Document:

<TABLE>
<CAPTION>
Name                                       Dated           Amount         Signatory
---------------------------------------    ------------    ----------     ---------------
<S>                                        <C>             <C>            <C>
Atlantis Capital fund, Ltd.                Mar. 26, 1998    $   250,000    Mark Valentine
Canadian Advantage Limited Partnership *   Mar. 26, 1998    $   625,000    Mark Valentine
Dominion Capital Fund Ltd.                 Mar. 26, 1998    $ 1,750,000    Mark Valentine
Sovereign Partners LP.                     Mar. 26, 1998    $ 2,875,000    Mark Valentine

*    This document has been filed.
</TABLE>

<PAGE>

                                                                   Exhibit 10.22

                       ----------------------------------
                          SWISSRAY INTERNATIONAL, INC.

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

THE SECURITIES  OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND ARE BEING OFFERED AND SOLD
IN RELIANCE ON EXEMPTIONS FROM THE  REGISTRATION  REQUIREMENTS OF SUCH LAWS. THE
SECURITIES ARE SUBJECT TO RESTRICTIONS OF TRANSFERABILITY AND RESALE AND MAY NOT
BE  TRANSFERRED  OR RESOLD  EXCEPT AS  PERMITTED  UNDER  SUCH LAWS  PURSUANT  TO
REGISTRATION OR AN EXEMPTION  THEREFROM.  THE SECURITIES HAVE NOT BE APPROVED OR
DISAPPROVED BY THE SECURITIES  AND EXCHANGE  COMMISSION OR ANY OTHER  REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE
MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING MATERIALS.

ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

                          Maximum Offering: $5,500,000

         This            offering   consists  of   $5,500,000   of   Convertible
                         Debentures of Swissray International, Inc.

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

                             SUBSCRIPTION AGREEMENT

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

                                       1

<PAGE>   2

                             SUBSCRIPTION PROCEDURES

      Convertible  Debentures of SWISSRAY  INTERNATIONAL,  INC.. (the "Company")
are  being  offered  in an  aggregate  amount  not  to  exceed  $5,500,000.  The
Debentures  will be  transferable  to the  extent  that  any  such  transfer  is
permitted by law. This  offering is being made in accordance  with the exemption
from  registration  under Section 4(2) of the Securities Act of 1933, as amended
(the  "Act")  and  Rule  506 of  Regulation  D  promulgated  under  the Act (the
"Regulation D Offering").

            The Investor  Questionnaire is designed to enable the Investor to
      demonstrate the minimum legal requirements under federal and state
      securities laws to purchase the Debentures.  The Signature Page for the
      Investor Questionnaire and the Subscription Agreement contain

      representations relating to the subscription.

            Also included is an Internal Revenue Service Form W-9:  "Request
            for Taxpayer Identification Number and Certification" for U.S.
            citizens or residents of the U.S. for U.S. federal income tax
            purposes only.  (Foreign investors should consult their tax
            advisors regarding the need to complete Internal Revenue Service
            Form W-9 and any other forms that may be required).

      If you are a foreign  person or  foreign  entity,  you may be subject to a
withholding  tax equal to 30% of any dividends paid by the Company.  In order to
eliminate  or reduce  such  withholding  tax you may submit a properly  executed
I.R.S.  Form 4224  (Exemption  from  Withholding  of Tax on  Income  Effectively
Connected  with the  Conduct of a Trade or  Business  in the  United  States) or
I.R.S. Form 1001 (Ownership  Exemption or Reduced Trade  Certificate),  claiming
exemption from  withholding or eligibility  for treaty benefits in the form of a
lower rate of withholding tax on interest or dividends.

      Payment must be made by wire transfer as provided below:

Immediately  available  funds  should be sent via wire  transfer  to the  escrow
account  stated  below  and  the  completed  subscription  documents  should  be
forwarded to the Escrow Agent. Your subscription  funds will be deposited into a
non-interest bearing escrow account of Joseph B. LaRocco, Esq., Escrow Agent, at
First  Union  Bank of  Connecticut,  Stamford,  Connecticut.  In the  event of a
termination of the Regulation D Offering or the rejection of this  subscription,
all subscription funds will be returned without interest.  The wire instructions
are as follows:

                                       2

<PAGE>   3

      First Union Bank of Connecticut
      Executive Office
      300 Main Street, P. O. Box 700
      Stamford, CT  06904-0700

      ABA #:      021101108
      Swift #:    FUNBUS33
      Account #:  20000-2072298-4

      Acct.Name:  Joseph B. LaRocco, Esq.  Trustee Account

                                       3

<PAGE>   4

                             SUBSCRIPTION AGREEMENT

THE SECURITIES  OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND ARE BEING OFFERED AND SOLD
IN RELIANCE ON EXEMPTIONS FROM THE  REGISTRATION  REQUIREMENTS OF SUCH LAWS. THE
SECURITIES ARE SUBJECT TO RESTRICTIONS OF TRANSFERABILITY AND RESALE AND MAY NOT
BE  TRANSFERRED  OR RESOLD  EXCEPT AS  PERMITTED  UNDER  SUCH LAWS  PURSUANT  TO
REGISTRATION OR AN EXEMPTION  THEREFROM.  THE SECURITIES HAVE NOT BE APPROVED OR
DISAPPROVED BY THE SECURITIES  AND EXCHANGE  COMMISSION OR ANY OTHER  REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE
MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING MATERIALS.

ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

To:   SWISSRAY INTERNATIONAL, INC.

      This Subscription Agreement is made between Swissray International,  Inc.,
("Company" or "Seller") a New York corporation,  and the undersigned prospective
purchaser  ("Purchaser") who is subscribing hereby for the Company's Convertible
Debentures (the  "Debentures").  The Debentures being offered will be separately
transferable,  to the extent that any such  transfer is  permitted  by law.  The
conversion terms of the Debentures are set forth in Section 4. This subscription
is submitted to you in accordance  with and subject to the terms and  conditions
described in this Subscription Agreement dated March __, 1998, together with any
Exhibits  thereto,  relating to an offering (the "Offering") of up to $5,500,000
of  Debentures.  This Offering is comprised of an offering of the  Debentures to
accredited  investors  (the  "Regulation  D Offering")  in  accordance  with the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended (the "Act"),  and Rule 506 of  Regulation  D  promulgated  under the Act
("Regulation D").

1.    SUBSCRIPTION.

      (a) The  undersigned  hereby  irrevocably  subscribes  for and  agrees  to
purchase $ 625,000   of    the    Company's Debentures. The Debentures shall pay
an 6% cumulative interest payable annually,  in cash or in freely trading Common
Stock of the Company,  at the Company's  option, at the time of each conversion.
If paid in Common Stock,  the number of shares of the Company's  Common Stock to
be received shall be determined by dividing the dollar amount of the dividend by
the then  applicable  Market Price,  as of the interest  payment  date.  "Market
Price" shall mean 80% of the 10-day average closing bid price, as

                                       4

<PAGE>   5

reported by Bloomberg, LP, for the ten (10) consecutive trading days immediately
preceding  the date of  conversion.  If the interest is to be paid in cash,  the
Company  shall  make  such  payment  within  5  business  days  of the  date  of
conversion.  If the  interest is to be paid in Common  Stock,  said Common Stock
shall be delivered to the Purchaser, or per Purchaser's  instructions,  within 5
business days of the date of conversion. The Debentures are subject to automatic
conversion  at the end of two years from the date of  issuance at which time all
Debentures  outstanding will be  automatically  converted based upon the formula
set forth in Section  4(d).  The closing shall be deemed to have occurred on the
date the funds are  received  by the  Company or its  designated  attorney  (the
"Closing Date").

      (b)  Upon  receipt  by  the  Company  of the  requisite  payment  for  the
Debentures  being purchased the Debentures so purchased will be forwarded by the
Escrow Agent, Joseph B. LaRocco, to the Purchaser and the name of such Purchaser
will be registered on the Debenture  transfer books of the Company as the record
owner of such  Debentures.  The Escrow  Agent shall not be liable for any action
taken or omitted by him in good faith and in no event shall the Escrow  Agent be
liable or  responsible  except for the Escrow  Agent's own gross  negligence  or
willful  misconduct.  The Escrow Agent has made no representations or warranties
in connection with this transaction and has not been involved in the negotiation
of the terms of this  Agreement  or any  matters  relative  thereto.  Seller and
Purchaser  each agree to indemnify  and hold  harmless the Escrow Agent from and
with respect to any suits, claims, actions or liabilities arising in any way out
of this transaction  including the obligation to defend any legal action brought
which in any way arises out of or is related to this Agreement. The Escrow Agent
is not  rendering  securities  advice to anyone  with  respect to this  proposed
transaction;  nor is the Escrow Agent opining on the  compliance of the proposed
transaction under applicable securities law.

2.    REPRESENTATIONS AND WARRANTIES.

      The  undersigned  hereby  represents and warrants to, and agrees with, the
Company as follows:

            (a) The  undersigned has been furnished with, and has carefully read
      the applicable form of Debenture included herein as Exhibit A and the form
      of  Registration  Rights  Agreement  annexed  hereto  as  Exhibit  B  (the
      "Registration Rights Agreement"), and is familiar with and understands the
      terms  of  the   Offering.   With  respect  to  tax  and  other   economic
      considerations involved in his investment,  the undersigned is not relying
      on the Company.  The undersigned has carefully  considered and has, to the
      extent the undersigned believes such discussion necessary,  discussed with
      the  undersigned's  professional  legal,  tax,  accounting  and  financial
      advisors the  suitability  of an investment in the Company,  by purchasing
      the Debentures, for the undersigned's particular

                                       5

<PAGE>   6

      tax and financial  situation and has determined that the investment  being
      made by the undersigned is a suitable investment for the undersigned.

            (b) The undersigned  acknowledges that all documents,  records,  and
      books  pertaining to this  investment  which the undersigned has requested
      including  Form  10-KSB for the fiscal  year ended June 30,  1997 and Form
      10-Q for the quarter ended September 30, 1997 (the "Disclosure Documents")
      have  been  made  available  for  inspection  by  the  undersigned  or the
      undersigned has had access to the Disclosure Documents.

            (c)  The  undersigned  has  had  a  reasonable  opportunity  to  ask
      questions of and receive answers from a person or persons acting on behalf
      of the Company  concerning  the Offering and all such  questions have been
      answered to the full satisfaction of the undersigned.

            (d)  The  undersigned  will  not  sell  or  otherwise  transfer  the
      Debentures  without   registration  under  the  Act  or  applicable  state
      securities  laws or an exemption  therefrom.  The Debentures have not been
      registered  under the Act or under the securities laws of any states.  The
      Common Stock  underlying the Debentures is to be registered by the Company
      pursuant to the terms of the Registration Rights Agreement attached hereto
      as  Exhibit B and  incorporated  herein  and made a part  hereof.  Without
      limiting  the right to convert the  Debentures  and sell the Common  Stock
      pursuant to the Registration Rights Agreement,  the undersigned represents
      that the  undersigned is purchasing  the Debentures for the  undersigned's
      own account,  for investment and not with a view to resale or distribution
      except in compliance with the Act. The undersigned has not offered or sold
      any portion of the Debentures being acquired nor does the undersigned have
      any  present  intention  of  dividing  the  Debentures  with  others or of
      selling,  distributing  or  otherwise  disposing  of  any  portion  of the
      Debentures   either   currently  or  after  the  passage  of  a  fixed  or
      determinable  period of time or upon the occurrence or  non-occurrence  of
      any predetermined event or circumstance in violation of the Act. Except as
      provided  in  the  Registration  Rights  Agreement,  the  Company  has  no
      obligation to register the Common Stock  issuable  upon  conversion of the
      Debentures.

            (e) The undersigned  recognizes that an investment in the Debentures
      involves  substantial  risks,  including loss of the entire amount of such
      investment. Further, the undersigned has carefully read and considered the
      schedule entitled Pending Litigation matters attached hereto as Exhibit C.

                                       6

<PAGE>   7

            (f) Legends.

