  under the laws of its
state of  incorporation  and is duly qualified as a foreign  corporation for the
transaction of business and is in good standing in each  jurisdiction  where the
failure  to be so  qualified  would  have a  materially  adverse  effect  on the
business of the Placement Agent.

                  3.2  BROKER/DEALER REGISTRATION.     The  Placement  Agent  is
registered as a broker-dealer under Section 15 of the Exchange Act.

                                       14
<PAGE>

                  3.3  GOOD STANDING.   The Placement Agent is  a member in good
standing of the NASD.

                  3.4 SALE IN  CERTAIN  JURISDICTIONS.  Sales of  Shares  by the
Placement  Agent  will be  made  only in such  jurisdictions  in  which  (i) the
Placement Agent is a registered  broker-dealer or where an applicable  exemption
from  such  registration  exists  and (ii) the  Offering  and sale of  Shares is
registered under, or is exempt from, applicable registration requirements.

                  3.5  COMPLIANCE  WITH LAWS.  Offers and sales of Shares by the
Placement Agent will be made in compliance with the provisions of Rule 502(c) of
Regulation D,  Regulation S, and/or Section 4(2) of the Securities  Act, and the
Placement  Agent will furnish to each investor a copy of the Offering  Documents
prior to accepting any payments for Shares.

         4.       CLOSING.

                  At or  prior  to  each  closing,  and  as a  condition  of the
Placement  Agent's  obligations   hereunder,   the  following  shall  have  been
satisfied:  (i) the Company shall have  delivered to the Placement  Agent at the
closing (a) a  certificate  of the  Company,  signed by two  executive  officers
thereof,  stating (I) the Offering  Documents meet the  requirements  hereof and
have been modified or  supplemented as required by Paragraph 2 hereof and do not
contain any untrue statement of material fact or fail to state any material fact
required to be stated  therein or necessary to make the  statements  therein not
misleading  in light of the  circumstances  in which  they were  made;  (II) all
necessary  corporate approvals have been obtained to enable the Company to issue
and deliver the Shares and the Placement Agent's Warrants in accordance with the
terms of the Offering;  and (III) the representations  and warranties  contained
herein  are true and  correct  as of the date of such  closing as if, and to the
same effect, the warranties and representations  were made on such date; (b) one
legal  opinion  of the  Company's  counsel,  in form  and  substance  reasonably
satisfactory to the Placement Agent and its counsel to be delivered at the Final
Closing;  (c)  Subscription  Agreements  signed by the  Company  and each of the
Subscribers;  (d) Consents of any party required to consummate this Offering and
the transactions  contemplated  thereby; and (e) such other closing documents as
shall be reasonably requested by the Placement Agent and/or its counsel.

4.1  PLACEMENT  AGENT'S  FEES AND  EXPENSESAt  the  First  Closing,  and at each
subsequent  closing,  the Company shall pay to the Placement  Agent a commission
equal to ten (10%) percent of the aggregate purchase price of the Shares sold by
the Placement Agent and a  non-accountable  expense allowance equal to 3% of the
aggregate purchase price of the Shares sold by the Placement Agent. In addition,
the Placement Agent shall receive a Placement  Agent's Warrant to purchase up to
10% of the number of Shares sold by the  Placement  Agent in the  Offering at an
exercise  price of $3.00 per  Share  (the  "Placement  Agent's  Warrants").  The
Placement  Agent's  Warrants  will  be  evidenced  by a Share  purchase  warrant
containing "piggyback"  registration  provisions,  anti-dilution  provisions and
other terms and  conditions  customarily  contained in Placement  Agent  Warrant
agreements. In addition, at the First Closing, the Company shall pay the fees of
Continental Stock Transfer and Trust Company referred to in Section  5.1 below.

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<PAGE>

All the foregoing  amounts are payable directly to the parties who are owed same
by deduction from the aggregate purchase price of the Shares sold.

         5.       COVENANTS.        The Company covenants and agrees that:

                  5.1 EXPENSES OF OFFERING AND OTHER EXPENSES. The Company shall
be responsible for, and shall pay, all fees, disbursements and expenses incurred
in connection  with the Offering,  including,  but not limited to, the Company's
legal and accounting fees and disbursements,  the costs of preparing,  printing,
mailing and delivering,  and filing, where necessary, the Offering Documents and
all  amendments  and  supplements  thereto (in such  quantities as the Placement
Agent may require), the costs of any "due diligence" meeting held by the Company
as requested by the Placement Agent, and the fees of Continental  Stock Transfer
& Trust  Company  pursuant  to the escrow  agreement  between  the  Company  and
Continental  Stock  Transfer & Trust  Company  relating to the  Offering.  State
exemption  and blue sky filing  fees will be paid by the Company as the same are
due.

                  5.2 FURTHER ASSURANCES. The Company will take such actions  as
may  be reasonably  required or desirable to  carry  out the  provisions of this
Agreement and the  transaction  contemplated hereby.

                  5.3 ACCURACY OF  REPRESENTATIONS  AND WARRANTIES.  The Company
hereby agrees that prior to the Termination Date or the Closing, as the case may
be, it will not enter into any transaction or take any action,  and will use its
best efforts to prevent the  occurrence of any event,  which could result in any
of its  representations,  warranties or covenants contained in this Agreement or
any of the Offering Documents not to be true and correct, or not to be performed
as contemplated,  at and as of the time immediately after the occurrence of such
transaction or event.

                  5.4 REGISTRATION RIGHTS. As additional  consideration for this
Agreement and the transactions  contemplated hereby, the Company agrees with the
Placement  Agent and will agree with each  Subscriber to register the Shares for
resale as set forth in each Subscriber's Subscription Agreement. All expenses of
registration  (exclusive of  underwriting  discounts and  commissions)  shall be
borne by the Company.

         6.       INDEMNIFICATION AND CONTRIBUTION.

                  6.1  INDEMNIFICATION  BY THE  COMPANY.  The Company  agrees to
indemnify  and hold harmless the  Placement  Agent and each person,  if any, who
controls the Placement Agent within the meaning of the Securities Act and/or the
Exchange  Act against  any  losses,  claims,  damages or  liabilities,  joint or
several,  to which the  Placement  Agent or such  controlling  person may become
subject, under the Securities Act or otherwise,  insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any untrue  statement or alleged  untrue  statement of a material  fact
contained (A) in the Offering  Documents,  or (B) in any blue sky application or
other  document  executed by the Company  specifically  for blue sky purposes or

                                       16
<PAGE>

based upon any other  written  information  furnished  by the  Company or on its
behalf to any state or other  jurisdiction in order to qualify any or all of the
Shares under the  securities  laws thereof  (any such  application,  document or
information being hereinafter called a "Blue Sky Application"),  (ii) any breach
by the Company of any of its representations,  warranties or covenants contained
herein or in any of the  Offering  Agreements,  or (iii) the omission or alleged
omission by the Company to state in the  Offering  Documents  or in any Blue Sky
Application a material  fact required to be stated  therein or necessary to make
the  statements  therein,  in light of the  circumstances  under which they were
made,  not  misleading;  and will  reimburse the  Placement  Agent and each such
controlling  person for any legal or other expenses  reasonably  incurred by the
Placement Agent or such controlling  person in connection with  investigating or
defending any such loss, claim, damage, liability or action, whether arising out
of an action between the Placement Agent and a third party;  provided,  however,
that the Company will not be liable in any such case to the extent that any such
loss,  claim,  damage or liability  arises out of or is based upon (i) an untrue
statement or alleged  untrue  statement or omission or alleged  omission made in
reliance upon and in conformity with written information regarding the Placement
Agent which is furnished to the Company by the Placement Agent  specifically for
inclusion in the Offering Documents or any such Blue Sky Application or (ii) any
breach by the Placement  Agent of the  representations,  warranties or covenants
contained  herein  (together,  (i)  and  (ii)  above  are  referred  to  as  the
"Non-indemnity Events").

                  6.2  INDEMNIFICATION  BY THE  PLACEMENT  AGENT.  The Placement
Agent agrees to indemnify and hold harmless the Company and each person, if any,
who controls  the Company  within the meaning of the  Securities  Act and/or the
Exchange  Act against  any  losses,  claims,  damages or  liabilities,  joint or
several,  to which the Company or such  controlling  person may become  subject,
under the Securities Act or otherwise,  insofar as such losses,  claims, damages
or  liabilities  (or actions in respect  thereof) arise out of or are based upon
any  Non-Indemnity   Event;  and  will  reimburse  the  Company  and  each  such
controlling  person for any legal or other expenses  reasonably  incurred by the
Company or such controlling person in connection with investigating or defending
any such loss,  claim,  damage,  liability  or action  provided  that such loss,
claim,  damage or liability is found ultimately to arise out of or be based upon
any Non-Indemnity Event.

                  6.3 PROCEDURE.  Promptly after receipt by an indemnified party
under  this  Section  6 of  notice  of  the  commencement  of any  action,  such
indemnified  party will, if a claim in respect thereof is to be made against any
indemnifying  party under this  Section 6,  notify in writing  the  indemnifying
party  of  the  commencement   thereof;  and  the  omission  so  to  notify  the
indemnifying  party will relieve the indemnifying party from any liability under
this Section 6 as to the particular item for which indemnification is then being
sought,  but not from any other  liability  which it may have to any indemnified
party. In case any such action is brought against any indemnified  party, and it
notifies an indemnifying  party of the  commencement  thereof,  the indemnifying
party will be entitled  to  participate  therein,  and to the extent that it may
wish, jointly with any other indemnifying party,  similarly notified,  to assume
the defense thereof, with counsel who shall be to the reasonable satisfaction of
such indemnified  party,  and after notice from the  indemnifying  party to such
indemnified  party  of its  election  so to  assume  the  defense  thereof,  the
indemnifying  party  will not be liable to such  indemnified  party  under  this
Section  6 for  any  legal  or  other  expenses  subsequently  incurred  by such

                                       17
<PAGE>

indemnified  party in connection  with the defense thereof other than reasonable
costs of investigation.  Any such indemnifying  party shall not be liable to any
such  indemnified  party on  account  of any  settlement  of any claim or action
effected without the consent of such indemnifying party.

                  6.4 CONTRIBUTION.  If the indemnification provided for in this
Section 6 is unavailable to any indemnified party (other than as a result of the
failure to notify the  indemnifying  party as provided in Section 6.3 hereof) in
respect to any losses,  claims,  damages,  liabilities  or expenses  referred to
therein,  then the indemnifying  party, in lieu of indemnifying such indemnified
party will contribute to the amount paid or payable by such  indemnified  party,
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is  appropriate to reflect the relative  benefits  received by the
Company on the one hand, and the Placement  Agent,  on the other hand,  from the
Offering,  or (ii)  if the  allocation  provided  by  clause  (i)  above  is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the  relative  benefits  referred  to in  clause  (i)  above,  but also the
relative fault of the Company,  on the one hand , and of the Placement Agent, on
the other hand, in connection with the statements or omissions which resulted in
such  losses,  claims,  damages,  liabilities  or  expenses as well as any other
relevant  equitable  considerations.  The  relative  benefits  received  by  the
Company,  on the one hand, and the Placement  Agent, on the other hand, shall be
deemed to be in the same proportion as the total proceeds from the Offering (net
of sales  commissions and the  non-accountable  expenses  allowance,  but before
deducting  other  expenses)  received by the Company bear to the commissions and
non-accountable  expense allowance received by the Placement Agent. The relative
fault of the Company,  on the one hand,  and the Placement  Agent,  on the other
hand,  will be determined  with  reference  to, among other things,  whether the
untrue or alleged untrue statement of a material fact of the omission to state a
material fact relates to information  supplied by the Company,  on the one hand,
and  the  Placement  Agent,  on the  other  hand,  and  their  relative  intent,
knowledge,  access to  information  and  opportunity  to correct or prevent such
statement or omission.

                  6.5  EQUITABLE  CONSIDERATIONS.  The Company and the Placement
Agent agree that it would not be just and equitable if contribution  pursuant to
this  Section  6 were  determined  by pro rata  allocation  or by any  method of
allocation which does not take into account the equitable consideration referred
to in the immediately preceding paragraph.

                  6.6 ATTORNEYS'  FEES. The amount payable by a party under this
Section 6 as a result of the losses,  claims,  damages,  liabilities or expenses
referred  to above will be deemed to include any legal or other fees or expenses
reasonably  incurred by such party in connection with investigating or defending
any action or claim (including,  without  limitation,  fees and disbursements of
counsel incurred by an indemnified party in any action or proceeding between the
indemnifying  party and indemnified  party or between the indemnified  party and
any third party or otherwise).

         7.  TERMINATION BY PLACEMENT  AGENT.  The Placement Agent will have the
right to terminate this Agreement by giving written notice as herein  specified,
at any time,  at or prior to the Closing:  (a) if the Company shall have failed,
refused, or been unable to perform any of its obligations hereunder, or breached
any of its representations or warranties hereunder;  or (b) if, in the Placement

                                       18
<PAGE>

Agent's opinion,  there has occurred an event materially and adversely affecting
the value of the Shares.  If the Placement  Agent elects not to proceed with the
Offering as a result of the  condition  enumerated  in clause (a) above,  or the
Company  elects not to proceed  with the  Offering for any reason other than the
Placement  Agent's  failure  to proceed  expeditiously  with the  Offering,  the
Company  shall  reimburse  the  Placement  Agent  in  full  for  its  reasonable
out-of-pocket  expenses  (including,  without  limitation,  its  legal  fees and
disbursements).

         8.  COMPETING  CLAIMS.  The  Company  acknowledges  and agrees that the
Placement  Agent  will not  proceed  to  perform  hereunder  until  it  receives
assurances,  in form and substance satisfactory to the Placement Agent and their
counsel,  that as of the first date that the Offering  Documents is presented to
potential purchasers of Shares, there will be no claims or payments for services
in the  nature of a  finder's  fee with  respect  to the  Offering  or any other
arrangements,  agreements, payments, issuances or understandings that may affect
the  Placement  Agent's  compensation  hereunder.   The  Placement  Agent  shall
compensate  any of its  personnel  who may have acted in such  capacities  as it
shall determine.

