Document:

Swissray [LOGO]

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   Swissray Medical Systems, Inc.
   a company of Swissray International, Inc.

 AUTHORIZED DISTRIBUTOR AGREEMENT

     THIS AGREEMENT (the  "Agreement")  is made effective the day of, 19, by and
between  Swissray  America,  Inc.  an  ______________  corporation,  having  its
principal  place of  business  at 5801  Soundview  Drive,  Suite 50, Gig Harbor,
Washington  98335 (which with its successors  and assigns is hereinafter  called
"Swissray") and

MEDIKA EQUIPOS MEDICOS, INC.
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(Distributor's Full Legal Name)

Corporation
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(state whether an individual, partnership or corporation)

Puerto Rico
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(if a corporation, show name of state in which incorporated)

__________________, having its principal place of business at
(DBA, if different from legal name)

PO Box 360888
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                                (Street Address)

San Juan PR  00936-0888
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(City/Town)                     (State)                              (Zip)

(which,  with its  successors  and  permitted  assigns,  is  hereinafter  called
"Distributor").

                                   BACKGROUND

     A.  Swissray is engaged in, among other  things,  the design,  development,
manufacture,  sale and distribution of high quality diagnostic imaging equipment
to the medical profession,  hospitals, clinics, national accounts and government
purchasers and has  established a quality image and goodwill among  consumers in
the diagnostic imaging marketplace.

     B. Swissray  desires to appoint a limited  number of  Distributors  to sell
certain Swissray products and accessories thereto (hereinafter  individually and
collectively called "Swissray  Products" or "Products").  Distributor desires to
be appointed as an  authorized  Swissray  Distributor,  and hereby  warrants and
represents to Swissray that it shall at all times meet each of its  requirements
and obligations set forth in this Agreement.

     C.  Based  upon  the  foregoing,  and in  reliance  thereon,  Swissray  and
Distributor agree as follows:

     Swissray Medical Systems, Inc.
     5801 Soundview Drive. Suite 50
     Gig Harbor, WA 98335, USA
     Phone  353 858 3330
     Fax 253 858 2777

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     2.6 Consumer Relations and Trade Practices.

          2.6.1 Distributor shall conduct its business operations in such manner
     so as to promote good customer relations.

          2.6.2  Distributor shall at no time engage in "bait and switch" or any
     other unfair or deceptive trade practice with respect to Swissray Products,
     and  shall  make  no  false,  misleading  or  disparaging   representations
     concerning Swissray or the Products in advertisements or otherwise.

          2.6.3 Distributor shall make no representations to customers or to the
     trade with respect to the  specifications or features of Swissray Products,
     except such as may be approved in writing or published by Swissray.

          2.6.4  Distributor  shall  advise  Swissray  promptly  concerning  any
     information  that may come to its  attention as to charges,  complaints  or
     claims about Swissray Products by Distributor's customers or other persons.

          2.6.5  Distributor will not imitate  Swissray  products or infringe in
     any way upon  Swissray's  trademarks,  trade  dress  or other  intellectual
     property,  and will not involve itself in any way in the sale of imitations
     of Products or the sale of any  Swissray-brand  products  not  intended for
     sale in the United States (i.e., gray market goods).

     2.7 Distributor Reports.

     From time to time  Swissray may ask  Distributor  to prepare and forward to
Swissray reports relevant to Distributor's business regarding Swissray Products.
All reports  submitted  by  Distributor  will become the  property of  Swissray.
Swissray will use reports submitted by Distributor only for Swissray's  internal
purposes in connection  with this Agreement and for no other  purpose.  Swissray
shall not  disclose  such  reports  to third  parties  except  its  professional
advisors and then only in connection with this Agreement.

     2.8 Compliance with Laws.

     Distributor  and Swissray shall comply with all applicable  federal,  state
and local laws and regulations in performing its duties  hereunder and in any of
its dealings with Swissray Products.

3    SUPPORT BY SWISSRAY

     Swissray shall provide Distributor with support, as follows:

     3.1 Swissray shall maintain such promotional programs as it believes in its
sole, absolute judgment will enhance the sale of the Products.

     3.2 Swissray  shall,  from time to time,  make sales  literature  and other
promotional materials available to Distributor.

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     3.3 Swissray shall maintain a network of authorized service centers,  which
shall provide both in-warranty and out-of-warranty services to consumers.

     3.4 Swissray shall,  as may be necessary or appropriate  from time to time,
provide technical assistance to Distributor concerning Swissray Products.

     3.5 From time to time  Swissray may suggest the level of resale  pricing of
Products. However, Distributor's resale prices, and its sales policies, shall be
established solely by Distributor, and Swissray, its employees and agents retain
no control of such resale prices or sales policies.

4    GOVERNING TERMS AND CONDITIONS; PRICES, ORDERING AND FINANCIAL REQUIREMENTS

     4.1 For  purposes of this  Agreement,  "Terms of Sale" shall mean the terms
set forth in Exhibit C,  annexed  hereto,  and found on the reverse side of each
Swissray  invoice,  as such  Terms  of Sale  may be  replaced,  supplemented  or
modified,  and "Price  Schedules"  shall mean the  Swissray  Confidential  Price
Schedules as are issued and replaced, supplemented or modified from time to time
by Swissray.  The Terms of Sale, Price Schedules are collectively referred to as
the  "Terms  and  Prices."  The  terms and  conditions  solely  and  exclusively
governing  the  relationship  of the parties to this  Agreement  and the sale of
Products to  Distributor  will be as set forth in this Agreement and in both the
Swissray Terms of Sale, and Price  Schedules,  as applicable.  The provisions of
this Agreement and the Terms and Prices are cumulative.  Nevertheless, except as
specifically  stated in this Agreement to the contrary,  and except with respect
to  this  paragraph  4.1  which  shall  be  paramount,   in  the  event  of  any
irreconcilable  conflict  between this  Agreement and the Terms and Prices,  the
latter will prevail.

