Document:

<TABLE>
<CAPTION>
Name                                       Dated           Amount         Maturity Date     Deb. No.
---------------------------------------    ------------    ----------     ---------------   ---------------
<S>                                        <C>             <C>            <C>               <C>
Dominion Capital Fund Ltd.*                May. 31, 1999   $   566,100    May 31,2001       LN-1999-102
Sovereign Partners LP.                     May. 31, 1999   $   566,100    May 31,2001       LN-1999-101
</TABLE>

*    This document has been filed.
<PAGE>
                                FORM OF DEBENTURE

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 BEEN 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.

CONVERTIBLE DEBENTURE DUE                                 May. 31, 1999
                                                          May. 31, 2001
$566,100
Number            LN-1999-102

          FOR  VALUE  RECEIVED,   SWISSRAY  INTERNATIONAL,   INC.,  a  New  York
          corporation (the  "Company"),  hereby promises to pay Dominion Capital
          Fund Ltd. or registered  assigns (the "Holder") on May 31_, 2001, (the
          ?Maturity  Date?),  the  principal  amount of Five  Hundred  Sixty-six
          Thousand One Hundred Dollars  ($566,100 ) U.S., and to pay interest on
          the principal  amount  hereof,  in such amounts,  at such times and on
          such terms and conditions as are specified herein.  The purchase price
          for this  Debenture  shall be  deemed to have  been  delivered  to the
          Company upon  non-payment of the full amount of principal and interest
          due on the Promissory Note dated March 3, 1999 between the Company and
          the Holder.  The fully  executed  Contingent  Subscription  Agreement,
          Registration  Rights Agreement and this Debenture shall be held by the
          escrow   agent  and  shall  only  be  delivered  to  the  Holder  upon
          non-payment  of the full amount of  principal  and interest due on the
          Promissory  Note on its ?Due Date?.  The ?Due Date? of the  Promissory
          Note shall mean the later of May 31, 1999,  or July 30,  1999,  if the
          Company exercises its option to extend the May 31, 1999 due date.

Article 1. Interest

         The Company shall pay interest on the unpaid  principal  amount of this
Debenture (the ?Debenture?) at the rate of Five Percent (5.0%) per year, payable
at the time of each conversion until the principal amount hereof is paid in full
or has been converted. Interest shall be computed on the basis of a 360 day year
of 12, 30 day months.  Each payment  shall be paid in cash or in freely  trading
Common Stock of the Company,  at the Company?s  option. 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 interest by the then  applicable
Market Price as of the interest payment date.  ?Market Price?  shall mean 80% of
the average of the 10 day closing bid prices,  as 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 Holder, or
per Holder?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 3.2. The closing shall be
deemed to have occurred on the Due Date as that term is defined above.

Article 2. Method of Payment

         This  Debenture  must be  surrendered  to the  Company in order for the
 Holder to receive  payment of the principal  amount  hereof.  The Company shall
 have the option of paying  the  interest  on this  Debenture  in United  States
 dollars or in common stock upon  conversion  pursuant to Article 1 hereof.  The
 Company may draw a check for the payment of interest to the order of the Holder
 of this Debenture and mail it to the Holder?s  address as shown on the Register
 (as defined in Section 7.2 below).  Interest and  principal  payments  shall be
 subject to withholding under applicable United States
Federal Internal Revenue Service Regulations.

Article 3.  Conversion

         Section 3.1.  Conversion Privilege

         (a)  The Holder of this Debenture shall have the right, at its option,
to convert it into shares of common stock, par value $0.01 per share, of the
Company (?Common Stock?) at any time following the Due Date and  which is before
the close of business on the Maturity Date, except as set

forth in Section 3.1(c) below.  The number of shares of Common Stock issuable
upon the conversion of this Debenture is determined pursuant to Section 3.2 and
rounding the result to the nearest whole share.

         (b) Less  than all of the  principal  amount of this  Debenture  may be
converted  into  Common  Stock if the  portion  converted  is  $5,000 or a whole
multiple  of $5,000  and the  provisions  of this  Article  3 that  apply to the
conversion  of all of the  Debenture  shall  also apply to the  conversion  of a
portion of it. This Debenture may not be converted, whether in whole or in part,
except in accordance with Article 3.

         (c)  In the event all or any portion of this Debenture remains
outstanding on the second anniversary of the date hereof, the unconverted
portion of such Debenture will automatically be converted into shares of Common
Stock on such date in the manner set forth in Section 3.2.

         Section 3.2.  Conversion Procedure.

         (a) Debentures.  Upon receipt by the Company or its designated attorney
 of a facsimile  or original of Holder?s  signed  Notice of  Conversion  and the
 receipt of the  original  Debenture  to be converted in whole or in part in the
 manner set forth in 3.2(b) below, 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 A 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 this  Debenture may be
converted  anytime  following the Due Date. Such conversion shall be effectuated
by surrendering to the Company, or its attorney,  this Debenture to be converted
together with a facsimile or original of the signed  Notice of Conversion  which
evidences  Holder?s  intention to convert the Debenture  indicated.  The date on
which the Notice of Conversion is effective  (?Conversion Date?) shall be deemed
to be the  date  on  which  the  Holder  has  delivered  to the  Company  or its
designated  attorney a facsimile or original of the signed Notice of Conversion,
as long as the original Debenture(s) 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  Company?s  designated
attorney is Gary B. Wolff,  Esq.,  747 Third Avenue,  25th Floor,  New York, New
York 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  attorney of a facsimile  or original of
Holder?s  signed Notice of Conversion  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  covering such shares
has been deemed effective (or with proper restrictive legend if the Registration
Statement has not as yet been declared effective), in the name of Holder (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.  Holder is entitled,  at its option to convert
the face amount of this Debenture, plus accrued interest,  anytime following the
Due Date,  at 80% of the 10 day  average  closing  bid  price,  as  reported  by
Bloomberg LP, for the ten (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 Due Date, but prior
to the Holder?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  Debenture,  then in such event,  the Holder at its sole
option shall be entitled to completely  replace the terms of this Debenture with
the terms of the more beneficial Debenture as to that balance, including accrued
interest and any accumulated liquidated damages,  remaining on Holder?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  Debenture  shall be deemed to
establish  or require  the payment of interest to the Holder 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 Holder to the Company.

                  (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
Holder a new  Debenture  equal to the  unconverted  amount,  if so  requested in
writing by Holder.

                  (g)  Within  five  (5)  business  days  after  receipt  of the
documentation  referred to above in Section 3.2(b),  the Company shall deliver a
certificate,  in accordance with Section 3(c) 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 Holder a new Debenture  equal
to the unconverted amount, if so requested in writing by Holder.
         In the event the Company does not make delivery of the Common Stock, as
instructed  by Holder,  within 8 business  days after  delivery of this original
Debenture, then in such event the Company shall pay to Holder 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.
                                     Late Payment for Each $10,000 of Debenture
No. Business Days Late                           Amount Being Converted
----------------------                           ----------------------
         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

         The Company  acknowledges  that its failure to deliver the Common Stock
within 8 business days after the Conversion Date will cause the Holder to suffer
damages in an amount  that will be  difficult  to  ascertain.  Accordingly,  the
parties agree that it is  appropriate  to include in this  Debenture 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 Debenture.

