Document:

PROMISSORY NOTE

$550,000                                                  Hochdorf, Switzerland
                                                          March 25, 1999

         FOR VALUE RECEIVED, the undersigned,  SWISSRAY  INTERNATIONAL,  INC., a
New York corporation,  (the "Company" or "Borrower"),  hereby promises to pay to
the  order of  ABERDEEN  AVENUE  LLC (the  "Lender"),  the  principal  amount of
$550,000  in lawful  money of the United  States of America in same day or other
immediately  available funds, together with interest at the rate hereinafter set
forth, payable on or before June 25, 1999.

         .

         Interest  on the  principal  balance  of this  Note  from  time to time
outstanding  and unpaid shall be computed on the basis of a 360-day year for the
actual number of days elapsed at a simple interest rate per annum equal to eight
percent (8%) commencing on March 25, 1999.

         Principal and all accrued  interest,  at the rate of eight percent (8%)
per annum,  shall be payable  without the necessity for demand or notice on June
25, 1999.  All payments of principal and interest shall be paid by wire transfer
per the written instructions of Lender. As further  consideration for this loan,
Borrower  agrees to issue to Lender a Warrant to purchase  27,500 shares of the
Borrower's common stock, par value $0.01 per share, exercisable (for a period of
5 years commencing with the date of closing) at 125% of the average five (5) day
closing bid price of the  Company's  common  stock for the five (5) trading days
immediately  preceding March 25, 1999, but in no event less than $1.00 per share
on day of closing for a period of five (5) years.

         The Borrower, in Borrower's sole discretion, may extend the term of
this Note for an additional sixty (60) day period at an additional 2% interest
rate per annum.  Borrower must send written notice of its election to extend the
term of this Note.  Said written notice must be sent by facsimile pursuant to
the notice provisions of this Note, on or before June 25, 1999.  Borrower shall
not be entitled to extend the term of this Note beyond August 24, 1999.

                  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 the later of June 25, 1999, or August
24, 1999, if the Company exercises its option to extend the June 25, 1999 Due
Date.

         The  obligations  of Borrower  under this Note are secured by a lien on
inventory  and by a second  mortgage on real estate  owned by the  Borrower  and
located in Switzerland  (the  "Security").  The Security is being provided as an
inducement  for Lender to enter into this loan  transaction  and so as to secure
Lender position in prior  financings in which Lender have been unable to convert
their debentures into shares of the Borrower's common stock, in part, due to the
absence of an established  trading market for a significant  period of time. The
Security shall remain in effect  throughout the term of this loan so long as any
portion of the Borrower's  indebtedness  to Lender  continues in effect and such
Security shall be reduced utilizing the following formula:

A. Reducing the Borrower's  indebtedness  (evidenced by  convertible  debentures
aggregating  $14,750,000*:  when such  $14,750,000*  indebtedness  is reduced to
$10,000,000  then (i) 25% of secured  inventory  shall be released from lien and
(ii) 25% of second  mortgage on land and  building  shall  similarly be released
from  lien  (*Inclusive  of  $1,080,000  represented  by  promissory  notes  and
contingently convertible into debentures);

B.  For  each  further  reduction  of an  additional  $2,500,000  in  Borrower's
indebtedness  from  $10,000,000  to  $5,000,000  releases  from  lien  shall  be
accomplished  on a pro-rata  basis in the same manner as  indicated  in A above,
i.e., each $2,500,000  reduction in indebtedness  shall result in release of 25%
of each lien amount;  and C. When indebtedness is reduced to $5,000,000 or less,
then the second  mortgage on land and building shall be released in its entirety
and inventory collateral shall continue to be reduced on a pro-rata basis in the
same manner as indicated in paragraphs designated A. and B. above.

         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 not 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  (except as  specifically
provided in the Loan Agreement)  expressly 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.

         SECURED  CREDITORS.  Borrower  represents and warrants that it does not
have any  outstanding  security  interests in the inventory or real estate other
than those set forth in Schedule A 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 until payment and performance in full of
the obligations  hereunder,  unless Lender  otherwise  consents in writing which
consent shall not be unreasonably  withheld.  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 other than as indicated in
attached Schedule A.

         AFFIRMATIVE COVENANTS OF BORROWER.  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 primarily for working capital.

         (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  excepting  for  such  law  suits  or
proceedings  as are indicated and  summarized in Borrower's  Form 10K for fiscal
year ended June 30, 1998.