                  (i)  The  undersigned   acknowledges   that  each  certificate
            representing  the  Debentures  unless  registered  pursuant  to  the
            Registration  Rights  Agreement,   shall  be  stamped  or  otherwise
            imprinted with a legend substantially in the following form:

            THE SECURITIES  EVIDENCED BY THIS  CERTIFICATE MAY NOT BE OFFERED OR
            SOLD,  TRANSFERRED,  PLEDGED,  HYPOTHECATED OR OTHERWISE DISPOSED OF
            EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
            SECURITIES ACT OF 1933, AS AMENDED,  (ii) TO THE EXTENT  APPLICABLE,
            RULE 144 UNDER THE ACT (OR ANY SIMILAR  RULE UNDER SUCH ACT RELATING
            TO THE  DISPOSITION  OF  SECURITIES),  OR (iii) IF AN EXEMPTION FROM
            REGISTRATION UNDER SUCH ACT IS AVAILABLE.

            NOTWITHSTANDING  THE  FOREGOING,  THE  COMMON  STOCK  INTO WHICH THE
            SECURITIES  EVIDENCED BY THIS  CERTIFICATE  ARE CONVERTIBLE ARE ALSO
            SUBJECT TO THE REGISTRATION RIGHTS SET FORTH IN EACH OF THAT CERTAIN
            SUBSCRIPTION  AGREEMENT  AND  REGISTRATION  RIGHTS  AGREEMENT BY AND
            BETWEEN THE HOLDER HEREOF AND THE COMPANY, A COPY OF EACH IS ON FILE
            AT THE COMPANY'S PRINCIPAL EXECUTIVE OFFICE.

                  (ii) The Common Stock issued upon conversion shall contain the
            following legend:

            THE  SECURITIES   REPRESENTED  HEREBY  HAVE  BEEN  INCLUDED  IN  THE
            COMPANY'S REGISTRATION STATEMENT INITIALLY FILED WITH THE SECURITIES
            AND EXCHANGE  COMMISSION  ON  __________,  1998,  AND MAY BE SOLD IN
            ACCORDANCE WITH THE COMPANY'S  PROSPECTUS DATED  ___________,  1998,
            WHICH FORMS A PART OF SUCH REGISTRATION  STATEMENT, OR AN OPINION OF
            COUNSEL  OR OTHER  EVIDENCE  ACCEPTABLE  TO THE  COMPANY  THAT  SUCH
            REGISTRATION IS NOT REQUIRED.

            (g) If this  Subscription  Agreement  is executed  and  delivered on
      behalf of a corporation, (i) such corporation has the full legal right and
      power and all authority and approval required (a) to execute and deliver,

                                       7

<PAGE>   8

      or authorize  execution and delivery of, this  Subscription  Agreement and
      all other instruments  (including,  without  limitation,  the Registration
      Rights  Agreement)  executed  and  delivered  by  or  on  behalf  of  such
      corporation  in connection  with the purchase of the Debentures and (b) to
      purchase and hold the Debentures:  (ii) the signature of the party signing
      on behalf of such corporation is binding upon such corporation;  and (iii)
      such corporation has not been formed for the specific purpose of acquiring
      the Debentures,  unless each beneficial  owner of such entity is qualified
      as an accredited  investor within the meaning of Rule 501(a) of Regulation
      D  and  has   submitted   information   substantiating   such   individual
      qualification.

            (h) The  undersigned  shall  indemnify and hold harmless the Company
      and each  stockholder,  executive,  employee,  representative,  affiliate,
      officer,  director,  agent  (including  Counsel) or control  person of the
      Company,  who is or may be a party or is or may be threatened to be made a
      party  to  any  threatened,   pending  or  contemplated  action,  suit  or
      proceeding, whether civil, criminal,  administrative or investigative,  by
      reason of or  arising  from any  actual or  alleged  misrepresentation  or
      misstatement  of facts or  omission  to  represent  or state facts made or
      alleged to have been made by the  undersigned to the Company or omitted or
      alleged  to  have  been  omitted  by  the   undersigned,   concerning  the
      undersigned  or the  undersigned's  subscription  for and  purchase of the
      Debentures or the undersigned's  authority to invest or financial position
      in connection with the Offering,  including,  without limitation, any such
      misrepresentation, misstatement or omission contained in this Subscription
      Agreement,  the  Questionnaire  or any  other  document  submitted  by the
      undersigned,  against  losses,  liabilities  and  expenses  for  which the
      Company,  or  any  stockholder,   executive,   employee,   representative,
      affiliate,  officer, director, agent (including Counsel) or control person
      of the Company has not otherwise  been  reimbursed  (including  attorneys'
      fees and disbursements,  judgments,  fines and amounts paid in settlement)
      actually and reasonably incurred by the Company, or such officer, director
      stockholder,    executive,    employee,    agent   (including    Counsel),
      representative,  affiliate  or  control  person  in  connection  with such
      action, suit or proceeding.

            (i) The  undersigned  is not  subscribing  for the  Debentures  as a
      result of, or pursuant  to, any  advertisement,  article,  notice or other
      communication  published in any  newspaper,  magazine or similar  media or
      broadcast over television or radio or presented at any seminar or meeting.

            (j) The  undersigned or the  undersigned's  representatives,  as the
      case may be, has such  knowledge  and  experience  in  financial,  tax and
      business   matters  so  as  to  enable  the  undersigned  to  utilize  the
      information  made  available to the  undersigned  in  connection  with the
      Offering to

                                       8

<PAGE>   9

      evaluate the merits and risks of an  investment in the  Debentures  and to
      make an informed investment decision with respect thereto.

            (k) The Purchaser is purchasing  the  Debentures for its own account
      for  investment,  and not with a view  toward the  resale or  distribution
      thereof.  Purchaser  is  neither an  underwriter  of, nor a dealer in, the
      Debentures or the Common Stock issuable upon conversion thereof and is not
      participating  in the  distribution  or  resale of the  Debentures  or the
      Common Stock issuable upon conversion thereof.

            (l) There has never been  represented,  guaranteed,  or warranted to
      the  undersigned by any broker,  the Company,  its officers,  directors or
      agents, or employees or any other person,  expressly or by implication (i)
      the  percentage  of  profits  and/or  amount of or type of  consideration,
      profit  or loss to be  realized,  if any,  as a  result  of the  Company's
      operations;  and (ii) that the past  performance or experience on the part
      of the management of the Company,  or of any other person, will in any way
      result in the overall profitable operations of the Company.

      3.    SELLER REPRESENTATIONS.

            (a) Concerning the  Securities.  The issuance,  sale and delivery of
the Debentures have been duly authorized by all required corporate action on the
part of Seller, and when issued, sold and delivered in accordance with the terms
hereof and thereof for the consideration  expressed herein and therein,  will be
duly and validly issued and enforceable in accordance with their terms,  subject
to the laws of bankruptcy and creditors'  rights  generally.  At least 7,500,000
shares of Common Stock  issuable upon  conversion of all the  Debentures  issued
pursuant to this offering have been duly and validly  reserved for issuance,  or
alternative  arrangements agreed to in writing to cover the contingency of their
being insufficient  reserved shares and, upon issuance shall be duly and validly
issued,  fully paid, and non-assessable  (the "Reserved  Shares").  From time to
time, the Company shall keep such additional  shares of Common Stock reserved so
as to allow for the  conversion of all the  Debentures  issued  pursuant to this
offering.

      Prior to conversion of all the Debentures, if at anytime the conversion of
all the  Debentures  outstanding  would  result  in an  insufficient  number  of
authorized  shares of Common Stock being available to cover all the conversions,
then in such  event,  the  Company  will  move to call and hold a  shareholder's
meeting within 60 days of such event for the purpose of  authorizing  additional
shares of  Common  Stock to  facilitate  the  conversions.  In such an event the
Company  shall  recommend to all  shareholders  to vote their shares in favor of
increasing the authorized  number of shares of Common Stock . Seller  represents
and warrants  that under no  circumstances  will it deny or prevent  Purchaser's
right  to  convert  the  Debentures  as  permitted   under  the  terms  of  this
Subscription  Agreement or the Registration  Rights  Agreement.  Nothing in this
Section shall limit the obligation of the Company to make the payments set forth
in Section 4(h).

                                       9

<PAGE>   10

            (b)  Authority  to Enter  Agreement.  This  Agreement  has been duly
authorized,  validly  executed and  delivered on behalf of Seller and is a valid
and  binding  agreement  in  accordance  with  its  terms,  subject  to  general
principals of equity and to bankruptcy or other laws  affecting the  enforcement
of creditors' rights generally.

            (c) Non-contravention.  The execution and delivery of this Agreement
and the  consummation  of the issuance of the Debentures,  and the  transactions
contemplated  by this Agreement do not and will not conflict with or result in a
breach by Seller of any of the terms or  provisions  of, or constitute a default
under,  the articles of  incorporation  or by-laws of Seller,  or any indenture,
mortgage,  deed of trust,  or other  material  agreement or  instrument to which
Seller is a party or by which it or any of its  properties  or assets are bound,
or any existing  applicable law, rule, or regulation of the United States or any
State thereof or any  applicable  decree,  judgment,  or order of any Federal or
State court,  Federal or State regulatory body,  administrative  agency or other
United States  governmental  body having  jurisdiction over Seller or any of its
properties or assets.

            (d) Company Compliance. The Company represents and warrants that the
Company  and  its  subsidiaries  are:  (i) in  full  compliance,  to the  extent
applicable,  with all reporting  obligations under either Section 13(a) or 15(d)
of the  Securities  Exchange  Act of 1934;  (ii) not in violation of any term or
provision of its Certificate of Incorporation  or by-laws;  (iii) not in default
in the  performance  or  observance  of any  obligation,  agreement or condition
contained in any bond, debenture,  note or any other evidence of indebtedness or
in any mortgage,  deed of trust,  indenture or other  instrument or agreement to
which  they are a party,  either  singly or  jointly,  by which it or any of its
property is bound or subject. Furthermore, the Company is not aware of any other
facts,  which it has not disclosed which could have a material adverse effect on
the  business,  condition,  (financial  or  otherwise),   operations,  earnings,
performance,  properties or prospects of the Company and its subsidiaries  taken
as a whole.

            (e) Pending Litigation.  Except as otherwise disclosed in Exhibit C,
there is (i) no action, suit or proceeding before or by any court, arbitrator or
governmental body now pending or, to the knowledge of the Company, threatened or
contemplated  to which the  Company  or any of its  subsidiaries  is or may be a
party  or to  which  the  business  or  property  of the  Company  or any of its
subsidiaries  is or may be  bound  or  subject,  (ii)  no  law,  statute,  rule,
regulation,  order or ordinance that has been enacted,  adopted or issued by any
Governmental Body or that, to the knowledge of the Company, has been proposed by
any   Governmental   Body  adversely   affecting  the  Company  or  any  of  its
subsidiaries, (iii) no injunction, restraining order or order of any nature by a
federal,  state or foreign court or Governmental Body of competent  jurisdiction
to which the Company or any of its  subsidiaries  is subject issued that, in the
case of clauses (i), (ii) and (iii) above, (x) is reasonably  likely,  singly or
in the  aggregate,  to  result in a  material  adverse  effect on the  business,
condition,   (financial  or  otherwise),   operations,   earnings,  performance,
properties or prospects of the Company, and its subsidiaries taken as a whole or
(y) would  interfere with or adversely  affect the issuance of the Debentures or
would  be  reasonably  likely  to  render  this  Subscription  Agreement  or the
Debentures, or any portion thereof, invalid or unenforceable.