     4.2 From time to time,  Swissray may issue policies relating to the sale of
Products  including,  without  limitation,  policies  covering  credit  matters,
product repair or replacement or product returns; it may also issue from time to
time special programs  containing terms and conditions of sale which temporarily
add to or deviate in part or in whole from the Terms and Prices. Such additional
or different  terms and  conditions,  while in effect,  supersede  the Terms and
Prices to the extent of any  conflict  with them.  Upon their  issuance,  and as
replaced,  supplemented  or  modified,  such  policies  and such  additional  or
different terms and conditions will be deemed a part of the Terms and Prices and
will be binding upon Swissray and  Distributor  with respect to orders  accepted
after their issuance.

     4.3 Distributor will,  purchase  Products at Swissray's  standard prices as
set forth in the Price Schedules in effect at the time the order is placed, less
all  applicable  discounts and  allowances as set forth in the Terms and Prices.
Prices,  less such  discounts and  allowances,  shall be set forth on Swissray's
invoice to Distributor.  Notwithstanding  anything to the contrary,  all prices,
discounts and  allowances  are subject to change by Swissray upon their issuance
and without advance notice.

     4.4  Distributor  will order  Products  from  Swissray in  accordance  with
ordering  procedures  established  by Swissray  from time to time.  All purchase
orders must be submitted by Distributor in writing to Swissray's sales

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representative  or,  if a sales  representative  is not  involved,  directly  to
Swissray. Telephone purchase orders must be confirmed in writing. All orders are
subject to acceptance in writing at Swissray's principal place of business.  Any
shipment of Products to  Distributor  in whole or in partial  fulfillment of any
purchase order of Distributor  will not be deemed to constitute an acceptance by
Swissray of any of the terms and conditions of such purchase order, except as to
identification  of  Products  and  the  quantities  involved,  unless  otherwise
expressly  agreed to in  writing by  Swissray.  Swissray  reserves  the right to
accept or reject  orders in whole or in part in its sole,  absolute  discretion.
Swissray  shall also have the right in its sole,  absolute  discretion to cancel
any   backorders   even  if  such  orders  have  been  accepted   previously  by
acknowledgment, partial shipment or otherwise.

     4.5 Distributor  represents and warrants to Swissray that it is in good and
substantial  financial  condition  and is able to pay all  bills  when  due.  At
Swissray's request, Distributor shall furnish financial statements or additional
information as may be necessary or  appropriate to enable  Swissray to determine
Distributor's creditworthiness.

     4.6 Sales  will be made on the  credit  terms in effect at the time that an
order is accepted.  Swissray shall have the right to establish credit limits for
Distributor.  If Distributor  becomes delinquent in payment obligations or other
credit or financial requirements  established by Swissray, or, if in the opinion
of Swissray,  Distributor's  credit becomes impaired,  Swissray may from time to
time at its sole,  absolute  discretion,  in  addition to any rights or remedies
provided by  applicable  law or the Terms of Sale,  alter  Distributor's  credit
limits (or other financial  requirements  established by Swissray) and take such
actions as it may deem necessary to protect its financial position.

     4.7  Swissray's   standard   terms  and  conditions   shall  apply  to  all
transactions. (See attached Swissray Terms and Conditions)

5    CHANGES IN PRODUCTS, PARTS OR POLICIES

     Unless otherwise provided by applicable laws, Swissray may at any time add,
change or cease making  available any of the Products or parts  without  advance
notice to  Distributor,  and  Swissray  shall not be liable to  Distributor  for
failure to furnish the Products or parts of the model, design or type previously
sold.

6    DURATION OF AGREEMENT AND TERMINATION

     6.1 Unless  earlier  terminated as provided  below,  this  Agreement  shall
remain  in effect  from one (1) year next  following  the date upon  which  this
Agreement  becomes  effective as set forth on the first page of this  Agreement.
This  Agreement  may be renewed for one or more  one-year  periods if each party
hereto  gives  written  notice of such  intent to the other  party not less than
sixty (60) days prior to the  expiration of the initial or any renewal term. If,
after the  expiration of the initial or any renewal term,  the Agreement has not
been renewed as above provided, and if the parties nonetheless continue to

                                       -6-
<PAGE>

do business,  then the Agreement  will continue in effect  subject to all of its
terms and conditions  except that either party shall have the right to terminate
the  Agreement  with or without  cause,  for any  reason or for no reason,  upon
thirty (30) days written notice to the other party.

     6.2 This Agreement may be terminated prospectively as follows:

          6.2.1  Distributor  may terminate this Agreement at any time,  with or
     without  cause,  for any reason of for no reason,  on 30 days prior written
     notice to  Swissray  or upon 15 days prior  written  notice as  provided in
     paragraphs 1.01, 2.04(c), above, or 11.07, below.

          6.2.2 Swissray may terminate this Agreement as follows:

          6.2.2.1 Swissray may terminate this Agreement by giving Distributor 30
     days prior  written  notice in the event  Distributor  will have  failed to
     fulfill  or  perform  any  one  or  more  of  the  duties,  obligations  or
     responsibilities  undertaken by it pursuant to paragraphs 2, 5.06 and 11.01
     of this  Agreement and  paragraphs 2, 5 (except with respect to non-payment
     provided for in paragraph  7.02(b)(ii)(4),  below] and 6(c) of the Terms of
     Sale,  or in the event of any change of which  Distributor  is  required to
     notify Swissray pursuant to paragraph 11.09 of this Agreement,  except that
     Swissray may terminate  this Agreement upon 15 days prior written notice as
     provided in paragraph 2.04(c), above.

          6.2.2.2  Swissray may terminate this Agreement by giving  Distributor
     written notice, effective immediately, in any of the following events:

          6.2.2.2.1  If  Distributor  has  continued  in  default  of any  duty,
     obligation  or  responsibility  (other  than as provided  for in  paragraph
     7.02(b)(i),  above, or other than as provided for in this paragraph 7.02(b)
     (ii)] imposed on it by this  Agreement,  for 30 days after  Swissray  gives
     written notice to Distributor of such default;

          6.2.2.2.2 Any assignment or attempted assignment by Distributor of any
     interest in this  Agreement,  or any  violation  of  paragraph  8, below in
     connection with a bulk sale or transfer;

          6.2.2.2,3 If Distributor becomes insolvent, files or has filed against
     it a petition in bankruptcy,  makes a general assignment for the benefit of
     its creditors or has a receiver or trustee  appointed for its business or a
     substantial portion of its properties;

          6.2.2.2.4 If Distributor  defaults in the payment of any  indebtedness
     to Swissray  when and as the same becomes due and payable,  if such default
     has continued for a period of 10 days after written  notice of such default
     is given to Distributor; or

          6.2.2.2.5 If Distributor makes a material false representation, report
     or claim in connection with the business  relationship  of the parties,  or
     engages in fraud or criminal misconduct.

