Document:

<TABLE>
<CAPTION>
Name                                       Dated           Amount         Maturity Date
---------------------------------------    ------------    ----------     ---------------
<S>                                        <C>             <C>            <C>
Southshore Capital, Ltd.*                  July 9, 1999    $1,100,000     August 23, 1999

*    This document has been filed.
</TABLE>

<PAGE>

                                 PROMISSORY NOTE

$1,100,000.00                                                        Switzerland

                                                                   July, 9, 1999

         FOR VALUE RECEIVED, the undersigned, SWISSRAY INTERNATIONAL INC., a New
York  corporation  (the  "Borrower"),  hereby  promises  to pay to the  order of
SOUTHSHORE CAPITAL,  LTD. (the "Lender"),  the principal amount of $1,100,000.00
in lawful money of the United States of America in same day or other immediately
available funds,  together with interest,  payable on or before August 23, 1999.
In the event that this note is paid off on or before  August 9,  1999,  then the
Borrower  shall pay the  principal  amount of  1,100,000  together  with accrued
interest of three percent (3.0%) for a total of $1,133,000.

         In  the  event  that  this  note  is paid off after August 9, 1999, the
Borrower  shall still be responsible for the $33,000 of accrued interest.  Also,
any  principal  amount still outstanding on August 23, 1999, shall bear interest
at a rate equal to three percent (3.0%) per thirty calendar period on a pro rata
basis until August 23, 1999.

         The  obligations  of  Borrower  under  this  Note are secured under the
provisions  of  that  certain  Security  Agreement  dated  July  9, 1999, by the
"Collateral"  and  all  "proceeds"  as  those  terms are defined in the Security
Agreement.  The Collateral shall be purchase orders copies of which are attached
hereto as Exhibit A.

         In  the  event the Promissory Note is not paid in full on or before its
due date, then in such event the terms of the Contingent Subscription Agreement,
Debenture  and  Registration  Rights Agreement, which are incorporated herein by
reference and made a part hereof, shall apply and control. The "Due Date" of the
Promissory Note shall mean August 23, 1999.

         Borrower  hereby  waives  presentment,  protest,  notice of protest and
notice  of  dishonor of this Note.  The non-exercise by the Lender of any rights
hereunder  in  any  particular instance shall not constitute a waiver thereof in
that or any other subsequent instance.  The Borrower shall no  create  any class
of indebtedness that ranks senior to this Note.

         Nothing  contained  herein  shall be deemed to establish or require the
payment  of  a  rate  of  interest  in  excess  of the maximum rate permitted by
applicable  law.  In  the  event  that  the rate of interest required to be paid
hereunder  exceeds  the  maximum  rate  permitted  by  such law, such rate shall
automatically be reduced to the maximum rate permitted by such law.

         The  Borrower  and any  endorsers  hereof,  for  themselves  and  their
respective   representatives,   successors  and  assigns   expressly  (a)  waive
presentment,  demand, protest, notice of dishonor, notice of non-payment, notice
of maturity, notice of protest,  diligence in collection, and the benefit of any
applicable exemptions,  including,  but not limited to, exemptions claimed under
insolvency  laws,  and (b)  consent  that the Lender may  release or  surrender,
exchange or substitute any property or other  collateral or security now held or
which may hereafter be held as security for the payment of this Promissory Note,
or may release any  guarantor,  or may extend the time for payment or  otherwise
modify  the  terms of  payment  of any part or the  whole of the debt  evidenced
hereby.

         Borrower  hereby grants to Lender a security interest in the Collateral
to  secure the payment of the entire Note balance.  As to any Collateral, Lender
shall have the rights of a secured party under the Uniform Commercial Code as in
effect in the State of New York.

SECURED CREDITORS.  Borrower represents and warrants that it shall not create or
incur any  indebtedness or obligation for borrowed money except for indebtedness
with  respect to trade  obligations  and other  normal  accruals in the ordinary
course  of  business  not yet due and  payable,  and  shall  not grant any other
security  interests  until payment and  performance  in full of the  obligations
hereunder,  unless Lender otherwise  consents in writing.  Borrower  represents,
warrants and covenants  that the  Collateral and proceeds are not subject to any
security  interest,  lien, prior assignment,  or other encumbrance of any nature
whatsoever except for the security interest created by this Note.