                                       10

<PAGE>   11

            (f) Issuance of the Debentures. No action has been taken and no law,
statute,  rule,  regulation,  order or ordinance  has been  enacted,  adopted or
issued by any Governmental  Body that prevents the issuance of the Debentures or
the Common Stock issuable upon  conversion or exercise  thereof;  no injunction,
restraining  order  or order  of any  nature  by a  federal  or  state  court of
competent  jurisdiction  has been  issued  that  prevents  the  issuance  of the
Debentures or the Common Stock issuable upon  conversion or exercise  thereof or
suspends the sale of the Debentures or the Common Stock issuable upon conversion
thereof  in any  jurisdiction;  and no  action,  suit or  proceeding  is pending
against  or,  to the  best  knowledge  of the  Company,  threatened  against  or
affecting, the Company, any of its subsidiaries or, to the best knowledge of the
Company,  before any court or  arbitrator  or any  Governmental  Body  that,  if
adversely  determined,  would prohibit,  materially  interfere with or adversely
affect the  issuance or  marketability  of the  Debentures  or the Common  Stock
issuable  upon  conversion  or  exercise  thereof  or  render  the  Subscription
Agreement or the Debentures, or any portion thereof, invalid or unenforceable.

            (g) The Company shall  indemnify and hold harmless the Purchaser and
each  stockholder,  executive,  employee,  representative,  affiliate,  officer,
director or control person of the  Purchaser,  who is or may be a party or is or
may be threatened to be made a party to any threatened,  pending or contemplated
action,  suit  or  proceeding,   whether  civil,  criminal,   administrative  or
investigative,   by  reason  of  or   arising   from  any   actual  or   alleged
misrepresentation  or  misstatement  of facts or omission to  represent or state
facts  made or  alleged to have been made by the  Company  to the  Purchaser  or
omitted or alleged to have been omitted by the Company, concerning the Purchaser
or the  Purchaser's  subscription  for and  purchase  of the  Debentures  or the
Purchaser 's authority to invest or financial  position in  connection  with the
Offering,   including,   without   limitation,   any   such   misrepresentation,
misstatement  or  omission  contained  in  this  Subscription   Agreement,   the
Questionnaire  or any other document  submitted by the Company,  against losses,
liabilities and expenses for which the Purchaser, or any stockholder, executive,
employee, representative,  affiliate, officer, director or control person of the
Purchaser has not  otherwise  been  reimbursed  (including  attorneys'  fees and
disbursements,  judgments,  fines and amounts paid in  settlement)  actually and
reasonably incurred by the Purchaser,  or such officer,  director,  stockholder,
executive, employee,  representative,  affiliate or control person in connection
with such action, suit or proceeding.

            (h) No  Change.  Other  than  filings  required  by the  Blue Sky or
federal securities law, no consent, approval or authorization of or designation,
declaration or filing with any governmental or other regulatory authority on the
part of the Company is required in connection with the valid execution, delivery
and performance of this Agreement.  Any required  qualification  or notification
under applicable  federal  securities laws and state Blue Sky laws of the offer,
sale and  issuance of the  Debentures,  has been  obtained on or before the date
hereof or will have been obtained within the allowable period thereafter,  and a
copy thereof will be forwarded to Counsel for the Purchaser.

                                       11

<PAGE>   12

            (i)  True  Statements.   Neither  this  Agreement  nor  any  of  the
"Disclosure Documents", as hereinafter defined, contains any untrue statement of
a material fact or omits to state any material  fact  necessary in order to make
the  statements  contained  herein or therein not misleading in the light of the
circumstances  under which such  statements  are made.  There  exists no fact or
circumstances  which, to the knowledge of the Company,  materially and adversely
affects  the  business,  properties  or  assets,  or  conditions,  financial  or
otherwise,  of the  Company,  which has not been set forth in this  Subscription
Agreement or disclosed in such documents.

            (j) The Purchaser has been advised that the Company has not retained
any independent professionals to review or comment on this Offering or otherwise
protect the  interests of the  Purchaser.  Although the Company has retained its
own  counsel,  neither  such  counsel  nor any other firm,  including  Joseph B.
LaRocco,  Esq., has acted on behalf of the Purchaser,  and the Purchaser  should
not rely on the Company's legal counsel or Joseph B. LaRocco,  Esq. with respect
to any matters herein described.

            (k) Prior Shares  Issued Under  Regulation S or Regulation D. In the
past six months the Company  raised  $5,848,285 in Regulation S and Regulation D
offerings.

            (l)  Current  Authorized  Shares.  As of March 2,  1998,  there were
50,000,000  authorized shares of Common Stock of which approximately  28,443,403
shares of Common Stock were deemed  issued and  outstanding  on a fully  diluted
basis.

            (m)  Disclosure  Documents.  The  Disclosure  Documents  are all the
documents (other than preliminary  materials) that the Company has been required
to file  with  the SEC from  June 30,  1997,  to the  date  hereof.  As of their
respective  dates,  none  of  the  Disclosure  Documents  contained  any  untrue
statement of a material  fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the  circumstances  under which they were made, not misleading,  and no material
event has occurred since the Company's  filing on Form 10-KSB for the year ended
June 30,  1997,  which  could  make  any of the  disclosures  contained  therein
misleading.  Excepting  for the  fact  that the  Company  is in the  process  of
amending its Form 10-KSB due to the fact that its financial statement heretofore
filed for the fiscal years ended June 30, 1997 and 1996 have been restated so as
to properly  record the accounting  treatment of certain  beneficial  conversion
features and debt issuance cost of convertible debentures issued during the year
ended June 30, 1997 and the  accounting  for the value of stock options  granted
during  the  years  ended  June  30,  1997  and  1996.  The net  effect  of such
restatements on the Company's 1997 financial  statements resulted in an increase
in total assets of $435,619,  a decrease in total  liabilities  of $689,441,  an
increase in stockholders' equity of $1,124,760,  and an increase in the net loss
of  $1,672,587  or ($.10) per common  share.  The  restated net loss for 1997 of
$12,562,215 or ($.79) per common share compared to the previously  reported loss
of $10,889,628 or ($.69) per common share.  The net effect of such  restatements
on the Company's 1996 financial statement resulted in no change in total assets,
total liabilities or total  stockholders'  equity and an increase in net loss of
$6,374,468 or ($.49) per common share. The restated net loss

                                       12

<PAGE>   13

of $8,226,080 or ($.64) per common share compared to the previously reported net
loss of  $1,891,612  or  ($.15)  per  common  share.  There was no effect to the
Company's cash flows for either 1997 or 1996. Such changes already appear in the
Company's  Registration  Statement  under SEC File No.  333-43401,  as  declared
effective  March 12, 1998.  For purposes of this  document the full  contents of
such  Registration  Statement  are herewith  incorporated  by  reference,  which
incorporation  necessarily  includes  financial  changes  necessitated by way of
restatement or revision to those  subsequently  unaudited  financial  statements
through  December 31, 1997. The financial  statements of the Company included in
the  Disclosure  Documents  have been  prepared  in  accordance  with  generally
accepted accounting  principles applied on a consistent basis during the periods
involved  (except as may be  indicated  in the notes  thereto or, in the case of
unaudited  financial  statements,   only  to  normal  recurring  year-end  audit
adjustments)  the  consolidated  financial  position  of  the  Company  and  its
consolidated  subsidiaries as at the dates thereof and the consolidated  results
of their  operations  and changes in  financial  position  for the periods  then
ended.

            (n) Information Supplied. The information supplied by the Company to
Purchaser in connection with the offering of the Debentures does not contain any
untrue  statement of a material fact or omit to state a material fact  necessary
to make the  statements,  in the light of the  circumstances  in which they were
made,  not  misleading.  There  exists no fact or  circumstances  which,  to the
knowledge  of the  Company,  materially  and  adversely  affects  the  business,
properties, assets, or conditions, financial or otherwise, of the Company, which
has not been set forth in this Agreement or disclosed in such documents.

            (o) Delivery Instructions.  On the Closing Date the Debentures being
purchased  hereunder  shall be  delivered to Joseph B.  LaRocco,  Esq. as Escrow
Agent,  who will  simultaneously  wire to the  Company  the funds  being held in
escrow,  less placement fees, at which time the Escrow Agent shall then have the
Debentures delivered to the Purchaser, per the Purchaser's instructions.

            (p) Non-contravention.  The execution and delivery of this Agreement
by the Company,  the issuance of the  Debentures,  and the  consummation  by the
Company  of the  other  transactions  contemplated  by this  Agreement,  and the
Debentures  do not and will  not  conflict  with or  result  in a breach  by the
Company of any of the terms or provisions of, or constitute a default under, the
(i) certificate of incorporation or by-laws of the Company,  (ii) any indenture,
mortgage,  deed of trust, or other material agreement or instrument to which the
Company is a party or by which it or any of its  properties or assets are bound,
(iii)  any  material  existing  applicable  law,  rule,  or  regulation  or  any
applicable decree,  judgment,  or (iv) order of any court, United States federal
or state regulatory body,  administrative  agency,  or other  governmental  body
having jurisdiction over the Company or any of its properties or assets,  except
such conflict,  breach or default which would not have a material adverse effect
on the transactions contemplated herein.

            (q) No Default.  Except as may be set forth in the Company's  report
on form 10-KSB for the fiscal year ending June 30,  1997,  the Company is not in
default in the performance or observance of any material obligation,  agreement,
covenant or

                                       13

<PAGE>   14

condition contained in any indenture,  mortgage, deed of trust or other material
instrument or agreement to which it is a party or by which it or its property is
bound, and neither the execution of, nor the delivery by the Company of, nor the
performance  by the Company of its  obligations  under,  this  Agreement  or the
Debentures,  other than the conversion provision thereof,  will conflict with or
result in the  breach or  violation  of any of the  terms or  provisions  of, or
constitute  a default or result in the  creation  or  imposition  of any lien or
charge on any  assets or  properties  of the  Company  under,  (i) any  material
indenture, mortgage, deed of trust or other material agreement applicable to the
Company or  instrument  to which the Company is a party or by which it is bound,
(ii)  any  statute  applicable  to  the  Company  or  its  property,  (iii)  the
Certificate  of  Incorporation  or  By-Laws  of the  Company,  (iv) any decree ,
judgment,  order, rule or regulation of any court or governmental agency or body
having  jurisdiction  over the Company  regulation of any court or  governmental
agency or body having  jurisdiction  over the Company or its properties,  or (v)
the Company's listing agreement for its Common Stock.

            (r) Use of Proceeds. The Company represents that the net proceeds of
this offering will be used for working capital.

            (s) The Purchaser has been advised that the Company has entered into
a consulting agreement with Net Financial International,  Ltd. pursuant to which
it will pay a fee of 10% of the gross proceeds of this offering.

      4.    TERMS OF CONVERSION.

            (a)  Debentures.  Upon  receipt  by the  Company  or its  designated
attorney of a facsimile or original of  Purchaser's  signed Notice of Conversion
and the original  Debenture  to be  converted  in whole or in part,  the Company
shall instruct its transfer agent to issue one or more Certificates representing
that number of shares of Common Stock into which the Debenture is convertible in
accordance  with the  provisions  regarding  conversion  set forth in  Exhibit D
hereto. The Seller's transfer agent or attorney shall act as Registrar and shall
maintain an appropriate ledger containing the necessary information with respect
to each Debenture.

            (b) Conversion Procedures.  The face amount of each Debenture may be
converted at the earlier of the effective date of the Registration  Statement or
sixty (60) days following the Closing Date. Such conversion shall be effectuated
by surrendering to the Company, or its attorney,  the Debentures to be converted
together with a facsimile or original of the signed  Notice of Conversion  which
evidences  Purchaser's  intention to convert those Debentures indicated The date
on which the Notice of  Conversion  is  effective  ("Conversion  Date") shall be
deemed to be the date on which the  Purchaser  has  delivered  to the  Company a
facsimile  or  original  of the  signed  Notice  of  Conversion,  as long as the
original  Debentures  to be  converted  are  received  by  the  Company  or  its
designated attorney within 5 business days thereafter. Unless otherwise notified
by the Company in writing via facsimile, the

                                       14

<PAGE>   15

Company's  designated  attorney is Gary B. Wolff,  Esq.,  747 Third Avenue,  New
York, NY 10017 (P) 212-644-6446 (f) 212-644-6498.

