Document:

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

Dominion Capital Fund Ltd.                 Jan. 29, 1999
Dominion Investment Fund LLC.              Jan. 29, 1999
Sovereign Partners LP.                     Jan. 29, 1999

*    This document has been filed.
<PAGE>

                          REGISTRATION RIGHTS AGREEMENT

 THIS REGISTRATION RIGHTS AGREEMENT, dated as of January 29, 1999, ("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 January  29,  1999,  between  the Initial
Investor and the Company (the "Subscription Agreement"),  the Company has agreed
to issue and sell to the Initial Investor 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 ("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 and any
         Warrants issued to the Investor by the Company.

         (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  forty-five  (45)  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 Warrants,  $1,170,000 of  Debentures,
plus accrued interest, in the total offering would be convertible.  In the event
the  Registration  Statement is not filed within  forty-five  (45) 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  forty-five  (45)  calendar  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 such form as is  applicable 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.

         The Company  acknowledges  that its failure to file with the SEC,  said
Registration  Statement no later than  forty-five  (45)  calendar 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  within one hundred twenty (120) calendar
days following the Closing Date, 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,
or portion  thereof,  following the one hundred twenty (120) calendar day period
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.

         The  Company  acknowledges  that its  failure to have the  Registration
Statement declared  effective within said ninety (90) calendar day period,  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 forty-five (45) days
of the Closing Date, a Registration  Statement 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  such  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) one hundred twenty (120) 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, 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;

         (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 The Nasdaq Stock
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) a form of appropriate
instruction and opinion of such counsel  acceptable for use for each conversion;
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
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 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 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
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 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 of
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 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,
SWISSRAY  International,  Inc.,  200 East 32nd Street,  Suite 34B, New York, New
York 10016 with copy by fax and mail to Gary B. Wolff,  P.C.,  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 and  interpreted in accordance
with the laws of the  State of New York.  Each of the  parties  consents  to the
jurisdiction  of the  state  and  federal  courts  of the  State  of New York in
connection 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.

         (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)

<PAGE>

         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

                           ---------------------------------------
                           (Name of Initial Investor)

                           By: ____________________________________
                           Name:
                           Title:<TABLE>
<CAPTION>
Name                                       Dated           Amount         Maturity Date     Deb. No.
---------------------------------------    ------------    ----------     ---------------   ---------------
<S>                                        <C>             <C>            <C>               <C>
Dominion Capital Fund Ltd.*                Jan. 29, 1999    $   292,500    Jan 29,2001       JAN-1999-101
Dominion Investment Fund LLC.              Jan. 29, 1999    $   292,500    Jan 29,2001       JAN-1999-101
Sovereign Partners LP.                     Jan. 29, 1999    $   585,000    Jan 29,2001       JAN-1999-103
</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                                      January 29, 1999
                                                               January 29, 2001
$292,500
Number            JAN-1999-101

               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 January
               __, 2001,  (the  "Maturity  Date"),  the principal  amount of Two
               Hundred  Ninety Two  Thousand  Five  Hundred  Dollars ($ 292,500)
               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.

Article 1. Interest

         The Company shall pay interest on the unpaid  principal  amount of this
Debenture (the  "Debenture") at the time of each conversion  until the principal
amount  hereof is paid in full or has been  converted,  as follows:  3% per each
30-day period, on a pro rata basis, for the first ninety (90) days following the
Closing; 3 1/2 % for each 30-day period, on a pro rata basis, beginning from the
ninety-first  (91st) day after the  Closing  and ending on the one  hundred  and
twentieth (120th) day following the Closing Date; and 4% per each 30-day period,
on a pro rata basis, beginning from the one hundred and twenty-first (121st) day
following the Closing. 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

<PAGE>
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 82% 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 date the funds are received by the Company or its
Counsel (the "Closing Date").

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 Closing 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 Closing 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.,  474 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  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 Closing Date, at 82% 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 Closing 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  (or  make
alternative  written  arrangements  for reservation or contribution of shares or
stockholder  approval to authorize  additional  shares as described in the proxy
statement for the August 31, 1998,  meeting) 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)  Notwithstanding  the provisions hereof or of the
Debenture(s),  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 public announcement that there is 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), 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 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.

                  (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  Closing  Date.
    Notwithstanding the preceding sentence, the Company shall be required to and
    herewith  agrees to and shall apply at least 20% of the gross  profits  from
    the sale of ddR  Multi-Systems  for the  redemption of the  Debentures.  The
    Company will  continue to do so until such time that the  Debentures  or any
    unconverted  portion of the Debentures has been fully  redeemed.  Redemption
    payments  would be  applied  to the  outstanding  balance  in the  following
    manner:  for example  should the company wish to redeem a portion  after the
    first  30-day  period  they would owe 3% x  $1,000,000  = $30,000  plus some
    portion of the $1,000,000 principle,  say $100,000.  This would mean that if
    the company  paid  $130,000 on the 30th day they would still owe $900,000 on
    the 31st day.
                           The  redemption  terms shall be based on the interest
rate  applicable to the Debentures as follows:  3% per each 30-day period,  on a
pro rata basis,  for the first ninety (90) days following  closing;  3 1/2 % for
each 30-day period, on a pro rata basis, beginning from the ninety-first (91st)
day after  closing  and ending on the one  hundred  and twentieth (120th) day
following closing; and 4% per each 30-day period, on a pro rata  basis,
beginning  from  the one  hundred  and  twenty-first  (121st)  day following the
closing.

         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 Section 3(a) of the Subscription  Agreement dated September of 1998, to
permit the conversion of this Debenture  subject to certain  options  granted to
the Company and referred to in Section 3(a) of the Subscription  Agreement.  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 does not make the payment of the  principal of this  Debenture  when the
same becomes due and payable at maturity, upon redemption or otherwise,  (b) the
Company does not make a payment, other than a payment of principal, for a period
of 5 business days  thereafter,  (c) the Company fails to comply with any of its
other agreements in this Debenture and such failure continues for the period and
after the notice  specified  below,  (d) 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, (e) the Company's  Common Stock is no longer
listed on any recognized exchange including electronic over-the-counter bulletin
board. 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

<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  Subscription  Agreement  dated  _________________,
1999.

Date of Conversion_________________________________________

Applicable Conversion Price_________________________________

Number of Shares Issuable upon this conversion______________

Signature___________________________________________________
                           [Name]

Address_____________________________________________________

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

Phone______________________   Fax___________________________

<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:

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