         AFFIRMATIVE COVENANTS.  Borrower  covenants  and  agrees  that from the
date  hereof until payment and performance in full of the obligations hereunder,
unless Lender otherwise consents in writing:

         (a) Use of Proceeds.  The  proceeds  disbursed  under the Note shall be
used solely for working capital and/or costs related to assembly and delivery of
Borrower's ddR-Multi System.

         (b) Borrower represents and warrants that there are no actions,  suits,
investigations  or  proceedings  pending or threatened  against or affecting the
validity or enforceability  of this Note and there are no outstanding  orders or
judgments of any court or governmental  authority or awards of any arbitrator or
arbitration board against the Borrower, except as may be indicated in Borrower's
current Registration  Statement on Form S-1 as filed with the SEC under File No.
333-59829.

DEFAULT.  If any of the following events occur (a "default"), Lender may declare
the  entire  Note  balance,  together  with any other amounts that Borrower owes
Lender, to be immediately due and payable:

         (a)      Borrower fails to pay when due any principal or interest under
the terms of this Note;

         (b)      Borrower fails to observe or perform any covenant or agreement
set  forth  in  this Note or in any instrument, document or agreement concerning
the Collateral;

         (c)      Borrower  makes  a  general  assignment for the benefit of its
creditors,  files  or  become  the  subject  of a petition in bankruptcy, for an
arrangement with its  creditors or for reorganization under any federal or state
bankruptcy or other insolvency law;

         (d)      Borrower  files  or  becomes the subject of a petition for the
appointment  of  a receiver, custodian, trustee or liquidator of the party or of
all  or substantially all of its assets under any federal or state bankruptcy or
other insolvency law;

         (e)      Borrower  is  voluntarily  or  involuntarily   terminated   or
dissolved;

         (f) Borrower or any accommodation  maker,  endorser or guarantor enters
into  any  merger  or  consolidation,  or  sale,  lease,  liquidation  or  other
disposition of all or substantially all of its assets or any transaction outside
the  ordinary  course of its  business  or for less than fair  consideration  or
substantially equivalent value without Lender's prior written consent; or

         (g)      Any  written  representation  or written statement made herein
or  any  other  written representation or written statement made or furnished to
Lender  by  Borrower  was  materially incorrect or misleading at the time it was
made or furnished.

LITIGATION.

          (a) Forum Selection and Consent to Jurisdiction.  Any litigation based
on or arising out of, under,  or in connection  with, this Promissory Note shall
be brought and maintained  exclusively in the federal courts of the State of New
York. The parties hereby expressly and irrevocably submit to the jurisdiction of
the  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 Borrower
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 Borrower  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 Borrower 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 Borrower
hereby irrevocably waives such immunity in respect of its obligations under this
agreement and the other loan documents.

         (b) Waiver of Jury Trial. The Lender and the Borrower 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 Lender or the Borrower.
The Borrower  acknowledges  and agrees that it has received full and  sufficient
consideration  for  this  provision  and  that  this  provision  is  a  material
inducement for the Lender entering into this agreement.

MISCELLANEOUS.

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

         (b) Neither  this  Promissory  Note  nor  any provision hereof shall be
waived,  modified,  changed, discharged, terminated, revoked or canceled, except
by  an instrument in writing signed by the party effecting the same against whom
any change, discharge or termination is sought.

         (c) Notices  required  or  permitted  to be given hereunder shall be in
writing  and  shall be deemed to be sufficiently given when personally delivered
or  sent by registered mail, return receipt requested, addressed:  (i) if to the
Borrower, c/o Gary B. Wolff 747 Third Avenue, 25th Floor, New York, NY 10017 and
(ii)  if  to Lender c/o Joseph B. LaRocco, Esq. 49 Locust Avenue, Suite 107, New
Canaan, CT 06840.