            (c) Common Stock to be Issued. Upon the conversion of any Debentures
and upon  receipt by the Company or its  designated  attorney of a facsimile  or
original of Purchaser's signed Notice of Conversion (see Exhibit D) Seller shall
instruct Seller's transfer agent to issue Stock Certificates without restrictive
legend or stop transfer instructions, if at that time the Registration Statement
has been deemed effective (or with proper restrictive legend if the Registration
Statement has not as yet been declared effective),  in the name of Purchaser (or
its  nominee)  and  in  such   denominations   to  be  specified  at  conversion
representing the number of shares of Common Stock issuable upon such conversion,
as  applicable.   Seller  warrants  that  no  instructions,   other  than  these
instructions,  have been given or will be given to the  transfer  agent and that
the Common Stock shall otherwise be freely transferable on the books and records
of Seller, except as may be set forth herein.

            (d) (i) Conversion Rate.  Purchaser is entitled,  at its option,  to
convert the face amount of each Debenture, plus accrued interest, at the earlier
of the effective date of the Registration Statement or sixty (60) days following
the Closing Date, at 80% of the 10 day average closing bid price, as reported by
Bloomberg,  LP for the 10  consecutive  trading days  immediately  preceding the
applicable  Conversion Date (the "Conversion  Price").  No fractional  shares or
scrip  representing  fractions of shares will be issued on  conversion,  but the
number of shares  issuable  shall be rounded up or down,  as the case may be, to
the nearest whole share.

            (ii) Most Favored Financing. If after the Closing Date, but prior to
the Purchaser's conversion of all the Debentures, the Company raises money under
either  Regulation D or Regulation S on terms that are more favorable than those
terms  set  forth  in this  Subscription  Agreement,  then in  such  event,  the
Purchaser at its sole option shall be entitled to  completely  replace the terms
of  this   Subscription   Agreement  with  the  terms  of  the  more  beneficial
Subscription  Agreement as to that balance,  including  accrued interest and any
accumulated  liquidated damages,  remaining on Purchaser's  original investment.
The Debentures are subject to a mandatory,  24 month  conversion  feature at the
end of which all Debentures  outstanding will be automatically  converted,  upon
the terms set forth in this section ("Mandatory Conversion Date").

            (e) Nothing contained in this Subscription Agreement shall be deemed
to  establish  or require the payment of interest to the  Purchaser at a rate in
excess of the maximum rate  permitted  by  governing  law. In the event that the
rate of interest  required to be paid  exceeds the  maximum  rate  permitted  by
governing  law,  the rate of interest  required to be paid  thereunder  shall be
automatically  reduced to the maximum rate permitted under the governing law and
such excess shall be returned with reasonable promptness by the Purchaser to the
Company.

                                       15

<PAGE>   16

            (f) It shall be the Company's  responsibility  to take all necessary
actions and to bear all such costs to issue the  Certificate  of Common Stock as
provided  herein,  including  the  responsibility  and cost for  delivery  of an
opinion letter to the transfer agent,  if so required.  The person in whose name
the  certificate  of Common  Stock is to be  registered  shall be  treated  as a
shareholder  of record on and after the conversion  date.  Upon surrender of any
Debentures  that are to be  converted  in part,  the Company  shall issue to the
Purchaser a new Debenture  equal to the unconverted  amount,  if so requested in
writing by Purchaser.

            (g) Within five (5) business days after receipt of the documentation
referred to above in Section  4(b),  the Company  shall  deliver a  certificate,
without  stop  transfer  instructions,  for the number of shares of Common Stock
issuable upon the conversion.  It shall be the Company's  responsibility to take
all  necessary  actions and to bear all such costs to issue the Common  Stock as
provided  herein,  including  the cost for delivery of an opinion  letter to the
transfer  agent,  if so required.  The person in whose name the  certificate  of
Common Stock is to be registered  shall be treated as a shareholder of record on
and after the conversion  date.  Upon surrender of any Debentures that are to be
converted  in part,  the Company  shall issue to the  Purchaser a new  Debenture
equal to the unconverted amount, if so requested in writing by Purchaser.

      In the event the Company does not make  delivery of the Common  Stock,  as
instructed by Purchaser,  within 8 business days after  delivery of the original
Debenture,  then in such event the Company shall pay to Purchaser an amount,  in
cash in accordance with the following schedule, wherein "No. Business Days Late"
is defined as the number of business  days beyond the 8 business  days  delivery
period.

<TABLE>

<CAPTION>

                                     Late Payment for Each
                                     $10,000 of Debenture

No. Business Days Late              Amount Being Converted

- ----------------------              ----------------------
<S>                                 <C>

      1                                   $100
      2                                   $200
      3                                   $300
      4                                   $400
      5                                   $500
      6                                   $600
      7                                   $700
      8                                   $800
      9                                   $900
      10                                  $1,000
      >10                                 $1,000 + $200 for each
                                          Business Day Beyond 10

</TABLE>

      The Company  acknowledges  that its  failure to deliver  the Common  Stock
within 8 business  days after the  Conversion  Date will cause the  Purchaser to
suffer  damages in an amount that will be difficult to  ascertain.  Accordingly,
the

                                       16

<PAGE>   17

parties agree that it is  appropriate  to include in this  Agreement a provision
for liquidated  damages.  The parties  acknowledge and agree that the liquidated
damages  provision set forth in this section  represents the parties' good faith
effort to qualify such  damages and, as such,  agree that the form and amount of
such  liquidated  damages are reasonable and will not constitute a penalty.  The
payment of liquidated damages shall not relieve the Company from its obligations
to deliver the Common Stock pursuant to the terms of this Agreement.

      To the extent that the  failure of the  Company to issue the Common  Stock
pursuant to this Section 4(g) is due to the  unavailability  of  authorized  but
unissued  shares of Common Stock,  the provisions of this Section 4(g) shall not
apply but instead the provisions of Section 4(h) shall apply.

      The Company  shall make any payments  incurred  under this Section 4(g) in
immediately  available  funds within five (5) business days from the  Conversion
Date if late.  Nothing  herein shall limit a Purchaser's  right to pursue actual
damages or cancel the conversion for the Company's  failure to issue and deliver
Common Stock to the Holder within 8 business days after the Conversion Date.

            (h) The Company  shall at all times  reserve and have  available all
Common Stock necessary to meet conversion of the Debentures by all Purchasers of
the entire  amount of Debentures  then  outstanding.  If, at any time  Purchaser
submits  a Notice  of  Conversion  and the  Company  does  not  have  sufficient
authorized but unissued shares of Common Stock  available to effect,  in full, a
conversion of the Debentures (a "Conversion  Default",  the date of such default
being referred to herein as the "Conversion  Default  Date"),  the Company shall
issue to the  Purchaser  all of the shares of Common Stock which are  available,
and the Notice of Conversion as to any Debentures  requested to be converted but
not converted (the "Unconverted Debentures"),  upon Purchaser's sole option, may
be deemed null and void.  The Company  shall provide  notice of such  Conversion
Default  ("Notice  of  Conversion   Default")  to  all  existing  Purchasers  of
outstanding  Debentures,  by  facsimile,  within  three (3) business day of such
default (with the original  delivered by overnight or two day courier),  and the
Purchaser  shall give notice to the Company by  facsimile  within five  business
days of receipt of the original Notice of Conversion  Default (with the original
delivered by overnight or two day courier) of its election to either  nullify or
confirm the Notice of Conversion.

      The Company  agrees to pay to all  Purchasers  of  outstanding  Debentures
payments for a Conversion Default  ("Conversion Default Payments") in the amount
of  (N/365)  x (.24) x the  initial  issuance  price of the  outstanding  and/or
tendered  but not  converted  Debentures  held by each  Purchaser  where N = the
number of days from the Conversion Default Date to the date (the  "Authorization
Date") that the Company authorizes a sufficient number of shares of Common Stock
to effect conversion of all remaining Debentures.  The Company shall send notice
("Authorization  Notice")  to each  Purchaser  of  outstanding  Debentures  that
additional shares of Common Stock have been authorized,  the Authorization  Date
and the amount of Purchaser's accrued Conversion Default Payments.

                                       17

<PAGE>   18

The accrued  Conversion  Default  shall be paid in cash or shall be  convertible
into Common Stock at the Conversion Rate, at the Purchaser's option,  payable as
follows:  (i) in the event  Purchaser  elects to take such payment in cash, cash
payments shall be made to such Purchaser of outstanding  Debentures by the fifth
day of the following  calendar month,  or (ii) in the event Purchaser  elects to
take such payment in stock,  the Purchaser may convert such payment  amount into
Common Stock at the  conversion  rate set forth in section 4(d) at anytime after
the 5th day of the calendar month following the month in which the Authorization
Notice was received,  until the expiration of the mandatory 24 month  conversion
period.

      The company  acknowledges that its failure to maintain a sufficient number
of authorized but unissued shares of Common Stock to effect in full a conversion
of the  Debentures  will cause the Purchaser to suffer damages in an amount that
will be  difficult  to  ascertain.  Accordingly,  the  parties  agree that it is
appropriate to include in this Agreement a provision for liquidated damages. The
parties acknowledge and agree that the liquidated damages provision set forth in
this section  represents the parties' good faith effort to quantify such damages
and,  as such,  agree that the form and amount of such  liquidated  damages  are
reasonable and will not constitute a penalty.  The payment of liquidated damages
shall not relieve the Company from its  obligations  to deliver the Common Stock
pursuant to the terms of this Agreement.

      Nothing herein shall limit the Purchaser's  right to pursue actual damages
for the Company's  failure to maintain a sufficient  number of authorized shares
of Common Stock.

            (i)  The  Company  shall   furnish  to  Purchaser   such  number  of
prospectuses and other documents incidental to the registration of the shares of
Common  Stock   underlying  the  Debentures,   including  any  amendment  of  or
supplements thereto.

5. LIMITS ON AMOUNT OF CONVERSION AND OWNERSHIP.

      Other than the Mandatory Conversion provisions contained in this Agreement
which are not limited by the following, in no other event shall the Purchaser be
entitled  to convert  that  amount of  Debentures  in excess of that amount upon
conversion  of  which  the sum of (1) the  number  of  shares  of  Common  Stock
beneficially  owned by the  Purchaser and its  affiliates  (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unconverted  portion of the Debentures),  and (2) the number of shares of Common
Stock issuable upon the  conversion of the Debentures  with respect to which the
determination  of this  proviso  is  being  made,  would  result  in  beneficial
ownership  by the  Purchaser  and  its  affiliates  of  more  than  4.9%  of the
outstanding  shares  of  Common  Stock  of the  Company.  For  purposes  of this
provision to the immediately  preceding sentence,  beneficial ownership shall be
determined in

                                       18

<PAGE>   19

accordance  with  Section  13 (d) of the  Securities  Exchange  Act of 1934,  as
amended,  and  Regulation  13 D-G  thereunder,  except as otherwise  provided in
clause (1) of such provision.

6.    DELIVERY INSTRUCTIONS.

      Prior to or on the Closing  Date the Company  shall  deliver to the Escrow
Agent an opinion  letter  signed by counsel for the Company in the form attached
hereto as Exhibit E. Also,  prior to or on the Closing  Date the  Company  shall
deliver to the Escrow Agent a signed  Registration  Rights Agreement in the form
attached hereto as Exhibit B. The Debentures being purchased  hereunder shall be
delivered  to Joseph B.  LaRocco,  Esq. as Escrow  Agent,  who will hold them in
escrow  until  funds have been wired to the Company or its Counsel at which time
the Escrow Agent shall then have the Debentures delivered to the Purchaser,  per
the Purchaser's instructions.

7.    UNDERSTANDINGS.

      The undersigned  understands,  acknowledges and agrees with the Company as
follows:

FOR ALL SUBSCRIBERS:

      (a) This Subscription may be rejected, in whole or in part, by the Company
in its sole and absolute  discretion at any time before the date set for closing
unless  the  Company  has  given  notice  of  acceptance  of  the  undersigned's
subscription by signing this Subscription Agreement.