                                       -7-

<PAGE>

     6.3  Termination  of this Agreement by Swissray for cause or termination by
Distributor with or without cause shall automatically accelerate the due date of
all invoices for Swissray Products so that they shall become immediately due and
payable as set forth in paragraph 5 of the Terms of Sale on the  effective  date
of termination, even if longer terms had been previously agreed to.

     6.4  Termination  of this  Agreement  by either  party shall  automatically
cancel all open orders  without  liability.  In the event of termination of this
Agreement by either  party with  advance  notice,  Swissray  shall,  at its sole
option,  be  entitled  to  reject  all or  part  of  any  orders  received  from
Distributor  after  notice  but  prior  to the  effective  date of  termination.
Notwithstanding  any credit terms made  available to  Distributor  prior to that
time, any Swissray  Products  shipped during said final period shall be paid for
by certified or cashier's check prior to shipment.

     6.5 Within ten (10) days  following the effective  date of  termination  of
this  Agreement,  Distributor  shall  submit  to  Swissray  a list  of all  new,
undamaged and current Swissray Products owned by Distributor as of the effective
date of  termination.  Swissray  shall  have the  option in its  sole,  absolute
discretion to repurchase  (but shall not be obligated to repurchase)  any or all
of the Products upon  providing  written  notice of its intention to Distributor
within  thirty  (30)  days  after  receipt  of the  list  of the  Products  from
Distributor.  Upon  receipt of notice  that  Swissray  intends to  exercise  its
repurchase option,  Distributor will cause the Products selected by Swissray for
repurchase to be delivered to such place(s) in the United States as Swissray may
designate,  freight  pre-paid.  Swissray  shall  have the right to  inspect  all
returned  merchandise before  establishing  final disposition.  Upon inspection,
Swissray shall be entitled to reject and return to Distributor, freight collect,
any of the  Products  which,  in  Swissray's  sole,  absolute  judgment,  are in
unacceptable condition.  Distributor shall be credited for any accepted Swissray
Products at the lower of: (i) the net invoice  prices at which the Products were
originally purchased by Distributor, less any allowances which Swissray may have
given  Distributor  on  account  of the  Products;  or (ii) the  price  for such
Products prevailing at the effective date of termination of this Agreement, and,
in both cases, less the costs of repair,  refurbishing or repackaging, as may be
necessary,  and a minimum  fee for  restocking  equal to 15% of the net  invoice
price credited to Distributor for returned Products.

     6.6 Neither  Swissray nor Distributor  shall be liable to the other because
of the termination of this Agreement  (regardless of the circumstances  thereof)
for  compensation,  reimbursement  or  damages of any kind,  including,  without
limitation,  damages  because  of loss of  prospective  profits  or  because  of
expenditures,  investments,  leases or any other  types of  commitments  made in
connection  with the  business of either of them.  In the event of  termination,
Distributor shall remain liable for all outstanding invoices and unpaid accounts
and Swissray shall remain liable for all credits due to Distributor with respect
to requests for credit  submitted by Distributor  prior to termination or within
ninety (90) days thereafter.

     6.7 Upon termination of this Agreement, each party shall immediately:

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          6.7.1 Discontinue any and all use of the trademark of the other party,
     including such use in advertising or business  materials of the other party
     (except as necessary to sell Products remaining in Distributor's  inventory
     after termination,  but in no event more than one hundred twenty (120) days
     after termination; and

          6.7.2  Remove  or  obliterate  any  and  all  signs  which   designate
     Distributor  as an  authorized  Swissray  Distributor  or which include any
     trademark of Swissray,  and cease holding  itself out, in any other manner,
     as an authorized Swissray Distributor; and

          6.7.3  Notify and instruct  publications  and others which may list or
     publish Distributor's name as an authorized Swissray Distributor (including
     telephone  directories,  yellow pages and other  business  directories)  to
     discontinue such listings.

7    ASSIGNMENT

     7.1 Distributor is appointed as an authorized Swissray  Distributor because
of Swissray's confidence in Distributor, which confidence is personal in nature.
Distributor may not assign, transfer or sell its rights under this Agreement (or
delegate  its  obligations  hereunder)  without  the prior  written  consent  of
Swissray, and any attempted assignment, transfer or sale (whether by transfer of
stock,  assets or  otherwise),  absent such written  consent,  shall be null and
void. Subject to these  restrictions,  the provisions of this Agreement shall be
binding  upon and shall inure to the benefit of the parties and their  permitted
assigns.

     7.2  Distributor  shall not sell or otherwise  transfer a major part of its
materials, supplies, merchandise or other inventory or a substantial part of its
equipment  in  connection  with a sale or transfer of  inventory  without  first
giving Swissray prior written notice as required by the Uniform  Commercial Code
and other applicable law.

     7.3  Distributor  shall not consummate any sale or transfer as set forth in
paragraph 7.2, above, unless  contemporaneously  therewith  Distributor pays all
sums due and payable to Swissray as determined in accordance with paragraph 5 of
the Terms of Sale, even if longer payment terms had been previously agreed to.

     7.4 If Distributor shall fail to pay to Swissray all monies due to Swissray
as provided in  paragraph  7.3,  above,  then  proceeds or other  consideration,
tangible or intangible, received by Distributors in connection with the transfer
described in paragraph 7.2,  above,  shall be deemed to be held by the recipient
of such  proceeds  in trust for the  benefit  of  Swissray  to the extent of the
amount due and payable to Swissray as provided in paragraph 7.3,  above.  If the
aforesaid  proceeds or other  consideration  from such sale or transfer  are not
received  directly by Distributor,  then  Distributor  shall cause the person or
other  legal  entity  receiving  such  proceeds  or  consideration  to hold such
proceeds or  consideration in trust for the benefit of Swissray to the extent of
the amount due and payable to Swissray as provided in paragraph 7.3,

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above.  Such trust shall be subordinate  to a prior security  interest held by a
person financing all or substantially  all of  Distributor's  inventory.  In the
event that a trust arises  hereunder,  Distributor  shall give written notice of
such trust to the buyer or transferee of the materials, supplies, merchandise or
other inventory or equipment described in paragraph 7.2, above, and to Swissray.