         To the extent that the failure of the Company to issue the Common Stock
pursuant to this Section 3.2(g) is due to the unavailability of authorized but
unissued shares of Common Stock, the provisions of this Section 3.2(g) shall not
apply but instead the provisions of Section 3.2(h) shall
apply.
         The Company shall make any payments incurred under this Section 3.2(g)
in immediately available funds within five (5) business days from the Conversion
Date if late.  Nothing herein shall limit a Holder?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 Holders
of the entire  amount of  Debentures  then  outstanding.  If, at any time Holder
submits  a Notice  of  Conversion  and the  Company  does  not  have  sufficient
authorized but unissued shares of Common Stock (or alternative  shares of Common
Stock as may be contributed  by  Stockholders)  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 Holder 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 Holder?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 Holders 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 Holder 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  Holders 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 Holder 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  Holder  of  outstanding   Debentures  that
additional shares of Common Stock have been authorized,  the Authorization  Date
and the amount of Holder?s  accrued  Conversion  Default  Payments.  The accrued
Conversion  Default  shall be paid in cash or shall be  convertible  into Common
Stock at the Conversion Rate, at the Holder?s option, payable as follows: (i) in
the event Holder  elects to take such payment in cash,  cash  payments  shall be
made to such Holder of outstanding  Debentures by the fifth day of the following
calendar  month,  or (ii) in the event  Holder  elects to take such  payment  in
stock,  the Holder 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  Holder 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 Debenture.

         Nothing herein shall limit the Holder?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 Holder 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.

         (j) The  Holder  is  limited  in the  amount of this  Debenture  it may
convert and own. In no event except (i) with respect to a conversion pursuant to
redemption by the Company or (ii) if there is (a) a public announcement that 50%
or more of the Company is being  acquired,  (b) a public  announcement  that the
Company  is being  merged,  or (c) a change  in  control,  shall  the  Holder be
entitled to convert any  Debentures to the extent that,  after such  conversion,
the sum of (1) the number of shares of Common  Stock  beneficially  owned by the
Holder 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  or any of the Company?s  Warrants),  and (2) the number of shares of
Common Stock issuable upon the conversion of the Debentures,  or exercise of any
of the  Company?s  Warrants,  with  respect to which the  determination  of this
proviso is being made,  would result in  beneficial  ownership by the Holder and
its  affiliates  of more than 4.99% of the  outstanding  shares of Common  Stock
(after  taking  into  account  the shares to be issued to the  Holder  upon such
conversion).  For purposes of the proviso to the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities  Exchange  Act of 1934,  as  amended  (the  ?1934  Act?),  except  as
otherwise provided in clause (1) of such proviso. The Holder further agrees that
if the Holder transfers or assigns any of the Debentures to a party who or which
would not be considered such an affiliate, such assignment shall be made subject
to  the  transferee?s  or  assignee?s  specific  agreement  to be  bound  by the
provisions of this Section as if such transferee or assignee were a signatory to
the  Subscription  Agreement.  Furthermore,  the  Company  shall not permit such
conversions  that would violate the  provisions of this Section  3.2(j),  unless
amended in writing upon mutual consent of the parties.

                           (k) Redemption.  Company reserves the right, at its
sole option, to call a mandatory redemption of any percentage of the balance on
the Debentures during the two year period following the Due Date.  In the event
the Company exercises such right of redemption up to and including the last day
of the fourth (4th) month following the Due Date it shall pay the Holder, in
U.S.  currency One Hundred Fifteen (115%) of the face amount of the  Debentures
to be  redeemed,  plus  accrued  interest.  In the event the Company  exercises
such right of redemption at anytime during the fifth (5th) or sixth (6th) months
following  the Due Date it shall pay the  Holder,  in U.S. currency One Hundred
Twenty  (120%) of the face amount of the  Debentures to be redeemed,  plus
accrued interest.  In the event the Company exercises such right of redemption
at anytime after the last day of the sixth (6th) month  following the Due Date
it shall pay the Holder, in U.S.  currency One Hundred  Twenty-five (125%)  of
the face  amount  of the  Debentures  to be  redeemed,  plus  accrued interest.
The date by which the Debentures must be delivered to the Escrow Agent shall not
be later than 5 business days following the date the Company  notifies the
Holder by facsimile of the redemption.  The Company shall give the Holder at
least 5 business day?s notice of its intent to redeem.

         Section 3.3.  Fractional Shares.  The Company shall not issue
fractional shares of Common Stock, or scrip representing fractions of such
shares, upon the conversion of this Debenture.  Instead, the Company shall round
up or down, as the case may be, to the nearest whole share.

         Section 3.4.  Taxes on Conversion.  The Company shall pay any
documentary, stamp or similar issue or transfer tax due on the issue of shares
of Common Stock upon the conversion of this Debenture.  However, the Holder
shall pay any such tax which is due because the shares are issued in a name
other than its name.

         Section 3.5.  Company to Reserve Stock.  The Company shall reserve the
 number of shares of Common Stock required pursuant to and upon the terms set
forth in this Debenture.  All shares of Common Stock which may be issued upon
the conversion hereof shall upon issuance be validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issuance thereof.

         Section 3.6.  Restrictions on Transfer.  This Debenture has not been
registered under the Securities Act of 1933, as amended, (the ?Act?) and is
being issued under Section 4(2) of the Act and Rule 506 of Regulation D
promulgated under the Act.  This Debenture and the Common Stock issuable
upon the conversion thereof may only be offered or sold pursuant to registration
under or an exemption from the Act.

         Section 3.7.  Mergers,  Etc. If the Company merges or consolidates with
another corporation or sells or transfers all or substantially all of its assets
to another  person and the holders of the Common  Stock are  entitled to receive
stock,  securities  or property in respect of or in exchange  for Common  Stock,
then as a condition of such merger, consolidation, sale or transfer, the Company
and any such  successor,  purchaser or transferee  shall amend this Debenture to
provide  that it may  thereafter  be  converted  on the terms and subject to the
conditions  set forth  above  into the kind and amount of stock,  securities  or
property  receivable  upon such  merger,  consolidation,  sale or  transfer by a
holder of the number of shares of Common Stock into which this  Debenture  might
have been  converted  immediately  before such  merger,  consolidation,  sale or
transfer,  subject to adjustments  which shall be as nearly equivalent as may be
practicable to adjustments provided for in this Article 3.

Article 4.  Mergers

         The Company shall not consolidate or merge into, or transfer all or
substantially all of its assets to, any person, unless such person assumes in
writing the obligations of the Company under this Debenture and immediately
after such transaction no Event of Default exists.  Any reference herein to the
Company shall refer to such surviving or transferee corporation and the
obligations of the Company shall terminate upon such written assumption.