      (b)  No  U.S.  federal  or  state  agency  or  any  agency  of  any  other
jurisdiction  has made any finding or  determination  as to the  fairness of the
terms of the Offering for  investment nor any  recommendation  or endorsement of
the Debentures.

      (c) The representations,  warranties and agreements of the undersigned and
the Company  contained  herein and in any other writing  delivered in connection
with the  transactions  contemplated  hereby  shall be true and  correct  in all
material respects on and as of the date of the sale of the Debentures, and as of
the date of the  conversion and exercise  thereof,  as if made on and as of such
date and shall survive the execution and delivery of this Subscription Agreement
and the purchase of the Debentures.

            (d) IN MAKING AN INVESTMENT DECISION, PURCHASERS MUST RELY ON THEIR
OWN EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE
MERITS AND RISKS INVOLVED. THE DEBENTURES HAVE NOT BEEN RECOMMENDED BY ANY

                                       19

<PAGE>   20

FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE
FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY
OF ANY MEMORANDUM OR THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A

CRIMINAL OFFENSE.

      (e) The  Regulation D Offering is intended to be exempt from  registration
under the Securities Act by virtue of Section 4(2) of the Securities Act and the
provisions  of  Regulation D  thereunder,  which is in part  dependent  upon the
truth,  completeness  and  accuracy of the  statements  made by the  undersigned
herein and in the Questionnaire.

      (f) It is understood that in order not to jeopardize the Offering's exempt
status under Section 4(2) of the Securities Act and Regulation D, any transferee
may, at a minimum, be required to fulfill the investor suitability  requirements
thereunder.

      (g) THE DEBENTURES MAY NOT BE TRANSFERRED, RESOLD OR OTHERWISE DISPOSED OF
EXCEPT AS PERMITTED  UNDER THE SECURITIES ACT AND  APPLICABLE  STATE  SECURITIES
LAWS,  PURSUANT TO REGISTRATION  OR EXEMPTION  THEREFROM.  PURCHASERS  SHOULD BE
AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL  RISKS OF THIS INVESTMENT
FOR AN INDEFINITE PERIOD OF TIME.

      (h) NASAA UNIFORM LEGEND

      IN  MAKING  AN  INVESTMENT  DECISION  INVESTORS  MUST  RELY ON  THEIR  OWN
EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE
OFFERING,  INCLUDING THE MERITS AND RISKS  INVOLVED.  THESE  SECURITIES HAVE NOT
BEEN  RECOMMENDED  BY ANY FEDERAL OR STATE  SECURITIES  COMMISSION OR REGULATORY
AUTHORITY.  FURTHERMORE,  THE  FOREGOING  AUTHORITIES  HAVE  NOT  CONFIRMED  THE
ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT.  ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.  THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY  AND  RESALE  AND MAY NOT BE  TRANSFERRED  OR  RESOLD  EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT OF 1933 AND THE APPLICABLE  STATE  SECURITIES
LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE
THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME.

                                       20

<PAGE>   21

9.    LITIGATION.

      (a) Forum  Selection and Consent to  Jurisdiction.  Any  litigation  based
thereon,  or arising out of, under, or in connection with, this agreement or any
course of conduct,  course of dealing,  statements  (whether oral or written) or
actions of the Company or Holder shall be brought and maintained  exclusively in
the  courts  of  the  State  of  Delaware.  The  Company  hereby  expressly  and
irrevocably  submits to the  jurisdiction of the state and federal courts of the
State of Delaware for the purpose of any such  litigation as set forth above and
irrevocably  agrees  to be bound  by any  final  judgment  rendered  thereby  in
connection with such litigation. The Company further irrevocably consents to the
service of process by registered mail,  postage prepaid,  or by personal service
within or without  the State of  Delaware.  The  Company  hereby  expressly  and
irrevocably  waives, to the fullest extent permitted by law, any objection which
it may have or hereafter may have to the laying of venue of any such  litigation
brought  in any  such  court  referred  to  above  and any  claim  that any such
litigation has been brought in any  inconvenient  forum.  To the extent that the
Company has or hereafter may acquire any immunity from jurisdiction of any court
or from any legal process (whether  through service or notice,  attachment prior
to judgment, attachment in aid of execution or otherwise) with respect to itself
or its property.  The Company hereby irrevocably waives such immunity in respect
of its obligations under this agreement and the other loan documents.

      (b) Waiver of Jury  Trial.  The Holder and the Company  hereby  knowingly,
voluntarily and intentionally  waive any rights they may have to a trial by jury
in respect of any  litigation  based  hereon,  or arising out of,  under,  or in
connection  with, this agreement,  or any course of conduct,  course of dealing,
statements  (whether  oral or written) or actions of the Holder or the  Company.
The Company  acknowledges  and agrees that it has received  full and  sufficient
consideration  for  this  provision  and  that  this  provision  is  a  material
inducement for the Holder entering into this agreement.

      (c)  Submission  To  Jurisdiction  . Any  legal  action or  proceeding  in
connection with this Agreement or the  performance  hereof may be brought in the
state and federal courts located in the State of Delaware and the parties hereby
irrevocably  submit to the  non-exclusive  jurisdiction  of such  courts for the
purpose of any such action or proceeding.

10.   MISCELLANEOUS.

      (a) All pronouns and any variations thereof used herein shall be deemed to
refer  to the  masculine,  feminine,  impersonal,  singular  or  plural,  as the
identity of the person or persons may require.

      (b) Neither this Subscription  Agreement nor any provision hereof shall be
waived, modified, changed, discharged, terminated, revoked or canceled,

                                       21

<PAGE>   22

except by an  instrument  in  writing  signed by the  party  effecting  the same
against whom any change, discharge or termination is sought.

      (c)  Notices  required  or  permitted  to be given  hereunder  shall be in
writing and shall be deemed to be sufficiently  given when personally  delivered
or sent by registered mail, return receipt requested,  addressed:  (i) if to the
Company,  at Swissray  International,  Inc. C/O Gary B. Wolff,  Esq.,  747 Third
Avenue, 25th Floor, New York, NY 10017(ii) if to the undersigned, at the address
for correspondence  set forth in the Questionnaire,  or at such other address as
may have  been  specified  by  written  notice  given in  accordance  with  this
paragraph 9(c).

      (d) This Subscription Agreement shall be enforced,  governed and construed
in all respects in  accordance  with the laws of the State of Delaware,  as such
laws are  applied by  Delaware  courts to  agreements  entered  into,  and to be
performed  in,  Delaware  by and between  residents  of  Delaware,  and shall be
binding  upon  the  undersigned,   the  undersigned's   heirs,   estate,   legal
representatives,  successors  and  assigns and shall inure to the benefit of the
Company,  its  successors  and assigns.  If any  provision of this  Subscription
Agreement is invalid or  unenforceable  under any  applicable  statue or rule of
law, then such provisions shall be deemed  inoperative to the extent that it may
conflict  therewith and shall be deemed modified to conform with such statute or
rule of law. Any provision hereof that may prove invalid or unenforceable  under
any law shall not affect the validity or  enforceability  of any other provision
hereof.

      (e) This Subscription  Agreement,  together with Exhibits A, B, C, D and E
attached hereto and made a part hereof,  constitute the entire agreement between
the parties  hereto with respect to the subject matter hereof and may be amended
only by a writing executed by both parties hereto. An executed facsimile copy of
the Subscription Agreement shall be effective as an original.

11.   SIGNATURE.

      The signature of this  Subscription  Agreement is contained as part of the
applicable Subscription Package, entitled "Signature Page."

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK)

                                       22

<PAGE>   23

                          SWISSRAY INTERNATIONAL, INC.

                            CORPORATION QUESTIONNAIRE
                         INVESTOR NAME: Canadian Advantage Limited Partnership

      The  information  contained in this  Questionnaire  is being  furnished in
order  to  determine  whether  the  undersigned  CORPORATION'S  Subscription  to
purchase the Debentures described in the Subscription Agreement may be accepted.

      ALL  INFORMATION   CONTAINED  IN  THIS   QUESTIONNAIRE   WILL  BE  TREATED
CONFIDENTIALLY.  The  undersigned  CORPORATION  understands,  however,  that the
Company may present this  Questionnaire to such parties as it deems  appropriate
if called upon to establish  that the proposed  offer and sale of the Debentures
is exempt  from  registration  under the  Securities  Act of 1933,  as  amended.
Further, the undersigned  CORPORATION  understands that the offering is required
to be reported to the  Securities  and Exchange  Commission and to various state
securities and "blue sky" regulators.

      IN ADDITION TO SIGNING THE SIGNATURE  PAGE,  THE  UNDERSIGNED  CORPORATION
MUST COMPLETE FORM W-9 ATTACHED HERETO.

I.    PLEASE CHECK EACH OF THE STATEMENTS BELOW THAT APPLIES TO THE
CORPORATION.

/ /         1. The undersigned CORPORATION: (a) has total assets in excess of
            $5,000,000; (b) was not formed for the specific purpose of acquiring
            the Debentures and (c) has its principal place of business in
            Toronto, Canada.

/           / 2. Each of the shareholders of the undersigned CORPORATION is able
            to certify that such shareholder meets at least one of the following
            three conditions:

                  (a)   the shareholder is a natural person whose individual net
                        worth* or joint net worth with his or her spouse exceeds
                        $1,000,000; or

                  (b)   the   shareholder   is  a  natural  person  who  had  an
                        individual income* in excess of $200,000 in each of 1995
                        and 1996 and who reasonably expects an individual income
                        in excess of $200,000 in 1997; or

                                       23

<PAGE>   24

                  (c)    Each of the shareholders of the undersigned
                        CORPORATION is able to certify that such shareholder
                        is a natural person who, together with his or her
                        spouse, has had a joint income in excess of $300,000
                        in each of 1995 and 1996 and who reasonably expects a
                        joint income in excess of $300,000 during 1997; and
                        the undersigned CORPORATION has its principal place
                        of business in ___________________.

* For purposes of this  Questionnaire,  the term "net worth" means the excess of
total assets over total liabilities.  In determining  income, an investor should
add to his or her adjusted gross income any amounts  attributable  to tax-exempt
income received, losses claimed as a limited partner in any limited partnership,
deductions claimed for depletion, contributions to IRA or Keogh retirement plan,
alimony payments and any amount by which income from long-term capital gains has
been reduced in arriving at adjusted gross income.

/ /         3. The undersigned CORPORATION is:

                  (a)   a bank as defined in Section 3(a)(2) of the
                  Securities Act; or

                  (b) a savings and loan  association  or other  institution  as
                  defined in Section  3(a)(5)(A) of the  Securities  Act whether
                  acting in its individual or fiduciary capacity; or

                  (c) a broker or dealer  registered  pursuant  to Section 15 of
                  the Securities Exchange Act of 1934; or

                  (d) an  insurance  company as defined in Section  2(13) of the
                  Securities Act; or

                  (e) An  investment  company  registered  under the  Investment
                  Company  Act of  1940 or a  business  development  company  as
                  defined in Section  2(a)(48) of the Investment  Company Act of
                  1940; or

                  (f) a small business  investment  company licensed by the U.S.
                  Small Business  Administration under Section 301 (c) or (d) of
                  the Small Business Investment Act of 1958; or

                  (g) a private  business  development  company  as  defined  in
                  Section 202(a) (22) of the Investment Advisors Act of 1940.

                                       24

<PAGE>   25

II.   OTHER CERTIFICATIONS.

      By signing the Signature Page, the undersigned certifies the following:

      (a) That the  CORPORATION'S  purchase of the Debentures will be solely for
      the  CORPORATION'S own account and not for the account of any other person
      or entity; and

      (b) that the CORPORATION'S  name,  address of principal place of business,
      place of incorporation and taxpayer  identification number as set forth in
      this Questionnaire are true, correct and complete.