DEFAULT.  If any of the following events occur (a "default"), 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:

         (a)      Borrower fails to pay when due any principal or interest under
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;

         (g)      Any judgment is entered against Borrower or any attachment
upon or garnishment of any property of Borrower is issued which materially
effects Borrower's ability to repay the Promissory Note; or

         (h)      Any representation or statement made herein or any other
written representation or 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 courts of Switzerland.  The parties
hereby  expressly and  irrevocably  submit to the  jurisdiction of the state and
federal  courts of  Switzerland  for the purpose of any such  litigation  as set
forth above and  irrevocably  agree 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  Switzerland.  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,
written  statements  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, Esq. 747 Third Avenue , 25th
Floor, NY, NY 10017 with a facsimile copy sent on the same date 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  Switzerland,  as such  laws are
applied by  Switzerland  courts to agreements  entered into, and to be performed
in,  Switzerland by and between  residents of Switzerland,  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/s/Ruedi G. Laupper_____________
                                               Ruedi G. Laupper its Chairman
                                                  and President duly authorized

                                   SCHEDULE A

         In  addition to the  security  interest  created by this note,  a prior
security interest has been created by virtue of notes dated December 11, 1998 in
accordance with which borrower  received gross proceeds  aggregating  $1,080,000
one-half of which was received from Dominion  Capital Fund, Ltd. and one-half of
which was received from Sovereign Partners Limited Partnership.----------------------------------

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

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

                           Maximum Offering: $561,000

                      This offering consists of $561,000 of
                       Convertible Debentures of Swissray
                               International, Inc.

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

                        CONTINGENT SUBSCRIPTION AGREEMENT

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

<PAGE>

                             SUBSCRIPTION PROCEDURES

         Convertible Debentures of SWISSRAY INTERNATIONAL, INC.. (the "Company")
are being offered in an aggregate  amount not to exceed  $550,000 The Debentures
will be  transferable  to the extent that any such transfer is permitted by law.
This offering is being made in accordance  with the exemption from  registration
under  Section 4(2) of the  Securities  Act of 1933,  as amended (the "Act") and
Rule  506  of  Regulation  D  promulgated  under  the  Act  (the  "Regulation  D
Offering").

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

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

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

         If and to the extent that there are any  discrepancies  or  differences
between the Term Sheet and the underlying documents consisting of the Promissory
Note, Contingent  Subscription  Agreement,  Convertible Debenture,  Registration
Rights Agreement and Warrants,  the terms contained in the Term Sheet shall take
precedence over those contained in the underlying  documents.  For instance (but
by no means limited to) if the Term Sheet  indicates  interest at the rate of 8%
per annum and the underlying  documents refer to interest at a different rate or
on a  different  basis,  then those  terms  contained  in the Term  Sheet  shall
control. In the event that the Term Sheet is silent as to any specific terms and
conditions,  then in that  event  the  terms and  conditions  in the  underlying
documents (absent any contradictions in the aforesaid Term Sheet) shall control.

<PAGE>

                        CONTINGENT SUBSCRIPTION AGREEMENT

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

To:      Swissray International, Inc.

         This  Subscription  Agreement is made between  Swissray  International,
Inc.,  ("Company"  or  "Seller")  a New York  corporation,  and the  undersigned
prospective purchaser  ("Purchaser") who is subscribing hereby for the Company's
Convertible Debentures (the "Debentures").  The Debentures being offered will be
separately  transferable,  to the extent that any such  transfer is permitted by
law. The  conversion  terms of the  Debentures  are set forth in Section 4. This
subscription is submitted to you in accordance with and subject to the terms and
conditions  described in this Subscription  Agreement together with any Exhibits
thereto,  relating  to  an  offering  (the  "Offering")  of up  to  $550,000  of
Debentures.  This  Offering is  comprised  of an offering of the  Debentures  to
accredited  investors  (the  "Regulation  D Offering")  in  accordance  with the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended (the "Act"),  and Rule 506 of  Regulation  D  promulgated  under the Act
("Regulation D").

1.       SUBSCRIPTION.

         (a) The  undersigned  hereby  irrevocably  subscribes for and agrees to
purchase $ 570,166.67 of the Company's Debentures. The Purchaser entering into
this  Contingent  Subscription  Agreement  shall pay the purchase  price for the
Debentures  by  delivering  immediately  available  good funds in United  States
Dollars to the escrow agent. (Said amount shall be deemed to have been delivered
to the Company upon non-payment of the full amount of principal and interest due
on the  Promissory  Note  dated  March 25,  1999  between  the  Company  and the
Purchaser.  The fully executed Contingent Subscription  Agreement,  Registration
Rights  Agreement and Debenture shall be held by the escrow agent and shall only
be delivered to the Purchaser  upon  non-payment of the full amount of principal
and interest due on the Promissory Note on its "Due Date". The "Due Date" of the
Promissory  Note assuming  non-payment  of the Promissory  Note,  shall mean the
later of June 25, 1999,  or August 24, 1999 if the Company  exercises its option
to  extend  the June  25,  1999  payoff  date.  The  Debentures  shall  pay a 5%
cumulative interest payable annually,  in cash or in freely trading Common Stock
of the Company, at the Company's option, at the time of each conversion. If paid
in Common  Stock,  the  number of shares  of the  Company's  Common  Stock to be
received  shall be  determined  by dividing the dollar amount of the dividend by
the then  applicable  Market  Price,  as of the interest  payment date. " Market
Price" shall mean 80% of the 10-day  average  closing bid price,  as reported by
Bloomberg,  LP, for the ten (10) consecutive trading days immediately  preceding
the date of conversion (the "Conversion  Price").  If the interest is to be paid
in cash,  the Company shall make such payment within 5 business days of the date
of conversion.  If the interest is to be paid in Common Stock, said Common Stock
shall be delivered to the Purchaser, or per Purchaser's  instructions,  within 5
business days of the date of conversion. The Debentures are subject to automatic
conversion  at the end of two years from the date of  issuance at which time all
Debentures  outstanding will be  automatically  converted based upon the formula
set forth in Section  4(d).  The closing shall be deemed to have occurred on the
Due Date, as that term is defined above.