Article 5.  Reports

         The Company  will mail to the Holder  hereof at its address as shown on
the  Register a copy of any annual,  quarterly  or current  report that it files
with the  Securities and Exchange  Commission  promptly after the filing thereof
and a copy of any annual,  quarterly or other report or proxy  statement that it
gives to its shareholders generally at the time such report or statement is sent
to shareholders.

Article 6.  Defaults and Remedies

         Section 6.1. Events of Default. An ?Event of Default? occurs if (a) the
Company fails to comply with any of its  agreements  in this  Debenture and such
failure  continues for the period and after the notice  specified below, (b) the
Company  pursuant to or within the meaning of any Bankruptcy Law (as hereinafter
defined): (i) commences a voluntary case; (ii) consents to the entry of an order
for relief against it in an involuntary  case; (iii) consents to the appointment
of a Custodian (as hereinafter defined) of it or for all or substantially all of
its property or (iv) makes a general assignment for the benefit of its creditors
or (v) a court of  competent  jurisdiction  enters an order or decree  under any
Bankruptcy  Law that:  (A) is for relief  against the Company in an  involuntary
case; (B) appoints a Custodian of the Company or for all or substantially all of
its  property or (C) orders the  liquidation  of the  Company,  and the order or
decree remains  unstayed and in effect for 60 days. As used in this Section 6.1,
the term  ?Bankruptcy  Law?  means  Title 11 of the  United  States  Code or any
similar  federal or state law for the relief of  debtors.  The term  ?Custodian?
means any receiver, trustee, assignee,  liquidator or similar official under any
Bankruptcy  Law.  A default  under  clause  (c) above is not an Event of Default
until the  holders  of at least  25% of the  aggregate  principal  amount of the
Debentures  outstanding  notify the Company of such default and the Company does
not cure it within  five (5)  business  days after the  receipt of such  notice,
which must specify the default,  demand that it be remedied and state that it is
a ?Notice of Default?.

         Section 6.2.  Acceleration.  If an Event of Default occurs and is
continuing, the Holder hereof by notice to the Company, may declare the
remaining principal amount of this Debenture to be due and payable.  Upon such
declaration, the remaining principal amount shall be due and payable
immediately.

Article 7.  Registered Debentures

         Section 7.1.  Series.  This  Debenture  is one of a numbered  series of
Debentures  which are identical  except as to the  principal  amount and date of
issuance  thereof and as to any restriction on the transfer  thereof in order to
comply with the Securities Act of 1933 and the regulations of the Securities and
Exchange  Commission  promulgated  thereunder.  Such  Debentures are referred to
herein collectively as the ?Debentures?. The Debentures shall be issued in whole
multiples of $5,000.

         Section 7.2.  Record  Ownership.  The Company,  or its attorney,  shall
maintain a register of the holders of the Debentures  (the  ?Register?)  showing
their  names and  addresses  and the serial  numbers  and  principal  amounts of
Debentures  issued to or  transferred  of record by them from time to time.  The
Register may be maintained in electronic,  magnetic or other  computerized form.
The Company may treat the person  named as the Holder of this  Debenture  in the
Register as the sole owner of this  Debenture.  The Holder of this  Debenture is
the  person  exclusively  entitled  to  receive  payments  of  interest  on this
Debenture, receive notifications with respect to this Debenture, convert it into
Common Stock and otherwise exercise all of the rights and powers as the absolute
owner hereof.

         Section 7.3. Registration of Transfer.  Transfers of this Debenture may
be registered on the books of the Company  maintained for such purpose  pursuant
to Section 7.2 above (i.e.,  the Register).  Transfers  shall be registered when
this  Debenture  is  presented  to the Company  with a request to  register  the
transfer  hereof and the Debenture is duly endorsed by the  appropriate  person,
reasonable assurances are given that the endorsements are genuine and effective,
and the Company has received  evidence  satisfactory to it that such transfer is
rightful and in  compliance  with all  applicable  laws,  including tax laws and
state and federal securities laws. When this Debenture is presented for transfer
and duly transferred hereunder, it shall be canceled and a new Debenture showing
the name of the  transferee as the record holder thereof shall be issued in lieu
hereof.  When this  Debenture  is  presented  to the Company  with a  reasonable
request to  exchange it for an equal  principal  amount of  Debentures  of other
denominations,  the  Company  shall make such  exchange  and shall  cancel  this
Debenture and issue in lieu thereof  Debentures  having a total principal amount
equal to this  Debenture in such  denominations  as agreed to by the Company and
Holder.

         Section 7.4. Worn or Lost Debentures.  If this Debenture  becomes worn,
defaced or mutilated but is still  substantially  intact and  recognizable,  the
Company  or its  agent  may  issue a new  Debenture  in  lieu  hereof  upon  its
surrender. Where the Holder of this Debenture claims that the Debenture has been
lost,  destroyed or wrongfully taken, the Company shall issue a new Debenture in
place of the original  Debenture if the Holder so requests by written  notice to
the Company  actually  received by the  Company  before it is notified  that the
Debenture  has  been  acquired  by a bona  fide  purchaser  and the  Holder  has
delivered  to the  Company an  indemnity  bond in such amount and issued by such
surety as the Company  deems  satisfactory  together  with an  affidavit  of the
Holder  setting forth the facts  concerning  such loss,  destruction or wrongful
taking and such other  information in such form with such proof or  verification
as the Company may request.

Article 8.  Notices

         Any notice  which is  required  or  convenient  under the terms of this
Debenture  shall be duly given if it is in writing  and  delivered  in person or
mailed by first class mail,  postage  prepaid and  directed to the Holder of the
Debenture  at its address as it appears on the  Register or if to the Company to
its principal  executive offices,  with a copy by fax to Gary B. Wolff, Esq. 747
Third Avenue, New York, NY 10017. The time when such notice is sent shall be the
time of the giving of the notice.

Article 9.  Time

         Where this Debenture authorizes or requires the payment of money or the
performance  of a condition  or  obligation  on a Saturday or Sunday or a public
holiday,  or authorizes or requires the payment of money or the performance of a
condition or obligation within, before or after a period of time computed from a
certain date, and such period of time ends on a Saturday or a Sunday or a public
holiday,  such payment may be made or condition or  obligation  performed on the
next  succeeding  business day, and if the period ends at a specified hour, such
payment may be made or condition  performed,  at or before the same hour of such
next  succeeding  business  day,  with the same  force and  effect as if made or
performed in accordance with the terms of this Debenture. A ?business day? shall
mean a day on which  the banks in New York are not  required  or  allowed  to be
closed.

Article 10.  Waivers

         The holders of a majority in  principal  amount of the  Debentures  may
waive a default  or  rescind  the  declaration  of an Event of  Default  and its
consequences except for a default in the payment of principal or conversion into
Common Stock.