         9.       MISCELLANEOUS.

                  (A) GOVERNING  LAW. This Agreement will be deemed to have been
made and  delivered  in the  State of New  Jersey  and  will be  governed  as to
validity, interpretation,  construction, effect and in all other respects by the
internal  law of the  State of New  Jersey,  without  regard  to  principles  of
conflicts  of law.  The  Company  (i)  agrees  that any  legal  suit,  action or
proceeding  arising  out of or relating to this  Agreement  shall be  instituted
exclusively in the Supreme Court of New Jersey, or in the United States District
Court for the District of New Jersey,  (ii) waives any objection to the venue of
any such suit, action or proceeding,  and the right to assert that such forum is
an inconvenient forum, and (iii) irrevocably consents to the jurisdiction of the
Supreme  Court of New  Jersey,  and the  United  States  District  Court for the
District  of New  Jersey in any such suit,  action or  proceeding.  The  Company
further  agrees to accept and  acknowledge  service of any and all process which
may be served in any such suit, action or proceeding in the Supreme Court of New
Jersey or the United  States  District  Court for the District of New Jersey and
agrees that service of process  upon it mailed by certified  mail to its address
shall be deemed in every  respect  effective  service of process  upon it in any
such suit, action or proceeding.

                  (B) COUNTERPARTS. This Agreement may be executed in any number
of  counterparts  each of which  shall be  deemed an  original  and all of which
together shall constitute one and the same instrument.

                  (C) NOTICES.  Whenever notice is required to be given pursuant
to this  Agreement,  such  notice  shall be in writing  and shall  either be (i)
mailed by first class mail, postage, prepaid,  addressed (a) if to the Placement
Agent,  at the respective  addresses set forth at the head of this Agreement and
(b) if to the Company, at 320 Broad Hollow Road,  Farmingdale,  New York, 11735,
or (ii) delivered personally or by express courier.

                                       19

<PAGE>

                  (D) PARTIES.  This  Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective  successors and assigns.
Neither party may assign this Agreement or its obligations hereunder without the
prior written consent of the other party.  This Agreement is intended to be, and
is, for the sole and  exclusive  benefit of the  parties  hereto and the persons
described  in Section  6.1 and 6.2 hereof and their  respective  successors  and
assigns,  and for the benefit of no other person,  and no other person will have
any legal or  equitable  right,  remedy or claim  under,  or in  respect of this
Agreement.

                  (E) AMENDMENT AND/OR MODIFICATION. Neither this Agreement, nor
any term or provision hereof, may not be changed, waived,  discharged,  amended,
modified or terminated  orally,  or in any manner other than by an instrument in
writing signed by each of the parties hereto.

                  (F) VALIDITY.  In case any term of this Agreement will be held
invalid,  illegal or unenforceable,  in whole or in part, the validity of any of
the other terms of this Agreement will not in any way be affected thereby.

                  (G) WAIVER OF BREACH.The failure of any party hereto to insist
upon strict performance of any of the covenants and agreements herein contained,
or to  exercise  any  option  or  right  herein  conferred  in any  one or  more
instances,  will not be construed to be a waiver or  relinquishment  of any such
option or right, or of any other  covenants or agreements,  and the same will be
and remain in full force and effect.

                  (H) FURTHER ASSURANCES.    Each party  to this  Agreement will
perform  any and all acts and execute any and all  documents as may be necessary
and proper under the  circumstances  in order  to  accomplish  the  intents  and
purposes of this Agreement and to carry out its provisions.

                  (I)  ENTIRE  AGREEMENT.This   Agreement  contains  the  entire
agreement and  understanding  of the parties with respect to the subject  matter
hereof and thereof, respectively, and there are no representations, inducements,
promises or agreements,  oral or otherwise,  not embodied in this Agreement. Any
and all prior discussions,  negotiations, commitments and understanding relating
to the subject matter of these agreements are superseded by them.

                  (J)  REPRESENTATIONS,  WARRANTIES  TO  SURVIVE  DELIVERY.  The
respective representations,  indemnities,  agreements, covenants, warranties and
other statements of the Company and the Placement Agent shall survive  execution
of  this  Agreement  and  delivery  of the  Shares  and/or  termination  of this
Agreement prior thereto.

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                            [SIGNATURE PAGES FOLLOW]

                                       20
<PAGE>

Network 1 Financial Securities, Inc.
Private Placement Agent's Agreement

                  If  you  find  the  foregoing  is  in   accordance   with  our
understanding, kindly sign and return to us a counterpart hereof, whereupon this
instrument along with all counterparts  will become a binding  agreement between
us.

                                                     Very truly yours,

                                              INTERNATIONAL SMART SOURCING, INC.

                                              BY: ______________________________

                                                  ANDREW FRANZONE
                                                  PRESIDENT

AGREED TO:

NETWORK 1 FINANCIAL SECURITIES, INC.

BY: _______________________________________
         WILLIAM R. HUNT, JR.
         PRESIDENT

                                       21SALES, MARKETING AND SERVICE AGREEMENT

                  THIS SALES, MARKETING AND SERVICE AGREEMENT (this "Agreement")
is made effective as of the 12th day of August 1999 (the "Effective  Date"),  by
and between Swissray America, Inc., a Delaware corporation,  with offices at 320
West 77th Street,  Suite 1A, New York, New York 10024  ("SWISSRAY")  and Hitachi
Medical  Systems  America  Inc.,  a Delaware  corporation,  with offices at 1959
Summit Commerce Park, Twinsburg, Ohio 44087 ("HMSA"). SWISSRAY and HMSA are each
sometimes  referred  to  herein as a  "Party,"  and are  sometimes  collectively
referred to herein as the "Parties."

                  In consideration of the mutual undertakings and agreements set
forth herein, and for other good and valuable  consideration given by each Party
hereto  to  the  other,   the  receipt  and   sufficiency  of  which  is  hereby
acknowledged, SWISSRAY and HMSA intending to be legally bound, agree as follows:

1.       DEFINITIONS.  Terms  not otherwise defined in this Agreement shall have
                       the following meanings:

         1.1   The term  "PRODUCT"  shall  mean the ddR  Multi-System  for X-Ray
               designed,  manufactured  and sold by SWISSRAY  under the SWISSRAY
               trademark  or  tradename,  as more fully  described  in Exhibit A
               attached  hereto and  incorporated  herein,  as well as  products
               manufactured and sold by SWISSRAY under the SWISSRAY trademark or
               tradename  that are new iterations  thereof,  so long as such new
               iterations  use the same core  technology as described in Exhibit
               A. No other  SWISSRAY  product,  whether  or not sold  under  the
               SWISSRAY  trademark or tradename,  is intended to be  encompassed
               within the definition of PRODUCT.

         1.2   "Term" shall mean the period of time  commencing on the Effective
               Date and ending upon  termination  of this  Agreement as provided
               under section 14 of this Agreement.

         1.3   "Effective Date" shall mean the date first written above.

         1.4   "SIS"  shall  mean  Swissray  Information  Solutions,   Inc.,  an
               affiliate of SWISSRAY.

2.       HMSA APPOINTMENT; SCOPE OF APPOINTMENT.

         2.1   General  Appointment.  SWISSRAY  hereby  appoints  HMSA, and HMSA
               hereby accepts  appointment,  solely to sell the PRODUCT directly
               to end users and to provide  warranty service for the PRODUCT its
               sells, all subject to the terms and conditions of this Agreement,
               including  the  limitations  set forth in sections 2.2 and 2.3 of
               this  Agreement.  See section 3.5 with  respect to  post-warranty
               service for PRODUCTS.

         2.2   Territories: HMSA is hereby authorized to sell the PRODUCT to end
               users  within  the  geographical  areas  specified  on Exhibit B,
               attached hereto and incorporated herein (the "Territory").

         2.3   SWISSRAY Reserved  Accounts:  Except with respect to the accounts
               listed in Exhibit C, attached hereto and incorporated herein (the
               "Reserved  Accounts"),  which are hereby  reserved  to  SWISSRAY,
               SWISSRAY  shall not sell the  PRODUCT  to  customers  within  the
               Territory  during the Term.  SWISSRAY  may sell  PRODUCTS  to the
               Reserved   Accounts  both  within  and  outside  the   Territory.
               Notwithstanding  anything  in  this  Agreement  to the  contrary,

<PAGE>

               nothing  in  this  Agreement  shall  prohibit  SIS  from  selling
               PRODUCTS to any  customer  within the  Territory as a part of the
               overall resolution of issues addressed by SIS. See Exhibit E.

         2.4   Notwithstanding anything to the contrary in this Agreement,  HMSA
               is not  authorized  to sell and  shall not sell  PRODUCTS  to the
               Reserved Accounts.  HMSA shall not, except as otherwise set forth
               in this  Agreement,  be  compensated  by SWISSRAY for any sale by
               SWISSRAY to any Reserved Account.

         2.5   If HMSA determines to market,  sell or service any direct digital
               radiographic system or computed radiography products (CR devices)
               that compete with  PRODUCTS,  HMSA shall give SWISSRAY  immediate
               notice  thereof and SWISSRAY shall have the right to presume that
               such intended  action will occur and may terminate this Agreement
               immediately  upon written  notice to HMSA.  Such  termination  by
               SWISSRAY shall be deemed a termination  for cause as described in
               section 14.2, below.

         2.6   Except as  specifically  limited by this section 2,  SWISSRAY and
               HMSA  shall  each  have  the  right to sell  and  distribute  any
               products and services within the Territory.

3.       HMSA'S  MARKETING  RESPONSIBILITIES.  HMSA  shall  have  the  following
               rights,    and   accepts   and   will   perform   the   following
               responsibilities,  at no additional  cost or expense to SWISSRAY,
               at all times during the Term:

         3.1   Promote Products: HMSA will use all reasonable commercial efforts
               to promote  the  goodwill  of  SWISSRAY  and to promote  and sell
               PRODUCTS  within the  Territory  in a manner that will  emphasize
               their high quality, technology and utility. Specifically:

         3.1.1 HMSA shall  develop  sales  incentives,  sales  support and other
               sales aids in support of the PRODUCT.

         3.1.2 Within  three (3) months  after the  Effective  Date,  HMSA shall
               provide  a  direct  mailing  in  support  of the  PRODUCT  to its
               Magnetic  Resonance  Imaging  product  installed  base within the
               Territory.  SWISSRAY  shall  have the right to  inspect,  but not
               copy,  the list of the  recipients of all such mailings  prior to
               the  mailing  being sent so that  SWISSRAY  may assure that it is
               being  sent  only  within  the  Territory  and  not  to  Reserved
               Accounts.

         3.1.3 SWISSRAY and HMSA shall,  to the extent  reasonably  practicable,
               coordinate  public  relations,   advertising  and  other  similar
               marketing  activities  and shall upon each party's  prior written
               approval  share on an equal basis the expenses of such  marketing
               activities.  The  primary  purpose  of such  activities  shall be
               commercial sales of the PRODUCT.

         3.2   Reports and Records:

         3.2.1 HMSA shall  provide  SWISSRAY  with reports  during the Term,  as
               follows:  (A) monthly,  at the end of each month during the Term:
               (i) a list of HMSA  current  sales  leads  or  prospects;  (ii) a
               rolling  forecast  of  sales  and  PRODUCT  requirements  for the
               following  six (6) month  period of which the first  ninety days'
               shall be  considered  firm  orders  and shall be  accompanied  by
               HMSA's purchase order, which shall be deemed accepted by SWISSRAY

                                       2
<PAGE>

               unless HMSA is notified to the contrary  within ten (10) business
               days thereafter;  (iii) the information required to be maintained
               by HMSA pursuant to section 3.2.2, below with respect to PRODUCTS
               sold by HMSA during the prior month;  and (B) on a routine basis,
               but in no event less than  monthly  during the Term, a good faith
               update from the appropriate  HMSA X-Ray  specialist to his or her
               SWISSRAY  regional  representative  counterpart  of the marketing
               activities and the status of sales leads within such region,  and
               (C) such other reports as may be reasonably requested by SWISSRAY
               from time to time. All reports submitted by HMSA shall become the
               property  of  SWISSRAY  but  shall  be  used  solely  for its own
               internal purposes.

         3.2.2 HMSA shall maintain  accurate  records that identify the Products
               (by model and serial  number)  it sells to all of its  customers,
               such  records to include,  customer's  name,  address,  telephone
               number and date of sale.  HMSA shall also  maintain  all  records
               required  to be  maintained  under  applicable  federal  laws and
               regulations,   including  as  required  by  the  Food,  Drug  and
               Cosmetics  Act. Such records shall be made  available to SWISSRAY
               for inspection  and copying  during HMSA's normal  business hours
               upon at least  twenty-four  (24) hours' prior notice to HMSA, but
               in no event shall SWISSRAY be allowed to see or copy resale price
               information.

         3.2.3 HMSA shall  notify  SWISSRAY  promptly of all  complaints  of its
               customers  regarding the PRODUCTS.  SWISSRAY shall have the right
               to  communicate  directly with such customer with respect to such
               complaint, but shall have no right to make, and shall not purport
               to have  authority to make, any commitment on behalf of HMSA with
               respect thereto.