     7.5 If Distributor  breaches any of its obligations  under this paragraph 7
and  Swissray is not paid the monies due as provided in  paragraph  7.3,  above,
then, in the event that Swissray chooses to pursue any rights it may have in any
forum in any  jurisdiction  to collect such monies from the  aforesaid  buyer or
transferee of Distributor, Distributor will indemnify and hold Swissray harmless
from and against any and all costs and expenses,  including, without limitation,
reasonable attorneys' fees in connection with such pursuit.

     7.6  Swissray  retains the right to assign  this  contract in the event the
Swissray is sold or merged.

8    MUTUAL RELEASE AND LIMITATIONS ON FUTURE CLAIMS

     8.1 Except as reserved in this paragraph 9.01, upon the mutual execution of
this Agreement, and any renewal thereof,  Swissray and Distributor hereby do and
shall release each other of and from all manner of action and actions, cause and
causes of action, suits, contracts,  controversies,  damages, claims and demands
whatsoever,  known or  unknown,  in law or in  equity,  whether  under  laws and
regulations of federal, state or municipal governments,  under the common law or
otherwise,  which such parties or their  respective  successors  or assigns ever
had, now have,  or which they or any of them  hereafter  can,  shall or may have
against the other party by reason of any matter,  cause or thing whatsoever from
the  beginning  or time  until the date  hereof.  Swissray  reserves  its rights
against  Distributor  for payment with respect to any  outstanding  invoices and
open  accounts  and with  respect to the  protection  of its  trademarks,  other
intellectual  property rights and goodwill,  and Distributor  reserves its right
against  Swissray for any unissued  credits,  for prior accruals for cooperative
advertising,   if   applicable,   for  matters   regarding  the   protection  of
Distributor's trademarks and other intellectual property and for matters arising
out of Swissray's Product liability.  All cooperative advertising claims must be
submitted in accordance with Swissray's cooperative advertising policy.

     8.2 Except as provided  below in this  paragraph  8.2,  both  Swissray  and
Distributor agree that any cause of action or claim hereafter arising out of the
relationship between Swissray and Distributor,  including any cause of action or
claim for alleged breach of this Agreement,  shall be barred unless  arbitration
(as  provided in  paragraph  10,  below) or other  action (if  permitted by this
Agreement)  is  commenced by the  aggrieved  party within one (1) year after the
cause of action or claim first accrues. The aforesaid one (1) year limitation is
in lieu of all other  applicable  statutes of limitation  which may be longer in
duration; however, such one (1) year period shall not apply to any

                                      -10-
<PAGE>

causes of action or claim asserted against  Distributor by Swissray arising from
any  delinquencies  in payment for Swissray  Products or asserted by Distributor
with respect to third-party claims arising out of Swissray's Product liability.

9    ARBITRATION AND GOVERNING LAW

     Except with respect to each party's  indemnity and the other rights of each
party set forth in paragraph  10.5,  below,  the  Arbitration  and Governing Law
provisions of paragraph 10 of the Terms of Sale attached as Exhibit C shall also
govern any  controversy or claim .arising out of or relating to this  Agreement,
to the breach thereof, to the relationship created thereby or to the termination
thereof,  with the additional  provision  that if  Distributor  shall breach the
provisions of paragraph 7 of this  Agreement,  it shall pay all of the costs and
expense of Swissray, including, without limitation,  reasonable attorneys' fees,
in connection with such  arbitration.  The arbitrators  award shall include such
costs  and  expenses.  The  provisions  of  paragraph  9(d) of the Terms of Sale
attached as Exhibit C shall govern any controversy or claim covered by paragraph
10.5, below.

     9.1  The  internal  law  of  the  State  of  New  York,  exclusive  of  its
conflict-of-laws  principles shall govern claims or  controversies  that are not
the subject of arbitration under these Terms, for this purpose, both DISTRIBUTOR
and SWISSRAY hereby.

10   MISCELLANEOUS PROVISIONS

     10.1  Swissray and  Distributor  agree that their  relationship  is that of
buyer and seller  only,  and  Distributor  shall be  considered  an  independent
contractor at all times with respect to its relationship with Swissray.  Nothing
in this Agreement  shall be construed as creating the  relationship  of employer
and employee, master and servant, franchisor and franchisee, principal and agent
or joint venturers between the parties hereto. The relationship  created by this
Agreement  does not create the grant by Swissray of a franchise to  Distributor,
and no federal  or state  franchise  statute,  law,  regulation  or rule will be
deemed  or  construed  to apply  to the  formation,  operation,  administration,
expiration or  termination  of this  Agreement.  Except as authorized in writing
neither  party shall have any express or implied right or authority to assume or
create any obligation on behalf of the other party,  and shall not attempt to do
so.  This  Agreement  does not grant to either  party a license to use any trade
name,  trademark,  service  mark or trade  dress of the  other  party.  Under no
circumstance  shall either  party,  its agents or employees,  be considered  the
agent of the other  party,  its agents and  employees,  and neither  party shall
represent themselves directly or by implication as such.

     10.2 The  failure or refusal by  Swissray  either 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 or
relinquishment  of such provision or right, nor shall such failure or refusal be
deemed a custom or practice contrary to such provision or right. A waiver of any
provision of this Agreement  must be in writing,  signed by the waiving party to
be effective.

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<PAGE>

     10.3 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  shall 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  shall remain in full force and effect and shall in
no way be affected,  impaired or invalidated.  In the event,  however,  that any
law, order, regulation,  direction, restriction or limitation, or interpretation
thereof,  shall  in  the  judgment  of  either  party  substantially  alter  the
relationship between the parties under this Agreement, or the advantages derived
from such relationship,  such party may request the other party hereto to modify
this  Agreement,  and, if, within  thirty (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 fifteen (15) days prior  written  notice to the other
party.