Article 11.  Rules of Construction

         In this Debenture,  unless the context otherwise requires, words in the
singular number include the plural, and in the plural include the singular,  and
words of the masculine gender include the feminine and the neuter,  and when the
sense so  indicates,  words of the neuter  gender may refer to any  gender.  The
numbers and titles of sections  contained  in the  Debenture  are  inserted  for
convenience  of reference  only,  and they neither form a part of this Debenture
nor are they to be used in the construction or interpretation hereof.  Wherever,
in this Debenture,  a determination of the Company is required or allowed,  such
determination  shall be made by a  majority  of the  Board of  Directors  of the
Company and if it is made in good faith, it shall be conclusive and binding upon
the Company and the Holder of this Debenture.

Article 12.  Governing Law

         The validity, terms, performance and enforcement of this Debenture
shall be governed and construed by the provisions hereof and in accordance with
the laws of the State of New York applicable to agreements that are negotiated,
executed, delivered and performed solely in the State of New York.

Article 13.       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 New  York.  The  Company  hereby  expressly  and
irrevocably  submits to the  jurisdiction of the state and federal courts of the
State of New York 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 New York.  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 New York and the parties hereby
irrevocably  submit to the  non-exclusive  jurisdiction  of such  courts for the
purpose of any such action or proceeding.

         IN WITNESS WHEREOF,  the Company has duly executed this Debenture as of
the date first written above.

    SWISSRAY INTERNATIONAL, INC.

                                                     By/s/Ruedi G. Laupper

                                                  Name:  Ruedi G. Laupper
                                                Title: Chairman and President

                                        9

<PAGE>

                                    Exhibit A

                              NOTICE OF CONVERSION

              (To be Executed by the  Registered  Holder in order to Convert the
Debentures.)

         The undersigned hereby irrevocably elects, as of ______________, 199_
to convert $_________________ of the Debentures into Shares of Common Stock
(the ?Shares?) of SWISSRAY INTERNATIONAL, INC. (the ?Company?) according to the
conditions set forth in the Contingent Subscription Agreement
dated _________________,1999.

Date of Conversion_________________________________________

Applicable Conversion Price_________________________________

Number of Shares Issuable upon this conversion______________

Signature___________________________________________________
                           [Name]

Address_____________________________________________________

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

Phone______________________   Fax___________________________

                                       10

<PAGE>

                             Assignment of Debenture

        The undersigned hereby sell(s) and assign(s) and transfer(s) unto

                   (name, address and SSN or EIN of assignee)

                                                   Dollars ($                )
------------------------------------------------------------------------------
(principal amount of Debenture, $5,000 or integral multiples of $5,000)

of  principal  amount of this  Debenture  together  with all  accrued and unpaid
interest hereon.

Date:                      Signed:
                                            (Signature must conform in all
     respects to name of Holder shown of face of Debenture)

Signature Guaranteed:<TABLE>
<CAPTION>
Name                                       Dated           Amount         Maturity Date     Deb. No.
---------------------------------------    ------------    ----------     ---------------   ---------------
<S>                                        <C>             <C>            <C>               <C>
Dominion Capital Fund Ltd.*                Mar. 3, 1999   $    25,000     Mar 3,2004       LN-1999-102
Sovereign Partners LP.                     Mar. 3, 1999   $    25,000     Mar 3,2004       LN-1999-102
</TABLE>

*    This document has been filed.
<PAGE>

THE SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN REGISTERED UNDER UNITED STATES
FEDERAL  OR STATE  SECURITIES  LAWS AND MAY NOT BE  OFFERED  FOR  SALE,  SOLD OR
OTHERWISE TRANSFERRED OR ASSIGNED FOR VALUE, DIRECTLY OR INDIRECTLY, NOR MAY THE
SECURITIES BE TRANSFERRED ON THE BOOKS OF THE CORPORATION,  WITHOUT REGISTRATION
OF SUCH SECURITIES UNDER ALL APPLICABLE UNITED STATES FEDERAL SECURITIES LAWS OR
COMPLIANCE WITH AN APPLICABLE EXEMPTION THEREFROM, SUCH COMPLIANCE AT THE OPTION
OF THE CORPORATION,  TO BE EVIDENCED BY AN OPINION OF STOCKHOLDER?S  COUNSEL, IN
FORM  ACCEPTABLE  TO THE  CORPORATION,  THAT NO VIOLATION  OF SUCH  REGISTRATION
PROVISIONS WOULD RESULT FROM ANY PROPOSED TRANSFER OR ASSIGNMENT.

                      WARRANT TO PURCHASE 25,000 SHARES OF
                  COMMON STOCK OF SWISSRAY INTERNATIONAL, INC.

                      Exercisable Commencing March 3, 1999;
                            Void after March 3, 2004

         THIS  CERTIFIES  that, for value received  SOVEREIGN  PARTNERS  LIMITED
PARTNERSHIP or its registered assigns (the ?Warrantholder?) is entitled, subject
to the terms and conditions set forth in this Warrant, to purchase from SWISSRAY
INTERNATIONAL,  INC., a New York  corporation  (the  ?Company?),  25,000 fully
paid, duly authorized and nonassessable shares (the ?Shares?),  of Common Stock,
$.01 par value per share,  of the  Company  (the  ?Common  Stock?),  at any time
commencing  March 3, 1999 and  continuing  up to 5:00 p.m. New York City time on
March 3, 2004 at an exercise  price of 125% of the average  five (5) day closing
bid  price of the  Company?s  common  stock  immediately  preceding  the date of
issuance,  but in no event at less than $1.00 per share,  subject to  adjustment
pursuant to Section 8 hereof.

         This  Warrant  is  subject  to  the  following  provisions,  terms  and
conditions:

         Section 1.        Transferability.

         1.1 Registration.  The Warrants shall be issued only in registered form
and  Shares  issuable  upon  exercise  of the  Warrants  shall  have  piggy back
registration rights and shall be registered by the Company pursuant to the terms
of a Registration  Rights Agreement  between the Company and SOVEREIGN  PARTNERS
LIMITED PARTNERSHIP.

         1.2 Transfer.  This Warrant shall be transferable  only on the books of
the Company maintained at its principal executive offices upon surrender thereof
for  registration of transfer duly endorsed by the  Warrantholder or by its duly
authorized  attorney or  representative,  or accompanied  by proper  evidence of
succession,  assignment  or  authority  to transfer.  Upon any  registration  of
transfer,  the  Company  shall  execute and deliver a new Warrant or Warrants in
appropriate denominations to the person or persons entitled thereto.