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

         THE BORROWER  ACKNOWLEDGES  THAT THE  TRANSACTIONS  IN CONNECTION  WITH
WHICH THIS NOTE WAS EXECUTED AND  DELIVERED  AND WHICH ARE  CONTEMPLATED  BY THE
TERMS OF THE  AGREEMENT  ARE,  IN ALL CASES,  COMMERCIAL  TRANSACTIONS;  AND THE
BORROWER HEREBY EXPRESSLY WAIVES ANY AND ALL  CONSTITUTIONAL  RIGHTS IT MAY HAVE
AS NOW  CONSTITUTED OR HEREAFTER  AMENDED,  WITH REGARD TO NOTICE,  ANY JUDICIAL
PROCESS AND ANY AND ALL OTHER RIGHTS IT MAY HAVE,  AND THE LENDER MAY INVOKE ANY
PREJUDGMENT REMEDY AVAILABLE TO IT OR ITS SUCCESSORS OR ASSIGNS.

                                     SWISSRAY INTERNATIONAL INC.

                                     By___________________________________
                                     Ruedi G. Laupper its Chairman and President
                                     duly authorizedName                                       Dated           Amount
---------------------------------------    ------------    ----------

Southshore Capital, Ltd.*                  July 9, 1999    $1,100,000

*    This document has been filed.

<PAGE>

                               SECURITY AGREEMENT

         This  Security  Agreement  (the "Agreement")  is made  between Swissray
International  Inc.,  as  borrower  ("Borrower"),  and  Southshore Capital. Ltd.
("Secured Party").

         For good  and  valuable  consideration,  receipt  of  which  is  hereby
acknowledged, Borrower and Secured Party hereby agree as follows:

         1. Grant of Security Interest.  Borrower hereby grants to Secured Party
a security  interest in each of those items as  described  in Exhibit A attached
hereto  and  made  a  part  hereof   (cumulatively  being  referred  to  as  the
"Collateral")  and all proceeds (as that term is defined in the New York Uniform
Commercial Code) of any and all of the property referred to in Exhibit A.

         Borrower and Secured  Party  acknowledge  their mutual  intent that all
security interests  contemplated herein are given as a contemporaneous  exchange
for new value to Borrower.

         2.  Debts Secured.The security interest granted by this Agreement shall
secure  the  following  obligation,  which  is a full recourse obligation of the
Borrower:  Promissory  Note  of Swissray International, Inc.  issued in favor of
Secured  Party  dated  July 9, 1999 in the principal amount of not more than One
Million  One  Hundred  Thousand  Dollars  ($1,100,000) (the "Note"), any and all
renewals,  extensions,  replacements,  modifications   and  amendments   thereof
(including any which increase the original principal amount).

         3.  Perfection and  Enforcement  of Assignment  and Security  Interest.
Borrower  agrees  to  deliver  any  and all  documents  or  similar  instruments
evidencing the Collateral,  to Secured Party or Secured Party's counsel,  at the
time of  execution  of this  Agreement.  Borrower  agrees  to give  good  faith,
diligent  cooperation  to  Secured  Party  and to  perform  such  other  acts as
reasonably  requested by Secured Party for  perfection  and  enforcement of said
security interest,  including the filing of a UCC-1 Financing Statement with the
New York  Secretary of State's  Office,  if  applicable.  Borrower will promptly
deliver to Secured Party all written notices, or other documents constituting or
relating to the  Collateral  and will promptly give Secured Party written notice
of any other  notices  which are received in the future by Borrower with respect
to the Collateral.

         4. Secured Creditors. Borrower represents and warrants that it does not
have any outstanding  security  interests  relating to the collateral other than
those set forth in Exhibit B attached hereto and made a part hereof and it shall
not create or incur any indebtedness or obligation for borrowed money except for
indebtedness  with respect to trade obligations and other normal accruals in the
ordinary  course of business  not yet due and  payable,  and shall not grant any
other security interests in the Collateral until payment and performance in full
of the  obligations  hereunder,  unless  Secured  Party  otherwise  consents  in
writing, which consent shall not be unreasonably withheld.