         3.3   Maintain Sales and Technological  Expertise:  Except as otherwise
               stated  below,  HMSA  shall,  at no cost or expense to  SWISSRAY,
               employ and maintain  sales and technical  personnel  sufficiently
               trained  to  assist  its  customers  in the  use of  Products  as
               solutions for end-user  problems,  to fill end-user  needs and to
               provide installation,  applications training and warranty service
               to its  customers.  SWISSRAY  will rely upon HMSA to provide such
               value-added  sales and  technical  and  engineering  service as a
               principal reason for entering into and continuing this Agreement.
               Without limiting this general obligation:

                  3.3.1    HMSA shall,  maintain an  aggressive  outbound  sales
                           force which actively pursues (including, making field
                           sales calls)  opportunities  to sell  Products to end
                           users,  and which is technically  trained as provided
                           in section 3.3.2, below;

                  3.3.2    HMSA shall provide necessary training so that (1) its
                           technical  support and service  engineer  staff shall
                           have a thorough  familiarity with the  specifications
                           and technical features of Products, and (2) its sales
                           personnel  will  have  a  full  understanding  of the
                           technical  features  of,  and  know  the  competitive
                           advantages of,  PRODUCTS.  HMSA shall  participate in
                           and  otherwise  cooperate  with  SWISSRAY in training
                           programs  which  SWISSRAY  may  establish,  and shall
                           require  its sales and  technical  staff to study all
                           materials   issued  to  HMSA  by  SWISSRAY  for  that
                           purpose;

                  3.3.3    HMSA  acknowledges   receipt  of  SWISSRAY's  current
                           service engineer  prerequisite minimum  requirements.

                                       3
<PAGE>

                           HMSA  shall  review   SWISSRAY's   service   engineer
                           prerequisite minimum requirements,  and shall require
                           its x-ray service engineers to meet such requirements
                           as the same may be  reasonably  amended  by  SWISSRAY
                           from time to time, including without limitation, with
                           respect  to  NT   Workstation,   DICOM  and  Ethernet
                           connectivity; and

                  3.3.4    HMSA will provide applications  training,  at its own
                           expense,  to  customers  in  connection  with  HMSA's
                           PRODUCT  sales.  SWISSRAY  shall  provide  the entire
                           requisite   documentation  and  software  to  support
                           applications  training and shall provide a "train the
                           trainer"  session for one HMSA  applications  person.
                           See Exhibit D.

         3.4      Warranty Service:  HMSA shall perform all warranty repairs and
                  parts  replacements  for PRODUCTS sold by HMSA, using SWISSRAY
                  Spare  Parts  (defined  in  section  8.1,  below),  as  may be
                  required by SWISSRAY's  End-User  Warranty (defined in section
                  11.1, below) using,  among other things,  the Activation Codes
                  made available to HMSA by SWISSRAY in accordance  with section
                  6.3. All such warranty repairs and parts replacements shall be
                  conducted  in  accordance  with  SWISSRAY's  warranty  service
                  policies  and  procedures  as they may be amended from time to
                  time   in   SWISSRAY's   sole,   absolute   discretion.   HMSA
                  acknowledges  receipt of SWISSRAY's  current  warranty service
                  policies and procedures manual.

                  3.4.1    In connection with its warranty service  obligations,
                           HMSA shall return parts  replaced  under the End-User
                           Product  Warranty to SWISSRAY  and HMSA shall pay all
                           expenses for transporting and insuring such defective
                           parts one-way to SWISSRAY.  SWISSRAY shall not accept
                           defective parts directly from HMSA customers,  unless
                           authorized  in  writing  by HMSA  to do so.  SWISSRAY
                           shall pay all expenses for  transporting and insuring
                           replacement parts for such parts that it confirms are
                           defective.

                  3.4.2    For the period of either (a) fifteen (15) months from
                           SWISSRAY's  delivery  of  PRODUCT  to  HMSA or to the
                           destination  specified in HMSA's order; or (b) twelve
                           (12)  months  after HMSA  completes  installation  of
                           PRODUCT  at  HMSA's  customer's  site,  whichever  is
                           shorter,  SWISSRAY  shall  issue a credit to HMSA for
                           the  net  cost  of  Spare   Parts  used  by  HMSA  as
                           replacement  parts under SWISSRAY's  End-User Product
                           Warranty.  SWISSRAY  reserves  the  right  to  verify
                           defects  in parts  before  it  issues  a Spare  Parts
                           credit to HMSA. HMSA  acknowledges and agrees that no
                           additional  consideration  shall  be due to HMSA  for
                           labor,  administrative or other costs associated with
                           warranty work performed by HMSA under this Agreement.

                  3.4.3    Within seven (7) days  following  the  expiration  or
                           earlier  termination  of this  Agreement,  HMSA shall
                           notify  SWISSRAY  in writing  whether  HMSA elects to
                           continue to provide  warranty  service as required by
                           this Agreement for HMSA's customers of PRODUCTS.  The
                           obligations  set forth in this  section  3.4.3  shall
                           survive the expiration or earlier termination of this
                           Agreement.  If HMSA fails to notify  SWISSRAY that it
                           elects to  continue  to provide  warranty  service as
                           required by this  Agreement,  SWISSRAY shall have the
                           right, at its option, to assume such warranty service
                           obligations.

                                       4
<PAGE>

                  3.4.4    HMSA  shall  not  contract  with any  third  party to
                           perform any of its installation or warranty  services
                           under  this  Agreement   without  the  prior  written
                           consent of SWISSRAY in each instance.

         3.5      Post-Warranty  Service:  HMSA may,  but shall not be obligated
                  to,  provide  post-warranty  service  for  PRODUCTS  sold  and
                  installed  by HMSA in the  Territory.  HMSA  acknowledges  and
                  agrees  that,  except to the extent of its  obligations  under
                  sections 8 and  11.2.2,  SWISSRAY  has no  responsibility  and
                  assumes no liability for  post-warranty  service  performed by
                  HMSA.

         3.6      Act   Lawfully:  Each  of SWISSRAY  and HMSA shall comply with
                  all   federal,  state   and  local  laws  and  regulations  in
                  performing  its  responsibilities  under this Agreement and in
                  all of its activities with respect to PRODUCTS.

         3.7      HMSA  shall  (1) at its own  expense,  except  as set forth in
                  section 3.4.2,  install and service the PRODUCTS in accordance
                  with   SWISSRAY's   published   specifications,   installation
                  procedures,  maintenance manuals and user manuals; and (2) not
                  modify  PRODUCTS  or Spare  Parts  without  the prior  written
                  consent of SWISSRAY.

         3.8      The  parties  acknowledge  that  the  services  of SIS  may be
                  significant to the proper systems integration and operation of
                  PRODUCTS.  Therefore,  whenever  HMSA shall receive an inquiry
                  from a customer or  potential  customer  of  PRODUCTS  that is
                  within the consulting or connectivity services offered by SIS,
                  HMSA shall  consult  with SIS with  respect  thereto and shall
                  direct such  customers  or  potential  customers to SIS in Gig
                  Harbor, Washington, tel. No. (253) 858-3330.

4.       SWISSRAY'S RESPONSIBILITIES.  SWISSRAY  accepts  and  will  perform the
         following  responsibilities  at  no additional  cost or expense to HMSA
         except as otherwise stated:

         4.1      The scope of the technical support, documentation and training
                  to be supplied by SWISSRAY is defined in Exhibit D attached to
                  this Agreement and incorporated herein. The technical support,
                  documentation  and  training to be supplied by SWISSRAY  shall
                  include a general indoctrination of PRODUCT knowledge.

         4.2      SWISSRAY  shall provide HMSA at no cost with four (4) complete
                  sets of operation manuals,  installation manuals and all other
                  service  documents  for the  PRODUCTS  upon  execution of this
                  Agreement, and thereafter during the Term, shall provide at no
                  cost to HMSA updates to these documents from time to time.

         4.3      SWISSRAY shall use its reasonable best efforts to provide HMSA
                  with access to the  installed  base of SWISSRAY  PRODUCTS  for
                  demonstration  and  testimonial  purposes.   Access,  in  each
                  instance,  to the SWISSRAY installed base shall be solely with
                  SWISSRAY's prior written authorization.

         4.4      For promotion purposes, SWISSRAY shall assist HMSA at mutually
                  agreed  upon   industry   trade-shows.   The  extent  of  such
                  assistance by SWISSRAY shall be mutually agreed upon on a case
                  by case basis.

         4.5      Subject to section 6.3, below, SWISSRAY shall, until the first
                  anniversary  of  the  Effective  Date,   provide  to  HMSA  at
                  SWISSRAY's  sole cost and expense  "SwissVision"  software and
                  images  that will  allow HMSA to  produce  clinical  images to
                  support  HMSA's  sales  effort.  HMSA will  provide  the laser

                                       5
<PAGE>

                  camera and manpower to produce such images.

         4.6      SWISSRAY  shall  provide  HMSA,  at  HMSA's  expense  (less an
                  initial  one-time  credit of  $5,000.00  ) with sales  support
                  materials,  including sales brochures, financial proformas and
                  sample images on X-Ray film in reasonable  quantities to allow
                  HMSA's to fulfill its obligations under this Agreement.

         4.7      SWISSRAY  shall  secure from SIS a letter substantially in the
                  form of Exhibit E.
                          ---------

5.       PURCHASE OF PRODUCT AND SPARE PARTS BY HMSA.

         5.1      Governing  Terms and  Conditions.  The  terms  and  conditions
                  solely and  exclusively  governing  the sale of  Products  and
                  spare parts for  PRODUCTS  ("Spare  Parts") to HMSA will be as
                  set forth in this  Agreement.  If the terms and conditions set
                  forth in any document forming a part of any order for Products
                  or  Spare  Parts  placed  by  HMSA  are  different  from or in
                  addition to the provisions of this  Agreement,  the provisions
                  of this  Agreement  shall  prevail,  and any such different or
                  additional terms and conditions  proposed by HMSA thereby will
                  be deemed deleted and not binding or enforceable upon SWISSRAY
                  and are hereby objected to by SWISSRAY.

         5.2      Ordering: HMSA  purchase  orders  for  PRODUCT  or Spare Parts
                  shall be addressed to:

                                            SWISSRAY America, Inc.
                                            5801 Soundview Drive, Suite 50
                                            Gig Harbor, WA  98355

                  All HMSA  purchase  orders  must be  submitted  to SWISSRAY in
                  writing and are subject to  acceptance  by SWISSRAY in writing
                  (as provided in section 3.1.2 with respect to  PRODUCTS).  Any
                  shipment  of  Products  or Spare  Parts to HMSA in whole or in
                  partial  fulfillment  of  any  order  will  not be  deemed  to
                  constitute  an  acceptance by SWISSRAY of any of the terms and
                  conditions  of such  order,  except  as to  identification  of
                  Products  or  Spare  Parts,  as  the  case  may  be,  and  the
                  quantities  involved,  unless otherwise expressly agreed to in
                  writing by SWISSRAY.

         5.3      Delivery:
                  --------

                  5.3.1    SWISSRAY  shall use its  reasonable  best  efforts to
                           deliver  the  PRODUCT not later than ninety (90) days
                           from  the  date of the HMSA  purchase  order,  unless
                           otherwise  requested by HMSA and agreed to in writing
                           by SWISSRAY.

                  5.3.2    SWISSRAY  shall use its  reasonable  best  efforts to
                           ensure  that (i) lead  times  for  shipment  of Spare
                           Parts  shall not  exceed  seven (7) days from  HMSA's
                           purchase order date,  and (ii)  emergency  orders for
                           Spare  Parts shall be shipped  within  three (3) days
                           after purchase order date. SWISSRAY shall make direct
                           deliveries  of emergency  orders to customers of HMSA
                           on   behalf  of  HMSA   only   upon   prior   written
                           instructions by HMSA.

         5.4      Order  Cancellations  by HMSA. No purchase  order for PRODUCTS
                  accepted by SWISSRAY may be revoked or  cancelled by HMSA,  in
                  whole or in part,  except with SWISSRAY's  written consent and
                  upon the following terms:

                                       6
<PAGE>

                  5.4.1    HMSA shall pay SWISSRAY 33% of the purchase price for
                           purchase   orders   cancelled   or  revoked   between
                           forty-five  (45) and ninety (90) days of the delivery
                           date;

                  5.4.2    HMSA shall pay SWISSRAY 66% of the purchase price for
                           purchase orders  cancelled or revoked between fifteen
                           (15) and  forty-four  (44) days of the delivery date;
                           and

                  5.4.3    HMSA shall pay SWISSRAY 75% of the purchase price for
                           purchase orders  cancelled or revoked between one (1)
                           and fourteen (14) days of the delivery date.

         The  cancellation  payments  required under sections  5.4.1,  5.4.2 and
         5.4.3 shall not apply to cancellations, in whole or in part, by HMSA of
         its   purchase   order  for  PRODUCT   accepted  by  SWISSRAY  if  such
         cancellation by HMSA is exclusively caused by a modification to PRODUCT
         by  SWISSRAY  that   materially   and  adversely   affects   functional
         specifications  and with  respect to which  SWISSRAY  receives  written
         confirmation   from   HMSA's   customer   that  as  a  result  of  such
         modification, such HMSA customer cancelled its order with HMSA.

6.       CONTINGENCY PLAN, INTELLECTUAL PROPERTY.

         6.1      In order to ensure the availability and quality of service and
                  Spare Parts hereunder,  SWISSRAY shall maintain a complete and
                  up-to-date   set  of  (a)   drawings  of  Spare   Parts;   (b)
                  documentation  necessary  for the  repair  of  detectors;  (c)
                  contact  information  for third party  vendors of Spare Parts;
                  and (d) the  Activation  Code  described  in section 6.3 in an
                  escrow  location  mutually agreed upon for the deposit of such
                  documentation  pursuant  to the terms of a  Technology  Escrow
                  Agreement   among   SWISSRAY,   HMSA   and   Data   Securities
                  International,  Inc.  substantially  in the form of  Exhibit H
                  (the "Technology  Escrow  Agreement"),  which is being entered
                  into by such parties  contemporaneously with the execution and
                  delivery  of this  Agreement.  HMSA shall have  access to such
                  documentation  solely upon (a)  SWISSRAY,  its  successors  or
                  assigns  ceasing  to engage in the sale of  PRODUCTS  or Spare
                  Parts;  (b) the events set forth in section 14.2.1 below shall
                  occur to SWISSRAY and not be cured as provided therein; or (c)
                  provided  that  HMSA is not in breach  of this  Agreement,  if
                  SWISSRAY fails to make Spare Parts available to HMSA as may be
                  required by this  Agreement  for a period of ninety (90) days.
                  HMSA's  access to the  escrow,  if any,  shall be for the sole
                  purpose  of  fulfilling   HMSA's  warranty  and  post-warranty
                  service   obligations   to  its  customer  base  of  installed
                  PRODUCTS. The provisions of this section 6.1 shall survive the
                  expiration or earlier  termination of this  Agreement.  In the
                  event SWISSRAY shall terminate this Agreement for cause as set
                  forth in section 14.2, the Technology  Escrow  Agreement shall
                  be  simultaneously  terminated and the escrowed  documentation
                  shall be returned to SWISSRAY in accordance with the terms and
                  conditions of the Technology Escrow Agreement.