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

2.       REPRESENTATIONS AND WARRANTIES.

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

         (b) The undersigned acknowledges that all documents, records, and books
pertaining to this investment which the undersigned has requested  includes Form
10-KSB for the fiscal  year  ended June 30,  1997 and 10K for fiscal  year ended
June 30, 1998 inclusive of any and all amendments  thereto and Form 10-Q for the
quarters  ended  December  31,  1997,  March 31,  1998,  September  30, 1998 and
December 31, 1998 inclusive of any and all amendments  thereto (the  "Disclosure
Documents")  have been made available for  inspection by the  undersigned or the
undersigned has access to the Disclosure Documents.

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

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

                  (f)      Legends.

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

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

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

                           (ii) The Common  Stock issued upon  conversion  shall
contain the following legend if converted prior to effectiveness of Registration
Statement:

                  "No  sale,  offer  to  sell  or  transfer  of  the  securities
                  represented  by  this  certificate  shall  be  made  unless  a
                  registration  statement  under the Federal  Securities  Act of
                  1933, as amended,  with respect to such  securities is then in
                  effect or an exemption  from the  registration  requirement of
                  such Act is then in fact applicable to such securities."

                           (iii)  Common Stock issued upon conversion and
subsequent to effective date of Registration Statement (pursuant to which shares
underlying conversion are registered) shall not bear any restrictive legend.

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

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

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

         (j) The undersigned or the undersigned's  representatives,  as the case
may be, has such knowledge and experience in financial, tax and business matters
so as to enable the undersigned to utilize the information made available to the
undersigned in connection  with the Offering to evaluate the merits and risks of
an investment in the Debentures and to make an informed investment decision with
respect thereto.

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

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

         3.       SELLER REPRESENTATIONS.

         (a) Concerning the Securities.  The issuance,  sale and delivery of the
Debentures  have been duly  authorized by all required  corporate  action on the
part of Seller, and when issued, sold and delivered in accordance with the terms
hereof and thereof for the consideration  expressed herein and therein,  will be
duly and validly issued and enforceable in accordance with their terms,  subject
to the laws of bankruptcy and creditors' rights generally.  At least 200% of the
number of shares of Common Stock issuable upon  conversion of all the Debentures
issued  pursuant  to this  Offering  have been  duly and  validly  reserved  for
issuance,  or  alternative  arrangements  agreed  to in  writing  to  cover  the
contingency of their being insufficient reserved shares and, upon issuance shall
be duly and  validly  issued,  fully paid,  and  non-assessable  (the  "Reserved
Shares").  From time to time, the Company shall keep such  additional  shares of
Common Stock  reserved so as to allow for the  conversion of all the  Debentures
issued pursuant to this offering.

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

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

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

         (d) Company  Compliance.  The Company  represents and warrants that the
Company  and  its  subsidiaries  are:  (i) in  full  compliance,  to the  extent
applicable,  with all reporting  obligations under either Section 13(a) or 15(d)
of the Securities Exchange Act of 1934;  excepting that the Company acknowledges
that it did not  timely  file its Form 10-K for its  fiscal  year ended June 30,
1998, and its Form 10-Q for the fiscal quarter ended September 30, 1998, both of
which were subsequently  filed on December 3, 1998, (ii) not in violation of any
term or provision of its Certificate of Incorporation  or by-laws;  (iii) not in
default  in the  performance  or  observance  of any  obligation,  agreement  or
condition contained in any bond,  debenture (excepting for reservation of number
of shares  required if all  Debentures  were to be converted  and  excepting for
registration  of underlying  shares as same relates to preexisting  debentures),
note or any other evidence of  indebtedness  or in any mortgage,  deed of trust,
indenture or other  instrument  or  agreement to which they are a party,  either
singly  or  jointly,  by which it or any of its  property  is bound or  subject.
Furthermore,  the  Company  is not  aware of any other  facts,  which it has not
disclosed which could have a material adverse effect on the business, condition,
(financial  or  otherwise),  operations,  earnings,  performance,  properties or
prospects of the Company and its subsidiaries taken as a whole.