         5. Representations  and  Warranties  Concerning  Collateral.   Borrower
represents and warrants that:

                  a.       Borrower is the sole owner of the Collateral.

                  b.       The  Collateral  is  not  subject  to  any   security
interest,  lien, prior assignment, or other encumbrance of any nature whatsoever
except  for  the security interest created by this Note and Agreement and except
as may be indicated in Exhibit B heteto.

                  c.       Borrower's  attorney shall prepare and have forwarded
by  overnight  courier  a UCC-1 financing statement (See copy off UCC-1 attached
hereof  as Exhibit C) in favor of Secured Party placing Secured Party in a first
lien position concerning the Collateral.

                  d.       The  Borrower  has  been  duly  organized, is validly
existing and is in good standing under the laws of the State of New York and  is
duly  qualified  and in good standing in each other state in which the nature of
its activities requires it to be so qualified.

                  e.       The  Borrower  has  not  changed its name or been the
subject  of  any  merger, consolidation or other corporate reorganization during
the four month period immediately prior to the date of this Agreement.

                  f.       The Borrower has all requisite power and authority to
transact  the  business that it now transacts and to own or lease the properties
and assets that it purports to own or lease.

                  g.       The  execution  performance  and  delivery  of   this
Agreement  and any promissory note or other instrument or agreement contemplated
herein by Borrower has been duly authorized by all requisite corporate action on
behalf of Borrower.

                  h.       The  Borrower  will  notify  Secured Party in writing
not  fewer  than  30  days  in advance of any change in the Borrower's principal
place of business or other business locations.

                  i.       The  execution,  delivery  and  performance  of  this
Agreement and any promissory note or other instrument or agreement  contemplated
herein by Borrower  will not  result in a breach of any terms or  conditions  of
any other contract or agreement or in the acceleration of any  other  obligation
of Borrower.
                  j.       No  consent or approval of any other person or entity
that  has not been obtained by Borrower is required before Borrower may execute,
deliver and perform its obligations under this Agreement.

         6.       Covenants Concerning Collateral.   Borrower covenants that:

                  a.       Borrower  covenants,  represents  and  warrants  that
there  are presently no other secured creditors that are able to obtain priority
over  Secured  Party concerning the Collateral or any proceeds of the Collateral
except as may be indicated in Exhibit B hereto.

                  b.       Borrower agrees to  promptly  execute and deliver any
UCC Financing Statements  reasonably  requested by Secured Party for  perfection
or enforcement of this Agreement and the security  interests created hereby, and
to  give  good  faith, diligent cooperation to Secured Party and to perform such
other acts  reasonably requested by Secured Party for perfection and enforcement
of said security interests.

                  c. Borrower will defend the Collateral  against all claims and
demands of all persons.  Borrower will keep the  Collateral  free from any lien,
security  interest,  assignment  or other  encumbrances  except for the security
interest granted herein.  Borrower will take all steps necessary or advisable to
preserve  rights  against  account  debtors  and other  parties.  Borrower  will
promptly and fully inform  Secured Party of any matter or  information  that may
come to its attention which might impair the validity or  collectability  of the
Collateral  or proceeds  thereof.  Borrower  will not sell,  transfer or further
encumber  or  lien  the  Collateral  in  any  way  whatsoever  except  as may be
contemplated by this Agreement.

                  d. Borrower will execute and deliver to Secured Party, at such
times and in such form and  containing  such terms as Secured Party may require,
instruments,  documents  and  agreements  evidencing  all  or  any  part  of the
indebtedness  and  such  certificates  of  title,   financing  and  continuation
statements  and  other  instruments  as  Secured  Party  may deem  necessary  or
desirable to protect, perfect and preserve the security interest created herein.
Borrower  will pay all  reasonable  costs of filing and  recording  incurred  by
Secured Party in connection with the protection,  perfection and preservation of
the security interest. Furthermore,  Borrower irrevocably appoints Secured Party
its  attorney-in-fact  in  Borrower's  name and on its behalf to make,  execute,
deliver and file any  instruments or documents and to take any action as Secured
Party deems  necessary or  appropriate to protect and preserve the Collateral on
behalf of and for the benefit of Secured Party.

                  e. Borrower will be  responsible  for all risk of loss and any
damage to the Collateral. Borrower will (if applicable to the type of collateral
indicated in Exhibit A) have and maintain insurance at all times with respect to
the collateral against risks of fire (including  so-called  extended  coverage),
theft and such other risks as Secured Party may require and in the case of motor
vehicles,  collision  insurance.  All insurance  with respect to the  Collateral
shall be written by such  companies,  on such  terms,  in such form and for such
periods  and  amounts  as may be  satisfactory  to Secured  Party,  and shall be
payable to Secured  Party and  Borrower  as their  interests  may appear on such
policies,  with annual premiums prepaid by Borrower.  Borrower shall deliver the
insurance  policies to Secured Party upon request.  Borrower hereby  irrevocably
appoints  Secured Party as its agent to collect,  compromise and settle any loss
or claim  payable  under such policies and to endorse any loss payment or return
premium  check in  Borrower's  name and to apply  the  proceeds  thereof  to the
satisfaction  of  the  indebtedness  in  such  manner  as  Secured  Party  shall
determine.
Borrower shall give immediate written notice to Secured Party and to insurers of
loss or damage to the  Collateral  and will  promptly  file  proofs of loss with
insurers.