         1.3      Legend on Warrant Shares.  Each certificate for Shares
initially issued upon exercise of a Warrant, unless at time of exercise such
Shares are registered under the Securities Act of 1933, as amended (the
?Securities Act?), shall bear the following legend:
                  ------------------------

         THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER UNITED
         STATES  FEDERAL OR STATE  SECURITIES  LAWS AND MAY NOT BE  OFFERED  FOR
         SALE, SOLD OR OTHERWISE  TRANSFERRED OR ASSIGNED FOR VALUE, DIRECTLY OR
         INDIRECTLY,  NOR MAY THE  SECURITIES BE TRANSFERRED ON THE BOOKS OF THE
         CORPORATION,   WITHOUT   REGISTRATION  OF  SUCH  SECURITIES  UNDER  ALL
         APPLICABLE UNITED STATES FEDERAL  SECURITIES LAWS OR COMPLIANCE WITH AN
         APPLICABLE  EXEMPTION  THEREFROM,  SUCH COMPLIANCE AT THE OPTION OF THE
         CORPORATION, TO BE EVIDENCED BY AN OPINION OF STOCKHOLDER?S COUNSEL, IN
         FORM  ACCEPTABLE  TO  THE  CORPORATION,   THAT  NO  VIOLATION  OF  SUCH
         REGISTRATION  PROVISIONS  WOULD  RESULT FROM ANY  PROPOSED  TRANSFER OR
         ASSIGNMENT.

         Any certificate  issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of  a  public  distribution  pursuant  to a  registration  statement  under  the
Securities Act of the securities  represented thereby) shall also bear the above
legend  unless the  Company  receives  an opinion of counsel  acceptable  to the
Company that registration or qualification of the securities represented thereby
under the laws referred to therein is not required.

         Section 2. Exchange of Warrant Certificate. Any Warrant certificate may
be exchanged for another certificate or certificates of like tenor entitling the
Warrantholder  to purchase a like aggregate  number of Shares as the certificate
or certificates  surrendered then entitle such  Warrantholder  to purchase.  Any
Warrantholder desiring to exchange a warrant certificate shall make such request
in writing delivered to the Company, and shall surrender, properly endorsed, the
certificate  evidencing the Warrant to be so exchanged.  Thereupon,  the Company
shall  execute  and  deliver  to  the  person  entitled  thereto  a new  Warrant
certificate as so requested.

         Section 3.        Terms of Warrants: Exercise of Warrants.

         (a) Subject to the terms of this Warrant,  the Warrantholder shall have
the right,  at any time after March 3, 1999, but before 5:00 p.m., New York City
time on March 3, 2004 (the ?Expiration  Time?),  to purchase from the Company up
to the number of Shares which the  Warrantholder  may at the time be entitled to
purchase pursuant to the terms of this Warrant, upon surrender to the Company at
its principal executive office, of the certificate evidencing this Warrant to be
exercised,  together with the attached  Election to Exercise form duly filled in
and signed,  and upon payment to the Company of the Warrant Price (as defined in
and determined in accordance  with the provisions of Section 7 and 8 hereof) for
the  number of Shares  with  respect to which  such  Warrant is then  exercised.
Payment of the aggregate  Warrant Price shall be made in cash,  wire transfer or
by cashier?s check or any combination thereof.

         (b) Subject to the terms of this Warrant,  upon such  surrender of this
Warrant and  payment of such  Warrant  Price as  aforesaid,  the  Company  shall
promptly issue and cause to be delivered to the  Warrantholder or to such person
or persons as the  Warrantholder  may  designate in writing,  a  certificate  or
certificates  (in such  name or  names as the  Warrantholder  may  designate  in
writing) for the number of duly authorized,  fully paid and non-assessable whole
Shares to be purchased  upon the exercise of this Warrant,  and shall deliver to
the  Warrantholder  Common  Stock or cash,  to the extent  provided in Section 9
hereof,  with respect to any  fractional  Shares  otherwise  issuable  upon such
surrender.  Such certificate or certificates shall be deemed to have been issued
and any person so  designated to be named therein shall be deemed to have become
a holder of such Shares as of the close of business on the date of the surrender
of this  Warrant  and  payment of the Warrant  Price,  notwithstanding  that the
certificates  representing such Shares shall not actually have been delivered or
that the Share and Warrant  transfer  books of the Company shall then be closed.
This Warrant shall be  exercisable,  at the sole election of the  Warrantholder,
either  in full  or from  time to time  in  part  and,  in the  event  that  any
certificate  evidencing this Warrant (or any portion thereof) is exercised prior
to the  Termination  Date with respect to less than all of the Shares  specified
therein at any time prior to the  Termination  Date, a new  certificate  of like
tenor  evidencing  the remaining  portion of this Warrant shall be issued by the
Company, if so requested by the Warrantholder.

         (c)  Upon  the  Company?s   receipt  of  a  facsimile  or  original  of
Warrantholder?s  signed  Election to Exercise,  the Company  shall  instruct its
transfer agent to issue one or more stock Certificates  representing that number
of shares of Common  Stock  which the  Warrantholder  is entitled to purchase in
accordance  with the terms and  conditions  of this  Warrant and the Election to
Exercise attached hereto.  The Company?s transfer agent or attorney shall act as
Registrar and shall  maintain an  appropriate  ledger  containing  the necessary
information with respect to each Warrant.

         (d) Such exercise shall be effectuated by  surrendering to the Company,
or its  attorney,  the  Warrants to be  converted  together  with a facsimile or
original  of the signed  Election to Exercise  which  evidences  Warrantholder?s
intention to exercise those Warrants  indicated.  The date on which the Election
to Exercise is  effective  (?Exercise  Date?)  shall be deemed to be the date on
which the  Warrantholder has delivered to the Company a facsimile or original of
the  signed  Election  to  Exercise,  as long  as the  original  Warrants  to be
exercised  are  received  by the  Company or its  designated  attorney  within 5
business days  thereafter.  As long as the Warrants to be exercised are received
by the Company  within  five  business  days after it  receives a  facsimile  or
original of the signed  Election to Exercise,  the Company  shall deliver to the
Warrantholder,  or per the  Warrantholder?s  instructions,  the shares of Common
Stock to an address in the U.S.,  without  restrictive  legend or stop  transfer
instructions, within 5 business days of receipt of the Warrants to be converted.

         (e) Nothing  contained in this Warrant  shall be deemed to establish or
require the payment of interest to the  Warrantholder 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 Warrantholder to the Company.

         (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  exercise  date.  Upon  surrender of any
Warrants  that are to be  converted  in part,  the  Company  shall  issue to the
Warrantholder  new Warrants equal to the unconverted  amount, if so requested by
Warrantholder.

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

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

         (h) Each  person in whose  name any  certificate  for  shares of Common
Stock shall be issued shall for all purposes be deemed to have become the holder
of record  of the  Common  Stock  represented  thereby  on the date on which the
Warrant was  surrendered  and payment of the purchase  price and any  applicable
taxes was made,  irrespective of date of issue or delivery of such  certificate,
except that if the date of such  surrender and payment is a date when the Shares
transfer  books of the Company are closed,  such person  shall be deemed to have
become the holder of such Shares on the next succeeding date on which such Share
transfer  books are open.  The Company shall not close such Share transfer books
at any one time for a period longer than seven days.