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

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

         (g) The Company  shall  indemnify  and hold  harmless the Purchaser and
each  stockholder,  executive,  employee,  representative,  affiliate,  officer,
director or control person of the  Purchaser,  who is or may be a party or is or
may be threatened to be made a party to any threatened,  pending or contemplated
action,  suit  or  proceeding,   whether  civil,  criminal,   administrative  or
investigative,   by  reason  of  or   arising   from  any   actual  or   alleged
misrepresentation  or  misstatement  of facts or omission to  represent or state
facts  made or  alleged to have been made by the  Company  to the  Purchaser  or
omitted or alleged to have been omitted by the Company, concerning the Purchaser
or the  Purchaser's  subscription  for and  purchase  of the  Debentures  or the
Purchaser 's authority to invest or financial  position in  connection  with the
Offering,   including,   without   limitation,   any   such   misrepresentation,
misstatement  or  omission  contained  in  this  Subscription   Agreement,   the
Questionnaire  or any other document  submitted by the Company,  against losses,
liabilities and expenses for which the Purchaser, or any stockholder, executive,
employee, representative,  affiliate, officer, director or control person of the
Purchaser has not  otherwise  been  reimbursed  (including  attorneys'  fees and
disbursements,  judgments,  fines and amounts paid in  settlement)  actually and
reasonably incurred by the Purchaser,  or such officer,  director,  stockholder,
executive, employee,  representative,  affiliate or control person in connection
with such action, suit or proceeding.
         (h) No Change.  Other than filings  required by the Blue Sky or federal
securities  law and/or  NASDAQ Rules and  Regulations,  no consent,  approval or
authorization of or designation,  declaration or filing with any governmental or
other regulatory  authority on the part of the Company is required in connection
with the valid  execution,  delivery  and  performance  of this  Agreement.  Any
required  qualification or notification under applicable federal securities laws
and state Blue Sky laws of the offer,  sale and issuance of the Debentures,  has
been obtained on or before the date hereof or will have been obtained within the
allowable period thereafter, and a copy thereof will be forwarded to Counsel for
the Purchaser.

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

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

         (k)      Prior Shares Issued Under Regulation S or Regulation D.  In
the past nine months the Company raised $17,043,449 in Regulation S and
Regulation D offerings, including redemptions and rollovers.

         (l)      Current Authorized Shares. As of March 22, 1999 there were
50,000,000 authorized shares of Common Stock of which approximately 5,051,722
shares of Common Stock were deemed issued and outstanding on a fully diluted
basis.

         (m)  Disclosure  Documents.   The  Disclosure  Documents  are  all  the
documents (other than preliminary  materials) that the Company has been required
to file with the SEC from June 30, 1997,  to the date hereof,  exclusive of such
registration   statements  as  have  been  filed  in  accordance   with  certain
registration rights  agreeements.  As of their respective dates, and/or dates of
amended filings with respect thereto, none of the Disclosure Documents contained
any  untrue  statement  of a material  fact or omitted to state a material  fact
required  to be stated  therein  or  necessary  in order to make the  statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading,  and no material  event has occurred  since the Company's  filing on
Form 10-K and 10-K/A for the year ended June 30, 1998 and Form 10-Q for quarters
ended  September  30,  1998 and  December  31,  1998 which could make any of the
disclosures   contained  therein  (as  subsequently   amended  and/or  restated)
misleading  The financial  statements of the Company  included in the Disclosure
Documents have been prepared in accordance  with generally  accepted  accounting
principles  applied on a consistent basis during the periods involved (except as
may be indicated in the audit  adjustments) the consolidated  financial position
of the Company and its consolidated subsidiaries as at the dates thereof and the
consolidated  results of their operations and changes in financial  position for
the periods then ended.

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

         (o)      Delivery Instructions.             On the Due Date, assuming
non-payment of the Promissory Note, the Debentures being purchased hereunder
which are being held in escrow by Joseph B. LaRocco, Esq. as Escrow Agent, at
which time shall be delivered to the Purchaser, per the Purchaser's
instructions.

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

         (q) No Default.  Except as may be set forth in the Company's  report on
form 10-K for the  fiscal  year  ending  June 30,  1998,  the  Company is not in
default in the performance or observance of any material obligation,  agreement,
covenant or condition  contained in any  indenture,  mortgage,  deed of trust or
other material  instrument or agreement to which it is a party or by which it or
its  property is bound,  and neither the  execution  of, nor the delivery by the
Company of, nor the  performance by the Company of its obligations  under,  this
Agreement or the Debentures,  other than the conversion provision thereof,  will
conflict  with or  result  in the  breach  or  violation  of any of the terms or
provisions  of, or  constitute a default or result in the creation or imposition
of any lien or charge on any assets or properties of the Company under,  (i) any
material  indenture,  mortgage,  deed  of  trust  or  other  material  agreement
applicable  to the Company or  instrument  to which the Company is a party or by
which it is bound,  (ii) any statute  applicable to the Company or its property,
(iii) the  Certificate  of  Incorporation  or By-Laws of the  Company,  (iv) any
decree , judgment, order, rule or regulation of any court or governmental agency
or body  having  jurisdiction  over the  Company or its  properties,  or (v) the
Company's listing agreement, if any, for its Common Stock.