                  f.       Borrower  will  permit  Secured Party or its agent to
inspect  and  audit  the  Collateral, during  normal business hours (or at other
times, if Secured Party shall have notified Borrower in advance).  Borrower will
furnish to Secured Party copies of all records, documents and  instruments which
Secured Party may reasonably request solely as same relates to the Collateral.

                  g.       Borrower shall pay its debts promptly as they  become
due.

                  h.       Borrower  shall  not  change  its name without giving
Secured  Party  notice  not fewer than 30 days in advance.  The notice shall set
forth  Borrower's  new  name  and  the date on which the new name shall first be
used.

                  i.       Borrower  shall  immediately deliver to Secured Party
all  certificates  of  title, or other such similar documents, to any Collateral
for which such certificates are used.

         7. Right to  Perform  for  Borrower.  Secured  Party  may,  in its sole
discretion and without any duty to do so, elect to discharge  taxes,  tax liens,
security  interests,  or any other encumbrance upon the Collateral,  perform any
duty or  obligation  of Borrower,  pay filing,  recording,  insurance  and other
charges payable by Borrower, or provide insurance as provided herein if Borrower
fails to do so. Any such  payments  advanced by Secured Party shall be repaid by
Borrower upon demand,  together  with interest  thereon from the date of advance
until repaid at the rate of ten percent (10%) per annum.

         8.       Default. Time  is  of  the  essence  of  thi s Agreement.  The
occurrence  of any of the following events shall constitute a default under this
Agreement:

                  a.       Any  representation,  warranty or covenant made by or
on  behalf  of  Borrower  in  this  Agreement  is materially false or materially
misleading when made;
                  b.       Borrower  fails  in the payment or performance of any
obligation,  covenant, agreement or liability created by or contemplated by this
Agreement or secured by this Agreement;

                  c.       Any  default  in  the  payment  or performance of any
amounts, obligation, covenant, agreement or liability under the Note; or

                  d.       Any default, as that term is defined in the Note.

         No course of dealing  or any delay or  failure  to assert  any  default
shall constitute a waiver of that default or of any prior or subsequent default.

         9.       Remedies. Upon  the  occurrence  of  any  default  under  this
Agreement,  Secured  Party  shall  have  the  following  rights and remedies, in
addition  to  all  other  rights  and remedies existing at law, in equity, or by
statute or provided in the Note:

                  a.       Secured  Party shall have all the rights and remedies
available under the Uniform Commercial Code:

                  b.       If Borrower fails to cure any default  within fifteen
(15)  days  after  Borrower's  receipt of written notice of default from Secured
Party, Secured Party may sell,  assign,  deliver or otherwise  dispose of any or
all of  the  Collateral  for cash and/or credit and upon such terms  and at such
place or places, and at such time or times, and to such person, firms, companies
or corporation as Secured Party  reasonably  believes  expedient,   without  any
advertisement  whatsoever,   and,  after  deducting  the  reasonable  costs  and
out-of-pocket expenses incurred by Secured Party, including, without limitation,
(1) reasonable attorneys fees and legal expenses, (2) advertising of sale of the
Collateral, (3) sale commissions,  (4) sales tax, and (5) costs for preservation
and  protection of the  Collateral,  apply the remainder to pay, or to hold as a
reserve against, the obligations secured by this Agreement.