         (i) The  Warrantholder  is limited in the amount of this Warrant it may
exercise and own. In no event  except (i) with respect to a conversion  pursuant
to redemption by the Company or (ii) if there is (a) a public  announcement that
50% or more of the Company is being acquired, (b) a public announcement that the
Company is being merged, or (c) a change in control,  shall the Warrantholder be
entitled  to exercise  any amount of this  Warrant in excess of that amount upon
exercise  of  which  the  sum of (1)  the  number  of  shares  of  Common  Stock
beneficially owned by the Warrantholder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unexercised  portion of the Warrant,  or any other  convertible  security of the
Company containing a similar 4.9% ownership  restriction,  and (2) the number of
shares of Common Stock  issuable upon the exercise of the Warrant,  or any other
convertible  security  of  the  Company  containing  a  similar  4.9%  ownership
restriction,  with respect to which the determination of this provision is being
made,  would  result  in  beneficial  ownership  by the  Warrantholder  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 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.  The Warrantholder
further  agrees  that  if the  Warrantholder  transfers  or  assigns  any of the
Warrants to a party who or which would not be considered such an affiliate, such
transfer or assignment  shall be made subject to the transferee?s or assigness?s
specific  agreement to be bound by the provisions of this Section.  Furthermore,
the Company  shall not  process any  exercise  that would  result in  beneficial
ownership  by the  Warrantholder  and its  affiliates  of more  than 4.9% of the
outstanding  shares of Common  Stock of the  Company,  unless  this  Section  is
amended in writing upon the mutual consent of the parties.

         Section 4.  Payment of Taxes.  The  Company  shall pay all  documentary
stamp  taxes,  if any,  attributable  to the  initial  issuance  of the  Shares;
provided,  however,  that the  Company  shall not be  required to pay any tax or
taxes which may be payable,  (i) with respect to any secondary  transfer of this
Warrant or the Shares or (ii) as a result of the  issuance  of the Shares to any
person other than the  Warrantholder,  and the Company  shall not be required to
issue or deliver  any  certificate  for any  Shares  unless and until the person
requesting  the  issuance  thereof  shall have paid to the Company the amount of
such tax or shall  have  produced  evidence  that  such tax has been paid to the
appropriate taxing authority.

         Section 5.  Mutilated or Missing  Warrant.  In case the  certificate or
certificates  evidencing  this  Warrant  shall be  mutilated,  lost,  stolen  or
destroyed,  the Company shall,  at the request of the  Warrantholder,  issue and
deliver in exchange and substitution for and upon  cancellation of the mutilated
certificate or certificates,  or in lieu of and substitution for the certificate
or  certificates  lost,  stolen  or  destroyed,  a new  Warrant  certificate  or
certificates of like tenor and representing an equivalent right or interest, but
only upon receipt of evidence satisfactory to the Company of such loss, theft or
destruction  of such  Warrant and of a bond of  indemnity,  if  requested,  also
satisfactory  to the Company in form and amount,  and issued at the  applicant?s
cost.  Applicants for such substitute Warrant certificate shall also comply with
such other reasonable  regulations and pay such other reasonable  charges as the
Company may prescribe.

         Section 6.  Reservation  of Shares.  The  Company  has duly and validly
reserved,  and shall at all times so long as this Warrant  remains  outstanding,
keep  reserved,  out of its authorized  and unissued  capital stock,  sufficient
shares of Common  Stock as shall be subject to purchase  under this Warrant (the
?Reserved Shares?). The issuance, sale and delivery of the Warrants and Reserved
Shares have been duly authorized by all required corporate action on the part of
the Company 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,  fully paid,  and  non-assessable  and  enforceable in
accordance  with their terms,  subject to the laws of bankruptcy  and creditors?
rights  generally.  The  Company  shall  pay all taxes in  respect  of the issue
thereof.  As a condition precedent to the taking of any action that would result
in the effective  purchase  price per share of Common Stock upon the exercise of
this  Warrant  being less than the par value per share (if such shares of Common
Stock then have a par value),  the Company  will take such  corporate  action as
may, in the opinion of its  counsel,  be necessary in order that the Company may
comply with all its obligations under this Agreement with regard to the exercise
of this Warrant.

         Prior to exercise of all the Warrants,  if at anytime the conversion of
all the  Shares  and  exercise  of all the  Warrants  outstanding  results in an
insufficient  number  of  Reserved  Shares  being  available  to  cover  all the
conversions and exercises, then in such event, the Company will move to call and
hold a  shareholder?s  meeting  within 45 days of such event for the  purpose of
authorizing  additional  Shares to facilitate the conversions.  In such an event
the Company shall:  (1) recommend to its current or future  officers,  directors
and  other  control  people to vote  their  shares  in favor of  increasing  the
authorized   number  of  shares  of  Common  Stock  and  (2)  recommend  to  all
shareholders  to vote their shares in favor of increasing the authorized  number
of shares of Common Stock. As for any  shareholders who do not vote on the issue
of increasing the authorized  number of shares of Common Stock,  such failure to
vote  shall  automatically  be  taken  as a vote  in  favor  of  increasing  the
authorized  number of shares of Common Stock.  The proxy sent out by the Company
to all  shareholders  shall  provide  that if no vote is  received  a consent to
action will be executed on behalf of those  shares of Common  Stock for which no
vote was received,  in favor of increasing  the  authorized  number of shares of
Common  Stock of the Company.  Company  represents  and  warrants  that under no
circumstances will it deny or prevent Warrantholder from exercising the Warrants
as permitted under the terms of the Subscription Agreement,  the Warrants or the
Registration Rights Agreement.

         Section 7. Warrant Price. From March 3, 1999 through 5:00 p.m. New York
City time on March 3, 2004,  the price per Share (the ?Warrant  price?) at which
Shares shall be  purchasable  upon the exercise of this Warrant shall be 125% of
the average 5 day closing bid price of the  Company?s  common stock  immediately
preceding  the date of  closing,  but in no event at less  than  $1.00 per share
(subject to adjustment pursuant to Section 8 hereof).