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

         (s)      The Company hereby represents that it shall be paying
consultant  a fee of  $40,000 from the gross proceeds of this Offering, which
fee shall be paid out of escrow by the Escrow Agent

         4.       TERMS OF CONVERSION.

         (a) Debentures.  Upon receipt by the Company or its designated attorney
of a facsimile or original of Purchaser's  signed Notice of Conversion  followed
by receipt of the original Debenture to be converted in whole or in part (within
5 business  days as  indicated in 4(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 D hereto.  The
Seller's transfer agent or attorney shall act as Registrar and shall maintain an
appropriate  ledger  containing the necessary  information  with respect to each
Debenture.

         (b)  Conversion  Procedures.  The face amount of each  Debenture may be
converted  anytime  following the Due Date. Such conversion shall be effectuated
by surrendering to the Company, or its attorney,  the Debentures to be converted
together with a facsimile or original of the signed  Notice of Conversion  which
evidences Purchaser's intention to convert those Debentures indicated.  The date
on which the Notice of  Conversion  is  effective  ("Conversion  Date") shall be
deemed to be the date on which the  Purchaser  has  delivered  to the  Company a
facsimile  or  original  of the  signed  Notice  of  Conversion,  as long as the
original  Debentures  to be  converted  are  received  by  the  Company  or  its
designated attorney within 5 business days thereafter. Unless otherwise notified
by the Company in writing via facsimile,  the Company's  designated  attorney is
Gary B. Wolff,  Esq., 747 Third Avenue,  New York, NY 10017 (P) 212-644-6446 (f)
212-644-6498.

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

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

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

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

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

         (g) Within five (5) business  days after  receipt of the  documentation
referred to above in Section 4(b),  the Company  shall deliver a certificate  in
accordance  with Section 4(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  Purchaser a new  Debenture
equal to the unconverted amount, if so requested in writing by Purchaser.
         In the event the Company does not make delivery of the Common Stock, as
instructed by Purchaser,  within 8 business days after  delivery of the original
Debenture,  then in such event the Company shall pay to Purchaser an amount,  in
cash in accordance with the following schedule, wherein "No. Business Days Late"
is defined as the number of business  days beyond the 8 business  days  delivery
period.
                                     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  Purchaser to
suffer  damages in an amount that will be difficult to  ascertain.  Accordingly,
the  parties  agree  that it is  appropriate  to  include  in this  Agreement  a
provision for liquidated  damages.  The parties  acknowledge  and agree that the
liquidated  damages provision set forth in this section  represents the parties'
good faith effort to qualify such damages and, as such,  agree that the form and
amount of such  liquidated  damages are  reasonable  and will not  constitute  a
penalty.  The payment of  liquidated  damages shall not relieve the Company from
its  obligations  to deliver  the  Common  Stock  pursuant  to the terms of this
Agreement.

         To the extent that the failure of the Company to issue the Common Stock
         pursuant  to  this  Section  4(g)  is  due  to  the  unavailability  of
         authorized but unissued shares of Common Stock,  the provisions of this
         Section 4(g) shall not apply but instead the provisions of Section 4(h)
         shall apply.  The Company shall make any payments  incurred  under this
         Section 4(g) in  immediately  available  funds within five (5) business
         days from the  Conversion  Date if late.  Nothing  herein shall limit a
         Purchaser's right to pursue actual damages or cancel the conversion for
         the Company's failure to
issue and deliver  Common Stock to the Holder  within 8 business  days after the
Conversion Date.

         (h) The Company shall at all times reserve (or make alternative written
arrangements  for  reservation or contribution of shares) and have available all
Common Stock necessary to meet conversion of the Debentures by all Purchasers of
the entire  amount of Debentures  then  outstanding.  If, at any time  Purchaser
submits  a Notice  of  Conversion  and the  Company  does  not  have  sufficient
authorized but unissued shares of Common Stock (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  Purchaser  all of the shares of Common Stock which are  available,
and the Notice of Conversion as to any Debentures  requested to be converted but
not converted (the " Unconverted Debentures"), upon Purchaser's sole option, may
be deemed null and void.  The Company  shall provide  notice of such  Conversion
Default  ("Notice  of  Conversion   Default")  to  all  existing  Purchasers  of
outstanding  Debentures,  by  facsimile,  within  three (3) business day of such
default (with the original  delivered by overnight or two day courier),  and the
Purchaser  shall give notice to the Company by  facsimile  within five  business
days of receipt of the original Notice of Conversion  Default (with the original
delivered by overnight or two day courier) of its election to either  nullify or
confirm the Notice of Conversion.
         The Company agrees to pay to all  Purchasers of outstanding  Debentures
payments for a Conversion Default  ("Conversion Default Payments") in the amount
of  (N/365)  x (.24) x the  initial  issuance  price of the  outstanding  and/or
tendered  but not  converted  Debentures  held by each  Purchaser  where N = the
number of days from the Conversion Default Date to the date (the  "Authorization
Date") that the Company authorizes a sufficient number of shares of Common Stock
to effect conversion of all remaining Debentures.  The Company shall send notice
("Authorization  Notice")  to each  Purchaser  of  outstanding  Debentures  that
additional shares of Common Stock have been authorized,  the Authorization  Date
and the amount of Purchaser's  accrued Conversion Default Payments.  The accrued
Conversion  Default  shall be paid in cash or shall be  convertible  into Common
Stock at the Conversion Rate, at the Purchaser's option, payable as follows: (i)
in the event Purchaser  elects to take such payment in cash, cash payments shall
be made to such  Purchaser  of  outstanding  Debentures  by the fifth day of the
following  calendar month,  or (ii) in the event  Purchaser  elects to take such
payment in stock,  the  Purchaser  may convert such  payment  amount into Common
Stock at the conversion  rate set forth in section 4(d) at anytime after the 5th
day of the calendar month following the month in which the Authorization  Notice
was received, until the expiration of the mandatory 24 month conversion period.