         6.2      HMSA  hereby  acknowledges  that  SWISSRAY  and its parent and
                  affiliates,  have legally  protected  rights and  interests in
                  Products, software,  tradenames,  trademarks, logos, insignias
                  and all other proprietary information and things, tangible and
                  intangible,  whether  or  not  registered  (the  "Intellectual
                  Property Rights").  HMSA will not imitate Products or infringe
                  upon  SWISSRAY's  Intellectual  Property  Rights  in  any  way
                  whatsoever.  HMSA shall immediately notify SWISSRAY in writing
                  upon  learning  that a  third  party  is or  may be  violating
                  SWISSRAY's Intellectual Property Rights.

                                        7
<PAGE>

         6.3      SWISSRAY    hereby   grants   to   HMSA   the    nonexclusive,
                  nontransferable,  nonsublicensable  right:  (a) to demonstrate
                  and evaluate (but not otherwise use) software  associated with
                  the PRODUCT;  and (b) to use the activation  codes provided by
                  SWISSRAY  to  HMSA  so  that  HMSA  can  have  access  to  the
                  diagnostic   software   resident   within  the  PRODUCT   (the
                  "Activation  Code")  solely for the purpose of  servicing  the
                  PRODUCT sold by HMSA and for no other purpose.  HMSA will not,
                  and will not allow any other  person  to,  make any  copies of
                  such  software,  to modify,  disassemble or decompile any such
                  software, or to remove, obscure or alter any notice of patent,
                  trademark, copyright or trade name on such software. No title,
                  ownership  or   proprietary   right  to  any  such   software,
                  Activation  Codes or other  Intellectual  Property  Rights  is
                  granted  or  transferred  by  virtue  of this  Agreement.  The
                  provisions of this Section 6.3 shall survive the expiration or
                  earlier termination of this Agreement.

         6.4      HMSA  shall  not  use  the  "SWISSRAY"  name  or  any  of  the
                  Intellectual  Property Rights without SWISSRAY's prior written
                  consent,  except  that  the  name  "SWISSRAY"  may be  used in
                  connection  with the sale of Products,  but only if due regard
                  is given to proper trademark use and the ownership by SWISSRAY
                  of its name and mark.  Without  limiting the generality of the
                  foregoing,  HMSA will not use any trademark or tradename owned
                  by  SWISSRAY,  or its parents or  affiliates,  either alone or
                  with  any  other  word or  words  as part of  HMSA's  trade or
                  corporate  name or in any  advertising,  without  the  express
                  written  consent  of  SWISSRAY.  HMSA will not remove any such
                  trademark or tradename from any Products, Spare Parts or other
                  literature or materials provided to HMSA by SWISSRAY. Upon the
                  termination  or  expiration  of  this  Agreement,   HMSA  will
                  discontinue completely any use of any of SWISSRAY's trademarks
                  or tradenames as set forth in section 15.3, below.

         6.5      HMSA acknowledges  that, should it breach its covenants as set
                  forth in  sections  6.2,  6.3,  or 6.4 above,  or section  13,
                  below, SWISSRAY will be irreparably harmed, that money damages
                  alone would not provide an adequate remedy, and that therefore
                  SWISSRAY  shall be entitled to an injunction  preventing  HMSA
                  from further  breaching such covenants  without any further or
                  more  particularized  showing  of  irreparable  injury  or the
                  posting of a bond or other security. Such an injunction may be
                  applied for before any Court having  jurisdiction  thereof. In
                  any such proceeding, SWISSRAY will also be entitled to recover
                  damages only as set forth in section 11.6 of this Agreement.

7.       MODIFICATION OF PRODUCT.

         7.1      SWISSRAY  may  modify  the  PRODUCT  in  its  sole,   absolute
                  discretion prior to delivery of PRODUCT. If such modifications
                  materially affect specifications or FDA submissions,  SWISSRAY
                  shall  use  its  best   efforts   to   notify   HMSA  of  such
                  modifications  in writing at least  ninety  (90) days prior to
                  first  delivery  of the  modified  PRODUCT.  In no event  will
                  SWISSRAY  be  obligated  to  make  any  such  modification  to
                  Products  previously supplied to HMSA or to continue to supply
                  Products as made prior to such modification.

         7.2      Modifications of PRODUCT which, in SWISSRAY's sole discretion,
                  are based upon safety or legal  concerns  shall be implemented
                  by  SWISSRAY  as  promptly  as may be  practicable  under  the
                  circumstances.  Notwithstanding  anything  to the  contrary in
                  this Agreement, SWISSRAY may, in its sole discretion,  suspend
                  sales and  shipment  of  PRODUCTS  or Spare  Parts for  safety
                  reasons without liability to HMSA.

                                       8
<PAGE>

         7.3      SWISSRAY  shall send HMSA all field change orders  relating to
                  the PRODUCT in writing.  HMSA shall  promptly  implement  such
                  field change orders within the time period  referenced in such
                  field change order. Field change orders shall contain at least
                  the following information:

                  (a)      Reason for change;
                  (b)      Designation of PRODUCT concerned by serial number(s);
                  (c)      Importance of modification (immediately, next service
                           call optionally);
                  (d)      Time required for work, and
                  (e)      Instructions for implementation.

         7.4      If, in SWISSRAY's sole judgment,  safety-related  field change
                  orders to PRODUCT are  required by law,  the costs of material
                  in  respect  of such  field  change  orders  shall be borne by
                  SWISSRAY  and the  cost of labor to  implement  same  shall be
                  borne by HMSA. In all other cases, unless a field change order
                  is required by SWISSRAY solely for its  convenience,  in which
                  case  SWISSRAY  shall bear the cost of  material  and labor in
                  respect  thereof,  the cost of materials and labor  associated
                  with a field change order shall be borne by HMSA.

         7.5      SWISSRAY  shall  promptly  respond  to HMSA's written concerns
                  relating to safety problems.

8.       SPARE PARTS, POST WARRANTY SERVICE.

         8.1      SWISSRAY shall make available to HMSA a complete list of Spare
                  Parts arranged according to SWISSRAY's part numbers. The Spare
                  Parts list shall be revised by  SWISSRAY  as  necessary  to be
                  kept up-to-date and shall cross reference HMSA part numbers.

         8.2      Spare  Parts  shall be packed  and  labeled  to  identify  the
                  contents of each  package in  accordance  with the Spare Parts
                  list.  Labeling shall indicate the respective  revision level,
                  if any, of Spare Parts.

         8.3      For a period  of seven (7) years  following  shipment  of each
                  PRODUCT under this Agreement,  SWISSRAY shall supply HMSA with
                  Spare Parts for such  PRODUCT at the then  current list price,
                  less any applicable discount. Thereafter, if any Spare Part is
                  not  available for purchase,  SWISSRAY  shall make  reasonable
                  efforts to  re-engineer  the fit or function of similar  Spare
                  Parts, if any, for a reasonable fee.

         8.4      Spare  Parts  shall  be  of  the  same  quality  as  the parts
                  installed in the PRODUCTS.

         8.5      The  parties   acknowledge  the  importance  of  post-warranty
                  service to the proper  operation  of PRODUCTS.  Therefore,  if
                  HMSA determines at any time that it will not, itself,  satisfy
                  any one or more post-warranty  service contracts for PRODUCTS,
                  HMSA shall  provide  SWISSRAY  with the first  opportunity  to
                  assume HMSA's obligations under such contracts.

9.       PRICES AND TERMS OF PAYMENT.

                                       9
<PAGE>

         9.1      The prices for PRODUCT (the "Prices") are stated in Exhibit F,
                  attached to this  Agreement and  incorporated  herein.  Prices
                  include  packaging,  packing  and  are  FOB to  SWISSRAY's  US
                  shipping point.

         9.2      Terms of payment:

                  For PRODUCT:

                  10% upon date of order
                  70% upon tender of delivery to the shipping  address in HMSA's
                  Purchase  Order 20% 30 days after  tender of  delivery  to the
                  shipping address in HMSA's Purchase Order

                  For Spare Parts:

                  100%  30 days after tender of delivery to the shipping address
                  in HMSA's Purchase Order

         9.3      The Prices  listed on Exhibit F shall remain in effect for all
                  Products or Spare Parts ordered prior to the first anniversary
                  of the Effective  Date.  For any PRODUCT  ordered  thereafter,
                  SWISSRAY may change the price by written  notification to HMSA
                  ninety  (90)  days  prior to the date the  price  change  will
                  become effective,  provided that, no price change shall affect
                  PRODUCT  orders placed by HMSA prior to effective  date of the
                  price changes.

10.      SHIPPING, TAXES, TITLE, RISK OF LOSS, Force Majeure.
         ---------------------------------------------------

         10.1     At  the  time  of shipment of PRODUCTS to HMSA, SWISSRAY shall
                  furnish HMSA with at least the following information:

                  (a)      Purchase order number
                  (b)      Transportation information
                  (c)      Serial number of the PRODUCT

         10.2     Shipment.
                  --------

                  10.2.1   Shipment Terms.  Delivery and price terms for PRODUCT
                           and  Spare  Parts  are  F.O.B.   to  SWISSRAY's  U.S.
                           shipping  point.  Thereafter,  HMSA  shall  bear  all
                           costs,  insurance  premiums,  freight  and all  other
                           charges and  expenses  incurred  after  SWISSRAY  has
                           placed  Products  or Spare  Parts in the custody of a
                           carrier. All such costs, charges and expenses will be
                           included  on  SWISSRAY's  invoice and will be paid by
                           HMSA in accordance  with the terms of this Agreement.
                           The  method  and  route of  shipment  shall be as set
                           forth on HMSA's  purchase  order.  If the  method and
                           route  of  shipment  are  not   specified  on  HMSA's
                           purchase  order,  the  method  and route of  shipment
                           shall be at SWISSRAY's discretion.

                  10.2.2   Separate  Shipments.  Each  shipment  of  Products or
                           Spare Parts to HMSA will  constitute a separate  sale
                           obligating   HMSA  to  pay  therefor,   whether  such
                           shipment  is in whole or in  partial  fulfillment  of
                           HMSA's  purchase  order  or  confirmation   for  such
                           Products or Spare Parts, as the case may be.

                                       10
<PAGE>

                  10.2.3   Suspension of Shipment.  In the event of a default by
                           HMSA under this Agreement,  SWISSRAY may decline,  at
                           its sole option,  to make further shipments under any
                           and/or all orders for  Products  or Spare Parts under
                           this  Agreement.   If  SWISSRAY  elects  to  continue
                           shipments,  such  continuation  will not constitute a
                           waiver of such default, nor will such continuation in
                           any way  limit  SWISSRAY's  legal  remedies  for such
                           default.

                  10.2.4   Shipment Allocation. If PRODUCTS are in short supply,
                           SWISSRAY  reserves the right to allocate  shipment of
                           orders and back orders for all  PRODUCTS  among HMSA,
                           other  customers  and  itself in its  sole,  absolute
                           discretion.  SWISSRAY  shall notify HMSA in the event
                           of a change in the status of HMSA's  deliveries under
                           this section 10.2.4.

                  10.2.5   Shipment   Directly  to   Customer.   Notwithstanding
                           anything  in  this  Agreement  to  the  contrary,  if
                           SWISSRAY  shall  suspend  shipments  as  provided  in
                           section  10.2.3,   SWISSRAY  shall  have  the  right,
                           without   liability,   to  ship  suspended   PRODUCTS
                           directly to the HMSA  customer to whom the  suspended
                           shipment was due for  SWISSRAY's  own  account.  HMSA
                           shall   cooperate   with   SWISSRAY   to  assure  the
                           completion of such shipment.

         10.3     Taxes.  Federal,  state and  municipal  taxes now or hereafter
                  imposed in respect of the sale, use, production,  manufacture,
                  delivery or transportation of Products or services of SWISSRAY
                  (except  SWISSRAY's  income taxes not levied in lieu of any of
                  the foregoing) will be added to and become a part of the price
                  of Products  payable by HMSA. Such taxes required by law to be
                  collected  or paid by SWISSRAY  will be  additional  to prices
                  quoted on Exhibit F, will be  included on  SWISSRAY's  invoice
                  and will be paid by HMSA unless HMSA  supplies  tax  exemption
                  certificates in form satisfactory to SWISSRAY.

         10.4.    Title and Risk of Loss.  All shipments  from  SWISSRAY's  U.S.
                  shipping point are made at HMSA's risk.  Title to PRODUCTS and
                  risk of loss of or damage to Products or Spare Parts will pass
                  to HMSA upon SWISSRAY  placing  Products or Spare Parts in the
                  custody of a carrier for shipment to HMSA. It will be the sole
                  responsibility  of HMSA to file all claims for shipment damage
                  or loss with the carrier but SWISSRAY will cooperate with HMSA
                  in such effort.