     10.4 The paragraph  headings  contained  herein are for reference  only and
shall not be considered as substantive  parts of this Agreement.  The use of the
singular or plural form shall include the other form,  and the use of masculine,
feminine or neuter gender shall include the other genders.

     10.5 Each party agrees to and does hereby  indemnify  and hold harmless the
other party and will, at the other party's request,  defend the other party, its
employees and agents, with respect to any claim, demand or liability asserted by
a third party  against  such other party which is based upon any act or omission
by the indemnifying  party  including,  without  limitation,  any breach of this
Agreement,  and from any and all expenses and  liabilities  resulting  therefrom
(including,   without  limitation,   reasonable  attorneys'  fees).  Each  party
acknowledges  that,  should it  breach  any of its  covenants  with  respect  to
trademarks  or other  intellectual  property  rights of the other  party in this
Agreement or in the Terms of Sale attached as Exhibit C, the otter party will be
irreparably  harmed and will be entitled to an injunction  preventing  the other
party from further  breaching  the  Agreement  or the Terms of Sale  attached as
Exhibit C without  any  further or more  particularized  showing of  irreparable
injury.  Such  an  injunction  may  be  applied  for  before  any  Court  having
jurisdiction  thereof.  In any such  proceeding,  the  aggrieved  party  will be
entitled to recover  any  damages it suffers as a result of the other's  breach,
including,  without  limitation,  the  recovery  of  any  costs  and  reasonable
attorneys'  fees  incurred in enforcing  its rights under this  Agreement or the
Terms of Sale attached to Exhibit C.

     10.6 Neither party shall be liable under the  provisions of this  Agreement
for direct or indirect damages (except with respect to Distributor's obligations
to pay for Products) on account of its failure to perform its obligations  under
this  Agreement  on account  of  reasons  beyond  its  absolute,  exclusive  and
unconditional  control,  and in no event  shall  either  party be liable for any
indirect,  special,  incidental,  punitive or consequential  damages, or loss of
profits or financial investments, under any legal theory, sustained by the other
party (or any person  transacting  business with such other party) in connection
with its  obligations  under this Agreement or the  relationship  of the parties
hereunder.

                                      -12-

<PAGE>

     10.7 Nothing contained herein shall be deemed to limit or affect Swissray's
rights  to  modify,  amend or  change,  in any way it deems to be  necessary  or
appropriate,  any  of its  Terms  and  Prices  or its  policies  or  procedures,
regardless of whether or not such modifications, amendments or changes relate to
matters contained in this Agreement; provided that, such modification, amendment
or change is prospective in nature and  Distributor  has received notice of such
modification, amendment or change prior to submitting its purchase order. In the
event that Distributor objects to any such modification, amendment or change, it
may so notify  Swissray  in  writing,  and if within  ten (10) days  after  such
notice,  Swissray and  Distributor  do not reach  agreement  with regard to such
modification, amendment or change, Distributor may terminate this Agreement upon
fifteen (15) days' prior written notice to Swissray

     10.8 Unless otherwise specified in this Agreement,  all notices and demands
of any kind,  which either Swissray or the Distributor may be required or desire
to serve upon the other under the terms of this  Agreement,  shall be in writing
and  shall  be  served  by  personal  delivery  or by mail at  their  respective
addresses  set forth in this  Agreement  or at such  other  addresses  as may be
designated by the parties in writing. If by personal delivery,  service shall be
deemed complete upon such delivery. If by mail, service shall be deemed complete
upon the expiration of the third day after the date of mailing, postage prepaid.

     10.9 This  Agreement has been entered into by Swissray with  Distributor in
reliance upon:

          10.9.l  Distributor's  representation  that  the  following  person(s)
     substantially participate(s) in the ownership of Distributor:

Name                                Address                   % Interest
----                                -------                   ----------

Whiyie Sang                     Guaynabo, P.R.
-----------                     --------------                ----------

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

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

          l0.9.2 Distributor's  representation that the following person(s) will
     have  full  managerial  authority  and  responsibility  for  the  operating
     management of Distributor in the performance of this Agreement:

Name                               Position
----                               --------

Whiyie Sang                     President
-----------                     --------------

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

-----------                     -------------- and

<PAGE>

          10.9.3  In  the  event  of  any  contemplated  change  of  controlling
     ownership,  Distributor  will give Swissray  prior written  notice  thereof
     (except in the

                                      -13-
<PAGE>

     event of a change caused by the death of any such person(s),  in which case
     Distributor will give Swissray  immediate  written notice thereof),  but no
     such change or notice thereof will act as a waiver of any right of Swissray
     under this  Agreement or at law unless and until embodied in an appropriate
     written waiver duly executed by the Vice President-Sales of Swissray.

     10.10  This  Agreement  shall be  effective  only  after its  execution  by
Distributor  and its  subsequent  execution  by an  officer of  Swissray  at the
principal office of Swissray.  No other employee or  representative  of Swissray
shall have any right or authority to execute this Agreement or any  modification
or waiver of this Agreement or to bind Swissray to any other agreement.

     11.11 This  Agreement,  together with its Exhibits and any other  documents
incorporated  herein by reference,  constitutes the entire Agreement between the
parties hereto  pertaining to the subject matter hereof.  Any and all written or
oral agreements  heretofore or  contemporaneously  existing  between the parties
pertaining  to the subject  matter of this  Agreement  are  expressly  canceled.
Except as  otherwise  provided  by this  Agreement,  this  Agreement  may not be
altered,  modified, amended or otherwise changed, except by a written instrument
executed by both parties.

     11.12 The rights and remedies of the parties  under this  Agreement and the
Terms, attached as Exhibit C, and Prices are cumulative with rights and remedies
provided at law or in equity.  Even if not expressly  provided in the provisions
of this  Agreement,  the obligations of a party which, if they are to have their
stated effect must survive the termination of this  Agreement,  shall so survive
for the period necessary to give full effect to their stated purpose.

11.13 This Agreement has been executed in multiple  counterparts,  each of which
shall be deemed enforceable without production of the others.

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

DISTRIBUTOR                                   Swissray America, Inc.