                  c. The rights and remedies herein conferred are cumulative and
not exclusive of any other rights and remedies and shall be in addition to every
other right, power and remedy herein specifically  granted or hereafter existing
at law, in equity,  or by statute which Secured Party might  otherwise have, and
any and all such rights and remedies  may be exercised  from time to time and as
often and in such order as Secured Party may deem  expedient.  Such remedies may
be exercised singularly or concurrently. No delay or omission in the exercise of
any such right,  power or remedy or in the  pursuance of any remedy shall impair
any such right, power or remedy or be construed to be a waiver thereof or of any
default or to be an acquiescence therein.
                  d. In the event of breach or  default  under the terms of this
Agreement by Borrower,  Borrower agrees to pay all reasonable attorneys fees and
legal expenses  incurred by or on behalf of Secured Party in enforcement of this
Agreement,  in  exercising  any remedy  arising from such breach or default,  or
otherwise related to such breach or default. Borrower additionally agrees to pay
all reasonable costs and out-of-pocket expenses,  including, without limitation,
(1) reasonable attorneys fees and legal expenses, (2) advertising of sale of the
Collateral, (3) sale commissions,  (4) sales tax, and (5) costs for preservation
and  protection  of the  Collateral,  incurred  by  Secured  Party in  obtaining
possession of Collateral,  preparation for sale, sale or other disposition,  and
otherwise  incurred in foreclosing  upon the Collateral.  Any and all such costs
and  out-of-pocket  expenses shall be payable by Borrower upon demand,  together
with interest thereon at ten percent (10.0%) per annum.

                  e. Regardless of any breach or default, Borrower agrees to pay
all expenses,  including reasonable attorneys fees and legal expenses,  incurred
by Secured Party in any bankruptcy  proceeding of any type  involving  Borrower,
the  Collateral,  or this Agreement,  including,  without  limitation,  expenses
incurred  in  modifying  or lifting the  automatic  stay,  determining  adequate
protection, use of cash collateral, or relating to any plan of reorganization.

                  f. If  Borrower  shall be in  default  under  this  Agreement,
Secured Party,  immediately and at any time  thereafter,  may declare all of the
indebtedness  secured  pursuant to this Agreement  immediately  due and payable,
shall  have  all  rights  available  in law  or at  equity,  including,  without
limitation,  specific performance of this Agreement or for an injunction against
violations of any of the terms hereof,  and the rights and all the remedies of a
secured party under the New York UCC and any other applicable law.

         10.  Notices.  All notices or demands by any party  hereto  shall be in
writing and may be sent by regular mail.  Notices shall be deemed  received when
deposited  in a  United  States  post  office  box,  postage  prepaid,  properly
addressed to Borrower or Secured Party at the mailing  addresses stated below or
to such other  addresses  as  Borrower  or  Secured  Party may from time to time
specify in writing.  Any notice otherwise  delivered shall be deemed to be given
when actually received by the addressee.  Additionally, copies of all notices or
demands  made by one party  shall be faxed by such  party to the  other  parties
attorney on the same date as mailed.

         If to Borrower to:

                  c/o      Gary B. Wolff, Esq.
                           747 Third Avenue, 25th Floor
                           New York, NY 10017
                           (f) 212-644-6498

         If to Secured Party to:

                  c/o  Joseph B. LaRocco, Esq.
                  49 Locust Avenue - Suite 107
                  New Canaan, CT 06840
                  (f) 203-966-0363

         11. Indemnification. Borrower agrees to indemnify Secured Party for any
and all claims and  liabilities,  and for damages  which may be awarded  against
Secured Party and for all reasonable  attorneys fees, legal expenses,  and other
out-of-pocket  expenses  incurred in  defending  such  claims,  arising  from or
related in any manner to the  negotiation,  execution,  or  performance  of this
Agreement,  excluding any claims and liabilities based upon breach or default by
Secured  Party under this  Agreement or upon the  negligence  or  misconduct  of
Secured Party. Secured Party shall have sole and complete control of the defense
of any such  claims,  and is hereby  given the  authority to settle or otherwise
compromise any such claims as Secured Party in good faith determines shall be in
its best interests.

         12. Litigation.  Borrower represents that there are no actions,  suits,
investigations  or  proceedings  pending or threatened  against or affecting the
validity or  enforceability  of the Note or this Agreement,  any guaranty or any
instrument,  document or agreement  concerning  the  Collateral or of which,  if
adversely  determined,  would have a material  adverse  effect on the  financial
condition,  operations, business or properties of the Borrower, and there are no
outstanding orders or judgments of any court or governmental authority or awards
of any  arbitrator or  arbitration  board against the Borrower  except as may be
indicated in Borrower's current Registration Statement on Form S-1 as filed with
the SEC under File Number 333-59829 or in Exhibit D attached hereto.