         10.5.    Force Majeure.   Notwithstanding  anything  in  this Agreement
                  to  the  contrary,  SWISSRAY  shall not be liable for loss or
                  damage  of any kind  resulting  from  delay or  inability  to
                  deliver,   or   failure  to  deliver,   caused    directly  or
                  indirectly    by: acts of God or the public enemy;  accidents;
                  strikes  or  differences   with  labor;  inability  to  obtain
                  labor,  material,  equipment   or  transportation;  compliance
                  with  or  the    operation  of  any  applicable   legislation,
                  regulation,    directive,  ruling,  judgment  or  order of any
                  governmental     unit  or  any   court  or   other   competent
                  governmental    authority  or matters  covered by section 7.2,
                  above;    or any other thing,  similar or  dissimilar,  beyond
                  SWISSRAY's    absolute  and  unconditional  control.  SWISSRAY
                  shall  not  be required to use overtime  labor,  nor to expend
                  any  monies  whatsoever,  to cure any such delay or failure to
                  deliver.  In  the  event of any  partial  failure to  deliver,
                  SWISSRAY  will  have the right to receive payment pro rata for
                  such  of   Products  or Spare Parts as it did in --- ---- fact
                  deliver,  whether  or  not  delivery of the same may have been
                  delayed.

11.      WARRANTY, LIMITATION OF DAMAGES.

                                       11
<PAGE>

         11.1     End-User  Product  Warranty.  SWISSRAY  extends a warranty for
                  Products  directly to end-users of the Products (the "End-User
                  Product   Warranty").   SWISSRAY's  current  End-User  Product
                  Warranty  is attached as Exhibit G. As set forth in Exhibit G,
                  the End-User  Product  Warranty  shall be in effect for twelve
                  (12) months from the date of completion of the installation of
                  the PRODUCT at HMSA's customers' site. Replacement parts shall
                  be  warranted  for  the  remainder  of the  original  warranty
                  period.

         11.2     SWISSRAY Warranties to HMSA.
                  ---------------------------

                  11.2.1   General:  SWISSRAY  warrants  to HMSA that:  (1) HMSA
                           shall  acquire  good title to the  PRODUCTS  free and
                           clear of all liens and encumbrances;  (2) there is no
                           pending  litigation or, to the knowledge of SWISSRAY,
                           any  existing   claim   involving  the  PRODUCT  that
                           adversely  affects HMSA's rights or obligations under
                           this  Agreement  in  respect  of  the  PRODUCT;   (3)
                           SWISSRAY's   sale   of  the   PRODUCT   to   HMSA  as
                           contemplated  by this  Agreement will not violate any
                           contract,   agreement  or   understanding   to  which
                           SWISSRAY  is a party or by which  SWISSRAY  is bound;
                           (4) throughout the Term of this  Agreement,  SWISSRAY
                           shall have the right to continue  to sell  PRODUCT to
                           HMSA.

                           In addition,  SWISSRAY  warrants to HMSA that, at the
                           time of sale  by  SWISSRAY,  the  PRODUCT  (1)  shall
                           comply  with all  applicable  United  States laws and
                           regulations  including  but  not  limited  to  safety
                           standards  and  FDA   requirements   related  to  the
                           manufacture  or sale of  PRODUCTS;  and (2)  shall be
                           listed by UL as appropriate and labeled  accordingly.
                           SWISSRAY  shall  certify  compliance  with  any  such
                           applicable laws and  regulations,  shall maintain any
                           UL listing and shall  maintain  required  FDA records
                           throughout the Term.

                  11.2.2   Spare  Parts:  SWISSRAY  warrants  to HMSA  only that
                           Spare Parts will be free from defects in material and
                           workmanship  at the time of delivery  to HMSA.  For a
                           period of twelve (12) months  thereafter  (the "Spare
                           Parts  Warranty  Period"),   SWISSRAY  in  its  sole,
                           absolute discretion, as HMSA's exclusive remedy under
                           this section  11.2.2,  will either repair Spare Parts
                           found by SWISSRAY to be  defective,  or replace  such
                           defective  Spare  Parts,   with  new  or  refurbished
                           equivalent Spare Parts. Repaired or replacement Spare
                           Parts are warranted  under the terms of this warranty
                           for  the  remainder  of  the  original   Spare  Parts
                           Warranty  Period.  Exchanged  Spare Parts  become the
                           property of SWISSRAY.

                           This Spare Parts warranty shall not apply if warranty
                           service is  necessitated  in whole or in part by: (1)
                           Spare Parts having been abused or damaged by casualty
                           or  accident  or Spare  Parts not used in  accordance
                           with SWISSRAY's  manuals or  publications,  (2) Spare
                           Parts having been serviced or modified  other than by
                           SWISSRAY, or the use of parts or software not sold by
                           SWISSRAY for the Spare Parts, (3) failure to maintain
                           the environmental  conditions  prescribed by SWISSRAY
                           for Spare Parts,  or (4)  deviation  from  SWISSRAY's
                           recommended maintenance procedures for Spare Parts.

         11.3     No Other  SWISSRAY  Warranty.  Except as set forth in  section
                  11.2,  above,  SWISSRAY  makes no  warranties,  guarantees  or
                  representations,  express or implied,  to HMSA with respect to
                  Products,  Spare  Parts or  otherwise.  ALL OTHER  WARRANTIES,
                  EXPRESS OR IMPLIED,  INCLUDING WITHOUT  LIMITATION ANY IMPLIED

                                       12
<PAGE>

                  WARRANTY  OF  MERCHANTABILITY  OR OF FITNESS  FOR USE OR FOR A
                  PARTICULAR PURPOSE ARE HEREBY EXCLUDED AND DISCLAIMED.

         11.4     HMSA  Warranty to SWISSRAY.  HMSA  warrants  that it shall (1)
                  install and service the PRODUCTS in accordance with SWISSRAY's
                  published specifications, installation procedures, maintenance
                  manuals  and user  manuals;  (2) not modify  PRODUCTS or Spare
                  Parts; and (3) comply with all applicable  federal,  state and
                  local laws,  rules,  regulations and ordinances  including but
                  not limited to safety standards and FDA requirements,  related
                  to HMSA's obligations under this Agreement.

         11.5     No  Warranty  by HMSA to  Customers.  HMSA  will  not make any
                  warranties,  representations  or  guarantees  to  any  person,
                  either  orally  or in  writing,  in the name or on  behalf  of
                  SWISSRAY  with  respect  to  Products  (or their  features  or
                  specifications)   or   otherwise,   except  as  set  forth  in
                  SWISSRAY's written literature distributed by SWISSRAY for that
                  purpose.

         11.6     Damage Limitations

                  11.6.1   EXCEPT  AS PROVIDED IN SECTION 11.6.2 WITH RESPECT TO
                           DIRECT  DAMAGES  ARISING  OUT  OF  CLAIMS  RELATED TO
                           PRODUCT OR SPARE PARTS ORDERS AND EXCEPT  AS PROVIDED
                           IN  SECTION  12  WITH  RESPECT TO THIRD PARTY CLAIMS,
                           UNDER  NO  CIRCUMSTANCE  WILL  SWISSRAY   OR  HMSA BE
                           LIABLE  FOR  ANY  DAMAGES,  UNDER  ANY  LEGAL THEORY,
                           INCLUDING,  WITHOUT  LIMITATION,  BREACH OF WARRANTY,
                           DIRECT,  INDIRECT,  SPECIAL,  INCIDENTAL, PUNITIVE OR
                           CONSEQUENTIAL  DAMAGES  (EXCEPT   FOR   CONSEQUENTIAL
                           DAMAGES  RELATING TO PERSONAL INJURY IN JURISDICTIONS
                           WHERE SUCH DAMAGES  MAY NOT BE DISCLAIMED AS A MATTER
                           OF  LAW)  OR  LOSS OF PROFITS, SUSTAINED BY THE OTHER
                           PARTY, OR BY ANY PERSON DEALING WITH SUCH OTHER PARTY
                           IN  CONNECTION  WITH ANY PRODUCT OR SPARE PARTS ORDER
                           OR PRODUCTS OR SPARE PARTS COVERED THEREBY.

                  11.6.2   THE  LIABILITY  OF EITHER  PARTY,  IF ANY, FOR DIRECT
                           DAMAGES IN CONNECTION  WITH A BREACH OF THE TERMS AND
                           CONDITIONS  OF  THIS  AGREEMENT,  REGARDLESS  OF  THE
                           DELIVERY OR  NON-DELIVERY OF PRODUCTS OR SPARE PARTS,
                           WILL NOT,  IN ANY EVENT,  BE GREATER  THAN THE ACTUAL
                           PURCHASE PRICE PAID OR TO BE PAID BY HMSA'S  CUSTOMER
                           FOR THE PRODUCTS OR SPARE PARTS WITH RESPECT TO WHICH
                           SUCH CLAIM IS MADE.

         11.7     The provisions of this section 11 shall survive the expiration
                  or earlier termination of this Agreement.

12.      THIRD PARTY CLAIMS.

         12.1     SWISSRAY shall  indemnify,  hold harmless and defend HMSA, its
                  parents,   subsidiaries  and  affiliates  and  its  and  their
                  officers,  directors,  agents,  employees  and  each of  their
                  successors and assigns (the "HMSA  Indemnified  Parties") from

                                       13

<PAGE>

                  and against or, in SWISSRAY's sole absolute discretion,  shall
                  settle, any and all third-party claim, loss, liability,  cost,
                  damage and expense including,  without limitation,  reasonable
                  attorneys'  fees,  with  respect  to  which  HMSA or the  HMSA
                  Indemnified  Parties  may  suffer   (collectively,   "Losses")
                  arising  out  of  (1)  alleged  product  liability  solely  in
                  connection with the design or manufacture of the Products; (2)
                  SWISSRAY's  material  breach  of  this  Agreement  by  act  or
                  omission of SWISSRAY,  its employees,  agents, or contractors,
                  or  otherwise;  and (3)  alleged  infringement  of any patent,
                  copyright,  trademark,  trade  secret  or  other  intellectual
                  property  right  solely  in  connection  with  the  design  or
                  manufacture of the PRODUCTS  (collectively,  "Patent Claims"),
                  provided  that,  SWISSRAY  shall have no obligation for Losses
                  for  Patent  Claims if  PRODUCTS  that are the  subject of any
                  Patent  Claims  have been  altered or  modified by HMSA or its
                  customers or have been combined by HMSA with any other product
                  or have been made to HMSA's  specifications  or custom made at
                  HMSA's request.

                  12.1.1   Notwithstanding  anything  to the  contrary  in  this
                           Agreement SWISSRAY's liability for Losses indemnified
                           under  12.1(2)  (but not under  12.1(1)  or  12.1(3))
                           shall be limited to the actual purchase price paid by
                           HMSA's  customer  for Spare  Parts or  PRODUCTS  with
                           respect to which such claim for Losses is made.

                  12.1.2   In  the  event  a claim is made against SWISSRAY that
                           PRODUCT  or  Spare  Parts  infringe  the intellectual
                           property  rights  of any third party, SWISSRAY may at
                           its  option  (a)  obtain  a  license for HMSA and its
                           customers  to  continue  to  use  or  to   sell   the
                           infringing  PRODUCT;  or  (b)  replace  or modify the
                           PRODUCT  so  that  it   performs   substantially   in
                           accordance  with  its  specifications  and avoids the
                           alleged infringement.  Moreover,  SWISSRAY may cancel
                           all  orders  for  PRODUCT  or Spare Parts effected by
                           such Patent Claim and, in  such event, HMSA shall use
                           commercially  reasonable  efforts  to  mitigate   its
                           damages. HMSA acknowledges and agrees that SWISSRAY's
                           liability  for cancelling orders for PRODUCT or Spare
                           Parts  pursuant  to  this  section  12.1.2  shall  be
                           limited  to  the  purchase price that would have been
                           paid by HMSA's customer for such  cancelled  PRODUCTS
                           or Spare Parts.

         12.2     HMSA shall  indemnify,  hold harmless and defend  SWISSRAY and
                  its parents,  subsidiaries  and  affiliates  and its and their
                  officers,  directors,  agents,  employees  and  each of  their
                  successors  and assigns (the "SWISSRAY  Indemnified  Parties")
                  from and against or, in HMSA's sole absolute discretion, shall
                  settle, any and all third-party claim, loss, liability,  cost,
                  damage and expense, including, without limitation,  reasonable
                  attorneys'  fees,  which SWISSRAY or the SWISSRAY  Indemnified
                  Parties  may suffer  arising out of (1) any act or omission of
                  HMSA, its employees,  agents or contractors in connection with
                  the satisfaction of HMSA's  obligations  under this Agreement;
                  and (2) HMSA's material  breach of this  Agreement,  including
                  its obligations described in Exhibit C.

12.3              The   indemnifications  set forth above are conditioned  upon
                  HMSA  or  SWISSRAY, as the case may be, giving the other party
                  prompt   notice  if  its   receipt  of   a   claim  for  which
                  indemnification  is  sought  hereunder.  The indemnified party
                  shall,  at   no  out-of-pocket  expense  to  the  indemnifying
                  party,  cooperate  with  the indemnifying  party in respect of
                  the  defense of  such matter. The indemnified party shall have
                  the   right,  without  affecting its indemnity  hereunder,  to
                  participate  in  the administration,  defense or settlement of
                  any  such  matter at its own  expense and with  counsel of its
                  own   choosing.  The  indemnifying  party shall not settle any
                  claim  indemnified  hereunder without the  written  consent of

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<PAGE>

                  the  indemnified   party unless the indemnified party is given
                  a full and unconditional release in respect of such matter.

12.4     The  provisions  of  this  section  12  shall survive the expiration or
         earlier termination of this Agreement.