Medika Equipos Medicos, Inc.                  By:  /s/ ILLEGIBLE
--------------------------------                   -----------------------------
Distributor's Full Legal Name

/s/ Whiyie Sang                               Title: /s/ ILLEGIBLE
--------------------------------                     ---------------------------
Signature

President, Whiyie Sang
--------------------------------
Name--print or type

                                      -14-
<PAGE>

Title:  President
        ------------------------
        Corporate Officer
        (indicate office)

Partner, Proprietor

Dated: October 16, 1998                       Dated:
       -------------------------                     ---------------------------
<PAGE>
Exhibits:

Exhibit A:           Producta and Discounts.
                                  ---------
                             Swissray Add-On Multi System     $450,000
                             Discount as negotiated

Exhibit B:                                Territoriy assignment.:
                             Selected South American markets, Puerto Rico,
                             Caribbean and Mexico

                             Swissray standard  Terms and Conditions
                                  TERMS of Sale

                  1.  TEMS  OF  SALE.   (a)  These  t  and  conditions  of  Sale
Icallectively.  the  -Termes)  govern the sale of products,  parts,  accessories
and/or  services  (collectively,  the  OProductal)  listed  on the  face of this
invoice sold by Swisavey America, Inc. t'SWISSRAY"I to the customer named an the
face of this invoice tthe  -DISTRIBUTORI  I. Any te,-, q and  conditions of sale
proposed by  DISTRXsuTOR  in  connection  with the  purchase  of  Products  from
SWISSRAY  which add to,  vary  from or  conflict  with  these  Terms are  hereby
objected  to,  and  SWISSRAY   @ressly   conditions  its  sale  of  Products  on
DISTRIBUTOR'S  assent  to  these  Terms  notwithstanding  any dif f  erencev  or
additions  in the terms  proposed  by  DRSTRIBUTOR.  DISTRIBUTOR  shall be deemd
conclusively  to have  unconditionally  accepted these Terms by the opening of a
,lettex of credit or other  facility  to pay for  Products;  or by the tender of
payment or advance  payment for  Products,  or by  acceptance  of any  Products,
whether conforming or nonconforming.

                  2-  PRICES.   Prices for Products that axe the subject of this
invoice  are set forth on the face  hereof.  less any  applicable  discount  and
allowances  that  may be  available  to  DISTRIBUTOR  pursuant  to any  SWISSRAY
programs  that may be  applicable.  Prices  &re  exclusive  of all  taxes of any
nature, whether imposed by federal, state, local or foreign authority.  All such
taxes shall be for DISTRIBUTORIS account. whether or not collected,  advanced or
paid by SWISSRAY.  and shall be paid by  DISTRIBUTOR  tapon RWISSRAY - s invoice
unless   DISTRIBUTOR   timely  provides  tax  exemption   certificates  in  form
satisfactory to SWISSRAY.

                                      -16-

<PAGE>

                  3.  SHIPMENT.  (a) Delivery and price terms are F.O.B. Factory
(swissray, s shipping point). The method and route of ship@ent are at Swissray's
discretion.  DISTRIBUTOR will bear all costs,  insurance  premiums,  freight and
other charges and expenses  incurred after  SWISSRAY has placed  Products in the
custody of a carrier.  Each shipment of Products  constitutes a separate  sal-e.
whether the  shipment  is in whole or in partial  fulfillment  of  DISTRIBUTORIS
order or confirmation for Products.  (c) If DISTRIBUTOR  defaults in payment for
Products as required by these  Terms,  SWISSRAY may suspend  further  shipments.
Continuation  of shipments does not constitute a waiver of such default.  (d) If
Products are in short supply,  SWISSRAY  reserves the right to allocate shipment
of  orders  and  back  orders  in  any  way it  deems  appropriate  in its  sale
discretion.  (e) All shipments are made at DISTRIBUTOR's risk. Title to and risk
of loss of, or damage to,  Products shall pass to DISTRIBUTOR  when Products are
placed in the custody of a carrier for shipment to  DISTRIBUTOR.  it is the sole
responsibility of DISTRIBUTOR to file all claims for

  shipment  damage or loss with a  carrier.  Failure  by  DISTRIBUTOR  to notify
  SWISSRAY of any  shortages,  defects or damage within ten (10) days  following
  receipt by DISTRIBUTOR of Products will be conclusive  proof that  DISTRIBUTOR
  has received Products without defects or damage, and in the quantity specified
  on the bill of lading.  (9) Date& for delivery of Products are estimates only.
  SWISSRAY  shall not be  responsible  for loss or damage of any kind  resulting
  from delay or inability to deliver,  or failure to deliver,  Products  that is
  caused  directly  or  indirectly  by any  thing  or  event  beyond  SWISSRAY's
  absolute, exclusive and unconditional control. SWISSRAY is not required to use
  overtime  labor or e@nd  monies to cure delay or failure  to  deliver.  In the
  event of any  partial  failure  to  deliver,  SWISSRAY  will have the right to
  receive  payment  @o rata  for  Products  in fact  delivered,  whether  or not
  delivery may have been delayed.

                    4. RE PRODUCTS; CANCELXATION. (a) in no case may Products be
  returned to SWISSRAY without first obtaining  SWISSRAY's written permission or
  upon  conditions  other  than  specified  by  SWISSRAY.  SWISSRAY  assumes  no
  responsibility  for unauthorized  returns.  (b) SWISSRAY reserves the right in
  its sole  discretion  to cancel any  backorders  even if such orders have been
  accepted   previously  by  acknowledgment,   partial  shipment  or  otherwise.
  DISTRIBUTOR  may  cancel  an order for  Products  in whole or in part upon two
  business days' written notice to SWISSRAY prior to shipment.