         Section 8.        Adjustment of Warrant Price and Number of Shares.
The number and kind of securities purchasable upon the exercise of this Warrant
and the Warrant Price shall be subject to adjustment from time to time after the
date hereof upon the happening of certain events, as

follows:

         8.1      Adjustments.  The number of Shares purchasable upon the
exercise of this Warrant shall be subject to adjustments as follows:
                  -----------

         (a) In case the  Company  shall (i) pay a dividend  on Common  Stock in
Common  Stock or  securities  convertible  into,  exchangeable  for or otherwise
entitling a holder  thereof to receive  Common  Stock,  (ii)  declare a dividend
payable in cash on its Common Stock and at substantially the same time offer its
shareholders  a right to purchase  new Common Stock (or  securities  convertible
into,  exchangeable  for or other  entitling a holder  thereof to receive Common
Stock) from the proceeds of such  dividend  (all Common Stock so issued shall be
deemed to have been issued as a stock dividend), (iii) subdivide its outstanding
shares of Common  Stock into a greater  number of shares of Common  Stock,  (iv)
combine its  outstanding  shares of Common Stock into a smaller number of shares
of Common Stock, or (v) issue by reclassification of its Common Stock any shares
of Common  Stock of the Company,  the number of shares of Common Stock  issuable
upon  exercise of the Warrants  immediately  prior  thereto shall be adjusted so
that the  holders  of the  Warrants  shall be  entitled  to  receive  after  the
happening of any of the events described above that number and kind of shares as
the holders would have received had such Warrants be converted immediately prior
to the  happening  of such event or any record date with  respect  thereto.  Any
adjustment made pursuant to this subdivision shall become effective  immediately
after the close of business  on the record date in the case of a stock  dividend
and shall  become  effective  immediately  after the  close of  business  on the
effective  date in the  case  of a  stock  split,  subdivision,  combination  or
reclassification.

         (b)  In  case  the  Company   shall   distribute,   without   receiving
consideration  therefor,  to all holders of its Common  Stock  evidences  of its
indebtedness  or assets  (excluding  cash  dividends  other than as described in
Section  (8)(a)(ii)),  then in such case,  the number of shares of Common  Stock
thereafter  issuable  upon  exercise  of the  Warrants  shall be  determined  by
multiplying  the  number of shares of Common  Stock  theretofore  issuable  upon
exercise of the Warrants,  by a fraction,  of which the  numerator  shall be the
closing  bid  price  per  share  of  Common  Stock on the  record  date for such
distribution, and of which the denominator shall be the closing bid price of the
Common Stock less the then fair value (as  determined  by the Board of Directors
of the Company,  whose  determination shall be conclusive) of the portion of the
assets or evidences of  indebtedness  so distributed  per share of Common Stock.
Such adjustment  shall be made whenever any such  distribution is made and shall
become  effective  immediately  after the record date for the  determination  of
stockholders entitled to receive such distribution.

         (c) Any  adjustment  in the number of shares of Common  Stock  issuable
hereunder  otherwise  required to be made by this  Section 8 will not have to be
adjusted  if such  adjustment  would not  require an increase or decrease in one
percent  (1%) or more in the  number of shares of  Common  Stock  issuable  upon
exercise of the Warrant.  No adjustment in the number of Shares purchasable upon
exercise  of this  Warrant  will be made for the  issuance  of shares of capital
stock  to  directors,  employees  or  independent  contractors  pursuant  to the
Company?s or any of its  subsidiaries?  stock option,  stock  ownership or other
benefit plans or  arrangements  or trusts related thereto or for issuance of any
shares of Common Stock  pursuant to any plan providing for the  reinvestment  of
dividends or interest payable on securities of the Company and the investment of
additional optional amounts in shares of Common Stock under such plan.

         (d)  Whenever the number of shares of Common  Stock  issuable  upon the
exercise of the Warrants is adjusted, as herein provided the Warrant Price shall
be adjusted (to the nearest cent) by multiplying such Warrant Price  immediately
prior to such  adjustment  by a fraction,  of which the  numerator  shall be the
number of shares of Common Stock issuable upon the exercise of each share of the
Warrants  immediately  prior to such  adjustment,  and of which the  denominator
shall be the number of shares of Common Stock issuable immediately thereafter.

         (e) The Company  from time to time by action of its Board of  Directors
may  decrease  the  Warrant  Price by any  amount  for any period of time if the
period is at least 20 days,  the decrease is  irrevocable  during the period and
the Board of Directors of the Company in its sole  discretion  shall have made a
determination  that such decrease  would be in the best interest of the Company,
which determination shall be conclusive. Whenever the Warrant Price is decreased
pursuant to the preceding sentence,  the Company shall mail to holders of record
of the  Warrants a notice of the decrease at least 15 days prior to the date the
decreased Warrant Price takes effect,  and such notice shall state the decreased
Warrant Price and the period it will be in effect.

         8.2 Mergers. Etc. In the case of any (i) consolidation or merger of the
Company  into any entity  (other  than a  consolidation  or merger that does not
result  in  any   reclassification,   exercise,   exchange  or  cancellation  of
outstanding shares of Common Stock of the Company),  (ii) sale, transfer,  lease
or  conveyance  of all or  substantially  all of the assets of the Company as an
entirety or substantially  as an entirety,  or (iii)  reclassification,  capital
reorganization  or change of the Common Stock (other than solely a change in par
value,  or from par  value to no par  value),  in each case as a result of which
shares of Common  Stock  shall be  converted  into the right to  receive  stock,
securities or other property (including cash or any combination  thereof),  each
holder of Warrants then outstanding  shall have the right thereafter to exercise
such  Warrant  only  into the kind and  amount  of  securities,  cash and  other
property receivable upon such consolidation,  merger,  sale,  transfer,  capital
reorganization or reclassification by a holder of the number of shares of Common
Stock of the  Company  into  which  such  Warrants  would  have  been  converted
immediately  prior  to  such  consolidation,  merger,  sale,  transfer,  capital
reorganization or reclassification,  assuming such holder of Common Stock of the
Company (A) is not an entity with which the Company  consolidated  or into which
the  Company  merged or which  merged  into the Company or to which such sale or
transfer was made, as the case may be (?constituent entity?), or an affiliate of
a constituent  entity, and (B) failed to exercise his or her rights of election,
if any,  as to the  kind or  amount  of  securities,  cash  and  other  property
receivable upon such  consolidation,  merger, sale or transfer (provided that if
the kind or amount of securities,  cash and other property  receivable upon such
consolidation, merger, sale or transfer is not the same for each share of Common
Stock of the Company held immediately prior to such consolidation,  merger, sale
or transfer by other than a  constituent  entity or an affiliate  thereof and in
respect  of  which  such  rights  or  election  shall  not have  been  exercised
(?non-electing  share?),  then for the purpose of this  Section 8.2 the kind and
amount  of   securities,   cash  and  other   property   receivable   upon  such
consolidation,  merger,  sale or  transfer by each  non-electing  share shall be
deemed to be the kind and amount so  receivable  per share by a plurality of the
non-electing shares). If necessary,  appropriate adjustment shall be made in the
application  of the  provision  set forth  herein with respect to the rights and
interests  thereafter of the holder of Warrants,  to the end that the provisions
set forth herein shall thereafter  correspondingly be made applicable, as nearly
as may reasonably be, in relation to any shares of stock or other  securities or
property  thereafter  deliverable  on the  exercise of the  Warrants.  The above
provisions shall similarly apply to successive  consolidations,  mergers, sales,
transfers, capital reorganizations and reclassifications.  The Company shall not
effect any such  consolidation,  merger,  sale or  transfer  unless  prior to or
simultaneously with the consummation thereof the successor company or entity (if
other than the  Company)  resulting  from such  consolidation,  merger,  sale or
transfer assumes, by written instrument, the obligation to deliver to the holder
of Warrants such shares of stock,  securities  or assets as, in accordance  with
the  foregoing  provision,  such holder may be  entitled  to receive  under this
Section 8.2.