13.      CONFIDENTIALITY.

         13.1     Each Party shall keep  confidential the Intellectual  Property
                  Rights,  Activation Codes,  technical data, past,  present and
                  future  business  plans,   concepts  and  designs,   drawings,
                  sketchings,  techniques,   technologies,  systems,  processes,
                  know-how,  trade  secrets  and/or  information  identified  as
                  confidential   (hereinafter   referred  to  as   "CONFIDENTIAL
                  INFORMATION")  that it  receives  from the  other  party.  The
                  receiving  party  agrees  not  to  reproduce,   disclose  such
                  CONFIDENTIAL  INFORMATION to any third party, or to use it for
                  any  purpose  not  authorized  by the  disclosing  party.  The
                  receiving party agrees to instruct its employees having access
                  to  such   CONFIDENTIAL   INFORMATION  of  receiving   party's
                  confidentiality  obligations,  and further  agrees to restrict
                  access of such CONFIDENTIAL INFORMATION to employees or agents
                  who have a need to know  pursuant to their scope of employment
                  or agency arrangement.  The receiving party agrees to hold the
                  disclosing party's CONFIDENTIAL  INFORMATION in confidence and
                  to protect such  information with the same degree of care used
                  in protecting the receiving party's similar  information,  but
                  in no event, with less than a reasonable degree of care.

         13.2     This  confidentiality  obligation shall not apply to know-how,
                  data and/or information which is:

                  13.2.1   demonstrated  to be available  from public sources or
                           in  the  public  domain   through  no  fault  of  the
                           receiving party, its employees or agents;

                  13.2.2   demonstrated  to be  received  at any  time  from any
                           third  party  without   breach  of  a   nondisclosure
                           obligation or obligation of secrecy to the disclosing
                           party or any other party;

                  13.2.3   demonstrated  through  proper  documentation  to have
                           been developed  independently  by the receiving party
                           without   reliance   on   the   disclosing    party's
                           CONFIDENTIAL  INFORMATION  or to  have  been  in  the
                           possession  of  the  receiving  party  prior  to  its
                           disclosure by disclosing party;

                  13.2.4   required to be disclosed by judicial or  governmental
                           order,  provided that, the disclosing  party is given
                           prompt  written  notice  of a request  or demand  for
                           disclosure to enable it to seek a protective order or
                           similar relief; or

                  13.2.5   approved for  disclosure by prior written  consent of
                           an  authorized   corporate   representative   of  the
                           disclosing party.

         13.3     The provisions of this section 13 shall survive the expiration
                  or termination of this Agreement.

14.      TERM AND TERMINATION.

                                       15

<PAGE>

         14.1     Term.  Unless  earlier  terminated  pursuant to section  14.2,
                  below,  this  Agreement  shall remain in force until the first
                  anniversary of the Effective Date (the "Term"). This Agreement
                  may be renewed  for  additional  periods  if each party  gives
                  written  notice of its intent to renew to the other  party not
                  less than  sixty  (60) days'  prior to the  expiration  of the
                  initial or any renewal period. SWISSRAY and HMSA shall consult
                  during the tenth (10th) month  following the Effective Date to
                  consider  whether to renew this  Agreement  and if so, for how
                  long and whether the renewal will be for an expanded territory
                  or otherwise. In reaching such decisions, SWISSRAY shall place
                  substantial   weight  on  HMSA's  performance  in  respect  of
                  purchase volumes and future  commitments to purchase PRODUCTS.
                  Assuming  that  HMSA can meet  SWISSRAY's  marketing  needs in
                  SWISSRAY's  sole,  good  faith  discretion,  it is  SWISSRAY's
                  present  intent to expand the  Territory  up to and  including
                  exclusivity throughout the United States.

                  If, after the  expiration  of the Term,  the Agreement has not
                  been renewed as above provided, and if the parties nonetheless
                  continue to do business,  then the Agreement  will continue in
                  effect  subject to all of the terms and  conditions  set forth
                  herein,  except that it will be  terminable  by either  party,
                  with or without cause,  for any reason or for no reason,  upon
                  30 days' written notice to the other party.

         14.2     Termination for Cause.  Notwithstanding  the Term hereof, this
                  Agreement may by written  notice be terminated and canceled at
                  the option of the party having such right as follows:

                  14.2.1   By  either  Party in the event  that the other  Party
                           voluntarily  files a petition  in  bankruptcy  or has
                           such a petition involuntarily filed against it, or is
                           placed in an insolvency proceeding, or if an order is
                           entered  appointing  a receiver  or trustee  for or a
                           levy attachment is made against a substantial portion
                           of its assets which voluntary  petition,  involuntary
                           petition, insolvency proceeding or order shall not be
                           vacated,   set   aside  or   stayed   or  a  plan  of
                           reorganization  shall not  accepted  within  120 days
                           after its  initiation,  or if any  assignment for the
                           benefit of its creditors is made;

                  14.2.2   By  SWISSRAY  in the event HMSA shall have  infringed
                           SWISSRAY's  Intellectual  Property Rights or breached
                           its obligations in section 13, above;

                  14.2.3   By  either  Party in the event  that the other  Party
                           shall  have  failed  to  cure,  upon 30  days'  prior
                           written   notice,   any   breach   of   a   covenant,
                           representation  or warranty  made or to be  performed
                           hereunder.

                  14.2.4   By either  Party in the event the other  Party  shall
                           merge or  consolidate  with or into any other entity,
                           or if either Party shall sell or otherwise dispose of
                           its capital stock or substantially all of its assets.

15.      PROVISIONS  AFTER  TERMINATION  OF  THE  AGREEMENT.  If  this Agreement
         expires or is sooner terminated:

         15.1     SWISSRAY  shall  continue to supply to HMSA PRODUCT to fulfill
                  HMSA's open sales orders to HMSA customers  prior to notice of
                  termination  of this  Agreement,  except  that,  SWISSRAY  may
                  demand  full  payment  immediately  upon tender of delivery of
                  PRODUCT to the destination stated in HMSA's purchase order.

                                       16
<PAGE>

         15.2     SWISSRAY may declare all sums owing from HMSA  immediately due
                  and  payable,  notwithstanding  any  credit  terms  previously
                  extended or in effect,  if SWISSRAY  terminates this Agreement
                  for cause in accordance with section 14.2.

         15.3     HMSA shall immediately discontinue use, direct or indirect, of
                  the  Intellectual  Property  Rights,  except  that,  HMSA  may
                  provide  post-warranty  service for PRODUCTS to its  customers
                  and SWISSRAY  shall  continue to supply  Spare Parts  therefor
                  pursuant to section 8.3, above.

         15.4     Nothing  contained  herein is intended to prejudice any rights
                  of  the  Parties   hereto  that  have  accrued  prior  to  the
                  termination of this Agreement in accordance  with its terms or
                  otherwise,  or any rights of the Parties  that are intended to
                  survive any such termination.

16.      ARBITRATION AND GOVERNING LAW.

         16.1     Arbitration.  Except as provided in section  6.5,  above,  and
                  except with respect to disputes as to indebtedness arising out
                  of the sale of Products or Spare  Parts,  any  controversy  or
                  claim  arising  out of or relating  to this  Agreement  or the
                  breach  thereof,  whether  common law or statutory,  including
                  without   limitation   claims  asserting   violations  of  the
                  antitrust  laws or  RICO,  shall  be  settled  exclusively  by
                  arbitration  in  New  York,  New  York,   using  the  American
                  Arbitration Association.

         16.2     Governing Law. The arbitrators shall apply the internal law of
                  the  State  of  New  York,   excluding  its   conflict-of-laws
                  principles,   in  determining  the  rights,   obligations  and
                  liabilities of the parties. The arbitrators shall not have the
                  power to alter,  modify,  amend,  add to or subtract  from any
                  term or provision of this Agreement,  nor to grant  injunctive
                  relief,  including interim relief, of any nature, nor to award
                  punitive  damages of any nature.  In all other  respects,  the
                  Commercial  Arbitration  Rules  of  the  American  Arbitration
                  Association  shall  govern the  arbitration.  Judgment  on the
                  award of the  arbitrators  may be entered by any Court  having
                  jurisdiction  to do so,  and the  parties  to  this  Agreement
                  hereby  irrevocably   consent  and  submit  to  the  exclusive
                  personal  jurisdiction and venue of the United States District
                  Court for the  Southern  District  of New York or the  Supreme
                  Court of the State of New York,  County of New York,  for that
                  purpose as well as for any and all other permitted purposes in
                  connection with this Agreement.

         16.3     Failure to  Arbitrate.  The failure or refusal of either party
                  to submit to  arbitration  shall  constitute  a breach of this
                  Agreement.  If judicial action is commenced in order to compel
                  arbitration,  and if  arbitration  is in fact  compelled,  the
                  Party that shall have resisted  arbitration  shall be required
                  to pay to the other  Party all costs and  expenses,  including
                  reasonable  attorneys'  fees,  that it  incurs  in  compelling
                  arbitration.  All  other  fees  and  charges  of the  American
                  Arbitration Association shall be borne by the losing Party or,
                  in the event, neither Party is the losing party on all issues,
                  as the arbitrators shall determine in their award.

         16.4     Matters   Not   Arbitrated.   With   respect   to   claims  or
                  controversies that are not the subject of arbitration pursuant
                  to this  Agreement,  the rights and obligations of the parties
                  under this  Agreement  will be governed by the internal law of
                  the  State  of New  York,  exclusive  of its  conflict-of-laws
                  principles.  All such  causes of action  instituted  by either
                  party with respect to this Agreement will be brought solely in
                  the United States District Court for the Southern  District of
                  New York, or, if that court lacks subject matter jurisdiction,

                                       17

<PAGE>

                  then  solely  in the  Supreme  Court of the State of New York,
                  County of New  York.  For this  purpose,  the  Parties  hereby
                  irrevocably  consent to the  jurisdiction  of the State of New
                  York over  their  person,  and waive any  defense  based  upon
                  improper venue, inconvenient venue or lack of jurisdiction.

17.      INSURANCE.

         SWISSRAY will provide HMSA with  documentation of acceptable  levels of
         product  liability  insurance  coverage (minimum limits of five million
         dollars  ($5,000,000) each occurrence and in the aggregate) naming HMSA
         as an additional insured, related to the PRODUCT.

18.      MISCELLANEOUS.

         18.1     All  changes  and  amendments  to  this  Agreement  must be in
                  writing,  must recite that they are  amendments  or changes to
                  this  Agreement  and must be signed by a corporate  officer of
                  HMSA and a corporate  officer of  SWISSRAY  to be valid.  This
                  requirement of written form can only be waived in writing.

         18.2     Notices and communications  between SWISSRAY and HMSA required
                  by this  Agreement  shall  be  given  in  writing  and sent by
                  certified mail,  postage prepaid and return receipt requested,
                  or by fax to the  following  address of the parties or to such
                  other address as the party concerned may  subsequently  notify
                  in writing to the other party:

                  If to SWISSRAY to:      SWISSRAY America, Inc.
                                          320 West 77th Street, Suite 1A
                                          New York, New York 10024
                                          Attn: Mr. Ueli Laupper, Vice President
                                          Fax No.: 212-545-7912

                  With a copy to:         Piliero Goldstein Jenkins & Hall, LLP
                                          292 Madison Avenue
                                          New York, New York 10017
                                          Attn:  Edward J. Goldstein, Esq.
                                          Fax No.: 212-685-2028

                  If to HMSA to:          Hitachi Medical Systems America, Inc.
                                          1959 Summit Commerce Park
                                          Twinsburg, OH  44087
                                          Attn:  Mr. Richard L. Ernst, President
                                                 & CEO
                                          Fax No.: 330-425-1410

                  Any  such  notice  if  given  or  made  by  certified  mail as
                  aforesaid shall be deemed to have been received on the earlier
                  of the-date  actually  received and the date five (5) calendar
                  days  after  the same was  posted  and if given or made by fax
                  shall be deemed to have been received at the time of dispatch,
                  provided  that,  a copy of such fax  notice  is  delivered  by
                  certified  mail within five (5)  calendar  days after the same
                  was  faxed.  If the date of deemed  receipt  is not a business
                  day,  the  date of  deemed  receipt  shall  be the  next  such
                  succeeding business day.

         18.3     No rights, duties,  obligations or interests in this Agreement
                  shall be  assigned  by either  SWISSRAY  or HMSA  without  the

                                       18

<PAGE>

                  written  consent  of  the  other  Party,   and  any  attempted
                  assignment, whether voluntarily,  involuntarily,  by operation
                  of  law  or   otherwise,   shall  be  wholly   void,   totally
                  ineffective,  and of no force and effect, and shall not confer
                  any rights of any kind upon the intended assignee.

         18.4     The  Parties  acknowledge  and  agree  that  the  Parties  are
                  independent  contractors.  Nothing in this Agreement  shall be
                  deemed  to  establish  or  otherwise  create or  constitute  a
                  relationship   of  principal  and  agent  or  franchisor   and
                  franchisee  between SWISSRAY and HMSA. Neither HMSA nor any of
                  its agents or  employees  shall have any right or authority to
                  assume or create any obligation of any kind,  whether  express
                  or implied,  on behalf of SWISSRAY  or have any  authority  to
                  bind  SWISSRAY in any  respect  whatsoever.  Neither  HMSA nor
                  SWISSRAY  will  represent   itself,   either  directly  or  by
                  implication, as franchisee or franchisor (as the case may be),
                  agent, joint venturer,  partner or representative of the other
                  Party.

         18.5     The  titles  to  the  sections  in  this   Agreement  are  for
                  convenience  of  reference  only  and  are  not  part  of this
                  Agreement  and shall not in any way affect the  interpretation
                  thereof.

         18.6     In the event that any of the  provisions of this  Agreement or
                  the  application of any such  provisions to the parties hereto
                  with respect to their obligations  hereunder will be held by a
                  Court  or  other  tribunal  of  competent  jurisdiction  to be
                  unlawful,  invalid,  or void or  unenforceable,  the remaining
                  provisions  of this  Agreement  will  remain in full force and
                  effect  and  will  in  no  way  be   affected,   impaired   or
                  invalidated.  In the  event,  however,  that any  law,  order,
                  regulation,   direction,   restriction   or   limitation,   or
                  interpretation  thereof,  will in the judgment of either Party
                  substantially alter the relationship between the Parties under
                  this   Agreement,   or  the   advantages   derived  from  such
                  relationship,  either Party may request the other Party hereto
                  to modify this  Agreement,  and, if, within 30 days subsequent
                  to the making of such request,  the Parties  hereto are unable
                  to agree upon a  mutually  satisfactory  modification  hereof,
                  then either Party may terminate this Agreement without further
                  cause on 30 days' notice to the other Party.