         13.      Miscellaneous.

                  a.       This  Agreement  is  made  for the sole and exclusive
benefit  of  Borrower and Secured Party and is not intended to benefit any third
party. No such third party may claim any right or benefit or seek to enforce any
term or provision of this Agreement.

                  b.       In  recognition of Secured Party's  right to have all
its  attorneys  fees  and  expenses  incurred  in connection with this Agreement
secured  by  the  Collateral, notwithstanding payment in full of the obligations
secured  by  the  Collateral,  Secured  Party  shall not be required to release,
reconvey, or terminate any security  interest in the Collateral unless and until
Borrower and  all  Guarantors,  if any,  have  executed and delivered to Secured
Party general release in form and substance satisfactory to Secured Party.

                  c.  Secured  Party  and its  officers,  directors,  employees,
representatives,  agents and  attorneys,  shall not be liable to Borrower or any
Guarantor,  if any, for  consequential  damages  arising from or relating to any
breach of contract,  tort, or other wrong in connection with or relating to this
Agreement or the Collateral.

                  d.  Borrower waives presentment, demand for payment, notice of
dishonor,  protest  and  any  other  notices  or demands in connections with the
delivery,  acceptance,  performance,  default  and enforcement of any promissory
note or instrument representing all or any part of the indebtedness.

                  e.  The provisions of this Agreement are binding on the heirs,
executors,  administrators,  successors  and  assigns  of  Borrower and shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, executors, administrators, successors and assigns.

                  f.       [Deliberately deleted.]

                  g.  Borrower  will pay to  Secured  Party on demand any costs,
expenses, reasonable attorneys' fees and their reasonable disbursements incurred
or paid by Secured Party in protecting or enforcing its rights in the Collateral
and in  collecting  any  part of the  indebtedness  and  such  amounts  extended
pursuant to this section shall be added to the indebtedness.

                  h.  Any  delay, failure or waiver by Secured Party to exercise
any  right  it  may have under this Agreement is not a waiver of Secured Party's
right to exercise the same or any other right at any other time.

                  i. If any provision of this  Agreement or the  application  of
any provision to any person or circumstance  shall be invalid or  unenforceable,
neither the balance of this  Agreement nor the  application  of the provision to
other  persons  or  circumstances  shall  be  affected.  Any  provision  of this
Agreement which is prohibited or unenforceable in any jurisdiction  shall, as to
such  jurisdiction  only, be  ineffective  to the extent of such  prohibition or
unenforceability  without  invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

                  j.  In  the  interest  of  a  speedy resolution of any lawsuit
which  may  arise hereunder, Borrower and Secured Party waive a trial by jury in
any  action with respect to this Agreement and as to any issues arising relating
to this Agreement.

                  k. If the  incurring of any debt by Borrower or the payment of
any money or transfer  of property to Secured  Party by or on behalf of Borrower
or any Guarantor, if any, should for any reason subsequently be determined to be
"voidable"  or avoidable" in whole or in part within the meaning of any state or
federal  law  of  the  United  States,   (collectively   "voidable  transfers"),
including, without limitation,  fraudulent conveyances or preferential transfers
under the United States  Bankruptcy  Code or any other federal or state law, and
Secured  Party is  required to repay or restore any  voidable  transfers  or the
amount or any portion thereof,  or upon the advise of Secured Party's counsel is
advised to do so,  then,  as to any such amount or property  repaid or restored,
including all reasonable  costs,  expenses,  and attorneys fees of Secured Party
related  thereto,  the liability of Borrower and Guarantor,  if any, and each of
them,  and this  Agreement,  shall  automatically  be  revived,  reinstated  and
restored and shall exist as though the voidable transfers had never been made.

                  l.  The  parties  hereto  expressly  agree that this Agreement
shall  be  governed  by,  interpreted  under,  and  construed  and  enforced  in
accordance of the laws of the State of New York.  Any action to enforce, arising
out  of,  or  relating  in any way to, any provisions of this Agreement shall be
brought exclusively, in the federal courts for the State of New York.