         The Company  acknowledges  that its  failure to  maintain a  sufficient
number of  authorized  but  unissued  shares of Common Stock to effect in full a
conversion of the  Debentures  will cause the Purchaser to suffer  damages in an
amount that will be difficult to ascertain.  Accordingly, the parties agree that
it is  appropriate  to include in this  Agreement  a  provision  for  liquidated
damages. The parties acknowledge and agree that the liquidated damages provision
set forth in this section  represents the parties' good faith effort to quantify
such  damages  and, as such,  agree that the form and amount of such  liquidated
damages  are  reasonable  and will not  constitute  a  penalty.  The  payment of
liquidated damages shall not relieve the Company from its obligations to deliver
the Common Stock pursuant to the terms of this  Agreement.  Nothing herein shall
limit the Purchaser's  right to pursue actual damages for the Company's  failure
to maintain a sufficient number of authorized shares of Common Stock.

         (i) The  Purchaser  shall  be  entitled  to  convert  any or all of the
Debentures, even though the Registration Statement covering those Debentures may
not have been declared effective at that time, in which case the Purchaser shall
receive  legended  Common  Stock until the  Registration  Statement  is declared
effective or in the written opinion of legal counsel the legend may be removed.

         (j) Right of First Refusal:        The Purchaser is granted the Right
of First Refusal on any subsequent financing the Company may seek during the
next twelve months.

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

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

5.       LIMITS ON AMOUNT OF CONVERSION AND OWNERSHIP.

         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 change in control,  shall the Purchaser 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  Purchaser  and its
affiliates  (other than shares of Common Stock which may be deemed  beneficially
owned through the ownership of the unconverted  portion of the Debentures),  and
(2) the number of shares of Common Stock  issuable  upon the  conversion  of the
Debentures  with  respect to which the  determination  of this  proviso is being
made,  would result in beneficial  ownership by the Purchaser and its affiliates
of more than 4.99% of the outstanding  shares of Common Stock (after taking into
account  the shares to be issued to the  Purchaser  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  Purchaser  further  agrees  that if the
Purchaser  transfers  or assigns any of the  Debentures  to a party who or which
would not be considered such an affiliate, such assignment shall be made subject
to  the  transferee's  or  assignee's  specific  agreement  to be  bound  by the
provisions of this Section as if such transferee or assignee were a signatory to
the  Subscription  Agreement.  Furthermore,  the  Company  shall not permit such
conversions  that would violate the provisions of this Section 5, unless amended
in writing upon mutual consent of the parties.

6.       DELIVERY INSTRUCTIONS.

         Prior to or on the Due Date the  Company  shall  deliver  to the Escrow
Agent an opinion  letter  signed by counsel for the Company in the form attached
hereto as Exhibit E. Also, prior to or on the Due Date the Company shall deliver
to the Escrow Agent a signed  Registration Rights Agreement in the form attached
hereto as Exhibit B. The Debentures being purchased hereunder shall be delivered
to Joseph B. LaRocco,  Esq. as Escrow Agent, who will hold them in escrow and if
Promissory Note is not paid, credit  outstanding  principal and interest towards
Debentures  at which  time the  Escrow  Agent  shall  then  have the  Debentures
delivered to the Purchaser, per the Purchaser's instructions.

7.       UNDERSTANDINGS.

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

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

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

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

         (d) IN MAKING AN INVESTMENT DECISION, PURCHASERS MUST RELY ON THEIR OWN
 EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING,  INCLUDING THE MERITS
 AND RISKS INVOLVED.  THE DEBENTURES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR
 STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
 AUTHORITIES  HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED  THE ADEQUACY OF ANY
 MEMORANDUM OR THIS DOCUMENT.  ANY  REPRESENTATION TO THE CONTRARY IS A CRIMINAL
 OFFENSE.

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

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

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

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

9.       Litigation.

         (a) Forum Selection and Consent to  Jurisdiction.  Any litigation based
thereon,  or arising out of, under, or in connection with, this agreement or any
course of conduct,  course of dealing,  statements  (whether oral or written) or
actions of the Company or Holder shall be brought and maintained  exclusively in
the  courts  of  the  State  of 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.