         18.7     This  Agreement  together  with its  Exhibits  sets  forth the
                  entire  agreement  between the parties  hereto with respect to
                  the subject  matter hereof and  supersedes and cancels any and
                  all  prior  or  contemporaneous   discussions,   negotiations,
                  arrangements and agreements  between them, express or implied,
                  with respect to such subject matter.  The Parties  acknowledge
                  that no  representations  or promises have been made to induce
                  either of them to enter into this Agreement  other than as may
                  be specifically set forth herein.

         18.8     The  failure  or refusal  by either  Party to insist  upon the
                  strict  performance  of any provision of this  Agreement or to
                  exercise   any  right  in  any  one  or  more   instances   or
                  circumstances shall not be construed as a waiver of such right
                  presently or as a modification or amendment of this Agreement,
                  nor  shall  such  failure  or  refusal  be  deemed a custom or
                  practice  contrary to such provision or right. A waiver of any
                  default by either party of any of the terms and  conditions of
                  this Agreement  shall not be deemed to be a continuing  waiver
                  or a waiver  of any  other  default  or of any  other of these
                  terms and conditions,  but shall apply solely to the instances
                  to which such waiver is granted.

         18.9     (a) This  Agreement  shall be  binding  upon and  inure to the
                  benefit of the respective  successors and permitted assigns of
                  the parties  hereto.  (b) The rights of the Parties under this
                  Agreement  are for the sole  benefit of SWISSRAY  and HMSA and
                  are  not  intended  for  any  other  person.   (c)  The  words
                  "including,"  "includes,"  "include" and "covering" as used in

                                       19

<PAGE>

                  this  Agreement  mean,   respectively,   "including,   without
                  limitation," "includes, without limitation," "include, without
                  limitation" and "covering, without limitation." (d) References
                  to sections are to sections in this Agreement and in each case
                  include  references to all  subsections  under the  referenced
                  section.  (e) The words "hereof"  "herein" and "hereunder" and
                  words  of  similar   import  shall  refer  to  all  applicable
                  provisions  of  this  document  and  not  to  any   particular
                  provision.  (f) This  Agreement  is the result of  negotiation
                  and, accordingly, no presumption or burden of proof will arise
                  with respect to any ambiguity or question of intent concerning
                  this  Agreement  favoring  or  disfavoring  any  Party to this
                  Agreement by virtue of the authorship of any provision of this
                  Agreement.  (g) Words  denoting the  singular  tense or person
                  shall include the plural and vice versa and  references to the
                  masculine gender shall, where the context permits, include the
                  feminine  and/or  neuter  genders  and  vice  versa.  (h)  All
                  references   to  statutory   provisions   shall   include  all
                  amendments and re-enactments  thereof.  (i) The obligations of
                  the  parties  that   expressly   survive  the   expiration  or
                  termination of this  Agreement,  or which, by their nature are
                  intended to survive such expiration or  termination,  shall so
                  survive in  accordance  with their  terms or as is required to
                  give effect to such intention, respectively.

         18.10    This  Agreement may be executed in multiple  counterparts  and
                  duplicate originals,  each of which will be deemed enforceable
                  without production of the others.

                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Agreement to be executed in duplicate by their duly  authorized  officers on the
day and year mentioned below.

SWISSRAY AMERICA, INC.                      HITACHI MEDICAL SYSTEMS
                                                AMERICA, INC.

By:_____/Ueli Laupper/___________           By:__/Richard L. Ernst__________
         -------------                           -----------------
          (authorized signature)                 (authorized signature)

Name:___Ueli Laupper____________            Name:__Richard L. Ernst________
        ------------                              -----------------
       (print or type)                            (print or type)

Title:_____CEO_________________             Title:___President and CEO_______
           ---                                       -----------------

By:____/Michael Baker/___________
         -------------
        (authorized signature)

Name:____Michael Baker__________
         -------------
        (print or type)

Title:___Deputy CEO_____________
      SWISSRAY America, Inc.

                                       20
<PAGE>

                                    EXHIBIT A

ddRMulti-System - General Informations

1.Overview

Direct  digital,   multifunctional   X-ray  system  for  advanced   radiographic
examinations

The  system  includes  the  Stand,  the  C-arm,   the  digital   AddOn(R)-Bucky,
GUN-X-2000/4000  X-ray Generator  including the tube and collimator,  the Mobile
Patient Table ddR and the SwissVision(R) Image Processing System.

The system can be supplied in different  versions,  when taking in consideration
the direction of the x-ray beam:

         - Standard Right version
           The  stand  is designed as a right hand version (tube is at the right
           side in horizontal beam position).

         -Standard Left version
          The stand is designed as a left hand version (tube is at the left side
          in horizontal beam position).

2.       Floor Mounted C-Arm Type Positioning Stand

All system movements are  automatically  manipulated and o All may be controlled
by touchscreen,  push buttons at the system or remote control. The movements are
motor-driven  with a  double  speed  slowstartlfast-  move  motor.  This  allows
convenient and ultra-precise positioning.

The unit is computer  controlled  and has two preset  positions for vertical and
horizontal  examinations  and an  additional  park  position,  which  all can be
individually programmed.

The C-Arm type tube arm allows cross-lateral  examinations.  The system computer
recognized the room measures and therefore collisions will not occur.

The X-ray tube is in any position, even for axial examinations,  centered to the
Add0n(R)-Bucky  which  results in  efficient  and  convenient  positioning.  For
special  examinations  the  AddOn(R)-Bucky  and the X-ray tube may be positioned
independent from each other.

3  Direct Digital Add0n(R)-Bucky

- The  Add0n(R)-Bucky  is a 35x43 cm or  43x35 cm  (17"x14")  full  size  direct
digital detector and performs digital X-rav images within 16-20 seconds.

                                       21

<PAGE>

The AddOn(R)-Bucky is CCD-based.

The ddRMulti-System is accompanied with an oscillating arid which can be removed

4.  GEN-X-2000/4000(R)X-Ray Generator

High frequency generator with 80kW output.

The GEN-X-2000/4000(R)  uses the patented Swissray 1-2-3 point system anatomical
program for efficient and easy selection of the exposure parameters.

5.  SRX 21-HS-1 High Speed Tube/Collimator

0.6/1.2 mm double focus  rotating  anode high speed tube with a 12 degree target
angle.

The tube is combined with a motor-drive collimator.  The tube/collimator unit is
accompanied with 3 different filters which can be used at the users convenience.

The   mounting   cone  may  be  rotated  to  perform   orthopedic   examinations
conveniently.

6.  Mobile Patient Table ddR

Mobile  patient table with  transparent  table top allowing  positioning  of the
Bucky and 4 double wheels for convenient handling of recumbent patients.

The table may be easily locked in any position by mechanical  brakes. Two wheels
on each side are fitted with a pedal lever to adjust three different positions.

   - Normal position: Table  can  be moved in all directions because wheels turn
     360(degree).

   - Position locked: Table can be moved in straight direction only.

   - Position brake: In this position both wheels on each side are locked.

To move it conveniently, the table is equipped with two handles

7.  SwissVision(R)Imase Processing System

The  SwissVision(R)  Image Processing  System is a Microsoft Windows NT(R) based
full digital X-ray acquisition workstation including postprocessing algorithms.

It performs the proprietary Swissray organ specific image processing  algorithms
and a wide range of other modern image processing functions. The user can decide
to automatically post process the image by using predetermined default values or
he can chance and modify these default values from case to case.

Swissvision(R)  offers its own patient  directory (image archiving) with an
additional  DICOM interfact  (DICOM 3.0 by Merge via Ethernet  TCP/IP).  Image
size is maximum 2500 x 2000 pixel (12 bit/pixel data) and image acquisition time
up to 20 seconds. The SwissVision(RE) software includes:

                                       22

<PAGE>

          - Patient demographics
          - Zooming
          - Contrast/Brightness/Shape adjustment
          - ROI definition
          - Post  processing  including  Noise reduction, Contrast Amplifcation,
            Edge  Contrast  Boosting, Lattitude Reduction, Sensitometric Curves,
            Window boundary offset, Density and other special algorithms

The  SwissVision(R)workstation  is DICOM 3.0  compliant  Optional  features  are
HL-7/DICOM Worklist softwares.

The Windows  NT(R)based  software is divided in mainly  four  different  modules
consisting of the following functions:

          a) Automatic Image processing for routine use:

          -  Contrast,
          -  Brightness,
          -  Shape
          -  Zooming
          -  Window leveling,
          -  Default  post  processing  values  will be used (standard values or
             customer specific)

          b) Individual image processing:

          -  All parameter as with automatic processing,
          -  All post processing parameter can be selected and set individually,
             as Noise reduction, Contrast Amplification, Edge Contrast Boosting,
             Lattitude Reduction,  Sensitometric Curves, Window boundary offset,
             Density and other special algorithms

          c) Additional functions:

          -  Image directory management (max 9 images in process)
          -  Patient management (DICOM conformity)
          -  Positive-/neative inversion including image rotation and mirroring.
          -  Online Help (in preparation).
          -  8 or 16 bit image display
          -  Duplication of images
          -  Storage of images local or external (DICOM archive)
          -  Print options:

> Multiple print out  (divisions  1/1, ?/1, 1/2 and 4/4) (DICOM)

> Printing with original size ("requested image size") (DICOIVI)

> Printing with modified window leveling

> Paper printing of images via Windows(R)  compatible  printer including patient
data

                                       23

<PAGE>

> Individual printer and storage management

    d)          Service and Support Functions

    -           Error management with logbook function
    -           Service mode

                                       24

<PAGE>

                                    EXHIBIT B

                                 [The Territory]

The  Territory  shall be the Fifty (50) states of the United  States of America,
except the following geographic areas:

1.       The  States  of  Alabama,  Arizona,  Connecticut,  Mississippi,  Maine,
         Massachusetts, New York, Rhode Island, Vermont and New Hampshire.

2.       The  portion  of  New Jersey that includes the Atlantic City Expressway
         and north.

3.       The following counties in the State of Pennsylvania: Allegheny, Clinton
         Mercer, Armstrong, and Crawford, Mifflin, Beaver, Elk, Potter,  Butler,
         Erie, Venago, Cambria, Forest, Warren,  Cameron,  Indiana,  Washington,
         Center,  Jefferson,  Westmoreland,  Clarion,  Lawrence,  Clearfield and
         McKean.

4.       The following counties in the State of California:Orange and San Diego.

5.       The Panhandle of Florida - Tallahassee west.

                                       25
<PAGE>

                                    EXHIBIT C

                     Symbol [ ] indicates  information  redacted  in  accordance
with confidential treatment request.

A. GENERAL

1. (a) Governmental National Accounts. Governmental National Accounts, i.e., the
Department of Defense and other federal,  state and local  government  accounts,
including each  Governmental  National  Accounts'  constituent  purchasing units
(each, a "Governmental  National Account"),  it being understood and agreed that
SWISSRAY shall  negotiate the terms and conditions of sale to such  Governmental
National Accounts and shall have the exclusive right to enter into contracts for
the  sale  of  PRODUCTS  to  such  Governmental  National  Accounts  within  the
Territory. HMSA shall solicit the sale of PRODUCTS to the constituent purchasing
units of the  Governmental  National  Accounts within the Territory on behalf of
SWISSRAY  solely  upon the terms and  conditions  of the  Governmental  National
Account  contract  negotiated  by SWISSRAY or otherwise in  accordance  with the
written  directions of SWISSRAY.  SWISSRAY  shall accept such orders only in its
sole, absolute  discretion.  For each PRODUCT sold by SWISSRAY to a Governmental
National  Account  within  the  Territory,  and to the  extent  permitted  under
SWISSRAY's contract with the relevant Governmental National Account with respect
to such PRODUCT. HMSA shall have the rights and obligations set forth in section
3 of this  Agreement,  and SWISSRAY  shall have the rights and  obligations  set
forth in  section 4 of this  Agreement.  For each sale of PRODUCT  completed  by
SWISSRAY  to a  Governmental  National  Account  within  the  Territory,  and in
consideration of HMSA's  obligations  undertaken in this section A(1),  SWISSRAY
shall pay HMSA a fee equal to the net price of the PRODUCT sold by SWISSRAY less
the price of the identically configured PRODUCT as set forth in Exhibit F.

    (b) Hospital  National  Accounts.  SWISSRAY will  negotiate  contracts  with
certain  Hospital  Buying  Groups  through  out the country  (each a  "Contract;
collectively,  the  "Contracts").  Such  Contracts  state  the  terms  of  sale,
including  price,  under which  SWISSRAY  will make  PRODUCTS  available to each
constituent  unit (a "Constituent  Unit") of such Hospital Buying Group. For the
avoidance of doubt, HMSA shall have the limited right to offer PRODUCTS directly
to a  Constituent  Unit  within the  Territory  and such sales are not  reserved
exclusively to SWISSRAY  under this  Agreement.  HMSA may provide  PRODUCTS at a
price higher than the price set forth in the Contract  covering the  Constituent
Unit.  In no event  shall  HMSA  have the  right to  provide  PRODUCTS  (i) to a
Hospital  Buying Group with which SWISSRAY has a Contract or (ii) to Constituent
Units of such Hospital  Buying Group outside of the Territory.  Hospital  Buying
Groups, as an entity, are Reserved Accounts under this Agreement.