III.  GENERAL INFORMATION

      (a)   PROSPECTIVE PURCHASER (THE CORPORATION)

Name: Canadian Advantage Limited Partnership

Principal Place of Business:  Toronto, Canada___________________________________
365 Bay Street, 10th Floor, Toronto Ontario M5H-2V2
--------------------------------------------------------------------------------

Address for Correspondence (if different):             SAME

                                          --------------------------------------
                                                (Number and Street)

--------------------------------------------------------------------------------
      (City)                        (State)                 (Zip Code)

Telephone Number:___________________(416) 860-8313______________________________
                        (Area Code)       (Number)

Jurisdiction of Incorporation:_______________Toronto, Canada____________________

Date of Formation:_________________________N/A__________________________________

Taxpayer Identification Number:_________________________________________________

Number of Shareholders:______________UNLIMITED__________________________________

      (b)  INDIVIDUAL  WHO IS  EXECUTING  THIS  QUESTIONNAIRE  ON  BEHALF OF THE
CORPORATION.

Name:_________________________________________Mark Valentine____________________

Position or Title:___________________________General Partner____________________

                                       25

<PAGE>   26

                          SWISSRAY INTERNATIONAL, INC.
                           CORPORATION SIGNATURE PAGE

      Your signature on this Corporation  Signature Page evidences the agreement
by  the  Purchaser  to be  bound  by  the  QUESTIONNAIRE  and  the  SUBSCRIPTION
AGREEMENT.

      1. The undersigned hereby represents that (a) the information contained in
the  Questionnaire  is complete and accurate and (b) the  Purchaser  will notify
SWISSRAY  INTERNATIONAL,  INC.  immediately if any material change in any of the
information  occurs  prior  to the  acceptance  of the  undersigned  Purchaser's
subscription and will promptly send SWISSRAY INTERNATIONAL, INC.

written confirmation of such change.

      2. The undersigned  officer of the Purchaser  hereby certifies that he has
read and understands this Subscription Agreement.

      3. The undersigned officer of the Purchaser hereby represents and warrants
that he has been  duly  authorized  by all  requisite  action on the part of the
Corporation to acquire the Debentures  and sign this  Subscription  Agreement on
behalf  of  Canadian  Advantage  Limited  Partnership  and,  further,  that Mark
Valentine has all requisite  authority to purchase the Debentures and enter into
this Subscription Agreement.

$625,000                                     March 26, 1998
-------------------------------           ------------------------------
Amount of Debentures subscribed for                                 Date
                                          Canadian Advantage Limited Partnership
                                          ------------------------------
                                                (Purchaser)

                                         By: _/s/ Mark Valentine________________
                                                (Signature)

                                         Name: ______Mark Valentine_____________
                                                (Please Type or Print)

                                         Title: _____General Partner____________
                                                (Please Type or Print)

      THE DEBENTURES HAVE NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933.
AS AMENDED (THE "ACT"),  AND MAY NOT BE OFFERED,  SOLD OR OTHERWISE  TRANSFERRED
UNLESS SUCH SECURITIES ARE INCLUDED IN AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT.

                                       26

<PAGE>   27

                             COMPANY ACCEPTANCE PAGE

This Subscription Agreement accepted
and agreed to this ____ day of March, 1998

SWISSRAY INTERNATIONAL, INC.

BY__________/s/ Ruedi G. Laupper____________________________

     Ruedi G. Laupper, its Chairman and President
     duly authorized

                                       27

<PAGE>   28

                                    EXHIBIT D

                              NOTICE OF CONVERSION

         (TO BE EXECUTED BY THE REGISTERED OWNER IN ORDER TO CONVERT
                                THE DEBENTURES)

      THE UNDERSIGNED HEREBY IRREVOCABLY  ELECTS, AS OF ______________,  199_ TO
CONVERT  $__________  OF  CONVERTIBLE  DEBENTURES  INTO COMMON STOCK OF SWISSRAY
INTERNATIONAL,  INC.(THE "COMPANY") ACCORDING TO THE CONDITIONS SET FORTH IN THE
SUBSCRIPTION AGREEMENT DATED NOVEMBER ____, 1997.

DATE OF CONVERSION_________________________________________

APPLICABLE CONVERSION PRICE_________________________________

NUMBER OF SHARES ISSUABLE UPON THIS CONVERSION______________

SIGNATURE___________________________________________________
                  [NAME]

ADDRESS_____________________________________________________

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

PHONE______________________   FAX___________________________

                                       28Name                                       Dated           Signatory
---------------------------------------    ------------    ---------------

Atlantis Capital fund, Ltd.                Mar. 26, 1998    Mark Valentine
Canadian Advantage Limited Partnership *   Mar. 26, 1998    Mark Valentine
Dominion Capital Fund Ltd.                 Mar. 26, 1998    Mark Valentine
Sovereign Partners LP.                     Mar. 26, 1998    Mark Valentine

*    This document has been filed.

<PAGE>
                                                                   Exhibit 10.23

                          REGISTRATION RIGHTS AGREEMENT

      THIS REGISTRATION  RIGHTS  AGREEMENT,  dated as of March 26 , 1998, ("this
Agreement"),  is made by and  between  SWISSRAY  INTERNATIONAL,  INC. a New York
corporation (the  "Company"),  and the person named on the signature page hereto
(the "Initial Investor").

                              W I T N E S S E T H:

      WHEREAS,  upon the terms and subject to the conditions of the Subscription
Agreement,  dated as of March 26,   1998,  between the Initial  Investor and the
Company (the "Subscription Agreement"), the Company has agreed to issue and sell
to  the  Initial  Investor  6%  Convertible   Debentures  of  the  Company  (the
"Debentures"),  which will be convertible into shares of the common stock,  $.01
par value (the "Common Stock"),  of the Company (the  "Conversion  Shares") upon
the terms and subject to the conditions of such Debentures; and

      WHEREAS,  to induce the  Initial  Investor  to  execute  and  deliver  the
Subscription  Agreement,  the Company has agreed to provide certain registration
rights  under  the  Securities  Act of  1933,  as  amended,  and the  rules  and
regulations  thereunder,  or any similar  successor statute  (collectively,  the
"Securities  Act"),  and applicable  state  securities  laws with respect to the
Conversion Shares;

      NOW, THEREFORE,  in consideration of the premises and the mutual covenants
contained  herein and other good and  valuable  consideration,  the  receipt and
sufficiency  of which are  hereby  acknowledged,  the  Company  and the  Initial
Investor hereby agrees as follows:

      I. Definitions.

      (a) As used  in  this  Agreement,  the  following  terms  shall  have  the
following meaning:

      (i) "Closing Date" means the date funds are received by the Company or its
designated attorney pursuant to the Subscription Agreement.

      (ii) "Investor"  means the Initial Investor and any transferee or assignee
who agrees to become bound by the  provisions  of this  Agreement in  accordance
with Section 9 hereof.

      (iii) "Register." "Registered." and "Registration" refer to a registration
effected by  preparing  and filing a  Registration  Statement or  Statements  in
compliance with the Securities Act and pursuant to Rule 415 under the Securities
Act or any  successor  rule  providing  for offering  securities on a continuous
basis

                                       1

<PAGE>   2

("Rule  415"),  and  the  declaration  or  ordering  of  effectiveness  of  such
Registration  Statement by the United States Securities and Exchange  Commission
(the "SEC").

      (iv) "Registrable Securities" means the Conversion Shares.

      (v) "Registration Statement" means a registration statement of the Company
under the Securities Act.

      (b) As used  in this  Agreement,  the  term  Investor  includes  (i)  each
Investor (as defined  above) and (ii) each person who is a permitted  transferee
or  assignee  of the  Registrable  Securities  pursuant  to  Section  9 of  this
Agreement.

      (c) Capitalized  terms used herein and not otherwise  defined herein shall
have the respective meanings set forth in the Subscription Agreement.

      2. REGISTRATION.

      (a)  MANDATORY  REGISTRATION.  The Company shall prepare and file with the
SEC,  no later  than  thirty  (30)  calendar  days  after the  Closing  Date,  a
Registration  Statement  covering a sufficient  number of shares of Common Stock
for the Initial Investors into which the $5,500,000 of Debentures,  plus accrued
interest,  in  the  total  offering  would  be  convertible.  In the  event  the
Registration  Statement is not filed within  thirty (30) calendar days after the
Closing  Date,  then in such event the Company  shall pay the Investor 2% of the
face amount of each Debenture for each 30 day period, or portion thereof,  after
30 days following the Closing Date that the Registration Statement is not filed.
The Investor is also granted additional  Piggy-back  registration  rights on any
other  Registration  Statement  filings made by the Company.  Such  Registration
Statement  shall state that,  in  accordance  with the  Securities  Act, it also
covers such  indeterminate  number of  additional  shares of Common Stock as may
become  issuable  to prevent  dilution  resulting  from Stock  splits,  or stock
dividends).  If at any time the number of shares of Common  Stock into which the
Debenture(s)  may be converted  exceeds the aggregate number of shares of Common
Stock then  registered,  the Company shall,  within ten (10) business days after
receipt of written notice from any Investor,  either (i) amend the  Registration
Statement  filed by the Company  pursuant  to the  preceding  sentence,  if such
Registration  Statement has not been declared effective by the SEC at that time,
to  register  all  shares of Common  Stock into  which the  Debenture(s)  may be
converted, or (ii) if such Registration Statement has been declared effective by
the SEC at that time, file with the SEC an additional  Registration Statement on
Form S-1 to register the shares of Common Stock into which the  Debenture may be
converted  that exceed the  aggregate  number of shares of Common Stock  already
registered.  The above damages shall  continue until the obligation is fulfilled
and shall be paid within 5 business  days after each 30 day  period,  or portion
thereof,  until the Registration  Statement is filed.  Failure of the Company to
make payment within said 5 business days shall be considered a default.

                                       2

<PAGE>   3

      The  Company  acknowledges  that its  failure  to file with the SEC,  said
Registration  Statement  no later than thirty  (30) days after the Closing  Date
will cause the  Initial  Investor  to suffer  damages in an amount  that will be
difficult to ascertain. Accordingly, the parties agree that it is appropriate to
include in this  Agreement  a  provision  for  liquidated  damages.  The parties
acknowledge  and agree that the liquidated  damages  provision set forth in this
section  represents  the parties' good faith effort to qualify such damages and,
as such,  agree  that  the  form  and  amount  of such  liquidated  damages  are
reasonable and will not constitute a penalty.  The payment of liquidated damages
shall not relieve the Company from its  obligations to register the Common Stock
and  deliver  the Common  Stock  pursuant  to the terms of this  Agreement,  the
Subscription Agreement and the Debenture.

      (b)  UNDERWRITTEN  OFFERING.  If any offering  pursuant to a  Registration
Statement pursuant to Section 2(a) hereof involves an underwritten offering, the
Investors acting by majority in interest of the Registrable  Securities  subject
to such  underwritten  offering shall have the right to select one legal counsel
to represent their interests, and an investment banker or bankers and manager or
managers to  administer  the  offering,  which  investment  banker or bankers or
manager  or  managers  shall be  reasonably  satisfactory  to the  Company.  The
Investors  who  hold  the   Registrable   Securities  to  be  included  in  such
underwriting shall pay all underwriting discounts and commissions and other fees
and  expenses  of such  investment  banker or bankers and manager or managers so
selected in  accordance  with this  Section  2(b) (other than fees and  expenses
relating  to  registration  of  Registrable  Securities  under  federal or state
securities  laws, which are payable by the Company pursuant to Section 5 hereof)
with respect to their  Registrable  Securities and the fees and expenses of such
legal counsel so selected by the Investors.

      (c) PAYMENT BY THE COMPANY.  If the  Registration  Statement  covering the
Registrable  Securities  required to be filed by the Company pursuant to Section
2(a) hereof is not declared  effective by June 15, 1998,  then the Company shall
pay the Initial  Investor 2% of the purchase price paid by the Initial  Investor
for the Registrable  Securities pursuant to the Subscription Agreement for every
thirty day period following June 15, 1998,  until the Registration  Statement is
declared effective.  Notwithstanding  the foregoing,  the amounts payable by the
Company  pursuant to this provision shall not be payable to the extent any delay
in the effectiveness of the Registration  Statement occurs because of an act of,
or a failure to act or to act timely by the Initial Investor or its counsel. The
above damages shall continue until the obligation is fulfilled and shall be paid
within 5 business days after each 30 day period,  or portion thereof,  until the
Registration  Statement  is declared  effective.  Failure of the Company to make
payment within said 5 business days shall be considered a default.