10.      MISCELLANEOUS.

         (a)      All pronouns and any variations thereof used herein shall be
deemed to refer to the masculine, feminine, impersonal, singular or plural, as
the identity of the person or persons may require.  Wherever the term "Closing
Date" is used herein it shall have the same meaning as "Due
Date".

         (b)      Neither this Subscription Agreement 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
Company, at SWISSRAY  International,  Inc., 200 East 32nd Street, Suite 34B, New
York,  New York 10017 with a copy by facsimile and mail to Gary B. Wolff,  P.C.,
747 Third Avenue,  25th Floor, New York, NY 10017and (ii) if to the undersigned,
at the address for  correspondence  set forth in the  Questionnaire,  or at such
other address as may have been  specified by written  notice given in accordance
with this paragraph 10(c).

         (d)  This  Subscription  Agreement  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
Company,  its  successors  and assigns.  If any  provision of this  Subscription
Agreement is invalid or  unenforceable  under any  applicable  statue or rule of
law, then such provisions shall be deemed  inoperative to the extent that it may
conflict  therewith and shall be deemed modified to conform with such statute or
rule of law. Any provision hereof that may prove invalid or unenforceable  under
any law shall not affect the validity or  enforceability  of any other provision
hereof.

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

11.      SIGNATURE.

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

                  [BALANCE OF PAGE INTENTIONALLY LEFT BLANK)

<PAGE>

                          SWISSRAY INTERNATIONAL, INC.

                            CORPORATION QUESTIONNAIRE
                         Investor Name: _______________

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

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

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

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

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

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

                           the shareholder is a natural person whose individual
net worth* or joint net worth with his or her spouse exceeds $1,000,000; or the
shareholder  is a  natural  person  who  had  an individual  income*  in  excess
of  $200,000  in each of 1997  and 1998 and who reasonably expects an individual
income in excess of $200,000 in 1999; or Each of the shareholders of the
undersigned CORPORATION  is able to  certify  that  such shareholder   is  a
natural person who, together  with his or her spouse,  has had a joint  income
in excess of  $300,000 in each of 1997 and 1998 and who reasonably  expects a
joint income in excess of $300,000  during 1999; and the  undersigned
CORPORATION  has its   principal   place   of   business   in ________________.

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

                  3.       The undersigned CORPORATION is:

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

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

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

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

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

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

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

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

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

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

III.     GENERAL INFORMATION

         (a)      PROSPECTIVE PURCHASER (THE CORPORATION)

Name:

Principal Place of Business:  ________________________________________

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

Address for Correspondence (if different):         SAME
                         (Number and Street)

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

Telephone Number:________________________________________________
                                    (Area Code)               (Number)

Jurisdiction of Incorporation:_________________________________________

Date of Formation:_________________________________________________

Taypayer Identification Number:______________________________________

Number of Shareholders:____________________________________________

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

Name:___________________________________________________________

Position or Title:__________________________________________________

<PAGE>

                          SWISSRAY INTERNATIONAL, INC.
                           CORPORATION SIGNATURE PAGE

         Your  signature  on  this  Corporation  Signature  Page  evidences  the
agreement by the Purchaser to be bound by the Questionnaire and the Subscription
Agreement.

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

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

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

--------------------------                           --------------------------
Amount of Debentures subscribed for                              Date

                                                   _____________________

                                          (Purchaser)

                                               By: _______________________
                                                            (Signature)

                                              Name: ____________________
                                                    (Please Type or Print)

                                            Title:   _____________________
                                                   (Please Type or Print)

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

                             COMPANY ACCEPTANCE PAGE

This Subscription Agreement accepted
and agreed to this ____ day of __________, 1999

SWISSRAY INTERNATIONAL, INC.

BY_/s/Ruedi G. Laupper___________________
     Ruedi G. Laupper, its Chairman and President
     duly authorized

<PAGE>

                                    Exhibit D

                              NOTICE OF CONVERSION

           (To be Executed by the Registered owner in order to Convert
                                 the Debentures

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

Date of Conversion_________________________________________

Applicable Conversion Price_________________________________

Number of Shares Issuable upon this conversion______________

Signature___________________________________________________
                           [Name]

Address_____________________________________________________

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

Phone______________________   Fax___________________________

                                            Exhibit E

_______________, 1999

Purchasers of [Company] [Describe Securities]

                                 Re: [Company]

Ladies and Gentlemen:

         We have acted as counsel to [Company], a corporation incorporated under
the laws of the State of  _________  (the  "Company"),  in  connection  with the
proposed issuance and sale of convertible debentures (the "Securities") pursuant
to the Distribution  Agreement and the related Subscription Agreement (including
all Exhibits and Appendices thereto) (collectively the "Agreements").

         In connection  with  rendering  the opinions set forth herein,  we have
examined drafts of the Agreement,  the Company's  Certificate of  Incorporation,
and its Bylaws, as amended to date [other documents - describe], the proceedings
of the Company's  Board of Directors  taken in connection with entering into the
Agreements,  and such  other  documents,  agreements  and  records  as we deemed
necessary to render the opinions set forth below.