           S.       PAYMENT AbM COLLECTION. (a) DISTRIBUTOR will pay SWISSRAY
  the full amount of the purchase  price of Products upon the due date set forth
  on the reverse side hereof.  Open  accounts  unpaid beyond such date will bear
  interest at a rate not to exceed the highest rate legally  permissible  in the
  state  of  DISTRIBUTOR'S  domicile.  if  SWISSRAY  retains  an  agency  and/or
  attorneys  to collect  amounts  overdue  after  notifying  DISTRIBUTOR  of its
  intention  to do  so,  all  collection  costs,  including  without  limitation
  reasonable  attorneys'  fees,  shall be  payable  by  DISTRIBUTOR.  (b) Unless
  specifically  authorized  by SWISSRAY in writing,  DISTRIBUTOR  will make full
  payment  of this  invoice  regardless  of any  claim,  counterclaim  or setoff
  DISTRIBUTOR may have against SWISSRAY. Any such claim,  counterclaim or setoff
  shall be resolved exclusively as provided in paragraph 10, below. (5) In the

                                      -17-

<PAGE>

event payment for this invoice becomes past due.  SWISSRAY will have the option,
in  addition to any other  rights it may have,  and in its sole  discretion,  to
cancel or delay  shipment  of  orders of  DISTRIBUTOR  previously  accepted,  to
declare all silm-q owing from  DISTRIBUTOR  to be  immediatel @ due and payable,
and to cancel credit previously extended by SWISSRAY.

                  6.      WARRANTIES. (a) SWISSRAY extends a Limited Warranty on
Products  directly to distributor of Products,  and SWISSRAY will,  from time to
time,  advise  DISTRIBUTOR of the terms and conditions of such Limited Warranty.
(b) SWISSRAY MAKES NO W TIES, GUARANTEES OR REPRESENTATIONS, EXPRESS OR IMPLIED,
TO DISTRIBUTOR  WITH RESPECT TO PRODUCTS.  ALL  WARRANTIES,  EXPRESS OR IMPLIED,
INCLUDING,  WITHOUT  LIMITATION,  ANY IMPLIED WARRANTY OF  MERCHANTABILITY OR OF
FITNESS FOR USE OR FITNESS FOR A  PARTICULAR  PURPOSE.  AND ALL  OBLIGATIONS  TO
DISTRIBUTOR ON 3 F OF SWISSRAY WITH RESPECT TO ANY PRODUCTS ARE HEREBY  EXCLUDED
AND  DISCLAIMED  EXCEPT AS  SWISSP-AY  MAY  UNDSRTAKE  IN A PUBLISHED  POLICY OR
WRITTEN  AGREEMENT WITH  DISTRIBUTOR AT ITS OPTION TO REPAIR OR REPLACE PRODUCTS
THAT ARE FOUND TO BE DEFECTIVE PRIOR TO RESALE BY DISTRIBUTOR. SWISSRAY WILL NOT
BE LIABLE  FOR ANY COST OR EXPENSE  FOR  REPAIR,  INSTALLATION  OR OTHER WORK BY
DISTRIBUTOR  IN CONNECTION  WITH  PRODUCTS.  ic)  DISTRIBUTOR  will not make any
warranties,  representations  or guarantees  to any person,  either orally or in
writing,  in the name or on behalf of SWISSRAY without  SWTSSRAY's prior written
consent,

                  7.  LIMITATION  OF  LUMILITY.  (a) EXCEPT AS  PROVIDED  IN THE
FOLLOWING  PARAGRAPH (b) WITH RESPECT TO DIRECT  DA14AGES  ARISING OUT OF CLAIMS
RELATED TO ORDERS FOR PRODUCTS,  UNDER NO  CIRCUMSTANCE  WILL SWISSRAY BE LIABLE
FOR  ANY  DAMAGES,  INCLUDING  WITHOUT  LIMITATION  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 AND  THIRD-PARTY  CLAIMS ARISING OUT OF SWRSSRAY'S
PRODUCT  LIABILITY)  OR LOSS OF PROFITS,  UNDER AMY LEGAL  THEORY,  SUSTAINED BY
DISTRIBUTOR,  OR BY ANY PERSON D @ ING WITH DISTRIBUTOR,  IN CONNECTION WITH ANY
ORDER FOR  PRODUCTS  OR THE  PRODUCTS  COVERED  THEREBY.  (b) THE  LIABILITY  OF
SWISSRAY,  IF ANY, FOR DIRECT  DAMAGES IN  CONNECTION  WITH  FILLING  ORDERS FOR
PRODUCTS  IN  ACCORDANCE  WITH  THESE  TERMS,  REGARDLESS  OF  THE  DELIVERY  OR
NON-DELIVERY  OF SUCH  PRODUCTS,  WILL NOT,  IN ANY EVENT,  BE GREATER  THAN THE
ACTUAL PURCHASE PRICE OF PRODUCTS WITH RESPECT TO WHICH SUCH CLAIM IS MADE.

                  8. TPJW DISTRIBUTOR will not use the 'SWISSRAY" name or any of
the other  intellectual  property rights of SWISSRAY  without  SWISSRAY's  prior
written  consent,  except that the name,  'SWISSRAY,L  may be used in connection
with the sale of genuine SWISSRAY Products, but only if due regard is given both
to proper  trademark  use and to the ownership by SWISSRAY of its name and mark.
DISTRIBUTOR will not remove or alter any trademark or tradename or serial number
from  any  Products  or  use in  connection  with  Products  any  trademarks  or
tradenames  other than SWISSRAY's or use SWISSRAY's  trademarks or tradenames in
connection with products of others.

                  9.      INTELLECTUAL PROPERTY PROTECTION.  SWISSRAY's sole and
exclusive obligation to DISTRIBUTOR with respect to claims made

                                       18
<PAGE>

against DISTRIBUTOR for alleged  infringement of any patent arising by virtue of
the sale or normal use of unmodified  Products or  allegedinfringement  of other
intellectual  property  (provided that  DISTRI13UTOR has not contributed to such
infringement)  shall be: (a) to defend.  at  SWISSRAY'S,  cost any legal  action
brought  against  DISTRIBUTOR  in  respect  of any such  claim  for such  patent
infringement  and pay all final  judgments  and costs  entered by reason of such
action (provided that SWISSRAY has been given prompt notice and has been allowed
to

deal with and defend any such action from the beginning) ; and (b) at SWISSRAY's
sole  option to do any one or more of the  following:  (i)  settle  the claim of
infringement;  (ii)  procure  for  DISTRIBUTOR  the  right  to use or  sell  the
allegedly infringing Products;  (iii) replace or modify the allegedly infringing
Products  so as to avoid the  alleged  infringement;  or (iv)  refund  the price
actually paid by DISTRIBUTOR to SWISSRAY for the allegedly infringing Products.