                                       3

<PAGE>   4

      The  Company  acknowledges  that  its  failure  to have  the  Registration
Statement  declared effective by June , 1998, will cause the Initial Investor to
suffer  damages in an amount that will be difficult to  ascertain.  Accordingly,
the  parties  agree  that it is  appropriate  to  include  in this  Agreement  a
provision for liquidated  damages.  The parties  acknowledge  and agree that the
liquidated  damages provision set forth in this section  represents the parties'
good faith effort to quantify such damages and, as such, agree that the form and
amount of such  liquidated  damages are  reasonable  and will not  constitute  a
penalty.  The payment of  liquidated  damages shall not relieve the Company from
its  obligations  to register  the Common  Stock and  deliver  the Common  Stock
pursuant to the terms of this  Agreement,  the  Subscription  Agreement  and the
Debenture.

      3. OBLIGATION OF THE COMPANY.  In connection with the  registration of the
Registrable Securities, the Company shall do each of the following:

      (a) Prepare promptly, and file with the SEC within thirty (30) days of the
Closing  Date,  an amendment to the Form S-1  Registration  Statement,  or a new
Registration Statement if required,  with respect to not less than the number of
Registrable  Securities  provided in Section 2(a), above, and thereafter use its
best  efforts to cause  each  Registration  Statement  relating  to  Registrable
Securities  to become  effective  the  earlier of (i) five  business  days after
notice  from the  Securities  and  Exchange  Commission  that  the  Registration
Statement may be declared  effective,  or (b) ninety (90) days after the Closing
Date,  and keep the  Registration  Statement  effective  at all times  until the
earliest (the "Registration Period") of (i) the date that is two years after the
Closing  Date  (ii)  the  date  when the  Investors  may  sell  all  Registrable
Securities  under Rule 144 or (iii) the date the  Investors no longer own any of
the  Registrable   Securities,   which  Registration  Statement  (including  any
amendments or supplements thereto and prospectuses  contained therein) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated  therein or necessary to make the statements  therein,  in
light of the circumstances in which they were made, not misleading;

      (b)   Prepare   and  file   with  the  SEC  such   amendments   (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus  used  in  connection  with  the  Registration  Statement  as  may be
necessary  to  keep  the   Registration   effective  at  all  times  during  the
Registration  Period,  and,  during the  Registration  Period,  comply  with the
provisions  of  the  Securities  Act  with  respect  to the  disposition  of all
Registrable  Securities  of the Company  covered by the  Registration  Statement
until such time as all of such  Registrable  Securities have been disposed of in
accordance  with the intended  methods of  disposition  by the seller or sellers
thereof as set forth in the Registration Statement;

      (c) Furnish to each Investor whose Registrable  Securities are included in
the Registration  Statement and its legal counsel identified to the Company, (i)
promptly  after the same is prepared  and publicly  distributed,  filed with the
SEC,

                                       4

<PAGE>   5

or received by the Company,  one (1) copy of the  Registration  Statement,  each
preliminary prospectus and prospectus, and each amendment or supplement thereto,
and (ii)  such  number  of  copies  of a  prospectus,  including  a  preliminary
prospectus, and all amendments and supplements thereto and such other documents,
as such Investor may reasonably  request in order to facilitate the  disposition
of the Registrable Securities owned by such Investor;

      (d) Use  reasonable  efforts to (i) register  and qualify the  Registrable
Securities covered by the Registration  Statement under such other securities or
blue sky laws of such  jurisdictions  as the  Investors  who hold a majority  in
interest of the Registrable  Securities being offered  reasonably request and in
which significant volumes of shares of Common Stock are traded, (ii) prepare and
file  in  those   jurisdictions   such  amendments   (including   post-effective
amendments) and supplements to such  registrations and  qualifications as may be
necessary  to  maintain  the  effectiveness  thereof  at all  times  during  the
Registration  Period,  (iii) take such  other  actions  as may be  necessary  to
maintain such  registrations and qualification in effect at all times during the
Registration  Period,  and (iv) take all other actions  reasonably  necessary or
advisable to qualify the Registrable  Securities for sale in such jurisdictions:
provided,  however,  that  the  Company  shall  not be  required  in  connection
therewith  or as a  condition  thereto  to (A)  qualify  to do  business  in any
jurisdiction  where it would not  otherwise  be required to qualify but for this
Section 3(d), (B) subject itself to general  taxation in any such  jurisdiction,
(C) file a general consent to service of process in any such  jurisdiction,  (D)
provide any  undertakings  that cause more than nominal expense or burden to the
Company or (E) make any change in its  articles of  incorporation  or by-laws or
any then  existing  contracts,  which in each case the Board of Directors of the
Company  determines to be contrary to the best  interests of the Company and its
stockholders;

      (e) As promptly as practicable after becoming aware of such event,  notify
each Investor of the happening of any event of which the Company has  knowledge,
as a result of which the prospectus included in the Registration  Statement,  as
then in effect,  includes any untrue  statement  of a material  fact or omits to
state a material  fact  required to be stated  therein or  necessary to make the
statements  therein,  in light of the circumstances  under which they were made,
not  misleading,  and uses its best efforts  promptly to prepare a supplement or
amendment to the Registration Statement or other appropriate filing with the SEC
to correct such untrue statement or omission,  and deliver a number of copies of
such  supplement or amendment to each  Investor as such Investor may  reasonably
request;

      (f) As promptly as practicable after becoming aware of such event,  notify
each Investor who holds  Registrable  Securities being sold (or, in the event of
an underwritten  offering, the managing underwriters) of the issuance by the SEC
of any  notice of  effectiveness  or any stop order or other  suspension  of the
effectiveness of the Registration Statement at the earliest possible time;

                                       5

<PAGE>   6

      (g) Use its commercially  reasonable efforts,  if eligible,  either to (i)
cause all the Registrable Securities covered by the Registration Statement to be
listed  on a  national  securities  exchange  and on  each  additional  national
securities  exchange on which  securities  of the same class or series issued by
the  Company  are  then  listed,  if any,  if the  listing  of such  Registrable
Securities is then permitted  under the rules of such  exchange,  or (ii) secure
designation  of all  the  Registrable  Securities  covered  by the  Registration
Statement as a National  Association of Securities Dealers Automated  Quotations
System ("NASDAQ") "Small  Capitalization"  within the meaning of Rule 11Aa2-1 of
the SEC under the  Securities  Exchange Act of 1934,  as amended (the  "Exchange
Act"),  and the quotation of the Registrable  Securities on the NASDAQ Small Cap
Market; or if, despite the Company's commercially  reasonable efforts to satisfy
the preceding  clause (i) or (ii), the Company is  unsuccessful  in doing so, to
secure NASD  authorization and quotation for such Registrable  Securities on the
over-the-counter  bulletin  board and,  without  limiting the  generality of the
foregoing,  to  arrange  for at least two  market  makers to  register  with the
National  Association of Securities Dealers,  Inc. ("NASD") as such with respect
to such registrable securities;

      (h) Provide a transfer agent for the Registrable Securities not later than
the effective date of the Registration Statement;

      (i) Cooperate  with the Investors who hold  Registrable  Securities  being
offered to facilitate the timely  preparation and delivery of  certificates  for
the Registrable  Securities to be offered pursuant to the Registration Statement
and  enable  such  certificates  for the  Registrable  Securities  to be in such
denominations  or amounts as the case may be, as the  Investors  may  reasonably
request and registration in such names as the Investors may request; and, within
five (5) business days after a Registration Statement which includes Registrable
Securities is ordered effective by the SEC, the Company shall deliver, and shall
cause legal counsel  selected by the Company to deliver,  to the transfer  agent
for the Registrable  Securities (with copies to the Investors whose  Registrable
Securities  are  included  in  such  Registration   /statement)  an  appropriate
instruction and opinion of such counsel; and

      (j) Take all other reasonable actions necessary to expedite and facilitate
distribution  to the  Investor  of the  Registrable  Securities  pursuant to the
Registration Statement.

      4.  OBLIGATIONS OF THE INVESTORS.  In connection with the  registration of
the Registrable Securities, the Investors shall have the following obligations;

      (a) It shall be a condition precedent to the obligations of the Company to
complete  the  registration  pursuant  to this  Agreement  with  respect  to the
Registrable Securities of a particular Investor that such Investor shall timely

                                       6

<PAGE>   7

furnish to the  Company  such  information  regarding  itself,  the  Registrable
Securities held by it, and the intended method of disposition of the Registrable
Securities  held  by  it,  as  shall  be  reasonably   required  to  effect  the
registration  of such  Registrable  Securities  and shall  timely  execute  such
documents in connection  with such  registration  as the Company may  reasonably
request.  At least five (5) days prior to the first  anticipated  filing date of
the  Registration  Statement,  the Company  shall  notify  each  Investor of the
information  the  Company  requires  from each  such  Investor  (the  "Requested
Information") if such Investor elects to have any of such Investor's Registrable
Securities included in the Registration  Statement. If at least two (2) business
days  prior to the  filing  date the  Company  has not  received  the  Requested
Information from an Investor (a "Non-Responsive Investor"), then the Company may
file the Registration Statement without including Registrable Securities of such
Non-Responsive Investor;

      (b)  Each  Investor  by  such  Investor's  acceptance  of the  Registrable
Securities  agrees to cooperate with the Company as reasonably  requested by the
Company  in  connection  with the  preparation  and  filing of the  Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such  Investor's  election  to  exclude  all  of  such  Investor's   Registrable
Securities from the Registration Statement; and

      (c) Each Investor agrees that, upon receipt of any notice from the Company
of the  happening  of any event of the kind  described  in Section 3(e) or 3(f),
above,  such Investor will  immediately  discontinue  disposition of Registrable
Securities  pursuant to the  Registration  Statement  covering such  Registrable
Securities  until such Investor's  receipt of the copies of the  supplemented or
amended  prospectus  contemplated by Section 3(e) or 3(f) and, if so directed by
the Company,  such investor  shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a  certificate  of  destruction)
all  copies in such  Investor's  possession,  of the  prospectus  covering  such
Registrable Securities current at the time of receipt of such notice.

      5.  EXPENSES  OF  REGISTRATION.   All  reasonable  expenses,   other  than
underwriting   discounts   and   commissions   incurred   in   connection   with
registrations,  filing or  qualifications  pursuant to Section 3, but including,
without  limitations,  all  registration,   listing,  and  qualifications  fees,
printers and  accounting  fees,  the fees and  disbursements  of counsel for the
Company, shall be borne by the Company.