         In conducting our examination,  we have assumed the following: (i) that
each of the Agreements  has been executed by each of the parties  thereto in the
same form as the  forms  which we have  examined,  (ii) the  genuineness  of all
signatures, the legal capacity of natural persons, the authenticity and accuracy
of all documents  submitted to us as originals,  and the conformity to originals
of all documents  submitted to us as copies,  (iii) that each of the  Agreements
has been duly and validly  authorized,  executed  and  delivered by the party or
parties  thereto  other than the Company,  and (iv) that each of the  Agreements
constitutes  the valid and  binding  agreement  of the party or parties  thereto
other than the Company,  enforceable against such party or parties in accordance
with the Agreements' terms.

         Based upon the subject to the foregoing, we are of the opinion that:

         1. The Company has been duly  incorporated and is validly existing as a
corporation in good standing under the laws of the State of __________,  is duly
qualified to do business as a foreign corporation and is in good standing in all
jurisdictions  where the Company owns or leases properties,  maintains employees
or  conducts  business,  except  for  jurisdictions  in which the  failure to so
qualify  would not have a material  adverse  effect on the Company,  and has all
requisite  corporate  power and authority to own its  properties and conduct its
business.

         2.       The authorized capital stock of the Company  consists of _____
shares of Common Stock, ________ par value per share, ("Common Stock") and
______________ Preferred Stock, par value $________ per share; [describe classes
if applicable]

         3. The Common Stock is registered  pursuant to Section 12(b) or Section
12(g) of the  Securities  Exchange  Act of 1934,  as amended and the Company has
timely filed all the material required to be filed pursuant to Sections 13(a) or
15(d) of such Act for a period  of at least  twelve  months  preceding  the date
hereof;

         4.  When  duly  countersigned  by  the  Company's  transfer  agent  and
registrar, and delivered to you or upon your order against payment of the agreed
consideration therefor in accordance with the provisions of the Agreements,  the
Securities  [and any  Common  Stock to be  issued  upon  the  conversion  of the
Securities]  as described  in the  Agreements  represented  thereby will be duly
authorized and validly issued, fully paid and nonassessable;

         5 The Company has the requisite  corporate power and authority to enter
into the  Agreements and to sell and deliver the Securities and the Common Stock
to be  issued  upon  the  conversion  of  the  Securities  as  described  in the
Agreements;  each of the Agreements has been duly and validly  authorized by all
necessary  corporate action by the Company to our knowledge,  no approval of any
governmental or other body is required for the execution and delivery of each of
the  Agreements  by  the  Company  or  the   consummation  of  the  transactions
contemplated  thereby; each of the Agreements has been duly and validly executed
and  delivered  by and on behalf  of the  Company,  and is a valid  and  binding
agreement of the Company,  enforceable in accordance  with its terms,  except as
enforceability  may be  limited  by general  equitable  principles,  bankruptcy,
insolvency,  fraudulent  conveyance,  reorganization,  moratorium  or other laws
affecting creditors rights generally,  and except as to compliance with federal,
state, and foreign securities laws, as to which no opinion is expressed;

         6. To the best of our  knowledge,  after due  inquiry,  the  execution,
delivery and performance of the Agreements by the Company and the performance of
its obligations  thereunder do not and will not constitute a breach or violation
of any of the terms and provisions of, or constitute a default under or conflict
with or violate any provision of (i) the Company's  Certificate of Incorporation
or By-Laws,  (ii) any  indenture,  mortgage,  deed of trust,  agreement or other
instrument  to which the Company is party or by which it or any of its  property
is bound,  (iii) any applicable  statute or regulation or as other,  (iv) or any
judgment,  decree or order of any court or governmental body having jurisdiction
over the Company or any of its property.

         7.       The issuance of Common Stock upon conversion of the debentures
in accordance with the terms and conditions of the Agreements, will not violate
the applicable listing agreement between the Company and any securities exchange
or market on which the Company's securities are listed.

         8.       To the best of our knowledge, after due inquiry, there is no
pending or threatened litigation, investigation or other proceedings against the
Company [except as described in Exhibit A hereto].

         9.       The Company complies with the eligibility requirements for the
use of Form S-3, under the Securities Act of 1933, as amended.

Note: Use this where Registration Rights were included in the offering and the
Company is S-3 eligible.

         This opinion is rendered only with regard to the matters set out in the
numbered  paragraphs  above.  No other  opinions are intended nor should they be
inferred.  This opinion is based  solely upon the laws of the United  States and
the State of _____________  and does not include an  interpretation or statement
concerning  the  laws  of  any  other  state  or  jurisdiction.  Insofar  as the
enforceability of the Agreements may be governed by the laws of other states, we
have  assumed  that such laws are  identical  in all respects to the laws of the
State of ___________.

         The opinions  expressed  herein are given to you solely for your use in
connection  with the  transaction  contemplated by the Agreements and may not be
relied upon by any other person or entity or for any other  purpose  without our
prior consent.

                                                              Very truly yours,

                                                 By:      _____________________

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