2. HBOC, Data General, IBM, Sequoia and Storcomm.

B.     SOUTHEAST

1. [                                     ]
2. [                                     ]
3. [                                     ]

                                       26

<PAGE>

4. [                                     ]
5. [                                     ]
6. [                                     ]
7. [                                     ]
8. [                                     ]
9. [                                     ]
10.[                                     ]
11.[                                     ]
12.[                                     ]
13.[                                     ]
14.[                                     ]
15.[                                     ]
16.[                                     ]
17.[                                     ]
18.[                                     ]
19.[                                     ]
20.[                                     ]
21.[                                     ]
22.[                                     ]
23.[                                     ]
24.[                                     ]
25.[                                     ]
26.[                                     ]
27.[                                     ]
28.[                                     ]
29.[                                     ]
30.[                                     ]
31.[                                     ]
32.[                                     ]
33.[                                     ]
34.[                                     ]
35.[                                     ]

                                       27

<PAGE>

B.     SOUTHWEST

Protected  accounts in the Southwest  territory  are the hospitals  listed below
including  associated  imaging  centers.  Hospitals  are  located  in [ ] unless
otherwise noted.

1. [                                     ]
2. [                                     ]
3. [                                     ]
4. [                                     ]
5. [                                     ]
6. [                                     ]
7. [                                     ]
8. [                                     ]
9. [                                     ]
10.[                                     ]
11.[                                     ]
12.[                                     ]
13.[                                     ]
14.[                                     ]
15.[                                     ]
16.[                                     ]
17.[                                     ]
18.[                                     ]
19.[                                     ]
20.[                                     ]
21.[                                     ]
22.[                                     ]
23.[                                     ]
24.[                                     ]
25.[                                     ]
26.[                                     ]
27.[                                     ]
28.[                                     ]
29.[                                     ]
30.[                                     ]

                                       28

<PAGE>

C. NORTHEAST

1. [                                     ]
2. [                                     ]
3. [                                     ]
4. [                                     ]
5. [                                     ]
6. [                                     ]
7. [                                     ]
8. [                                     ]
9. [                                     ]

D. NORTHWEST

1. [                                     ]
2. [                                     ]
3. [                                     ]
4. [                                     ]
5. [                                     ]
6. [                                     ]
7. [                                     ]
8. [                                     ]
9. [                                     ]
10.[                                     ]
11.[                                     ]
12.[                                     ]
13.[                                     ]
14.[                                     ]
15.[                                     ]
16.[                                     ]
17.[                                     ]
18.[                                     ]
19.[                                     ]
20.[                                     ]
21.[                                     ]

                                       29

<PAGE>

22.[                                     ]
23.[                                     ]
24.[                                     ]
25.[                                     ]
26.[                                     ]
27.[                                     ]
28.[                                     ]
29.[                                     ]
30.[                                     ]
31.[                                     ]
32.[                                     ]
33.[                                     ]
34.[                                     ]
35.[                                     ]
36.[                                     ]
37.[                                     ]
38.[                                     ]

                                       30
<PAGE>

                                    EXHIBIT D

                [Technical, Support Documentation and Training]

    SWISSRAY  shall provide HMSA with service  training,  technical  support and
parts support as follows:

(a)      SWISSRAY shall provide HMSA with factory  training for a maximum of [ (
         )] engineers. Additional training can be purchased from SWISSRAY at the
         rate of [$ ] per engineer.  HMSA is responsible for all transportation,
         meals and lodging  expenses of its  employees in  connection  with such
         training.

(b)      SWISSRAY  shall  provide  reasonable installation support for the first
         two (2) HMSA installations of PRODUCT.

(c)      SWISSRAY shall provide technical support services to HMSA.  Fees to  be
         determined.

(d)      SWISSRAY shall maintain a spare parts depot in the United States.

(e)      SWISSRAY  shall provide a "hero kit" (parts deemed by SWISSRAY and HMSA
         to be essential site spares) at no charge to HMSA. Replacement parts to
         the "hero kit" will be invoiced  based on SWISSRAY's  then current list
         price less any HMSA  discount.  HMSA will purchase a factory spares kit
         from  SWISSRAY  for first  line  support  to  customers  after HMSA has
         installed ten (10) units of PRODUCT.

(f)      For a mutually  agreed  upon  period,  SWISSRAY  shall  provide  remote
         diagnostics at an agreed upon charge to HMSA. AS a long-term goal, both
         parties agree to transfer this capability to HMSA as soon as reasonably
         practicable.

(g)      SWISSRAY  shall  make   available  its  sales  and  product   marketing
         specialists to support HMSA in connection with its sales efforts within
         the Territory.

(h)      SWISSRAY shall exchange detectors that it determines are defective with
         a  refurbished  detector and charge HMSA an amount equal to  SWISSRAY's
         cost of repair, including labor and parts, in respect of such defective
         detector.

                                       31

<PAGE>

                                    EXHIBIT E

Hitachi Medical Systems America Inc.
1959 Summit Commerce Park
Twinsburg, Ohio 44087

                  Re: Commitment to Consult
                      Medical Imaging Informatics

Gentlemen:

         We understand that Hitachi  Medical  Systems America Inc.  ("HMSA") has
entered  into  a  distribution   agreement  with  Swissray  America,  Inc.  (the
"Agreement").  Unless otherwise  defined herein,  capitalized  terms used herein
shall have the meanings ascribed to them in the Agreement.

         With  reference  to  sections  3.8 and 4.7 of the  Agreement,  Swissray
Information  Solutions,  Inc.  ("SIS")  will  provide a finder's  fee to HMSA in
connection with (1) the initial contract for services rendered by SIS to an HMSA
customer, and (2) all imaging devices, other than Product, sold to such customer
during the Term.  The finder's fee will be in an amount equal to [ ] percent [ (
%)] of the net price for such services or devices is the direct result of a lead
provided to SIS by HMSA.

         In the event SIS or its partners completes a sale of Product within the
Territory to an account that is not the direct  result of a lead provided to SIS
by HMSA and is not a Reserved Account, SIS shall pay HMSA a [$ ] commission upon
full  payment of SIS's  invoice by such SIS  account.  In  consideration  of the
payment by SIS of [$ ] per unit of Product,  HMSA shall have  responsibility for
installation,  applications  training and warranty  service (as described in the
Agreement)  for each of such  Products  sold by SIS or its  partners  within the
Territory.

         The  determination  by SIS whether and upon what terms it will contract
with an HMSA customer shall be in the sole absolute discretion of SIS.

         This letter  contains  the entire  understandings  between SIS and HMSA
with  respect  othe  subject   matter  hereof  and   supersedes  all  prior  and
contemporaneous  agreements,  representations,  warranties  and  understandings,
either oral or written,  with respect thereto. The provisions of this letter may
be amended only by a written  instrument  signed by SIS. All claims for finder's
fees by HMSA under this letter shall be made to SIS at its Gig Harbor address.

                               Very truly yours,

                                       32

                                    EXHIBIT F

                 [SWISSRAY Price Quotation to HMSA for PRODUCT]

DIRECT DIGITAL RADIOGRAPHY SYSTEM

Quantity                                  Product

1-10 SWISSRAY branded ddR Multi-System, complete, consisting of:

o               Motorized, remote controlled positioning device
o               AddOn-Bucky, full size digital detector
o               Mobile patient table for recumbent examinations
o               80k W high frequency generator
o               0.6/1.2 mm high speed x-ray tube, 100kW
o               Motorized, remote controlled collimator with 3 different filters
o               SwissVision Acquisition Station
o               MUSICA Algorithms
o               DICOM 3.0 connectivity
o               One set of operator's manuals (2 sets for government accounts)

Hitachi Net Price                         [US$             ]

* HMSA shall be granted a one time PRODUCT purchase price of [US$          ] for
PRODUCT to be installed within the greater Chicago, Atlanta or Miami areas.

Additional Discounts

o    For unit nos. 11 - 25,  SWISSRAY shall provide HMSA with an additional [ %]
         discount  off of the  "Hitachi  Net Price"  set forth  above if ordered
         within one (1) year of the date of this Agreement.

o    For unit nos. 26 - 50,  SWISSRAY shall provide HMSA with an additional [ %]
         discount  off of the  "Hitachi  Net Price"  set forth  above if ordered
         within one (1) year from the date of this Agreement.

                                       33
<PAGE>

OPTIONS

Product                                                        Hitachi Net Price

DICOM Worklist Management                                      [               ]

HL - 7 Interface                                               [               ]

Single Monitor Diagnostic Acquisition Workstation              [               ]
Upgrade of the SwissVision workstation supplied with ddR Multi-System.

Upgraded workstation includes:

SwissVision 4000 Software

Single 21 "MegaScan Monitor (2048x2560) in lieu of standard
monitor

4 Megapixel Dome Graphics Card (Dual monitor capability) in lieu of
standard graphics card

Dual Monitor Diagnostic Acquisition Workstation                [               ]
Upgrade of the SwissVision workstation supplied with ddR Multi-System.

Upgraded workstation includes:

SwissVision 4000 Software Plus

Two (2) 21 "MegaScan Monitors (2048x2560) in lieu of single
standard monitor

Two (2) 5 Megapixel Dome Graphics Card (Dual monitor capability)
in lieu of standard graphics card

Dual Monitor Diagnostic Acquisition Workstation                [               ]
 (General Rad work only)

SwissVision workstation supplied.

SwissVision 4000 Software PlusTwo

Two (2) 21 Megapixel Dome Graphics Card (Dual monitor capability)
in lieu of standard graphics card

Two (2) 5 Megapixel Dome Graphics Card (Dual  monitor  capability)  in  lieu  of
standard graphics card

SwissVision AIT Archive - 40 GB                                [               ]

                                       34
<PAGE>

Upgrade  of the ddR  Multi-System  to  provide  expanded  on-line  and near line
digital image storage. Upgrade consists of the following:

Windows NT Workstation/Server with 9GB Mirrored Drives, 128 MB RAM,
Tape Backup, UPS, Modem,  Remote Access  Software,  NT, SQL

FileLink Medical Archive Software(TM)

Ability to archive from  multiple  ddR  Multi-Systems  or other DICOM  compliant
Storage  Service Class Users

FileLink  Medical Archive Software (TM)

40 gigabyte total storage capacity using AIT drive

SwissVision DLT Archive - 40 GB                             [$                 ]

Upgrade  of the ddR  Multi-System  to  provide  expanded  on-line  and near line
digital image storage. Upgrade consists of the following:

Windows NT Workstation/Server with 9GB Mirrored Drives,
128 MB RAM, Tape Backup,  UPS, Modem,  Remote Access Software,  NT, SQL

FileLink Medical Archive Software (TM)

Ability to archive from multiple ddR  Multi-Systems or
other DICOM compliant  Storage  Service Class Users

40 gigabyte total storage capacity using AIT drive

                                       35
<PAGE>

                                   EXHIBIT G

                          [End User Product Warranty]

SWISSRAY AMERICA,  INC. warrants to End-User that Product  (exclusive of Product
Software)  will be free from defects in material and  workmanship at the time of
delivery  to  End-User.  For a period of  twelve  (12)  months  from the date of
completion of the  installation of the Product,  SWISSRAY  AMERICA,  INC. in its
sole,  absolute  discretion will either repair defects in defective Product,  or
parts thereof,  or replace  defective  Product,  or parts  thereof,  with new or
refurbished  equivalent  Product or parts.  Repaired or replacement  Product and
parts are  warranted  under the terms of this  warranty for the remainder of the
original  Warranty  Period.  Exchanged  Product and parts become the property of
SWISSRAY AMERICA, INC.

The warranties and remedies set forth herein do not apply to Product,  advice or
assistance  that  SWISSRAY  AMERICA,  INC.  furnishes  to End-User as a business
courtesy,  or if  warranty  service is  necessitated  in whole or in part by (1)
Product  having  been  abused or damaged by  casualty or accident or Product not
used in  accordance  with its  manuals,  (2)  Product  having  been  serviced or
modified other than by SWISSRAY AMERICA, INC. or its authorized  representative,
or the use of parts or  software  not sold by  SWISSRAY  AMERICA,  INC.  for the
Product (3) failure to  maintain  the  environmental  conditions  prescribed  by
SWISSRAY  AMERICA,  INC. for the Product site,  or (4)  deviation  from SWISSRAY
AMERICA, INC. recommended maintenance procedures.

THIS  WARRANTY IS GIVEN IN LIEU OF ALL OTHER  WARRANTIES,  WHETHER  EXPRESSED BY
AFFIRMATION,  PROMISE, DESCRIPTION,  MODEL, SAMPLE OR OTHERWISE, AND ANY AND ALL
OTHER  WARRANTIES,  INCLUDING  WITHOUT  LIMITATION,  THE IMPLIED  WARRANTIES  OF
MERCHANTABILITY  AND  FITNESS  FOR A  PARTICULAR  USE  OR  PURPOSE,  ARE  HEREBY
DISCLAIMED.

EXCEPT FOR THE EXCLUSIVE  REMEDIES FOR BREACH OF WARRANTY SET FORTH ABOVE, UNDER
NO CIRCUMSTANCE WILL SWISSRAY AMERICA, INC. BE LIABLE FOR ANY DAMAGES, INCLUDING
WITHOUT  LIMITATION,   DIRECT,  INDIRECT,  SPECIAL,   INCIDENTAL,   PUNITIVE  OR
CONSEQUENTIAL  DAMAGES (EXCEPT FOR DAMAGES  RELATING TO DEATH OR PERSONAL INJURY
IN JURISDICTIONS WHERE SUCH DAMAGES MAY NOT BE DISCLAIMED AS A MATTER OF LAW) OR
LOSS OF SAVINGS,  REVENUES  OR PROFITS,  UNDER ANY LEGAL  THEORY,  SUSTAINED  BY
END-USER OR BY ANY OTHER PERSON IN CONNECTION  WITH  PRODUCTS.  THIS  LIMITATION
CANNOT BE WAIVED OR AMENDED BY ANY PERSON AND WILL BE EFFECTIVE EVEN IF SWISSRAY
AMERICA,  INC. OR ITS  AUTHORIZED  REPRESENTATIVE  HAS BEEN ADVISED OF, OR MIGHT
HAVE ANTICIPATED, THE POSSIBILITY OF SUCH DAMAGES.

                                       36

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