         8.3      Statement of Warrants.             Irrespective of any
adjustments in the Warrant Price of the number or kind of shares purchasable
upon the exercise of this Warrant, this Warrant certificate or certificates
hereafter issued may continue to express the same price and number and kind of
shares as are stated in this Warrant.

         Section 9.  Fractional  Shares.  Any fractional  shares of Common Stock
issuable  upon  exercise of the Warrants  shall be rounded to the nearest  whole
share or, at the  election  of the  Company,  the  Company  shall pay the holder
thereof an amount in cash equal to the closing bid price thereof. Whether or not
fractional shares are issuable upon exercise shall be determined on the basis of
the total number of Warrants the holder is at the time exercising and the number
of shares of Common Stock issuable upon such exercise.

         Section  10. No  Rights as  Stockholders:  Notices  to  Warrantholders.
Nothing  contained in this Warrant  shall be  construed as  conferring  upon the
Warrantholder  or its  transferees  any rights as a stockholder  of the Company,
including the right to vote, receive dividends,  consent or receive notices as a
stockholder  with  respect to any meeting of  stockholders  for the  election of
directors of the Company or any other matter. If, however,  at any time prior to
5:00 p.m.,  New York City time, on March 3, 2004,  (the  ?Expiration  Time?) and
prior to the exercise of this Warrant, any of the following events shall occur:

         (a)      any action which would require an adjustment pursuant to
Section 8.1; or

         (b)      a dissolution, liquidation or winding up of the Company or any
consolidation, merger or sale of its property, assets and business as an
entirety; then in any one or more of said events, the Company shall give notice
in writing of such event to the Warrantholder at least 10 days prior to the date
fixed as a record date or the date of closing the transfer books for the
determination  of the shareholders entitled to any relevant dividend,
distribution,  subscription rights,  or  other  rights  or  for  the  effective
date  of  any  dissolution, liquidation of winding up or any merger,
consolidation, or sale of substantially all assets,  but failure to mail or
receive such notice or any defect therein or in the mailing  thereof  shall not
affect the validity of any such action taken. Such notice shall  specify such
record date or the  effective  date, as the case may be.

         Section 11.       Successors.  All the covenants and provisions of this
Warrant by or for the benefit of the Company or the Warrantholder shall bind and
inure to the benefit of their respective successors and permitted assigns
hereunder.

         Section 12.       Applicable Law.  This Warrant shall be construed and
enforced in accordance with and the rights of the parties shall be governed by
the laws of the State of New York.

         Section 13.       Benefits of this Agreement.  Nothing in this Warrant
shall be construed to give to any person or corporation other than the Company
and the Warrantholder any legal or equitable right, remedy or claim under this
Warrant, and this Warrant shall be for the sole and exclusive

benefit of the Company and the Warrantholder.

         Section 14. Piggy-back Registration Rights. If at any time prior to the
expiration of the warrant the Company shall propose to prepare on its own behalf
or  on  behalf  of  any  of  its  stockholders   (other  than  Warrantholder)  a
registration statement in connection with an underwritten public offering of any
equity securities of the Company,  the Company shall give Warrantholder  written
notice at least 20 days before the anticipated  filing date of such registration
statement.  Should  Warrantholder  desire to have any of the Shares  included in
such registration statement Warrantholder shall so advise the Company in writing
no later than 15 days after the  Company?s  notice is given,  setting  forth the
number or amount of Shares  which  Warrantholder  requests to be included in the
registration  statement,  and the Company shall include the securities specified
in such  request  in such  registration  statement  and keep  such  registration
statement in effect and maintain  compliance with each federal and state law and
regulation as set forth herein. The Company may, at its option, require that the
amount of Shares offered for sale by  Warrantholder  pursuant to this Section 14
be decreased if, in the opinion of the Company?s  investment  banking firm, such
reduction is necessary in order to permit the orderly  distribution  and sale of
the  securities  being  offered.  If the Company shall require such a reduction,
Warrantholder shall have the right to withdraw from the offering.

         Section 15.       Definitions.

         ?Common Stock?  shall mean (i) Common Stock,  $.01 par value per share,
of the Company and (ii) any other security purchasable upon the exercise of this
Warrant upon the happening of certain events.

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

                                            SWISSRAY INTERNATIONAL , INC.

                                            By:_/s/Ruedi G. Laupper
                                   Ruedi G. Laupper its Chairman and President
                                       SWISSRAY INTERNATIONAL, INC.

                                           ELECTION TO EXERCISE

SWISSRAYINTERNATIONAL, INC.
c/o Gary B. Wolff, Esq.
747 Third Avenue ? 25th Floor
New York, NY 10017

The  undersigned  hereby  irrevocably  elects to exercise  the right of purchase
represented by the within Warrant for, and to purchase thereunder, _______shares
of  Common  Stock  (the  ?Share?)  provided  for  therein,   and  requests  that
certificates for the Shares be issued in the name of:*

Name:___________________________________________________________
Address:_________________________________________________________
Social Security No.________________________________________________
or Tax ID Number:_________________________________________________

and, if such number of Shares shall not be all of the Shares  purchasable  under
the  Warrant,  that a new  Warrant  certificate  for the  balance  of the Shares
purchasable  under  the  within  Warrant  be  registered  in  the  name  of  the
undersigned  warrantholder  or his Assignee* as indicated below and delivered to
the address stated below:

Dated:________, 19___

Name of Warrantholder of
Assignee (Please Print)_____________________________________________

Address:_________________________________________________________

Signature:________________________________________________________

Signature Guaranteed:______________________________________________
                                    Signature of Guarantor

--------------------
*        The Warrant contains restrictions on sale, assignment or transfer.

**       Note:  The above signature must correspond with the name as written on
          the face of this  Warrant  certificate  in every  particular,  without
          alteration or enlargement or any change whatever,  unless this warrant
          has been assigned.

                                            FORM OF ASSIGNMENT

                             (To be signed only upon assignment of Warrant)*

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

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

----------------------------------------------------------------
(Name and Address of Assignee must be Printed or Typewritten)

the   within   Warrant,   hereby   irrevocably   constituting   and   appointing
_________Attorney  to transfer  said Warrant on the books of the  Company,  with
full power of substitution in the premises.

Dated:______________, 19____

                                            ________________________________**
                                            Signature of Registered Holder

Signature Guaranteed: ________________________________
                                    Signature of Guarantor

--------------------
*        The Warrant contains restrictions on sale, assignment or transfer.

**       Note:  The signature of this assignment must correspond with the name
     as it appears upon the face of the Warrant certificate in every particular,
     without alteration or enlargement or any change whatever.

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