                  m.  All  references in this Agreement to the singular shall be
deemed to include the plural if the context so requires and vice versa.Reference
in  the  collective or conjunctive shall also include the disjunctive unless the
context otherwise clearly requires a different interpretation.

                  n. All agreements,  representations,  warranties and covenants
made by Borrower shall survive the execution and delivery of this Agreement, the
filing and  consummation  of any bankruptcy  proceedings,  and shall continue in
effect so long as any obligation to Secured Party contemplated by this Agreement
is outstanding  and unpaid,  notwithstanding  any termination of this Agreement.
All  agreements,  representations,  warranties  and covenants in this  Agreement
shall bind the party making the same and its heirs and successors,  and shall be
to the  benefit  of and be  enforceable  by  each  party  for  whom  made  their
respective heirs, successors and assigns.

                  o.  This  Agreement  constitutes  the entire agreement between
Borrower  and  Secured  Party  as  to  the  subject matter hereof and may not be
altered  or  amended  except by written agreement signed by Borrower and Secured
Party.  All other prior and contemporaneous understandings  between  the parties
hereto as to the subject matter hereof are rescinded.

Dated:  July 9, 1999

Secured Party:                                      Borrower:
                                                    SWISSRAY INTERNATIONAL, INC.

________________________                            By: ________________________
                                                   Ruedi G. Laupper its Chairman
                                                   and President duly authorized

<PAGE>

                                  SCHEDULE "A"
                  TO FINANCING STATEMENT AND SECURITY AGREEMENT

This FINANCING  STATEMENT and SECURITY  AGREEMENT  covers,  and the  undersigned
("Debtor") hereby grants Southshore  Capital,  Ltd. ("Secured Party") a security
interest in, the following  types or items of property,  as  collateral  for the
payment and  performance  of all present and future  indebtedness,  liabilities,
guarantees and  obligations of Debtor to Secured Party:  All  "Receivables"  and
"Inventory",  (as those  terms are  defined  below),  including  packaging,  raw
materials and finished goods, and all money, and all property now or at any time
in the  future in  Secured  Party's  possession  (including  claims  and  credit
balances),  and all proceeds of any of the foregoing, as that term is defined in
the New York  Uniform  Commercial  Code,  (including  proceeds of any  insurance
policies,  proceeds of proceeds, and claims against third parties), all products
of any of the  foregoing,  and  all  books  and  records  related  to any of the
foregoing.  Debtor agrees that said security interest may be enforced by Secured
Party in  accordance  with the terms and  provisions  of all  security and other
agreements  between  Secured Party and Debtor,  the New York Uniform  Commercial
Code,  or  both,  but this  document  shall be  fully  effective  as a  security
agreement, even if there is no other security or other agreement between Secured
Party and Debtor.

For  purposes  of this  Schedule  A, the  following  terms  have  the  following
meanings:

"Inventory"  means,  with  respect  only to the  Purchase  Orders  for  Debtor's
Products,  listed on  Schedule  AA,  all of  Debtor's  now  owned and  hereafter
acquired goods, merchandise or other personal property,  wherever located, to be
furnished  under any  contract  of service or held for sale or lease  (including
without limitation all raw materials,  work in process, finished goods and goods
in transit, and including without limitation all materials and supplies of every
kind,  nature and description which are or might be used or consumed in Debtor's
business  or  used  in  connection  with  the  manufacture,  packing,  shipping,
advertising,  selling or finishing of such goods,  merchandise or other personal
property,  and all warehouse  receipts,  documents of title and other  documents
representing any of the foregoing.

"Receivables"  means,  with  respect  only to the  Purchase  Orders for Debtor's
Products,  listed on  Schedule  AA,  all of  Debtor's  now  owned and  hereafter
acquired  accounts  (whether or not earned by  performance),  letters of credit,
contract rights, chattel paper, instruments, securities, documents and all other
forms of  obligations  at any time owing to  Debtor,  all  guaranties  and other
security therefor,  all merchandise returned to or repossessed by Debtor, an all
rights of stoppage in transit and other rights or remedies of an unpaid  vendor,
lienor or secured party.

                                            SWISSRAYINTERNATIONAL, INC.

                                              By:_______________________________
                                              Ruedi G. Laupper its Chairman  and
                                              President duly authorized

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}]]