                    10.   MMXTRATION AND            LAW.  (a) Fxcept with
resnect to  disputes as to  indebtedness  arising out of the sale of Pro@ucts in
the ard @ ry course of SWISSRAY's  business and disputes  relating Lo SWISSPAY's
intellectual property rights, any and all controversies or claims arising out of
or  relating to these  Terms,  including  without  limitation  claims  asserting
violation of the antitrust laws, shall be settled  exclusively by arbitration in
New York,  New York if the  arbitration  shall be  commenced by SWISSRAY and New
York,  New York if  arbitration  shall be  comenced  by  DISTRIBUTOR,  using the
knerican  Arbitration  Association.  The Arbitration shall be heard before three
arbitrators,  one to be chosen by DI M IBUTOR, one to be chosen by SWISSRAY, and
the third to be chosen by those two arbitrators. (b) 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 of these  Terms,  nor to grant  injunctive  relief  or
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  emtered by any
Court  having  jurisdiction  to  do  so,  and  DISTRIBUTOR  and  SWISSRAY  her @
irrevocably  consent  to the  jurisdiction  and venue of the  federal  and state
courts of the  States of New  Jersey and  Nebraska  over  their  person for that
purpose  as well as for any and all other  purposes  in  connection  with  these
Terms,  and waive any defense based upon improper venue,  inconvenient  venue or
lack of  jurisdiction  in  connection  therewith.  (c) The failure or refusal of
either  DISTRIBUTOR  or SWISSRAY to Submit to  arbitration  shall  constitute  a
breach of these Terms and the party resisting  arbitration  shall be required to
pay  the  costs,  including  without  limitation  reasonable  attorneys,   fees,
compelling  the same.  Cc) claims or  controversies  that are not the subject of
arbitration under these Terms shall be governed by the internal law of the State
of New York,  exclusive of its  conflict-of-laws  principles.  For this purpose,
both DISTRIBUTOR and SWISKRAY hereby.

II.  MISCELLKNEOUS  PRMASIONS.  (a) In the event that any of the  provisions  of
these Terms are held by a Court or other tribunal of competent  jurisdiction  to
be unlawful. invalid, void or

                                       19
<PAGE>

  unenforceable. the remaining provisions of these Ter= will rwmin in full force
  and effect and will in no way be affected,  impaired or  invalidated.  (b) The
  failure or refusal by SwissRAY to insist  upon the strict  performance  of any
  provision of these or to @rcise any right in one or more instances will not be
  construed an a waiver of such  provision or right  presently or in the future.
  nor will such  failure or refusal be deemed a custom or  practice  contrary to
  such provision or right.  (c) The paragraph  headings  contained in these Term
  are for reference only and will not be conxide@ as substantive parts of these

  Terms or in their  interpretation  or for any  other  purpose.  The use of the
  singular or plural will include the other form. . (cl) SWISSRAY may assign the
  proceeds  under any  contract to sell  Products to any third party at any time
  without  the  consent of  DISTRIBLITOR.  DISTRI]BL"ROR  shall have no right to
  assign any of its rights or  obligations  with .respect to orders for Products
  without the prior  written  consent of SWISSRAY,  and any attempt to so assign
  shall be null and void-

  Enhibit D!            Swineray Standard Software Warranty

  Soft a  Waz=ant-yz  For a period  of me (1)  yuar  Er= the date of  ah:Llpment
  ovismiray warrants that the software *bell canto= to the specifications not Eo
  @ in the  dommentation.  swiceray,,Lv  &*la  obligation  %,,-der thin warranty
  shall be IbAted to using  reasonable  efforts to ensure o@ cmf@ty ma to supply
  SWer with a  corrected  version of the  Baftmze an soon as  practicable  after
  Buyer has notified  @Aperay of UW  ZLOACOnfommity.  @ffaray @o not @-ramt that
  (1) overat;ico of any of Um software shall be Interrupted or error free,,  (2)
  functions  con@nad in the Software shall operate in Um ewftinations  which may
  be selected  for use by buyer or meet:  I"zlo  -requireftente.  This  warranty
  shall be @fLd it the Software is find without the written consent of @Aperay.

  Exhibit E.-          Swissray s       anty

LXKX2= t OwimAr-ray warrants for a period of me (1) year two= the data of wh@nt,
that egmipmnt shall be free from defects iz material or wor ilp and will achieve
Um functionality  domeribeci in the product documntation provided by Mdearay. AU
tomting of the aqu@nt shall be per:Eo=a4 using @owrar'n ip@ieb*d sipmelfications
text @theds MA test equiamnt.  @ezray,'a solo componsibi3.ity under LM* warranty
shall lm to repair or replace,  at  awlesrayro  cqption.  wW @onento which faila
during the warranty period because oil eL doinct:  in ma-v hilp and/or material.
All. replileamat e@ t: cc parts

                                      -20-SALES, 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

                                       14

<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

IS  NOT  BEING  FILED  WITH  THIS  REGISTRATION   STATEMENT  AS  A  REQUEST  FOR
CONFIDENTIALITY  WITH RESPECT TO SUCH EXHIBIT HAS BEEN SEPARATELY FILED WITH THE
MATERIAL (EXHIBIT A) FOR WHICH  CONFIDENTIALITY  IS SOUGHT.  THE NUMBER OF PAGES
OMITTED AMOUNTS TO 4 PAGES.

                                       21
<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.

                                       22
<PAGE>

                            EXHIBITS C, D, E, F AND G

ARE  NOT  BEING  FILED  WITH  THIS  REGISTRATION  STATEMENT  AS  A  REQUEST  FOR
CONFIDENTIALITY  WITH RESPECT TO SUCH EXHIBITS HAVE BEEN  SEPARATELY  FILED WITH
THE MATERIAL (EXHIBIT C, D, E, F and G) FOR WHICH CONFIDENTIALITY IS SOUGHT. THE
NUMBER OF PAGES OMITTED AMOUNTS TO 11 PAGES.

                                       23

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