Exhibit 10.3


                            NOTE REPURCHASE AGREEMENT


AGREEMENT, dated as of December 28, 2001 (the "Agreement") by and between
NORLAND MEDICAL SYSTEMS, INC., a Delaware corporation ("Norland") on one hand;
and NISSHO IWAI AMERICAN CORPORATION, a New York corporation ("NIAC"), on the
other hand.


      WHEREAS, NIAC (the "Note Holder") holds a promissory note dated as of
March 28, 1999 (the "Note") pursuant to which Norland promises to pay the Note
Holder on September 11, 2002 (the "Maturity Date") the amount of $695,831;


      WHEREAS, Norland has the right to extend the Maturity Date for additional
period of two years until September 11, 2004;


      WHEREAS, the Note Holder has agreed to discount the Note in order to
induce Norland to repurchase the Note on or before April 30, 2002;


      NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereby agree as follows:


1.    REPURCHASE OF NOTE. Subject to the terms and conditions herein set
      forth, the Note Holder agrees to sell to Norland, and Norland agrees to
      purchase from the Note Holder, by the Closing Date (as defined in Section
      2 hereof), the Note for an aggregate amount of $278,333. All accrued and
      unpaid interests on the Note shall be waived. The Note Holder agrees that
      the payment received pursuant to this Agreement shall be in full
      satisfaction of the Note.


2.    CLOSING. The "Closing Date" shall be the earlier of (i) April 30, 2002,
      (ii) the date of the closing of the transaction for the sale of certain
      assets of Norland referred to in Mr. R. Bonmati's letter of December 26,
      2001 to NIAC or (iii) such other earlier date as may be mutually agreed
      upon by the Note Holder and Norland. The closing will take place 10:00
      a.m. on the Closing Date at the offices of Norland, 106 Corporate Park
      Drive, Suite 106, White Plains, New York 10604, or at such other time and
      place on the Closing Date as the Note Holder and Norland shall agree. At
      such closing Norland shall deliver to NIAC the amount of $278,333 in the
      form of a Certified or Cashier's Check, against receipt by Norland of the
      original Note.


3.    COUNTERPARTS. This Agreement may be executed in any number of
      counterparts, and all of such counterparts shall for all purposes
      constitute an agreement, binding on the parties hereto, notwithstanding
      that all parties are not signatories to the same counterpart.


4.    APPLICABLE LAW. This Agreement shall be governed by and construed in
      accordance with the laws of the State of New York, without reference to
      the choice of law principles of such laws.



5.    TERMINATION. Except as amended herein, the Note shall remain in full
      force and effect. If Norland fails to repurchase the Note by the Closing
      Date, then this Agreement shall become null and void as though this
      Agreement had never been entered into.


6.    ENTIRE AGREEMENT. This Agreement represents the entire agreement of the
      parties with respect to the subject matter hereof.


            IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day and year first above written.


                                    NORLAND MEDICAL SYSTEMS INC.








                                    By:  /s/ Reynald G. Bonmati
                                         -------------------------------
                                            Name:  Reynald G. Bonmati
                                            Title: Chief Executive Officer





                                    NISSHO IWAI AMERICAN CORPORATION








                                    By: /s/ Masakazu Arisaka
                                        --------------------------------------
                                           Name:  Masakazu Arisaka
                                           Title: Senior Vice President