      6. INDEMNIFICATION.  In the event any Registrable  Securities are included
in a Registration Statement under this Agreement:

      (a) To the extent  permitted by law, the Company will  indemnify  and hold
harmless each Investor who holds such Registrable Securities,  the directors, if
any, of such Investor, the officers, if any, of such Investor, each

                                       7

<PAGE>   8

person,  if any, who controls any Investor  within the meaning of the Securities
Act or the Exchange Act (each,  an  "Indemnified  Person"),  against any losses,
claims,   damages,   liabilities  or  expenses   (joint  or  several)   incurred
(collectively,  "Claims")  to which  any of them may  become  subject  under the
Securities  Act,  the  Exchange  Act or  otherwise,  insofar as such  Claims (or
actions or proceedings,  whether  commenced or threatened,  in respect  thereof)
arise out of or are based upon any of the  following  statements,  omissions  or
violations  of  the  Registration  Statement  or  any  post-effective  amendment
thereof, or any prospectus included therein: (i) any untrue statement or alleged
untrue statement of a material fact contained in the  Registration  Statement or
any post-effective amendment thereof or any prospectus included therein: (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration  Statement or any post-effective  amendment thereof or the omission
or alleged  omission  to state  therein a material  fact  required  to be stated
therein or necessary to make the  statements  therein not  misleading,  (ii) any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary  prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented,  if
the Company files any amendment  thereof or supplement  thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein,  in light of the circumstances under which the
statements  therein were made,  not misleading or (iii) any violation or alleged
violation by the Company of the  Securities  Act,  the  Exchange  Act, any state
securities law or any rule or regulation  under the Securities Act, the Exchange
Act or any state  securities  law (the  matters  in the  foregoing  clauses  (i)
through (iii) being,  collectively,  "Violations").  The Company shall reimburse
the  Investors,  promptly as such expenses are incurred and are due and payable,
for any reasonable legal fees or other reasonable  expenses  incurred by them in
connection  with  investigating  or  defending  any such Claim.  Notwithstanding
anything  to  the  contrary  contained  herein,  the  indemnification  agreement
contained in this Section 6(a) shall not (i) apply to a Claim  arising out of or
based upon a Violation  which  occurs in reliance  upon and in  conformity  with
information  furnished  in  writing  to  the  Company  by or on  behalf  of  any
Indemnified  Person  expressly for use in connection with the preparation of the
Registration  Statement or any such amendment thereof or supplement  thereto, if
such  prospectus  was timely made  available by the Company  pursuant to Section
3(b)  hereof;  (ii) with  respect to any  preliminary  prospectus,  inure to the
benefit  of any such  person  from  whom the  person  asserting  any such  Claim
purchased the  Registrable  Securities  that are the subject  thereof (or to the
benefit of any person  controlling  such  person)  if the  untrue  statement  or
omission of material fact contained in the preliminary  prospectus was corrected
in the  prospectus,  as then amended or  supplemented,  if such  prospectus  was
timely made available by the Company  pursuant to Section 3(b) hereof;  (iii) be
available  to the extent  such Claim is based on a failure  of the  Investor  to
deliver or cause to be delivered the  prospectus  made available by the Company;
or (iv) apply to amounts paid in settlement  of any Claim if such  settlement is
effected without the prior written consent of the

                                       8

<PAGE>   9

Company,  which consent shall not be unreasonably  withheld.  Each Investor will
indemnify the Company,  its officers,  directors and agents (including  Counsel)
against  any claims  arising out of or based upon a  Violation  which  occurs in
reliance upon and in  conformity  with  information  furnished in writing to the
Company, by or on behalf of such Investor,  expressly for use in connection with
the preparation of the Registration  Statement,  subject to such limitations and
conditions as are applicable to the  Indemnification  provided by the Company to
this Section 6. Such indemnity shall remain in full force and effect  regardless
of any  investigation  made by or on behalf of the Indemnified  Person and shall
survive the transfer of the Registrable  Securities by the Investors pursuant to
Section 9.

      (b) Promptly after receipt by an Indemnified  Person or Indemnified  Party
under this Section 6 of notice of the commencement of any action  (including any
governmental  action),  such Indemnified Person or Indemnified Party shall, if a
Claim in respect thereof is to be made against any indemnifying party under this
Section  6,  deliver  to  the  indemnifying   party  a  written  notice  of  the
commencement  thereof  and the  indemnifying  party  shall  have  the  right  to
participate in, and, to the extent the  indemnifying  party so desires,  jointly
with any other indemnifying  party similarly  noticed,  to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified  Person or the Indemnified  Party, as the case may be; provided,
however, that an Indemnified Person or Indemnified Party shall have the right to
retain its own counsel with the  reasonable  fees and expenses to be paid by the
indemnifying  party,  if, in the reasonable  opinion of counsel  retained by the
indemnifying party, the representation by such counsel of the Indemnified Person
or Indemnified  Party and the indemnifying  party would be inappropriate  due to
actual or  potential  differing  interests  between such  Indemnified  Person or
Indemnified  Party and any  other  party  represented  by such  counsel  in such
proceeding.  In such event,  the Company  shall pay for only one separate  legal
counsel for the Investors; such legal counsel shall be selected by the Investors
holding a majority  in interest of the  Registrable  Securities  included in the
Registration  Statement  to which the Claim  relates.  The  failure  to  deliver
written  notice  to the  indemnifying  party  within  a  reasonable  time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified  Person or Indemnified  Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action. The indemnification required by this Section 6 shall be made
by  periodic   payments  of  the  amount   thereof  during  the  course  of  the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.

      7.  CONTRIBUTION.  To the extent any  indemnification  by an  indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would

                                       9

<PAGE>   10

otherwise  be liable  under  Section 6 to the fullest  extent  permitted by law;
provided,  however,  that (a) no contribution shall be made under  circumstances
where the maker would not have been liable for  indemnification  under the fault
standards set forth in Section 6; (b) no seller of Registrable Securities guilty
or  fraudulent  misrepresentation  (within the  meaning of Section  11(f) of the
Securities Act) shall be entitled to contribution from any seller of Registrable
Securities  who was not  guilty of such  fraudulent  misrepresentation;  and (c)
contribution by any seller of Registrable  Securities shall be limited in amount
to the net amount of  proceeds  received  by such  seller  from the sale of such
Registrable Securities.

      8. REPORTS  UNDER  EXCHANGE  ACT.  With a view to making  available to the
Investors the benefits of Rule 144  promulgated  under the Securities Act or any
other  similar  rule or  regulation  of the SEC that may at any time  permit the
Investors to sell  securities of the Company to the public without  registration
("Rule 144"), the Company agrees to use its reasonable best efforts to:

      (a)  make and keep  public  information  available,  as  those  terms  are
understood and defined in Rule 144;

      (b) file with the SEC in a timely  manner all reports and other  documents
required of the Company under the Securities Act and the Exchange Act; and

      (c) furnish to each  Investor so long as such  Investor  owns  Registrable
Securities,  promptly upon request,  (i) a written statement by the Company that
it has complied with the reporting  requirements of Rule 144, the Securities Act
and the Exchange Act, (ii) a copy of the most recent annual or quarterly  report
of the Company and such other  reports and documents so filed by the Company and
(iii)  such  other  information  as may be  reasonably  requested  to permit the
Investors to sell such securities pursuant to Rule 144 without registration.

      9. ASSIGNMENT OF THE REGISTRATION  RIGHTS.  The rights to have the Company
register   Registrable   Securities   pursuant  to  this   Agreement   shall  be
automatically  assigned by the Investors to any transferee of in excess of fifty
(50%) percent or more of the  Registrable  Securities  (or all or any portion of
any Debenture of the Company which is convertible into such securities) only if:
(a) the  Investor  agrees in writing with the  transferee  or assignee to assign
such rights,  and a copy of such  agreement is furnished to the Company within a
reasonable time after such  assignment,  (b) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (i) the
name and address of such  transferee  or assignee and (ii) the  securities  with
respect to which such registration rights are being transferred or assigned, (c)
immediately  following  such transfer or assignment  the further  disposition of
such securities by the transferee or assignee is restricted under the Securities
Act and  applicable  state  securities  laws,  and (d) at or before the time the
Company

                                       10

<PAGE>   11

received  the written  notice  contemplated  by clause (b) of this  sentence the
transferee or assignee  agrees in writing with the Company to be bound by all of
the  provisions  contained  herein.  In the  event  of any  delay in  filing  or
effectiveness of the Registration Statement as a result of such assignment,  the
Company  shall not be liable for any damages  arising  from such  delay,  or the
payments set forth in Section 2(c) hereof.

      10. AMENDMENT OF REGISTRATION  RIGHTS. Any provision of this Agreement may
be amended and the observance  thereof may be waived  (either  generally or in a
particular  instance and either  retroactively or prospectively),  only with the
written  consent of the Company and investors who hold a majority in interest of
the Registrable Securities.  Any amendment or waiver effected in accordance with
this Section 10 shall be binding upon each Investor and the Company.

      11. MISCELLANEOUS.

      (a) A person or entity is deemed to be a holder of Registrable  Securities
whenever such person or entity owns of record such  Registrable  Securities.  If
the Company received conflicting instructions,  notices or elections from two or
more persons or entities with respect to the same  Registrable  Securities,  the
Company shall act upon the basis of  instructions,  notice or election  received
from the registered owner of such Registrable Securities.

      (b)  Notices  required  or  permitted  to be given  hereunder  shall be in
writing and shall be deemed to be sufficiently  given when personally  delivered
(by  hand,  by  courier,  by  telephone  line  facsimile  transmission,  receipt
confirmed,  or other means) or sent by certified mail, return receipt requested,
properly  addressed and with proper postage pre-paid (i) if to the Company,  C/O
Gary B. Wolff,  Esq., 747 Third Avenue,  25th Floor, New York, NY 10017; (ii) if
to the  Initial  Investor,  at the  address  set  forth  under  its  name in the
Subscription  Agreement,  with a copy to its designated attorney and (iii) if to
any other  Investor,  at such address as such  Investor  shall have  provided in
writing to the Company, or at such other address as each such party furnishes by
notice given in accordance with this Section 11(b), and shall be effective, when
personally delivered, upon receipt and, when so sent by certified mail, four (4)
business days after deposit with the United States Postal Service.

      (c)  Failure  of any party to  exercise  any right or  remedy  under  this
Agreement or otherwise,  or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

      (d) This Agreement shall be governed by the interpreted in accordance with
the  laws  of the  State  of  Delaware.  Each  of the  parties  consents  to the
jurisdiction  of the  state and  federal  courts  of the  State of  Delaware  in
connection

                                       11

<PAGE>   12

with any dispute arising under this Agreement and hereby waives,  to the maximum
extent  permitted by law, any objection,  including any objection based on forum
non coveniens,  to the bringing of any such proceeding in such jurisdictions.  A
facsimile  transmission  of this signed  Agreement shall be legal and binding on
all parties  hereto.  This Agreement may be signed in one or more  counterparts,
each of which shall be deemed an original.  The headings of this  Agreement  are
for  convenience  of  reference  and  shall  not form  part of,  or  affect  the
interpretation  of, this Agreement.  If any provision of this Agreement shall be
invalid   or   unenforceable   in   any   jurisdiction,   such   invalidity   or
unenforceability  shall  not  effect  the  validity  or  enforceability  of  the
remainder of this Agreement or the validity or  enforceability of this Agreement
in any other  jurisdiction.  This Agreement may be amended only by an instrument
in writing  signed by the party to be charged with  enforcement.  This Agreement
supersedes all prior agreements and understandings among the parties hereto with
respect to the subject matter hereof.

      (e) This  Agreement  constitutes  the entire  agreement  among the parties
hereto with respect to the subject  matter  hereof.  There are no  restrictions,
promises, warranties or undertakings,  other than those set forth or referred to
herein. This Agreement  supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof.

      (f) Subject to the requirements of Section 9 hereof,  this Agreement shall
inure to the benefit of and be binding upon the  successors  and assigns of each
of the parties hereto.

      (g) All  pronouns  and any  variations  thereof  refer  to the  masculine,
feminine or neuter, singular or plural, as the context may require.

      (h) The headings in this  Agreement are for  convenience of reference only
and shall not limit or otherwise affect the meaning thereof.

      (i) This  Agreement may be executed in two or more  counterparts,  each of
which shall be deemed an original but all of which shall  constitute one and the
same agreement.  This Agreement,  once executed by a party,  may be delivered to
the other party hereto by telephone  line  facsimile  transmission  of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.

                  (REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)

                                       12

<PAGE>   13

      IN WITNESS  WHEREOF,  the parties  have caused this  Agreement  to be duly
executed by their  respective  officers  thereunto duly authorized as of the day
and year first above written.

                      SWISSRAY INTERNATIONAL, INC.

                  By: ___/s/ Ruedi G. Laupper_________________________________
                  Name: Ruedi G. Laupper
                  Title: Chairman and President
                    Canadian Advantage Limited Partnership
                  ---------------------------------------
                  (Name of Initial Investor)

                  By: _/s/ Mark Valentine____________________________
                  Name:  Mark Valentine

                  Title: General Partner

                                       13

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